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OneStream - $OS - Earnings Analysis: Strong growth in subscription revenue indicates increasing adoption of the platform.

By sagebytes in Business —

Business Model

OneStream is an enterprise finance platform that unifies financial and operational data. Revenue is generated through subscriptions to its cloud-based platform, licenses, and professional services.

Revenue Sources

  • Subscription revenue: Generated from SaaS contracts and cloud computing service fees.
  • License revenue: From perpetual or term-based software licenses.
  • Professional services revenue: Consulting, implementation, configuration, and training services.

Income Statement Analysis

  • Total revenue increased by 29% year-over-year, driven by a 35% increase in subscription revenue. License and professional services revenue decreased slightly.
  • GAAP Operating loss was $(47.4) million compared to income of $0.2 million for the fourth quarter of 2023, and GAAP operating margin was (36%) compared to 0% for the fourth quarter of 2023. This included equity-based compensation expense of $52.6 million, compared to $1.2 million for the fourth quarter of 2023.
  • Net loss was $(44.5) million compared to a net income of $2.8 million in Q4 2023.

Balance Sheet Analysis

  • Total assets increased significantly due to IPO in 2024.
  • Total liabilities increased, reflecting increased deferred revenue.
  • Total equity increased substantially, primarily due to capital raised during the IPO.

Cash Flow Analysis

  • Net cash provided by operating activities decreased slightly compared to the same quarter last year.
  • Net cash from financing activities was significantly positive due to capital raised during the IPO.
  • Cash and cash equivalents at the end of the period increased substantially due to the IPO.

Capital Allocation

OneStream is focused on investing in innovation (Finance AI), strategic partnerships (Microsoft), customer success (high gross retention), and solution exchange to become the OS for modern finance.

Management Commentary

Capping a year of incredible innovation and solid execution, we posted 35% year-over-year subscription revenue growth in the fourth quarter, and were free cash flow positive and non-GAAP profitable

We're excited to bring new products to market in 2025, paving the way for OneStream to become the operating system for modern Finance

Overall Sentiment: Positive, with a focus on innovation and expanding the platform's capabilities to solidify its position in the market.

Recommendation

Rating: Hold

Reason for Rating: Despite increased losses, OneStream has had a strong 2024. While they are focused on the future, their growth in losses needs to be monitored. As they continue their mission, the increased losses combined with a continued growth will force a future re-evaluation of rating.

Disclaimer: This analysis is based on company filings and public information. It is for informational purposes only and not financial advice. Past performance does not guarantee future results.

Generated on: 2/12/2025, 3:45:37 AM