Model N (MODN) Q4 Earnings and Revenues Surpass Estimates
Model N, Inc. MODN delivered solid fourth-quarter fiscal 2023 results, with the bottom and the top line beating the respective Zacks Consensus Estimate. The San Mateo, CA-based company recorded a top-line expansion year over year, driven by solid sales growth across all verticals. New product launches in high-tech and life sciences verticals led to customer expansion in various end markets.
Net Income
Net income on a GAAP basis was $0.6 million or 2 cents per share against a loss of $8.1 million or a loss of 22 cents per share in the year-ago quarter. Net sales growth led to a year-over-year improvement in net income.
Non-GAAP net income improved to $12.2 million or 31 cents per share from $7.7 million or 20 cents per share in the year-earlier quarter. The bottom line beat the Zacks Consensus Estimate by a penny.
For fiscal 2023, the company reported a GAAP net loss of $33.9 million or a loss of 89 cents per share compared with a loss of $28.6 million or a loss of 78 cents per share in fiscal 2022. Non-GAAP net income stood at $43 million or $1.11 per share, up from $26.6 million or 72 cents per share in the year-ago quarter.
Model N, Inc. Price, Consensus and EPS Surprise
Model N, Inc. price-consensus-eps-surprise-chart | Model N, Inc. Quote
Revenues
The company generated $64 million in revenues, up 10% year over year driven by increasing cloud adoption from on-premise solutions. The top line surpassed the Zacks Consensus Estimate of $62 million.
For fiscal 2023, revenues increased to $249.5 million from $219.2 million in fiscal 2022.
Net sales from Subscriptions rose to $46.4 million, up from $42.9 million in the prior-year quarter. The figure surpassed our estimate of $45.9 million. SaaS ARR (annual recurring revenue) improved 20% year over year, with SaaS net dollar retention of 118% in the quarter. Growing SaaS transitions and new logo signings drove the top line. The company also launched various product enhancements to support pharma manufacturers with optimized revenue management and ease complexity regarding regulatory compliances.
It also unveiled a self-service portal called Channel Collaboration. The product will offer high-tech manufacturers real-time visibility into their channel data. This will accelerate decision-making and enable them to better manage complex regulatory environments.
Professional Services revenues totaled $17.5 million, up from $15.3 million a year ago, backed by solid execution and high utilization rates. The top line beat our estimate of $16.2 million.
Other Details
Non-GAAP gross profit increased to $39.6 million from $36.2 million a year ago, with a margin of 62% in both quarters. Adjusted EBITDA was $11 million, up 34% from $8.2 million in the prior-year quarter. Non-GAAP operating income stood at $10.8 million compared with $8 million in the year-earlier quarter.
Cash Flow & Liquidity
In fiscal 2023, Model N generated $23.6 million from operating activities compared with $25.3 million in the year-ago period. As of Sep 30, 2023, it had $301.4 million in cash and cash equivalents with $280.4 million of long-term debt compared with the respective figures of $193.5 million and $135.4 million in fiscal 2022.
Outlook
For first-quarter fiscal 2024, the company expects total revenues between $61.5-62.5 million. Subscription revenues are expected in the range of $46.5-$47 million. Adjusted EBITDA is projected to be between $8.5-$9.5 million. Non-GAAP operating income is estimated within $8.2-$9.2 million, while non-GAAP earnings per share are estimated in the band of 29-31 cents.
For fiscal 2024, management expects total revenues in the band of $260-$263 million. Subscription revenues are anticipated in the range of $193-$195 million. Adjusted EBITDA is forecasted within $48-$51 million. Non-GAAP operating income is expected within $46.9-$49.9 million, while non-GAAP earnings are anticipated to be within $1.25-$1.32 per share.
Zacks Rank & Other Stocks to Consider
Model N currently sports a Zacks Rank #1 (Strong Buy).
InterDigital, Inc. IDCC, carrying a Zacks Rank #2 (Buy), delivered an earnings surprise of 170.71%, on average, in the trailing four quarters. You can see the complete list of today’s Zacks #1 Rank stocks here.
It is a pioneer in advanced mobile technologies that enable wireless communications and capabilities. The company engages in designing and developing a wide range of advanced technology solutions, which are used in digital cellular and wireless 3G, 4G and IEEE 802-related products and networks.
NVIDIA Corporation NVDA, currently sporting a Zacks Rank #1, delivered an earnings surprise of 9.79%, on average, in the trailing four quarters. In the last reported quarter, it pulled off an earnings surprise of 29.19%.
NVIDIA is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit. Over the years, the company’s focus has evolved from PC graphics to artificial intelligence-based solutions that support high-performance computing, gaming and virtual reality platforms.
Arista Networks, Inc. ANET, presently carrying a Zacks Rank #2, is likely to benefit from strong momentum and diversification across its top verticals and product lines. The company has a software-driven, data-centric approach to help customers build their cloud architecture and enhance their cloud experience. Arista has delivered an earnings surprise of 12%, on average, in the trailing four quarters.
ANET holds a leadership position in 100-gigabit Ethernet switching share in port for the high-speed data center segment. Arista is increasingly gaining market traction in 200 and 400-gigabit high-performance switching products and is well-positioned for healthy growth in the data-driven cloud networking business with proactive platforms and predictive operations.
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