10-Q: OneStream Reports Q1 2025 Results, Driven by Subscription Revenue Growth

OneStream's Q1 2025 results show revenue growth driven by increased subscription adoption, despite a net loss.

Summary

• OneStream, Inc. reported its financial results for the quarter ended March 31, 2025.
• Total revenue increased by 24% year-over-year to $136.3 million, driven primarily by subscription revenue.
• Subscription revenue grew by 31% to $125.1 million, representing 92% of total revenue.
• License revenue decreased by 40% to $3.7 million as the company continues to shift to a SaaS-based model.
• Professional services revenue decreased by 11% to $7.5 million.
• The company reported a net loss of $32.7 million, compared to a net loss of $5.0 million in the same quarter of the previous year.
• Non-GAAP operating loss was $0.5 million, compared to $4.3 million in the prior year.
• Free cash flow was $35.8 million, compared to $24.9 million in the prior year.
• The company had $593.9 million in cash and cash equivalents as of March 31, 2025.
• Remaining performance obligations as of March 31, 2025, were $1,139.8 million.
• The company acquired three partner-developed solutions, AllocateIt, DrillIt and ToolkIt, for cash consideration of $3.7 million in May 2025.

Sentiment

Score: 6

Explanation: The document presents a mixed sentiment. While revenue growth is positive, the increasing net loss and operating expenses raise concerns. The company's strategic direction and market opportunity are viewed favorably, but the financial performance needs improvement.

Positives

• Subscription revenue is growing strongly at 31% year-over-year.
• The company is successfully transitioning to a SaaS-based model.
• Free cash flow is positive and increasing.
• Remaining performance obligations are substantial, indicating future revenue.
• The company has a strong cash position with $593.9 million in cash and cash equivalents.
• The acquisition of DataSense and three partner-developed solutions, AllocateIt, DrillIt and ToolkIt, may enhance the platform's capabilities.

Negatives

• The company is still operating at a net loss of $32.7 million.
• License revenue is decreasing significantly.
• Professional services revenue is also decreasing.
• Operating expenses are increasing significantly, impacting profitability.

Risks

• The company's rapid growth may not be sustainable.
• The company may not achieve or sustain profitability in the future.
• The company faces intense competition.
• Security breaches could harm the company's reputation and financial results.
• Changes in laws and regulations related to the Internet and cloud computing could diminish demand for the platform.
• The company's reliance on third-party data centers could lead to disruptions.
• The company's dependence on key personnel could be a risk.
• The company's international operations are subject to various risks.
• The company's organizational structure and the Tax Receivable Agreement (TRA) could create conflicts of interest and impose additional costs.
• The company's Class C and Class D common stock structure concentrates voting control.
• The company's stock price may be volatile.

Future Outlook

The company expects revenue from SaaS contracts to contribute an increasing portion of total revenue over time and intends to continue to invest efficiently in growing its business to take advantage of its expansive market opportunity, while remaining focused on positive cash flow.

Management Comments

• OneStream is modernizing and redefining the Office of the CFO through the Digital Finance Cloud, our AI-enabled and extensible software platform that unifies core financial functions and broader operational data and processes within a single platform.
• Our business model centers on maximizing the lifetime value of a customer relationship.
• We believe that our market opportunity is large, and we will continue to invest significantly in scaling across organizational functions to grow our operations, both domestically and internationally.

Industry Context

OneStream competes with legacy players like Oracle and SAP, as well as point product providers such as Anaplan, Blackline, Wolters Kluwer, and Workday. The company is focused on modernizing the Office of the CFO through its Digital Finance Cloud platform.

Comparison to Industry Standards

• Comparing OneStream to Anaplan, a direct competitor in the cloud-based planning software space, Anaplan reported revenue growth of 25% in their most recent quarter before being acquired, which is similar to OneStream's 24% revenue growth.
• BlackLine, another competitor focusing on financial close automation, reported a revenue growth of 14% in their most recent quarter, indicating OneStream is growing faster in comparison.
• Workday, while a broader HCM and Financials platform, reported subscription revenue growth of around 19%, suggesting OneStream's focused CPM approach is yielding competitive growth rates.
• Given the industry average growth rates for SaaS companies in the financial software sector, OneStream's growth rate is competitive, but the net losses indicate a need for improved operational efficiency.

Stakeholder Impact

• Shareholders may be concerned about the net loss, but encouraged by the revenue growth and SaaS transition.
• Employees may benefit from the company's continued investment in growth and development.
• Customers should see continued improvements and new features in the platform.
• Suppliers may benefit from the company's increasing scale and operations.
• Creditors should be reassured by the company's strong cash position and positive free cash flow.

Next Steps

• The company intends to continue to invest in scaling across organizational functions to grow its operations, both domestically and internationally.
• The company plans to continue to invest in personnel, office space, marketing and data center capacity to support its international growth.
• The company intends to continue to invest in its research and development to expand and enhance its platforms features and capabilities.
• The company intends to continue to invest in quantitative and generative AI-enabled solutions that are purpose-built for the Office of the CFO.

Key Dates

Keywords

OneStream, financial results, subscription revenue, SaaS, net loss, free cash flow, remaining performance obligations, acquisition, financial planning, corporate performance management