Content Assessment: Revenue Headwinds? KLDiscovery Inc. Announces Second Quarter 2022 Financial Results
Information - 90%
Insight - 89%
Relevance - 92%
Objectivity - 84%
Authority - 88%
A short percentage-based assessment of the qualitative benefit of the recent 2Q22 earnings report from global provider of electronic discovery, information governance and data recovery technology solutions, KLDiscovery.
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Background Note: The following announcement shares the 2Q2022 financial results for eDiscovery provider KLDiscovery and may be of interest to legal, business, and information technology professionals operating or investing in the eDiscovery ecosystem. Additionally, a recent post by Tomasz Tunguz, a venture capitalist with Redpoint, provides an interesting consideration that may be of relevance regarding the value of public software companies. The post, titled Growth is No Longer the Best Predictor of a Software Company’s Value, notes that profitability has surged as the most significant correlate and predictor of a public software company’s value. This revenue headwinds consideration may also be of interest to individuals considering valuations in light of quarterly earnings results.
Press Announcement Extract (August 10, 2022)
KLDiscovery Inc. Announces Second Quarter 2022 Financial Results
Total revenue second highest quarter in company history; 9% Revenue Growth, and Strong Nebula Adoption for the quarter versus Q1 2021
MCLEAN, Va.–(BUSINESS WIRE)– KLDiscovery Inc. (“KLDiscovery” or the “Company”), a leading global provider of electronic discovery, information governance and data recovery technology solutions, announced today that revenue for the second quarter ended June 30, 2022 was $75.2 million versus $81.7 million in the second quarter of 2021. Net loss for the second quarter of 2022 was $(11.2) million compared to $(8.9) million in the second quarter of 2021.
EBITDA for the second quarter of 2022 was $9.7 million versus $13.7 million in the second quarter of 2021. Adjusted EBITDA (which excludes stock-based compensation, acquisition financing and transaction costs and other items as described below) for the second quarter of 2022 was $12.4 million compared to $17.7 million in the first quarter of 2021, reflecting planned investments in research and development and sales and marketing.
“The second quarter of 2022 was a very good quarter for KLDiscovery,” said Christopher Weiler, CEO of KLDiscovery Inc. “Despite the headwinds we are experiencing from a weakening U.S. economy, as reflected by two consecutive quarters of declines in GDP in the first half of 2022, we continue to deliver solid revenue. We achieved the best quarter of Nebula revenue in our history, up 27% from the first quarter of 2022 as our investments in the platform and sales team are yielding measurable results. We increased the number of Nebula clients and Nebula matters in Q2 2022 vs. Q1 2022 by 8% and 10% respectively.
Mr. Weiler continued, “I am very pleased with the Nebula results. Both Nebula and Client Portal are being extremely well received. The partnerships we have formed with Luminance, Canopy and Shield provide additional functionality that truly differentiates us from the competition and offer maximum value to our clients. As a Company, we remain laser-focused on the things we can control during these difficult economic times. Our team continues to deliver world-class customer service to our clients combined with our fully integrated solution of full-stack AI and ML powered technology.”
KLDiscovery provides technology solutions to help law firms, corporations, insurance companies and individuals solve complex data challenges. With 31 locations, 9 data centers and 17 data recovery labs across 19 countries, KLDiscovery is a global leader in delivering best-in-class eDiscovery, information governance and data recovery solutions to support the litigation, regulatory compliance, internal investigation and data recovery and management needs of our clients. Serving clients for over 30 years, KLDiscovery offers data collection and forensic investigation, early case assessment, electronic discovery and data processing, application software and data hosting for web-based document reviews, and managed document review services. In addition, through its global Ontrack Data Recovery business, KLDiscovery delivers world-class data recovery, email extraction and restoration, data destruction and tape management. KLDiscovery has been recognized as one of the fastest growing companies in North America by both Inc. Magazine (Inc. 5000) and Deloitte (Deloitte’s Technology Fast 500) and CEO Chris Weiler was recognized as a 2014 Ernst & Young Entrepreneur of the Year™. Additionally, KLDiscovery is a Relativity Certified Partner and maintains ISO/IEC 27001 Certified data centers around the world. For more information, please email email@example.com or visit https://investors.kldiscovery.com.
KLDiscovery Inc Announces Second Quarter 2022 Financial Results
- Growth is No Longer the Best Predictor of a Software Company’s Value (Tomasz Tunguz)
- Strong Growth? KLDiscovery Inc. Announces First Quarter 2022 Financial Results
- Investments in eDiscovery (A Running Listing)
- An Abridged Look at the Business of eDiscovery: Mergers, Acquisitions, and Investments
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