Model N Beat Consensus Estimate – Here’s What to Expect

    Author Siraj SarwarPosted on Categories Financial, Financial ServicesTags , , , , , , , , , , , , , , , , , , , , , ,
    Model N

    Strong financial numbers and improving fundamentals supported Model N (NASDAQ:MODN) share price over the last twelve months. The stock is currently trading around $17, up 26% today and gained almost 50% in the past twelve months.

    Today’s rally was the outcome of higher than expected numbers for the first quarter of FY2018. Model N, the leading provider of cloud-based revenue management solutions to life sciences, technology, and manufacturing companies, has beaten revenue and earnings estimates by $2 million and $0.09 per share for the first quarter.

    Model N

    Source Image: finviz.com

    Strong Q1 FY2018 Numbers

    Its revenue increased 39% year over year to $39 million from $28 million in the past year quarter. The substantial growth in SaaS and maintenance revenues were the key drivers for revenue growth.

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    SaaS and maintenance revenues were stood around $32.3 million, up from $22.6 million in for the first quarter of fiscal 2017.

    “Model N exceeded both revenue and profitability guidance and started the fiscal year 2018 with record SaaS and Maintenance revenues, which is a testament to the progress we have made in transitioning our business model to SaaS,” said Zack Rinat, Founder, Chairman and Chief Executive Officer of Model N.

    Moreover, record revenues in the first quarter led the company to increase its second quarter and fiscal 2018 guidance.

    (in $ millions, except per share outlook)

    Second Quarter Fiscal 2018

    Fiscal 2018

    Total GAAP Revenues

    38.0 – 38.5

    149 – 151

    Adjusted EBITDA

    1.0 – 1.5

    6.0 – 8.0

    Source: Q1 earnings release

    Future Business Strategy Looks Strong

    The company is looking to expand the growth of Model N along with delivering complete end-to-end revenue management solutions. It is also working on the strategy of enhancing the Revenue Cloud in its core verticals, and in particular, semi and High Tech, MedTech, and Pharma mid-markets.

    Its strategies are working considering several deals in the first quarter with High Tech and Life Sciences companies, including DexCom, Amgen, CSL, Mallinckrodt Seagate and Intel. Overall, the company is looking to increase its penetration in software application industry for the sustainable long-term growth.

    Featured Image: Twitter

    Author Siraj Sarwar
    About the author: Based in Saudi Arabia, Siraj has a strong understanding of and passion for accounting and finance. He has worked for international clients for many years on several projects related to the stock market, equity research and other business, accounting and finance related projects. Siraj is a published financial analyst on the world's leading websites including SeekingAlpha, TheStreet, MSN, and others.