And then it rides up. Conservative guidance. Nothing has changed fundamentally. No macroeconomic headwinds. They just had a really good Q4 and now took a breather. Hiring more sales people is a sign that if they missed on revenue now, its because they didnt have enough sales people out there to meet demand!
Buy buy buy
Well something is not adding up. Their revenue was greater than expected. Perhaps fb doesnt need teenagers at all (american teenagers) when fb is more than just a hangout site. Keep in mind, fb was originally targetted for college people.... Educated and tech savvy individuals. Teen use is a non-issue... Facebook is NOT myspace
Could it not be plausible that the reason they are seeing lower usage by teens is due to many of them becoming adults? Teens were the first wave of active fb users... That wave are becoming adults... But theyre daily usage no longer counts as teen... Thus we get lower numbers.
Its like a fb "baby-user boom".... They are simply moving up the age group while the new generatikn becomes as active as their predecessors.
This will open at around 90 tomorrow. Slight 3 minute dip and then all green from then on.
Gross margin decline is only due to the consulting side. These services will ADD to revenue while helping sales improve of the higher margin core products. You gotta spend money to make money! Yoy comparisons are said to improve overall... Buy it now or in the premarket tomorrw.
You just KNOW they're gonna repeat all of this if not elaborate more on the success of their core business on the analyst day. Buy buy buy
They are in the midst of becoming a subscription based business. Thats where their higher margin is. The reduction in $7 million or so from the FY guidance is due to this mod gaining ground faster. The professional services part of their business is expected to die out. Which is why, going forward, they dont need to breakdown revenue segments. It will ALL become subscription and support focused. Its a cheaper higher margin business. Yes its less in revenue right now, but the more clients you sign up, the more predictable your revenue stream is. Costs go down overall and thus profitability rises.
This is an example of reduced guidance being a good thing looking at the bigger picture of growth.
IF they had LOST clients in addition to reducing guidance, then this should rightfully tank to single digit stock price. The bottom line is that is still growing at 30% and for now, the costs of building that platform is a small trade off to what will soon be gained.