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WANdisco’s cautious guidance sends shares limboing lower

Published: 20:45 25 Sep 2019 AEST

Wandisco PLC - WANdisco’s cautious full-year guidance sends shares lower

Software company WANdisco PLC (LON:WAND) investors were not dancing as full-year revenue guidance was a few million lower than expected, with a bulging deal pipeline that could yet see further surprises.

Sales for this calendar year are now expected to be US$24mln, while analysts at the house broker Peel Hunt predicted in July that the figure could be as much as US$30mln.

READ: WANdisco shimmies higher after partnering with Databricks

A small portion of this total was delivered in the first half, US$6.0mln, though this was up from US$5.7mln a year ago as the company made progress in Chinese markets with a total of US$2.9mln in contracts with blue chips.

The second half is therefore expected to deliver sales of US$18mln as WANdisco has a “strong” pipeline of deals from direct sales, which account for over three-quarters of the expected revenue. 

WANdisco provides tools to transfer data from and to different platforms using cloud analytics, allowing businesses to keep consistency and data loss, and is looking to generate a larger portion of sales via partners and from the fast-growing niche market of data analytics in the cloud.

Deals derived from partners, such as Microsoft, Alibaba, Amazon and the recently announced Databricks, could add sales roughly equivalent to the current second-half expectation of US$18mln.

Given a high risk of contract slippage, the company is not factoring this into the updated full-year revenue guidance, broker Peel Hunt said in a note to clients.

Underlying losses (EBITDA) increased to US$7.6mln (compared to US$6.8mln a year ago) and resulted in a US$16.7mln post-tax loss (US$11.3mln) due to increased overheads and increased share-based payment charge.

Shares were down 12.5% to 455p by mid-morning on Wednesday.

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