ON24 (NYSE: ONTF), a leading cloud-based digital experience platform provider, today announced financial results for its second quarter ended June 30, 2021.
“Total revenue in the second quarter of 2021 grew 43% year-over-year, and our subscription and other platform revenue, excluding legacy, grew 68% year-over-year,” said Sharat Sharan, co-founder and CEO of ON24. “The second quarter of 2021 was a transition quarter where we went from a ‘peak of Covid’ in Q2 2020 to a ’peak of vaccinations’ in Q2 2021 and we exited this quarter with a significantly improved quality of our customer base. The last year has accelerated the global enterprise awareness of our offerings and we are now serving a larger market than ever before. As our category leadership grows, our future is more exciting than ever before.”
Second Quarter 2021 Financial Highlights
- Revenue: Total revenue was $52.1 million, an increase of 43% year-over-year, or 47% year-over-year, excluding legacy.
- Subscription and Other Platform Revenue: Subscription and Other Platform Revenue, excluding legacy, was $44.4 million, an increase of 68% year-over-year.
- ARR: ARR increased 44% year-over-year to $164.1 million as of June 30, 2021.
- Net Loss Attributable to Common Stockholders: Net loss attributable to common stockholders was $2.5 million, or $(0.05) per diluted share, compared to net income attributable to common stockholders of $5.3 million, or $0.14 per diluted share in the second quarter of 2020.
- Non-GAAP Operating Income: Non-GAAP operating income was $2.5 million, compared to non-GAAP operating income of $7.3 million in the second quarter of 2020.
- Non-GAAP Net Income: Non-GAAP net income was $2.5 million, or $0.04 per diluted share, compared to a non-GAAP net income of $7.1 million, or $0.69 per diluted share in the second quarter of 2020.
- Cash Flow: Net cash provided by operating activities was $6.9 million, compared to $14.0 million provided in operating activities in the second quarter of 2020. Free cash flow was $5.7 million for the quarter, compared to $13.8 million in the second quarter of 2020.
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.
Second Quarter 2021 Industry Recognition and Innovation Highlights
Industry Recognition
- In June 2021, ON24 Elite was recognized as the top webinar software for Enterprises and Mid-Market companies by G2, one of the largest software marketplace and user review platforms.
- In addition, in July 2021, TrustRadius, another review site for business technology, named ON24 the best webinar software for Enterprises.
Customer Experience Innovation
- ON24 introduced its Hybrid Engagement solution, enabling customers to deliver unified experiences, where both physical and digital audiences can interact and engage with the same experience, at the same time. Virtual and physical attendees can view the same presentations, interact with the same digital content, participate in the same Q&A, polls, and network with breakouts. This enhances prospect engagement data, now spanning across both physical and digital attendees.
- With the addition of ON24 Breakouts, ON24 now offers five experiences products, including ON24 Elite, ON24 Virtual Conference, ON24 Engagement Hub, and ON24 Target. Breakouts enable attendees and presenters to network with each other virtually face-to-face, allowing sales teams to connect immediately with prospects and subject matters experts to engage directly with customers.
AI-Driven Personalization
- ON24 enhanced its ON24 Intelligence product and AI-Based personalization engine by expanding the first-party data displayed for each individual. Our customers are now able to view over 50+ data points over their prospect’s lifetime of engagement across live, always-on and personalized experiences and also integrate that data into key CRM and Marketing Automation platforms.
Financial Outlook
For the third quarter of 2021, the Company currently expects:
- Total revenue of $47.5 to $48.5 million.
- Non-GAAP operating loss of $(4.0) to $(3.0) million.
- Non-GAAP net loss per share of $(0.09) to $(0.07) using approximately 47.5 million basic and diluted shares outstanding.
For the full year 2021, the Company expects:
- Total revenue of $201.2 to $204.2 million.
- Non-GAAP operating loss of $(4.3) to $(1.3) million.
- Non-GAAP loss per share of $(0.13) to $(0.06), using approximately 44 million basic and 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) 248-8441, and international parties can access the call by dialing (323) 289-6581, using the conference ID 5561958.
A webcast 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.
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, non-GAAP net income (loss) and free cash flow in evaluating our operating performance. We define non-GAAP operating income as net (loss) income excluding, interest expense, other (income) expense, income tax and stock-based compensation. We define non-GAAP net income (loss) as net income (loss) excluding cumulative preferred dividends allocated to preferred shareholders and stock-based compensation. 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) and non-GAAP net income (loss) 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) and non-GAAP net income (loss) 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.
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,” “convert,” “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 size of our market opportunity, impact of COVID-19 and vaccines on the way people do business, 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 sustain our recent revenue growth rate, attract new customers and expand sales to existing customers; fluctuation in our performance, our history of net losses and expected increases in our expenses; competition in our markets and any decline in demand for our solutions; our ability to expand our sales and marketing capabilities and otherwise manage our growth; the impact of the COVID-19 pandemic; 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.
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