SLI Systems, the online retail search engine developer, said revenue in the second half of its financial year will be less than expected because of a shortfall in American sales after it reorganised its sales team, and as it was impacted by a weaker Brazilian economy.
Operating revenue will rise to $28 million in the year ending June 30, from $22 million a year earlier, the Christchurch-based company said in a statement. The forecast is lower than the $30.5 million expected by analysts in a Reuters poll.
SLI Systems said growth in annualised recurring revenue, its preferred financial measure based on forward subscription revenue, will slow in the second half of the year, compared with the first half. That’s a turnaround from the company’s guidance in February when it said second-half growth would be stronger than the first half.
“The change stems from a shortfall in American sales due to a sales team reorganisation, following the company’s transition to new sales leadership, along with weakness in the Brazilian economy,” the company said. “With the appointment of a new chief revenue officer and increased sales disciplines we remain confident of returning to more aggressive growth in the near future.”
In December, the company hired Neil Thomas, a California-based Adaptive Insights executive, as chief revenue officer and president of North America as part of its push into the world’s largest economy.
The company is forgoing profits and dividends to fund growth in the expanding e-commerce market, particularly in the US, and says its software as a service is the second biggest after Oracle to provide online retailers with suggestive search engines. Analysts polled by Reuters before today’s announcement had expected the company’s annual loss to widen to $7 million this year, from $5.7 million last year.
It expects to report its annual earnings in late August.
Shares in SLI Systems last traded at $1.12 and have dropped 6.7 per cent so far this year.