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Model N (MODN) Q2 Earnings Miss Despite Top-Line Growth
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Model N, Inc. (MODN - Free Report) 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.
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.
Pinterest is increasingly establishing a unique value proposition to advertisers that could provide a competitive advantage in the long haul. Through various innovations, it continues to dramatically improve the advertising platform, which appears to be one of the best ad platforms for consumer discretionary brands looking for ways to reach customers and stretch smaller ad budgets.
Arista Networks, Inc. (ANET - Free Report) , carrying a Zacks Rank #2 at present, 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 a long-term earnings growth expectation of 17.5% and delivered an earnings surprise of 13.3%, on average, in the trailing four quarters.
It holds a leadership position in 100-gigabit Ethernet switching share in port for the high-speed datacenter segment. Arista is increasingly gaining market traction in 200 and 400-gig high-performance switching products and remains well-positioned for healthy growth in data-driven cloud networking business with proactive platforms and predictive operations.
United States Cellular Corporation (USM - Free Report) , carrying a Zacks Rank #2 at present, delivered a trailing four-quarter average earnings surprise of 78.02%.
It is the one of largest full-service wireless carrier in the United States. The company provides a range of wireless products and services, and a high-quality network to increase the competitiveness of local businesses and improve efficiency of government operations.
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Model N (MODN) Q2 Earnings Miss Despite Top-Line Growth
Model N, Inc. (MODN - Free Report) 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.
Model N, Inc. Price, Consensus and EPS Surprise
Model N, Inc. price-consensus-eps-surprise-chart | Model N, Inc. Quote
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.
Zacks Rank & Stocks to Consider
Model N currently carries a Zacks Rank #3 (Hold).
Pinterest (PINS - Free Report) , carrying a Zacks Rank #2 (Buy) at present, delivered a trailing four-quarter average earnings surprise of 38.78%. In the last reported quarter, it delivered an earnings surprise of 42.86%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Pinterest is increasingly establishing a unique value proposition to advertisers that could provide a competitive advantage in the long haul. Through various innovations, it continues to dramatically improve the advertising platform, which appears to be one of the best ad platforms for consumer discretionary brands looking for ways to reach customers and stretch smaller ad budgets.
Arista Networks, Inc. (ANET - Free Report) , carrying a Zacks Rank #2 at present, 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 a long-term earnings growth expectation of 17.5% and delivered an earnings surprise of 13.3%, on average, in the trailing four quarters.
It holds a leadership position in 100-gigabit Ethernet switching share in port for the high-speed datacenter segment. Arista is increasingly gaining market traction in 200 and 400-gig high-performance switching products and remains well-positioned for healthy growth in data-driven cloud networking business with proactive platforms and predictive operations.
United States Cellular Corporation (USM - Free Report) , carrying a Zacks Rank #2 at present, delivered a trailing four-quarter average earnings surprise of 78.02%.
It is the one of largest full-service wireless carrier in the United States. The company provides a range of wireless products and services, and a high-quality network to increase the competitiveness of local businesses and improve efficiency of government operations.