Executive Summary

Q4 2024 revenue was $36.68M and non-GAAP diluted EPS was $0.06; non-GAAP operating loss was $0.36M and adjusted EBITDA was $0.72M, marking the seventh consecutive quarter of non-GAAP profitability and fourth consecutive quarter of positive free cash flow .
ARR ended at $127.3M (Core) and $129.7M (Total), down $2.3M sequentially, driven by two large customer downsells despite the highest new and expansion ARR of the year; Enterprise NRR was 91% and gross retention improved to the low-80s for 2024, both up mid-single digits YoY .
Management guided to a return to ARR growth in 2025 with FY25 Core revenue of $136.3–$139.3M, total revenue of $138.6–$141.6M, ~76% gross margin, and non-GAAP EPS of $0.02–$0.05; Q1’25 revenue is guided to $34.0–$34.5M and non-GAAP loss per share of $(0.03) to $(0.01) .
Catalysts: accelerating AI-powered ACE adoption (>20% of growth ARR bookings), improving retention/NRR, disciplined cost structure, and explicit framework to resume ARR growth in 2025; near-term overhangs include macro-tight marketing budgets and the Q4 downsells .

What Went Well and What Went Wrong

What Went Well
- AI-powered ACE momentum: “ACE accounted for over 20% of our growth ARR bookings in Q4,” with the “highest level of new bookings” and customers now “crossed double digits as a percentage of our customer base” .
- Retention and NRR improved: gross retention reached the highest level in three years; Enterprise Core NRR was 91% (up mid-single digits YoY), supported by multi-year and multi-product adoption (51% of ARR in multi-year; 39% of customers using 2+ products) .
- Profitability and cash generation: non-GAAP EPS positive for the 7th consecutive quarter and adjusted EBITDA positive; free cash flow positive for the 4th consecutive quarter .
What Went Wrong
- Sequential ARR decline: Core ARR fell $2.3M QoQ (to $127.3M), impacted by two significant downsells despite robust new and expansion activity .
- YoY revenue contraction: total revenue declined to $36.68M from $39.34M in Q4’23 amid tight marketing budgets; management cited 2024 as “one of the toughest years” for marketing spend .
- Non-core product headwind: Virtual Conference revenue continued to shrink (Q4 VC total revenue $0.64M vs $1.05M in Q4’23), reflecting de-emphasis of the product .

Financial Results

Sequential trend (oldest → newest)

Metric	Q2 2024	Q3 2024	Q4 2024
Total Revenue ($M)	$37.349	$36.325	$36.680
Core Platform Revenue incl. services ($M)	$36.485	$35.608	$36.037
Subscription & Other Platform ($M)	$34.147	$33.860	$33.576
Professional Services ($M)	$3.202	$2.465	$3.104
Non-GAAP Gross Margin (%)	77%	77%	77%
Adjusted EBITDA ($M)	$0.774	$0.228	$0.724
Non-GAAP Diluted EPS ($)	$0.03	$0.02	$0.06
Cash + Marketable Securities ($M)	$193.8	$188.8	$182.7

YoY comparison

Metric	Q4 2023	Q4 2024
Total Revenue ($M)	$39.337	$36.680
Subscription & Other Platform ($M)	$35.752	$33.576
Professional Services ($M)	$3.585	$3.104
GAAP Gross Margin (%)	75%	74%
Non-GAAP Gross Margin (%)	77%	77%
Adjusted EBITDA ($M)	$1.434	$0.724
Non-GAAP Diluted EPS ($)	$0.06	$0.06

Segment/product revenue mix (oldest → newest)

Revenue ($M)	Q2 2024	Q3 2024	Q4 2024
Core Platform – Subscription & Other	$33.479	$33.272	$33.030
Core Platform – Professional Services	$3.006	$2.336	$3.007
Total Core Platform	$36.485	$35.608	$36.037
Virtual Conference – Subscription & Other	$0.668	$0.588	$0.546
Virtual Conference – Professional Services	$0.196	$0.129	$0.097
Total Virtual Conference	$0.864	$0.717	$0.643
Total Revenue	$37.349	$36.325	$36.680

KPIs and operating metrics

KPI	Q2 2024	Q3 2024	Q4 2024
Core ARR ($M)	$131.0	$129.7	$127.3
Total ARR ($M)	$133.7	$132.2	$129.7
Enterprise Core NRR (%)	—	—	91%
Core NRR (Total) (%)	—	—	89%
Gross Retention (%)	—	—	Low-80s (2024)
ARR in Multi-year Contracts (%)	—	—	51% (as of 12/31/24)
Customers Using 2+ Products (%)	—	—	39% (as of 12/31/24)
Customers ≥$100K ARR (count)	—	—	305 (2024 year-end)
Total Customers (count)	—	—	1,645 (Q4-end)

Non-GAAP adjustments (Q4 2024 reference data): stock-based compensation $10.898M; restructuring $0.388M; amortization of acquired intangibles $0.135M; non-GAAP net income $2.549M .

Guidance Changes

Q4 2024 guidance vs. actuals

Metric	Period	Previous Guidance (Q3’24 PR)	Actual (Q4’24)	Change
Core Platform Revenue incl. services ($M)	Q4 2024	$34.7–$35.7	$36.037	Raised vs guide (beat)
Total Revenue ($M)	Q4 2024	$35.4–$36.4	$36.680	Raised vs guide (beat)
Non-GAAP Operating Income/Loss ($M)	Q4 2024	$(1.3)–$(0.3)	$(0.358)	In-line/better than mid
Non-GAAP Diluted EPS ($)	Q4 2024	$0.01–$0.02 (diluted)	$0.06	Significant beat

New guidance issued at Q4 2024

Metric	Period	Current Guidance	Previous Guidance	Change
Core Platform Revenue incl. services ($M)	FY 2025	$136.3–$139.3	N/A	New
Total Revenue ($M)	FY 2025	$138.6–$141.6	N/A	New
Non-GAAP Operating Loss ($M)	FY 2025	$(5.5)–$(3.5)	N/A	New
Non-GAAP Diluted EPS ($)	FY 2025	$0.02–$0.05 (≈47.5M dil.)	N/A	New
Gross Margin (%)	FY 2025	~76% (mgmt commentary)	N/A	New
Core Platform Revenue incl. services ($M)	Q1 2025	$33.4–$33.9	N/A	New
Total Revenue ($M)	Q1 2025	$34.0–$34.5	N/A	New
Non-GAAP Operating Loss ($M)	Q1 2025	$(3.3)–$(2.3)	N/A	New
Non-GAAP EPS ($)	Q1 2025	$(0.03)–$(0.01) (≈42.0M sh)	N/A	New
Restructuring Charge ($M)	Q1 2025	$0.8–$1.0 (excluded from non-GAAP)	N/A	New

Notes: Management expects adjusted EBITDA to be positive for FY25 and for each quarter starting in Q2’25; Q1 is seasonally the trough for revenue and profitability .

Earnings Call Themes & Trends

Topic	Q2 2024 (Q-2)	Q3 2024 (Q-1)	Q4 2024 (Current)	Trend
AI/ACE adoption	ACE at high-teens % of growth ARR; platform momentum	ACE reached new high as % of growth ARR	ACE >20% of growth ARR; best quarter for bookings; customer penetration now double digits %	Accelerating
Retention/NRR	Sequential and YoY Core ARR growth in life sciences and financial services; improving gross retention	High single-digit YoY improvement in gross retention	Gross retention best in 3 years; Enterprise NRR 91% (Core NRR 89%)	Improving
New business & winbacks	Early adopters driving ARR uplift	Boomerang customer winbacks supporting stability	Highest new & expansion ARR of 2024; continued winbacks	Improving
Regulated verticals	Strength in life sciences, financial services	Focus on regulated industries	Multiple case studies in life sciences and asset management; deeper enterprise push	Strengthening
Profitability & FCF	Exceeded guide; FCF positive; gross margin improvement	Exceeded guide; FCF positive 3rd straight quarter	7th straight quarter non-GAAP profitability; 4th straight FCF positive	Stable/Positive
Macro/Marketing budgets	Cautious environment	Stabilization narrative	2024 “one of the toughest years” for marketing budgets; seeing green shoots in tech	Stabilizing

Management Commentary

Strategic focus: “We improved our retention rates, executed on our product innovation roadmap, consistently exceeded our profitability targets, and laid the foundation for a return to growth.” – Sharat Sharan, CEO .
AI differentiation: “Our AI-powered ACE had its best quarter yet… enabling personalized engagement and AI-generated content, driving immediate ROI.” – Sharat Sharan .
Enterprise momentum: “We saw continued strength in regulated verticals, including life sciences and financial services… elevating our platform, including ACE, as foundational technology.” – Sharat Sharan .
Profitability discipline: “We delivered positive adjusted EBITDA and positive non-GAAP EPS in Q4 for the seventh consecutive quarter… total non-GAAP expenses were almost $20 million lower than 2023.” – Steve Vattuone, CFO .
2025 roadmap: “We expect to return to ARR growth during the year… with ending 2025 Core ARR higher than ending 2024 levels; gross margins ~76%; adjusted EBITDA positive for 2025.” – Steve Vattuone .

Q&A Highlights

Macro budgets and demand: Management characterized 2024 as one of the toughest years for marketing budgets (per Gartner), but noted “green shoots” in tech and winbacks, with stabilization and expected NRR improvement in 2025; stance remains cautiously optimistic .
OpEx and margins: 2025 is about balancing growth with profitability; selective investments in AI and go-to-market for regulated industries while maintaining adjusted EBITDA and EPS profitability for the year, with Q1 as the trough .
Free cash flow: CFO expects free cash flow positive again in 2025, excluding potential one-time/restructuring items .

Estimates Context

S&P Global (Capital IQ) consensus revenue and EPS estimates for Q4 2024 were unavailable at the time of analysis due to data access limitations. As a proxy, we compared results to company-issued guidance (beats across revenue and EPS) and to prior periods. We will update comparatives versus Wall Street consensus upon availability.

Key Takeaways for Investors

Execution beat: Q4 revenue and EPS exceeded company guidance; non-GAAP profitability and FCF remain intact, underscoring disciplined cost control and a resilient margin profile .
ACE-led catalyst: AI-powered ACE is scaling (now >20% of growth ARR bookings) and differentiating ON24 in enterprise-first, regulated verticals—an important lever for ARR re-acceleration in 2025 .
ARR inflection targeted: Despite two large Q4 downsells, mgmt expects ending 2025 Core ARR to grow YoY; Q1 tends to be seasonal trough with improving trajectory through the year .
Quality of ARR: Multi-year contracts (51% of ARR) and multi-product adoption (39% of customers) provide durability and expansion potential as macro stabilizes .
Cash and capital returns: ~$182.7M in cash and marketable securities supports ongoing investments and buybacks; 2024 delivered 4 consecutive FCF-positive quarters .
Risk checks: Macro marketing budgets remain tight; Virtual Conference continues to decline; watch for magnitude/timing of ARR improvements and execution of enterprise go-to-market .
Trading lens: Near-term sentiment likely improves on guidance beats and the ARR growth framework, with AI/ACE adoption and retention/NRR improvements as key KPI catalysts over the next 1–2 quarters .

ON24 INC. (ONTF)·Q4 2024 Earnings Summary