For the second time since March, KIT digital (Nasdaq: KITD)'s stock has hit the skids, this time after it announced its preliminary quarterly results that reported first quarter revenue had missed analysts' estimates by a whopping 18.5 percent, and that it would have a non-GAAP operating loss of $8 million.
KIT digital said revenue would be $59 million, compared to the $72.42 million expected by Wall Street, and the $72 million it had projected in March.
The news sent shares sinking. In Prague, they were down 21 percent to their lowest level on the exchange. KIT digital opened down 27 percent on NASDAQ today, at $4.57.
KIT digital said longer than anticipated sales cycles for a number of larger opportunities, increased personnel costs and payments of assumed liabilities arising from the acquisition of Sezmi, and higher than expected legal and advisory fees, among other factors as reasons for lower than expected financial results.
In a statement, CEO Barak Bar-Cohen said the company had taken a detailed look at the business.
"Over the last several weeks, the management team and I have performed a detailed review of our lines of business and their cash flow contributions, and have determined that previous guidance was too high," he said.
The company has experienced a major upheaval in its leadership over the past couple of months.
In March, several directors stepped down, including independent director Santo Politi, who had a 2 percent share in the company, and reportedly left over differences of opinion with management over the company's buyout.
Last month, Kaleil Isaza Tuzman, who led the company's acquisition spree over the past couple of years, announced he was stepping down from his role as CEO, but would remain as non-executive chairman. Weeks later, Tuzman said he also would resign that role.
The move, COO Alex Blum told FierceOnlineVideo at the time, was a necessary one that reflected the company's need to move forward and integrate all of its acquisitions.
- see this release
- see this Bloomberg report
KIT digital chairman resigns
KIT digital management shuffle sends stock skidding
KIT digital reports record $70M revenue for Q4
KIT digital acquires Sezmi