ON24, Inc. Provides Key Updates: Litigation Surrounding Merger, Supplemental Disclosures, and Financial Forecasts

Overview

ON24, Inc. (NYSE: ONTF), a leading provider in the prepackaged software sector, has issued a significant update for investors regarding ongoing merger litigation, supplemental disclosures to its definitive proxy statement, and detailed financial projections. The company’s latest SEC filing (Form 8-K, dated March 19, 2026) includes information that could materially impact the company’s share price and is of high importance to current and prospective shareholders.

Key Points for Investors

• Ongoing Litigation Related to Proposed Merger: Two putative stockholder lawsuits have been filed against ON24 and its Board of Directors in the Supreme Court of New York, New York County. The suits—Burke v. ON24, Inc., et al., and Jones v. ON24, Inc., et al.—allege that the Definitive Proxy Statement failed to disclose material information regarding the merger. The plaintiffs seek to enjoin the merger and claim damages if it proceeds. Additionally, ON24 received multiple demand letters from purported shareholders regarding alleged disclosure deficiencies.
• Company’s Position: ON24 maintains that these allegations are without merit and asserts that its disclosures fully comply with applicable law. However, to avoid delays, costs, and uncertainties—including potential impacts on the timing of the merger vote—the company has voluntarily issued supplemental disclosures to address the claims.
• Supplemental Disclosures in the Proxy Statement:
  • Non-Disclosure Agreements (NDAs): The NDAs entered into by ON24 in the context of the merger did not contain “don’t-ask, don’t-waive” or similar provisions. No counterparty is restricted from making an offer or entering into discussions regarding an acquisition proposal or superior proposal, even after public announcement of the merger agreement.
  • Cvent’s Proposal: The competing proposal from Cvent did not include any provisions or negotiations regarding the participation or employment of ON24’s management in the surviving entity prior to the signing of the merger agreement. Furthermore, Cvent’s request for transition support from key ON24 executives was not implemented during the finalization of the merger agreement.
  • Financial Advisor’s Opinion: Goldman Sachs, ON24’s financial advisor, clarified that it used ON24’s cash and cash equivalents of approximately \$169 million as of September 30, 2025 (adjusted for share repurchases through December 26, 2025), for its valuation analysis. Projected cash balances for 2026 and 2027 are \$168 million and \$189 million, respectively, as provided by ON24 management.
• Valuation and Comparable Transactions:
  • Selected Precedent Transactions: The company provided a detailed table of recent M&A deals in the software and marketing technology space, with EV/NTM Revenue multiples ranging from 0.9x to 4.0x and transaction values from \$0.1 billion to \$2.6 billion. This data is intended to give shareholders context for the valuation of ON24 in the proposed merger.
  • ON24’s Relative Valuation: By applying reference EV/NTM Revenue multiples of 1.0x to 2.3x to ON24’s estimated next-twelve-month (NTM) revenue as of December 31, 2025, and adding the company’s cash balance, Goldman Sachs derived a range of implied equity values per ON24 share of \$6.20 to \$9.70 (rounded to the nearest \$0.10).
  • Peer Comparison: The company compared itself to selected peers in the business-to-business marketing and communications industry, highlighting that ON24’s estimated EV/Revenue multiple is 0.5x (based on both internal forecasts and analyst consensus), versus a peer range of 0.9x to 3.6x (median 1.8x).
• Updated Financial Projections:
  • Sales and Marketing Expenses: Projected at \$59 million in 2025 and \$51 million in 2026.
  • EBIT (excluding SBC): Projected EBIT (excluding stock-based compensation) transitions from losses in 2025 to growing profits through 2027 and beyond.
  • Adjusted EBITDA (excluding SBC): The company expects to move from breakeven in 2025 to steadily increasing adjusted EBITDA in subsequent years.
  • Unlevered Free Cash Flow: The company provided updated free cash flow forecasts, which are critical for investors assessing ON24’s standalone value and the merits of the merger.
• Shareholder Action and Access to Materials: The company urges investors to read the definitive proxy statement and all related supplemental materials before making voting or investment decisions. All relevant documents are available on the SEC’s website and ON24’s investor relations site.

Potential Impact on Share Price

Why This Matters:

• The outcome of the litigation could delay or potentially derail the proposed merger, which may have a material effect on ON24’s share price.
• The supplemental disclosures and the transparent communication regarding the proxy statement, merger process, and financials may reassure investors and mitigate legal and regulatory risks.
• The provided valuation ranges and peer comparisons give investors critical data to assess whether the proposed merger consideration is fair, which may influence voting outcomes and trading activity.
• ON24’s financial projections and the context of recent industry M&A multiples provide a clearer picture of the company’s value and growth prospects—key information for both current shareholders and potential merger arbitrageurs.

Disclaimer

This article is for informational purposes only and does not constitute investment advice. Investors should read all official disclosures, SEC filings, and consult with their financial advisors before making any investment or voting decisions. The information provided is based on ON24, Inc.’s SEC filings as of March 19, 2026, and may be subject to change.

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