Shares of software-as-a-service company E2open Parent Holdings experienced a significant drop after the release of their second-quarter financial results. The company’s revenue showed a decline, falling short of analysts’ estimates and causing a 13% decrease in stock value during after-hours trading on Tuesday. Despite finishing the day’s regular session with a 4% gain, closing at $4.39, the stock fell to $3.81 after hours.
Disappointing Second-Quarter Results
E2open reported a loss per share of 12 cents on revenue amounting to $158.5 million for the second quarter. This result fell below analysts’ expectations of an 8-cent loss per share according to FactSet. In comparison, during the same period last year, the company reported a loss per share of $1.22 on revenue totaling $160.7 million.
Revised Revenue Guidance
The company revised its fiscal year 2024 revenue guidance downward to $625 million to $635 million. This adjustment marks a decline from their previous projection of $655 million to $670 million.
Leadership Change
In addition to disappointing financial results, E2open announced a leadership change. The board and Chief Executive Michael Farlekas mutually agreed to this decision and named Andrew Appel as the interim CEO. The company has initiated a search for a permanent successor.
Future Growth Concerns
Marje Armstrong, E2open’s Chief Financial Officer, acknowledged their inability to reach their growth potential despite delivering subscription revenue near the high end of their guidance for the second quarter and maintaining strong adjusted EBITDA margins. The company expects continued pressure on its growth rate throughout fiscal year 2024.
