Ultimate Software Falls on Capacity Concerns
Small companies often face challenges in getting new business. Yet it can often prove equally dangerous for a small company to get too much business, because it can lack the capacity to handle an influx of clients quickly while retaining its reputation for quality and customer service. Cloud-based human resource management solutions provider Ultimate Software Group (NASDAQ: ULTI) appears to be going through that transition right now, and although it's a far better problem to have than not having any demand for products and services, Ultimate still has to figure out how best to handle the situation.
Coming into Tuesday's second-quarter financial report, Ultimate Software investors wanted to see a continuation of the company's impressive growth trends on the top and bottom lines. Ultimate delivered on the earnings front, but sales growth lagged what investors were expecting, and a cut to sales guidance for the remainder of the year raised questions about the HR cloud company's ability to execute well. Let's look more closely at Ultimate Software to see what happened and what's ahead for the company.
Image source: Ultimate Software.
Source: Fool.com
