American Software, Inc. reported preliminary financial results for the fourth quarter and fiscal year 2023.
Key Fourth Quarter Financial Highlights:
- Subscription fees were $13.0 million for the quarter ended April 30, 2023, an 18% increase compared to $11.1 million for the same period last year.
- Total revenues for the quarter ended April 30, 2023 decreased 14% to $29.9 million, compared to $34.6 million for the same period of the prior year, principally due to a decline in services and license fee revenue.
- Recurring revenue streams for Maintenance and Cloud Subscriptions were $21.2 million or 71% of total revenues in the quarter ended April 30, 2023 compared to $19.8 million or 57% of total revenues in the same period of the prior year.
- Maintenance revenues for the quarter ended April 30, 2023 decreased 7% to $8.2 million compared to $8.8 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 April 30, 2023 decreased 32% to $8.0 million compared to $11.7 million for the same period last year. The decline was primarily driven by a 43% decrease in non-core project revenue in our IT Consulting business unit. For the Supply Chain business, professional services revenues for the quarter ended April 30, 2023 decreased by 23% to $4.6 million when compared to $6.0 million in the same period last year due to lower project work and outsourcing of some services to partners.
- Software license revenues were $0.7 million for the quarter ended April 30, 2023 compared to $3.1 million in the same period last year.
- Operating earnings for the quarter ended April 30, 2023 were $2.3 million compared to $5.5 million for the same period last year.
- GAAP net earnings for the quarter ended April 30, 2023 were $2.9 million or $0.08 per fully diluted share compared to $3.6 million or $0.10 per fully diluted share for the same period last year.
- Adjusted net earnings for the quarter ended April 30, 2023, which excludes non-cash stock-based compensation expense and amortization of acquisition-related intangibles, were $4.1 million or $0.12 per fully diluted share compared to $4.4 million or $0.13 per fully diluted share for the same period last year.
- EBITDA was $3.0 million for the quarter ended April 30, 2023 compared to $6.4 million for the same period last year.
- Adjusted EBITDA was $4.3 million for the quarter ended April 30, 2023 compared to $7.5 million for the same period last year. Adjusted EBITDA represents GAAP net earnings adjusted for amortization of intangibles, depreciation, interest income & other, net, income tax expense and non-cash stock-based compensation expense.
Key Fourth Quarter of Fiscal Year 2023 highlights:
Clients & Channels
- Notable new and existing customers placing orders with the Company in the fourth quarter include: Annex Products Pty Ltd., CertainTeed LLC., DecoPac, Inc, Farmlands Cooperative Society Ltd., Heidelberg Materials US Inc., ICL, Inc., Libbey Glass LLC, Tilly’s Inc. and Yazaki, Inc.
- During the quarter, SaaS subscription and software license agreements were signed with customers located in the following eight countries: Australia, Belgium, Mexico, New Zealand, Norway, Sweden, the United Kingdom and the United States.
Company & Technology
- Announced in February, Allan Dow, president of Logility, Inc., and Elaine Videau, director of planning for Tillamook County Creamery Association, a farmer-owned co-op, were two winners of this year’s Food Logistics’ Rock Stars of the Supply Chain award. This annual award program recognizes influential individuals in the industry whose achievements, hard work and vision have shaped the global cold food supply chain.
- In March, Allan Dow, president of Logility, Inc. and Marti Kirsch, EVP marketing for Logility, Inc. were announced as winners of the 2023 Pros to Know award by Supply and Demand Chain Executive. This annual award recognizes outstanding executives whose accomplishments offer a roadmap for other leaders looking to leverage their supply chain for competitive advantage.
- In August, Logility was recognized with the Gartner Peer Insights “Voice of the Customer” award for Supply Chain Planning Solutions. This Gartner research document synthesizes Gartner Peer Insights’ customer feedback on supply chain planning solutions for a specific 18-month period to offer peer perspective.
Key Fiscal 2023 Year to Date Financial Highlights:
- Subscription fees were $50.4 million for the twelve months ended April 30, 2023, a 20% increase compared to $42.1 million for the same period last year.
- Total revenues for the twelve months ended April 30, 2023 were $123.7 million compared to $127.6 million for the same period last year. Excluding our non-core IT Consulting business unit, total revenues from our Supply Chain Management segment increased 2% compared to the same period last year.
- Recurring revenue streams for Maintenance and Cloud Services were $85.0 million and $78.7 million or 69% and 62% of total revenues for the twelve-month periods ended April 30, 2023 and 2022, respectively.
- Maintenance revenues for the twelve months ended April 30, 2023 were $34.6 million, a 6% decrease compared to $36.6 million for the same period last year.
- Professional services and other revenues for the twelve months ended April 30, 2023 decreased 17% to $35.9 million compared to $43.5 million for the same period last year.
- Software license revenues were $2.8 million compared to $5.4 million for the same period last year.
- For the twelve months ended April 30, 2023, the Company reported operating earnings of approximately $10.5 million compared to $13.2 million for the same period last year.
- GAAP net earnings were approximately $10.4 million or $0.31 per fully diluted share for the twelve months ended April 30, 2023 compared to $12.8 million or $0.37 per fully diluted share for the same period last year.
- Adjusted net earnings for the twelve months ended April 30, 2023, which exclude stock-based compensation expense and amortization of acquisition-related intangibles were $15.2 million or $0.45 per fully diluted share, compared to $16.0 million or $0.47 per fully diluted share for the same period last year.
- EBITDA was $13.7 million for the twelve months ended April 30, 2023 compared to $17.3 million for the same period last year.
- Adjusted EBITDA was $18.9 million for the twelve months ended April 30, 2023 compared to $21.3 million for the twelve months ended April 30, 2022. Adjusted EBITDA represents GAAP net earnings adjusted for amortization of intangibles, depreciation, interest income & other, net, income tax expense and non-cash stock-based compensation.
The overall financial condition of the Company remains strong, with cash and investments of approximately $115.5 million. During the fourth quarter of fiscal year 2023, the Company paid shareholder dividends of approximately $3.7 million.
“We endured a number of macroeconomic headwinds throughout the past year and were pleased to deliver adjusted EBITDA above our original guidance entering FY ‘23,” said Allan Dow, CEO and President of American Software. “While we have seen signs that the economic challenges facing our customers are beginning to abate, our initial outlook for FY ’24 reflects some conservatism as we manage through the current uncertainty. However, we remain confident in the long-term growth prospects of our business given the secular tailwinds from digital supply chain transformation and our platform expansion.”
Fiscal Year 2024 Financial Outlook
- Total revenues of $120.0 million to $126.0 million, including total recurring revenues of $88.0 million to $92.0 million.
- Adjusted EBITDA of $19.0 million to $21.0 million.
