Earnings call transcript: ON24’s Q2 2025 earnings beat forecasts, stock dips

ON24 Inc. (Ticker:ONTF) reported its second-quarter 2025 earnings, surpassing analysts’ expectations with an EPS of $0.02 compared to the forecasted $0.01. Revenue reached $35.3 million, exceeding the anticipated $34.76 million. Despite these positive results, the company’s stock fell by 4.06% in after-hours trading, closing at $4.73. According to InvestingPro data, the company maintains a strong financial position with more cash than debt on its balance sheet, suggesting operational stability despite market volatility.

Key Takeaways

• ON24’s EPS doubled the forecast, marking a 100% surprise.
• Revenue surpassed expectations by 1.55%.
• Stock declined by 4.06% despite positive earnings.
• AI-powered solutions are driving customer engagement and revenue.

Company Performance

ON24 demonstrated strong financial performance in Q2 2025, with revenue of $35.3 million, which beat expectations. The company achieved a net income of $900,000, translating to $0.02 per share. This performance was bolstered by the launch of AI-powered solutions that enhanced customer engagement and personalization. The company also reported a positive adjusted EBITDA and free cash flow for the sixth consecutive quarter. InvestingPro analysis reveals a healthy gross profit margin of 74.7% and a solid current ratio of 2.53, indicating strong operational efficiency and ability to meet short-term obligations.

Financial Highlights

• Revenue: $35.3 million, exceeding the forecast of $34.76 million.
• Earnings per share: $0.02, surpassing the $0.01 forecast.
• Total ARR: $127.1 million, with Core Platform ARR at $125.1 million.
• Sales and marketing expenses reduced to $15.1 million.

Earnings vs. Forecast

ON24’s actual EPS of $0.02 was double the forecasted $0.01, resulting in a 100% earnings surprise. The revenue of $35.3 million exceeded the expected $34.76 million by 1.55%. This marks a significant improvement compared to previous quarters, highlighting the company’s successful cost-saving measures and strategic focus on AI solutions.

Market Reaction

Despite the earnings beat, ON24’s stock fell by 4.06% in after-hours trading, closing at $4.73. This decline may reflect investor concerns over the company’s future growth prospects or broader market trends affecting tech stocks. The stock remains near its 52-week low of $4.35, indicating potential volatility. Based on InvestingPro’s Fair Value analysis, ON24 appears undervalued at current levels. The stock has experienced a significant 31.45% decline over the past six months, potentially presenting an opportunity for value investors. Get access to 8 more exclusive ProTips and comprehensive valuation metrics with InvestingPro’s detailed research report.

Outlook & Guidance

ON24 provided guidance for Q3 2025, with revenue expected to range between $33.6 million and $34.2 million. For the full year, the company anticipates revenue between $137.7 million and $138.7 million. ON24 aims to achieve positive ARR growth in Q4 and maintain positive adjusted EBITDA for the entire year. With a market capitalization of $200.91 million and trading at a low revenue multiple, the company’s valuation metrics suggest potential upside. Discover the complete financial picture with ON24’s comprehensive Pro Research Report, available exclusively on InvestingPro.

Executive Commentary

CEO Sharat Sharan stated, "In the age of AI, content, and data wins," highlighting the strategic importance of AI innovations. CFO Steve Atmone expressed confidence in returning to positive ARR growth in Q4, driven by AI offerings and customer retention.

Risks and Challenges

• Market volatility could affect stock performance.
• Increased competition in AI-powered solutions.
• Potential challenges in scaling AI innovations.
• Economic uncertainties impacting customer spending.

Q&A

During the earnings call, analysts focused on ON24’s pipeline generation and enterprise execution improvements. The management expressed confidence in sustained ARR growth through AI-driven customer retention strategies.

Full transcript - ON24 Inc (ONTF) Q2 2025:

Conference Operator: Good afternoon, ladies and gentlemen, and welcome to the ON24 Second Quarter twenty twenty five Earnings Conference Call. At this time, all lines are in a listen only mode. Following the presentation, we will conduct a question and answer session. This call is being recorded on Thursday, 08/07/2025. I would now like to turn the conference over to Lauren Sloan.

Please go ahead.

Lauren Sloan, Investor Relations, ON24: Thank you. Hello, and good afternoon, everyone. Welcome to ON24’s second quarter twenty twenty five earnings conference call. On the call with me today are Sharat Sharan, Co Founder and CEO of ON24 and Steve Atmone, Chief Financial Officer of ON24. Before we begin, I would like to remind everyone that some information provided during this call will include forward looking statements regarding future events and financial performance, including guidance for the third quarter and fiscal year of 2025 as well as certain third quarter and full year non GAAP projections.

These forward looking statements are subject to known and unknown risks and uncertainties that could adversely affect ON24’s future results and cause these forward looking statements to be inaccurate, including our ability to grow revenue, attract new customers and expand sales to existing customers, the success of our new products and capabilities, other statements regarding our ability to achieve our business strategies, growth or other future events or conditions such as the impact of adverse economic conditions and macroeconomic deterioration. ON24 cautions that these statements are not guarantees of future performance. All forward looking statements made today reflect our current expectations only, and we undertake no obligation to update any statements to reflect the events that occur after this call. Please refer to the company’s periodic SEC filings in today’s financial press release for factors that could cause our actual results to differ materially from any forward looking statements. We’d also like to point out that on today’s call, we will report both GAAP and non GAAP results.

We use these non GAAP financial measures to evaluate our ongoing operations and for internal planning and forecasting purposes. Non GAAP financial measures are presented in addition to and not as a substitute for financial measures calculated in accordance with GAAP. To see the reconciliation of these non GAAP financial measures, please refer to today’s financial press release. I will now turn the call over to Sharat. Please go ahead.

Sharat Sharan, Co-Founder and CEO, ON24: Thank you, and welcome everyone to the ON24 second quarter twenty twenty five earnings call. I appreciate you joining us today. With me is Steve Batuoni, our Chief Financial Officer. Our Q2 results exceeded our expectations. We drove improvements in ARR performance ending the quarter with 127,100,000 in total ARR and core platform ARR of $125,100,000.

Our in period gross retention was the highest in four years supported by deeper customer engagement and expanded use cases. A 100 ks plus ARR customer base grew in Q2, signaling traction in enterprise segments with high value accounts leveraging our solutions to deliver pipeline and business results. We saw continued win back momentum from boomerang customers, many of which are returning and increasing their commitment with us compared to their previous engagement. Our product innovations, including AI powered a solutions, continue to build momentum. A mid teens percentage of our customers are paying for AI powered ace, a number that has grown consistently since we launched it last year.

We achieved positive adjusted EBITDA in q two and generated positive free cash flow for the sixth consecutive quarter, underscoring our continued focus on operational discipline. Lastly, total revenue beat our expectations coming in at $35,300,000 We believe we have laid a solid foundation for improvement in our top and bottom line performance in the second half of the year. Our positive momentum is directly tied to the progress we have made with our strategic initiatives around AI innovation, enhanced enterprise go to market execution and a commitment to positive cash flow. First, I will elaborate on our product and AI innovation strategy. Our AI innovation builds on our strength in first party data.

We have over a billion engagement minutes annually on our platform, and we have hundreds of thousands of webinar experiences annually. In the age of AI, content, and data wins. Our vision here is twofold. One, moving from single digital events to omnichannel global campaigns, enabling our customers to create intelligent, personalized, and scalable content ecosystem from every live event they deliver. Two, helping our customers take the global campaign and content that they have created on our platform and make it more discoverable in the new world of AI search and large language models, and to do all this in an automated, scalable way which drives measurable business outcomes for our customers.

Imagine, you’ve just hosted a sixty to ninety minute long from live product event experience. For many companies, that’s where it ends. But with ON twenty four, the event is just beginning. We automatically turn that long form session to transcripts, blog posts, key takeaways, short form video clips, even social content. Now layer on our multi language translation capabilities.

That same webinar can be translated and launched in French, German, Spanish for EMEA markets, and Japanese, Korean, Mandarin for APAC markets. Suddenly, one digital event becomes a global campaign that reaches audiences worldwide with personalized messaging and content tailored to each market. But we’re not stopping there. Now we can leverage our AI powered a’s to hyper personalized content. In this new world of AI search and large language models, content discoverability is critical.

It’s not just about creating content. It’s about making sure that content is found by the right people in the right places and increasingly by AI search and chatbots. Specifically, our product and AI innovation strategies anchored on five core pillars, which enable our customers to benefit from positive business outcomes, greater efficiencies, and global scalability. Let’s touch on these five important pillars. First, our AI powered segmentation and personalization solutions allow customers to leverage our unmatched first party engagement data to tailor every interaction and create dynamic personalized audience journeys.

Second, on twenty four’s AI powered analytics and content engine delivers. AI generated content and nurture capabilities enabling teams to turn that single event into ongoing nurture opportunities. With AI powered days, engagement events are instantly repurposed into derivative content like blog posts, ebooks, social snippets, video assets, and more, creating a powerful content engine that fuels multichannel engagement, enables always on nurture, and propels funnel velocity. Third, we just announced the launch of the first phase of ON24 translate, integrated AI powered multilingual translation capabilities which will allow customers to localize registration pages, captions, and post even assets into 64 languages. We also offer solutions to translate webinars, allowing our customers to dramatically scale their business and drive global marketing campaign opportunities.

Fourth, On24 IQ, our autonomous event automation and workflow manager is an intelligent AI assistant that streamlines event creation, session setup, and live q and a moderation. These AI powered tools streamline complex workflows by simplifying event execution and ultimately driving smarter, more personalized events. Finally, we continue to enhance our unmatched first party customer engagement data and performance insights, delivering real time engagement signals and intent data that helps customers turn insights into actions. Now go to market teams can effectively personalize outreach, nurture audience engagement, and propel significant pipeline and revenue growth for their business. Together, these five pillars are central to the On 24 platform.

Our enhanced solutions that enables customers to use ON24 to expand well beyond a single engagement event, strengthening audience reach and engagement, increasing funnel velocity, scaling globally, and improving pipeline and revenue performance. Let me give you an example, especially as it relates to the ON24 AI powered a solution. An Italian affiliate of a major pharmaceutical organization partnered with ON24 to host a virtual event for senior oncologists across the country. The affiliate reaffirmed its commitment to the HCP community by presenting its latest research and development efforts in oncology and highlighting clinical data from recent studies. By leveraging ON24’s platform, the affiliate delivered an immersive multi touch live experience that engaged participants in real time.

To extend the value of the event beyond the live session, they utilized ON twenty four’s AI powered content engine to generate derivative assets such as key moment highlight videos, event summaries, transcripts, and concise takeaways all centralized on a dynamic always on nurture page. Through this collaboration, the pharmaceutical affiliate not only educated its HCP audience, but also created a scalable content ecosystem to sustain engagement and drive long term impact. The second strategic initiative I want to cover is our enterprise focused go to market strategy. In Q2, ON24 made meaningful advances by aligning our sales, customer success, and marketing organizations around a unified solutions based approach to address the more complex needs of global enterprises and drive value and long term growth in this important segment. This go to market shift allows our sales and customer success teams to directly align with our customers’ priorities such as improving pipeline performance and deepening customer or client engagement and retention.

We are delivering meaningful value through innovation that is helping our enterprise clients drive engagement, scale globally, and improve their business outcomes. With the help of our differentiated solution, we are experiencing healthy customer activity and stable platform demand. We are seeing the results of these initiatives in some key metrics. The average core ARR per customer reached approximately $80,000 at the end of the second quarter, the highest we have ever reported. And we added five net new customers with over $100,000 in ARR.

We have also continued to see a strong positive trend with win backs from boomerang customers in Q2. In addition, our regulated industries business, which includes financial services and life sciences continues to build with growth ARR from these sectors increasing as a percentage of our business. Let me give you some customer examples starting with some of the new logos that we closed in q two. A leading global payments platform faced several challenges in scaling their demand generation efforts, including low registration to attendee conversion rates. By adopting the ON 24 platform and AI powered AS capabilities, they unlocked a 24 by seven omnichannel approach and turned their webinars into a predictable revenue generating pipeline exceeding their conversion goals and driving significant business impact.

Another notable win in q two was a leading financial services company that adopted the ON24 platform and AI powered innovations across three key business lines. Investment management, retail and wealth management, and workplace solutions. This customer was a win back for us. They tried another solution, but it was not providing the results they desired. With ON twenty four’s interactive engagement capabilities, always on content, and seamless integration with their tech stack, they can leverage real time data and insights to drive sales.

Our solution propels global scale by enabling multi language programs across business lines. Another new customer that was a boomerang is a leading healthcare solutions provider that sought to boost pipeline generation and propel funnel velocity. Adopting ON24’s platform including AIAs and advanced analytics, they improved attendee experiences, generated valuable first party engagement, data and insights,

Steve Atmone, Chief Financial Officer, ON24: and

Sharat Sharan, Co-Founder and CEO, ON24: delivered derivative content at scale. Importantly, ON24’s reliable and scalable solution drove greater pipeline velocity and revenue generation. Next, I’ll provide a few examples on the renewal and expansion front. We closed one of our largest renewals, a high 7 figure commitment spread over multiple years. The customer provides education and certification for the technology industry.

On the expansion front, I would like to highlight a couple of notable deals. A large and fast growing insurance organization based in EMEA initially adopted ON24 in 2022. They expanded the use of ON24’s platform and signed a multiyear 7 figure deal. A global leader in life sciences and diagnostics renewed and expanded this partnership with ON twenty four with a 7 figure multiyear deal with a commitment increase of over 50%. As part of this multiyear renewal, the customer also expanded its relationship with ON twenty four by adding our engagement hub and AI powered edge capability.

In summary, the positive momentum in the quarter underscores that we are making progress on our strategic goals. Before I turn it over to Steve, I’d like to say that as I look at the first half performance in 2025 compared to the equivalent period last year, almost all customer and financial metrics have trended positively. ARR performance, while marginally negative, has improved meaningfully as compared to the same period last year. Gross retention and new business performance increased significantly. Free cash flow margin performance continues to be strong and our win rate has improved.

All these factors give us confidence in our expectation that the business will be ARR positive in Q4. Now, I will turn it over to Steve.

Steve Atmone, Chief Financial Officer, ON24: Thank you, Sharat, and good afternoon, everyone. I’m going to start with our second quarter twenty twenty five results and will then discuss our outlook for the 2025 and full year 2025. Total revenue for the second quarter, which includes revenue from our Virtual Conference product, was $35,300,000 Total subscription and other platform revenue was $32,400,000 Total professional services revenue was $2,900,000 representing approximately 8% of total revenue. Revenue from our core platform, including services in 2025, was $34,600,000 Moving on to ARR. ARR represents the annualized value of all subscription contracts at the end of the period and excludes professional services and overages.

Total ARR at the end of Q2 was $127,100,000 and ARR related to our core platform was in line with expectations at $125,100,000 We are encouraged by the positive momentum we are seeing in our business. As Sharath mentioned earlier, during Q2, our in period gross retention was the highest it has been in the past four years. In addition, we continue to win back customers, a trend we have seen over the past year. We believe that these boomerang customers highlight the differentiated nature of our solution. Sharan provided some examples of customers that returned to us after trying other tools.

They returned to ON24 because the other products did not provide the benefits that ON24 solutions offer. These boomerang customers not only highlight the power of our platform, but they also contributed to the improvement in our ARR performance in Q2. Turning to customer metrics. We have continued to shift focus to our larger enterprise customers, resulting in improvements in a number of our customer metrics. In Q2, the number of customers with ARR of over $100,000 grew by five and represented approximately two thirds of our total ARR.

And as Sharath mentioned, our focus on enterprise customers resulted in our average core ARR per customer reaching its highest level ever. Our strategy of moving customers to longer term commitments is also paying off with the percentage of our ARR in multiyear agreements, the highest ever at the end of Q2 at over 50%. As our customer base continues to adopt more of our products, we have continued to see an increase in customers using two or more products, with that metric also hitting an all time high at the end of Q2. Total customer base at the end of Q2 was fifteen sixty six, driven by a net reduction in SMB customers. Before turning to expense items and profitability, I would like to point out that I will be discussing non GAAP results going forward.

Our non GAAP results exclude stock based compensation, restructuring charges, impairment charges for real estate, amortization of acquired intangibles, shareholder activism related costs, certain legal costs related to litigation regarding our 2021 IPO as well as certain other items. Our GAAP financial results, along with the reconciliation between GAAP and non GAAP results, can be found within our earnings release. Our gross margin in Q2 was 77%, consistent with 2024 gross margins and Q1 of this year. Now moving on to operating expenses. Sales and marketing expense in Q2 was $15,100,000 compared to $15,800,000 in Q2 last year.

This represents 43% of total revenue compared to 42% in the same period last year and 45% last quarter. Our sales and marketing expenses have decreased in absolute dollars both year over year and from last quarter, largely due to the cost savings measures we have implemented to improve operational efficiency in that organization. R and D expense in Q2 was $6,900,000 compared to $6,700,000 in Q2 last year. This represents 19% of total revenue compared to 18% in the same period last year and 20% last quarter. We continue to prioritize investments in product innovation for our platform to drive future growth, including AI enabled features that utilize our first party data advantage.

G and A expense in Q2 was $6,100,000 compared to $6,500,000 in Q2 last year. This represents 17% of total revenue compared to 17% in the same period last year and 18% last quarter. We have continued to take actions to streamline our G and A functions and as a result, our G and A expenses in absolute dollars have decreased compared to the same period last year and last quarter. Moving on to our bottom line performance and cash flow metrics. Operating loss for Q2 was $900,000 or a negative 3% operating margin compared to an operating loss of $300,000 and a negative 1% operating margin in the same period last year.

Net income in Q2 was $900,000 or $02 per share based on approximately 45,100,000.0 diluted shares outstanding. This compares to net income of $1,500,000 or $03 per share in Q2 last year, using approximately 45,800,000.0 diluted shares outstanding. We delivered positive adjusted EBITDA in Q2 as well as our sixth consecutive quarter of positive free cash flow. Our free cash flow for Q2 was positive $2,500,000 when you exclude cash outflows related to our restructuring efforts, shareholder activism fees and certain other legal costs, which collectively totaled $400,000 in Q2 twenty twenty five. Our free cash flow in Q2, including all of these items, was positive $2,100,000 compared to positive $900,000 in Q2 last year.

Cash provided by operations in Q2 was $2,600,000 compared to cash provided by operations of $1,400,000 in Q2 of last year. I would like to provide an update on the $50,000,000 capital return program we announced in May. In Q2, we utilized $4,300,000 for share repurchases under this program and a further $2,500,000 thus far in Q3 under this program for a total of approximately $6,800,000 utilized to date under this program. This share repurchase program followed the completion of three earlier capital return programs, which collectively returned $191,000,000 to shareholders. Our balance sheet remains strong with just under $180,000,000 of cash and investments at the end of Q2.

Now turning to our guidance. Regarding Q3 guidance, we expect Q3 total revenue, which includes our Virtual Conference product, in the range of $33,600,000 to $34,200,000 and core platform revenue, including services, in the range of $33,000,000 to $33,600,000 Professional services is expected to represent approximately 7% of total revenue. We expect our gross margin to be approximately 76% in Q3. We expect a non GAAP operating loss in the range of $1,300,000 to $700,000 and non GAAP net income per share of $00 per share to $02 per share using approximately 45,000,000 diluted shares outstanding. In Q3, we also expect to be adjusted EBITDA positive.

We expect a restructuring charge of $100,000 to $400,000 in Q3 related to our ongoing cost reduction efforts, which is excluded from the non GAAP amounts provided above. Amortization of acquired intangibles, shareholder activism costs, certain other legal costs and certain other items are excluded from the Q3 non GAAP amounts provided above. Now turning to our annual guidance for 2025. For the full year, we expect total revenue to be in the range of $137,700,000 to $138,700,000 Professional services is expected to represent approximately 7.5 of total revenue. We expect core platform revenue, including services, to be in the range of $135,200,000 to $136,200,000 We expect a non GAAP operating loss in the range of 5,200,000 to $3,800,000 and non GAAP net income per share of $02 per share to $05 per share using approximately 45,000,000 diluted shares outstanding.

We expect gross margins for the year to be 76% to 77%. We expect to be adjusted EBITDA positive in Q4 and for 2025, our second consecutive year of positive adjusted EBITDA. Excluding any incremental non GAAP expenses, we expect to deliver positive free cash flow in 2025, our second consecutive year of positive free cash flow. Restructuring charges and amortization of acquired intangibles, shareholder activism costs, certain other legal costs and certain other items are excluded from the full year non GAAP amounts provided above. I also want to provide our outlook for ARR for the second half of this year.

For ARR in Q3, which has historically been a seasonally softer quarter for us, we assume core ARR performance in Q3 to be relatively consistent with Q2, with core ARR down by $500,000 to $1,500,000 compared to Q2 levels. For our Virtual Conference product, we expect Q3 ARR to decline by approximately $100,000 in Q3, ending Q3 at $1,900,000 We expect to return to positive ARR growth in Q4 of this year, driven by improved retention as well as expected improvement in our growth bookings in the fourth quarter. We expect the increase in the core ARR to be between 0 and $1,000,000 in Q4 as compared to Q3. Virtual Conference ARR is expected to be $1,800,000 at the end of Q4. In summary, in Q2, we delivered on the goals we set on our prior earnings call, including delivering positive adjusted EBITDA and positive free cash flow in Q2 as well as positive free cash flow for the first six months of this year.

We’re executing on the $50,000,000 share repurchase program we announced in May to capitalize on the opportunity to acquire more of our undervalued stock. We are committed to delivering positive adjusted EBITDA for 2025 while continuing to invest in AI focused innovation that capitalizes on our first party data advantage. We expect our strategic initiatives and positive momentum to drive a return to ARR growth in Q4 of this year. With that, Sharat and I will open the call up for questions.

Conference Operator: If you would like to cancel your request, please press 2. Please ensure you lift the handset before pressing any keys. One moment, please, for your first question. Your first question comes from the line of Rob Oliver.

Your line is now open.

Rob Oliver, Analyst: Great. Hi, good afternoon, guys. Thanks for taking my question. I had two, Sharat, one for you and then Steve, one for you. So, Sharat, I was wondering if you could just provide a bit more color just on the general market environment, within, your customer base in terms of buying trends, what you’re seeing if there’s if you feel as if, you know, gen I GenAI is starting to be a bit of, like, a catalyst for you guys given where you are with AI powered ace or whether it’s, you know, still freezing marketing departments a little bit.

And then Steve, for you, my question is around just that pipeline heading into Q4 and the confidence around, the ARR strength in Q4 and how that pipeline looks and any color you can provide around you know, making us comfortable around that number would be great. Thank you guys both very much.

Sharat Sharan, Co-Founder and CEO, ON24: Rod, this is Sharad. So so let let me take I think that your first comment was about how are the customer conversations. Look. In q two, we saw good enterprise new business performance, improved growth retention, and traction with AI powered days. We continue to see customer win backs, and these customers are signing up for larger deals compared to the previous previous engagement with us.

There are couple key highlights that we are seeing in these customer conversations. One, as as you said, there’s excitement, Rob, pertaining to our AI offerings and increased sophistication as most companies are now dealing with their own AI agenda. I’m increasingly seeing more traction in areas like financial services and life sciences for our AI powered ACE offering that earlier had started slower out of the gate. Now the customer appetite overall in the market environment does depend on market segments. Some segments are beginning to focus more on growth initiatives like the financial services segment and others are still challenged like the manufacturing segment.

Okay. As examples that I highlighted in the prepared remarks, in q two, we saw some good performance from some of our larger customers. One of our largest customer, which is an education and certification company for the technology industry, renewed its multiyear commitment to ON24, and larger customers in insurance and life sciences expanded their commitments by using more ON24 products, including AI powered ace and expanding across their business segments. Now you you’d also asked the question, and I’ll give the guidance kind of question to Steve, on pipeline. Q two was a strong pipeline generation quarter for us.

This is this was encouraging because we made some go to market improvements that included new sales and marketing leadership and the launch of new positioning and messaging. So that was quite encouraging. I believe that we will continue to see improvements here as the year progresses. Steve?

Steve Batuoni, CFO, ON24: Rob, you asked about how we’re feeling about guidance. So let me start by saying that we are seeing some good signs in the business and we’re making progress. We delivered over the high end of our revenue guidance for Q2. And on the P and L side, we’re EBITDA profitable in Q2, and we’re free cash flow positive for the sixth consecutive quarter. And we’re also raising our full year revenue guidance as well.

Really quick, in terms of profitability and cash flow, we do expect to be EBITDA and EPS positive in q three, q four, and for 2025 as a whole. And for cash flow, we expect to be cash flow positive for 2025, excluding any incremental non GAAP items like restructuring. Now Sharath talked about ARR, but just briefly, Q3 is a seasonally softer quarter for us, and we expect it to be relatively consistent with Q2, ARR performance. We provided guidance on that.

Sharat Sharan, Co-Founder and CEO, ON24: And as we look at

Steve Batuoni, CFO, ON24: the second half, we do expect to be ARR positive in Q4 with an increase of $0 to $1,000,000 and expect to exit 2025 with some ARR growth in Q4.

Sharat Sharan, Co-Founder and CEO, ON24: Add to what Steve said, you know, are very we were very close to being ARR positive in q two. And as I talked in the prepared remarks, if you compare, you know, first half twenty twenty five to the first half twenty twenty four, almost all financial and customer metrics trended positively. That’s what gives us confidence to expect ARR performance for Q4 to grow between 1,000,000. It’s tied around improvements in gross retention, new business performance, our focus on regular industries like financial service and life sciences and continued traction in our AI offerings and win backs from boomerang customers. So as I look at 2026, it is early and we are not giving 2025 guidance, but based on the progress we have made, I expect to be ARR positive for the year.

Rob Oliver, Analyst: Super helpful. Okay. Appreciate it guys. Thank you very much.

Conference Operator: Your next question comes from the line of Ian Black from Needham and Company. Congratulations

Steve Atmone, Chief Financial Officer, ON24: on the growth in 100 ks plus customer count. How are you driving greater penetration within your enterprise customers? Like, is it balance between volume versus product cross sell? Just some insight into that would be great. Thank you.

Sharat Sharan, Co-Founder and CEO, ON24: Yeah. So, you know, on on the 100 k plus customers, that base grew in q two, signaling traction in enterprise segments. We saw good traction in new business acquisitions, and we also saw customers up leveling their their commitment to ON 24. I gave up I gave a couple of those examples in the in the prepared remarks. Now while there may be some quarter to quarter seasonality, especially in slower quarters, we are seeing improvements in our enterprise execution, our focus on regular industries, win backs, etcetera.

And I’ll highlight a couple of things. Our enterprise customer metrics in q two were were quite strong. Average core ARR per customer was the highest ever. And the percentage of ARR and multi year agreements was the highest ever, and that is what we are focused on. So this is based on more adoption of different use cases, more adoption of AI powered ace, and also, more strength in the new business kind of acquisition business at Ian.

Steve Atmone, Chief Financial Officer, ON24: Great. Thank you.

Conference Operator: There are no further questions at this time. Ladies and gentlemen, this concludes today’s conference call. Thank you for your participation. You may now disconnect.

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