Why Bazaarvoice Inc. Stock Plunged Today

By Markets Fool.com

Image source: Bazaarvoice Inc.

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What happened

Shares of Bazaarvoice Inc. (NASDAQ: BV) fell 11.3% Thursday after the smart shopper-network specialist released mixed fiscal second-quarter 2017 results and a disappointing outlook.

So what

Quarterly revenue climbed a modest 1% year over year, to $50.4 million, while the company's net loss (based on generally accepted accounting principles, or GAAP) narrowed to $4.1 million from $4.9 million in last year's fiscal second quarter. On an adjusted (non-GAAP) basis, Bazaarvoice's net income was $1.4 million, or $0.02 per share, compared to an adjusted net loss of $0.4 million, or flat on a per-share basis in the same year-ago period. Adjusted earnings before interest, taxes, depreciation and amortization rose 67.7% year over year, to $5.2 million.

For perspective, these results were mixed relative to the guidance Bazaarvoice provided last quarter, which called for quarterly revenue in the range of $50.3 million to $50.9 million, adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) of $4.1 million to $4.7 million, and an adjusted loss per share ranging from $0.00 to $0.02.

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Bazaarvoice CEO Gene Austin added:

The second quarter was another good quarter for Bazaarvoice, as we delivered stronger dollar retention and overall bookings growth year-over-year. We also achieved strong year-over-year adjusted EBITDA growth and our fifth straight quarter of positive operating cash flow as we continue to improve the margin profile of the business. We believe our large and growing network of retailers and brands and our unique insights into shopping behavior across the network provide us with an exciting long term growth opportunity.

Now what

Management also provided fresh guidance during the subsequent quarterly conference call. For the current quarter, Bazaarvoice anticipates revenue of $50.4 million to $51.2 million, adjusted EBITDA ranging from $3.5 million to $4.1 million, and an adjusted loss per share of $0.01 to $0.03. And for the full fiscal year, the company reiterated guidance for revenue in the range of $202.3 million to $204.3 million.

By comparison, analysts' consensus estimates called for higher current-quarter revenue of $51.4 million, quarterly adjusted net income of $0.01 per share, and roughly the same full-year revenue.

That's not to say this quarter was as bad as today's steep pullback might indicate, as the company indeed made strides improving margins for the quarter. But given Bazaarvoice's top-line shortfall and light forward guidance, and with shares still up around 16% over the past three months as of this writing, it's no surprise to see investors taking a step back today.

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