• Revenue Growth: 29% year-over-year increase in Q4; 31% year-over-year increase for 2024 to $489 million.
• Subscription Revenue: 41% year-over-year growth to $428 million for 2024; 35% year-over-year increase in Q4 to $119 million.
• Free Cash Flow: $59 million for 2024, representing a 12% free cash flow margin; $25 million generated in Q4.
• Gross Retention Rate: 98% for 2024.
• Net Dollar Retention Rate: 113% for 2024.
• Annual Recurring Revenue (ARR): $568 million at the end of 2024.
• Remaining Performance Obligations (RPO): Greater than $1 billion, with a 23% year-over-year increase.
• International Revenue: 38% year-over-year growth to $155 million for 2024; 49% year-over-year increase in Q4 to $46 million.
• Non-GAAP Operating Income: $9 million in Q4, with a 7% operating margin; $1 million for the full year.
• Non-GAAP Net Income: $12 million in Q4; $14 million for the full year.
• Non-GAAP Earnings Per Share: $0.07 in Q4; $0.14 for the full year.
• Equity-Based Compensation Expense: $53 million in Q4; $316 million for the full year.
• Cash and Cash Equivalents: $544 million at the end of 2024.
• Guidance for 2025: Total revenue expected between $583 million to $587 million; Non-GAAP operating margin expected to be 1%.

• Warning! GuruFocus has detected 2 Warning Sign with OS.

Release Date: February 11, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• OneStream Inc (NASDAQ:OS) achieved a 29% year-over-year revenue growth in Q4 2024, demonstrating strong financial performance.
• The company reported a 98% gross retention rate, highlighting the stickiness and value of its platform.
• OneStream Inc (NASDAQ:OS) introduced 15 new innovations in 2024, enhancing its product offerings and market competitiveness.
• The company successfully completed an IPO and secondary offering, strengthening its financial position.
• OneStream Inc (NASDAQ:OS) received FedRAMP High authorization, enabling it to work with high-security federal agencies, expanding its public sector opportunities.

Negative Points

• The strengthening of the US dollar negatively impacted financial metrics by approximately 2%, affecting ARR, RPO, and Q4 billings.
• Macro uncertainties, including geopolitical tensions and regulatory changes, caused deal scrutiny and delays, impacting revenue timing.
• The company faces challenges in transitioning customers from term licenses to a 100% SaaS model, which may affect short-term revenue.
• Despite strong growth, the company reported a non-GAAP operating margin of only 7% in Q4, indicating room for profitability improvement.
• There is uncertainty in the public sector market due to spending pressures, which could impact future revenue growth in this segment.

Q & A Highlights

Q: Can you discuss the improving demand for modern consolidation planning solutions despite the challenging enterprise software environment? A: Tom Shea, CEO: Our core solution is essential for finance teams, providing reliable data and simplifying ecosystems. We focus on customer success and retention, with a 98% growth retention rate. Our growth model leverages a durable customer base, forming long-term relationships and adapting with market needs. We offer AI solutions and faster on-ramps like CPM Express to enhance customer value. The vast data we manage positions us to support AI-driven applications for CFOs in the future.

Q: How much of the term headwinds are due to FX versus other factors like deal closings and sales cycle elongations? A: Bill Koefoed, CFO: About 32% of our business is international, and the US dollar strengthened by 6% from September to December, impacting financial metrics by roughly 2%. This FX impact is separate from other headwinds like deal closings.

Q: Can you provide more details on the packaging changes and their impact on net revenue retention (NRR)? A: Tom Shea, CEO: Our pricing and packaging changes align with our multi-solution strategy, including new offerings like sensible machine learning and ESG. This evolution is not a reset but a way to offer new products efficiently. We operationalized these changes in 2025 to support our long-term strategy.

Q: What is the potential for ARR and subscription revenue growth in 2025? A: Bill Koefoed, CFO: We expect subscription revenue to grow faster than total revenue. While we don't provide specific ARR guidance, we're focused on growing net new ARR and converting existing customers to SaaS, which currently represents 80% of total ARR.

Q: How are you approaching the federal government opportunity given spending pressures and FedRAMP High authorization? A: Tom Shea, CEO: FedRAMP High is a significant opportunity for us, enabling us to offer efficiency solutions to the government. Despite spending pressures, we remain committed to this market, leveraging our FedRAMP High status to unlock additional opportunities.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.