Cision CEO Akeroyd blames slow pipeline and China trade war for soft growth

The PR software company grew 1.6% in Q2 to $190.5 million, but Cision reduced its full-year revenue predictions.

Kevin Akeroyd, CEO of Cision
Kevin Akeroyd, CEO of Cision

CHICAGO: Cision reported its revenue for Q2 increased 1.6% year over year to $190.5 million.

However, the company reported a 20.8% decline in operating income to $17.6 million. Its net loss for the quarter steepened to $7.8 million from $6.6 million.

"Our business continues to perform well, with second-quarter 2019 organic constant currency revenue growth of 3.4% versus the prior year," said CEO Kevin Akeroyd in a statement.

During an analyst earnings call, Akeroyd said he hopes organic growth will pick up pace in the second half of 2019 and top 5% in Q3 and 4.5% for the full year.

"We expect our organic growth rate to accelerate in the back half of the year, primarily due to our EMEA turnaround that we’ve seen over the past couple months," he added. "We were unexpectedly hit by trade tensions in China and a number of the larger business deals are progressing through our pipeline slower than anticipated." 

Investor website Seeking Alpha said Cision’s revenue fell short of forecasts by $0.94 million. Revenue in Cision’s largest market, the Americas, was up 2.6% in Q2 to $130.2 million. EMEA was down 0.7% to $51.6 million, while APAC increased 1.1% to 8.7%.

Cision acquired social media company Falcon and digital PR platform Trendkite in January.

"Our U.S. segment continues to benefit from the Trendkite acquisition and its infusion [from the standpoint of] technical and go-to-market as well as product leadership," Akeroyd said in the call.

He added that Cision would start adding new features to its Cision Communications Cloud offer, including "social influencer database, influencer management, sophisticated image and monitoring analytics, streamlined workflows, superior content discovery and even deeper integration back into the paid and owned systems [Cision] clients have implemented on the marketing and advertising fronts."

As Cision rolls out these features, the company will pivot to "shifting some resources to integrate Falcon into Cision Communications Cloud."

Cision continued is strategic drive away from single transactions to subscription sales. Its subscription customer average increased 2.5% to about 46,340, while one-off transaction customers dipped 9.2% to about 37,422. 

Average subscription customer sales increased 2.1% to about $11,510; average one-off transactions rose 6.1% to $1,535.

Cision lowered its full-year revenue estimate for 2019 from $773-$783 million to $766-$773 million.

Earlier this week, Cision announced it had inked a partnership with Edelman, offering the world’s largest PR agency exclusive access to a raft of data.

Last month, Cision rolled out the second version of its flagship product, the Cision Communications Cloud, after integrating its Trendkite acquisition into the platform.

The company also added David Krantz, group president of North America Fuel at business payment company FleetCor Technologies, to its now-nine-person board of directors.

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