American Software (AMSWA) Tops Q1 EPS by 5c, Revenues Miss

American Software (NASDAQ: AMSWA) reported Q1 EPS of $0.09, $0.05 better than the analyst estimate of $0.04. Revenue for the quarter came in at $27.28 million versus the consensus estimate of $28.52 million.

Key First Quarter Financial Highlights:

• Subscription fees were $6.4 million for the quarter ended July 31, 2020, a 43% increase compared to $4.5 million for the same period last year, while Software license fee revenues were $0.8 million, a 56% decrease compared to $1.8 million for the same period last year, reflecting our continued transition to the Software as a Service (SaaS) engagement model.
• Cloud Services Annual Contract Value (ACV) increased approximately 36% to $27.5 million as of the quarter ended July 31, 2020 compared to $20.2 million as of the same period of the prior year.
• Total revenues for the quarter ended July 31, 2020 were $27.3 million, compared to $27.4 million for the same period of the prior year.
• Recurring revenue streams for Maintenance and Cloud Services were 61% of total revenues in the quarter ended July 31, 2020 compared to 56% in the same period of the prior year.
• Maintenance revenues for the quarter ended July 31, 2020 decreased 6% to $10.3 million compared to $11.0 million for the same period last year.
• Professional services and other revenues for the quarter ended July 31, 2020 decreased 3% to $9.8 million compared to $10.1 million for the same period last year.
• Operating earnings for the quarter ended July 31, 2020 increased 11% to $0.9 million compared to $0.8 million for the same period last year.
• GAAP net earnings for the quarter ended July 31, 2020 increased 77% to $2.0 million or $0.06 per fully diluted share compared to $1.2 million or $0.04 per fully diluted share for the same period last year.
• Adjusted net earnings for the quarter ended July 31, 2020, which excludes non-cash stock-based compensation expense and amortization of acquisition-related intangibles, increased 37% to $2.8 million or $0.09 per fully diluted share compared to $2.1 million or $0.06 per fully diluted share for the same period last year.
• EBITDA decreased by 16% to $2.6 million for the quarter ended July 31, 2020 compared to $3.0 million for the same period last year.
• Adjusted EBITDA decreased by 11% to $3.1 million for the quarter ended July 31, 2020 compared to $3.5 million for the same period last year. Adjusted EBITDA represents GAAP net earnings adjusted for amortization of intangibles, depreciation, interest income & other, net, income tax expense and non-cash stock-based compensation expense.

The overall financial condition of the Company remains strong, with cash and investments of approximately $93.0 million, an increase of over $5.0 million when compared to July 31, 2019, and no debt as of July 31, 2020. During the first quarter of fiscal 2021, the Company paid shareholder dividends of approximately $3.5 million.

“Overall we are pleased with our 43% growth in Subscription Fees and 36% increase in Annual Contract Value during the first quarter fiscal 2021 as we continue to navigate through these uncertain times.,” said Allan Dow, CEO and president of American Software. “The turbulent global economy due to the ongoing pandemic has put heightened attention on supply chain effectiveness and as a result we see strong momentum for our solutions and services. Strong customer retention and satisfaction along with increasing momentum in cloud-based deployments delivered recurring revenue that represents 61% of the first quarter revenue.”

“Companies today must focus on creating a resilient enterprise that is agile and responsive to minimize the impact of disruptions and be able to seize new opportunities. Our innovative, cloud-based digital platform helps companies accelerate decision making to stay ahead of market changes,” Dow continued. “Our efforts and advancements in artificial intelligence (AI) and machine learning (ML) help leading businesses around the world automate routine processes and augment their employee’s capabilities to provide focus and to make better decisions faster.”

For earnings history and earnings-related data on American Software (AMSWA) click here.

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