Nuix (ASX: NXL) share price down on realised FY21 guidance

Nuix’s revenue has met the company’s most recent FY21 guidance.
The post Nuix (ASX: NXL) share price down on realised FY21 guidance appeared first on The Motley Fool Australia. –

The Nuix Ltd (ASX: NXL) share price is slipping this morning after the embattled company released its earnings for financial year 2021 (FY21).

On opening, the Nuix share price jumped 6.97% higher than its previous close. However, the rise has been short-lived. Right now, Nuix shares are trading down 2.09% for $2.81.

Nuix share price falters on $176 million of revenue

Here’s how the controversial provider of investigative analytics and intelligence software performed through FY21:

$176 million of revenue, just 0.1% more than that of FY20
An after-tax loss of $1.64 million, down 107% on FY20’s $23.5 million profit
$30.15 million in earnings before interest, tax, depreciation, and amortisation (EBITDA), 51% less than that of FY20
Gross profit $157.2 million

Nuix reported its annualised contract value increased during FY21. It grew by 4.1% in constant currency. Its subscription annualised contract value grew by 10.3% on that of FY20, while its consumption annualised contract value grew by 22%.

Come the end of FY21, Nuix’s total software-as-a-service (SaaS) customers had grown to 112, up from 71 at the end of the previous financial year.  

Additionally, the company stated that contracts beginning in FY22 suggest those figures will continue to increase.

Nuix’s customer churn was lower in FY21 at just 3.7%.  

Nuix spent $44.3 million on research and development in the past financial year. It expects its research and development spending to increase in FY22.

Nuix ended the period with $70.8 million of cash and no borrowings.

What happened in FY21 for Nuix?

For those who haven’t kept an eye on the company previously touted as a future market darling, here’s what you missed.

The Nuix share price has been hit hard over FY21 by a number of dramatic happenings.

Nuix conducted its Initial Public Offering (IPO) in December 2020. The unicorn’s prospectus’ offer price of $5.31 per share gave the company a market capitalisation of around $1.7 billion on listing.

At the time, we reported the tech company’s debut could have brought its major investor and backer of its float, Macquarie Group Ltd (ASX: MQG) a $1 billion pay day.

Nuix’s first day on the ASX saw its share price finishing at a massive $8.01, representing a 50.8% gain on its offer price.

Within its prospectus, Nuix forecasted it would reap revenue of $193.5 million, $166.7 million of gross profit, and EBITDA of $63.6 million in FY21.

Nuix’s forecasts were downgraded in April and again in May. The first downgrade saw Nuix’s forecasted revenue lowered to between $180 million and $185 million. In May, Nuix’s guidance was dropped to between $173 million and $183 million.

Then came the real trouble. Nuix was the subject of an intense media campaign that began in May. Over the course of the campaign, Nuix was accused of poor governance, questionable financial reporting, and a controversial options package given to the company’s founder.

Since then, Nuix has been the subject of an Australian Federal Police investigation, watched its CEO and CFO walk out, and, now, it’s being investigated by the Australian Securities and Investments Commission (ASIC).

Despite the bad press, Nuix welcomed 100 new customers over FY21. Its average new order value rose to $240,000. Additionally, its customers were generally willing to enter into multi-year contracts, which accounted for 36.3% of Nuix’s revenue for FY21.

What did management say?

Nuix’s CEO Rod Vawdrey commented on the news driving the company’s share price today, saying:

This last year has been challenging for Nuix and our stakeholders. Despite this, the Nuix team has delivered significant customer wins, important technology developments and strategic expansion. We are optimistic and remain confident in Nuix’s future. Our employee base continues to grow, and our technology is best in class, and critical for our customers and partners. Further investment in our technology will enhance and consolidate Nuix’s market position.

Nuix’s chair Jeff Bleich added:

The board and senior management are focussed on strengthening all aspects of the company and addressing the issues that surfaced during our first eight months as a publicly listed company. Progress on our agenda continues apace with expansion of our board through the pending appointment of two additional independent non-executive directors and a strong field of candidates for the CEO position…

We recognise there are areas for improvement and necessary change. We must learn from recent challenges and ensure we address any underlying problems.

What’s next for Nuix?

Here’s what those interested in the Nuix share price might want to keep an eye out for in FY21:

Nuix plans to continue investing in its growth. Particularly, into its journey to the cloud beyond its Discover SaaS offering.

It will also work towards accelerating its product development pipeline, its strong product base, and additional value-added solutions.

It says it will also be building and enhancing its sales and distribution capacity.

As noted by Nuix’s chair, the company will be looking towards board expansion and senior leadership renewal in FY22.

Nuix hasn’t yet provided guidance for FY22.

Nuix share price snapshot

Since its debut on the ASX, the Nuix share price has slipped a whopping 61%. It is also 64% lower than it was at the start of 2021.

The company now has a market capitalisation of around $910 million, with approximately 317 million shares outstanding.

The post Nuix (ASX: NXL) share price down on realised FY21 guidance appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned.

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Nuix Pty Ltd. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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