American Software (AMSWA) Q2 Earnings Meet Estimates, Down Y/Y
American Software AMSWA reported second-quarter fiscal 2024 non-GAAP earnings of 8 cents per share, which was in line with the Zacks Consensus Estimate. The bottom line dropped 11.1% year over year.
Revenues decreased 5.8% year over year to $25.7 million and lagged the consensus mark by 4.12%.
Quarter in Detail
Subscription fees accounted for 52% of revenues in second-quarter fiscal 2024. The figure increased 8.4% year over year to $13.4 million.
License fees accounted for 0.9% of revenues. The figure declined 66.7% year over year to $0.2 million.
American Software, Inc. Price, Consensus and EPS Surprise
American Software, Inc. price-consensus-eps-surprise-chart | American Software, Inc. Quote
Professional services & other fell 26.3% year over year to $4 million and accounted for 15.6% of revenues.
Maintenance revenues declined 8.3% year over year to $8.1 million and accounted for 31.5% of revenues.
In the fiscal second quarter, gross margin contracted 240 basis points year over year to 63.8%. Subscription fee margin was 66% in the reported quarter compared with 67% in the year-ago quarter.
Operating expenses were $15.2 million, down 2.2% year over year, driven by 1.6% growth in sales and marketing expenses.
Non-GAAP operating income fell 13.3% year over year to $3.6 million.
Balance Sheet
As of Sep 30, 2023, American Software’s cash & cash equivalents and short-term investments were $84 million.
The company repurchased approximately 430,000 shares for a total cost of $4.8 million.
Key Q2 Development
In the reported quarter, American Software completed the acquisition of Garvis, a disruptive SaaS start-up that developed an AI-native demand forecasting system. The company rebranded the Garvis product as DemandAI+.
American Software divested The Proven Method in mid-September. Subsequent to quarter-end, the company also sold its transportation business.
Guidance
For fiscal 2024, revenues are expected between $100 million and $104 million. The Zacks Consensus Estimate for revenues is pegged at $180 million.
Total recurring revenues are expected to be between $85 million and $88 million.
Adjusted EBITDA is expected in the $14.5-$16 million range.
Zacks Rank & Upcoming Earnings to Watch
American Software currently carries a Zacks Rank #3 (Hold).
NVIDIA NVDA, ASANA ASAN and Snowflake SNOW are some better-ranked stocks that investors can consider in the broader sector.
While NVIDIA sports a Zacks Rank #1 (Strong Buy), ASANA and Snowflake carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
NVIDIA shares have jumped 238.6% year to date. NVDA is set to report its third-quarter fiscal 2024 results on Nov 21.
ASANA shares have gained 52.4% year to date. ASAN is set to report its third-quarter fiscal 2024 results on Dec 5.
Snowflake shares have returned 12.1% year to date. SNOW is set to report its third-quarter fiscal 2024 results on Nov 29.
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