ONTF

ON24 INC

Technology | Micro Cap

-$0.14

EPS Forecast

$36.66

Revenue Forecast

The company already released most recent quarter's earnings. We will publish our AI's next quarter's forecast around 2024-12-31
EX-99.1 2 ontf-2023q1exx991.htm EX-99.1 Document
Exhibit 99.1
on24logo.jpg

ON24 Announces First Quarter 2023 Financial Results 

•On track to achieve Q2 2023 profitability target
•ARR of $149.2 million on our Core Platform
•First quarter total revenue of $43.1 million
•Expanded capital return program to $125 million; cash dividend of $1.09 per share
•Added three new board members: Cynthia Paul, Ron Mitchell and Teresa Anania
SAN FRANCISCO--(BUSINESS WIRE)--ON24 (NYSE: ONTF), a leading sales and marketing platform for B2B digital engagement, today announced financial results for the first quarter ended March 31, 2023.
“I am pleased with our first quarter results and the progress we have made accelerating our path to profitability. We are on track to reach break-even non-GAAP EPS by Q2 and are now targeting break-even non-GAAP EBITDA by Q4 2023, with continued improvement in the quarters ahead,” said Sharat Sharan, co-founder and CEO of ON24. “While many marketing budgets are facing temporary economic pressure, resulting in greater deal scrutiny and softness in our key customer verticals which has impacted our near-term top-line, we believe we are well positioned to capture market share and are confident in our ability to deliver profitable growth.”
First Quarter 2023 Financial Highlights
•Core Platform ARR of $149.2 million as of March 31, 2023, a decrease of 4% year-over-year.
•Total ARR of $155.6 million as of March 31, 2023, a decrease of 7% year-over-year.
•Revenue:
◦Revenue from our Core Platform, including services, was $41.2 million, a decrease of 7% year-over-year.
◦Total revenue was $43.1 million, a decrease of 11% year-over-year.
•GAAP Operating Loss was $19.9 million, compared to GAAP operating loss of $15.2 million in the first quarter of 2022.
•Non-GAAP Operating Loss was $4.2 million, compared to non-GAAP operating loss of $5.7 million in the first quarter of 2022.
•GAAP Net Loss was $17.6 million, or $(0.37) per diluted share, compared to GAAP net loss of $15.5 million, or $(0.32) per diluted share in the first quarter of 2022.
•Non-GAAP Net Loss was $1.8 million, or $(0.04) per diluted share, compared to a non-GAAP net loss of $6.0 million, or $(0.13) per diluted share in the first quarter of 2022.
•Cash Flow: Net cash used in operating activities was $4.2 million, compared to $6.8 million used in operating activities in the first quarter of 2022. Free cash flow was negative $4.3 million for the quarter, compared to negative $7.8 million in the first quarter of 2022.

•Cash, Cash Equivalents and Marketable Securities totaled $315.7 million as of March 31, 2023.
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.









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Recent Business Highlights:
•Strong enterprise customer tenure with our top 25 customers expanding Core Platform ARR at an aggregate rate of over 5X over 5 years.
•Continued adoption of multiple products with Q1 2023 ASP for new customers increasing YoY to its highest level in the last 4 quarters.
•Introduced two key generative AI capabilities, Smart Text for automated content creation and Key Moments for enhanced reporting, to help our customers improve revenue results with less resources.
•Achieved industry recognition as a differentiated digital engagement platform based on excellent customer satisfaction ratings, earning the third consecutive “Top-Rated Award” by TrustRadius and winning the “Appealie Awards” that represents excellence in customer success for the marketing category.
•Announced that the annual ON24 global user conference, The ON24 Experience 2023, will be held virtually on June 13 - 15, where our latest platform innovations and customer success stories will be showcased.
Financial Outlook
For the second quarter of 2023, ON24 expects:
•Core Platform Revenue, including services, to be in the range of $39.5 million to $40.5 million.
•Total revenue of $41.1 million to $42.1 million.
•Non-GAAP operating loss of $2.4 million to $1.8 million.
•Non-GAAP net income per share of $0.00 per share, or break-even EPS, using approximately 50.5 million diluted shares outstanding.
◦Restructuring charge of $1.5 million to $2.3 million, excluded from the non-GAAP amounts above.
◦Charge for underutilized real estate of $1.3 million to $1.5 million, excluded from the Non-GAAP amounts above.
For the full year 2023, ON24 now expects:
•Core Platform Revenue, including services, to be in the range of $156.5 million to $159.5 million.
•Total revenue of $162.0 million to $165.0 million.
•Non-GAAP operating loss of $10.5 million to $8.0 million.
•Non-GAAP net loss per share of $(0.07) to net income of $0.00 per share using approximately 45.1 million basic and diluted shares outstanding and 49.7 million diluted shares outstanding, respectively.
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 (877) 497-9071 or +1 (201) 689-8727.
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.









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Definitions of Certain Key Business Metrics
•Core Platform: The ON24 Core Platform products include:
•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.
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) 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 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.









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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 execution of our capital return program, the size of our market opportunity, the success of our new products and capabilities, the impact of the COVID-19 pandemic 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 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 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.
About ON24
ON24 is on a mission to re-imagine how companies engage, understand and build relationships with their audience in a digital world. Through our leading sales and marketing platform for digital engagement, businesses use our portfolio of webinar, virtual event and content experiences to drive engagement and generate first-party data, delivering revenue growth across the enterprise – from demand generation to customer success to partner enablement.
ON24 powers digital engagement for industry-leading customers worldwide, including 3 of the 5 largest global technology companies, 3 of the 6 largest US banks, 3 of the 5 largest global healthcare companies, and 3 of the 5 largest global industrial manufacturers, enabling organizations to reach millions of professionals a month for billions of engagement minutes per year with all the first-party data being captured, generated and integrated from one place. ON24 is headquartered in San Francisco with global offices in North America, EMEA, and APAC. For more information, visit www.ON24.com.

© 2023 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.









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ON24, INC.
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited)
 March 31, 2023December 31, 2022
Assets
Current assets
Cash and cash equivalents
$100,777 $26,996 
Marketable securities
214,908 301,125 
Accounts receivable, net
33,451 43,757 
Deferred contract acquisition costs, current
12,571 13,136 
Prepaid expenses and other current assets
8,431 6,281 
Total current assets
370,138 391,295 
Property and equipment, net
5,957 7,212 
Operating right-of-use assets5,119 5,606 
Intangible asset, net1,711 1,979 
Deferred contract acquisition costs, non-current
17,991 17,773 
Other long-term assets
1,486 1,608 
Total assets
$402,402 $425,473 
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable
$3,187 $4,611 
Accrued and other current liabilities
17,322 18,465 
Deferred revenue
81,166 83,453 
Finance lease liabilities, current1,245 1,554 
Operating lease liabilities, current2,644 2,648 
Total current liabilities
105,564 110,731 
Operating lease liabilities, non-current4,389 5,040 
Other long-term liabilities1,513 1,741 
Total liabilities
111,466 117,512 
Stockholders’ equity
Common stock
5 5 
Additional paid-in capital
562,151 562,555 
Accumulated deficit
(271,317)(253,727)
Accumulated other comprehensive income (loss)
97 (872)
Total stockholders’ equity
290,936 307,961 
Total liabilities and stockholders’ equity
$402,402 $425,473 









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ON24, INC.
Condensed Consolidated Statements of Operations
(in thousands, except share and per share data)
(Unaudited)
 Three Months Ended March 31,
 20232022
Revenue:
Subscription and other platform
$39,364 $43,477 
Professional services
3,699 5,015 
Total revenue
43,063 48,492 
Cost of revenue:
Subscription and other platform(1)(4)
9,889 9,602 
Professional services(1)(4)
3,317 3,342 
Total cost of revenue
13,206 12,944 
Gross profit
29,857 35,548 
Operating expenses:
Sales and marketing(1)(3)
24,417 29,193 
Research and development(1)(2)(4)
11,099 10,644 
General and administrative(1)(3)(4)
14,278 10,877 
Total operating expenses
49,794 50,714 
Loss from operations
(19,937)(15,166)
Interest expense
29 54 
Other (income) expense, net
(2,572)177 
Loss before provision for income taxes
(17,394)(15,397)
Provision for income taxes
196 82 
Net loss
(17,590)(15,479)
Net loss per share:
Basic and diluted
$(0.37)$(0.32)
Weighted-average shares used in computing net loss per share:
Basic and diluted
47,304,983 47,631,813 
(1)Includes stock-based compensation as follows:
Three Months Ended March 31,
20232022
Cost of revenue
Subscription and other platform
$785 $868 
Professional services
152 174 
Total cost of revenue
937 1,042 
Sales and marketing
3,057 3,692 
Research and development
2,021 1,981 
General and administrative
4,106 2,792 
Total stock-based compensation expense
$10,121 $9,507 
(2)Research and development expense for the three months ended March 31, 2023 includes amortization of acquired intangible asset of $142 thousand in connection with the Vibbio acquisition in April 2022.
(3)General and administrative expense for the three months ended March 31, 2023 includes fees related to shareholder activism of $2,446 thousand.
(4)Includes restructuring costs, which primarily represent severance and related expense due to restructuring activities, as follows.
Three Months Ended March 31,
20232022
Cost of revenue
Subscription and other platform
$785 $— 
Professional services
54 — 
Total cost of revenue
839 — 
Sales and marketing
1,211 — 
Research and development
773 — 
General and administrative
230 — 
Total restructuring costs
$3,053 $— 









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ON24, INC.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
 Three Months Ended March 31,
 20232022
Cash flows from operating activities:
Net loss
$(17,590)$(15,479)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization
1,417 1,207 
Stock-based compensation expense
10,121 9,507 
Amortization of deferred contract acquisition cost
3,893 4,067 
Provision for allowance for doubtful accounts and billing reserve
901 260 
Non-cash lease expense
497 519 
Other
(1,698)254 
Change in operating assets and liabilities:
Accounts receivable
9,405 3,779 
Deferred contract acquisition cost
(3,546)(3,627)
Prepaid expenses and other assets
(2,069)(3,555)
Accounts payable
(1,353)1,742 
Accrued liabilities
(1,089)(752)
Deferred revenue
(2,287)(4,098)
Other non-current liabilities
(769)(594)
Net cash used in operating activities
(4,167)(6,770)
Cash flows from investing activities:
Purchase of property and equipment
(178)(984)
Purchase of marketable securities
(119,591)(60,271)
Proceeds from maturities of marketable securities
199,210 14,708 
Proceeds from sale of marketable securities9,321 — 
Net cash provided by (used in) investing activities
88,762 (46,547)
Cash flows from financing activities:
Proceeds from exercise of stock options
255 1,157 
Payment of tax withholding obligations related to net share settlements on equity awards
— (1,756)
Payment for repurchase of common stock(10,720)(13,074)
Repayment of equipment loans(71)(66)
Repayment of finance lease obligations
(411)(417)
Net cash used in financing activities
(10,947)(14,156)
Effect of exchange rate changes on cash, cash equivalents and restricted cash
130 27 
Net increase (decrease) in cash, cash equivalents and restricted cash
73,778 (67,446)
Cash, cash equivalents and restricted cash, beginning of period
27,169 165,043 
Cash, cash equivalents and restricted cash, end of period
$100,947 $97,597 










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ON24, INC.
Reconciliation of 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,
 20232022
GAAP gross profit
$29,857$35,548
Add:
Stock-based compensation
9371,042
Restructuring costs839—
Non-GAAP gross profit
$31,633$36,590
GAAP gross margin
69 %73 %
Non-GAAP gross margin
73 %75 %

Reconciliation of operating expenses
 Three Months Ended March 31,
 20232022
GAAP sales and marketing
$24,417 $29,193 
Less:
Stock-based compensation
(3,057)(3,692)
Restructuring costs(1,211)— 
Non-GAAP sales and marketing
$20,149 $25,501 
GAAP research and development
$11,099 $10,644 
Less:
Stock-based compensation
(2,021)(1,981)
Restructuring costs(773)— 
Amortization of acquired intangible asset(142)— 
Non-GAAP research and development
$8,163 $8,663 
GAAP General and administrative
$14,278 $10,877 
Less:
Stock-based compensation
(4,106)(2,792)
Restructuring costs(230)— 
Fees related to shareholder activism(2,446)— 
Non-GAAP General and administrative
$7,496 $8,085 











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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,
 20232022
Net loss
$(17,590)$(15,479)
Add:
Interest expense
29 54 
Other (income) expense, net
(2,572)177 
Provision for income taxes196 82 
Stock-based compensation
10,121 9,507 
Amortization of acquired intangible asset142 — 
Restructuring costs3,053 — 
Fees related to shareholder activism2,446 — 
Non-GAAP operating (loss) income
$(4,175)$(5,659)

Reconciliation of net loss to non-GAAP net loss
Three Months Ended March 31,
20232022
Net loss
$(17,590)$(15,479)
Add:
Stock-based compensation
10,121 9,507 
Amortization of acquired intangible asset142 — 
Restructuring costs3,053 — 
Fees related to shareholder activism2,446 — 
Non-GAAP net loss
$(1,828)$(5,972)









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Reconciliation of GAAP to Non-GAAP basic and diluted net loss per share
Three Months Ended March 31,
20232022
GAAP basic and diluted net loss per share:
Net loss
$(17,590)$(15,479)
Weighted average common stock outstanding, basic and diluted
47,304,983 47,631,813 
Net loss per share, basic and diluted
$(0.37)$(0.32)
Three Months Ended March 31,
20232022
Non-GAAP basic and diluted net loss per share:
Net loss
$(17,590)$(15,479)
Add:
Stock-based compensation
10,121 9,507 
Amortization of acquired intangible asset142 — 
Restructuring costs3,053 — 
Fees related to shareholder activism2,446 — 
Non-GAAP net loss
$(1,828)$(5,972)
Non-GAAP weighted-average common stock outstanding, basic and diluted
47,304,983 47,631,813 
Non-GAAP net loss per share, basic and diluted
$(0.04)$(0.13)









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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,
20232022
Net cash used in operating activities:
$(4,167)$(6,770)
Less: Purchases of property and equipment
(178)(984)
Free cash flow
$(4,345)$(7,754)









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ON24, INC.
Revenue
(in thousands)
(Unaudited)

Three Months Ended March 31,
20232022
Core Platform
Subscription and other platform$37,811 $40,070 
Professional services3,395 4,437 
Total core platform revenue$41,206 $44,507 
Virtual Conference
Subscription and other platform$1,553 $3,407 
Professional services304 578 
Total virtual conference revenue$1,857 $3,985 
Revenue
Subscription and other platform $39,364 $43,477 
Professional services 3,699 5,015 
Total revenue $43,063 $48,492 










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Contacts
Media Contact:
Tessa Barron
press@on24.com

Investor Contact:
Lauren Sloane, The Blueshirt Group for ON24
investorrelations@on24.com









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