QAD Inc. (QADB) Misses Q1 EPS by 4c, Revenues Miss

QAD Inc. (NASDAQ: QADB) reported Q1 EPS of ($0.02), $0.04 worse than the analyst estimate of $0.02. Revenue for the quarter came in at $74.15 million versus the consensus estimate of $76.74 million.

Additional fiscal 2021 first quarter financial results versus the same period last year, include:

• Subscription revenue of $30.8 million, up from $25.3 million. Currency had a $535,000 negative impact.
• Subscription gross margin of 66 percent, versus 63 percent.
• License revenue of $1.2 million, compared with $4.5 million. Currency had a $134,000 negative impact.
• Professional services revenue of $15.7 million, versus $18.4 million. Currency had a $578,000 negative impact.
• Professional services margin improved to 5 percent from negative 5 percent in the prior-year quarter.
• Maintenance revenue of $26.4 million, compared with $29.9 million. Currency had a $754,000 negative impact.
• GAAP pre-tax income of $585,000, versus a GAAP pre-tax loss of $2.5 million. Expense management measures, including actions taken as a result of COVID-19, helped drive bottom line improvements.
• Non-GAAP pre-tax income of $3.3 million, compared with approximately breakeven.
• GAAP net loss of $410,000, or $(0.02) per Class A and Class B share, versus a GAAP net loss of $3.2 million, or $(0.17) per Class A share and $(0.14) per Class B share.

“As customers increasingly recognize the need for QAD’s agile cloud solutions, our momentum in subscription growth continued into the first quarter. At the same time, we implemented expense management measures given COVID-19, which helped improve efficiency. Our financial position remains strong,” said Anton Chilton, QAD’s Chief Executive Officer. “I am extremely proud of our team’s ability to keep our customers’ critical operations up and running and continue to advance implementation projects while we seamlessly switched to remote working.”

Business Outlook:

Our business outlook incorporates the effects of currency fluctuations experienced during the first fiscal quarter, and assumes current foreign exchange rates for the remainder of the quarter. Consistent with the guidance provided for the fiscal 2021 first quarter, QAD is providing guidance only for subscription and maintenance revenue for the fiscal 2021 second quarter as follows:

• Subscription revenue of $31 million.
• Maintenance revenue of $26 million.

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

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