UPDATED: Chief executive Chris Brennan said two of the losses were the result of insolvencies and the third reflected a change of ownership of a company and the new owners' decision to use its own infrastructure.
SLI Systems [NZX: SLI] shares fell to a two-month low after he online retail search engine developer said annual recurring revenue growth is likely to stall in its full-year after the loss of three customers. It doesn't expect to need to raise more capital as a result.
The forecast for ARR, its preferred growth measure, for the year ending June 30 comes after the Christchurch-based company in February posted first-half ARR growth of 23% to $35.6 million and a 30% gain in operating revenue to $17.4 million, while narrowing its loss to $502,000.
For the full year, ARR "will be relatively flat compared to June 2015, primarily due to the loss of three large customers," the company said. Operating revenue was expected to rise 25% to $35 million, a record for the company, SLI said.
Chief executive Chris Brennan said two of the losses were the result of insolvencies and the third reflected a change of ownership of a company and the new owners' decision to use its own infrastructure.
"This is not a reflection on the market or SLI's products but rather extenuating circumstances that are unusual and beyond the company's control," Mr Brennan said.
Brennan didn't identify the lost customers. He was named chief executive in September last year, replacing founding chief executive Shaun Ryan, who became chief innovation officer.
SLI shares fell 4.8% to $1, the lowest since March 1. The stock soared about 50% in the two weeks following its first-half results but it has been a disappointing ride for investors since its 2013 initial public offering at $1.50 a share and for those who bought the stock at its January 2014 peak of $2.90.
The software developer missed its sales forecast for the second half of the 2015 year but said at the time it was optimistic Mr Brennan and fellow Silicon Valley veteran Martin Onofrio, the chief revenue officer, would drive revenue and earnings growth.
Mr Brennan said today that SLI has cash of $6.3 million, up from $5.6 million at June 30 last year and "will not need to raise additional capital to achieve cash flow break-even performance."
(BusinessDesk)
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