Shares of Nuix Ltd (ASX:NXL) plummeted 20.04% in intraday trading, following the company's announcement that it has abandoned its annualized contract value target for fiscal 2025. The software firm cited uncertainties surrounding the timing of deal closures as the primary reason for this decision.

In a filing with the Australian Securities Exchange on Tuesday, Nuix stated that it was "prudent" to withdraw its previously slashed annualized contract value target range of 11% to 16% in constant currency. The company has also pulled out of its strategic targets relating to revenue growth and underlying cash flow, highlighting the challenges it faces in the current market environment.

Nuix explained that recent volatility has made it "more difficult to predict" the closure times of its transactions, despite having a "strong" pipeline. This unexpected move has clearly shaken investor confidence, leading to the sharp decline in the company's stock price. The market's reaction underscores the importance of predictable financial targets and the potential impact of uncertainty on investor sentiment in the software sector.