Edgewater Technology (EDGW) Prelim. Q3 Revenue Misses Views

October 18, 2016 8:31 AM EDT

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Edgewater Technology, Inc. (Nasdaq: EDGW) announced that the company expects to report service revenue of approximately $27.0 million for the quarter ended September 30, 2016. Total revenue for the quarter ended September 30, 2016 is expected to be approximately $30.8 million, including approximately $2.1 million in software-related revenue. All reported preliminary revenue amounts are subject to the completion of our standard quarterly review procedures.

*** The Street sees Q3 revenue of $34.8 million.

“We expect third quarter 2016 service revenue to be essentially flat on a year-over-year quarterly basis,” commented Shirley Singleton, Edgewater’s chairman, president and CEO. “During the second half of the third quarter, our ability to drive organic service revenue growth was hindered by channel disruption associated with a vendor push to accelerate the adoption of new cloud-based applications, a curtailment of IT spending by customers across all of our service offerings and underperformance in the United Kingdom. These events combined to cause third quarter 2016 service revenue to fall short of our anticipated service revenue guidance. While we have proactively taken steps to manage billable consultant headcount and reduce operating expenses, the lower than anticipated service revenue performance will also negatively affect our billable consultant utilization and operating performance during the third quarter of 2016.

“The strong push from our channel partners to drive the adoption of new cloud-based applications may continue to cause near-term disruption as customers contemplate their cloud adoption strategy. Edgewater is actively marketing cloud-based services and we are pleased to see traction coming from customers deciding to embrace the cloud. We continue to close new business, we are pleased with the performance of our acquisitions, and our backlog remains stable. We continue to anticipate that we will still see double-digit service revenue growth for the full year 2016.”

Edgewater will hold an analyst conference call on Wednesday, November 2, 2016 at 10:00 a.m. Eastern Time to discuss its financial results for the third quarter ended September 30, 2016. The company will issue its financial results in a press release prior to the call.

Date: Wednesday, November 2, 2016Time: 10:00 a.m. Eastern TimeDial-in number: 1-877-713-9347 / Passcode: 86873551Webcast: http://ir.edgewater.com/

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization.

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