ON24 Announces Second Quarter 2024 Financial Results

  • Achieved Total Revenue of $37.3 million
  • Exceeded profitability targets for 5th consecutive quarter
  • Generated positive free cash flow for 2nd consecutive quarter
  • Drove sequential improvement in gross retention
  • Experienced 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 second quarter ended June 30, 2024.

“I am pleased with our Q2 results, as we exceeded guidance on the top and bottom line and delivered positive free cash flow. I am encouraged by another quarter of improvement in gross retention, which is trending much better than the average rates we have seen for each of the past three years,” said Sharat Sharan, co-founder and CEO of ON24. “Continued momentum of our next generation platform drove our AI-powered ACE ARR to the high teens as a percentage of growth ARR. We remain focused on driving profitable growth and establishing ourselves as the AI platform for intelligent digital engagement.”

Second Quarter 2024 Financial Highlights

  • Revenue:
    • Revenue from our Core Platform, including services, was $36.5 million.
    • Total revenue was $37.3 million.
  • ARR:
    • Core Platform ARR of $131.0 million as of June 30, 2024.
    • Total ARR of $133.7 million as of June 30, 2024.
  • GAAP Operating Loss was $13.1 million, compared to GAAP operating loss of $15.8 million in the second quarter of 2023.
  • Non-GAAP Operating Loss was $0.3 million, compared to non-GAAP operating loss of $0.9 million in the second quarter of 2023.
  • GAAP Net Loss was $11.2 million, or $(0.27) per diluted share, compared to GAAP net loss of $12.8 million, or $(0.28) per diluted share in the second quarter of 2023.
  • Non-GAAP Net Income was $1.5 million, or $0.03 per diluted share, compared to non-GAAP net income of $2.1 million, or $0.04 per diluted share in the second quarter of 2023.
  • Adjusted EBITDA was $0.8 million.
  • Cash Flow: Net cash provided by operating activities was $1.4 million, compared to $4.3 million used in operating activities in the second quarter of 2023. Free cash flow was $0.9 million for the quarter, compared to $(4.9) million in the second quarter of 2023.
  • Cash, Cash Equivalents and Marketable Securities totaled $193.8 million as of June 30, 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:

  • Drove sequential and YoY Core ARR growth in Q2 in life sciences and financial services verticals.
  • Thousands of ON24 customers and prospects gathered for annual virtual user conference, The ON24 Experience, on June 11 – 14, where industry-leading enterprises, including Autodesk, Guardian, SAP and UCB, were named winners of the 2024 ON24 Digital Engagement Excellence Awards for delivering exceptional customer experiences and significant revenue impact.

Financial Outlook

For the third quarter of 2024, ON24 expects:

  • Core Platform Revenue, including services, to be in the range of $34.2 million to $35.2 million.
  • Total revenue of $35.0 million to $36.0 million.
  • Non-GAAP operating loss of $2.3 million to $1.3 million.
  • Non-GAAP net loss per share of $(0.01) to non-GAAP net income per share of $0.01 using approximately 42.0 million basic and diluted shares outstanding and 46.0 million diluted shares outstanding, respectively.
    • Restructuring charge of $0.4 million to $0.7 million, excluded from the non-GAAP amounts above.

For the full year 2024, ON24 now expects:

  • Core Platform Revenue, including services, to be in the range of $141.7 million to $144.5 million.
  • Total revenue of $145.0 million to $147.8 million.
  • Non-GAAP operating loss of $4.5 million to $3.0 million.
  • Non-GAAP net income per share of $0.05 to $0.08 per share using approximately 45.5 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 877-497-9071 or 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.

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.

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, provision for income taxes, stock-based compensation, amortization of acquired intangible assets, shareholder activism related costs, restructuring costs, impairment 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 for underutilized real estate, 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 (Unaudited)

(in thousands)

 

 

June 30, 2024

 

December 31, 2023

Assets

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

15,485

 

 

$

53,209

 

Marketable securities

 

178,317

 

 

 

145,497

 

Accounts receivable, net

 

24,025

 

 

 

37,939

 

Deferred contract acquisition costs, current

 

11,932

 

 

 

12,428

 

Prepaid expenses and other current assets

 

6,246

 

 

 

4,714

 

Total current assets

 

236,005

 

 

 

253,787

 

Property and equipment, net

 

5,344

 

 

 

5,371

 

Operating right-of-use assets

 

2,269

 

 

 

2,981

 

Intangible asset, net

 

984

 

 

 

1,305

 

Deferred contract acquisition costs, non-current

 

13,391

 

 

 

15,756

 

Other long-term assets

 

1,019

 

 

 

1,102

 

Total assets

$

259,012

 

 

$

280,302

 

Liabilities and Stockholders’ Equity

 

 

 

Current liabilities

 

 

 

Accounts payable

$

2,014

 

 

$

1,914

 

Accrued and other current liabilities

 

14,627

 

 

 

16,907

 

Deferred revenue

 

66,007

 

 

 

74,358

 

Finance lease liabilities, current

 

 

 

 

127

 

Operating lease liabilities, current

 

2,856

 

 

 

2,779

 

Total current liabilities

 

85,504

 

 

 

96,085

 

Operating lease liabilities, non-current

 

1,101

 

 

 

2,483

 

Other long-term liabilities

 

1,560

 

 

 

1,517

 

Total liabilities

 

88,165

 

 

 

100,085

 

Stockholders’ equity

 

 

 

Common stock

 

4

 

 

 

4

 

Additional paid-in capital

 

498,574

 

 

 

485,291

 

Accumulated deficit

 

(327,391

)

 

 

(305,513

)

Accumulated other comprehensive income (loss)

 

(340

)

 

 

435

 

Total stockholders’ equity

 

170,847

 

 

 

180,217

 

Total liabilities and stockholders’ equity

$

259,012

 

 

$

280,302

 

 

 

 

 

ON24, INC.

Condensed Consolidated Statements of Operations (Unaudited)

(in thousands, except share and per share data)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Revenue:

 

 

 

 

 

 

 

Subscription and other platform

$

34,147

 

 

$

38,336

 

 

$

68,976

 

 

$

77,700

 

Professional services

 

3,202

 

 

 

3,750

 

 

 

6,100

 

 

 

7,449

 

Total revenue

 

37,349

 

 

 

42,086

 

 

 

75,076

 

 

 

85,149

 

Cost of revenue:

 

 

 

 

 

 

 

Subscription and other platform(1)(4)

 

7,032

 

 

 

9,066

 

 

 

14,378

 

 

 

18,955

 

Professional services(1)(4)

 

2,506

 

 

 

3,134

 

 

 

4,942

 

 

 

6,451

 

Total cost of revenue

 

9,538

 

 

 

12,200

 

 

 

19,320

 

 

 

25,406

 

Gross profit

 

27,811

 

 

 

29,886

 

 

 

55,756

 

 

 

59,743

 

Operating expenses:

 

 

 

 

 

 

 

Sales and marketing(1)(4)

 

19,457

 

 

 

22,628

 

 

 

39,531

 

 

 

47,045

 

Research and development(1)(2)(4)

 

9,081

 

 

 

10,930

 

 

 

18,190

 

 

 

22,029

 

General and administrative(1)(3)(4)

 

12,332

 

 

 

12,105

 

 

 

23,568

 

 

 

26,383

 

Total operating expenses

 

40,870

 

 

 

45,663

 

 

 

81,289

 

 

 

95,457

 

Loss from operations

 

(13,059

)

 

 

(15,777

)

 

 

(25,533

)

 

 

(35,714

)

Interest expense

 

10

 

 

 

33

 

 

 

21

 

 

 

62

 

Other income, net

 

(2,305

)

 

 

(3,193

)

 

 

(4,582

)

 

 

(5,765

)

Loss before provision for income taxes

 

(10,764

)

 

 

(12,617

)

 

 

(20,972

)

 

 

(30,011

)

Provision for income taxes

 

411

 

 

 

230

 

 

 

906

 

 

 

426

 

Net loss

 

(11,175

)

 

 

(12,847

)

 

 

(21,878

)

 

 

(30,437

)

Net loss per share:

 

 

 

 

 

 

 

Basic and diluted

$

(0.27

)

 

$

(0.28

)

 

$

(0.53

)

 

$

(0.65

)

Weighted-average shares used in computing net loss per share:

 

 

 

 

 

 

 

Basic and diluted

 

41,991,996

 

 

 

45,866,022

 

 

 

41,652,834

 

 

 

46,581,527

 

(1)

Includes stock-based compensation as follows:

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2024

 

 

2023

 

 

2024

 

 

2023

Cost of revenue

 

 

 

 

 

 

 

Subscription and other platform

$

687

 

$

709

 

$

1,355

 

$

1,494

Professional services

 

129

 

 

144

 

 

250

 

 

296

Total cost of revenue

 

816

 

 

853

 

 

1,605

 

 

1,790

Sales and marketing

 

3,338

 

 

3,555

 

 

6,396

 

 

6,612

Research and development

 

2,246

 

 

2,363

 

 

4,374

 

 

4,384

General and administrative

 

5,676

 

 

4,834

 

 

10,038

 

 

8,940

Total stock-based compensation expense

$

12,076

 

$

11,605

 

$

22,413

 

$

21,726

 

 

 

 

 

 

 

 

(2)

Research and development expense includes amortization of acquired intangible asset of $138 thousand and $276 thousand for the three and six months ended June 30, 2024, respectively, and $135 thousand and $277 thousand for the three and six months ended June 30, 2023, respectively, in connection with the Vibbio acquisition in April 2022.

(3)

General and administrative expense includes fees related to shareholder activism of $210 thousand and $2,656 thousand for the three and six months ended June 30, 2023, respectively. We did not incur such fees in the three and six months ended June 30, 2024.

(4)

The results of operations for the three and six months ended June 30, 2024 and 2023 includes restructuring costs, which primarily represent severance and related expense due to restructuring activities, and impairment charge on our headquarters’ lease, as follows:

Three Months Ended June 30, 2024

 

Six Months Ended June 30, 2024

 

Severance

and related

Charges

 

Lease

Impairment

Charge

 

Total

 

Severance

and related

Charges

 

Lease

Impairment

Charge

 

Total

Cost of revenue

 

 

 

 

 

 

 

 

 

 

 

Subscription and other platform

$

21

 

$

 

$

21

 

$

213

 

$

 

$

213

Professional services

 

1

 

 

 

 

1

 

 

13

 

 

 

 

13

Total cost of revenue

 

22

 

 

 

 

22

 

 

226

 

 

 

 

226

Sales and marketing

 

330

 

 

 

 

330

 

 

1,005

 

 

 

 

1,005

Research and development

 

 

 

 

 

 

 

112

 

 

 

 

112

General and administrative

 

149

 

 

 

 

149

 

 

339

 

 

 

 

339

Total restructuring costs

$

501

 

$

 

$

501

 

$

1,682

 

$

 

$

1,682

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 2023

 

Six Months Ended June 30, 2023

 

Severance

and related

Charges

 

Lease

Impairment

Charge

 

Total

 

Severance

and related

Charges

 

Lease

Impairment

Charge

 

Total

Cost of revenue

 

 

 

 

 

 

 

 

 

 

 

Subscription and other platform

$

720

 

$

89

 

$

809

 

$

1,505

 

$

89

 

$

1,594

Professional services

 

50

 

 

101

 

 

151

 

 

104

 

 

101

 

 

205

Total cost of revenue

 

770

 

 

190

 

 

960

 

 

1,609

 

 

190

 

 

1,799

Sales and marketing

 

597

 

 

208

 

 

805

 

 

1,808

 

 

208

 

 

2,016

Research and development

 

340

 

 

472

 

 

812

 

 

1,113

 

 

472

 

 

1,585

General and administrative

 

52

 

 

339

 

 

391

 

 

282

 

 

339

 

 

621

Total restructuring costs

$

1,759

 

$

1,209

 

$

2,968

 

$

4,812

 

$

1,209

 

$

6,021

 

 

 

 

 

 

 

 

 

 

 

 

ON24, INC.

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In thousands)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Cash flows from operating activities:

 

 

 

 

 

 

 

Net loss

$

(11,175

)

 

$

(12,847

)

 

$

(21,878

)

 

$

(30,437

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

Depreciation and amortization

 

1,221

 

 

 

1,375

 

 

 

2,454

 

 

 

2,792

 

Stock-based compensation expense

 

12,076

 

 

 

11,605

 

 

 

22,413

 

 

 

21,726

 

Amortization of deferred contract acquisition cost

 

3,752

 

 

 

3,951

 

 

 

7,595

 

 

 

7,844

 

Provision for allowance for doubtful accounts and billing reserves

 

576

 

 

 

798

 

 

 

1,201

 

 

 

1,699

 

Non-cash lease expense

 

388

 

 

 

444

 

 

 

779

 

 

 

941

 

Accretion of marketable securities

 

(1,428

)

 

 

(1,885

)

 

 

(2,935

)

 

 

(3,711

)

Lease impairment charge

 

 

 

 

1,209

 

 

 

 

 

 

1,209

 

Other

 

35

 

 

 

28

 

 

 

70

 

 

 

156

 

Change in operating assets and liabilities:

 

 

 

 

 

 

 

Accounts receivable

 

3,922

 

 

 

1,339

 

 

 

12,713

 

 

 

10,744

 

Deferred contract acquisition cost

 

(2,305

)

 

 

(2,717

)

 

 

(4,734

)

 

 

(6,263

)

Prepaid expenses and other assets

 

635

 

 

 

1,221

 

 

 

(1,743

)

 

 

(848

)

Accounts payable

 

478

 

 

 

882

 

 

 

344

 

 

 

(471

)

Accrued liabilities

 

1,014

 

 

 

(1,658

)

 

 

(2,888

)

 

 

(2,747

)

Deferred revenue

 

(7,110

)

 

 

(6,707

)

 

 

(8,351

)

 

 

(8,994

)

Other liabilities

 

(691

)

 

 

(1,354

)

 

 

(1,514

)

 

 

(2,123

)

Net cash provided by (used in) operating activities

 

1,388

 

 

 

(4,316

)

 

 

3,526

 

 

 

(8,483

)

Cash flows from investing activities:

 

 

 

 

 

 

 

Purchase of property and equipment

 

(490

)

 

 

(554

)

 

 

(1,528

)

 

 

(732

)

Purchase of marketable securities

 

(52,328

)

 

 

(76,234

)

 

 

(126,421

)

 

 

(195,825

)

Proceeds from maturities of marketable securities

 

53,127

 

 

 

77,260

 

 

 

91,648

 

 

 

276,470

 

Proceeds from sale of marketable securities

 

 

 

 

 

 

 

4,360

 

 

 

9,321

 

Net cash provided by (used in) investing activities

 

309

 

 

 

472

 

 

 

(31,941

)

 

 

89,234

 

Cash flows from financing activities:

 

 

 

 

 

 

 

Proceeds from exercise of stock options

 

241

 

 

 

629

 

 

 

994

 

 

 

884

 

Proceeds from issuance of common stock under ESPP

 

367

 

 

 

546

 

 

 

367

 

 

 

546

 

Payment for repurchase of common stock

 

(5,006

)

 

 

(22,586

)

 

 

(10,276

)

 

 

(33,306

)

Payment of cash dividend

 

 

 

 

(49,872

)

 

 

 

 

 

(49,872

)

Repayment of equipment loans

 

(36

)

 

 

(60

)

 

 

(72

)

 

 

(131

)

Repayment of finance lease obligations

 

(44

)

 

 

(531

)

 

 

(127

)

 

 

(942

)

Net cash used in financing activities

 

(4,478

)

 

 

(71,874

)

 

 

(9,114

)

 

 

(82,821

)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

(24

)

 

 

99

 

 

 

(197

)

 

 

229

 

Net decrease in cash, cash equivalents and restricted cash

 

(2,805

)

 

 

(75,619

)

 

 

(37,726

)

 

 

(1,841

)

Cash, cash equivalents and restricted cash, beginning of period

 

18,377

 

 

 

100,947

 

 

 

53,298

 

 

 

27,169

 

Cash, cash equivalents and restricted cash, end of period

$

15,572

 

 

$

25,328

 

 

$

15,572

 

 

$

25,328

 

Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets:

 

 

 

 

 

 

 

Cash and cash equivalents

$

15,485

 

 

$

25,158

 

 

$

15,485

 

 

$

25,158

 

Restricted cash included in other assets, non-current

 

87

 

 

 

170

 

 

 

87

 

 

 

170

 

Total cash, cash equivalent and restricted cash

$

15,572

 

 

$

25,328

 

 

$

15,572

 

 

$

25,328

 

 

 

 

 

 

 

 

 

ON24, INC.

Reconciliation of GAAP to Non-GAAP Results (Unaudited)

(in thousands, except share and per share data)

 

Reconciliation of gross profit and gross margin

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

GAAP gross profit

$

27,811

 

 

$

29,886

 

 

$

55,756

 

 

$

59,743

 

Add:

 

 

 

 

 

 

 

Stock-based compensation

 

816

 

 

 

853

 

 

 

1,605

 

 

 

1,790

 

Restructuring costs

 

22

 

 

 

770

 

 

 

226

 

 

 

1,609

 

Impairment charge

 

 

 

 

190

 

 

 

 

 

 

190

 

Non-GAAP gross profit

$

28,649

 

 

$

31,699

 

 

$

57,587

 

 

$

63,332

 

GAAP gross margin

 

74

%

 

 

71

%

 

 

74

%

 

 

70

%

Non-GAAP gross margin

 

77

%

 

 

75

%

 

 

77

%

 

 

74

%

 

 

 

 

 

 

 

 

Reconciliation of operating expenses

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

GAAP sales and marketing

$

19,457

 

 

$

22,628

 

 

$

39,531

 

 

$

47,045

 

Less:

 

 

 

 

 

 

 

Stock-based compensation

 

(3,338

)

 

 

(3,555

)

 

 

(6,396

)

 

 

(6,612

)

Restructuring costs

 

(330

)

 

 

(597

)

 

 

(1,005

)

 

 

(1,808

)

Impairment charge

 

 

 

 

(208

)

 

 

 

 

 

(208

)

Non-GAAP sales and marketing

$

15,789

 

 

$

18,268

 

 

$

32,130

 

 

$

38,417

 

 

 

 

 

 

 

 

 

GAAP research and development

$

9,081

 

 

$

10,930

 

 

$

18,190

 

 

$

22,029

 

Less:

 

 

 

 

 

 

 

Stock-based compensation

 

(2,246

)

 

 

(2,363

)

 

 

(4,374

)

 

 

(4,384

)

Restructuring costs

 

 

 

 

(340

)

 

 

(112

)

 

 

(1,113

)

Impairment charge

 

 

 

 

(472

)

 

 

 

 

 

(472

)

Amortization of acquired intangible asset

 

(138

)

 

 

(135

)

 

 

(276

)

 

 

(277

)

Non-GAAP research and development

$

6,697

 

 

$

7,620

 

 

$

13,428

 

 

$

15,783

 

 

 

 

 

 

 

 

 

GAAP general and administrative

$

12,332

 

 

$

12,105

 

 

$

23,568

 

 

$

26,383

 

Less:

 

 

 

 

 

 

 

Stock-based compensation

 

(5,676

)

 

 

(4,834

)

 

 

(10,038

)

 

 

(8,940

)

Restructuring costs

 

(149

)

 

 

(52

)

 

 

(339

)

 

 

(282

)

Impairment charge

 

 

 

 

(339

)

 

 

 

 

 

(339

)

Fees related to shareholder activism

 

 

 

 

(210

)

 

 

 

 

 

(2,656

)

Non-GAAP general and administrative

$

6,507

 

 

$

6,670

 

 

$

13,191

 

 

$

14,166

 

 

 

 

 

 

 

 

 

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 June 30,

 

Six Months Ended June 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Net loss

$

(11,175

)

 

$

(12,847

)

 

$

(21,878

)

 

$

(30,437

)

Add:

 

 

 

 

 

 

 

Interest expense

 

10

 

 

 

33

 

 

 

21

 

 

 

62

 

Other income, net

 

(2,305

)

 

 

(3,193

)

 

 

(4,582

)

 

 

(5,765

)

Provision for income taxes

 

411

 

 

 

230

 

 

 

906

 

 

 

426

 

Stock-based compensation

 

12,076

 

 

 

11,605

 

 

 

22,413

 

 

 

21,726

 

Amortization of acquired intangible asset

 

138

 

 

 

135

 

 

 

276

 

 

 

277

 

Restructuring costs

 

501

 

 

 

1,759

 

 

 

1,682

 

 

 

4,812

 

Impairment charge

 

 

 

 

1,209

 

 

 

 

 

 

1,209

 

Fees related to shareholder activism

 

 

 

 

210

 

 

 

 

 

 

2,656

 

Non-GAAP operating loss

$

(344

)

 

$

(859

)

 

$

(1,162

)

 

$

(5,034

)

 

 

 

 

 

 

 

 

Reconciliation of net loss to Adjusted EBITDA

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Net loss

$

(11,175

)

 

$

(12,847

)

 

$

(21,878

)

 

$

(30,437

)

Add:

 

 

 

 

 

 

 

Interest expense

 

10

 

 

 

33

 

 

 

21

 

 

 

62

 

Other income, net

 

(2,305

)

 

 

(3,193

)

 

 

(4,582

)

 

 

(5,765

)

Provision for income taxes

 

411

 

 

 

230

 

 

 

906

 

 

 

426

 

Depreciation and amortization

 

1,083

 

 

 

1,240

 

 

 

2,178

 

 

 

2,515

 

Amortization of acquired intangible asset

 

138

 

 

 

135

 

 

 

276

 

 

 

277

 

Amortization of cloud implementation costs

 

35

 

 

 

37

 

 

 

71

 

 

 

74

 

Stock-based compensation

 

12,076

 

 

 

11,605

 

 

 

22,413

 

 

 

21,726

 

Restructuring costs

 

501

 

 

 

1,759

 

 

 

1,682

 

 

 

4,812

 

Impairment charge

 

 

 

 

1,209

 

 

 

 

 

 

1,209

 

Fees related to shareholder activism

 

 

 

 

210

 

 

 

 

 

 

2,656

 

Adjusted EBITDA

$

774

 

 

$

418

 

 

$

1,087

 

 

$

(2,445

)

 

 

 

 

 

 

 

 

Reconciliation of net loss to non-GAAP net income

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Net loss

$

(11,175

)

 

$

(12,847

)

 

$

(21,878

)

 

$

(30,437

)

Add:

 

 

 

 

 

 

 

Stock-based compensation

 

12,076

 

 

 

11,605

 

 

 

22,413

 

 

 

21,726

 

Amortization of acquired intangible asset

 

138

 

 

 

135

 

 

 

276

 

 

 

277

 

Restructuring costs

 

501

 

 

 

1,759

 

 

 

1,682

 

 

 

4,812

 

Impairment charge

 

 

 

 

1,209

 

 

 

 

 

 

1,209

 

Fees related to shareholder activism

 

 

 

 

210

 

 

 

 

 

 

2,656

 

Non-GAAP net income

$

1,540

 

 

$

2,071

 

 

$

2,493

 

 

$

243

 

 

 

 

 

 

 

 

 

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 June 30,

 

Six Months Ended June 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

GAAP basic and diluted net loss per share:

 

 

 

 

 

 

 

Net loss

$

(11,175

)

 

$

(12,847

)

 

$

(21,878

)

 

$

(30,437

)

Weighted average common stock outstanding, basic and diluted

 

41,991,996

 

 

 

45,866,022

 

 

 

41,652,834

 

 

 

46,581,527

 

Net loss per share, basic and diluted

$

(0.27

)

 

$

(0.28

)

 

$

(0.53

)

 

$

(0.65

)

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Non-GAAP basic and diluted net income per share:

 

 

 

 

 

 

 

Net loss

$

(11,175

)

 

$

(12,847

)

 

$

(21,878

)

 

$

(30,437

)

Add:

 

 

 

 

 

 

 

Stock-based compensation

 

12,076

 

 

 

11,605

 

 

 

22,413

 

 

 

21,726

 

Amortization of acquired intangible asset

 

138

 

 

 

135

 

 

 

276

 

 

 

277

 

Restructuring costs

 

501

 

 

 

1,759

 

 

 

1,682

 

 

 

4,812

 

Impairment charge

 

 

 

 

1,209

 

 

 

 

 

 

1,209

 

Fees related to shareholder activism

 

 

 

 

210

 

 

 

 

 

 

2,656

 

Non-GAAP net income

$

1,540

 

 

$

2,071

 

 

$

2,493

 

 

$

243

 

Non-GAAP weighted-average common stock outstanding

 

 

 

 

 

 

 

Basic

 

41,991,996

 

 

 

45,866,022

 

 

 

41,652,834

 

 

 

46,581,527

 

Diluted

 

45,802,883

 

 

 

50,716,390

 

 

 

45,713,706

 

 

 

51,120,544

 

Non-GAAP net income per share of common stock:

 

 

 

 

 

 

 

Basic

$

0.04

 

 

$

0.05

 

 

$

0.06

 

 

$

0.01

 

Diluted

$

0.03

 

 

$

0.04

 

 

$

0.05

 

 

$

 

 

 

 

 

 

 

 

 

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 June 30,

 

Six Months Ended June 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Net cash provided by (used in) operating activities:

$

1,388

 

 

$

(4,316

)

 

$

3,526

 

 

$

(8,483

)

Less: Purchases of property and equipment

 

(490

)

 

 

(554

)

 

 

(1,528

)

 

 

(732

)

Free cash flow

$

898

 

 

$

(4,870

)

 

$

1,998

 

 

$

(9,215

)

 

 

 

 

 

 

 

 

ON24, INC.

Revenue

(in thousands)

(Unaudited)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2024

 

 

2023

 

 

2024

 

 

2023

Core Platform

 

 

 

 

 

 

 

Subscription and other platform

$

33,479

 

$

37,000

 

$

67,539

 

$

74,811

Professional services

 

3,006

 

 

3,460

 

 

5,761

 

 

6,855

Total core platform revenue

$

36,485

 

$

40,460

 

$

73,300

 

$

81,666

 

 

 

 

 

 

 

 

Virtual Conference

 

 

 

 

 

 

 

Subscription and other platform

$

668

 

$

1,336

 

$

1,437

 

$

2,889

Professional services

 

196

 

 

290

 

 

339

 

 

594

Total virtual conference revenue

$

864

 

$

1,626

 

$

1,776

 

$

3,483

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

 

Subscription and other platform

$

34,147

 

$

38,336

 

$

68,976

 

$

77,700

Professional services

 

3,202

 

 

3,750

 

 

6,100

 

 

7,449

Total revenue

$

37,349

 

$

42,086

 

$

75,076

 

$

85,149

 

 

 

 

 

 

 

 

 

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