AvidXchange (AVDX -29.72%) stock got crushed in Wednesday’s trading. The company’s share price ended the daily session down 29.7%, according to data from S&P Global Market Intelligence.
Despite a bullish surge for the broader market today, AvidXchange stock got hit hard after the company published its second-quarter results. The accounts payable/automation specialist’s share price cratered following the release of mixed Q2 results and concerning forward guidance.
AvidXchange’s Q2 results weren’t terrible
AvidXchange’s revenue increased roughly 15% year over year to hit $105.13 million, but it still missed the average analyst estimate by $1.75 million. On the other hand, the company’s non-GAAP (adjusted) earnings per share came in at $0.05 — beating the average Wall Street target by $0.01 per share.
AvidXchange closed out Q2 with 19.7 million total transactions processed through its platform, up 4.8% year over year. Meanwhile, total payment volume rose 10.4% to hit $20.6 billion, and average transaction yield rose 10.1% to $5.33. The company actually posted encouraging results along some key fronts in the quarter, but its forward guidance spooked the market.
But the company’s outlook signaled fault lines
AvidXchange provided a guidance update with its recent earnings report, and investors weren’t happy with the new guidance. Citing macroeconomic headwinds, the company now expects full-year sales to come in between $436 million and $439 million. That’s down from its previous target for sales to be between $442 million and $448 million. Prior to the report, the average analyst estimate had called for the business to deliver sales of $447.4 million.
AvidXchange actually raised its target for full-year adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to between $73 million and $75 million. For comparison, the company had previously guided for adjusted EBITDA to come in between $71 million and $75 million. But the target increase failed to comfort investors.
Notably, AvidXchange’s commentary suggested that the business could continue to face macroeconomic headwinds. The company also noted that it expected roughly $9 million in political media revenue this year through its Fast Pay division. The guidance likely underwhelmed investors given that this is a presidential election year and the Fast Pay unit recorded $8.5 million in sales the 2022 midterm election year.
Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
