ON24’s third quarter results were well received by the market, as the company exceeded Wall Street’s revenue and non-GAAP profit expectations. Management credited the outperformance to rising adoption of its AI-enabled products and a growing share of customers using multiple ON24 offerings. CEO Sharat Sharan highlighted that nearly one in five customers now pay for AI solutions, and the company saw a record high in average annual recurring revenue (ARR) per customer. While ON24 experienced softness in new growth bookings—particularly in the life sciences vertical—deal slippage was partially offset by strong customer win-backs and deeper product utilization across its enterprise base.
Is now the time to buy ONTF? Find out in our full research report (it’s free for active Edge members).
ON24 (ONTF) Q3 CY2025 Highlights:
- Revenue: $34.6 million vs analyst estimates of $33.85 million (4.7% year-on-year decline, 2.2% beat)
- Adjusted EPS: $0.03 vs analyst estimates of $0.01 ($0.02 beat)
- Adjusted Operating Income: -$376,000 vs analyst estimates of -$1.08 million (-1.1% margin, relatively in line)
- Revenue Guidance for Q4 CY2025 is $34.2 million at the midpoint, roughly in line with what analysts were expecting
- Management raised its full-year Adjusted EPS guidance to $0.06 at the midpoint, a 57.1% increase
- Operating Margin: -23.1%, up from -36.7% in the same quarter last year
- Annual Recurring Revenue: $124.5 million vs analyst estimates of $126 million (5.8% year-on-year decline, 1.2% miss)
- Billings: $30.21 million at quarter end, down 11% year on year
- Market Capitalization: $236.8 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 Q3 Earnings Call
- Rob Oliver (Baird) asked about the revenue impact and penetration of AI-powered offerings. CEO Sharat Sharan explained that AI solutions already drive significant expansion and that penetration is expected to keep growing.
- Rob Oliver (Baird) followed up on internal sales and marketing efficiency from AI use. CFO Steve Vattuone detailed that AI and resource reallocation have allowed for a $10 million quarterly reduction in sales and marketing since 2022 without disrupting enterprise account growth.
- Michael Rackers (Needham), with Scott Berg, inquired about deal slippage and its impact. Sharan noted that most delayed deals have already closed in Q4 and that regulated verticals remain a strategic focus for recovery.
- Michael Rackers (Needham) also asked about monetization of the LinkedIn partnership. Sharan replied that initial phases enhance customer retention, with future phases expected to bring new monetizable features.
- Linda Lee (William Blair) questioned the effectiveness of ON24's enterprise-focused go-to-market motion. Sharan said the shift has increased high-retention business in regulated sectors and expanded product use, supported by new marketing leadership.
Catalysts in Upcoming Quarters
Looking forward, the StockStory team will be monitoring (1) the pace at which AI-powered products like AI Propel Plus and AI Translate are adopted across ON24’s customer base, (2) successful integration and monetization milestones in the LinkedIn partnership, and (3) sustained reductions in sales and marketing expenses. Additional watchpoints include customer win-backs in regulated industries and the commercialization of new AI features.
ON24 currently trades at $5.60, up from $4.98 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free for active Edge members).
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