Investment
OneStream (NASDAQ: OS)

Q3 2025: OneStream's competitive positioning within the CFO-office SaaS market remains intact but valuation is fully reflected at current levels; Neutral Rating; $18 Target Price.

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3Q25 Key Financials

  1. OneStream delivered 19% YoY revenue growth to $154m in 3Q25, with notable geographic divergence. The US market, representing 66% of total revenue, grew 12% YoY. In contrast, non-US markets demonstrated stronger momentum, expanding 37.5% YoY.

  2. Customer count increased 44 sequentially to 1,739, representing 13% YoY growth from 1,534 in 3Q24. While sequential adds remain modest, the consistency suggests stable retention and organic expansion.

  3. Billing increased 20% YoY to $178m, outpacing revenue growth and indicating healthy subscription renewal patterns and expansion within existing accounts.

  4. Dramatic improvement in operating income, which swung from -$255m loss to -$17m — a $238m improvement driven by (1) $30m in incremental revenue contribution and (2) $200m in reduced stock-based compensation. The underlying operational improvement (revenue plus SBC reduction) of $230m against ~$30m revenue growth underscores that profitability remains heavily dependent on SBC normalization rather than operational efficiency gains..

  5. Operating and investing cashflow combined improved to $4.8m from $1.3m, a modest sequential gain. However, this metric requires contextualization: considering stock-based compensation as a cash expense, 3Q25 free cashflow would have been -$20m. This suggests underlying operating cash generation remains pressured, and reported metrics benefit substantially from SBC treatment. This is a critical distinction for evaluating true economic cashflow generation.

View remains unchanged - OneStream's competitive positioning within the CFO‑office SaaS market remains intact but valuation is fully reflected at current levels.

  1. The company will continue to benefit from secular trends favoring CFO software and faces limited direct competition in the CFO Office Software section. Business moats persist through its unified hybrid architecture, high switching costs, network effects through partner referrals and marketplace add-ons, and a sustained track record of R&D investment.

  2. Intrinsic value is estimated at $18 per share, implying a 18% downside from the current $22 trading level. OneStream qualifies as a high-quality enterprise with durable competitive advantages so building a position becomes compelling once the stock approaches $18, where valuation no longer commands a premium.