Why did this ASX All Ordinaries share just crash 33%?

The All Ordinaries (ASX: XAO) index may be rising strongly but the same cannot be said for the Symbio Holdings Ltd (ASX: SYM) share price on Wednesday.

At the time of writing, the voice communications software provider’s shares are down a massive 33% to a 52-week low of $1.72.

This means the Symbio share price is now down a very disappointing 75% in 2022, as you can see below.

Why is this All Ords share being hammered?

Investors have been hitting the sell button today in response to the release of a trading update after the market close on Tuesday.

Unfortunately for Symbio, it appears that demand during the COVID pandemic is unravelling somewhat right now, which is weighing on its performance.

According to the release, the company now expects FY 2023 EBITDA to be between $26 million and $30 million. This compares to its previous guidance of between $36 million and $39 million, which represents a 25% downgrade based on the mid-point of the ranges.

What’s going on?

Management advised that the company’s Communications Platform-as-a-Service (CPaaS) division has been impacted by returns and slow sales progress.

In respect to the former, it notes that several US-based global software companies have returned unused phone number inventory in the second quarter following COVID-related bulk orders.

As for the latter, management highlights that new deals are taking longer to finalise. It revealed that there are approximately 400,000 Australian phone numbers that have been in the final stages of the contract process since 30 June. Positively, Symbio remains confident they will materialise.

The All Ordinaries share also advised that other business divisions, TaaS and UCaaS, are performing in line with previous expectations, albeit at a slightly slower pace due to some areas of softness in the economy.

In response, Symbio has reduced its capital expenditure plans, cut discretionary spending on travel and marketing, and suspended recruiting. It is also exploring additional measures and opportunities to reduce its cost base.

Symbio co-founder and CEO, Rene Sugo, commented:

Despite a positive Q1’23, which tracked in line with our expectations, some unexpected customer activity during Q2’23 has impacted trading. As a result, we have revised our expected FY23 EBITDA guidance to $26 million to $30 million.

Symbio has acted quickly in response, reducing capex and opex to preserve our strong balance sheet. We are continuing to efficiently execute our strategy and remain committed to our APAC expansion plans. Singapore is performing well and at this stage, our focus is now on launching operations in Malaysia and Taiwan. Once we are cash flow positive in all three countries, we will then expand further into the APAC region as outlined in our 2030 vision.

The post Why did this ASX All Ordinaries share just crash 33%? appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Symbio Holdings Limited. The Motley Fool Australia owns and has recommended Symbio Holdings Limited. . The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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