• by Richard Whitman , Columnist, July 22, 2022

More trouble on the financial front for S4 Capital as it announced Thursday (July 21) that it was lowering its outlook for full-year earnings before interest, taxes, depreciation and amortization to approximately $144 million.

The previous estimate was a range of between $185 million and $198 million, according to analysts.

Investors weren’t happy as S4’s stock tumbled nearly 40% this week.

The company said the revision was due to higher-than-expected costs related to hiring mostly in the firm’s Content practice.

“Significant cost reduction measures, including a brake on hiring and discretionary cost controls have been introduced,” the company stated.

Word of the profit squeeze comes just a few months after the firm struggled to get out its full year 2021 financial results, which were delayed twice and which S4 chief Martin Sorrell said was an embarrassment and unacceptable. Those results were finally released in May.

The firm stressed that the “significant investment” in controls put in place this year to improve financial accounting, reporting and related efforts, “will not be impacted in any way” by the latest round of cost containment measures.

S4 also said it was standing by its previously stated guidance of 25% organic revenue growth for the year.