13th Jan 2025 11:22
(Alliance News) - Eagle Eye Solutions Group PLC shares plunged on Monday as it cut revenue expectations for the next two years due to a reduction in Professional Services revenue and challenges from the economic climate.
The London-based software-as-a-service marketing solutions provider said it expects revenue in financial year 2025 and 2026 to be around 15% and 18% below current market expectations respectively.
Eagle Eye shares fell 22% to 366.00 pence in London on Monday morning.
The company said consensus market expectations as at Friday for FY25 and FY26 were for revenue of GBP56.4 million and GBP64.0 million and adjusted earnings before interest, tax, depreciation and amortisation of GBP12.7 million and GBP15.0 million respectively.
It said the reduction in revenue is due to a significant fall in its Professional Services revenue and "lengthening sales cycles due to the macroeconomic climate".
Eagle Eye said it still expects "double digit" SaaS revenue growth and Ebitda margins of approximately 24% and 25% respectively due to an increasing proportion of SaaS revenue limiting the impact on profitability.
The adjusted Ebitda margin in financial 2024 was 24%.
In a trading update, the company said group revenue increased by 0.4% in the six months to the end of December, to GBP24.2 million from GBP24.1 million year-on-year.
SaaS revenue grew 10% to GBP19.5 million from GBP17.7 million, while Professional Services revenue was down 16% to GBP4.4 million from GBP5.2 million.
Recurring revenue from subscription fees and transactions increased to 82% from 78%.
Net cash as at December 31 was up 51% to GBP11.8 million from GBP7.8 million in the previous year. Adjusted Ebitda was unchanged at around GBP5.9 million.
The company on Monday also said it has inked a five-year original equipment manufacturer agreement with a "major multinational enterprise software vendor".
Eagle Eye said its Air platform will integrate with the vendor's "cloud-base loyalty solution", with the first customers expected to be live in early 2026.
The group said once the product is live, it "provides the opportunity" to contribute significantly to Eagle Eye's annual recurring revenue, with a minimum three-year commitment.
Eagle Eye said the deal "provides confidence in substantial revenue growth acceleration from FY27".
The company increased its target Ebitda margin to 30% and said the contract has strengthened its confidence in its three to five year journey to GBP100 million revenue.
Chief Executive Tim Mason said: "We are delighted to announce this morning a landmark agreement with one of the world's leading enterprise software vendors, providing Eagle Eye with a platform for growth at a rate far greater than that which could be achieved alone.
"Accelerating our win rate remains a key focus... We are more confident than ever that we have the right building blocks: industry leading software; a growing blue chip customer base; and now major global partners, to build Eagle Eye into a world-leading SaaS business."
By Michael Hennessey, Alliance News reporter
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