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NextGen (NXGN) Q1 Earnings Top Estimates, Revenues Surge Y/Y
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NextGen Healthcare, Inc. delivered adjusted earnings per share (EPS) of 24 cents in the first quarter of fiscal 2024, up 50% year over year. The figure topped the Zacks Consensus Estimate by 14.3%.
GAAP EPS in the quarter was 9 cents compared with the prior-year period’s EPS of 2 cents.
Revenue Details
NextGen registered revenues of $178.2 million in the fiscal first quarter, up 16.2% year over year. The figure surpassed the Zacks Consensus Estimate by 2.9%.
Segment Details
NextGen generates revenues from two sources, namely, Recurring revenues and Software, hardware and other non-recurring revenues.
Total Recurring revenues were $163.4 million, up 16.9% from the year-ago quarter’s figure. This figure compares to our Recurring revenues’ fiscal first-quarter projection of $156.8 million.
Subscription services revenues in the fiscal first quarter amounted to $52.5 million, up 22.8% from the prior-year period’s level. This figure compares to our fiscal first-quarter projection of $48.5 million.
Support and maintenance revenues amounted to $38.5 million, down 1.6%. This figure compares to our quarterly projection of $40.7 million.
Managed services revenues amounted to $34.8 million, up 13.4%. This figure compares to our projection of $34.1 million.
Transactional and data services revenues amounted to $37.6 million, up 38.2% from the prior-year period’s level. This figure compares to our projection of $33.5 million.
Total Software, hardware and other non-recurring revenues amounted to $14.8 million, up 9.5% on a year-over-year basis. This figure compares to our segmental fiscal first-quarter projection of $15.6 million.
Software license and hardware revenues amounted to $4.9 million, down 19.8%. This figure compares to our fiscal first-quarter projection of $6.6 million.
Other non-recurring services revenues amounted to $9.9 million, up 34.3% year over year. This figure compares to our projection of $9.1 million.
NextGen Healthcare, Inc. Price, Consensus and EPS Surprise
In the quarter under review, NextGen’s adjusted gross profit increased 7.9% to $86.8 million. However, the adjusted gross margin contracted 372 basis points to 48.7%.
Selling, general and administrative expenses declined 1.7% to $48.2 million. Research and development expenses fell 3.9% year over year to $20.9 million. Adjusted operating expenses of $69.1 million decreased 2.4% year over year.
Adjusted operating profit totaled $17.7 million, improving 85.2% from the prior-year quarter. Adjusted operating margin in the quarter expanded 370 bps to 9.9%.
Financial Position
NextGen exited first-quarter fiscal 2024 with cash and cash equivalents of $70.3 million compared with $98.7 million at the end of fiscal 2023.
As of Jun 30, 2023, 71,892 shares were issued and 67,043 shares were outstanding.
Net cash used in operating activities at first-quarter fiscal 2024-end was $8.1 million compared with $4.6 million a year ago.
Fiscal 2024 Guidance
NextGen has revised its outlook for fiscal 2024.
NextGen now projects revenues in the range of $714 million-$722 million, narrowed from the earlier projection of $712 million-$722 million. The Zacks Consensus Estimate for the same is pegged at $717.8 million.
Adjusted EPS is continued to be projected in the band of $1.04-$1.11 for the full fiscal year. The Zacks Consensus Estimate for the same stands at $1.08.
Our Take
NextGen exited the first quarter of fiscal 2024 with better-than-expected results. The solid uptick in the top line and bottom line, along with strength in both Recurring and Non-recurring revenues, were impressive. Robust increases in Subscription services, Managed services and Transactional and data services revenues in the quarter were encouraging. The improvement in Other non-recurring services revenues was also promising. The continued integration of TSI Healthcare also looks promising for the stock. Adjusted operating margin expansion bodes well.
However, NextGen’s year-over-year decline in Support and maintenance revenues and Software license and hardware revenues was worrying. Rising operating costs leading to the contraction of the adjusted gross margin do not bode well.
Zacks Rank and Other Key Picks
NextGen currently carries a Zacks Rank #2 (Buy).
A few other top-ranked stocks in the broader medical space that have announced quarterly results are Abbott Laboratories (ABT - Free Report) , Elevance Health, Inc. (ELV - Free Report) and Intuitive Surgical, Inc. (ISRG - Free Report) .
Abbott, carrying a Zacks Rank of 2, reported second-quarter 2023 adjusted EPS of $1.08, beating the Zacks Consensus Estimate by 3.8%. Revenues of $9.98 billion outpaced the consensus mark by 2.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Abbott has a long-term estimated growth rate of 5.1%. ABT’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 12.4%.
Elevance Health reported second-quarter 2023 adjusted EPS of $9.04, beating the Zacks Consensus Estimate by 2.5%. Revenues of $43.38 billion surpassed the Zacks Consensus Estimate by 4.5%. It currently carries a Zacks Rank #2.
Elevance Health has a long-term estimated growth rate of 12.1%. ELV’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 2.8%.
Intuitive Surgical reported second-quarter 2023 adjusted EPS of $1.42, beating the Zacks Consensus Estimate by 7.6%. Revenues of $1.76 billion surpassed the Zacks Consensus Estimate by 1.4%. It currently carries a Zacks Rank #2.
Intuitive Surgical has a long-term estimated growth rate of 14.5%. ISRG’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 4.2%.
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NextGen (NXGN) Q1 Earnings Top Estimates, Revenues Surge Y/Y
NextGen Healthcare, Inc. delivered adjusted earnings per share (EPS) of 24 cents in the first quarter of fiscal 2024, up 50% year over year. The figure topped the Zacks Consensus Estimate by 14.3%.
GAAP EPS in the quarter was 9 cents compared with the prior-year period’s EPS of 2 cents.
Revenue Details
NextGen registered revenues of $178.2 million in the fiscal first quarter, up 16.2% year over year. The figure surpassed the Zacks Consensus Estimate by 2.9%.
Segment Details
NextGen generates revenues from two sources, namely, Recurring revenues and Software, hardware and other non-recurring revenues.
Total Recurring revenues were $163.4 million, up 16.9% from the year-ago quarter’s figure. This figure compares to our Recurring revenues’ fiscal first-quarter projection of $156.8 million.
Subscription services revenues in the fiscal first quarter amounted to $52.5 million, up 22.8% from the prior-year period’s level. This figure compares to our fiscal first-quarter projection of $48.5 million.
Support and maintenance revenues amounted to $38.5 million, down 1.6%. This figure compares to our quarterly projection of $40.7 million.
Managed services revenues amounted to $34.8 million, up 13.4%. This figure compares to our projection of $34.1 million.
Transactional and data services revenues amounted to $37.6 million, up 38.2% from the prior-year period’s level. This figure compares to our projection of $33.5 million.
Total Software, hardware and other non-recurring revenues amounted to $14.8 million, up 9.5% on a year-over-year basis. This figure compares to our segmental fiscal first-quarter projection of $15.6 million.
Software license and hardware revenues amounted to $4.9 million, down 19.8%. This figure compares to our fiscal first-quarter projection of $6.6 million.
Other non-recurring services revenues amounted to $9.9 million, up 34.3% year over year. This figure compares to our projection of $9.1 million.
NextGen Healthcare, Inc. Price, Consensus and EPS Surprise
NextGen Healthcare, Inc. price-consensus-eps-surprise-chart | NextGen Healthcare, Inc. Quote
Margins
In the quarter under review, NextGen’s adjusted gross profit increased 7.9% to $86.8 million. However, the adjusted gross margin contracted 372 basis points to 48.7%.
Selling, general and administrative expenses declined 1.7% to $48.2 million. Research and development expenses fell 3.9% year over year to $20.9 million. Adjusted operating expenses of $69.1 million decreased 2.4% year over year.
Adjusted operating profit totaled $17.7 million, improving 85.2% from the prior-year quarter. Adjusted operating margin in the quarter expanded 370 bps to 9.9%.
Financial Position
NextGen exited first-quarter fiscal 2024 with cash and cash equivalents of $70.3 million compared with $98.7 million at the end of fiscal 2023.
As of Jun 30, 2023, 71,892 shares were issued and 67,043 shares were outstanding.
Net cash used in operating activities at first-quarter fiscal 2024-end was $8.1 million compared with $4.6 million a year ago.
Fiscal 2024 Guidance
NextGen has revised its outlook for fiscal 2024.
NextGen now projects revenues in the range of $714 million-$722 million, narrowed from the earlier projection of $712 million-$722 million. The Zacks Consensus Estimate for the same is pegged at $717.8 million.
Adjusted EPS is continued to be projected in the band of $1.04-$1.11 for the full fiscal year. The Zacks Consensus Estimate for the same stands at $1.08.
Our Take
NextGen exited the first quarter of fiscal 2024 with better-than-expected results. The solid uptick in the top line and bottom line, along with strength in both Recurring and Non-recurring revenues, were impressive. Robust increases in Subscription services, Managed services and Transactional and data services revenues in the quarter were encouraging. The improvement in Other non-recurring services revenues was also promising. The continued integration of TSI Healthcare also looks promising for the stock. Adjusted operating margin expansion bodes well.
However, NextGen’s year-over-year decline in Support and maintenance revenues and Software license and hardware revenues was worrying. Rising operating costs leading to the contraction of the adjusted gross margin do not bode well.
Zacks Rank and Other Key Picks
NextGen currently carries a Zacks Rank #2 (Buy).
A few other top-ranked stocks in the broader medical space that have announced quarterly results are Abbott Laboratories (ABT - Free Report) , Elevance Health, Inc. (ELV - Free Report) and Intuitive Surgical, Inc. (ISRG - Free Report) .
Abbott, carrying a Zacks Rank of 2, reported second-quarter 2023 adjusted EPS of $1.08, beating the Zacks Consensus Estimate by 3.8%. Revenues of $9.98 billion outpaced the consensus mark by 2.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Abbott has a long-term estimated growth rate of 5.1%. ABT’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 12.4%.
Elevance Health reported second-quarter 2023 adjusted EPS of $9.04, beating the Zacks Consensus Estimate by 2.5%. Revenues of $43.38 billion surpassed the Zacks Consensus Estimate by 4.5%. It currently carries a Zacks Rank #2.
Elevance Health has a long-term estimated growth rate of 12.1%. ELV’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 2.8%.
Intuitive Surgical reported second-quarter 2023 adjusted EPS of $1.42, beating the Zacks Consensus Estimate by 7.6%. Revenues of $1.76 billion surpassed the Zacks Consensus Estimate by 1.4%. It currently carries a Zacks Rank #2.
Intuitive Surgical has a long-term estimated growth rate of 14.5%. ISRG’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 4.2%.