If you've ever planned a wedding or other major gathering, you know what a hassle it can be to organize it all. For corporations and industry trade group, the logistics of conferences and other events are an order of magnitude more complex. That's where Cvent (NYSE:CVT) comes in, with its cloud-based platform to simplify major-event management. Coming into Friday morning's fourth-quarter financial report, Cvent investors wanted to see further strong growth in sales and a continued emphasis on translating that revenue into profit. Cvent's results were largely favorable, and the company pointed toward ongoing efforts to bolster growth in 2015 and beyond. Let's look more closely at Cvent's results and how investors should interpret them.
Cvent keeps building its audience
Cvent stayed on its growth trajectory during the fourth quarter, with revenue rising 28% to $39.3 million, topping the growth rate that most investors expected by about a percentage point. The company posted a generally accepted accounting principles operating loss -- but on an adjusted basis, earnings came in at $0.03 per share, a penny better than the consensus estimate.
Both of Cvent's major business divisions contributed to the company's overall growth. Platform subscription revenue, which makes up more than two-thirds of Cvent's total sales, rose 29% from the year-ago quarter. Meanwhile, sales from the marketing solutions segment climbed 26%, reflecting the company's two-pronged approach to making the most of its business opportunity.
For the full year, Cvent's growth was also apparent. The company managed 264,000 different meetings and processed 10.9 million individual registrations for events; these both rose between 25% and 30% from 2013. The company's customer count climbed above 14,000, and it transmitted 1.6 million requests for proposals, up 27% from the previous year and representing $8 billion in potential volume. Also, Cvent's strategy for handling hotel requests paid off, with a 31% rise to more than 27 million hotel room-nights.
How can Cvent keep growing in 2015?
CEO Reggie Aggarwal said Cvent had "a great year" in 2014, noting the company's financial results were above its guidance range. Yet Aggarwal's focus was clearly on 2015, as he described his plans to "further develop our vision of the Hospitality Cloud that enables hotels and venues to generate, manage, and measure group business opportunities through a combination of our advertising, software, and analytics technologies." He also expects Cvent will sustain its growth throughout the year.
Cvent's outlook for 2015 includes revenue guidance of $177 million to $180 million, translating to adjusted earnings of $0.21 to $0.25 per share. For the first quarter, Cvent's sales should come in between $39.7 million and $40.1 million, producing roughly breakeven results on an adjusted basis with the potential for $0.01 per share in earnings. The profit expectations for the full year are much better than most investors expect from Cvent currently, but Aggarwal's conviction that the company "anticipates delivering healthy cash profitability" suggests Cvent could post an even better bottom line than it did in 2014.
One element of that success could come from Cvent's January acquisition of Elite Meetings. The purchase of the California-based hospitality marketing company gives Cvent more access to the influential meeting planners who are responsible for an increasing number of events worldwide. Moreover, with an interface that facilitates coordination with hotel websites, Cvent should see further integration across all of its business services.
Cvent has only scratched the surface of the potential scope for event handling and coordination, but it has already built a solid foundation of profitability. If Cvent can keep up its momentum in 2015, then its stock price has plenty of room to rise to reflect its better prospects for the future.