Model N (MODN) Q4 Earnings & Revenues Surpass Estimates
Zacks Investment Research | Nov 08, 2018 11:53PM ET
Model N, Inc. (NYSE:MODN) delivered fourth-quarter fiscal 2018 non-GAAP earnings of 6 cents per share comparing favorably with the year-ago quarter’s loss of 6 cents per share. The Zacks Consensus Estimate was pegged at a loss of 2 cents.
Revenues of $36.7 million increased 3.1% from the year ago quarter, outpacing the Zacks Consensus Estimate of $35 million. The figure also outpaced the guided range of $35.2-$35.7 million.
Management noted that the company is making steady progress in its transformation to a 100% Software-as-a-Service (SaaS) based model.
Quarter in Detail
Model N has two reportable segments namely SaaS & Maintenance and License & Implementation.
SaaS & Maintenance revenues of almost $35 million grew 18.1% year over year. Model N is accelerating its transition of revenue management to cloud and is on track to shift business to a 100% SaaS and Maintenance revenue model.
License & Implementation revenues of $1.7 million declined 71.1% on a year-over-year basis. The company no longer sells on-premise perpetual licenses. Management had anticipated the decline in fourth quarter due to backlog burn off and transition of customers to cloud.
Expanding Customer Base
Model N made significant efforts in its go to market strategy in order to improve growth. Management is optimistic about its Revenue Cloud offering for med-tech, pharma and high tech companies.
The company is leaving no stone unturned to enable customers’ transition to cloud from an on-premise infrastructure. Management is elated on the rapid adoption witnessed among life sciences companies in particular, including Biogen (NASDAQ:BIIB), Novo Nordisk (CO:NOVOb), among others, which subscribed to Revenue Cloud.
Additionally, Model N’s growth prospects in the life sciences & high technology are bright due to increasing redundancy of legacy systems. The company’s solutions provide higher Return on Investment (“ROI”) as well as plug gaps in the end-to-end revenue management process that legacy systems fail to do.
The company has enhanced Revenue Cloud with Amazon’s (NASDAQ:AMZN) Amazon Web Services (AWS) infrastructure as part of its cloud optimization initiative. This has enabled it to aid companies like Allegro Microsystems, Edwards Life Sciences, Ipsen and Shionogi, among others in their transition.
Management is also optimistic regarding Seagate’s (NASDAQ:STX) increased utilization of Revenue Cloud. Seagate recently subscribed to Model N’s Channel Data Management solution.
Integra Life Sciences intends to deploy Revenue Cloud across its international business units. In this regard, the life sciences company added an acquired business entity to Revenue Cloud.
Get The News You Want
The growing clout of Model N’s Global Price Management solution, Model N CPQ (Configure, Price and Quote), Model N Channel Cloud and Revenue Cloud for High Tech suites is notable.
The company’s Revenue Management platform aimed at enhancing digital reinvention experience also bodes well.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.