QAD Inc. (QADB) Reports In-Line Q4 EPS; Provides 1Q21 Business Outlook

QAD Inc. (NASDAQ: QADB) reported Q4 EPS of $0.02, in-line with the analyst estimate of $0.02. Revenue for the quarter came in at $78.55 million versus the consensus estimate of $78.71 million.

Fiscal 2020 Fourth Quarter Financial Results:

Total revenue for the fiscal 2020 fourth quarter was $78.6 million, compared with $82.7 million for the fiscal 2019 fourth quarter, reflecting an expected reduction in maintenance, professional services and license revenue. Subscription revenue grew 19 percent from the same period last year, and equaled 36 percent of total revenue, a seven-percentage point increase over last year’s fourth quarter.

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

• Subscription revenue of $28.6 million, up from $24 million.
• Subscription gross margin of 67 percent, versus 63 percent.
• License revenue of $5.3 million, compared with $9.1 million.
• Professional services revenue of $15.9 million, versus $19.1 million.
• Maintenance and other revenue of $28.7 million, compared with $30.5 million.
• GAAP pre-tax income of $764,000, versus $3.2 million.
• Non-GAAP pre-tax income of $3.8 million, compared with $6 million.
• GAAP net income of $410,000, or $0.02 per diluted Class A and Class B share, versus $4.9 million, or $0.24 per diluted Class A share and $0.21 per diluted Class B share.

“We finished the year with strong cloud bookings performance, driving recurring revenue to 73 percent of our total business, and further strengthening the company’s competitive position and stability,” said Anton Chilton, QAD’s Chief Executive Officer. “Notwithstanding the current external environment, we believe QAD remains well positioned to achieve our long-term strategic goals. In these disruptive times our customers can be assured that our resilient cloud and support operations help provide them with business continuity and risk mitigation.”

Business Outlook:

Given the current uncertainty related to COVID-19 and its economic and social implications, we are not providing full year guidance at this time. For our quarterly guidance, given the travel and other restrictions currently in place in most countries, our professional services and license revenues could vary significantly. As a result, we are not providing our normal guidance and will only provide guidance for our recurring revenue, which consists of subscription revenue and maintenance revenue. We estimate first quarter recurring revenue will account for over 75% of our total revenues.

For the fiscal 2021 first quarter, QAD expects:

• Subscription revenue of $31 million.
• Maintenance revenue of $27 million.

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

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