- Achieved Total Revenue of $37.7 million and exceeded
profitability targets for 4th consecutive quarter
- Continued signs of stabilization in customer base driven by
positive trends in gross retention
- Strong enterprise business performance metrics; including
record percentage of ARR in multiyear agreements and highest ARR
per customer
- Growth ARR uplift from momentum of early adopters of the ON24
next gen platform and AI-powered offerings
ON24 (NYSE: ONTF), an intelligent engagement platform for B2B
sales and marketing, today announced financial results for the
first quarter ended March 31, 2024.
“In Q1, we continued to execute against our strategic and
financial targets, delivering solid topline results and achieving
our profitability targets for the fourth quarter in a row,” said
Sharat Sharan, co-founder and CEO of ON24. “Furthermore, we were
pleased with continued signs of stability in our customer base with
positive trends in gross retention rates, greater business
diversification across customer verticals with mission-critical
digital transformation use cases, and expansion through our newly
launched AI-powered next generation platform. Looking forward, we
are being prudent in our outlook for FY 2024 given continued
pressure on marketing budgets, but we remain confident that the
company is well-positioned to achieve its long-term goal of
generating double-digit top-line growth with double-digit EBITDA
margins.”
First Quarter 2024 Financial
Highlights
- Revenue:
- Revenue from our Core Platform, including services, was $36.8
million.
- Total revenue was $37.7 million.
- ARR:
- Core Platform ARR of $133.3 million as of March 31, 2024.
- Total ARR of $136.5 million as of March 31, 2024.
- GAAP Operating Loss was $12.5 million, compared to GAAP
operating loss of $19.9 million in the first quarter of 2023.
- Non-GAAP Operating Loss was $0.8 million, compared to
non-GAAP operating loss of $4.2 million in the first quarter of
2023.
- GAAP Net Loss was $10.7 million, or $(0.26) per diluted
share, compared to GAAP net loss of $17.6 million, or $(0.37) per
diluted share in the first quarter of 2023.
- Non-GAAP Net Income was $1.0 million, or $0.02 per
diluted share, compared to a non-GAAP net loss of $1.8 million, or
$(0.04) per diluted share in the first quarter of 2023.
- Adjusted EBITDA was $0.3 million.
- Cash Flow: Net cash provided by operating activities was
$2.1 million, compared to $4.2 million used in operating activities
in the first quarter of 2023. Free cash flow was $1.1 million for
the quarter, compared to $(4.3) million in the first quarter of
2023.
- Cash, Cash Equivalents and Marketable Securities totaled
$196.1 million as of March 31, 2024.
For more information regarding non-GAAP operating income (loss),
non-GAAP net income (loss) and free cash flows, see the section
titled “Non-GAAP Financial Measures” below. For reconciliations of
these non-GAAP financial measures to the most directly comparable
GAAP financial measure, see the tables at the end of this press
release.
Recent Business Highlights:
- Strong momentum from early adopters of the ON24 Intelligent
Engagement Platform and AI-powered ACE with AI-powered ACE ARR
reaching the double-digit mark as a percentage of growth ARR in
Q1.
- ON24 named winner of the TrustRadius “Most Loved” award in the
marketing technology category based on thousands of customer
reviews.
- With steadfast focus on enterprises, ON24 ranked top enterprise
digital engagement platform for past 5 years on G2.
- As focus on life sciences vertical continues, ON24 achieved
Silver Certification in the Veeva Technology Partner Program.
Financial Outlook
For the second quarter of 2024, ON24 expects:
- Core Platform Revenue, including services, to be in the range
of $35.0 million to $36.0 million.
- Total revenue of $35.8 million to $36.8 million.
- Non-GAAP operating loss of $1.7 million to $0.7 million.
- Non-GAAP net income per share of $0.00 to $0.02 using
approximately 46.9 million diluted shares outstanding.
- Restructuring charge of $0.6 million to $0.9 million, excluded
from the Non-GAAP amounts above.
For the full year 2024, ON24 expects:
- Core Platform Revenue, including services, to be in the range
of $139.8 million to $143.8 million.
- Total revenue of $143.0 million to $147.0 million.
- Non-GAAP operating loss of $5.5 million to $3.5 million.
- Non-GAAP net income per share of $0.03 to $0.07 per share using
approximately 47.2 million diluted shares outstanding.
Conference Call Information
ON24 will host a conference call and live webcast for analysts
and investors today at 2:00 p.m. Pacific Time. Parties in the
United States can access the call by dialing (866) 682-6100 or
(862) 298-0702.
A webcast and management’s prepared remarks for today’s call
will be accessible on ON24’s investor relations website at
investors.on24.com. Approximately one hour after completion of the
live call, an archived version of the webcast will be available on
the Company’s investor relations website.
Definitions of Certain Key Business Metrics
Core Platform: The ON24 Core
Platform products include those listed below:
ON24 Elite: live, interactive
webinar experience that engages prospective customers in real-time
and can be made available in an on-demand format.
ON24 Breakouts: live breakout room
experience that facilitates networking, collaboration and
interactivity between users.
ON24 Forums: live, interactive
experience that facilitates video-to-video interaction between
presenters and audiences.
ON24 Go Live: live, interactive
video event experience that enables presenters and attendees to
engage face-to-face in real-time and can also be made available in
an on-demand format.
ON24 Engagement Hub: always-on,
rich multimedia content experience that prospective customers can
engage anytime, anywhere.
ON24 Target: personalize and
curate, rich landing page experience that engages specific segments
of prospective customers to drive desired action.
ON24 AI-powered ACE: the next
generation AI-powered analytics and content engine.
Annual Recurring Revenue (“ARR”): ARR is calculated as
the sum of the annualized value of our subscription contracts as of
the measurement date, including existing customers with expired
contracts that we expect to be renewed. Our ARR amounts exclude
professional services, overages from subscription customers and
Legacy revenue.
Non-GAAP Financial Measures
In addition to our results determined in accordance with
generally accepted accounting principles in the United States, or
“GAAP”, we consider our non-GAAP operating income (loss), non-GAAP
net income (loss), Adjusted EBITDA, and free cash flow in
evaluating our operating performance. We define non-GAAP operating
income (loss) as net income (loss) excluding, interest expense,
other (income) expense, net, income tax, stock-based compensation,
amortization of acquired intangible assets, shareholder activism
related costs, restructuring costs, charges for underutilized real
estate, and certain other costs. We define non-GAAP net income
(loss) as net income (loss) excluding stock-based compensation,
amortization of acquired intangible assets, shareholder activism
related costs, restructuring costs, charges for underutilized real
estate, and certain other costs. We define Adjusted EBITDA as net
income (loss) excluding interest expense, other (income) expense,
net, provision for income taxes, depreciation and amortization,
amortization of acquired intangible assets, amortization of cloud
implementation costs, stock-based compensation, restructuring
costs, impairment charges, and shareholder activism related costs.
We define free cash flow as net cash provided by (used in)
operating activities, less purchases of property and equipment.
We use non-GAAP operating income (loss), non-GAAP net income
(loss), and Adjusted EBITDA to evaluate our ongoing operations and
for internal planning and forecasting purposes, and we use free
cash flow to measure and evaluate cash generated through normal
business operations. We believe non-GAAP operating income (loss),
non-GAAP net income (loss), and Adjusted EBITDA may be helpful to
investors because they provide consistency and comparability with
past financial performance. We believe free cash flow may be
helpful to investors because it reflects that some purchases of
property and equipment are necessary to support ongoing operations,
while providing a measure of cash available to acquire customers,
expand within existing customers and otherwise pursue our business
strategies.
However, these non-GAAP financial measures are each presented
for supplemental informational purposes only, have limitations as
analytical tools and should not be considered in isolation or as a
substitute for financial information presented in accordance with
GAAP. Non-GAAP financial measures have no standardized meanings
prescribed by GAAP and are not prepared under a comprehensive set
of accounting rules or principles. In addition, other companies,
including companies in our industry, may calculate similarly-titled
non-GAAP financial measures differently or may use other measures
to evaluate their performance, all of which could reduce the
usefulness of our non-GAAP financial measure as a tool for
comparison.
We do not provide a quantitative reconciliation of the
forward-looking non-GAAP financial measures included in this press
release to the most directly comparable GAAP measures due to the
high variability and difficulty to predict certain items excluded
from these non-GAAP financial measures; in particular, the effects
of stock-based compensation expense, and restructuring and
transaction expenses. We expect the variability of these excluded
items may have a significant, and potentially unpredictable, impact
on our future GAAP financial results.
Reconciliations of these non-GAAP financial measures to their
most directly comparable GAAP financial measure are included in the
tables at the end of this press release.
Forward-Looking Statements
This document contains “forward-looking statements” under
applicable securities laws. Such statements can be identified by
words such as: “outlook,” “expect,” “target,” “believe,” “plan,”
“future,” “may,” “should,” “will,” and similar references to future
periods. Forward-looking statements include express or implied
statements regarding our expected financial and operating results,
the execution of our capital return program, the size of our market
opportunity, the success of our new products and capabilities,
including our new AI-powered Analytics and Content Engine, and
other statements regarding our ability to achieve our business
strategies, growth, or other future events or conditions. Such
statements are based on our current beliefs, expectations, and
assumptions about future events or conditions, which are subject to
inherent risks and uncertainties, including our ability to attract
new customers and expand sales to existing customers, decline in
our growth rate; fluctuation in our performance, our history of net
losses and expected increases in our expenses; competition and
technological development in our markets and any decline in demand
for our solutions; our ability to expand our sales and marketing
capabilities and otherwise achieve our growth; the impact of the
resumption of in-person marketing activities on our customer growth
rate; disruptions or other issues with our technology or
third-party services; compliance with data privacy, import and
export controls, customs, sanctions and other laws and regulations;
intellectual property matters; and matters relating to our common
stock, along with the other risks and uncertainties discussed in
the filings we make from time to time with the Securities and
Exchange Commission. Actual results may differ materially from
those indicated in forward-looking statements, and you should not
place undue reliance on them. All statements herein are based only
on information currently available to us and speak only as of the
date hereof. Except as required by law, we undertake no obligation
to update any such statement.
About ON24
ON24 is on a mission to help businesses bring their go-to-market
strategy into the AI era and drive cost-effective revenue growth.
Through its leading intelligent engagement platform, ON24 enables
customers to combine best-in-class experiences with personalization
and content, to capture and act on connected insights at scale.
ON24 provides industry-leading companies, including 3 of the 5
largest global technology companies, 3 of the 5 top global asset
management firms, 3 of the 5 largest global healthcare companies
and 3 of the 5 largest global industrial companies, with a valuable
source of first-party data to drive sales and marketing innovation,
improve efficiency and increase business results. Headquartered in
San Francisco, ON24 has offices globally in North America, EMEA and
APAC. For more information, visit www.ON24.com.
© 2024 ON24, Inc. All rights reserved. ON24 and the ON24 logo
are trademarks owned by ON24, Inc., and are registered in the
United States Patent and Trademark Office and in other
countries.
ON24, INC.
Condensed Consolidated Balance
Sheets
(in thousands)
(Unaudited)
March 31, 2024
December 31, 2023
Assets
Current assets
Cash and cash equivalents
$
18,292
$
53,209
Marketable securities
177,766
145,497
Accounts receivable, net
28,523
37,939
Deferred contract acquisition costs,
current
12,349
12,428
Prepaid expenses and other current
assets
6,922
4,714
Total current assets
243,852
253,787
Property and equipment, net
6,130
5,371
Operating right-of-use assets
2,650
2,981
Intangible asset, net
1,102
1,305
Deferred contract acquisition costs,
non-current
14,421
15,756
Other long-term assets
1,009
1,102
Total assets
$
269,164
$
280,302
Liabilities and Stockholders’
Equity
Current liabilities
Accounts payable
$
1,713
$
1,914
Accrued and other current liabilities
13,559
16,907
Deferred revenue
73,117
74,358
Finance lease liabilities, current
44
127
Operating lease liabilities, current
2,867
2,779
Total current liabilities
91,300
96,085
Operating lease liabilities,
non-current
1,775
2,483
Other long-term liabilities
1,666
1,517
Total liabilities
94,741
100,085
Stockholders’ equity
Common stock
4
4
Additional paid-in capital
490,896
485,291
Accumulated deficit
(316,216
)
(305,513
)
Accumulated other comprehensive income
(loss)
(261
)
435
Total stockholders’ equity
174,423
180,217
Total liabilities and stockholders’
equity
$
269,164
$
280,302
ON24, INC.
Condensed Consolidated
Statements of Operations
(in thousands, except share
and per share data)
(Unaudited)
Three Months Ended March
31,
2024
2023
Revenue:
Subscription and other platform
$
34,829
$
39,364
Professional services
2,898
3,699
Total revenue
37,727
43,063
Cost of revenue:
Subscription and other platform(1)(4)
7,346
9,889
Professional services(1)(4)
2,436
3,317
Total cost of revenue
9,782
13,206
Gross profit
27,945
29,857
Operating expenses:
Sales and marketing(1)(4)
20,074
24,417
Research and development(1)(2)(4)
9,109
11,099
General and administrative(1)(3)(4)
11,236
14,278
Total operating expenses
40,419
49,794
Loss from operations
(12,474
)
(19,937
)
Interest expense
11
29
Other income, net
(2,277
)
(2,572
)
Loss before provision for income taxes
(10,208
)
(17,394
)
Provision for income taxes
495
196
Net loss
(10,703
)
(17,590
)
Net loss per share:
Basic and diluted
$
(0.26
)
$
(0.37
)
Weighted-average shares used in computing
net loss per share:
Basic and diluted
41,313,674
47,304,983
(1)
Includes stock-based compensation as
follows:
Three Months Ended March
31,
2024
2023
Cost of revenue
Subscription and other platform
$
668
$
785
Professional services
121
152
Total cost of revenue
789
937
Sales and marketing
3,058
3,057
Research and development
2,128
2,021
General and administrative
4,362
4,106
Total stock-based compensation expense
$
10,337
$
10,121
(2)
Research and development expense for the
three months ended March 31, 2024 and 2023 includes amortization of
acquired intangible asset of $138 thousand and $142 thousand,
respectively, in connection with the Vibbio acquisition in April
2022.
(3)
General and administrative expense for the
three months ended March 31, 2024 and 2023 includes fees related to
shareholder activism of nil and $2,446 thousand, respectively.
(4)
The results of operations for the three
months ended March 31, 2024 and 2023 includes restructuring costs,
which primarily represent severance and related expense due to
restructuring activities, as follows:
Three Months Ended March
31,
2024
2023
Cost of revenue
Subscription and other platform
$
192
$
785
Professional services
12
54
Total cost of revenue
204
839
Sales and marketing
675
1,211
Research and development
112
773
General and administrative
190
230
Total restructuring costs
$
1,181
$
3,053
ON24, INC.
Condensed Consolidated
Statements of Cash Flows
(In thousands)
(Unaudited)
Three Months Ended March
31,
2024
2023
Cash flows from operating
activities:
Net loss
$
(10,703
)
$
(17,590
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization
1,233
1,417
Stock-based compensation expense
10,337
10,121
Amortization of deferred contract
acquisition cost
3,843
3,893
Provision for allowance for doubtful
accounts and billing reserves
625
901
Non-cash lease expense
391
497
Accretion of marketable securities
(1,507
)
(1,826
)
Other
35
128
Change in operating assets and
liabilities:
Accounts receivable
8,791
9,405
Deferred contract acquisition cost
(2,429
)
(3,546
)
Prepaid expenses and other assets
(2,378
)
(2,069
)
Accounts payable
(134
)
(1,353
)
Accrued liabilities
(3,902
)
(1,089
)
Deferred revenue
(1,241
)
(2,287
)
Other liabilities
(823
)
(769
)
Net cash provided by (used in) operating
activities
2,138
(4,167
)
Cash flows from investing
activities:
Purchase of property and equipment
(1,038
)
(178
)
Purchase of marketable securities
(74,093
)
(119,591
)
Proceeds from maturities of marketable
securities
38,521
199,210
Proceeds from sale of marketable
securities
4,360
9,321
Net cash (used in) provided by investing
activities
(32,250
)
88,762
Cash flows from financing
activities:
Proceeds from exercise of stock
options
753
255
Payment for repurchase of common stock
(5,270
)
(10,720
)
Repayment of equipment loans
(36
)
(71
)
Repayment of finance lease obligations
(83
)
(411
)
Net cash used in financing activities
(4,636
)
(10,947
)
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
(173
)
130
Net (decrease) increase in cash, cash
equivalents and restricted cash
(34,921
)
73,778
Cash, cash equivalents and restricted
cash, beginning of period
53,298
27,169
Cash, cash equivalents and restricted
cash, end of period
$
18,377
$
100,947
Reconciliation of cash, cash
equivalents, and restricted cash to the condensed consolidated
balance sheets:
Cash and cash equivalents
$
18,292
$
100,777
Restricted cash included in other assets,
non-current
85
170
Total cash, cash equivalent, and
restricted cash
$
18,377
$
100,947
ON24, INC.
Reconciliation from GAAP to
Non-GAAP Results
(in thousands, except share
and per share data)
(Unaudited)
Reconciliation of gross profit and
gross margin
Three Months Ended March
31,
2024
2023
GAAP gross profit
$
27,945
$
29,857
Add:
Stock-based compensation
789
937
Restructuring costs
204
839
Non-GAAP gross profit
$
28,938
$
31,633
GAAP gross margin
74
%
69
%
Non-GAAP gross margin
77
%
73
%
Reconciliation of operating
expenses
Three Months Ended March
31,
2024
2023
GAAP sales and marketing
$
20,074
$
24,417
Less:
Stock-based compensation
(3,058
)
(3,057
)
Restructuring costs
(675
)
(1,211
)
Non-GAAP sales and marketing
$
16,341
$
20,149
GAAP research and development
$
9,109
$
11,099
Less:
Stock-based compensation
(2,128
)
(2,021
)
Restructuring costs
(112
)
(773
)
Amortization of acquired intangible
asset
(138
)
(142
)
Non-GAAP research and
development
$
6,731
$
8,163
GAAP general and administrative
$
11,236
$
14,278
Less:
Stock-based compensation
(4,362
)
(4,106
)
Restructuring costs
(190
)
(230
)
Fees related to shareholder activism
—
(2,446
)
Non-GAAP general and
administrative
$
6,684
$
7,496
ON24, INC.
Reconciliation of GAAP to
Non-GAAP Results
(in thousands, except share
and per share data)
(Unaudited)
Reconciliation of net loss to non-GAAP
operating loss
Three Months Ended March
31,
2024
2023
Net loss
$
(10,703
)
$
(17,590
)
Add:
Interest expense
11
29
Other income, net
(2,277
)
(2,572
)
Provision for income taxes
495
196
Stock-based compensation
10,337
10,121
Amortization of acquired intangible
asset
138
142
Restructuring costs
1,181
3,053
Fees related to shareholder activism
—
2,446
Non-GAAP operating loss
$
(818
)
$
(4,175
)
Reconciliation of net loss to Adjusted
EBITDA
Three Months Ended March
31,
2024
2023
Net loss
$
(10,703
)
$
(17,590
)
Add:
Interest expense
11
29
Other income, net
(2,277
)
(2,572
)
Provision for income taxes
495
196
Depreciation and amortization
1,095
1,275
Amortization of acquired intangible
asset
138
142
Amortization of cloud implementation
costs
36
37
Stock-based compensation
10,337
10,121
Restructuring costs
1,181
3,053
Fees related to shareholder activism
—
2,446
Adjusted EBITDA
$
313
$
(2,863
)
Reconciliation of net loss to non-GAAP
net income (loss)
Three Months Ended March
31,
2024
2023
Net loss
$
(10,703
)
$
(17,590
)
Add:
Stock-based compensation
10,337
10,121
Amortization of acquired intangible
asset
138
142
Restructuring costs
1,181
3,053
Fees related to shareholder activism
—
2,446
Non-GAAP net income (loss)
$
953
$
(1,828
)
ON24, INC.
Reconciliation of GAAP to
Non-GAAP Results
(in thousands, except share
and per share data)
(Unaudited)
Reconciliation of GAAP to Non-GAAP
basic and diluted net income (loss) per share
Three Months Ended March
31,
2024
2023
GAAP basic and diluted net loss per
share:
Net loss
$
(10,703
)
$
(17,590
)
Weighted average common stock outstanding,
basic and diluted
41,313,674
47,304,983
Net loss per share, basic and diluted
$
(0.26
)
$
(0.37
)
Three Months Ended March
31,
2024
2023
Non-GAAP basic and diluted net income
(loss) per share:
Net loss
$
(10,703
)
$
(17,590
)
Add:
Stock-based compensation
10,337
10,121
Amortization of acquired intangible
asset
138
142
Restructuring costs
1,181
3,053
Fees related to shareholder activism
—
2,446
Non-GAAP net income (loss)
$
953
$
(1,828
)
Non-GAAP weighted-average common stock
outstanding
Basic
41,313,674
47,304,983
Diluted
45,624,532
47,304,983
Non-GAAP net income (loss) per share of
common stock:
Basic
$
0.02
$
(0.04
)
Diluted
$
0.02
$
(0.04
)
ON24, INC.
Reconciliation of GAAP to
Non-GAAP Results
(in thousands)
(Unaudited)
Reconciliation of GAAP Cash Flow from
Operating Activities to Free Cash Flow
Three Months Ended March
31,
2024
2023
Net cash provided by (used in) operating
activities:
$
2,138
$
(4,167
)
Less: Purchases of property and
equipment
(1,038
)
(178
)
Free cash flow
$
1,100
$
(4,345
)
ON24, INC.
Revenue
(in thousands)
(Unaudited)
Three Months Ended March
31,
2024
2023
Core Platform
Subscription and other platform
$
34,060
$
37,811
Professional services
2,755
3,395
Total core platform revenue
$
36,815
$
41,206
Virtual Conference
Subscription and other platform
$
769
$
1,553
Professional services
143
304
Total virtual conference revenue
$
912
$
1,857
Revenue
Subscription and other platform
$
34,829
$
39,364
Professional services
2,898
3,699
Total revenue
$
37,727
$
43,063
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240507690532/en/
Media Contact: Tessa Barron press@on24.com
Investor Contact: Lauren Sloane, The Blueshirt Group for
ON24 investorrelations@on24.com
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