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Model N (MODN) Q2 Earnings Beat Estimates on Solid Revenues
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Model N, Inc. delivered impressive second-quarter fiscal 2023 results, with the bottom and the top line beating the respective Zacks Consensus Estimate. The San Mateo, CA-based company recorded higher revenues year over year, driven by solid momentum in Subscription induced by rising demand for cloud-based solutions and growth in Professional services. SaaS ARR (annual recurring revenue) increased 40% year over year.
Net Income
The company recorded a GAAP loss of $33.3 million or a loss of 88 cents per share compared with a loss of $8 million or a loss of 22 cents per share in the prior-year quarter. In spite of the top-line growth, increased operating expenses and loss on debt extinguishment led to higher loss in the quarter.
Non-GAAP net income rose to $8.6 million or 22 cents per share from $5 million or 14 cents per share in the prior-year quarter. The bottom line beat the Zacks Consensus Estimate by 5 cents.
Quarterly revenues stood at $62.6 million, up from $53.3 million reported in the prior-year quarter. The 18% year-over-year improvement can be attributed to healthy net sales growth in all the business verticals. The top line beat the Zacks Consensus Estimate of $59 million.
Revenues from subscription increased to $44.9 million, up 17% from $38.2 million reported in the year-ago quarter. Increase in SaaS revenues, induced by the growing adoption of the company’s cloud solutions, supported net sales in this segment. However, this positive trend was partially reversed by declining maintenance revenues. SaaS net dollar retention increased to 138% from 116% year over year. In the second quarter, the company generated $17.7 million in revenues from Professional Services. Increase in number of professional service hours performed led to an 18% year-over-year growth from this vertical.
Other Details
Total operating expenses reported in the quarter was $38.1 million, up 15% from $33.1 million in the year-ago quarter, owing to increase in employee-related costs and equipment-related expenses. Non-GAAP gross margin was 60%, in line with the prior-year quarter’s figure.
Adjusted EBITDA was $9.2 million, up from $6.6 million in the prior-year quarter. Non-GAAP operating income was $9 million, up 40% year over year.
Cash Flow & Liquidity
In the second quarter of fiscal 2023, Model N generated $12.1 million from operating activities compared with $12.6 million of cash generation in the year-ago quarter. As of Mar 31, 2023, the company had $270.6 million in cash and cash equivalents with $279.5 million of long-term debt.
Outlook
For third-quarter fiscal 2023, the company expects total revenues between $61.5 million and $62.5million. Subscription revenues are projected in the range of $45-$45.5 million. Adjusted EBITDA is expected to be between $9.5 million and $10.5 million. Non-GAAP operating income is expected within $9.2-$10.2 million, while non-GAAP earnings per share are estimated in the band of 23-25 cents.
For fiscal 2023, management raised total revenue expectations in the band of $244-$246 million, up from $242-$245million projected earlier. Subscription revenues are estimated in the range of $180-$181 million. Adjusted EBITDA is projected within $39-$41 million. Non-GAAP operating income is expected within $37-$39 million. Non-GAAP earnings are expected to be 94-99 cents per share.
InterDigital, Inc (IDCC - Free Report) , carrying a Zacks Rank #2 (Buy), delivered an earnings surprise of 170.89%, on average, in the trailing four quarters. In the last reported quarter, it pulled off an earnings surprise of 579.03%.
It is a pioneer in advanced mobile technologies that enables wireless communications and capabilities. The company engages in designing and developing a wide range of advanced technology solutions, which are used in digital cellular and wireless 3G, 4G and IEEE 802-related products and networks.
Meta Platforms Inc. (META - Free Report) , sporting a Zacks Rank #1, delivered an earnings surprise of 15.46%, on average, in the trailing four quarters. Meta Platforms is the world’s largest social media platform. The company’s portfolio offering evolved from a single Facebook app to multiple apps like photo and video-sharing app Instagram and WhatsApp messaging app owing to acquisitions.
Meta is considered to have pioneered the concept of social networking, which is why it enjoys a first mover’s advantage in this market. As developed regions mature, Meta undertakes measures to drive penetration in emerging markets of South East Asia, Latin America and Africa.
Workday Inc (WDAY - Free Report) , carrying a Zacks Rank #2, delivered an earnings surprise of 7.67%, on average, in the trailing four quarters. In the last reported quarter, it pulled off an earnings surprise of 11.24%.
Workday is a provider of enterprise-level software solutions for financial management and human resource domains. The company’s cloud-based platform combines finance and HR in a single system that makes it easier for organizations to provide analytical insights and decision support.
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Model N (MODN) Q2 Earnings Beat Estimates on Solid Revenues
Model N, Inc. delivered impressive second-quarter fiscal 2023 results, with the bottom and the top line beating the respective Zacks Consensus Estimate. The San Mateo, CA-based company recorded higher revenues year over year, driven by solid momentum in Subscription induced by rising demand for cloud-based solutions and growth in Professional services. SaaS ARR (annual recurring revenue) increased 40% year over year.
Net Income
The company recorded a GAAP loss of $33.3 million or a loss of 88 cents per share compared with a loss of $8 million or a loss of 22 cents per share in the prior-year quarter. In spite of the top-line growth, increased operating expenses and loss on debt extinguishment led to higher loss in the quarter.
Non-GAAP net income rose to $8.6 million or 22 cents per share from $5 million or 14 cents per share in the prior-year quarter. The bottom line beat the Zacks Consensus Estimate by 5 cents.
Model N, Inc. Price, Consensus and EPS Surprise
Model N, Inc. price-consensus-eps-surprise-chart | Model N, Inc. Quote
Revenues
Quarterly revenues stood at $62.6 million, up from $53.3 million reported in the prior-year quarter. The 18% year-over-year improvement can be attributed to healthy net sales growth in all the business verticals. The top line beat the Zacks Consensus Estimate of $59 million.
Revenues from subscription increased to $44.9 million, up 17% from $38.2 million reported in the year-ago quarter. Increase in SaaS revenues, induced by the growing adoption of the company’s cloud solutions, supported net sales in this segment. However, this positive trend was partially reversed by declining maintenance revenues. SaaS net dollar retention increased to 138% from 116% year over year. In the second quarter, the company generated $17.7 million in revenues from Professional Services. Increase in number of professional service hours performed led to an 18% year-over-year growth from this vertical.
Other Details
Total operating expenses reported in the quarter was $38.1 million, up 15% from $33.1 million in the year-ago quarter, owing to increase in employee-related costs and equipment-related expenses. Non-GAAP gross margin was 60%, in line with the prior-year quarter’s figure.
Adjusted EBITDA was $9.2 million, up from $6.6 million in the prior-year quarter. Non-GAAP operating income was $9 million, up 40% year over year.
Cash Flow & Liquidity
In the second quarter of fiscal 2023, Model N generated $12.1 million from operating activities compared with $12.6 million of cash generation in the year-ago quarter. As of Mar 31, 2023, the company had $270.6 million in cash and cash equivalents with $279.5 million of long-term debt.
Outlook
For third-quarter fiscal 2023, the company expects total revenues between $61.5 million and $62.5million. Subscription revenues are projected in the range of $45-$45.5 million. Adjusted EBITDA is expected to be between $9.5 million and $10.5 million. Non-GAAP operating income is expected within $9.2-$10.2 million, while non-GAAP earnings per share are estimated in the band of 23-25 cents.
For fiscal 2023, management raised total revenue expectations in the band of $244-$246 million, up from $242-$245million projected earlier. Subscription revenues are estimated in the range of $180-$181 million. Adjusted EBITDA is projected within $39-$41 million. Non-GAAP operating income is expected within $37-$39 million. Non-GAAP earnings are expected to be 94-99 cents per share.
Zacks Rank & Stocks to Consider
Model N currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
InterDigital, Inc (IDCC - Free Report) , carrying a Zacks Rank #2 (Buy), delivered an earnings surprise of 170.89%, on average, in the trailing four quarters. In the last reported quarter, it pulled off an earnings surprise of 579.03%.
It is a pioneer in advanced mobile technologies that enables wireless communications and capabilities. The company engages in designing and developing a wide range of advanced technology solutions, which are used in digital cellular and wireless 3G, 4G and IEEE 802-related products and networks.
Meta Platforms Inc. (META - Free Report) , sporting a Zacks Rank #1, delivered an earnings surprise of 15.46%, on average, in the trailing four quarters. Meta Platforms is the world’s largest social media platform. The company’s portfolio offering evolved from a single Facebook app to multiple apps like photo and video-sharing app Instagram and WhatsApp messaging app owing to acquisitions.
Meta is considered to have pioneered the concept of social networking, which is why it enjoys a first mover’s advantage in this market. As developed regions mature, Meta undertakes measures to drive penetration in emerging markets of South East Asia, Latin America and Africa.
Workday Inc (WDAY - Free Report) , carrying a Zacks Rank #2, delivered an earnings surprise of 7.67%, on average, in the trailing four quarters. In the last reported quarter, it pulled off an earnings surprise of 11.24%.
Workday is a provider of enterprise-level software solutions for financial management and human resource domains. The company’s cloud-based platform combines finance and HR in a single system that makes it easier for organizations to provide analytical insights and decision support.