Image source: Inovalon.
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What: Shares of Inovalon (NASDAQ: INOV), a cloud-based analytics company focused on the healthcare industry, tumbled on Thursday following the release of the company's second-quarter report. Inovalon reported lower revenue than expected, and it cut its guidance for the full year. At 12:00 p.m. ET, the stock was down about 24%.
So what: Inovalon reported second-quarter revenue of $123.8 million, up 5% year over year but $3 million lower than the average analyst estimate. CFO Thomas Kloster explained why the company came up short:
Non-GAAP EPS came in at $0.14, down from $0.18 during the prior-year period and in line with analyst expectations. EPS on a GAAP basis was $0.11, down from $0.17. Total costs soared 35% year over year, driving down profitability. CEO Keith Dunleavy pointed to a slower-than-expected payoff time for investments in sales capacity:
Now what: A weaker-than-expected second quarter led Inovalon to lower its outlook for the full year.
Data source: Inovalon Q2 earnings report.
Inovalon still expects to reach $1 billion of revenue by 2020, with the company believing that the current issues affecting its performance are temporary. With the stock crashing 24% on the news, investors don't seem so sure.
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