MODN Stock Price Increases Over 22% Intraday: Why It Happened

By Amit Chowdhry ● Aug 10, 2021
  • The stock price of Model N, Inc. (NYSE: MODN) increased by over 22% during intraday trading. This is why it happened.

The stock price of Model N, Inc. (NYSE: MODN) – the leader in cloud revenue management solutions – increased by over 22% during intraday trading. Investors responded positively to Model N announcing the financial results for the third quarter of the fiscal year 2021 ended June 30, 2021.

Q3 2021 Financial Highlights:

— Total revenues were $51.0 million, an increase of 24% from the third quarter of the fiscal year 2020. Subscription revenues were $36.9 million, an increase of 26% from the third quarter of the fiscal year 2020. Business Services, which we acquired from Deloitte, contributed $6.0 million in total revenues for the third quarter of the fiscal year 2021.

— Gross profit was $27.6 million, an increase of 10% from the third quarter of the fiscal year 2020. The gross margin was 54% compared to 61% for the third quarter of the fiscal year 2020. Non-GAAP gross profit was $30.7 million, an increase of 16% from the third quarter of the fiscal year 2020. Non-GAAP gross margin was 60% compared to 64% for the third quarter of the fiscal year 2020. The subscription gross margin was 63% compared to 71% for the third quarter of the fiscal year 2020. Non-GAAP subscription gross margin was 68% compared to 74% for the third quarter of the fiscal year 2020. Both GAAP and Non-GAAP gross margins for the third quarter of the fiscal year 2021 were impacted by the revenue mix coming from the acquisition of Business Services.

— GAAP loss from operations was $(3.9) million compared to $(0.4) million for the third quarter of the fiscal year 2020. Non-GAAP income from operations was $7.2 million, an increase of 16% from the third quarter of the fiscal year 2020.

— GAAP net loss was $(7.8) million compared to a net loss of $(2.4) million for the third quarter of the fiscal year 2020. GAAP basic and diluted net loss per share attributable to common stockholders was $(0.22) based upon weighted average shares outstanding of 35.7 million compared to net loss per share of $(0.07) for the third quarter of fiscal year 2020 based upon weighted average shares outstanding of 34.4 million.

— Non-GAAP net income was $5.7 million, an increase of 11% from the third quarter of the fiscal year 2020. Non-GAAP net income per diluted share was $0.16 based upon diluted weighted average shares outstanding of 36.8 million compared to non-GAAP net income per diluted share of $0.15 for the third quarter of fiscal year 2020 based upon diluted weighted average shares outstanding of 35.3 million.

— Adjusted EBITDA was $7.4 million, an increase of 16% from the third quarter of the fiscal year 2020.

— Cash and cash equivalents as of June 30, 2021, totaled $153.8 million, an increase of $5.4 million over the prior quarter. Net cash provided by operating activities was $9.7 million for the first nine months of the fiscal year 2021, compared with $7.2 million in the prior fiscal year period. Free cash flow was $8.8 million for the first nine months of fiscal year 2021, compared with $7.0 million in the prior fiscal year period.

Guidance:

As of August 9, 2021, the company provided guidance for the fourth quarter fiscal year 2021 and raising guidance for the full fiscal year ending September 30, 2021.

(in $ millions, except per share)

Total revenues

Fourth Quarter Fiscal 2021: 50.5 – 51.0

Full Year Fiscal 2021: 192.5 – 193.0

Subscription revenues

Fourth Quarter Fiscal 2021: 37.0 – 37.5

Full Year Fiscal 2021: 141.3 – 141.8

Non-GAAP income from operations

Fourth Quarter Fiscal 2021: 4.8 – 5.3

Full Year Fiscal 2021: 22.3 – 22.8

Non-GAAP net income per share

Fourth Quarter Fiscal 2021: 0.09 – 0.11

Full Year Fiscal 2021: 0.45 – 0.47

Adjusted EBITDA

Fourth Quarter Fiscal 2021: 5.0 – 5.5

Full Year Fiscal 2021: 23.1 – 23.6

KEY QUOTES:

“Our results for the third quarter outperformed across the board, with total revenue, subscription revenue, professional services revenue, and adjusted EBITDA all exceeding expectations. These results clearly demonstrate the success of our strategic focus on the Life Sciences and High Tech verticals and our customers’ need for our mission-critical products. The strategic decisions that we have made over the last three years resulted in achieving the milestone of surpassing $50 million in quarterly total revenue. Our focus on our go-to-market programs and customer success, including SaaS transitions, new logos, and professional services, all meaningfully contributed to our third quarter financial results. As a result of our solid execution, we are raising our full-year outlook on both the top and bottom line.”

— Jason Blessing, president and chief executive officer of Model N

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.