OneStream Announces Third Quarter 2024 Financial Results
BIRMINGHAM, Mich., Nov. 7, 2024 /PRNewswire/ -- OneStream, Inc. (Nasdaq: OS), the leading enterprise Finance management platform that modernizes the Office of the CFO by unifying core finance and operational functions -- including financial close, consolidation, reporting, planning and forecasting, today announced financial results for its third quarter ended September 30, 2024.
Third Quarter 2024 Financial Highlights
-- Total Revenue: $129.1 million, an increase of 21% year-over-year.
-- Subscription Revenue: $110.7 million, an increase of 39% year-over-year.
-- GAAP Loss / Income from Operations and Operating Margin: GAAP operating
loss was $255.2 million compared to income of $7.0 million for the third
quarter of 2023, and GAAP operating margin was (198)% compared to 7% for
the third quarter of 2023. This included equity-based compensation
expense of $260.0 million, compared to $1.4 million for the third
quarter of 2023.
-- Non-GAAP Operating Income and Non-GAAP Operating Margin: Non-GAAP
operating income was $5.5 million compared to income of $8.4 million for
the third quarter of 2023, and non-GAAP operating margin was 4% compared
to 8% for the third quarter of 2023.
-- Net Cash Provided by / Used in Operating Activities: Net cash provided
by operating activities was $2.4 million compared to net cash used in
operating activities of $4.4 million for the third quarter of 2023.
-- Free Cash Flow: Positive free cash flow of $1.3 million compared to
negative free cash flow of $5.3 million for the third quarter of 2023.
"We posted strong third quarter results, led by 39 percent year-over-year growth in subscription revenue and positive free cash flow," said Tom Shea, CEO, OneStream. "The market is ripe for what we do. As evidenced in our Finance 2035 initiative, CFOs are realizing that legacy technology and data overload are holding them back from becoming more strategic. Finance leaders are looking to OneStream to help them digitally transform, laying the foundation for our future growth."
Recent Developments and Business Highlights
-- Splash EMEA User Conference. OneStream took its annual Splash User
Conference to Copenhagen, where three new innovations were introduced:
OneStream Navigation Center, which builds upon the advanced Narrative
Reporting capabilities and streamlines access to reports and bookmarks
critical audit and narrative documents in one place; OneStream
AI-Powered Anomaly Detection, which is a pre-packaged AI method that
helps finance leaders detect anomalies for data cleansing,
consolidation, and reporting; and OneStream Solution Exchange offerings
to support Tax Pillar 2 regulatory reporting.
-- Launched the Finance 2035 Initiative. Earlier this month OneStream
launched the Finance 2035 Initiative (www.finance2035.com), a report and
platform to foster dialogue on how the Office of the CFO is evolving and
how CFOs can become more strategic. Through a partnership with academia,
economists and a survey of 2,000 global CFOs, CEOs, line of business
executives and investors, the report examines what the next 10 years
hold for businesses at large, and how external forces are both elevating
and impacting the critical role played by CFOs in shaping that future.
-- Leadership in IDC's Record to Report MarketScape. IDC, a premier global
market intelligence analyst group, recognized OneStream as a Leader in
its inaugural Record to Report MarketScape report. The record-to-report
process is a fundamental aspect of the financial reporting cycle; it is
crucial for CFOs, investors and shareholders as they provide a detailed
and accurate account of a company's financial activities. OneStream was
recognized as a Leader based on our capabilities, including reporting
such as Microsoft Power BI, the OneStream Solution Exchange, a robust AI
roadmap and Strategies among 9 vendors who were evaluated.
-- Initial Public Offering. On July 25, 2024, the Company completed its
initial public offering (the "IPO") of 28,175,000 shares of Class A
common stock, including shares sold by the Company and the selling
stockholders, and the full exercise of the underwriters' option to
purchase additional shares. Net proceeds to OneStream from the offering
were $352.9 million after deducting underwriting discounts and
commissions.
Financial Outlook
OneStream is providing the following guidance for the fourth quarter of 2024 and the full year 2024:
Q4'24 FY24
Total Revenue
$127M - $129M
$484M - $486M
Non-GAAP Operating Margin 0% - 2% (2)% - (1)%
Non-GAAP Net Income per Share
$0.01 - $0.03
$0.06 - $0.08
Equity-Based Compensation
$50M - $55M
$315M - $320M
OneStream has not provided a reconciliation of its forward outlook for non-GAAP operating margin and non-GAAP net loss per share to their most directly comparable GAAP financial measures in reliance on the unreasonable efforts exception provided under Item 10(e)(1)(i)(B) of Regulation S-K. OneStream is unable to predict with reasonable certainty the amount and timing of adjustments that are used to calculate these non-GAAP financial measures, particularly related to equity-based compensation and its related tax effects.
Earnings Webcast Information
OneStream will host a conference call for analysts and investors to discuss its financial results for the third quarter of 2024 and its outlook for the fourth quarter of 2024 and full year 2024 today at 4:30 p.m. Eastern time / 1:30 p.m. Pacific time. A webcast replay will be available on the Investor Relations Section of OneStream's website following the call.
Date: Thursday, November 7,
2024
Time: 4:30 p.m. ET /1:30 p.m.
PT
Webcast: https://investor.onestream.com
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this press release may be forward-looking statements. In some cases, you can identify forward-looking statements by terms such as "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "targets," "projects," "contemplates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of these terms or other similar expressions. Forward-looking statements contained in this press release include, but are not limited to, statements regarding our business strategy and future growth, and our guidance for total revenue, non-GAAP operating margin, non-GAAP net income per share and equity-based compensation for the fourth quarter ending December 31, 2024 and the year ending December 31, 2024. Forward-looking statements are subject to known and unknown risks, uncertainties, assumptions and other factors. Some of these risks are described in greater detail in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, which we expect to file with the SEC on or around the date of this press release. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause our actual results to differ materially from those contained in any forward-looking statements we may make. These factors may cause our actual results, performance or achievements to differ materially and adversely from those anticipated or implied by our forward-looking statements. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not rely on these statements or regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified timeframe, or at all. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Non-GAAP Financial Measures
In addition to GAAP financial measures, this press release includes non-GAAP financial measures that we use to help us evaluate our business, identify trends affecting our business, formulate business plans and make strategic decisions. These non-GAAP financial measures include non-GAAP operating income, non-GAAP operating margin, non-GAAP net income per share and free cash flow, and their respective definitions are presented below.
There are limitations to the non-GAAP financial measures included in this press release, and they may not be comparable to similarly titled measures of other companies. The non-GAAP financial measures included in this press release should not be considered in isolation from or as a substitute for their most directly comparable GAAP financial measures. Our management believes that our non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses that may not be indicative of our ongoing core operating performance. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when analyzing historical performance and liquidity and when planning, forecasting and analyzing future periods.
For a reconciliation of the non-GAAP financial measures presented for historical periods to their most directly comparable GAAP financial measures, please see the tables captioned "Reconciliation of Non-GAAP Financial Measures" included at the end of this press release. We encourage you to review the reconciliation in conjunction with the presentation of the non-GAAP financial measures for each of the periods presented. In future periods, we may exclude similar items, may incur income and expenses similar to these excluded items and may include other expenses, costs and non-recurring items.
Non-GAAP Operating Income
We define non-GAAP operating income as income from operations adjusted for non-cash, non-operational and non-recurring items, including equity-based compensation expense, employer taxes on employee stock transactions, and amortization of acquired intangible assets.
Non-GAAP Operating Margin
We define non-GAAP operating margin as non-GAAP operating income as a percentage of total revenue.
Non-GAAP Net Income Per Share
We define non-GAAP net income as net (loss) / income adjusted for non-cash, non-operational and non-recurring items, including equity-based compensation expense, employer taxes on employee stock transactions, and amortization of acquired intangible assets. We define non-GAAP net income per share as non-GAAP net income divided by weighted-average shares outstanding.
Free Cash Flow
We define free cash flow as net cash provided by (used in) operating activities less purchases of property and equipment.
About OneStream
OneStream is how today's Finance teams can go beyond just reporting on the past and Take Finance Further by steering the business to the future. It's the leading enterprise finance platform that unifies financial and operational data, embeds AI for better decisions and productivity, and empowers the CFO to become a critical driver of business strategy and execution.
We deliver a comprehensive cloud-based platform to modernize the Office of the CFO. Our Digital Finance Cloud unifies core financial and broader operational data and processes and embeds AI for better planning and forecasting, with an extensible architecture, so customers can adopt and develop new solutions, achieving greater value as their business needs evolve.
With over 1,500 customers, including 15% of the Fortune 500, more than 250 go-to-market, implementation, and development partners and over 1,400 employees, our vision is to be the operating system for modern finance. To learn more, visit onestream.com.
Investor Relations Contacts
INVESTOR CONTACT
Anne Leschin
VP, Investor Relations and Strategic Finance
OneStream
investors@onestreamsoftware.com
MEDIA CONTACT
Victoria Borges
Media Relations Contact
OneStream
media@onestreamsoftware.com
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(Unaudited)
As of
September 30, December 31,
2024 2023
Assets
Current assets:
Cash and cash equivalents $
495,458 $
117,087
Accounts receivable, net 113,525 107,308
Unbilled accounts receivable 23,753 31,519
Deferred commissions 19,238 17,225
Prepaid expenses and other current assets 11,504 13,098
Total current assets 663,478 286,237
Unbilled accounts receivable, noncurrent 1,291 2,009
Deferred commissions, noncurrent 42,421 41,030
Operating lease right-of-use assets 17,953 18,559
Property and equipment, net 10,513 10,266
Intangible assets, net 2,842
Goodwill 9,277
Other noncurrent assets 2,334 3,458
Total assets $
750,109 $
361,559
Liabilities and stockholders' / members' equity
Current liabilities:
Accounts payable $
19,246 $
8,274
Accrued compensation 23,333 22,436
Accrued commissions 6,702 10,158
Deferred revenue, current 205,801 177,465
Operating lease liabilities, current 3,318 2,505
Other accrued expenses and current liabilities 12,607 11,532
Total current liabilities 271,007 232,370
Deferred revenue, noncurrent 4,157 5,141
Operating lease liabilities, noncurrent 16,538 17,522
Other noncurrent liabilities 199
Total liabilities 291,901 255,033
Stockholders' / members' equity:
Members' interest 107,151
Preferred stock
Class A common stock 3
Class B common stock
Class C common stock 7
Class D common stock 13
Additional paid-in capital 630,354
Accumulated other comprehensive loss (450) (625)
Accumulated deficit (299,885)
Total stockholders' equity attributable to OneStream, Inc. / members' equity 330,042 106,526
Non-controlling interests 128,166
Total stockholders' / members' equity 458,208 106,526
Total liabilities and stockholders' / members' equity $
750,109 $
361,559
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2024 2023 2024 2023
Revenues:
Subscription $
110,722 $
79,419 $
309,542 $
215,340
License 11,734 19,495 24,818 32,939
Professional services and other 6,684 8,090 22,572 24,048
Total revenue 129,140 107,004 356,932 272,327
Cost of revenues:
Subscription(2) 32,386 19,366 82,007 53,247
Professional services and other(2) 32,015 10,159 53,397 30,769
Total cost of revenue 64,401 29,525 135,404 84,016
Gross profit 64,739 77,479 221,528 188,311
Operating expenses:
Sales and marketing(2) 162,700 42,226 263,225 136,241
Research and development(2) 83,040 13,859 119,916 39,614
General and administrative(2) 74,170 14,391 110,509 43,176
Total operating expenses 319,910 70,476 493,650 219,031
Loss from operations (255,171) 7,003 (272,122) (30,720)
Interest income, net 5,022 1,133 8,319 2,702
Other income (expense), net 772 (1,072) 2,263 (2,894)
(Loss) income before income taxes (249,377) 7,064 (261,540) (30,912)
(Benefit) provision for income taxes (32) 300 614 770
Net (loss) income $
(249,345) $
6,764 $
(262,154) $
(31,682)
Less: Net loss attributable to non-controlling interests (77,402) (77,402)
Net (loss) income attributable to OneStream, Inc. $
(171,943) $
6,764 $
(184,752) $
(31,682)
Net loss per share of Class A and Class D common stock- (1.06) (1.06)
basic and diluted(1)
Weighted-average shares of Class A and Class D common 160,300 160,300
stock outstanding-basic and diluted(1)
(1) Represents net loss per share of Class A common stock and Class D common stock and weighted-average shares of Class A common stock and Class D common stock outstanding for the period following OneStream Inc.'s IPO and related reorganization transactions.
(2) Includes equity-based compensation expense as follows:
Three Months Ended Nine Months Ended
September 30, September 30,
2024 2023 2024 2023
Cost of subscription $
4,981
$ $
4,981
$
Cost of professional services and other 21,886 21,886 15
Sales and marketing 114,713 459 115,987 3,582
Research and development 62,251 104 63,505 413
General and administrative 56,152 864 57,456 3,077
Total equity-based compensation $
259,983 $
1,427 $
263,815 $
7,087
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
Nine Months Ended
September 30,
2024 2023
Cash flows from operating activities:
Net loss $
(262,154) $
(31,682)
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities:
Depreciation and amortization 2,586 2,230
Noncash operating lease expense 2,303 1,669
Amortization of deferred commissions 15,206 12,661
Equity-based compensation 263,815 7,087
Other noncash operating activities, net (1,402) 3,180
Changes in operating assets and liabilities:
Accounts receivable, net 967 (8,499)
Deferred commissions (18,610) (15,708)
Prepaid expenses and other assets (1,395) (6,407)
Accounts payable 15,720 (6,359)
Deferred revenue 27,349 33,298
Accrued and other liabilities (8,371) 3,000
Net cash provided by (used in) operating activities 36,014 (5,530)
Cash flows from investing activities:
Purchases of property and equipment (2,177) (2,367)
Acquisition of business, net of cash acquired (7,594)
Sales of marketable securities 87,339
Net cash (used in) provided by investing activities (9,771) 84,972
Cash flows from financing activities:
Principal payments on finance lease obligation (46)
Proceeds from initial public offering, net of underwriting discounts and 409,598
commissions
Repurchase of LLC Units (56,663)
Payments of deferred offering costs (4,943)
Proceeds from option exercises 3,941 247
Repayments of borrowings on revolving credit facility (3,500)
Net cash provided by (used in) financing activities 351,933 (3,299)
Effect of exchange rate changes on cash and cash equivalents 195 (94)
Net increase in cash and cash equivalents 378,371 76,049
Cash and cash equivalents - Beginning of period 117,087 14,687
Cash and cash equivalents - End of period $
495,458 $
90,736
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Unaudited)
Non-GAAP Operating Income
Three Months Ended September
30,
2024 2023
(in thousands)
(Loss) income from operations $
(255,171) $
7,003
Equity-based compensation expense 259,983 1,427
Employer taxes on employee stock transactions 393
Amortization of acquired intangible assets 275
Non-GAAP operating income $
5,480 $
8,430
Non-GAAP Operating Margin
Three Months Ended September
30,
2024 2023
(in thousands)
Operating margin (198) 7
% %
Equity-based compensation expense 201 1
% %
Employer taxes on employee stock transactions
Amortization of acquired intangible assets
Non-GAAP operating margin(1) 4 8
% %
(1) Non-GAAP operating margin may not foot due to rounding.
Free Cash Flow
Three Months Ended September
30,
2024 2023
(in thousands)
Net cash provided by (used in) operating activities $
2,360 $
(4,372)
Purchases of property and equipment (1,077) (923)
Free cash flow 1,283 (5,295)
Net cash used in investing activities $
(1,077) $
(831)
Net cash provided by financing activities $
352,978
$
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SOURCE OneStream, Inc.
