NextGen (NXGN) Q2 Earnings Beat, Revenues Miss Estimates

NextGen Healthcare, Inc. (NASDAQ:NXGN) reported second-quarter fiscal 2020 adjusted earnings per share (EPS) of 24 cents, flat with the year-ago quarter’s figure. The metric edged past the Zacks Consensus Estimate by a penny.

Revenues of this Zacks Rank #3 (Hold) company totaled $134.3 million, up 3% year over year. However, the figure missed the Zacks Consensus Estimate by a nominal 0.1%.

Bookings Update

Bookings for the quarter came in at $36.6 million, up 1.4% from the year-ago quarter’s figure.

Segment Details

The company reported second-quarter fiscal 2020 revenues under the following segments:

Total Recurring revenues grossed $120.6 million, up 3.7% from the year-ago quarter’s figure.

Meanwhile, total Software, hardware and other non-recurring revenues came in at $13.7 million, down 2.4% on a year-over-year basis. Per management, this reflects headwinds in the managed services and software areas.

Margin

In the quarter under review, gross profit totaled $68.5 million, down 1%% from the prior-year quarter’s tally. Gross margin was 51%, down 210 basis points (bps).

Adjusted operating income in the fiscal second quarter was $75.4 million, down 3% from the year-ago quarter’s figure. Adjusted operating margin, as a percentage of revenues, was 56.2%, down 340 bps.

Fiscal 2020 View Retained

For fiscal 2020, NextGen continues to expect revenues between $536 million and $550 million. The Zacks Consensus Estimate for revenues is pegged at $541.8 million, which is within the guided range.

Full-year EPS are expected between 82 cents and 90 cents. The Zacks Consensus Estimate for EPS is pegged at 85 cents, which is within the projected range.

Summing Up

NextGen exited the fiscal second quarter on a mixed note. The company gained from its Recurring segment in the quarter under review. Bookings surged in the quarter on significant deal-size growth. Impressive rates of client addition have worked well for NextGen. Management has retained its fiscal 2020 outlook. Meanwhile, NectGen’s Software, hardware and other non-recurring revenues were soft in the quarter. Significant contraction in gross margin and operating margins raises concern. Additionally, NextGen faces stiff rivalry in the MedTech space.

Earnings of Other MedTech Majors at a Glance

Some better-ranked stocks which posted solid results this earnings season are Intuitive Surgical, Inc. (NASDAQ:ISRG) , Thermo Fisher Scientific Inc. (NYSE:TMO) and ResMed Inc. (NYSE:RMD) , each carrying a Zacks Rank of 2. (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Intuitive Surgical delivered third-quarter 2019 adjusted EPS of $3.43, beating the Zacks Consensus Estimate by 15.9%. Revenues of $1.13 billion surpassed the Zacks Consensus Estimate by 6.6%.

Thermo Fisher delivered third-quarter 2019 adjusted EPS of $2.94, which surpassed the Zacks Consensus Estimate by 2.1%. Revenues of $6.27 billion outpaced the Zacks Consensus Estimate by 1.3%.

ResMed reported third-quarter 2019 adjusted EPS of 93 cents, which beat the Zacks Consensus Estimate of 87 cents by 6.9%. Revenues were $681.1 million, surpassing the Zacks Consensus Estimate by 3.6%.

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