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Model N (MODN) Q4 Earnings Beat, Stock Down on Bleak View
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Model N, Inc. (MODN - Free Report) reported fourth-quarter fiscal 2020 non-GAAP earnings of 14 cents per share, which surpassed the Zacks Consensus Estimate by 55.6%. The bottom line also improved 7.7% year over year.
Revenues were $41.5 million, which beat the Zacks Consensus Estimate by 2.6% and increased 13% year over year.
Robust adoption of the company’s revenue management solutions drove the fiscal fourth-quarter top line. Model N’s Revenue Cloud aids organizations with enhanced efficiency, visibility, and transparency in reporting.
Shares Down on Bleak Guidance
Despite better-than-expected fourth-quarter fiscal 2020 results, shares of Model N are down more than 11% in the pre-market trading on Nov 11.
The company anticipates fiscal first-quarter 2021 total revenues between $40.2 million and $40.6 million. The Zacks Consensus Estimate for revenues is pegged at $41.1 million.
Non-GAAP earnings are anticipated in the range of 5-8 cents per share. The Zacks Consensus Estimate for earnings is pegged at 10 cents per share.
For fiscal 2021, Model N expects total revenues in the range of $170 million to $172 million. The Zacks Consensus Estimate for revenues stands at $174.1 million.
Non-GAAP earnings are expected to be 27-35 cents per share. The Zacks Consensus Estimate for earnings is currently pegged at 43 cents per share.
On a year-to-date basis, shares of Model N have gained 1.1%, compared with the industry’s rally of 71.8%.
Quarter Details & Business Highlights
Model N reports earnings under two business lines — Subscription and Professional Services.
In fourth-quarter fiscal 2020, Subscription revenues (71.6% of total fiscal fourth-quarter revenues) were $29.7 million, up 8% year over year. This was driven by strong go-to-market execution and new logo additions.
Professional Services revenues (28.4%) increased 28.6% on a year-over-year basis to $11.8 million.
Notable companies including, Merck Co. (MRK - Free Report) , Seqirus USA, Mallinckrodt and Octapharma, have selected Model N’s Revenue Cloud products. In the fiscal fourth quarter, Advanced Micro Devices (AMD - Free Report) , went live with full suite of Model N’s cloud solutions, with an aim to enhance pricing, quoting, and rebating activities and obtain more data-driven actionable intelligence into its channel.
Also, Servier Monde went live with implementation of Global Pricing Management offering in a bid to accelerate and enhance decision-making.
Moreover, the company is making steady progress in its transformation to a Software-as-a-Service (SaaS) based model, which is driving top-line growth.
Operating Details
Non-GAAP gross margin expanded 130 basis points (bps) from the year-ago-figure to 63%. Non-GAAP subscription gross margin expanded 100 bps from the year-ago-figure to 74% on higher revenue base.
Adjusted EBITDA during the quarter was $7 million, up 38%year over year.
Non-GAAP operating income was $6.8 million, up 41% year over year. Non-GAAP operating margin (as a percentage of total revenues) expanded 530 bps to 22.9%.
Balance Sheet
As of Sep 30, 2020, Model N had cash and cash equivalents of $200.5 million compared with $192.4 million as of Jun 30, 2020.
As of Sep 30, 2020, the company had total debt (including current portion) of $114.4 million, compared with $112.2 million reported as of Jun 30, 2020.
Fiscal 2020 at a Glance
In fiscal 2020, the company generated revenues of $161.1 million, up 14% year over year.
Subscription revenues (72.1% of total fiscal 2020 revenues) of $116.2 million, improved 10% on a year-over-year basis.
Professional Services revenues (27.9%) of $44.9 million climbed 24.6% year over year.
Net cash flow from operating activities was $14.4 million for the fiscal year 2020 ended Sep 30, 2020, compared with $10.5 million in the fiscal year 2019. Free cash flow was reported at $13.8 million for the fiscal year 2020, compared with free cash flow of $10.2 million in fiscal year 2019.
Guidance in Detail
Fiscal first-quarter 2021 subscription revenues are projected to be $29.4-$29.8 million. Adjusted EBITDA is expected between $4.1 million and $4.5 million.
Fiscal 2021 subscription revenues are forecast in the range of $122 million to $124 million. Adjusted EBITDA is projected in the band of $18-20 million.
Zacks Rank & a Stock to Consider
Currently, Model N carries a Zacks Rank #3 (Hold).
The long-term earnings growth rate for NVIDIA is currently pegged at 20.07%.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.
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Model N (MODN) Q4 Earnings Beat, Stock Down on Bleak View
Model N, Inc. (MODN - Free Report) reported fourth-quarter fiscal 2020 non-GAAP earnings of 14 cents per share, which surpassed the Zacks Consensus Estimate by 55.6%. The bottom line also improved 7.7% year over year.
Revenues were $41.5 million, which beat the Zacks Consensus Estimate by 2.6% and increased 13% year over year.
Robust adoption of the company’s revenue management solutions drove the fiscal fourth-quarter top line. Model N’s Revenue Cloud aids organizations with enhanced efficiency, visibility, and transparency in reporting.
Shares Down on Bleak Guidance
Despite better-than-expected fourth-quarter fiscal 2020 results, shares of Model N are down more than 11% in the pre-market trading on Nov 11.
The company anticipates fiscal first-quarter 2021 total revenues between $40.2 million and $40.6 million. The Zacks Consensus Estimate for revenues is pegged at $41.1 million.
Non-GAAP earnings are anticipated in the range of 5-8 cents per share. The Zacks Consensus Estimate for earnings is pegged at 10 cents per share.
For fiscal 2021, Model N expects total revenues in the range of $170 million to $172 million. The Zacks Consensus Estimate for revenues stands at $174.1 million.
Non-GAAP earnings are expected to be 27-35 cents per share. The Zacks Consensus Estimate for earnings is currently pegged at 43 cents per share.
On a year-to-date basis, shares of Model N have gained 1.1%, compared with the industry’s rally of 71.8%.
Quarter Details & Business Highlights
Model N reports earnings under two business lines — Subscription and Professional Services.
In fourth-quarter fiscal 2020, Subscription revenues (71.6% of total fiscal fourth-quarter revenues) were $29.7 million, up 8% year over year. This was driven by strong go-to-market execution and new logo additions.
Professional Services revenues (28.4%) increased 28.6% on a year-over-year basis to $11.8 million.
Notable companies including, Merck Co. (MRK - Free Report) , Seqirus USA, Mallinckrodt and Octapharma, have selected Model N’s Revenue Cloud products. In the fiscal fourth quarter, Advanced Micro Devices (AMD - Free Report) , went live with full suite of Model N’s cloud solutions, with an aim to enhance pricing, quoting, and rebating activities and obtain more data-driven actionable intelligence into its channel.
Also, Servier Monde went live with implementation of Global Pricing Management offering in a bid to accelerate and enhance decision-making.
Moreover, the company is making steady progress in its transformation to a Software-as-a-Service (SaaS) based model, which is driving top-line growth.
Operating Details
Non-GAAP gross margin expanded 130 basis points (bps) from the year-ago-figure to 63%. Non-GAAP subscription gross margin expanded 100 bps from the year-ago-figure to 74% on higher revenue base.
Model N, Inc. Price, Consensus and EPS Surprise
Model N, Inc. price-consensus-eps-surprise-chart | Model N, Inc. Quote
Adjusted EBITDA during the quarter was $7 million, up 38%year over year.
Non-GAAP operating income was $6.8 million, up 41% year over year. Non-GAAP operating margin (as a percentage of total revenues) expanded 530 bps to 22.9%.
Balance Sheet
As of Sep 30, 2020, Model N had cash and cash equivalents of $200.5 million compared with $192.4 million as of Jun 30, 2020.
As of Sep 30, 2020, the company had total debt (including current portion) of $114.4 million, compared with $112.2 million reported as of Jun 30, 2020.
Fiscal 2020 at a Glance
In fiscal 2020, the company generated revenues of $161.1 million, up 14% year over year.
Subscription revenues (72.1% of total fiscal 2020 revenues) of $116.2 million, improved 10% on a year-over-year basis.
Professional Services revenues (27.9%) of $44.9 million climbed 24.6% year over year.
Net cash flow from operating activities was $14.4 million for the fiscal year 2020 ended Sep 30, 2020, compared with $10.5 million in the fiscal year 2019. Free cash flow was reported at $13.8 million for the fiscal year 2020, compared with free cash flow of $10.2 million in fiscal year 2019.
Guidance in Detail
Fiscal first-quarter 2021 subscription revenues are projected to be $29.4-$29.8 million. Adjusted EBITDA is expected between $4.1 million and $4.5 million.
Fiscal 2021 subscription revenues are forecast in the range of $122 million to $124 million. Adjusted EBITDA is projected in the band of $18-20 million.
Zacks Rank & a Stock to Consider
Currently, Model N carries a Zacks Rank #3 (Hold).
A better-ranked stock in the broader technology sector is NVIDIA (NVDA - Free Report) , which carries a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
NVIDIA is set to report earnings on Nov 18.
The long-term earnings growth rate for NVIDIA is currently pegged at 20.07%.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.
Click here for the 6 trades >>