ON24 (ONTF) Q2 Revenue Tops Estimates

Key Points

• Revenue (GAAP) for Q2 2025 reached $35.3 million, exceeding analyst expectations Revenue exceeded analyst expectations compared to the same quarter last year.

• Non-GAAP earnings per share were $0.02, above the $0.01 non-GAAP estimate, though lower than last year's $0.03 (non-GAAP, Q2 2024).

• Free cash flow was $2.1 million, compared to $0.9 million in Q2 2024.

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ON24 (NYSE:ONTF), a digital engagement platform focused on B2B sales and marketing transformation, reported its results for Q2 2025 on August 7, 2025. The main highlights from the earnings release were revenue (GAAP) and earnings (non-GAAP) modestly above Wall Street expectations, continued improvements in customer retention in Q1 2025, and positive free cash flow for the sixth consecutive quarter. GAAP revenue reached $35.3 million versus the analyst consensus of $34.7 million, while Non-GAAP earnings per share came in at $0.02, surpassing estimates by $0.01. However, revenue declined compared to the prior year. Overall, the quarter demonstrated operational progress and cash flow gains, even as underlying sales remain below the previous year's levels.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

Business Overview and Key Strategic Focus Areas

ON24 delivers a cloud-based platform for businesses seeking digital solutions to engage customers, particularly in business-to-business (B2B) sales and marketing. Its software enables organizations to run interactive webinars, virtual events, and personalized content experiences. The goal is to help enterprises shift away from traditional in-person tactics to more efficient, data-driven digital engagement.

Recently, ON24 has focused on expanding capabilities around artificial intelligence (AI), customer data analytics, and product-led innovation. Its strategy targets large enterprise clients and regulated industries like financial services and life sciences. Success depends on delivering measurable ROI for customers, growing adoption of AI-powered solutions, and sustaining recurring revenues through robust customer retention and multi-year contracts.

Quarterly Highlights: Key Developments and Metrics

ON24’s GAAP revenue edged above expectations but declined relative to last year. The company attributed this to macroeconomic caution. Still, several metrics showed positive movement, particularly in recurring contract performance (ARR, a non-GAAP metric) and cash flow. Annual recurring revenue (ARR), which recognizes the run-rate of contracted subscription revenue, was $127.1 million as of Q2 2025. Growth in $100,000-plus ARR enterprise customers returned after several quarters of declines in that key segment.

The company continued to reduce costs as shown by lower operating expenses. While the Non-GAAP operating loss increased to $0.9 million, Free cash flow more than doubled year-over-year. Gross margin also remained stable, with reported Non-GAAP gross margin at 77%, the same as Q2 2024. Stock-based compensation, an important expense for technology companies, decreased 39% to $7.4 million compared to Q2 2024.

Product innovation took center stage with the launch of ON24 Translate, a multilingual content and translation tool. Additionally, ON24 ACE, a family of AI-powered engagement tools, gained further traction. The company stated that about 30% of customers used ON24’s AI features as of Q1 2025, with a "low-teen percentage" paying for these solutions. This product direction aims to win new enterprise users and expand services to existing ones, including international markets. The company’s AI capabilities are positioned as a differentiator in a crowded digital engagement market.

Customer retention reached a high not seen in four years, attributed to win-backs from former clients and higher renewal rates in verticals like financial services and life sciences. Over one-third of ARR now derives from these regulated sectors, where compliance with strict data privacy rules such as GDPR (General Data Protection Regulation) and CCPA (California Consumer Privacy Act) is essential. Multi-year customer agreements also hit a record share, improving revenue predictability.

ON24 reported continued positive cash flow, marking its sixth consecutive quarter of generating more cash than it spends. The company’s balance sheet featured $179.6 million in cash, equivalents, and marketable securities as of June 30, 2025. A new $50 million share repurchase program was authorized, reflecting management’s emphasis on returning capital to shareholders. Deferred revenue, an indicator of future service commitments, fell to $62.2 million as of June 30, 2025 from $66.7 million as of December 31, 2024.

Looking Ahead: Guidance and Watchpoints

ON24 projected total revenue between $33.6 million and $34.2 million for Q3 2025, signaling a sequential decrease. Core platform revenue is expected to be $33.0 million to $33.6 million, and Non-GAAP operating loss is forecast in the $1.3 million to $0.7 million range. Non-GAAP net income per share guidance is between $0.00 and $0.02 for Q3 2025. The company also anticipates restructuring charges between $0.1 million and $0.4 million, excluded from Non-GAAP figures.

ON24 set a total revenue (GAAP) range of $137.7 million to $138.7 million for FY2025, which would be down compared to the previous year’s total revenue of $146.5 million. Non-GAAP operating loss is targeted at $5.2 million to $3.8 million, with Non-GAAP earnings per share expected between $0.02 and $0.05. Notably, management declined to provide explicit guidance for ARR, citing ongoing economic uncertainty and shifting customer spending patterns. The company continues to aim for improved core platform ARR performance by year-end 2025 but has not specified figures. ON24’s focus for the remainder of the year will be on driving additional enterprise wins, rolling out further AI-driven product features, and maintaining both cash flow and customer retention momentum.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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