Model N Announces First Quarter Fiscal Year 2022 Financial Results
Total Revenue Grew 21% Year-over-Year
Subscription Revenue Grew 21% Year-over-Year
SAN MATEO, Calif.–(BUSINESS WIRE)–Model N, Inc. (NYSE: MODN), the leader in cloud revenue management solutions, today announced financial results for the first quarter fiscal year 2022 ended December 31, 2021.
“We kicked off fiscal year 2022 with very solid financial results that exceeded all of our guidance metrics. During the first quarter, we signed new logos, closed four SaaS transitions, expanded within numerous existing customers, and enjoyed strong renewals,” said Jason Blessing, president and chief executive officer of Model N. “We are executing right on plan and I’m optimistic about the opportunity ahead for Model N as we move through fiscal 2022 with positive momentum.”
Recent Highlights
- Strong Performance in Life Sciences Vertical – Model N continued to bolster its stronghold in the Life Sciences vertical, adding new customers, expanding with existing customers, and securing additional commitments for SaaS transitions. During the quarter, the Company signed a new agreement with a Japanese pharmaceutical and biotechnology company, one of the 40th largest in the world. Model N expanded relationships with Akorn Pharmaceuticals and one of the world’s largest pharmaceutical companies based in Germany. Also in the quarter, four long-time Model N customers committed to SaaS transitions, including Abbott Diagnostics Division, AstraZeneca plc, ConMed Corporation and Stryker Orthopaedics.
- High Tech Vertical Gains Momentum with New and Existing Customers – In the first quarter, Model N demonstrated growing traction in the High Tech vertical with the addition of Solidigm Technology, a global provider of NAND flash technology that was recently spun out of Intel. We also expanded our relationships with Advanced Micro Devices, Diodes Incorporated, Marvell Technology, Inc. and Western Digital, among several others.
- New Product Introduction – In February 2022, Model N launched State Price Transparency Management, a new SaaS solution for pharmaceutical and biotech companies, designed to meet the fast-growing demands for state price transparency mandates.
- Continued Platform Innovation – During Q1, Model N introduced its Fall 2021 product releases which continue to drive continuous innovation and new operational efficiencies on behalf of the company’s customers. The company’s semi-annual update to its flagship product, Revenue Cloud, incorporates several upgrades and new features for life sciences companies and for high-tech manufacturers, including enhanced compliance, a new mobile experience, and upgraded analytics.
First Quarter 2022 Financial Highlights
- Revenues: Total revenues were $51.5 million, an increase of 21% from the first quarter of fiscal year 2021. Subscription revenues were $38.1 million, an increase of 21% from the first quarter of fiscal year 2021. Business Services, acquired from Deloitte, contributed $5.8 million in total revenues for the first quarter of fiscal year 2022.
- Gross Profit: Gross profit was $28.9 million, an increase of 13% from the first quarter of fiscal year 2021. Gross margin was 56% compared to 60% for the first quarter of fiscal year 2021. Non-GAAP gross profit was $31.1 million, an increase of 15% from the first quarter of fiscal year 2021. Non-GAAP gross margin was 60% compared to 63% for the first quarter of fiscal year 2021. Subscription gross margin was 63% compared to 71% for the first quarter of fiscal year 2021. Non-GAAP subscription gross margin was 68% compared to 74% for the first quarter of fiscal year 2021. Both GAAP and Non-GAAP gross margins for the first quarter of fiscal year 2022 were impacted by the revenue mix coming from the acquisition of Business Services.
- GAAP Income (Loss) and Non-GAAP Income from Operations: GAAP loss from operations was $(2.0) million compared to income from operations of $(1.3) million for the first quarter of fiscal year 2021. Non-GAAP income from operations was $7.0 million, a decrease of (5)% from the first quarter of fiscal year 2021.
- GAAP Net Loss: GAAP net loss was $(6.3) million compared to a net loss of $(5.2) million for the first quarter of fiscal year 2021. GAAP basic and diluted net loss per share attributable to common stockholders was $(0.17) based upon weighted average shares outstanding of 36.2 million compared to net loss per share of $(0.15) for the first quarter of fiscal year 2021 based upon weighted average shares outstanding of 34.9 million.
- Non-GAAP Net Income: Non-GAAP net income was $5.4 million, an decrease of (8)% from the first quarter of fiscal year 2021. Non-GAAP net income per diluted share was $0.15 based upon diluted weighted average shares outstanding of 36.6 million compared to non-GAAP net income per diluted share of $0.16 for the first quarter of fiscal year 2021 based upon diluted weighted average shares outstanding of 36.0 million.
- Adjusted EBITDA: Adjusted EBITDA was $7.2 million, a decrease of (4)% from the first quarter of fiscal year 2021.
A reconciliation of GAAP to non-GAAP financial measures has been provided in the financial tables included in this press release.
Guidance
As of February 8, 2022, we are providing guidance for the second quarter fiscal year 2022 and issuing guidance for the full fiscal year ending September 30, 2022.
|
(in $ millions, except per share) |
Second Quarter Fiscal 2022 |
Full Year Fiscal 2022 |
|
Total revenues |
51.0 – 51.5 |
212.0 – 214.5 |
|
Subscription revenues |
37.0 – 37.5 |
153.0 – 155.5 |
|
Non-GAAP income from operations |
3.8 – 4.3 |
23.0 – 25.0 |
|
Non-GAAP net income per share |
0.06 – 0.08 |
0.46 – 0.52 |
|
Adjusted EBITDA |
4.0 – 4.5 |
24.0 – 26.0 |
Quarterly Results Conference Call
Model N will host a conference call today at 2:00 PM Pacific Time (5:00 PM Eastern Time) to review the company’s financial results for the first quarter fiscal year 2022 ended December 31, 2021. The conference call can be accessed by dialing 877-407-4018 from the United States or +1-201-689-8471 internationally with reference to the company name and conference title, and a live webcast and replay of the conference call can be accessed from the investor relations page of Model N’s website at investor.modeln.com. Following the completion of the call through 11:59 p.m. ET on February 22, 2022, a telephone replay will be available by dialing 844-512-2921 from the United States or +1-412-317-6671, internationally, with recording access code 13725724.
About Model N
Model N enables life sciences and high tech companies to drive growth and market share, minimizing revenue leakage throughout the revenue lifecycle. With deep industry expertise and solutions purpose-built for these industries, Model N delivers comprehensive visibility, insight and control over the complexities of commercial operations and compliance. Its integrated cloud solution is proven to automate pricing, incentive and contract decisions to scale business profitably and grow revenue. Model N is trusted across more than 120 countries by the world’s leading pharmaceutical, medical technology, semiconductor, and high tech companies, including Johnson & Johnson, AstraZeneca, Stryker, Seagate Technology, Broadcom and Microchip Technology. For more information, visit www.modeln.com.
Forward-Looking Statements
This press release contains forward-looking statements including, among other things, statements regarding Model N’s first quarter and full year fiscal 2022 financial results, Model N’s profitability, future planned enhancements to our products and benefits from our products, and expected benefits from our acquisition. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” and similar expressions are intended to identify forward-looking statements. These forward-looking statements are subject to risks, uncertainties, and assumptions. If the risks materialize or assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. Risks include, but are not limited to: (i) delays in closing customer contracts; (ii) our ability to improve and sustain our sales execution; (iii) the timing of new orders and the associated revenue recognition; (iv) adverse changes in general economic or market conditions; (v) delays or reductions in information technology spending and resulting variability in customer orders from quarter to quarter; (vi) competitive factors, including but not limited to pricing pressures, industry consolidation, entry of new competitors and new applications and marketing initiatives by our competitors; (vii) our ability to manage our growth effectively; (viii) acceptance of our applications and services by customers; (ix) success of new products; (x) the risk that the strategic initiatives that we may pursue will not result in significant future revenues; (xi) changes in health care regulation and policy and tax in the United States and worldwide; (xii) our ability to retain customers; (xiii) adverse impacts on our business and financial condition due to COVID-19; and (xiv) the possibility that the expected benefits related to our acquisition may not materialize as expected and our ability to successfully integrate Deloitte’s life sciences pricing and contracting solutions business and underlying technology. Further information on risks that could affect Model N’s results is included in our filings with the Securities and Exchange Commission (“SEC”), including our most recent quarterly report on Form 10-Q and our annual report on Form 10-K for the fiscal year ended September 30, 2020, and any current reports on Form 8-K that we may file from time to time. Should any of these risks or uncertainties materialize, actual results could differ materially from expectations. Model N assumes no obligation to, and does not currently intend to, update any such forward-looking statements after the date of this release.
Non-GAAP Financial Measures
We have provided in this release financial information that has not been prepared in accordance with accounting standards generally accepted in the United States of America (“GAAP”). We use these non-GAAP financial measures internally in analyzing our financial results and believe they are useful to investors, as a supplement to GAAP measures, in evaluating our ongoing operational performance. We believe that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends, and in comparing our financial results with other companies in our industry, many of which present similar non-GAAP financial measures to investors.
Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures below. A reconciliation of our non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the financial statement tables included below in this press release.
Our reported results include certain non-GAAP financial measures, including non-GAAP gross profit, non-GAAP gross margin, non-GAAP subscription gross profit, non-GAAP subscription gross margin, non-GAAP income (loss) from operations, non-GAAP net income (loss), non-GAAP net income (loss) per share, and adjusted EBITDA. Non-GAAP gross profit excludes stock-based compensation expenses, amortization of intangible assets, and deferred revenue adjustments as they are often excluded by other companies to help investors understand the operational performance of their business. Non-GAAP income (loss) from operations excludes stock-based compensation expense, amortization of intangible assets, acquisition-related expense, and deferred revenue adjustments. Non-GAAP net income (loss) excludes stock-based compensation expense, amortization of intangible assets, acquisition-related expense, amortization of debt discount and issuance costs, and deferred revenue adjustments. Additionally, stock-based compensation expense varies from period to period and from company to company due to such things as valuation methodologies and changes in stock price. Adjusted EBITDA is defined as net loss, adjusted for depreciation and amortization, stock-based compensation expense, acquisition-related expense, deferred revenue adjustment, interest (income) expense, net, other (income) expenses, net, and provision for (benefit from) income taxes. Reconciliation tables are provided in this press release.
We have not reconciled guidance for non-GAAP financial measures to their most directly comparable GAAP measures because certain items that impact these measures are uncertain, out of our control and/or cannot be reasonably predicted or estimated, such as the difficulties of estimating certain items such as charges to stock-based compensation expense. Accordingly, a reconciliation of the non-GAAP financial measure guidance to the corresponding GAAP measures is not available without unreasonable effort.
|
Model N, Inc. Condensed Consolidated Balance Sheets (in thousands) |
|||||
|
|
As of |
|
As of |
||
|
Assets |
|
|
|
||
|
Current assets |
|
|
|
||
|
Cash and cash equivalents |
$ 155,513 |
|
|
$ 165,467 |
|
|
Funds held for customers |
592 |
|
|
316 |
|
|
Accounts receivable, net |
49,712 |
|
|
43,185 |
|
|
Prepaid expenses |
4,493 |
|
|
4,920 |
|
|
Other current assets |
7,287 |
|
|
8,442 |
|
|
Total current assets |
217,597 |
|
|
222,330 |
|
|
Property and equipment, net |
1,925 |
|
|
1,907 |
|
|
Operating lease right-of-use assets |
19,382 |
|
|
20,565 |
|
|
Goodwill |
65,665 |
|
|
65,665 |
|
|
Intangible assets, net |
43,386 |
|
|
45,394 |
|
|
Other assets |
8,533 |
|
|
7,929 |
|
|
Total assets |
$ 356,488 |
|
|
$ 363,790 |
|
|
Liabilities and Stockholders’ Equity |
|
|
|
||
|
Current liabilities |
|
|
|
||
|
Accounts payable |
$ 2,565 |
|
|
$ 4,802 |
|
|
Customer funds payable |
592 |
|
|
316 |
|
|
Accrued employee compensation |
10,596 |
|
|
24,662 |
|
|
Accrued liabilities |
3,640 |
|
|
4,719 |
|
|
Operating lease liabilities, current portion |
4,549 |
|
|
4,529 |
|
|
Deferred revenue, current portion |
58,032 |
|
|
57,431 |
|
|
Total current liabilities |
79,974 |
|
|
96,459 |
|
|
Long-term liabilities |
|
|
|
||
|
Long term debt |
126,957 |
|
|
124,301 |
|
|
Operating lease liabilities, less current portion |
16,116 |
|
|
17,229 |
|
|
Other long-term liabilities |
3,452 |
|
|
2,283 |
|
|
Total long-term liabilities |
146,525 |
|
|
143,813 |
|
|
Total liabilities |
226,499 |
|
|
240,272 |
|
|
Stockholders’ equity |
|
|
|
||
|
Common stock |
5 |
|
|
5 |
|
|
Preferred stock |
— |
|
|
— |
|
|
Additional paid-in capital |
393,278 |
|
|
380,528 |
|
|
Accumulated other comprehensive loss |
(1,218 |
) |
|
(1,205 |
) |
|
Accumulated deficit |
(262,076 |
) |
|
(255,810 |
) |
|
Total stockholders’ equity |
129,989 |
|
|
123,518 |
|
|
Total liabilities and stockholders’ equity |
$ 356,488 |
|
|
$ 363,790 |
|
|
|
|
|
|
||
|
Model N, Inc. Condensed Consolidated Statements of Operations (in thousands, except per share amounts) |
|||||
|
|
Three Months Ended December 31, |
||||
|
|
2021 |
|
2020 |
||
|
Revenues |
|
|
|
||
|
Subscription |
$ 38,088 |
|
|
$ 31,435 |
|
|
Professional services |
13,454 |
|
|
11,299 |
|
|
Total revenues |
51,542 |
|
|
42,734 |
|
|
Cost of revenues |
|
|
|
||
|
Subscription |
13,916 |
|
|
8,992 |
|
|
Professional services |
8,735 |
|
|
8,124 |
|
|
Total cost of revenues |
22,651 |
|
|
17,116 |
|
|
Gross profit |
28,891 |
|
|
25,618 |
|
|
Operating expenses |
|
|
|
||
|
Research and development |
11,427 |
|
|
8,697 |
|
|
Sales and marketing |
11,039 |
|
|
9,456 |
|
|
General and administrative |
8,439 |
|
|
8,787 |
|
|
Total operating expenses |
30,905 |
|
|
26,940 |
|
|
Income (loss) from operations |
(2,014 |
) |
|
(1,322 |
) |
|
Interest expense, net |
3,778 |
|
|
3,462 |
|
|
Other expenses (income), net |
100 |
|
|
130 |
|
|
Loss before income taxes |
(5,892 |
) |
|
(4,914 |
) |
|
Provision for (benefit from) income taxes |
374 |
|
|
239 |
|
|
Net loss |
$ (6,266 |
) |
|
$ (5,153 |
) |
|
Net loss per share: |
|
|
|
||
|
Basic and diluted |
$ (0.17 |
) |
|
$ (0.15 |
) |
|
Weighted average number of shares used in computing net loss per share: |
|
|
|
||
|
Basic and diluted |
36,223 |
|
|
34,936 |
|
|
|
|
|
|
||
|
Model N, Inc. Condensed Consolidated Statements of Cash Flows (in thousands) |
|||||
|
|
Three Months Ended December 31, |
||||
|
|
2021 |
|
2020 |
||
|
Cash Flows from Operating Activities |
|
|
|
||
|
Net loss |
$ (6,266 |
) |
|
$ (5,153 |
) |
|
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
||
|
Depreciation and amortization |
2,240 |
|
|
1,320 |
|
|
Stock-based compensation |
6,986 |
|
|
5,128 |
|
|
Amortization of debt discount and issuance costs |
2,655 |
|
|
2,357 |
|
|
Deferred income taxes |
158 |
|
|
60 |
|
|
Amortization of capitalized contract acquisition costs |
982 |
|
|
651 |
|
|
Other non-cash charges |
40 |
|
|
— |
|
|
Changes in assets and liabilities, net of acquisition |
|
|
|
||
|
Accounts receivable |
(6,499 |
) |
|
(233 |
) |
|
Prepaid expenses and other assets |
1,202 |
|
|
(602 |
) |
|
Accounts payable |
(2,229 |
) |
|
(422 |
) |
|
Accrued employee compensation |
(8,367 |
) |
|
(5,563 |
) |
|
Other current and long-term liabilities |
(1,542 |
) |
|
(878 |
) |
|
Deferred revenue |
955 |
|
|
3,114 |
|
|
Net cash provided by operating activities |
(9,685 |
) |
|
(221 |
) |
|
Cash Flows from Investing Activities |
|
|
|
||
|
Purchases of property and equipment |
(325 |
) |
|
(336 |
) |
|
Acquisition of business |
— |
|
|
(56,444 |
) |
|
Net cash used in investing activities |
(325 |
) |
|
(56,780 |
) |
|
Cash Flows from Financing Activities |
|
|
|
||
|
Proceeds from exercise of stock options and issuance of employee stock purchase plan |
72 |
|
|
26 |
|
|
Net changes in customer funds payable |
276 |
|
|
— |
|
|
Net cash provided by financing activities |
348 |
|
|
26 |
|
|
Effect of exchange rate changes on cash and cash equivalents |
(16 |
) |
|
1 |
|
|
Net increase (decrease) in cash and cash equivalents |
(9,678 |
) |
|
(56,974 |
) |
|
Cash and cash equivalents |
|
|
|
||
|
Beginning of period |
165,783 |
|
|
200,491 |
|
|
End of period |
$ 156,105 |
|
|
$ 143,517 |
|
|
|
|
|
|
||
|
Model N, Inc. |
||||||
|
Reconciliation of GAAP to Non-GAAP Operating Results |
||||||
|
(in thousands, except per share amounts) |
||||||
|
|
||||||
|
|
|
Three Months Ended September 30, |
||||
|
|
|
2021 |
|
2020 |
||
|
Reconciliation from GAAP net loss to adjusted EBITDA |
|
|
|
|
||
|
GAAP net loss |
|
$ (6,266 |
) |
|
$ (5,153 |
) |
|
Reversal of non-GAAP items |
|
|
|
|
||
|
Stock-based compensation expense |
|
6,986 |
|
|
5,128 |
|
|
Depreciation and amortization |
|
2,240 |
|
|
1,320 |
|
|
Acquisition-related expense |
|
— |
|
|
2,362 |
|
|
Interest expense, net |
|
3,778 |
|
|
3,462 |
|
|
Other expenses (income), net |
|
100 |
|
|
130 |
|
|
Provision for (benefit from) income taxes |
|
374 |
|
|
239 |
|
|
Adjusted EBITDA |
|
$ 7,212 |
|
|
$ 7,488 |
|
|
|
|
|
|
|
||
|
|
|
Three Months Ended September 30, |
||||
|
|
|
2021 |
|
2020 |
||
|
Reconciliation from GAAP gross profit to non-GAAP gross profit |
|
|
|
|
||
|
GAAP gross profit |
|
$ 28,891 |
|
|
$ 25,618 |
|
|
Reversal of non-GAAP expenses |
|
|
|
|
||
|
Stock-based compensation (a) |
|
1,479 |
|
|
1,177 |
|
|
Amortization of intangible assets (b) |
|
709 |
|
|
282 |
|
|
Non-GAAP gross profit |
|
$ 31,079 |
|
|
$ 27,077 |
|
|
Percentage of revenue |
|
60.3 |
% |
|
63.4 |
% |
|
|
|
|
|
|
||
|
|
|
Three Months Ended September 30, |
||||
|
|
|
2021 |
|
2020 |
||
|
Reconciliation from GAAP subscription gross profit to non-GAAP subscription gross profit |
|
|
|
|
||
|
GAAP subscription gross profit |
|
$ 24,172 |
|
|
$ 22,443 |
|
|
Reversal of non-GAAP expenses |
|
|
|
|
||
|
Stock-based compensation (a) |
|
858 |
|
|
523 |
|
|
Amortization of intangible assets (b) |
|
709 |
|
|
282 |
|
|
Non-GAAP subscription gross profit |
|
$ 25,739 |
|
|
$ 23,248 |
|
|
Percentage of subscription revenue |
|
67.6 |
% |
|
74.0 |
% |
|
|
|
Three Months Ended September 30, |
||||
|
|
|
2021 |
|
2020 |
||
|
Reconciliation from GAAP professional services gross profit to non-GAAP professional services gross profit |
|
|
|
|
||
|
GAAP professional services gross profit |
|
$ 4,719 |
|
|
$ 3,175 |
|
|
Reversal of non-GAAP expenses |
|
|
|
|
||
|
Stock-based compensation (a) |
|
621 |
|
|
654 |
|
|
Non-GAAP professional services gross profit |
|
$ 5,340 |
|
|
$ 3,829 |
|
|
Percentage of professional services revenue |
|
39.7 |
% |
|
33.9 |
% |
|
|
|
Three Months Ended September 30, |
||||
|
|
|
2021 |
|
2020 |
||
|
Reconciliation from GAAP operating income (loss) to non-GAAP operating income |
|
|
|
|
||
|
GAAP operating income (loss) |
|
$ (2,014 |
) |
|
$ (1,322 |
) |
|
Reversal of non-GAAP expenses |
|
|
|
|
||
|
Stock-based compensation (a) |
|
6,986 |
|
|
5,128 |
|
|
Amortization of intangible assets (b) |
|
2,008 |
|
|
1,172 |
|
|
Acquisition-related expense (c) |
|
— |
|
|
2,362 |
|
|
Non-GAAP operating income |
|
$ 6,980 |
|
|
$ 7,340 |
|
|
|
|
|
|
|
||
|
Numerator |
|
|
|
|
||
|
Reconciliation between GAAP net loss and non-GAAP net income |
|
|
|
|
||
|
GAAP net loss |
|
$ (6,266 |
) |
|
$ (5,153 |
) |
|
Reversal of non-GAAP expenses |
|
|
|
|
||
|
Stock-based compensation (a) |
|
6,986 |
|
|
5,128 |
|
|
Amortization of intangible assets (b) |
|
2,008 |
|
|
1,172 |
|
|
Acquisition-related expense (c) |
|
— |
|
|
2,362 |
|
|
Amortization of debt discount and issuance costs (d) |
|
2,655 |
|
|
2,357 |
|
|
Non-GAAP net income |
|
$ 5,383 |
|
|
$ 5,866 |
|
|
|
|
|
|
|
||
|
Denominator |
|
|
|
|
||
|
Reconciliation between GAAP and non-GAAP net income (loss) per share |
|
|
|
|
||
|
Shares used in computing GAAP net loss per share: |
|
|
|
|
||
|
Basic |
|
36,223 |
|
|
34,936 |
|
|
Diluted |
|
36,223 |
|
|
34,936 |
|
|
Shares used in computing non-GAAP net income per share |
|
|
|
|
||
|
Basic |
|
36,223 |
|
|
34,936 |
|
|
Diluted |
|
36,578 |
|
|
36,010 |
|
|
GAAP net loss per share |
|
|
|
|
||
|
Basic and diluted |
|
$ (0.17 |
) |
|
$ (0.15 |
) |
|
Non-GAAP net income per share |
|
|
|
|
||
|
Basic |
|
$ 0.15 |
|
|
$ 0.17 |
|
|
Diluted |
|
$ 0.15 |
|
|
$ 0.16 |
|
|
|
|
Three Months Ended September 30, |
||||
|
|
|
2021 |
|
2020 |
||
|
Amortization of intangibles assets recorded in the statements of operations |
|
|
|
|
||
|
Cost of revenues |
|
|
|
|
||
|
Subscription |
|
$ 709 |
|
$ 282 |
||
|
Professional services |
|
— |
|
— |
||
|
Total amortization of intangibles assets in cost of revenue (b) |
|
709 |
|
282 |
||
|
Operating expenses |
|
|
|
|
||
|
Research and development |
|
— |
|
— |
||
|
Sales and marketing |
|
1,299 |
|
890 |
||
|
General and administrative |
|
— |
|
— |
||
|
Total amortization of intangibles assets in operating expense (b) |
|
1,299 |
|
890 |
||
|
Total amortization of intangibles assets (b) |
|
$ 2,008 |
|
$ 1,172 |
||
|
|
|
|
|
|
||
|
|
|
Three Months Ended September 30, |
||||
|
|
|
2021 |
|
2020 |
||
|
Stock-based compensation recorded in the statements of operations |
|
|
|
|
||
|
Cost of revenues |
|
|
|
|
||
|
Subscription |
|
$ 858 |
|
$ 523 |
||
|
Professional services |
|
621 |
|
654 |
||
|
Total stock-based compensation in cost of revenue (a) |
|
1,479 |
|
1,177 |
||
|
Operating expenses |
|
|
|
|
||
|
Research and development |
|
1,281 |
|
1,131 |
||
|
Sales and marketing |
|
1,620 |
|
1,553 |
||
|
General and administrative |
|
2,606 |
|
1,267 |
||
|
Total stock-based compensation in operating expense (a) |
|
5,507 |
|
3,951 |
||
|
Total stock-based compensation (a) |
|
$ 6,986 |
|
$ 5,128 |
||
|
|
|
|
|
|
||
Use of Non-GAAP Financial Measures
To supplement our condensed consolidated financial statements presented on a GAAP basis, we use non-GAAP measures of adjusted EBITDA, gross profit, gross margin, income from operations, net income, weighted average shares outstanding and net income per share, which are adjusted to exclude stock-based compensation expense, amortization of intangible assets, acquisition-related expense, and amortization of debt discount and issuance costs and include dilutive shares where applicable. We believe these adjustments are appropriate to enhance an overall understanding of our past financial performance and also our prospects for the future. These adjustments to our current period GAAP results are made with the intent of providing both management and investors a more complete understanding of our underlying operating results and trends and our marketplace performance. The non-GAAP results are an indication of our baseline performance that are considered by management for the purpose of making operational decisions. In addition, these non-GAAP results are the primary indicators management uses as a basis for our planning and forecasting of future periods. The presentation of this additional information is not meant to be considered in isolation or as a substitute for operating income (loss), net loss or basic and diluted net loss per share prepared in accordance with generally accepted accounting principles in the United States. Non-GAAP financial measures are not based on a comprehensive set of accounting rules or principles and are subject to limitations.
While a large component of our expenses incurred in certain periods, we believe investors may want to exclude the effects of these items in order to compare our financial
Contacts
Investor Relations Contact:
Carolyn Bass
Market Street Partners
investorrelations@modeln.com
Media Contact:
Judith Rich
Model N, Inc.
516-884-6879
jrich@modeln.com
