Have Investors Overreacted to Pluralsight’s Q2?

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Pluralsight Inc. (NASDAQ: PS) shares tumbled after it reported its most recent quarterly results before the markets opened on Thursday. The company posted a net loss of $0.06 per share and $75.9 million in revenue, which was better than the consensus estimates calling for a net loss of $0.14 per share and $73.88 million in revenue. The second quarter of last year reportedly had a net loss of $0.21 per share and $53.57 million in revenue.

During the latest quarter, billings increased 23% year over year to $80.6 million. Billings from business customers increased 27% to $69.1 million. At the same time, gross margin was 78%, compared to 76% in the same period last year.

Looking ahead to the third quarter, the company expects to see a pro forma net loss per share in the range of $0.15 to $0.13 and revenue between $79.5 million and $80.0 million. The consensus estimates are a net loss of $0.11 per share and $82.34 million in revenue for the quarter.

As for the full year, Pluralsight expects a net loss per share in the range of $0.42 to $0.38 and revenue of $312 million to $318 million. Consensus estimates call for a net loss of $0.40 per share and $315.92 million in revenue.

Aaron Skonnard, co-founder and CEO of Pluralsight, commented:

Our Q2 revenue and Non-GAAP EPS were both above guidance with revenue growing 42% and Non-GAAP EPS improving by 71%. Our continued penetration with our top customers, our best in class net revenue retention and our early wins with GitPrime give us a strong base for continued success, and I’m excited about the insights and capabilities our platform and content provide to technology leaders.

Shares of Pluralsight traded down 35% Thursday to $19.90, in a 52-week range of $17.88 to $38.37. The consensus price target is $41.10.


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