Nuix (ASX:NXL) share price crashes 12% after downgrading guidance again

The Nuix Ltd (ASX:NXL) share price is dropping today after it downgraded its guidance just a little over a month after issuing it…

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The Nuix Ltd (ASX: NXL) share price is tumbling lower again on Monday after downgrading its guidance just over a month after a previous downgrade.

At the time of writing, the investigative analytics company’s shares are down 12% to a new record low of $2.97.

This means the Nuix share price is now down a whopping 75% from its 52-week high of $11.86.

What did Nuix announce?

According to the release, Nuix is now expecting pro forma revenue of $173 million to $182 million in FY 2021. This compares to its 21 April guidance of $180 million to $185 million.

It’s a similar story for its annualised contract value (ACV), which is now forecast in the range of $165 million to $172 million. This is down from its previous guidance of $168 million to $177 million.

One positive, though, is that its pro forma earnings before interest, tax, depreciation and amortisation (EBITDA) guidance is unchanged since last month at $64.6 million to $66.6 million.

Why is Nuix downgrading its guidance?

The release explains that several key factors have affected the revised forecasts. This includes the expected timing of closure of some upsell opportunities and new potential customers.

Furthermore, it notes that there remains uncertainty in relation to both the structure and timing of a small number of large customer upsell opportunities, including whether these may result in multi-year deals during FY 2021.

Management has also warned that the revised forecasts are susceptible to a number of risk factors relevant between now and 30 June 2021. These include final customer negotiations of products and licence types, timing of deals and potential foreign exchange rate variability.

Nuix’s CEO, Rod Vawdrey, commented: “We understand the importance of meeting financial forecasts. There’s a near-term level of uncertainty regarding the precise timing, shape and scope of some large and anticipated customer contracts coming to fruition in the next few weeks. We expect to capture most of the revenue which remains under current negotiation with these customers either by financial year-end or early in our new financial year. We remain confident in the long-term outlook for the company.”

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James Mickleboro 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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