Nuix shares hit after software group reveals annual revenue, earnings slump
Investors dump Nuix shares after the embattled software company revealed a further slide in revenues, profit and contract values.
Nuix shares sink after the embattled software group revealed a collapse in annual earnings and contracts, hit by hefty legal costs.
The profit hit comes after mounting legal bills once again buffeted the former market darling, which has copped a massive sharemarket battering since its listing last year.
Nuix, which is led by Jonathan Rubinsztein, expects earnings to come in between $10-12m ahead of its earnings results announcement on August 18. That’s down sharply from last year’s $30.5m statutory profit.
The group warned it was facing “materially high non-operational legal costs” during the financial year, toping $14m.
Nuix also locked itself in for a $25m acquisition of speech processing software business Topos Labs in September last year.
The buyout was funded through an initial upfront $7.3m (US$5m) payment, plus a further $29.3m (US$20m) cash earn out over 30 months.
Annualised contract value, the measure by which Nuix tracks the value of its multi-year software deals, is also expected to come in below 2021.
ACV will likely land between $160-163m, this is below the $165m Nuix delivered last year.
Revenues are also down on 2021, likely to come in between $151-154m from $176.1m last year.
Nuix noted its revenues were expected to fall driven by the recognition of revenues for some large-multi year contracts in the prior period, leading to lower sales to new customers and deals being pushed into the 2023 financial year.
The company warned in May it had seen a slide in ACV, as well as a 27 per cent fall in revenue, noting June was a “critical month for contract signing”.
Nuix warned it had already been hit with $11m in non-operational legal costs, as the tech company prepared to face off with its former chief executive Eddie Sheehy in the Federal Court.
These costs have since risen to $14m after days of bruising legal sparring between Mr Sheehy and Nuix’s lawyers in June.
The looming question of Mr Sheehy’s case hangs over Nuix, with the case set to return to court in mid-August.
Mr Sheehy alleges he could be owed as much as $183m after Nuix blocked his attempt to strike options he said entitled him to 22 million shares.
Mr Sheehy had said he hoped to cash out those shares as soon as possible, capitalising on Nuix’s rapid rise on the ASX after it hit trading boards in December 2020.
Nuix’s sharemarket fortunes rose amid hopeful expectations for the tech darling which was backed by Macquarie and heavily spruiked ahead of its listing.
However, Mr Sheehy told the Federal Court in June he had “absolutely no belief” in the prospectus forecasts being spruiked, noting he thought the share price was “going off a cliff”.
Nuix’s shares have been hammered after a string of downgrades and missed prospectus forecasts, falling from their market high of $11.05 in mid-January, well up on its IPO price of $5.31.
Its shares dropped as much as 25 per cent to 55c on its bleak trading update on Monday, before slightly recovering to 64c on Monday afternoon.
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