Why is the Nuix share price crashing 25% to a record low today?

A man holds his head in his hands after seeing bad news on his laptop screen.

A man holds his head in his hands after seeing bad news on his laptop screen.

The Nuix Ltd (ASX: NXL) share price is having a very poor start to the week.

In early trade, the investigative analytics and intelligence software provider’s shares crashed 25% to a new record low of 55 cents.

The Nuix share price has recovered a touch since then but remains down by 11% at 65 cents.

Why is the Nuix share price crashing?

Investors have been selling down the Nuix share price on Monday after the company released an update on its performance in FY 2022.

According to the release, Nuix expects to report annualised contract value (ACV) in the range of $160 million to $163 million.

This will be down from $165.6 million a year earlier. It is also lower than the ACV of $164.5 million reported during the first half of FY 2022.

Also falling year on year will be the company’s revenue and statutory EBITDA. These are expected to be in the ranges of $151 million to $154 million and $10 million to $12 million, respectively.

The midpoint of these guidance ranges implies declines of 13.4% and 64%, respectively, year on year.

What’s happening?

Management blamed its weaker top line performance on the recognition of revenue for some large multi-year contracts in the prior period, lower sales to new customers, and slipped deals into the FY 2023 financial year.

As for its operating earnings, these are being impacted by materially higher non-operational legal costs during the financial year of approximately $14 million. It is also continuing to reinvest in sustainable revenue generation, with further investment in sales and distribution capability, marketing, and product development.

Excluding the impact of non-operational legal costs and trading losses associated with Nuix’s recent acquisition of Topos, underlying EBITDA is expected to be in the range of $25 million to $27 million. This compares to pro forma EBITDA of $66.7 million a year earlier.

Nuix ended the financial year with cash on hand of $46.8 million.

The post Why is the Nuix share price crashing 25% to a record low today? appeared first on The Motley Fool Australia.

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