On Wednesday, JMP Securities adjusted its rating on Model N, Inc. (NYSE:MODN), moving from Market Outperform to Market Perform. This change follows the company's release of its first-quarter fiscal year 2024 results, which presented a mix of hits and misses against market expectations.
Model N reported non-GAAP earnings per share (EPS) of $0.28, falling slightly short of the consensus estimate of $0.29. However, the company's total revenue came in at $63.5M, surpassing the expected $62.4M and marking a 7% year-over-year increase. Despite this, the growth rate showed a deceleration from the 10% expansion seen in the previous quarter.
The subscription revenue stood at $47.7M, which was above the consensus forecast of $47M and represented a significant 68% year-over-year rise. This figure held steady with the 8% growth reported in the prior quarter. Billings for the quarter were also strong at $76.1M, exceeding consensus estimates of $68.7M and showing a substantial 19% year-over-year increase, a notable recovery from the 1% decline observed in the last quarter.
Despite these positive indicators, the company's SaaS Annual Recurring Revenue (ARR) growth slowed to 16%, aligning with JMP Securities' expectations but down from the 20% growth rate experienced in the previous quarter. The stock's performance remained unchanged in after-market trading and has been flat year-to-date, contrasting with a 3% increase in the Russell 3000 index.
InvestingPro Insights
As investors digest the latest earnings report from Model N, Inc. (NYSE:MODN), several metrics and insights from InvestingPro provide a deeper understanding of the company's financial health and market position. According to InvestingPro, Model N is expected to see net income growth this year, which aligns with the company's performance trajectory despite the recent deceleration in growth rate.
InvestingPro Data highlights that Model N has a market capitalization of approximately $1.05 billion, with a high Price / Book multiple of 9.11 as of the last twelve months ending Q4 2023. This valuation suggests that investors have high expectations for the company's book value growth. Additionally, the company's revenue growth of 13.82% over the last twelve months indicates a healthy expansion pace, although the quarterly growth rate shows a slight decline to 9.97% in Q4 2023.
One of the InvestingPro Tips that stands out for Model N is that while the company operates with a moderate level of debt, it currently does not pay a dividend to shareholders. This could be a strategic decision to reinvest earnings into the business to fuel further growth, which may be appealing to growth-oriented investors. Furthermore, the company's liquid assets exceed its short-term obligations, suggesting financial stability in meeting its immediate liabilities.
For those looking to delve deeper into Model N's financials and future prospects, InvestingPro offers a comprehensive list of additional tips. To explore these insights and make more informed investment decisions, consider using the coupon code SFY24 to get an additional 10% off a 2-year InvestingPro+ subscription, or SFY241 to get an additional 10% off a 1-year InvestingPro+ subscription. There are 6 more InvestingPro Tips available for Model N at https://www.investing.com/pro/MODN, which could provide valuable context to the company's recent performance and future outlook.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.