ON24 Sinks 15% After-Hours Despite Upbeat Q2 Results

Shares of cloud-based digital experience platform provider ON24 (ONTF) lost nearly 15% in Tuesday’s extended trade even after the company reported better-than-expected financial results for the second quarter of 2021.

San Francisco-based ON24 offers multimedia content experiences, virtual event experiences and interactive webinar experiences to help businesses convert customer engagement into revenue.

Adjusted earnings per share came in at $0.04, beating the Street’s estimate of $0. The company had reported earnings per share of $0.69 in the second quarter of 2020. Quarterly revenue rose 43% year-over-year to $52.1 million, surpassing analysts’ expectations of $51.03 million.

Subscription and Other Platform Revenue surged 68% year-over-year to $44.4 million and ARR climbed 44% to $164.1 million. (See ON24 stock chart on TipRanks)

The CEO of ON24, Sharat Sharan, said, “The last year has accelerated the global enterprise awareness of our offerings and we are now serving a larger market than ever before. As our category leadership grows, our future is more exciting than ever before.”

For the third quarter, the company expects total revenue in the range of $47.5 million to $48.5 million, and adjusted loss per share to range from $0.07 to $0.09.

Furthermore, it expects total revenue to lie between $201.2 million and $204.2 million in full-year 2021, and adjusted loss per share to be in the range of $0.06 to $0.13.

Following the announcement of the second-quarter results, Robert W. Baird analyst Robert Oliver reiterated a Buy rating on the stock but lowered the price target from $70 to $38 (17.6% upside potential).

The analyst said, “The company reduced 2H’21 guidance to reflect conservatism around enterprise renewals, continued SMB churn, and lower professional services.”

Overall, the stock has a Moderate Buy consensus based on 5 Buys and 2 Holds. The average ON24 price target of $51 implies 57.9% upside potential. Shares have lost 54.4% over the past year.