QAD Inc. (QADB) Reports In-Line Q3 EPS; Offers FY20 Revenue Guidance Below Consensus

QAD Inc. (NASDAQ: QADB) reported Q3 EPS of $0.01, in-line with the analyst estimate of $0.01. Revenue for the quarter came in at $77.8 million versus the consensus estimate of $78.07 million.

Fiscal 2020 Third Quarter Financial Highlights:

Total revenue for the fiscal 2020 third quarter was $77.8 million, compared with $79.6 million for the year-ago third quarter, reflecting an expected reduction in professional services and license revenue. Currency had a negative $1.2 million impact on total revenue compared with the prior year quarter, and a negative $657,000 impact compared with the second quarter of fiscal 2020. Subscription revenue grew 16 percent on a constant currency basis from the third quarter of fiscal 2019, and equaled 35 percent of total revenue, a five-percentage point increase over last year’s third quarter.

Additional fiscal 2020 third quarter financial highlights, versus the same period last year, include:

• Subscription revenue of $27.3 million, up from $23.9 million. Currency had a $278,000 negative impact.
• Subscription gross margin of 65 percent, versus 64 percent.
• License revenue of $3.3 million, compared with $4.6 million. Currency had a $97,000 negative impact.
• Professional services revenue of $17.5 million, versus $20.7 million. Currency had a $319,000 negative impact.
• Maintenance and other revenue of $29.7 million, compared with $30.4 million. Currency had a $482,000 negative impact.
• GAAP pre-tax income of $1.5 million, versus $3.6 million.
• Non-GAAP pre-tax income of $4.6 million, compared with $5.7 million.
• GAAP net income of $125,000, or $0.01 per diluted Class A and Class B share, versus $3 million, or $0.14 per diluted Class A share and $0.12 per diluted Class B share.

“We were pleased to generate a record-high number of cloud deals during the quarter, including a robust amount of new logos,” said Anton Chilton, QAD’s Chief Executive Officer. “Our subscription margin improved this quarter, and we turned our professional services business back to profitability, resulting in better than anticipated bottom-line results.”

GUIDANCE:

QAD Inc. sees FY2020 revenue of $311 million, versus the consensus of $315.81 million.

For the fiscal 2020 full year, QAD expects:

• Total revenue of approximately $311 million, including approximately $108 million of subscription revenue.
• GAAP pre-tax loss of approximately $4 million.
• Non-GAAP pre-tax income of approximately $8 million.

For earnings history and earnings-related data on QAD Inc. (QADB) click here.

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