TD Cowen has increased its price target for OneStream (OS, Financial) from $27 to $28, while maintaining a Buy rating for the stock. The firm highlighted that OneStream has shown a significant recovery in performance, driven by improved sales strategies after experiencing some deal delays in the previous quarter.
Despite concerns over increased budget scrutiny from management, key indicators such as international expansion, commercial ventures, and AI offerings are showing positive trends. In light of these developments, TD Cowen has slightly reduced its projected fiscal year 2025 constant currency growth from 22% to 21% to mitigate potential risks for the latter part of the year.
OS Key Business Developments
Release Date: May 08, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- OneStream Inc (OS, Financial) achieved a total revenue growth of 24% in Q1 2025.
- The company reported a strong free cash flow margin of 26%.
- Subscription revenue increased by 31% year over year, indicating strong demand for their services.
- OneStream's international business saw a 40% year-over-year revenue growth, highlighting its global expansion success.
- The company launched new product innovations, including ESG reporting and planning solutions, and a CPM express offering for rapid implementation.
Negative Points
- License revenue decreased by 40% compared to last year due to customer fast conversions.
- There is heightened uncertainty in the broader markets, which may lead to deal headwinds and potential downsells.
- Ongoing customer conversions to SaaS continue to impact license revenue negatively.
- The macroeconomic environment is causing some companies and government agencies to slow or pause spending.
- There is a cautious outlook for the rest of the year despite strong current results, reflecting potential demand issues.
