American Software, Inc. reported preliminary financial results for the second quarter of fiscal year 2023.
Key Second Quarter Financial Highlights:
- Subscription fees were $12.3 million for the quarter ended October 31, 2022, a 19% increase compared to $10.4 million for the same period last year, and software license revenues were $0.7 million compared to $0.8 million for the same period last year.
- Total revenues for the quarter ended October 31, 2022 increased 1% to $31.4 million, compared to $31.2 million for the same period of the prior year.
- Recurring revenue streams for Maintenance and Cloud Subscriptions were $21.2 million or 67% of total revenues in the quarter ended October 31, 2022 compared to $19.6 million or 63% in the same period of the prior year.
- Maintenance revenues for the quarter ended October 31, 2022 decreased 5% to $8.8 million compared to $9.3 million for the same period last year reflecting the shift to cloud revenue as a client preference.
- Professional services and other revenues for the quarter ended October 31, 2022 decreased 11% to $9.6 million compared to $10.8 million for the same period last year. For the Supply Chain business, professional services revenues for the quarter ended October 31, 2022 decreased by 1% to $5.2 million when compared to $5.3 million in the same period prior year.
- Operating earnings for the quarter ended October 31, 2022 increased 3% to $2.8 million compared to $2.7 million for the same period last year.
- GAAP net earnings for the quarter ended October 31, 2022 decreased 37% to $2.1 million or $0.06 per fully diluted share compared to $3.3 million or $0.10 per fully diluted share for the same period last year.
- Adjusted net earnings for the quarter ended October 31, 2022, which excludes non-cash stock-based compensation expense and amortization of acquisition-related intangibles, decreased 21% to $3.3 million or $0.10 per fully diluted share compared to $4.2 million or $0.12 per fully diluted share for the same period last year.
- EBITDA decreased by 3% to $3.6 million for the quarter ended October 31, 2022 compared to $3.7 million for the same period last year.
- Adjusted EBITDA increased by 4% to $4.9 million for the quarter ended October 31, 2022 compared to $4.8 million for the same period last year. Adjusted EBITDA represents GAAP net earnings adjusted for amortization of intangibles, depreciation, interest (loss)/income & other, net, income tax expense and non-cash stock-based compensation expense.
Key Fiscal 2023 Year to Date Financial Highlights:
- Subscription fees were $24.4 million for the six months ended October 31, 2022, a 21% increase compared to $20.1 million for the same period last year, while Software license revenues were $1.0 million compared to $1.3 million for the same period last year.
- Total revenues for the six months ended October 31, 2022 increased 4% to $62.7 million compared to $60.5 million for the same period last year.
- Recurring revenue streams for Maintenance and Cloud Services were $42.1 million and $38.9 million or 67% and 64% of total revenues for the six-month periods ended October 31, 2022 and 2021, respectively.
- Maintenance revenues for the six months ended October 31, 2022 were $17.7 million, a 5% decrease compared to $18.7 million for the same period last year.
- Professional services and other revenues for the six months ended October 31, 2022 decreased 3% to $19.6 million compared to $20.3 million for the same period last year.
- For the six months ended October 31, 2022, the Company reported operating earnings of approximately $5.3 million compared to $4.5 million for the same period last year, a 19% increase.
- GAAP net earnings were approximately $4.2 million or $0.12 per fully diluted share for the six months ended October 31, 2022, a 33% decrease compared to $6.3 million or $0.18 per fully diluted share for the same period last year.
- Adjusted net earnings for the six months ended October 31, 2022, which exclude stock-based compensation expense and amortization of acquisition-related intangibles, decreased 16% to $6.6 million or $0.19 per fully diluted share, compared to $7.8 million or $0.23 per fully diluted share for the same period last year.
- EBITDA increased by 4% to $6.9 million for the six months ended October 31, 2022 compared to $6.6 million for the same period last year.
- Adjusted EBITDA increased 13% to $9.6 million for the six months ended October 31, 2022 compared to $8.4 million for the six months ended October 31, 2021. Adjusted EBITDA represents GAAP net earnings adjusted for amortization of intangibles, depreciation, interest (loss)/income & other, net, income tax expense and non-cash stock-based compensation.
Key Second Quarter of Fiscal Year 2023 highlights:
Clients & Channels
- Notable new and existing customers placing orders with the Company in the second quarter include: Fastenal Company, Grand & Toy Ltd., Great Lakes Cheese Company, Inc., Herbalife Nutrition, Jackson Family Enterprises, Inc., Niagara Bottling, LLC., Ralph Lauren Inc., WEG Industries, and Workwear Outfitters LLC.
- During the quarter, SaaS subscription and/or software license agreements were signed with customers located in the following six countries: Australia, Brazil, Canada, India, the United Kingdom, and the United States.
- With its partner ecosystem continuing to play an important role in the company’s growth strategy, Logility formalized partnership agreements with Parker Avery and Wipro Ltd.
- Logility celebrated Supply & Demand Chain Executive’s 2022 Women in Supply Chain Award, as it saw leaders at its clients ORBIS Corporation and Polymer Group take home the distinction.
The overall financial condition of the Company remains strong, with cash and investments of approximately $106.8 million. During the second quarter of fiscal year 2023, the Company paid shareholder dividends of approximately $3.7 million.
“We were pleased to see our adjusted EBITDA margin expand sequentially and year-over-year to nearly 16% despite delayed project starts that impacted our revenue in Q2,” said Allan Dow, CEO and President of American Software. “Although we are adjusting our revenue guidance lower to account for these delays, we are increasing our adjusted EBITDA expectations to reflect the strong performance to date and a more measured pace of investment amid the current global economic environment.”
Fiscal Year 2023 Financial Outlook
- Total revenues of $125.5 million to $127.5 million, including total recurring revenues of $85.5 million to $87.5 million.
- Adjusted EBITDA of $18.0 million to $20.0 million.
