Image: Cvent.
Event-management specialist Cvent (CVT +0.00%) has used cloud computing to make dealing with conferences and other major corporate events simpler. Throughout 2015, the company has aimed to make its products simpler and more effective, and coming into Thursday's fourth-quarter financial report, Cvent investors were looking to see revenue continue to grow and produce at least some profits.
Cvent's results were largely encouraging, showing the ongoing potential for the company to develop its strategic vision, and keep aiming at becoming more profitable. Let's look more closely at how Cvent's fourth quarter went, and what to expect for 2016 and beyond.
Cvent plans well
Cvent's fourth-quarter results required a bit of extra attention to interpret. Revenue gains of almost 30%, to $50.9 million, were better than the 27% growth rate that most investors were expecting to see. The company reported a non-GAAP net loss of $100,000, which would work out to a breakeven earnings per share. Yet the result included an income tax expense to establish a valuation allowance against deferred tax assets. If you further adjust for that item, adjusted earnings would have been $0.15 per share, or quintuple the $0.03 consensus forecast among investors.
As we've seen in past quarters, Cvent's growth came from all fronts. Event-cloud revenue climbed 31%, to $130.7 million, making up about 70% of the company's total sales. Hospitality-cloud sales climbed 34%, to $57 million.
Cvent's scorecard for strategic successes continued to grow. During the quarter, the company signed several major corporate clients as enterprise solutions customers, and it also focused on middle market for key pickups of business, as well. New customers continue to use mobile-app technology from Cvent to manage their needs, and several new and renewed relationships with hotel chains and other hospitality companies produced growth in that segment, as well.
Even Cvent's moves to exit some businesses showed overall progress. The event-manager sold off its consumer-ticketing assets in December, and its consumer-mobile assets in January. The move intensified Cvent's attention on event-management and hospitality-platform solutions.
CEO Reggie Aggarwal celebrated a successful year. "Through 2015," Aggarwal said, "our strategy to invest in broadening and deepening our software solutions significantly helped us in signing larger new deals and gaining further adoption by existing customers." Aggarwal also talked about expanding its addressable market, and getting a more diverse set of customers into each of its two segments.
What's ahead for Cvent?
Aggarwal also said that Cvent will take steps to keep making progress. "We plan to continue the strategy that helped drive our success in 2015," the CEO said, "by investing in technology that will broaden our reach to new customers around the world and expand our relationships with existing customers." Moves to boost its sales team should also support growth.
Cvent's first-quarter guidance points to the possibility of continued bottom-line pressure. Sales guidance for $51 million to $51.5 million would be above the current expected range, and would represent growth of 29% to 30% when you account for divested businesses. Yet Cvent expects an adjusted net loss of $0.03 to $0.04 per share for the quarter, which is a far cry from the gain that investors want to see. Similarly, although full-year revenue of $228.5 million to $231.5 million would be respectable, adjusted earnings of between a $0.03 per-share loss and a $0.01 per-share profit represent a huge hit compared to the $0.26 per share that investors are expecting.
Even with that guidance, Cvent investors seemed to like the results, sending the stock up more than 5% in after-hours trading following the announcement. If it can cross-sell to existing customers and develop new relationships, Cvent has more potential for long-term gains.
