Model N Inc. (MODN) Tops Q2 EPS by 9c, Revenues Beat; Offers 3Q & FY21 EPS/Revenues Guidance Above Consensus

Model N Inc. (NYSE: MODN) reported Q2 EPS of $0.04, $0.09 better than the analyst estimate of ($0.05). Revenue for the quarter came in at $48.2 million versus the consensus estimate of $46.38 million.

Second Quarter 2021 Financial Highlights

• Revenues: Total revenues were $48.2 million, an increase of 21% from the second quarter of fiscal year 2020. Subscription revenues were $35.9 million, an increase of 24% from the second quarter of fiscal year 2020. Business Services, which we acquired from Deloitte, contributed $6.5 million in total revenues for the second quarter of fiscal year 2021.
• Gross Profit: Gross profit was $24.8 million, an increase of 6% from the second quarter of fiscal year 2020. Gross margin was 51% compared to 59% for the second quarter of fiscal year 2020. Non-GAAP gross profit was $27.4 million, an increase of 10% from the second quarter of fiscal year 2020. Non-GAAP gross margin was 57% compared to 62% for the second quarter of fiscal year 2020. Subscription gross margin was 62% compared to 70% for the second quarter of fiscal year 2020. Non-GAAP subscription gross margin was 66% compared to 72% for the second quarter of fiscal year 2020. Both GAAP and Non-GAAP gross margins for the second quarter of fiscal year 2021 were impacted by the revenue mix coming from the acquisition of Business Services.
• GAAP Loss and Non-GAAP Income from Operations: GAAP loss from operations was $(6.8) million compared to $(4.1) million for the second quarter of fiscal year 2020. Non-GAAP income from operations was $3.0 million, the same as the second quarter of fiscal year 2020.
• GAAP Net Loss: GAAP net loss was $(10.7) million compared to a net loss of $(4.6) million for the second quarter of fiscal year 2020. GAAP basic and diluted net loss per share attributable to common stockholders was $(0.30) based upon weighted average shares outstanding of 35.3 million compared to net loss per share of $(0.14) for the second quarter of fiscal year 2020 based upon weighted average shares outstanding of 33.8 million.
• Non-GAAP Net Income: Non-GAAP net income was $1.6 million compared to $2.6 million for the second quarter of fiscal year 2020. Non-GAAP net income per diluted share was $0.04 based upon diluted weighted average shares outstanding of 36.9 million compared to non-GAAP net income per diluted share of $0.07 for the second quarter of fiscal year 2020 based upon diluted weighted average shares outstanding of 35.1 million.
• Adjusted EBITDA: Adjusted EBITDA was $3.2 million, the same as the second quarter of fiscal year 2020.
• Cash and Cash Flows: Cash and cash equivalents as of March 31, 2021 totaled $148.3 million. During the first six months of fiscal year 2021, the company paid $56.8 million for the acquisition of Business Services. Net cash provided by operating activities was $3.1 million for the first six months of fiscal year 2021, compared with $3.4 million in the prior fiscal year period. Free cash flow was $2.4 million for the first six months of fiscal year 2021, compared with $3.3 million in the prior fiscal year period.

“In the second quarter, we executed well, most notably with large SaaS transitions and expansions within our customer base. Business Services, which we acquired from Deloitte in the first quarter, made significant contributions to our results, and we are already achieving operating synergies and expect to achieve continued growth throughout 2021,” said Jason Blessing, president and chief executive officer of Model N. “I believe that our strategic roadmap, our focus on customer success, and our ability to serve our customers with a powerful combination of software and business services will position us for continued success.”

GUIDANCE:

Model N Inc. sees Q3 2021 EPS of $0.01-$0.02, versus the consensus of $0.00. Model N Inc. sees Q3 2021 revenue of $48.5-49 million, versus the consensus of $47.89 million.

Model N Inc. sees FY2021 EPS of $0.21-$0.24, versus the consensus of $0.14. Model N Inc. sees FY2021 revenue of $189-190 million, versus the consensus of $185.6 million.

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

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