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Why Is Model N (MODN) Up 0.3% Since Last Earnings Report?
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A month has gone by since the last earnings report for Model N . Shares have added about 0.3% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Model N due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Model N Q2 Earnings Miss Despite Top-Line Growth
Model N delivered mixed second-quarter fiscal 2024 results, with the top line beating the Zacks Consensus Estimate but the bottom line missing the same. This San Mateo, CA-based company recorded a top-line expansion year over year, driven by healthy demand for cloud revenue management solutions in several end markets.
Net Income
On a GAAP basis, the company incurred a net loss of $1.4 million or a loss of 4 cents per share compared with a loss of $33.3 million or a loss of 88 cents per share in the year-ago quarter. Revenue growth year over year led to a narrower loss during the quarter.
Non-GAAP net income rose to $9.4 million or 24 cents per share from $6.8 million or 18 cents per share in the year-earlier quarter. The bottom line missed the Zacks Consensus Estimate by 2 cents.
Revenues
The company generated $65.1 million in revenues, up 4% year over year. Healthy traction in various industries, including pharmaceuticals and semiconductor, is supporting the top line. The top line surpassed the Zacks Consensus Estimate of $64 million.
Net sales from Subscription rose to $49.2 million, up from $44.9 million in the prior-year quarter. The figure surpassed our estimate of $48.7 million. SaaS ARR (annual recurring revenue) improved 11% year over year to $139.1 million.
Professional Services revenues totaled $15.9 million, down from $17.7 million a year ago. The top line beat our estimate of $15.4 million.
Other Details
Non-GAAP gross profit increased to $39.8 million from $37.8 million a year ago, with respective margins of 61.2% and 60.3%. Adjusted EBITDA was $10.9 million, up from $9.2 million in the prior-year quarter. Non-GAAP operating income stood at $10.7 million compared with $9 million in the year-earlier quarter.
Cash Flow & Liquidity
In the March quarter, Model N generated $31 million in cash from operating activities against a cash utilization of $6.1 million in the year-ago period. As of Mar 31, 2024, it had $334.6 million in cash and cash equivalents with $281.2 million of long-term debt.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.
VGM Scores
At this time, Model N has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Model N has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Model N is part of the Zacks Internet - Software industry. Over the past month, Meta Platforms (META - Free Report) , a stock from the same industry, has gained 1.9%. The company reported its results for the quarter ended March 2024 more than a month ago.
Meta Platforms reported revenues of $36.46 billion in the last reported quarter, representing a year-over-year change of +27.3%. EPS of $4.71 for the same period compares with $2.64 a year ago.
For the current quarter, Meta Platforms is expected to post earnings of $4.67 per share, indicating a change of +44.6% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.2% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Meta Platforms. Also, the stock has a VGM Score of B.
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Why Is Model N (MODN) Up 0.3% Since Last Earnings Report?
A month has gone by since the last earnings report for Model N . Shares have added about 0.3% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Model N due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Model N Q2 Earnings Miss Despite Top-Line Growth
Model N delivered mixed second-quarter fiscal 2024 results, with the top line beating the Zacks Consensus Estimate but the bottom line missing the same. This San Mateo, CA-based company recorded a top-line expansion year over year, driven by healthy demand for cloud revenue management solutions in several end markets.
Net Income
On a GAAP basis, the company incurred a net loss of $1.4 million or a loss of 4 cents per share compared with a loss of $33.3 million or a loss of 88 cents per share in the year-ago quarter. Revenue growth year over year led to a narrower loss during the quarter.
Non-GAAP net income rose to $9.4 million or 24 cents per share from $6.8 million or 18 cents per share in the year-earlier quarter. The bottom line missed the Zacks Consensus Estimate by 2 cents.
Revenues
The company generated $65.1 million in revenues, up 4% year over year. Healthy traction in various industries, including pharmaceuticals and semiconductor, is supporting the top line. The top line surpassed the Zacks Consensus Estimate of $64 million.
Net sales from Subscription rose to $49.2 million, up from $44.9 million in the prior-year quarter. The figure surpassed our estimate of $48.7 million. SaaS ARR (annual recurring revenue) improved 11% year over year to $139.1 million.
Professional Services revenues totaled $15.9 million, down from $17.7 million a year ago. The top line beat our estimate of $15.4 million.
Other Details
Non-GAAP gross profit increased to $39.8 million from $37.8 million a year ago, with respective margins of 61.2% and 60.3%. Adjusted EBITDA was $10.9 million, up from $9.2 million in the prior-year quarter. Non-GAAP operating income stood at $10.7 million compared with $9 million in the year-earlier quarter.
Cash Flow & Liquidity
In the March quarter, Model N generated $31 million in cash from operating activities against a cash utilization of $6.1 million in the year-ago period. As of Mar 31, 2024, it had $334.6 million in cash and cash equivalents with $281.2 million of long-term debt.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.
VGM Scores
At this time, Model N has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Model N has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Model N is part of the Zacks Internet - Software industry. Over the past month, Meta Platforms (META - Free Report) , a stock from the same industry, has gained 1.9%. The company reported its results for the quarter ended March 2024 more than a month ago.
Meta Platforms reported revenues of $36.46 billion in the last reported quarter, representing a year-over-year change of +27.3%. EPS of $4.71 for the same period compares with $2.64 a year ago.
For the current quarter, Meta Platforms is expected to post earnings of $4.67 per share, indicating a change of +44.6% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.2% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Meta Platforms. Also, the stock has a VGM Score of B.