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Virtual events software company (NYSE:ONTF) announced better-than-expected revenue in Q1 CY2025, but sales fell by 7.9% year on year to $34.73 million. On the other hand, next quarter’s revenue guidance of $34.8 million was less impressive, coming in 0.7% below analysts’ estimates. Its non-GAAP loss of $0.01 per share was $0.01 above analysts’ consensus estimates.
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ON24 (ONTF) Q1 CY2025 Highlights:
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Revenue: $34.73 million vs analyst estimates of $34.23 million (7.9% year-on-year decline, 1.5% beat)
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Adjusted EPS: -$0.01 vs analyst estimates of -$0.02 ($0.01 beat)
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Adjusted Operating Income: -$2.12 million vs analyst estimates of -$2.88 million (-6.1% margin, relatively in line)
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The company dropped its revenue guidance for the full year to $137.5 million at the midpoint from $140.1 million, a 1.9% decrease
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Management reiterated its full-year Adjusted EPS guidance of $0.04 at the midpoint
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Operating Margin: -30.1%, up from -33.1% in the same quarter last year
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Free Cash Flow Margin: 5.6%, up from 1.2% in the previous quarter
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Market Capitalization: $200.5 million
Company Overview
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.
Sales Growth
A company’s long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. ON24’s demand was weak over the last three years as its sales fell at a 10.4% annual rate. This wasn’t a great result and is a sign of poor business quality.
This quarter, ON24’s revenue fell by 7.9% year on year to $34.73 million but beat Wall Street’s estimates by 1.5%. Company management is currently guiding for a 6.8% year-on-year decline in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to decline by 4% over the next 12 months. While this projection is better than its three-year trend, it's hard to get excited about a company that is struggling with demand.
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Customer Acquisition Efficiency
The customer acquisition cost (CAC) payback period represents the months required to recover the cost of acquiring a new customer. Essentially, it’s the break-even point for sales and marketing investments. A shorter CAC payback period is ideal, as it implies better returns on investment and business scalability.