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Cvent CEO Reggie Aggarwal in the meetings technology company’s third-quarter earnings calls fended off analyst questioning about a looming recessionary environment, pointing to the diversification of the tech provider’s platform to hybrid and virtual options through the pandemic. In a show of confidence going into the fourth quarter and year end, executives raised revenue guidance for both metrics.
“The total cost of an event can vary up to 90 percent, depending on what format [the hosts] choose. Our platform’s flexibility ensures organizations will be able to continue to host their events in whatever format they like,” said Aggarwal about what the company refers to as the “triple threat” of its onsite, hybrid and virtual meetings platform. “Due to how well positioned we are for varying economic conditions, we believe Cvent will continue to attract a disproportionate share of event tech spend going forward. So even though our business is not recession proof, we believe we’re recession resilient.”
For now, however, Cvent predicts a strong upside going into Q4 and 2023. Aggarwal pointed to continued pent up demand for meetings, which hotel industry executives also underscored in their third-quarter earnings reports is expected to remain strong going into 2023.
Indeed, even with a potential recessionary environment, Aggarwal pointed to hotel economics as a positive omen for Cvent’s hospitality cloud, which hosts hotel marketing information and facilitates request for proposal activity for the meetings sector. He predicted leisure travel would draw back in 2023, making events more important as “the largest segment of top line revenue tends to be meetings and groups for the larger hotels.” But not only are groups and meetings more profitable, he said, they offer financial stability.
“They’re locked in,” Aggarwal said, contrasting contracted meetings business to leisure travel that can cancel within 24 hours of a scheduled arrival. “With event business you can’t cancel.”
He continued: “There’s a term called ‘group up’ … Group up means if a recession comes, lock that [business] in now, get the signed contract, so if things go down [hotels] have this contracted business that people can’t cancel at the last minute,” Aggarwal said. “So we’re feeling pretty good. We’re going to Q4 and, like I said, I think hotels are really needing to group up for 2023 because they’re kind of expecting a little bit of economic headwinds.”
Q3 Performance Metrics & Future Forecast
The company, which went public again just under a year ago, overperformed its Q3 guidance by 1.4 percent, with total revenue for the quarter hitting $161.3 million, an increase of 20.3 percent from the comparable period in 2021. The company reported net loss of $18.2 million for the quarter, compared to a $26.1 million loss for the same period last year. It reported $33.7 million in earnings before interest, taxes, depreciation and amortization.
Event cloud revenue was $112.9 million for Q3, representing revenue from meeting host organizations, which climbed 22.1 percent from the same period last year. Aggarwal claimed a number of “new logos” in the client base and pointed to clients deepening their relationships with Cvent for more onsite event technology that helps them digitize and gather data from in-person programs.
Hospitality cloud revenue, which comes from hotels, venues and destinations that distribute and market through the Cvent platform, grew 16.5 percent year over year to $48.5 million.
Cvent expects Q4 revenue to be in the range of $169.3 million to $170.3 million, representing 17.4 percent year-over-year growth at the mid-point. It expects full year 2022 to end somewhere between $628.9 million to $629.9 million, representing 21.3 percent year-over-year growth at the mid-point. This is a $2.8 million increase over the mid-point of the company’s previous forecast.
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