ON24, Inc. (ONTF) | Investment Case

1. Company Snapshot

1.a. Company Description

ON24, Inc.provides a cloud-based digital experience platform that enables businesses to convert customer engagement into revenue through interactive webinar, virtual event, and multimedia content experiences worldwide.The company provides ON24 Experience products, such as ON24 Elite, a live and interactive webinar experience; ON24 Breakouts, a live breakout room experience that facilitates networking, collaboration and interactivity between users; ON24 Go Live, a live, interactive video event experience that enables presenters and attendees to engage face-to-face in real-time; ON24 Virtual Confrence, a live and large scale virtual event experience; ON24 Engagement Hub, a rich multimedia content experience; and ON24 Target, a personalized and curated rich multimedia content experience, as well as solutions; ON24 Intelligence, an analytics backbone that captures first-person data to power the insights, benchmarking, reporting, and artificial intelligence and machine learning engine; and ON24 Connect, an ecosystem of third-party application integrations.

It also offers professional services, such as experience management, monitoring, premium support, and implementation and other services.The company sells its products through direct sales.It serves technology, financial services, healthcare, industrial and manufacturing, professional services, and business-to-business information service industries.

The company was formerly known as NewsDirect, Inc.and changed its name to ON24, Inc.in December 1998.

The company was incorporated in 1998 and is headquartered in San Francisco, California.

Show Full description

1.b. Last Insights on ONTF

Negative drivers behind ON24's recent 3 months performance include the ongoing investigation into potential self-dealing by certain officers and directors, as announced by Kuehn Law on January 30, 2025. This investigation may lead to increased scrutiny and potential legal costs for the company. Additionally, the recent announcement of the first quarter 2025 earnings release and conference call on April 16, 2025, may indicate that the company is preparing for a potentially challenging earnings report.

1.c. Company Highlights

Last Price	5.95
Change Percentage	2.06%
Open	5.81
Previous Close	5.83
Market Cap ( Millions)	252
Volume	115885
Year High	7.04
Year Low	4.35
M A 50	5.52
M A 200	5.36

FCF Yield	1.82%
Dividend Yield	0.00%
ROE	-23.09%
Debt / Equity	1.36%
Net Debt / EBIDTA	94.42%
Price To Book	1.69
Price Earnings Ratio	-6.99
Price To FCF	54.93
Price To sales	1.76
EV / EBITDA	-5.71

2. ON24 Delivers Strong Q3 with Revenue and Profitability Exceeding Guidance

ON24 reported total revenue of $34.6 million in Q3, exceeding guidance, with core platform revenue reaching new heights. The company's adjusted EBITDA was positive, demonstrating its ability to maintain profitability. Earnings per share (EPS) came in at $0.03, beating estimates of $0.02. Gross margin remained stable, a testament to the company's efficient operations. The strong financial performance was driven by the company's diversified revenue streams and its focus on high-growth areas such as AI innovation.

Publication Date: Nov -12

                                    📋 Highlights
                                    Q3 Financial Performance::
                                                Revenue of $34.6 million, total ARR of $124.5 million, and positive adjusted EBITDA, exceeding guidance with profitability growth.
LinkedIn Partnership Milestones::
                                                Phased integration (Phase 3 by Q1 2026) to enable event marketing monetization, with LinkedIn lookalike audiences and cross-platform audience flow.
AI Adoption Momentum::
                                                20% of customers currently pay for AI solutions, targeting higher penetration in Q4, with AI Translate and AI Propel Plus driving ARR growth of $1-500,000 in Q4.
Capital Returns & Balance Sheet::
                                                $13.8 million in share repurchases under a $50 million program, $175 million in cash and investments, and $191 million returned to shareholders since 2021.
Sales & Marketing Efficiency Goal::
                                                Targeting double-digit reduction in sales/marketing expenses as a percentage of revenue over two years, supported by AI-driven operational streamlining.

                                

Annual Recurring Revenue (ARR) Performance

The company's ARR stood at $124.5 million, with a significant portion coming from multiyear agreements. ON24 expects a meaningful improvement in ARR performance in Q4, driven by improved gross retention, increased AI penetration, and new business from regulated industries. The partnership with LinkedIn is also expected to contribute to ARR growth, with phase one already in progress and phase three, which includes monetizable elements, slated for Q1 next year.

AI Innovation and Growth

ON24 is making significant strides in AI innovation, with 20% of customers already paying for AI solutions. The company expects this number to increase in Q4 and future quarters, driven by its AI Translate and AI Propel Plus offerings. AI is expected to drive efficiencies in sales and marketing, with the company aiming to achieve a double-digit improvement in sales and marketing expenses as a percentage of revenue over the next two years.

Valuation and Outlook

With a P/S Ratio of 1.68 and an EV/EBITDA of -5.42, the market appears to have tempered expectations for ON24's growth. Analysts estimate revenue growth to be -3.5% next year, indicating a challenging environment. However, the company's strong Q3 performance and its focus on AI innovation and regulated industries may provide a catalyst for growth. As the company continues to deploy AI tools to improve efficiency and streamline operations, it is well-positioned to drive growth and improve profitability in 2026 and beyond.

Go-to-Market Strategy

ON24's enterprise-focused approach has performed well, with regulated industries now making up 50% of its business. The company will continue to emphasize AI-based offerings and focus on high-growth areas. The recent appointment of David Lee as CMO is expected to drive demand generation, corporate marketing, and product marketing efforts, closely tied with sales and customer success teams.

3. NewsRoom

Can ON24 (ONTF) Run Higher on Rising Earnings Estimates?

Dec -03

Source: zacks.com

The Cambridge MBA at the University of Cambridge Judge Business School Scales Recruitment with ON24, Driving 30% of Leads Through Events

Nov -24

Source: businesswire.com

ON24 Granted U.S. Patent for AI-Powered ‘Key Moments' Technology in Long-Form Video and Virtual Events

Nov -17

Source: businesswire.com

ON24, Inc. (NYSE:ONTF) Receives Average Rating of “Reduce” from Brokerages

Nov -17

Source: defenseworld.net

ON24: Becoming Positive On Earnings Beat, Re-Rating Catalysts (Rating Upgrade)

Nov -11

Source: seekingalpha.com

ON24: Despite New Growth Initiatives, I Remain Skeptical

Nov -11

Source: seekingalpha.com

ON24, Inc. (ONTF) Q3 2025 Earnings Call Transcript

Nov -11

Source: seekingalpha.com

ON24 Announces Third Quarter 2025 Financial Results

Nov -10

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (11.66%)

6. Segments

Core Platform - Subscription and Other Platform

Expected Growth: 10.98%

ON24's Core Platform - Subscription and Other Platform growth of 10.98% is driven by increasing demand for virtual events and digital experiences, expansion into new markets, and strategic partnerships. Additionally, the company's focus on product innovation, enhancing customer engagement, and expanding its sales and marketing efforts have contributed to this growth.

Core Platform - Professional Services

Expected Growth: 12.47%

ON24's Core Platform - Professional Services growth of 12.47% is driven by increasing demand for virtual events, expansion of existing customer relationships, and strategic partnerships. The shift to digital transformation and hybrid event models also contributes to growth, as companies invest in scalable and engaging experiences. Additionally, ON24's platform enhancements and innovative features, such as AI-powered analytics, further support revenue expansion.

Virtual Conference - Subscription and Other Platform

Expected Growth: 26.3%

ON24's Virtual Conference - Subscription and Other Platform growth of 26.3% is driven by increasing demand for virtual events, expansion into new markets, and strategic partnerships. The shift to digital events, cost savings, and enhanced attendee experience also contribute to growth. Additionally, ON24's platform enhancements, such as AI-powered engagement tools and analytics, improve customer retention and attract new customers.

Virtual Conference - Professional Services

Expected Growth: 26.3%

ON24's Virtual Conference - Professional Services growth is driven by increasing demand for digital events, expansion into new markets, and strategic partnerships. The shift to virtual and hybrid events, coupled with the need for cost-effective and engaging experiences, fuels growth. Additionally, ON24's innovative platform and expertise in virtual events enable it to capitalize on this trend, resulting in a 26.3% growth rate.

7. Detailed Products

Webcasting

ON24's webcasting platform enables users to create and deliver engaging, interactive webinars and virtual events that drive audience engagement and conversion.

Virtual Event Platform

ON24's virtual event platform allows users to create immersive, interactive virtual events that simulate in-person experiences, including conferences, trade shows, and product launches.

Content Hub

ON24's Content Hub is a centralized platform for hosting, managing, and delivering on-demand content, including videos, webinars, and virtual events.

Analytics and Insights

ON24's analytics and insights platform provides users with real-time data and insights on audience engagement, behavior, and conversion.

8. ON24, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

ON24's webcasting and virtual event platform is a unique offering, but there are substitutes available in the market, such as in-person events and other digital event platforms.

Bargaining Power Of Customers

ON24's customers are primarily large enterprises and organizations, which have limited bargaining power due to the customized nature of ON24's offerings.

Bargaining Power Of Suppliers

ON24 has a diversified supplier base, and the company is not heavily dependent on a single supplier, reducing the bargaining power of suppliers.

Threat Of New Entrants

The webcasting and virtual event platform market is rapidly growing, and new entrants can easily enter the market, posing a significant threat to ON24's market share.

Intensity Of Rivalry

The webcasting and virtual event platform market is moderately competitive, with a few established players, including ON24, competing for market share.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	2.90%
Debt Cost	3.95%
Equity Weight	97.10%
Equity Cost	6.43%
WACC	6.36%
Leverage	2.99%

11. Quality Control: ON24, Inc. passed 4 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Mitek Systems

A-Score: 5.0/10

Value: 5.3

Growth: 6.8

Quality: 6.8

Yield: 0.0

Momentum: 6.0

Volatility: 5.0

1-Year Total Return ->

ON24

A-Score: 4.6/10

Value: 6.2

Growth: 4.0

Quality: 4.2

Yield: 4.0

Momentum: 3.5

Volatility: 5.7

1-Year Total Return ->

PROS

A-Score: 4.5/10

Value: 5.2

Growth: 6.6

Quality: 5.0

Yield: 0.0

Momentum: 8.0

Volatility: 2.3

1-Year Total Return ->

Semrush

A-Score: 3.7/10

Value: 3.8

Growth: 9.0

Quality: 5.8

Yield: 0.0

Momentum: 0.5

Volatility: 3.0

1-Year Total Return ->

PAR Technology

A-Score: 3.6/10

Value: 7.6

Growth: 3.9

Quality: 4.5

Yield: 0.0

Momentum: 1.5

Volatility: 4.0

1-Year Total Return ->

Decisionpoint Systems

A-Score: 3.4/10

Value: 3.9

Growth: 4.8

Quality: 5.3

Yield: 0.0

Momentum: 5.0

Volatility: 1.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

11.23%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

6.36%

ON24, Inc. - US68339B1044

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on ONTF

1.c. Company Highlights

Higher Yield

Cheaper

Lower Growth

Earnings Beats

Revenues Beats

Weak Momentum

Average Growth

Earnings Miss

Stable Momentum

Medium Volatility

Average Quality

2. ON24 Delivers Strong Q3 with Revenue and Profitability Exceeding Guidance

Annual Recurring Revenue (ARR) Performance

AI Innovation and Growth

Valuation and Outlook

Go-to-Market Strategy

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (11.66%)

6. Segments

Core Platform - Subscription and Other Platform

Expected Growth: 10.98%

Core Platform - Professional Services

Expected Growth: 12.47%

Virtual Conference - Subscription and Other Platform

Expected Growth: 26.3%

Virtual Conference - Professional Services

Expected Growth: 26.3%

7. Detailed Products

Webcasting

Virtual Event Platform

Content Hub

Analytics and Insights

8. ON24, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: ON24, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

5.95$

Current Price

5.95$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA