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01/11 17:34
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals strong financial performance with a 24% revenue growth and a record free cash flow margin of 26%. Product developments like CPM Express and SensibleAI show promising market reception and potential for scaling. Despite some macroeconomic uncertainties and vague responses on specific financial impacts, overall guidance remains optimistic with reiterated revenue growth. Positive customer feedback and expanding international business further support a positive sentiment. Given these factors, the stock is likely to experience a moderate positive movement in the near term.
Total Revenue $148 million, a 26% year-over-year increase, driven by strong subscription revenue growth.
Subscription Revenue $134 million, a 30% year-over-year increase, attributed to SaaS conversions and customer adoption of version 9 of the platform.
License Revenue Declined by $900,000 compared to last year, primarily due to the success in driving SaaS conversions.
Professional Services and Other Revenue Increased by $500,000 compared to last year.
Free Cash Flow (Q2) $29 million, up 281% year-over-year, reflecting strong revenue growth and scaling of operating expenses.
Free Cash Flow (First Half of 2025) $65 million, up 100% year-over-year.
International Revenue Growth 34% year-over-year, now contributing 33% to total revenue, driven by strong performance in international markets.
Customer Growth Nearly 1,700 customers, up 14% year-over-year, with more than 60% of bookings from new customers.
Billings $151 million, a 20% year-over-year increase, and 23% growth on a trailing 12-month basis.
12-Month cRPO Up 29% year-over-year, indicating strong bookings momentum.
Total RPO $1.2 billion, a 21% year-over-year increase.
Non-GAAP Gross Margin 70%, up from 69% last year, due to higher software revenue as a percentage of total revenue.
Non-GAAP Software Gross Margin 76%, flat compared to last year.
Non-GAAP Operating Income $1.6 million, an increase of $10.3 million compared to the prior year, driven by strong revenue growth and scaling of operating expenses.
Non-GAAP Net Income $9 million, compared to a loss of $5 million in the prior year.
Non-GAAP Earnings Per Share $0.05, reflecting improved profitability.
Equity-Based Compensation Expense $31 million for the second quarter.
Cash and Cash Equivalents $652 million at the end of the quarter.
SensibleAI Forecast: Enhanced AI-driven forecasting tool introduced at Splash conference, achieving up to 95% forecast accuracy.
SensibleAI Studio: Moved to general availability in June, offering algorithms for anomaly detection and trending analysis. Customers can access these routines through embedded solutions, Genesis blocks, or REST APIs.
SensibleAI Agents: Introduced in private preview, includes finance analyst, operations analyst, search analyst, and deep analysis agents to automate tasks and deliver insights.
Genesis Architecture: Plug-and-play architecture now generally available, simplifying and personalizing customer experience with reusable functionality.
CPM Express: Early momentum with this offering, enabling faster implementation (8-12 weeks) and targeting legacy system replacements.
European and North American market growth: Strong growth in European and North American commercial business despite challenges in U.S. federal public sector.
Public sector expansion: Landmark win with a major U.S. government institution and FedRAMP High certification achieved, opening doors for future public sector opportunities.
International revenue growth: International revenue grew 34% year-over-year, contributing 33% to total revenue.
Revenue growth: Total revenue grew 26% year-over-year to $148 million in Q2 2025. Subscription revenue increased 30% year-over-year to $134 million.
Free cash flow: Free cash flow for Q2 was $29 million, up 281% year-over-year.
Customer base: Customer base grew to nearly 1,700, up 14% year-over-year.
AI-driven strategy: Focus on integrating advanced AI solutions into core finance functions to enhance efficiency and decision-making.
Agile Financial Analytics (AFA): Introduced to harmonize transactional and operational drivers with financial intelligence for integrated planning.
U.S. Federal Public Sector Uncertainty: The company is navigating near-term uncertainty in the U.S. federal public sector market, which is expected to impact Q3 revenue growth. This is the largest quarter for the U.S. federal government business, and spending and restructuring challenges in this sector are creating headwinds.
Public Sector Spending and Restructuring: The public sector, particularly the U.S. federal government, is experiencing spending and restructuring challenges, which could affect the company's ability to secure contracts and revenue in this segment.
SaaS Conversions Impact on License Revenue: The company's success in driving SaaS conversions has led to a decline in license revenue, which could impact overall revenue growth if not offset by other revenue streams.
Competitive Pressures in AI and Finance Solutions: The company faces competitive pressures in the AI and finance solutions market, as it seeks to differentiate its offerings and maintain its market leadership.
Economic and Market Uncertainty: The company is navigating economic and market uncertainties, particularly in certain regions, which could impact its growth and financial performance.
Dependency on New Customer Acquisition: Over 60% of bookings come from new customers, indicating a dependency on acquiring new clients to sustain growth. This could pose a risk if customer acquisition slows.
Stock-Based Compensation Expense: The company has significant stock-based compensation expenses, which could impact profitability and shareholder value.
Q3 2025 Revenue Guidance: Total revenue is expected to be between $147 million to $149 million. Subscription revenue is expected to grow at least 25% year-over-year. Billings are expected to be between $160 million to $162 million. Free cash flow is expected to be breakeven to slightly negative, in line with historical seasonality trends. Non-GAAP operating margin is expected to be between 0% to 2%. Non-GAAP net income per share is expected to be between $0.01 to $0.03. Stock-based compensation expense is expected to be approximately $30 million.
Full Year 2025 Revenue Guidance: Total revenue is expected to be between $586 million to $590 million. Non-GAAP operating margin is expected to be between 1% to 3%. Non-GAAP net income per share is expected to be between $0.07 to $0.15. Stock-based compensation expense is expected to be between $120 million to $125 million.
The selected topic was not discussed during the call.
The earnings call highlights strong financial performance, optimistic guidance, and promising product developments, particularly in AI. The company is expanding in key markets, has a robust pipeline, and anticipates strong growth in revenue and billings. Despite some uncertainties, such as government shutdown risks, the overall sentiment is positive. The company's strategy to enhance shareholder returns and the positive feedback on new offerings further support a positive outlook.
The earnings call reveals strong financial performance with a 24% revenue growth and a record free cash flow margin of 26%. Product developments like CPM Express and SensibleAI show promising market reception and potential for scaling. Despite some macroeconomic uncertainties and vague responses on specific financial impacts, overall guidance remains optimistic with reiterated revenue growth. Positive customer feedback and expanding international business further support a positive sentiment. Given these factors, the stock is likely to experience a moderate positive movement in the near term.
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