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Model N (MODN) Outpaces Q3 Earnings and Revenue Estimates
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Model N, Inc. (MODN - Free Report) reported strong third-quarter fiscal 2022 results with both the bottom line and top line beating the respective Zacks Consensus Estimate driven by the successful transition to a SAAS platform as part of its transformation to a cloud company.
GAAP earnings loss was 17 cents per share compared to the loss of 22 cents per share in the prior-year quarter. Non-GAAP earnings were 23 cents per share, which surpassed the Zacks Consensus Estimate of 15 cents. The bottom line increased 43.8% from 16 cents reported in the prior-year quarter on top-line growth.
Revenues were $56.1 million, which beat the Zacks Consensus Estimate of $55 million and increased 10.1% from $51 million reported in the prior-year quarter as the company successfully transitioned its customers onto its SaaS platform. Model N strengthened its foothold in the quarter by closing three large SaaS transitions and continued to witness strong contributions from subscription booking across its portfolio.
Quarter Details & Business Highlights
Subscription revenues (72.2% of total revenues) were $ 40.6 million, up 10% year over year from $36.9 million.
Professional Services revenues (27.8%) increased 10.5% to $15.6 million from $14.1 million reported in the prior-year quarter.
The spring 2022 product release for the Model N Revenue Cloud fueled channel efficiencies in the High-Tech vertical and further enhanced the automation and compliance for the Life Science vertical.
The latest semi-annual update to the company’s flagship product constituted a new payment management solution catering to high-tech companies along with improvements to its Global Price Management mobile application serving the requirements of pharmaceutical and MedTech companies.
Non-GAAP gross margin expanded 150 basis points (bps) from the year-ago quarter’s figure to 61.7%.
Non-GAAP subscription gross margin increased 80 bps from the prior-year quarter’s levels to 68.5%. Non-GAAP professional services gross margin expanded 340 bps to 44%.
Adjusted EBITDA was $10 million, up 36.2% year over year. Non-GAAP operating income was $9.8 million, up 36.8%.
Cash Flow & Liquidity
For the first nine months of fiscal 2022, Model N generated $17.3 million from operating activities compared with $9.7 million in the prior-year period. As of Jun 30, 2022, the company had $184.5 million in cash and cash equivalents with $132.5 million of long-term debt.
Guidance
The company anticipates fourth-quarter fiscal 2022 total revenues between $56 million and $56.5 million. Subscription revenues are projected in the range of $41.5-$42 million. Adjusted EBITDA is expected to be between $8 million and $8.5 million. Non-GAAP operating income is expected in the range of $7.7-$8.2 million. Non-GAAP earnings per share are anticipated in the band of 18-20 cents per share.
For fiscal 2022, Model N expects total revenues in the band of $217-$217.5 million. Subscription revenues are estimated in the range of $158.4-$158.9 million. Adjusted EBITDA is projected within $31.9-$32.4 million. Non-GAAP operating income is expected in the range of $30.9-$31.4 million. Non-GAAP earnings are expected to be 70-72 cents per share.
First Bancorp. (FBP - Free Report) , sporting a Zacks Rank #1, delivered an earnings surprise of 17.1%, on average, in the trailing four quarters. Over the past year, the stock has risen 17%.
Earnings estimates for the current year have moved up 16.8% since August 2021. First Bancorp operates in six segments – Commercial and Corporate Banking, Mortgage Banking, Consumer Banking, Treasury and Investments, United States Operations and Virgin Islands Operations.
SP Plus Corporation (SP - Free Report) , sporting a Zacks Rank #1, is another key pick for investors. It delivered an earnings surprise of 15.7% in the previous quarter and a stellar earnings surprise of 19.5%, on average, in the trailing four quarters. SP Plus operates in Commercial and Aviation segments. It provides mobility solutions, parking management, ground transportation, baggage and other ancillary services in North America.
Earnings estimates for the current year have moved up 16.9% since August 2021.
Chewy, Inc. (CHWY - Free Report) has a Zacks Rank #1. The Zacks Consensus Estimate for Chewy's current-year earnings has been revised 194.6% downward since August 2021.
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Model N (MODN) Outpaces Q3 Earnings and Revenue Estimates
Model N, Inc. (MODN - Free Report) reported strong third-quarter fiscal 2022 results with both the bottom line and top line beating the respective Zacks Consensus Estimate driven by the successful transition to a SAAS platform as part of its transformation to a cloud company.
GAAP earnings loss was 17 cents per share compared to the loss of 22 cents per share in the prior-year quarter. Non-GAAP earnings were 23 cents per share, which surpassed the Zacks Consensus Estimate of 15 cents. The bottom line increased 43.8% from 16 cents reported in the prior-year quarter on top-line growth.
Revenues were $56.1 million, which beat the Zacks Consensus Estimate of $55 million and increased 10.1% from $51 million reported in the prior-year quarter as the company successfully transitioned its customers onto its SaaS platform.
Model N strengthened its foothold in the quarter by closing three large SaaS transitions and continued to witness strong contributions from subscription booking across its portfolio.
Quarter Details & Business Highlights
Subscription revenues (72.2% of total revenues) were $ 40.6 million, up 10% year over year from $36.9 million.
Professional Services revenues (27.8%) increased 10.5% to $15.6 million from $14.1 million reported in the prior-year quarter.
The spring 2022 product release for the Model N Revenue Cloud fueled channel efficiencies in the High-Tech vertical and further enhanced the automation and compliance for the Life Science vertical.
The latest semi-annual update to the company’s flagship product constituted a new payment management solution catering to high-tech companies along with improvements to its Global Price Management mobile application serving the requirements of pharmaceutical and MedTech companies.
Model N, Inc. Price, Consensus and EPS Surprise
Model N, Inc. price-consensus-eps-surprise-chart | Model N, Inc. Quote
Operating Details
Non-GAAP gross margin expanded 150 basis points (bps) from the year-ago quarter’s figure to 61.7%.
Non-GAAP subscription gross margin increased 80 bps from the prior-year quarter’s levels to 68.5%. Non-GAAP professional services gross margin expanded 340 bps to 44%.
Adjusted EBITDA was $10 million, up 36.2% year over year. Non-GAAP operating income was $9.8 million, up 36.8%.
Cash Flow & Liquidity
For the first nine months of fiscal 2022, Model N generated $17.3 million from operating activities compared with $9.7 million in the prior-year period. As of Jun 30, 2022, the company had $184.5 million in cash and cash equivalents with $132.5 million of long-term debt.
Guidance
The company anticipates fourth-quarter fiscal 2022 total revenues between $56 million and $56.5 million. Subscription revenues are projected in the range of $41.5-$42 million. Adjusted EBITDA is expected to be between $8 million and $8.5 million. Non-GAAP operating income is expected in the range of $7.7-$8.2 million. Non-GAAP earnings per share are anticipated in the band of 18-20 cents per share.
For fiscal 2022, Model N expects total revenues in the band of $217-$217.5 million. Subscription revenues are estimated in the range of $158.4-$158.9 million. Adjusted EBITDA is projected within $31.9-$32.4 million. Non-GAAP operating income is expected in the range of $30.9-$31.4 million. Non-GAAP earnings are expected to be 70-72 cents per share.
Zacks Rank & Stocks to Consider
Model N currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
First Bancorp. (FBP - Free Report) , sporting a Zacks Rank #1, delivered an earnings surprise of 17.1%, on average, in the trailing four quarters. Over the past year, the stock has risen 17%.
Earnings estimates for the current year have moved up 16.8% since August 2021. First Bancorp operates in six segments – Commercial and Corporate Banking, Mortgage Banking, Consumer Banking, Treasury and Investments, United States Operations and Virgin Islands Operations.
SP Plus Corporation (SP - Free Report) , sporting a Zacks Rank #1, is another key pick for investors. It delivered an earnings surprise of 15.7% in the previous quarter and a stellar earnings surprise of 19.5%, on average, in the trailing four quarters. SP Plus operates in Commercial and Aviation segments. It provides mobility solutions, parking management, ground transportation, baggage and other ancillary services in North America.
Earnings estimates for the current year have moved up 16.9% since August 2021.
Chewy, Inc. (CHWY - Free Report) has a Zacks Rank #1. The Zacks Consensus Estimate for Chewy's current-year earnings has been revised 194.6% downward since August 2021.