Onvia, Inc. (NASDAQ: ONVI), a leading provider of comprehensive government-business intelligence, reports 4th quarter revenue of US$ 5 million, up 3% compared to the third quarter prior year.  Full year 2014 revenue were up 3% to $22.6 million vs $22.0 million in 2013.  The company occurred a net loss before tax of US$ 727,000.

Fourth Quarter and FY2014 Results

Subscription revenue for the year and quarter ended December 31, 2014 grew 5% over the same periods in 2013.  The growth in subscription revenue is primarily a result of improved client retention and contract expansions throughout the year.  As previously announced, Onvia’s 2014 operating initiatives were designed to drive subscription revenue growth.

Total revenue for the years ended December 31, 2014 and 2013 was $22.6 million and $22.0 million, respectively. Fourth quarter 2014 revenue was $5.7 million, up by 3% compared to the same period last year.  In addition to subscription revenue, total revenue includes content license and report revenue.

ACV increased by 6% to $21.5 million in Q4 2014 from $20.3 million one year ago.  As previously announced, growth in ACV indicates that new client acquisitions, contract expansions and improving client retention rates have more than offset the impact of client attrition.  ACV represents the aggregate annual value of subscription contracts and is a leading indicator of future revenue growth.  The growth rate in ACV can fluctuate from quarter to quarter based on timing in the amount of ACV available for renewal.

ACVC increased 17% to $6,500 in Q4 2014 compared to $5,572 in Q4 2013.  In addition, ACVC for new clients increased 5% to$14,514 from $13,860 in Q4 2013.  The continued growth in new client ACVC demonstrates success in acquiring clients with a strategic interest in the public sector at a regional or national level.  Companies within this target market typically have higher ACVC and renew at higher rates, which are key attributes of a profitable long-term client.

As of December 31, 2014, Onvia had 3,300 clients, down 10% from 3,650 clients during the same period last year.  The Company’s decline in client count is expected as a result of the decision to transition to a more strategic target market. Management believes that ACV is a better measure of sales effectiveness than the number of clients.

Operating expenses in Q4 2014 increased 7% to $5.3 million from $4.9 million in Q4 2013.  In the fourth quarter of 2014, we invested approximately $200,000 to independently evaluate potential future product offerings and to ensure that our product and content organizations are properly organized to deliver our long term product and content roadmap. The $200,000 is a onetime investment that is not expected to reoccur in 2015.  The remaining increase in fourth quarter operating expenses represents incremental sales and marketing investment which we believe is a reasonable estimate of future operating expenses in 2015.  The sales and marketing investment is required to accelerate revenue growth the second half of 2015.

2014 operating expenses increased 4% to $19.6 million compared to $18.8 million in 2013 primarily due to investments in sales and marketing to drive future revenue growth.  Adjusted EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization, and non-cash stock-based compensation) for the quarter ended December 31, 2014 decreased to $226,000 from $605,000 in Q4 2013.  2014 Adjusted EBITDA decreased 9% to $2.5 million compared to $2.8 million in 2013.  Due to the Company’s small size, increased variable sales costs and investment may exceed the incremental revenue generated each period, which negatively impacts short term Adjusted EBITDA.

Net loss was $479,000, or $(0.06) cents per diluted share, in Q4 2014 compared to $2.4 million, or $(0.33) cents per diluted share, in Q4 2013.  Net loss for 2014 was $727,000, or $(0.10) cents per diluted share, compared to $2.7 million, or $(0.36) cents per diluted share, in 2013.  Net loss in the fourth quarter and full year of 2013 included a $2.2 million provision for income taxes.

At December 31, 2014, cash, cash equivalents and available for sale investments increased to $8.0 million compared to $7.6 millionat the end of 2013.   Management believes that the remaining cash balance is adequate to fund operations until such time that Adjusted EBITDA accelerates.

Source:  Prnewswire.com