Virtual events software company (NYSE:ONTF) reported Q4 FY2023 results topping analysts' expectations, with revenue down 15.5% year on year to $39.34 million. The company also expects next quarter's revenue to be around $37 million, coming in 2.3% above analysts' estimates. It made a non-GAAP profit of $0.06 per share, improving from its loss of $0.04 per share in the same quarter last year.
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ON24 (ONTF) Q4 FY2023 Highlights:
- Revenue: $39.34 million vs analyst estimates of $37.26 million (5.6% beat)
- EPS (non-GAAP): $0.06 vs analyst estimates of $0.02 ($0.05 beat)
- Revenue Guidance for Q1 2024 is $37 million at the midpoint, above analyst estimates of $36.18 million
- Management's revenue guidance for the upcoming financial year 2024 is $145 million at the midpoint, missing analyst estimates by 1.6% and implying 11.4% decline (vs -14.3% in FY2023)
- Free Cash Flow was -$1.97 million compared to -$3.20 million in the previous quarter
- Gross Margin (GAAP): 74.6%, up from 71.6% in the same quarter last year
- Market Capitalization: $323.7 million
Started in 1998 as a platform to broadcast press conferences, ON24’s (NYSE:ONTF) software helps organizations organize online webinars and other virtual events and convert prospects into customers.
Virtual Events SoftwareOnline marketing and sales are expanding at a rapid pace. Compared to the offline advertising market, which has been affected by the Covid pandemic and is challenging to measure and improve, more organizations are expected to adopt data-driven digital engagement platforms to better engage their customers online.
Sales GrowthAs you can see below, ON24's revenue has been declining over the last two years, shrinking from $52.03 million in Q4 FY2021 to $39.34 million this quarter.
ON24's revenue was down again this quarter, falling 15.5% year on year.
Next quarter, ON24 is guiding for a 14.1% year-on-year revenue decline to $37 million, a further deceleration from the 11.2% year-on-year decrease it recorded in the same quarter last year. For the upcoming financial year, management expects revenue to be $145 million at the midpoint, declining 11.4% year on year compared to 14.2% drop in FY2023.
Cash Is King If you've followed StockStory for a while, you know that we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can't use accounting profits to pay the bills. ON24 burned through $1.97 million of cash in Q4, reducing its cash burn by 77.8% year on year.
ON24 has burned through $14.39 million of cash over the last 12 months, resulting in a negative 8.8% free cash flow margin. This low FCF margin stems from ON24's constant need to reinvest in its business to stay competitive.
Key Takeaways from ON24's Q4 Results ON24's revenue continues to shrink, while the company keeps burning cash. But it was good to see that the cash burn is slowing down, on the other hand, its full-year revenue guidance was below expectations. Zooming out, we think this was still mixed quarter. The stock is flat after reporting and currently trades at $7.7 per share.