ON24’s second-quarter results were met with a positive market reaction, as revenue and non-GAAP earnings both exceeded Wall Street expectations. Management pointed to record customer retention and growing adoption of ON24’s AI-powered ACE solutions as key drivers. CEO Sharat Sharan highlighted improving performance in enterprise segments and the return of “boomerang” customers—those who previously left but have since re-engaged with the platform. The company’s focus on operational discipline, including cost control and product innovation, was emphasized as contributing to its positive adjusted EBITDA and free cash flow.
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ON24 (ONTF) Q2 CY2025 Highlights:
- Revenue: $35.33 million vs analyst estimates of $34.66 million (5.4% year-on-year decline, 1.9% beat)
- Adjusted EPS: $0.02 vs analyst estimates of $0.01 ($0.01 beat)
- Adjusted Operating Income: -$919,000 vs analyst estimates of -$1.12 million (-2.6% margin, relatively in line)
- The company slightly lifted its revenue guidance for the full year to $138.2 million at the midpoint from $137.5 million
- Management reiterated its full-year Adjusted EPS guidance of $0.04 at the midpoint
- Operating Margin: -26%, up from -35% in the same quarter last year
- Annual Recurring Revenue: $127.1 million vs analyst estimates of $126.9 million (4.9% year-on-year decline, in line)
- Billings: $25.93 million at quarter end, down 14.3% year on year
- Market Capitalization: $221.3 million
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From ON24’s Q2 Earnings Call
- Robert Cooney Oliver (Baird): asked how generative AI is influencing customer buying trends. CEO Sharat Sharan replied that AI is a growing catalyst, especially in financial services and life sciences, though some markets remain cautious.
- Oliver (Baird): also pushed CFO Steven Vattuone for clarity on pipeline strength and Q4 ARR confidence. Vattuone cited improved retention, new business momentum, and sector-specific traction as supporting factors.
- Ian Black (Needham & Company): inquired about enterprise penetration strategies. Sharan explained that growth stems from both new business wins and cross-selling, with increased adoption of AI-powered products among large clients.
- Black (Needham & Company): sought insight on the balance between volume and cross-sell in enterprise growth. Sharan emphasized that both are contributing, with multi-product adoption and longer-term deals underpinning ARR gains.
- No further analyst questions were asked on the call.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will watch (1) the pace of adoption and monetization for ON24’s AI-powered ACE and Translate capabilities, (2) progress in expanding multi-year, high-value enterprise agreements, and (3) improvements in gross and net retention rates. We are also monitoring whether the company can return to ARR growth as forecasted and sustain operational efficiencies.
ON24 currently trades at $5.23, up from $4.76 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free).
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