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Majesco Reports Revenue, EBITDA and Sales Growth for First Quarter Fiscal 2020 Financial Results

MORRISTOWN, N.J.--(BUSINESS WIRE)--

First quarter revenue of $37.3M up 10% year over year

First quarter EBITDA margin of 12.7% up 35% year over year

Cloud revenue now represents 37.4% of total revenue

Majesco (MJCO), a global provider of cloud insurance platform software, today announced solid financial results for the fiscal 2020 first quarter that ended June 30, 2019.

“Our first quarter financial results reflect the ongoing momentum of our product focus and cloud strategy,” said Adam Elster, Majesco’s CEO. “The number of cloud customers continues to grow, and our customers are benefiting from dramatically reduced project implementation timelines. These trends clearly demonstrate Majesco’s ability to rapidly deliver time-to-value to our customers while providing a modern platform for insurers to innovate new products and business models. This is the foundation for our long-term growth as we acquire, adopt and expand customers.”

Key Revenue Drivers

  • Revenue from cloud-based customers was $13.9 million (37.4% of total revenue) for the quarter ended June 30, 2019.
  • Total number of cloud customers is now 58.
  • Total recurring revenue was 32.5% of total revenue for the quarter ended June 30, 2019.
  • Majesco’s 12-month order backlog as of June 30, 2019 was $98.7 million.
  • We added 4 new cloud customers organically for the quarter ended June 30, 2019.

First Quarter 2020 Financial Results

  • Revenue was $37.3 million, compared to $34.0 million for the same period last fiscal year.
  • Gross profit was $19.9 million (53.3% of revenue), compared to $15.9 million for the same period last fiscal year.
  • Research and development (R&D) expenses were $5.5 million (14.7% of revenue), compared to $4.8 million for the same period last fiscal year.
  • Selling, general and administrative (SG&A) expenses were $11.8 million (31.7% of revenue), compared to $9.3 million for the same period last fiscal year.
  • Adjusted EBITDA was $4.7 million (12.7% of revenue), compared to $3.5 million for the same period last fiscal year.
  • Net income was $1.3 million, or $0.03 per diluted share.

    EBITDA and Adjusted EBITDA are non-GAAP measures. Reconciliation tables of EBITDA and Adjusted EBITDA as used in this press release to GAAP are included in the financial section of this press release.

Balance Sheet Highlights

  • Majesco had no debt and cash equivalents of $33.0 million at June 30, 2019, compared to net debt of $1.6 million for the same period last fiscal year.

Other Highlights

  • Majesco launched new brand, website and vision for the future of insurance
  • Majesco broke attendance records at Convergence 2019, the company’s annual customer conference
  • Majesco announced the release of P&C Core Suite v11
  • Majesco announced the release of L&A and Group Core Suite v11
  • Majesco and DataRobot announce a partnership to bring AI and machine learning to insurance
  • Majesco appointed Finance and Operations expert Wayne Locke as new CFO
  • Majesco hosted its annual Investor/Analyst Day at the brand-new Nasdaq MarketSite in New York highlighting the company’s growth strategy, product roadmaps and market opportunity
  • Majesco and Capgemini became Alliance Partners
  • Majesco CEO Adam Elster presented at Needham & Company’s Emerging Technology Conference and B. Riley’s Annual Investor Conference

Conference Call and Webcast Information

Majesco management will conduct a live teleconference to discuss Majesco’s fiscal 2020 first quarter at 8:00 a.m. ET on Thursday, August 8, 2019. Anyone interested in participating should call 855-327-6837 if calling from the U.S., or 631-891-4304 if dialing internationally. A replay will be available until August 22, 2019, which can be accessed by dialing 844-512-2921 within the U.S. and 412-317-6671 if dialing internationally. Please use passcode: 10007431 to access the replay. In addition, the call will be webcast and will be available on the Company’s website at www.majesco.com or by clicking here.

Use of Non-GAAP Financial Measures

In evaluating our business, we consider and use EBITDA as a supplemental measure of operating performance. We define EBITDA as earnings before interest, taxes, depreciation and amortization. We present EBITDA because we believe it is frequently used by securities analysts, investors and other interested parties as a measure of financial performance. We define Adjusted EBITDA as EBITDA before stock-based compensation.

The terms EBITDA and Adjusted EBITDA are not defined under U.S. generally accepted accounting principles, or U.S. GAAP, and are not a measure of operating income, operating performance or liquidity presented in accordance with U.S. GAAP. EBITDA and Adjusted EBITDA have limitations as an analytical tool, and when assessing Majesco’s operating performance, investors should not consider EBITDA or Adjusted EBITDA in isolation, or as a substitute for net income (loss) or other consolidated income statement data prepared in accordance with U.S. GAAP. Among other things, EBITDA and Adjusted EBITDA do not reflect our actual cash expenditures. Other companies may calculate similar measures differently than Majesco, limiting their usefulness as comparative tools. We compensate for these limitations by relying on U.S. GAAP results and using EBITDA and Adjusted EBITDA only as supplemental.

About Majesco

Majesco (MJCO) provides technology, expertise, and leadership that helps insurers modernize, innovate and connect to build the future of their business – and the future of insurance – at speed and scale. Our platforms connect people and businesses to insurance in ways that are innovative, hyper-relevant, compelling and personal. Over 200 insurance companies worldwide in P&C, L&A and Group Benefits are transforming their businesses by modernizing, optimizing or creating new business models with Majesco. Our market-leading solutions include CloudInsurer™ P&C Core Suite (Policy, Billing, Claims); CloudInsurer™ L&A and Group Core Suite (Policy, Billing, Claims); Digital1st Insurance™ with Digital1st eConnect™, Digital1st EcoExchange™ and Digital1st Platform™ – a cloud-native, microservices and open API platform; Distribution Management, Data and Analytics and an Enterprise Data Warehouse. For more details on Majesco, please visit www.majesco.com.

Cautionary Language Concerning Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the “safe harbour” provisions of the Private Securities Litigation Reform Act. These forward-looking statements are made on the basis of the current beliefs, expectations and assumptions of management, are not guarantees of performance and are subject to significant risks and uncertainty. These forward-looking statements should, therefore, be considered in light of various important factors, including those set forth in Majesco’s reports that it files from time to time with the Securities and Exchange Commission (SEC) and which you should review, including those statements under “Item 1A – Risk Factors” in Majesco’s Annual Report on Form 10-K.

Important factors that could cause actual results to differ materially from those described in forward-looking statements contained in this press release include, but are not limited to: integration risks; changes in economic conditions, political conditions, trade protection measures, licensing requirements and tax matters; technology development risks; intellectual property rights risks; competition risks; additional scrutiny and increased expenses as a result of being a public company; the financial condition, financing requirements, prospects and cash flow of Majesco; loss of strategic relationships; changes in laws or regulations affecting the insurance industry in particular; restrictions on immigration; the ability and cost of retaining and recruiting key personnel; the ability to attract new clients and retain them and the risk of loss of large customers; continued compliance with evolving laws; customer data and cybersecurity risk; and Majesco’s ability to raise capital to fund future growth.

These forward-looking statements should not be relied upon as predictions of future events and Majesco cannot assure you that the events or circumstances discussed or reflected in these statements will be achieved or will occur. If such forward-looking statements prove to be inaccurate, the inaccuracy may be material. You should not regard these statements as a representation or warranty by Majesco or any other person that we will achieve our objectives and plans in any specified timeframe, or at all. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this presentation. Majesco disclaims any obligation to publicly update or release any revisions to these forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this press release or to reflect the occurrence of unanticipated events, except as required by law.

 

Majesco and Subsidiaries

Consolidated Statements of Operations (Unaudited)

(All amounts are in thousands of US Dollars except per share data and as stated otherwise)

 

 

 

Three
months ended
June 30, 2019

 

Three
months
ended
June 30, 2018

Revenue

$

37,304

$

33,975

Cost of revenue

 

17,434

 

18,045

Gross profit

$

19,870

$

15,930

 

 

 

 

 

Operating expenses

 

 

 

 

Research and development expenses

$

5,470

$

4,849

Selling, general and administrative expenses

 

11,826

 

9,305

Total operating expenses

$

17,296

$

14,154

Income from operations

$

2,574

$

1,776

Interest income

 

189

 

6

Interest expense

 

(89)

 

(124)

Other income (expenses), net

 

(11)

 

181

Income before provision for income taxes

$

2,663

$

1,839

Provision for income taxes

 

1,381

 

795

Net Income

$

1,282

$

1,044

 

 

 

 

 

Earnings per share:

 

 

 

 

Basic

$

0.03

$

0.03

Diluted

$

0.03

$

0.03

 

 

 

 

 

Weighted average number of common shares outstanding

 

 

 

 

Basic

 

42,912,982

 

36,600,811

Diluted

 

44,875,925

 

38,789,725

See accompanying notes to the Consolidated Financial Statements.

 

Majesco and Subsidiaries

Consolidated Balance Sheets (Unaudited)

(All amounts are in thousands of U.S. Dollars except per share data and as stated otherwise)

 

 

June 30,

 

March 31,

2019

2019

ASSETS

 

 

 

CURRENT ASSETS

 

 

 

Cash and cash equivalents

$

9,633

 

$

11,329

Short term investments

 

23,375

 

 

28,108

Restricted cash

 

43

 

 

43

Accounts receivables, net

 

18,221

 

 

17,366

Unbilled accounts receivable

 

19,367

 

 

17,916

Prepaid expenses and other current assets

 

13,542

 

 

15,598

Total current assets

 

84,181

 

 

90,360

Property and equipment, net

 

2,702

 

 

3,026

Right of use asset, net

Intangible assets, net

 

 

5,205

12,261

 

 

 

--

12,969

Deferred income tax assets

 

6,992

 

 

7,816

Unbilled accounts receivable, net of current portion

 

2,389

 

 

543

Other assets

 

377

 

489

Goodwill

 

34,170

 

 

34,145

Total Assets

$

148,277

 

$

149,348

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

CURRENT LIABILITIES

 

 

 

Loan from bank-receivable and vehicle loan

 

134

 

 

442

Lease liability

 

2,654

 

 

--

Accounts payable

 

2,669

 

 

2,327

Accrued expenses and other liabilities

 

24,793

 

 

31,341

Deferred revenue

 

11,811

 

 

10,988

Total current liabilities

 

42,061

 

 

45,098

Vehicle loan

 

102

 

 

109

Lease liability, net of current portion

Consideration payable on Exaxe acquisition

 

 

2,563

2,977

 

 

 

--

2,951

Other liabilities

 

1,134

 

 

1,089

Total Liabilities

$

48,837

 

$

49,247

 

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

Preferred stock, par value $0.002 per share – 50,000,000 shares authorized as of June 30, 2019 and 50,000,000 as of March 31, 2019, NIL shares issued and outstanding as of June 30, 2019 and March 31, 2019

 

--

 

 

--

Common stock, par value $0.002 per share – 450,000,000 shares authorized as of June 30, 2019 and 450,000,000 as of March 31, 2019, 42,929,765 shares issued and outstanding as of June 30, 2019 and 42,846,273 as of March 31, 2019

$

86

 

$

86

Additional paid-in capital

 

123,567

 

 

122,163

Accumulated deficit

 

(25,217)

 

 

(22,969)

Accumulated other comprehensive loss

 

(229)

 

 

(412)

Non-controlling interest in consolidated subsidiaries

 

1,233

 

1,233

 

Total equity of common stockholder

 

99,440

 

 

100,101

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$

148,277

 

$

149,348

 

 

 

 

Majesco and Subsidiaries

Reconciliation of U.S. GAAP Net Income to EBITDA and Adjusted EBITDA

(Unaudited)

 

Three Months Ended
June 30,

(U.S. dollars; in thousands):

2019

 

2018

Net Income

$

1,282

$

1,044

 

 

 

Add:

 

 

Provision for income taxes

 

1,381

 

795

Depreciation and amortization

 

1,226

 

1,046

Interest expense

 

89

 

124

 

 

 

Less:

 

 

 

Interest income

 

(189)

 

(6)

Other income (expenses), net

 

11

 

(180)

EBITDA

$

3,800

$

2,823

 

 

 

Add:

 

 

 

Stock based compensation

 

929

 

675

 

 

 

Adjusted EBITDA

$

4,729

$

3,498

 

 

 

Revenue

 

37,304

 

33,975

Adjusted EBITDA as a % of Revenue

 

12.68%

 

10.30%

 

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