What happened

Shares of E2open Parent Holdings (ETWO 5.65%) were down 47% as of 1:45 p.m. ET Wednesday after the supply chain software company announced weaker-than-expected quarterly results, replaced its CEO, and lowered its full fiscal-year outlook.

So what

For its fiscal second quarter ended Aug. 31, 2023, E2open's revenue declined 1.9% at constant-currency to $158.5 million, translating to adjusted (non-GAAP) net income of $16.9 million, or $0.04 per share. Analysts, on average, were expecting roughly the same net income on revenue closer to $160 million.

Within E2open's top line, subscription revenue grew 2.4% year over year to $134.7 million, near the high end of previous guidance and representing 85% total revenue.

Even so, E2open CFO Marje Armstrong admitted their "growth rate remained below our potential," adding that they've already taken steps to improve go-to-market performance and reaccelerate growth.

In conjunction with its quarterly release, E2open also announced that its board and Chief Executive Officer Michael Farlekas have mutually agreed a leadership change was warranted. As such, Farlekas has stepped down from his position and the company has appointed Andrew Appel interim CEO while it commences a search for a permanent CEO. Appel has served on E2open's advisory board for over a year, and was previously president and CEO at predictive-analytics company IRI.

Now what

Armstrong elaborated that the company's growth-reacceleration initiatives will likely take "several quarters to show their intended impact [...]," and current growth headwinds are expected to endure through the end of the fiscal year. 

As such, E2open lowered its full fiscal-year outlook to call for revenue of $625 million to $635 million compared to previous guidance of $655 million to $670 million.

Whether that modest guidance reduction merit's today's precipitous decline remains to be seen. But it's clear in the meantime that the market hates being told to hurry up and wait for growth to materialize. Coupled with the company's unexpected CEO transition, E2open's stock is understandably responding in kind.