The stock price of RealPage, Inc. (NASDAQ:RP) plunged more than 20% at the time of this writing, around 11:24 A.M. in New York after the company lowered its second-quarter adjusted total revenue outlook.
Revised financial outlook
RealPage, Inc. (NASDAQ:RP) announced that its second-quarter adjusted total revenue is expected to be around $93.8 million to $94.8 million.
The provider of on-demand property management solutions previously estimated that it will be able to achieve adjusted total revenue in the range of $106 million to $108 million.
Wall Street analysts expected RealPage, Inc. (NASDAQ:RP) to deliver $107.19 million in total adjusted revenue.
RealPage, Inc. (NASDAQ:RP) said its adjusted EBITDA was expected to be around $11.5 million to $12.5 million for the second-quarter.
Weaker leasing velocity
RealPage, Inc. (NASDAQ:RP) explained that the primary factor the negatively affected its financial results for the second-quarter was the lower than expected revenue from products and services related to leasing activity including organic lead-generation tools, screening and the contact center.
The company believes that property owners are spending less on advertising and marketing due to low vacancy and turnover rates during the quarter. According to RealPage, Inc. (NASDAQ:RP), actions have been implemented that resulted to lower per transaction especially in the contact center while increasing its market share.
In a statement, Steve Winn, Chairman and CEO of RealPage, Inc. (NASDAQ:RP) said,”We believe lower than expected revenue driven by weakness in leasing velocity and marketing products was primarily responsible for our revenue and profit miss.”
RealPage to provide details sales expansion
According to Winn, the management of RealPage, Inc. (NASDAQ:RP) will continue its direction towards sales expansion investment and to complete the rollout of its product development backlog.
The management will provide additional details regarding its action plan and progress related to the new product introductions, salesforce expansion and pricing action to increase the market share RealPage, Inc. (NASDAQ:RP).
As we address the factors that impacted our revenue performance, we will also discuss certain actions underway to restructure or eliminate the cost that we expect will enable margin expansion over the long-term,” according to RealPage CFO and Treasurer W. Bryan Hill.