Model N Inc. (MODN) Tops Q3 EPS by 9c, Revenues Beat; Offers 3Q & FY20 EPS/Revenue Guidance Above Consensus

Model N Inc. (NYSE: MODN) reported Q3 EPS of $0.15, $0.09 better than the analyst estimate of $0.06. Revenue for the quarter came in at $41.3 million versus the consensus estimate of $39.57 million.

Third Quarter 2020 Financial Highlights

• Revenues: Total revenues were $41.3 million, an increase of 19% from the third quarter of fiscal year 2019. Subscription revenues were $29.3 million, an increase of 10% from the third quarter of fiscal year 2019.
• Gross Profit: Gross profit was $25.2 million, an increase of 34% from the third quarter of fiscal year 2019. Gross margin was 61% compared to 54% for the third quarter of fiscal year 2019. Non-GAAP gross profit was $26.4 million, an increase of 30% from the third quarter of fiscal year 2019. Non-GAAP gross margin was 64% compared to 58% for the third quarter of fiscal year 2019. Subscription gross margin was 71% compared to 67% for the third quarter of fiscal year 2019. Non-GAAP subscription gross margin was 74% compared to 71% for the third quarter of fiscal year 2019.
• GAAP Loss and Non-GAAP Income from Operations: GAAP loss from operations was $(0.4) million, an improvement of 82% from the third quarter of fiscal year 2019. Non-GAAP income from operations was $6.2 million, an increase of 106% from the third quarter of fiscal year 2019.
• GAAP Net Loss: GAAP net loss was $(2.4) million, an improvement of 21% from the third quarter of fiscal year 2019. GAAP basic and diluted net loss per share attributable to common stockholders was $(0.07) based upon weighted average shares outstanding of 34.4 million compared to net loss per share of $(0.09) for the third quarter of fiscal year 2019 based upon weighted average shares outstanding of 32.6 million.
• Non-GAAP Net Income: Non-GAAP net income was $5.2 million compared to a non-GAAP net income of $2.1 million for the third quarter of fiscal year 2019. Non-GAAP net income per diluted share was $0.15 based upon diluted weighted average shares outstanding of 35.3 million compared to non-GAAP net income per diluted share of $0.06 for the third quarter of fiscal year 2019 based upon diluted weighted average shares outstanding of 33.5 million.
• Adjusted EBITDA: Adjusted EBITDA was $6.4 million, an increase of 93% from the third quarter of fiscal year 2019.
• Cash and Cash Flows: Cash and cash equivalents as of June 30, 2020 totaled $192.4 million. During the quarter, the company raised $172.5 million from the issuance of convertible senior notes before issuance costs and paid down $40.0 million in debt, accrued interest and other fees. Net cash provided by operating activities was $7.2 million for the first nine months of fiscal year 2020, compared with net cash provided by operating activities of $4.8 million in the prior fiscal year period. Free cash flow was $7.0 million for the first nine months of fiscal year 2020, compared with free cash flow of $4.6 million in the prior fiscal year period.

“Our third quarter results exceeded our revenue and profitability guidance. I am pleased with our team’s performance during this unprecedented time,” said Jason Blessing, president and chief executive officer of Model N. “We had an impressive number of go-lives in the quarter and strong engagement with our customer base. This demonstrates the importance of our cloud products during this critical time when our customers are responding to the COVID-19 pandemic. We continue to collaborate closely with our customers, delivering on existing projects and commencing new initiatives.”

GUIDANCE:

Model N Inc. sees Q4 2020 EPS of $0.07-$0.09, versus the consensus of $0.04. Model N Inc. sees Q4 2020 revenue of $40.1-40.5 million, versus the consensus of $37.77 million.

Model N Inc. sees FY2020 EPS of $0.41-$0.43, versus the consensus of $0.29. Model N Inc. sees FY2020 revenue of $159.7-160.1 million, versus the consensus of $155.52 million.

For earnings history and earnings-related data on Model N Inc. (MODN) click here.

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