InnerWorkings (INWK) Misses Q2 EPS by 2c, Revenues Miss; Affirms FY18 EPS Outlook Above Consensus

InnerWorkings (NASDAQ: INWK) reported Q2 EPS of $0.01, $0.02 worse than the analyst estimate of $0.03. Revenue for the quarter came in at $282 million versus the consensus estimate of $285.18 million.

“One of the best indicators of a company\'s strength is its ability to grow within its existing clients. We have been awarded additional work with two existing accounts in just the last two weeks, and our pipeline is full of opportunities to further penetrate our customer base,” said Chief Executive Officer Rich Stoddart. “With the momentum of our new wins and a robust plan to improve our cost structure, InnerWorkings is poised to deliver significant value for our shareholders.”

• Gross revenue was $282.0 million in the second quarter of 2018, an increase of 1% compared to $280.1 million in the second quarter of 2017. Excluding currency impacts, second quarter gross revenue increased 4% compared to the same period of last year.
• Gross profit (net revenue) was $64.9 million, or 23.0% of gross revenue in the second quarter of 2018, compared to $70.0 million, or 25.0% of revenue, in the same period of last year.
• Net loss for the second quarter of 2018 was $(0.3) million, or $(0.01) per diluted share, compared to net income of $4.4 million, or $0.08 per diluted share in the second quarter of 2017.
• Non-GAAP earnings per diluted share for the second quarter of 2018 was $0.01, compared to $0.12 in the second quarter of 2017.
• Non-GAAP adjusted EBITDA was $8.2 million in the second quarter of 2018, compared to $16.5 million in the second quarter of 2017.
• InnerWorkings has been awarded additional work from new and existing clients so far during 2018, which collectively is expected to drive $85 million of annual revenue at full run-rate. Recent new wins include two expansions with global Fortune 500 companies in the healthcare and food verticals.

“We have already initiated cost reduction measures with approximately 50% of the plan to be actioned by October 1st,” said Chip Hodgkins, Interim Chief Financial Officer of InnerWorkings. “If in 2019 we achieve a similar gross revenue growth rate and gross margin as compared to this year, these cost reductions are expected to enable 2019 non-GAAP adjusted EBITDA of $65 to $70 million, or approximately 30% above our expectation for 2018.”

GUIDANCE:

InnerWorkings sees Q3 2018 EPS of $0.30-$0.33, versus the consensus of $0.22. InnerWorkings sees Q3 2018 revenue of $1.155-1.19 billion, versus the consensus of $1.16 billion.

For earnings history and earnings-related data on InnerWorkings (INWK) click here.

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