Onestream, Inc. Class A Reports Strong Earnings Call

Onestream, Inc. Class A ((OS)) has held its Q3 earnings call. Read on for the main highlights of the call.

The recent earnings call for Onestream, Inc. Class A painted a largely positive picture, with strong growth in subscription and international revenues, and a significant surge in demand for AI solutions. The company celebrated successful customer wins, particularly in Europe and with major enterprises, although it faced challenges in the U.S. Federal sector and reported a notable decline in license revenue. Overall, the sentiment was optimistic, with growth metrics overshadowing the hurdles.

Strong Subscription Revenue Growth

Subscription revenue saw a robust increase of 27% year-over-year, reaching $141 million. This growth underscores the company’s strong performance in recurring revenue streams, highlighting its ability to maintain and expand its customer base.

Record International Revenue Growth

International revenue experienced a remarkable 37% growth year-over-year, now accounting for 34% of total revenue. This surge was largely driven by legacy replacement momentum in Europe, showcasing the company’s expanding global footprint.

AI Bookings Surge

AI bookings increased by an impressive 60% year-over-year, reflecting the strong demand for AI-driven solutions. This growth indicates that Onestream is well-positioned to capitalize on the burgeoning AI market.

SensibleAI Forecast Success

The SensibleAI Forecast has significantly improved forecast accuracy, with gross revenue forecast accuracy up by 5 percentage points and payroll forecast accuracy by 8 percentage points. Additionally, it reduced forecast generation time by 94%, demonstrating the efficiency and effectiveness of their AI solutions.

Major Customer Wins

A notable deal with a Swiss multinational healthcare leader marked Onestream’s first major win in the pharmaceutical sector. This highlights the platform’s growing appeal to leading enterprises and its potential for further expansion in this industry.

Positive Free Cash Flow

Onestream reported a positive free cash flow of $5 million for the third quarter, surpassing expectations and indicating strong financial health and operational efficiency.

Decline in License Revenue

License revenue fell by 64% to $4 million compared to the previous year, primarily due to contract rationalization and a shift towards SaaS conversions. This decline highlights a strategic transition in the company’s revenue model.

Challenges in U.S. Federal Business

The company faced headwinds in the U.S. Federal sector, with contract rationalization impacting performance. However, renewals remained strong, with only one contract loss due to agency discontinuation, suggesting resilience in this challenging market.

Forward-Looking Guidance

Onestream’s management provided robust guidance for the future, reflecting strong business performance and strategic momentum. They projected fourth-quarter revenue between $156 million to $158 million, with a non-GAAP operating margin of 4% to 6%. For the full year 2025, revenue is expected to be between $594 million to $596 million, with non-GAAP net income per share forecasted between $0.15 to $0.19. Looking ahead to 2026, the company expressed confidence in meeting Wall Street consensus for revenue and operating income, driven by a strong pipeline and innovative product portfolio.

In summary, Onestream, Inc. Class A’s earnings call conveyed a positive sentiment, driven by strong growth in key areas such as subscription and international revenues, and a surge in AI demand. Despite challenges in the U.S. Federal sector and a decline in license revenue, the company’s strategic initiatives and robust guidance suggest a promising outlook for the future.