Total Fiscal Year Revenue Grew 14% Year-over-Year

SaaS ARR Grew 20% Year-over-Year

SAN MATEO, Calif. — (BUSINESS WIRE) — November 9, 2023 — Model N, Inc. (NYSE: MODN), the leader in cloud revenue management solutions, today announced financial results for the fourth quarter and fiscal year 2023 ended September 30, 2023.

“2023 was a pivotal year in our business model transition as we continued our path to convert our remaining customers to the cloud. During the fourth quarter, we signed five SaaS transitions, closed numerous deals in our customer base, and saw strong pipeline growth for new logos. Our professional services team continues to deliver stellar results including generating best-in-class service margins,” stated Jason Blessing, president and chief executive officer of Model N.

Recent Company Highlights

• Model N launched Channel Collaboration, a new self-service portal for high-tech manufacturers and their channel partners. Channel Collaboration provides high-tech manufacturers and their partners real-time visibility into channel data, enabling faster and more informed business decisions while maintaining channel compliance in a complex global market.

• Model N released new product innovations to ensure compliance and optimize revenue geared towards the increasingly complex regulatory environment for global pharma manufacturers.

Fourth Quarter 2023 Financial Highlights

• Revenues: Total revenues were $64.0 million, an increase of 10% from the fourth quarter of fiscal year 2022. Subscription revenues were $46.4 million, an increase of 8% from the fourth quarter of fiscal year 2022.

• Gross Profit: Gross profit was $36.9 million, an increase of 13% from the fourth quarter of fiscal year 2022. Gross margin was 58% and 56% for the fourth quarter of fiscal year 2023 and 2022, respectively. Non-GAAP gross profit was $39.6 million, an increase of 9% from the fourth quarter of fiscal year 2022. Non-GAAP gross margin was 62% for the fourth quarter of fiscal year 2023 and 2022. Subscription gross margin was 66% for the fourth quarter of fiscal year 2023 compared to 64% for the fourth quarter of fiscal year 2022. Non-GAAP subscription gross margin was 69% and 70% for the fourth quarter of fiscal year 2023 and 2022, respectively.

• GAAP Loss and Non-GAAP Income from Operations: GAAP loss from operations was $0.4 million compared to loss from operations of $4.9 million for the fourth quarter of fiscal year 2022. Non-GAAP income from operations was $10.8 million, an increase of 35% from the fourth quarter of fiscal year 2022.

• GAAP Net Income: GAAP net income was $0.6 million compared to a net loss of $8.1 million for the fourth quarter of fiscal year 2022. GAAP diluted net income per share attributable to common stockholders was $0.02 based upon weighted average shares outstanding of 38.9 million compared to net loss per share of $0.22 for the fourth quarter of fiscal year 2022 based upon weighted average shares outstanding of 37.2 million.

• Non-GAAP Net Income: Non-GAAP net income was $12.2 million, an increase of 59% from the fourth quarter of fiscal year 2022. Non-GAAP net income per diluted share was $0.31 based upon diluted weighted average shares outstanding of 38.9 million compared to non-GAAP net income per diluted share of $0.20 for the fourth quarter of fiscal year 2022 based upon diluted weighted average shares outstanding of 37.5 million.

• Adjusted EBITDA: Adjusted EBITDA was $11.0 million, an increase of 34% from the fourth quarter of fiscal year 2022. Adjusted EBITDA margin was 17% compared to 14% for the fourth quarter of fiscal year 2022.

• SaaS ARR and SaaS Net Dollar Retention: SaaS ARR reached $131.2 million, representing growth of 20% year-over-year. Trailing 12-month SaaS net dollar retention decreased to 118.2% from 129% in the prior quarter.

Fiscal Year 2023 Financial Highlights

• Revenues: Total revenues were $249.5 million, an increase of 14% from fiscal year 2022. Subscription revenues were $181.4 million, an increase of 14% from fiscal year 2022.

• Gross Profit: Gross profit was $141.2 million, an increase of 16% from fiscal year 2022. Gross margin was 57% compared to 56% for fiscal year 2022. Non-GAAP gross profit was $152.6 million, an increase of 14% from fiscal year 2022. Non-GAAP gross margin was 61% for the fiscal year 2023 and 2022. Subscription gross margin was 65% compared to 63% for fiscal year 2022. Non-GAAP subscription gross margin was 69% compared to 68% for fiscal year 2022.

• GAAP Loss and Non-GAAP Income from Operations: GAAP loss from operations was $4.1 million compared to $13.0 million for fiscal year 2022. Non-GAAP income from operations was $41.8 million, an increase of 34% from the fiscal year 2022.

• GAAP Net Loss: GAAP net loss was $33.9 million compared to $28.6 million for fiscal year 2022. GAAP basic and diluted net loss per share attributed to common stockholders was $0.89 based upon weighted average shares outstanding of 38.1 million compared to net loss per share of $0.78 based upon weighted average shares outstanding of 36.7 million for the fiscal year 2022.

• Non-GAAP Net Income: Non-GAAP net income was $43.0 million, an increase of 62% from fiscal year 2022. Non-GAAP net income per diluted share was $1.11 based upon diluted weighted average shares outstanding of 38.8 million compared to non-GAAP net income per diluted share of $0.72 based upon diluted weighted average shares outstanding of 37.0 million for the fiscal year 2022.

• Adjusted EBITDA: Adjusted EBITDA was $42.9 million, an increase of 34% from the fiscal year 2022.

• Cash and Cash Flows: Cash and cash equivalents as of September 30, 2023 totaled $301.4 million. Net cash provided by operating activities was $23.6 million for fiscal year 2023 compared with $25.3 million in fiscal year 2022. Free cash flow was $23.2 million for fiscal year 2023 compared with $24.3 million in the fiscal year 2022.

A reconciliation of GAAP to non-GAAP financial measures has been provided in the financial tables included in this press release.

Guidance

As of November 9, 2023, we are providing guidance for the first quarter of the fiscal year 2024 ending December 31, 2023 and the full fiscal year ending September 30, 2024.