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Here’s why the Nuix (ASX:NXL) share price is tanking 27%

asx share price crash represented by iron ball smashing into piggy bank
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Nuix Ltd (ASX: NXL) shares are getting smashed today after the company reported its first results since its initial public offering (IPO). At the time of writing, the Nuix share price has plummeted an eye-watering 27.31% to $6.52.

Let’s take a look at how the analytics software company has been performing.

What’s pushing the Nuix share price lower?

Investors are driving the Nuix share price lower today after the company released its inaugural results since listing on the ASX late last year.  

For the six months ending 31 December, Nuix announced a 4% decline in revenue to $85.3 million. Overall, the software solutions company reported a statutory net loss of $16.6 million. However, on a proforma basis Nuix reported a net profit after tax (NPAT) of $9.4 million.

Nuix noted that profit margins for the period increased, with software licences generating 98% of revenue for the first half.

The company also highlighted its commitment to continued investment in research and development. Nuix noted that 26% of revenue from the first half of FY21 was spent on product enhancements.

Despite dour financial highlights, Nuix flagged increasing customer numbers. For the first half of FY21, the company saw a 17% increase in new business. In addition, Nuix also reported larger dollar value deals were completed.

CEO of Nuix Mr Rod Vawdrey noted that the results demonstrated “the stickiness” of the business’ customer base.

Nuix also highlighted its strong capital position with $103 million cash on hand.

Outlook

Nuix is a provider of investigative analytics and intelligence software. The company’s Discover, Workstation, and Investigate platforms help users convert data from emails, social media and communications into actionable intelligence. Nuix currently licences its software to more than 1,000 customers across 78 countries.

Unlike many other companies this reporting season, Nuix also provided guidance for the full year. For FY21, the company forecast a full-year revenue target of $193.5 million and pro forma earnings of $63.6 million.

Nuix noted that it expects a strong 2021, fuelled by “exponential growth in data and regulatory compliance”.

Investors were quick to sell their shares following the company’s release today, with the Nuix share price hitting an intraday and all-time low of $6.42 in morning trade. Based on the current Nuix share price, the company has a market capitalisation of around $2.8 billion.

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Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. recommends Nuix Pty Ltd. The Motley Fool Australia has recommended Nuix Pty Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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