E2open Q1 Disappoints: Revenue Falls Short, Stock Price Plummets

E2open Parent Holdings, Inc. ETWO shares are trading lower after the company reported first-quarter FY25 results.

Revenue declined 5.6% Y/Y at $151.2 million, missing the consensus of $155.0 million. Subscription revenue fell 2.6% Y/Y to $131.4 million.

Adjusted gross profit fell 7.1% Y/Y to $102.6 million, with gross margin contracted to 67.8% from 69.0% a year ago.

Adjusted EBITDA fell 5.7% Y/Y to $50.7 million, with a margin of 33.6% (flat Y/Y).

Adjusted EPS stood at $0.04, in line with the consensus.

Outlook: For the second quarter, the company expects GAAP Subscription revenue of $129 million-$132 million.

For FY25, E2open projects revenue of $630 million-$645 million (vs. an estimate of $637.1 million) and subscription revenue of $532 million-$542 million.

The company expects an adjusted gross profit margin of 68%-70% and adjusted EBITDA of $215 million-$225 million.

Andrew Appel, e2open chief executive officer, said, “We are prioritizing and investing in e2open’s most important asset – our client relationships – and in Q1, this enabled us to improve client satisfaction and secure long-term contract extensions to support future growth.”

“We closed important new subscription business in Q1, and although we experienced some temporary deal closure delays, we have already closed a number of those delayed deals in June.”

Marje Armstrong, chief financial officer, also noted continued engagement in the strategic review that e2open announced in March, anticipating its completion in the near future. 

Price Action: ETWO shares are down 12.4% at $3.90 premarket at the last check Thursday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.