Summary
OneStream's third quarter fiscal 2024 revenue was $129.14 million, up 20.7% from the prior-year quarter. For the nine months ended September 30, 2024, revenue was $356.93 million, up 31.1%. Gross profit was $64.74 million in the quarter, down 16.4%, and gross margin was 50.1%, down 22.3 percentage points. Year-to-date gross profit was $221.53 million, up 17.6%, while gross margin was 62.1%, down 7.1 percentage points. The margin decline reflects a shift in sales mix and a large equity-based compensation charge tied to the IPO-related option modification. SaaS contracts have made up more than 90% of new customer contracts since 2023.
The GAAP operating loss was $255.17 million in the quarter, compared with operating income a year earlier, and the operating margin was -197.6%, down 204.1 percentage points. For the nine months, the operating loss was $272.12 million, and the operating margin was -76.2%, down 65.0 percentage points. Net loss attributable to OneStream was $171.94 million in the quarter, a swing from net income a year earlier. The year-to-date net loss attributable to OneStream was $184.75 million, and the loss widened from the prior-year period. The GAAP results include a significant non-cash equity-based compensation charge tied to the option modification. On a non-GAAP basis, operating income was $5.5 million in the quarter compared with $8.4 million a year earlier, and non-GAAP operating margin was 4% compared with 8%.
Cash generation improved. Operating cash flow was $2.36 million in the quarter, up from a use of cash a year earlier. For the nine months, operating cash flow was $36.01 million. Capital expenditures were $1.08 million in the quarter, up 16.7%, and $2.18 million year to date, down 8.0%. Free cash flow was positive $1.3 million in the quarter compared with negative $5.3 million a year earlier. Deferred revenue, current portion, was $205.80 million as of September 30, 2024. The company ended the quarter with no borrowings outstanding under its $150.0 million revolving credit facility.
Operational metrics showed continued customer growth. OneStream had 1,534 customers as of September 30, 2024, up 18% from 1,305 a year earlier. International revenue was 29% of total revenue in the quarter, up from 27% in the prior-year quarter. The company completed its initial public offering on July 25, 2024, issuing 28,175,000 shares and receiving $352.9 million in net proceeds. Recent product and market efforts included the Finance 2035 Initiative, the OneStream Navigation Center, AI-Powered Anomaly Detection, and Solution Exchange offerings for Tax Pillar 2. IDC also recognized OneStream as a Leader in its inaugural Record to Report MarketScape. The company served 15% of the Fortune 500 and had more than 250 go-to-market, implementation, and development partners, with operations in approximately 45 countries.
Guidance for the fourth quarter of 2024 calls for non-GAAP operating margin of 0% to 2%, non-GAAP net income per share of $0.01 to $0.03, and equity-based compensation of $50 million to $55 million. For the full year 2024, the company guided to non-GAAP operating margin of negative 2% to negative 1%, non-GAAP net income per share of $0.06 to $0.08, and equity-based compensation of $315 million to $320 million. Revenue guidance was also provided for both periods, but the company has not provided a reconciliation of forward-looking non-GAAP measures to GAAP. Risks include substantial payment obligations under the Tax Receivable Agreement, credit facility covenants that require an indebtedness-to-recurring-revenue ratio of no more than 0.50 to 1.00 and $50.0 million in liquidity, reliance on partners for implementation, international expansion, customer acquisition, platform innovation, and the ongoing shift to a SaaS model. The company also plans to keep investing in sales and marketing, research and development, and international growth.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2024 | Q2 FY2024 | QoQ | Q3 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $129.1M | $117.5M | +9.9% | — | — |
| Gross profit | $64.7M | $80.5M | -19.6% | — | — |
| Gross margin | 50.1% | 68.5% | -18.4 pp | — | — |
| Research & development | $83.0M | $20.0M | +316.2% | — | — |
| Sales & marketing | $162.7M | $52.2M | +211.6% | — | — |
| General & administrative | $74.2M | $19.9M | +272.2% | — | — |
| Total operating expenses | $319.9M | $92.1M | +247.4% | — | — |
| Operating income (loss) | -$255.2M | -$11.6M | -2105.3% | — | — |
| Operating margin | -197.6% | -9.8% | -187.7 pp | — | — |
| Net income (loss) | -$171.9M | -$7.8M | -2090.4% | — | — |
| Net margin | -133.1% | -6.7% | -126.5 pp | — | — |
Risks
The July 2024 Option Modification removed a forfeiture provision on outstanding common unit options, causing $260.0 million of equity-based compensation expense in Q3 FY2024. This drove operating income to swing to a loss of $255.2 million from income of $7.0 million in Q3 FY2023 and net loss attributable to OneStream, Inc. of $171.9 million.
Gross margin decreased to 50.1% in Q3 FY2024 from 72.4% in Q3 FY2023, and software gross margin decreased to 74% from 80%, primarily due to the equity-based compensation increase and sales mix. The company expects gross margin to be affected by SaaS versus license mix and customer acquisition timing.
Revenue grew 20.7% in Q3 FY2024, but the company warns its rapid growth may not be sustainable or indicative of future growth, and it has a limited history at current scale. It must attract new customers, retain existing customers, and increase adoption to avoid slower revenue growth.
Sales cycles are long and unpredictable, averaging four to eight months and sometimes extending over years for large enterprises. Large individual sales can slip to later quarters or not occur, making quarterly results difficult to predict and potentially causing margins and cash flows to differ from expectations.
Competitors may incorporate AI technology into their offerings more quickly or successfully, and some have more advanced AI and machine learning capabilities. The company also faces evolving AI laws such as the EU AI Act and the White House executive order, plus potential liability for deficient or biased AI output.
The business depends on customers renewing subscriptions and adding users. Current and future AI capabilities may reduce or replace customers' need for existing or future employees who are or would be potential users of the platform, which could lower retention or expansion.
The market is intensely competitive with legacy players such as Oracle, SAP and Infor and point providers such as Anaplan, Blackline, Wolters Kluwer and Workday. Competitors may have greater resources, broader relationships, and more advanced AI capabilities, potentially forcing price reductions or reduced margins.
Revenue growth depends on strategic relationships with go-to-market and implementation partners, and the company increasingly relies on partners for implementation services. Partners may prioritize competing products, fail to provide adequate resources, or not comply with contractual obligations, harming customer satisfaction and growth.
The platform is hosted on Microsoft Azure and the company relies on a limited number of third-party data centers. Disruptions, capacity constraints, or failure to maintain the Microsoft relationship could cause service shortfalls, customer credits, or terminations.
Sales to U.S. federal, state, local and foreign government entities and highly regulated organizations are subject to FedRAMP certification, government contracting laws, audits, and budget cycles. Changes in certification or funding reductions could delay or limit sales and lead to contract terminations.
KKR holds a majority of the voting power and can effectively control or significantly influence the company. The certificate of incorporation renounces certain corporate opportunities, and KKR consent is required for a change of control and for hiring or terminating the CEO while KKR owns at least 25% of outstanding common stock.
Lock-up agreements and market standoff restrictions expire at the opening of trading on November 11, 2024. Substantial future sales of Class A common stock, or the perception that such sales may occur, could cause the market price to decline.
The Tax Receivable Agreement requires OneStream, Inc. to pay cash to TRA Members equal to 85% of applicable tax savings, and payments are expected to be substantial. These obligations could reduce overall cash flow, require debt, and deter changes of control.
Success depends on executive officers and key employees, including co-founder and CEO Mr. Shea, and the company has no employment agreements requiring them to continue. Competition is intense for experienced sales personnel and engineers with AI and machine learning skills.
SaaS KPIs
All quarters →Free Cash Flow
Total Customers
Remaining Performance Obligations
Non-GAAP operating margin
Summary, forecast, risks and KPIs are extracted from OneStream, Inc.'s SEC filings for Q3 FY2024 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 1, 2026.