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Model N (MODN) Q1 Earnings and Revenues Surpass Estimates
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Model N, Inc. (MODN - Free Report) reported first-quarter fiscal 2020 non-GAAP earnings of 12 cents per share, which surpassed the Zacks Consensus Estimate by 100% and increased 300% year over year.
Revenues came in at $38.4 million, which beat the consensus mark by 3.2% and increased 9% year over year. The figure was also higher than the guided range of $37 million to $37.4 million.
Robust adoption of the company’s revenue cloud platform drove the top line. Notably, life sciences companies like Biogen and Novo Nordisk as well as a leading pharmaceutical company completed their transition to Model N’s revenue cloud platform during the quarter.
Moreover, the company is making steady progress in its transformation to a Software-as-a-Service (SaaS) based model.
Model N has started reporting earnings under two business lines — Subscription and Professional Services — from first-quarter fiscal 2019.
In first-quarter fiscal 2020, Subscription revenues were $28.2 million, up 12% year over year. This was driven by strong sales execution, which added new subscription revenues of $17.5 million, partially offset by a decline in maintenance subscription contracts.
Professional Services revenues increased 3.4% on a year-over-year basis to $10.2 million.
Operating Details
Non-GAAP gross profit for the first fiscal quarter was $23.5 million.
Non-GAAP gross margin expanded 400 basis points (bps) from the year-ago-figure to 61%. Non-GAAP subscription gross margin during the reported quarter came in at 72% and non-GAAP gross margin for professional services was 31%.
Adjusted EBITDA during the quarter came in at $4.8 million compared with $2.9 million reported in the year-ago quarter.
Non-GAAP operating income was $4.6 million. Moreover, non-GAAP operating margin expanded 500 bps to 12%.
Balance Sheet & Cash Flow
As of Dec 31, Model N had cash and cash equivalents of $55.8 million compared with $60.8 million reported in the previous quarter.
As of Dec 31, the company had total debt (including current portion) of $44.4 million, compared with $44.3 million reported in the previous quarter.
For the three months ended Dec 31, net cash outflow from operating activities was $4.9 million and free cash outflow was $5 million.
Guidance
The company anticipates fiscal second-quarter 2020 GAAP revenues to come in between $38.8 million and $39.2 million. Second-quarter subscriptions are anticipated in the range of $28.4-$28.8 million.
The Zacks Consensus Estimate for revenues is pegged at $37.8 million, indicating growth of 8.5% from the figure reported in the year-ago quarter.
Non-GAAP net income is anticipated in the range of 1 cent to 3 cents per share for the second quarter. The Zacks Consensus Estimate for earnings is pegged at 5 cents per share compared with 1 cent reported in the year-ago quarter.
Adjusted EBITDA is anticipated in the range of $1.8 million to $2.2 million.
For fiscal 2020, Model N expects GAAP revenues to be in the range of $154 million to $156 million. The Zacks Consensus Estimate for revenues is pegged at $153.4 million, up 8.6% year over year.
Fiscal 2020 subscription is projected in the range of $113-$115 million.
Non-GAAP earnings are expected in the range of 25-31 cents per share. The Zacks Consensus Estimate for earnings is currently pegged at 28 cents per share, up 27.3% year over year.
Adjusted EBITDA is projected in the range of $13 million to $15 million.
Silicon Motion Technology, Perion and CEVA are set to report quarterly results on Feb 6, 12 and 18, respectively.
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Model N (MODN) Q1 Earnings and Revenues Surpass Estimates
Model N, Inc. (MODN - Free Report) reported first-quarter fiscal 2020 non-GAAP earnings of 12 cents per share, which surpassed the Zacks Consensus Estimate by 100% and increased 300% year over year.
Revenues came in at $38.4 million, which beat the consensus mark by 3.2% and increased 9% year over year. The figure was also higher than the guided range of $37 million to $37.4 million.
Robust adoption of the company’s revenue cloud platform drove the top line. Notably, life sciences companies like Biogen and Novo Nordisk as well as a leading pharmaceutical company completed their transition to Model N’s revenue cloud platform during the quarter.
Moreover, the company is making steady progress in its transformation to a Software-as-a-Service (SaaS) based model.
Model N, Inc. Price, Consensus and EPS Surprise
Model N, Inc. price-consensus-eps-surprise-chart | Model N, Inc. Quote
Quarter in DetailModel N has started reporting earnings under two business lines — Subscription and Professional Services — from first-quarter fiscal 2019.
In first-quarter fiscal 2020, Subscription revenues were $28.2 million, up 12% year over year. This was driven by strong sales execution, which added new subscription revenues of $17.5 million, partially offset by a decline in maintenance subscription contracts.
Professional Services revenues increased 3.4% on a year-over-year basis to $10.2 million.
Operating Details
Non-GAAP gross profit for the first fiscal quarter was $23.5 million.
Non-GAAP gross margin expanded 400 basis points (bps) from the year-ago-figure to 61%. Non-GAAP subscription gross margin during the reported quarter came in at 72% and non-GAAP gross margin for professional services was 31%.
Adjusted EBITDA during the quarter came in at $4.8 million compared with $2.9 million reported in the year-ago quarter.
Non-GAAP operating income was $4.6 million. Moreover, non-GAAP operating margin expanded 500 bps to 12%.
Balance Sheet & Cash Flow
As of Dec 31, Model N had cash and cash equivalents of $55.8 million compared with $60.8 million reported in the previous quarter.
As of Dec 31, the company had total debt (including current portion) of $44.4 million, compared with $44.3 million reported in the previous quarter.
For the three months ended Dec 31, net cash outflow from operating activities was $4.9 million and free cash outflow was $5 million.
Guidance
The company anticipates fiscal second-quarter 2020 GAAP revenues to come in between $38.8 million and $39.2 million. Second-quarter subscriptions are anticipated in the range of $28.4-$28.8 million.
The Zacks Consensus Estimate for revenues is pegged at $37.8 million, indicating growth of 8.5% from the figure reported in the year-ago quarter.
Non-GAAP net income is anticipated in the range of 1 cent to 3 cents per share for the second quarter. The Zacks Consensus Estimate for earnings is pegged at 5 cents per share compared with 1 cent reported in the year-ago quarter.
Adjusted EBITDA is anticipated in the range of $1.8 million to $2.2 million.
For fiscal 2020, Model N expects GAAP revenues to be in the range of $154 million to $156 million. The Zacks Consensus Estimate for revenues is pegged at $153.4 million, up 8.6% year over year.
Fiscal 2020 subscription is projected in the range of $113-$115 million.
Non-GAAP earnings are expected in the range of 25-31 cents per share. The Zacks Consensus Estimate for earnings is currently pegged at 28 cents per share, up 27.3% year over year.
Adjusted EBITDA is projected in the range of $13 million to $15 million.
Zacks Rank & Stocks to Consider
Model N currently carries a Zacks Rank #3 (Hold).
Silicon Motion Technology Corporation (SIMO - Free Report) , Perion Network Ltd. (PERI - Free Report) and CEVA Inc. (CEVA - Free Report) and are some better-ranked stocks in the broader computer and technology sector. All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Silicon Motion Technology, Perion and CEVA are set to report quarterly results on Feb 6, 12 and 18, respectively.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>