In This Article:
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Total Revenue: $36.3 million for Q3 2024.
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Core Platform Revenue: $35.6 million, a 7% year-over-year decrease.
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Subscription and Other Platform Revenue: $33.9 million.
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Professional Services Revenue: $2.5 million, a 12% year-over-year decrease.
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Core Platform ARR: $129.7 million, a decrease of $1.37 million from Q2 2024.
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Total ARR: $132.2 million at the end of Q3 2024.
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Gross Margin: 77%, up 100 basis points from Q3 2023.
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Adjusted EBITDA Margin Improvement: Over 300 basis points year-to-date in 2024 compared to 2023.
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Free Cash Flow: Positive $0.1 million in Q3 2024.
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Net Income: $1.1 million or $0.02 per share.
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Cash and Equivalents: $188.8 million at the end of Q3 2024.
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Operating Loss: $0.8 million or a negative 2% operating margin.
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Sales and Marketing Expense: $15.9 million, representing 44% of total revenue.
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R&D Expense: $6.7 million, representing 18% of total revenue.
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G&A Expense: $6.2 million, representing 17% of total revenue.
Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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ON24 Inc (NYSE:ONTF) reported revenue, gross margins, adjusted EBITDA, and EPS all above guidance for Q3 2024.
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The company achieved its sixth consecutive quarter of adjusted EBITDA profitability and third consecutive quarter of positive free cash flow.
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AI-powered solutions are gaining traction, with AI-powered ARR reaching a new high as a percentage of growth ARR.
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ON24 Inc (NYSE:ONTF) has seen significant improvement in gross retention and net retention rates, with churn and downsells improving year over year.
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The company is experiencing customer win-backs, particularly from those who previously left for less effective solutions, indicating strong platform differentiation.
Negative Points
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Total ARR decreased by approximately 1% from Q2 2024, indicating ongoing challenges in stabilizing the business.
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Revenue from the core platform decreased by 7% year over year, reflecting pressure on marketing budgets.
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Despite improvements, ON24 Inc (NYSE:ONTF) still faces macroeconomic challenges and softness in marketing budgets.
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The company expects a sequential reduction of core ARR by 1% to 2% in Q4 2024, showing continued pressure on growth.
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ON24 Inc (NYSE:ONTF) has not yet returned to ARR growth, with further work needed to improve new business execution.
Q & A Highlights
Q: Can you provide more details on the customer win backs and the impact of AI on your platform? A: Sharat Sharan, CEO: We are seeing encouraging signs with customer win backs, particularly from those who left for collaboration tools and realized their mistake. For example, a large cybersecurity company returned to us after realizing the negative impact on their pipeline. Our AI-powered solutions are a significant draw, offering personalized experiences and actionable insights that competitors lack.