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ON24 (ONTF)
NYSE:ONTF
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ON24
(NYSE:ONTF)
51Neutral
Positive Factors
AI Initiatives
AI initiatives continue to play a key role in driving growth, as customers increasingly turn to the solution to enable enhanced personalization and content creation, ultimately boosting engagement.
Customer Retention
ON24 continues to win back customers that churned, with many returning to sign multiyear contracts.
Financial Performance
On24 posted a typical quarter with a moderate revenue beat and solid upside on profitability.
Negative Factors
Earnings Guidance
Initial FY25 guidance calls for revenue to decline 5.4% as net retention continues to stabilize from the 91% level reached in 2024.
Growth Challenges
The path to sustained growth remains unclear and may take several quarters to play out.
Market Competition
ON24 is a premium priced product in an area where marketing budgets are still tight and there are lower-cost, good-enough alternatives in the market.
ON24 (ONTF) vs. S&P 500 (SPY)
Market Cap
$209.93M
Dividend YieldN/A
Average Volume (3M)175.90K
Price to Earnings (P/E)―
Beta (1Y)1.13
Revenue Growth-9.55%
EPS Growth12.28%
CountryUS
Employees437
SectorTechnology
Sector Strength39
IndustrySoftware - Application
Share Statistics
EPS (TTM)-1.01
Shares Outstanding42,325,214
10 Day Avg. Volume139,315
30 Day Avg. Volume175,901
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.57
Price to Cash Flow (P/CF)58.90
P/FCF Ratio136.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$7.50Price Target Upside51.21% Upside
Rating ConsensusHold
Number of Analyst Covering4
ON24 Business Overview & Revenue Model
Company DescriptionON24, Inc. (NASDAQ: ONTF) is a leading cloud-based digital experience platform company that empowers businesses to create engaging, data-rich webinars, virtual events, and multimedia content experiences. Serving various sectors, including technology, healthcare, and finance, ON24's solutions enable organizations to effectively communicate and engage with their audiences, driving measurable business outcomes.
How the Company Makes MoneyON24 generates revenue primarily through subscriptions to its digital experience platform. The company offers a range of pricing plans based on the number of users, the features required, and the scale of the virtual events. These subscriptions typically involve multi-year agreements, providing ON24 with a recurring revenue stream. Additionally, ON24 may earn revenue from professional services offered to help clients optimize their use of the platform and from strategic partnerships that enhance the platform's capabilities and reach.
ON24 Financial Statement Overview
Summary
ON24 demonstrates a strong balance sheet with low leverage, but the company is struggling with profitability as reflected in its income statement. The improvement in cash flow is a positive development, though the company needs to address its revenue and profit decline to enhance financial stability and performance.Income Statement
ON24's revenue has been declining, with a notable decrease from 2023 to TTM (Trailing-Twelve-Months). The gross profit margin remains relatively stable but the net profit margin is negative due to sustained net losses. The company faces challenges in achieving EBIT and EBITDA profitability, indicating ongoing operational inefficiencies.45
Neutral
Balance Sheet
ON24 maintains a strong equity position with a low debt-to-equity ratio, indicating a conservative use of leverage. However, the return on equity is negative due to ongoing net losses. The equity ratio is robust, reflecting a strong asset base relative to liabilities.65
Positive
Cash Flow
The company has improved its free cash flow position recently, but the growth is from a low base. Operating cash flow has turned positive in the TTM, which is a positive sign, but the free cash flow to net income ratio remains weak due to persistent losses.50
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 148.08M | 163.71M | 190.87M | 203.61M | 156.94M | Gross Profit |
| 110.07M | 119.48M | 138.09M | 156.25M | 123.61M | EBIT |
| -50.66M | -54.14M | -59.58M | -23.59M | 21.84M | EBITDA |
| -36.66M | -45.34M | -49.69M | -19.48M | 24.89M | Net Income Common Stockholders |
| -42.16M | -51.79M | -58.21M | -24.26M | 20.75M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 182.74M | 198.71M | 328.12M | 382.56M | 61.24M | Total Assets |
| 250.95M | 280.30M | 425.47M | 480.49M | 156.72M | Total Debt |
| 3.39M | 5.39M | 9.33M | 3.99M | 28.09M | Net Debt |
| -11.54M | -47.82M | -17.66M | -160.95M | -30.16M | Total Liabilities |
| 91.54M | 100.08M | 117.51M | 125.40M | 146.52M | Stockholders Equity |
| 159.41M | 180.22M | 307.96M | 355.09M | 10.20M |
| Cash Flow | Free Cash Flow | |||
| 2.56M | -14.38M | -24.16M | 1.63M | 36.51M | Operating Cash Flow |
| 4.81M | -12.20M | -20.46M | 5.19M | 37.54M | Investing Cash Flow |
| -19.45M | 162.31M | -88.98M | -219.19M | 970.00K | Financing Cash Flow |
| -23.27M | -124.18M | -28.62M | 320.51M | 804.00K |
ON24 Technical Analysis
Negative
4.96
Price Trends
6.07
Negative
6.31
Negative
6.23
Negative
Market Momentum
-0.20
Positive
33.26
Neutral
17.75
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ONTF, the sentiment is Negative. The current price of 4.96 is below the 20-day moving average (MA) of 5.50, below the 50-day MA of 6.07, and below the 200-day MA of 6.23, indicating a bearish trend. The MACD of -0.20 indicates Positive momentum. The RSI at 33.26 is Neutral, neither overbought nor oversold. The STOCH value of 17.75 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ONTF.
ON24 Risk Analysis
ON24 disclosed 53 risk factors in its most recent earnings report. ON24 reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
ON24 Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $2.77T | 30.05 | 34.29% | 0.85% | 15.04% | 12.38% | |
77 Outperform | $22.36B | 22.87 | 11.92% | ― | 3.05% | 55.96% | |
75 Outperform | $156.52B | 24.19 | 47.28% | ― | 10.65% | 44.84% | |
74 Outperform | $245.86B | 27.08 | 20.02% | 2.79% | -5.34% | -30.57% | |
63 Neutral | $5.18B | 20.41 | -39.97% | ― | 2.18% | 5.77% | |
57 Neutral | $20.94B | 10.43 | -13.41% | 2.52% | 4.53% | -23.34% | |
51 Neutral | $209.93M | ― | -24.82% | ― | -9.55% | 12.28% |
* Technology Sector Average
Performance Comparison
ONTF
ON24
4.96
-1.99
-28.63%
ADBE
Adobe
367.25
-117.87
-24.30%
CSCO
Cisco Systems
54.54
7.41
15.72%
MSFT
Microsoft
373.11
-49.19
-11.65%
ETSY
Etsy
44.42
-20.56
-31.64%
ZM
Zoom Video Communications
73.25
10.31
16.38%
ON24 Earnings Call Summary
Earnings Call Date: Feb 25, 2025 | % Change Since: -17.88% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a mix of positive developments and challenges. ON24 has seen significant success with its AI-powered ACE platform, improved retention rates, and strong performance in regulated industries. These achievements suggest a positive trajectory toward growth and profitability. However, there are notable challenges, such as the decrease in ARR and revenue decline, alongside significant customer downsells. While there is a foundation for growth in 2025, these challenges indicate caution.Highlights
AI-Powered ACE Platform Success
The AI-powered ACE platform launched in January 2024 accounted for over 20% of growth ARR bookings. The number of customers using and paying for ACE grew each quarter of 2024, crossing double-digits as a percentage of the customer base.
Improvement in Retention Rates
Gross retention for 2024 was at its highest level in the last three years, and net retention for the Enterprise business improved to 91%, showing a mid-single-digit improvement over 2023.
Positive Financial Metrics
Non-GAAP gross margin improved from 75% in 2023 to 77% in 2024. Adjusted EBITDA margin improved by almost 200 basis points, and free cash flow for 2024 was positive $2.6 million compared to negative $14.4 million in 2023.
Strong Performance in Regulated Industries
Continued strength in regulated verticals like life sciences and financial services was noted, with significant customer wins and expansions in these areas.
Customer Base and Multi-Product Adoption
The percentage of customers with two or more products reached an all-time high at close to 40%. The ARR from multi-year deals increased to 51%.
Lowlights
Decrease in ARR
Ending ARR related to the core platform totaled $127.3 million, a decrease of approximately $2.3 million compared to Q3 2024.
Revenue Decline
Revenue from the core platform, including services, in Q4 of 2024 was $36.0 million, representing a decrease of 6% year-over-year.
Significant Downsells
Two significant customer downsells were noted, which adjusted the scope of their work with ON24 for business reasons.
Company Guidance
During the ON24 Fourth Quarter 2024 Earnings Conference Call, the company provided guidance for the first quarter and full fiscal year 2025, emphasizing key financial metrics and strategic priorities. The company aims to return to ARR growth in 2025, with ending core ARR expected to increase by 1% to 2% compared to 2024 levels. In Q1, core platform revenue is projected between $33.4 million and $33.9 million, with total revenue ranging from $34 million to $34.5 million. The company plans to invest in AI innovation and maintain a disciplined approach to expenses, targeting an annual core platform revenue of $136.3 million to $139.3 million and total revenue of $138.6 million to $141.6 million. Gross margins are expected to be around 76%, with non-GAAP operating losses between $5.5 million and $3.5 million for the year. ON24 is committed to achieving positive adjusted EBITDA and non-GAAP EPS profitability for 2025, despite a seasonally softer Q1, and maintains a long-term goal of double-digit top-line revenue growth and EBITDA margins.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.