QAD Inc. Class A (NASDAQ: QADA), a leading provider of flexible, cloud-based enterprise software and services for global manufacturing companies, stock lost over 9.3% on 23rd august, 2018 pre-market session on disappointing the second quarter 2019.
The group’s sales funnel is relatively flat against last year while cloud currently accounts 70% against 60% last year. The annual recurring revenue and the subscription revenue growth slowed which also hurt the stock sentiment.
On the other hand, QAD’s cash and equivalents balance was $139.5 million at July 31, 2018, versus $147 million at January 31, 2018. Cash provided by operations was $9.1 million for the first six months of FY19, compared with $7.6 million for the first six months of FY18.
QADA in the second quarter of FY 19 has reported the adjusted earnings per share of 20 cents, while adjusted revenue growth was 11 percent to $84.5 million in the second quarter of FY 18. Subscription revenue, which grew 29 percent year-over-year, was 27 percent of total revenue for the second quarter of FY19, a two-percentage point improvement over the first quarter of FY19. The company’s Subscription gross margin is of 63 percent, versus 57 percent. License revenue of $5.6 million in the second quarter, compared with $6.7 million. For the second quarter 2019, Professional services revenue of $26 million, versus $19.8 million and Maintenance and other revenue of $30.6 million, compared with $32 million.
Moreover, during the second quarter 2018, the company has received orders from 20 customers representing more than $500,000 each in combined license, subscription, maintenance and professional services billings, including seven orders exceeding $1 million. QADA has also received license or cloud orders from companies across QAD’s six vertical markets, including: Adient Limited, Amcor Ltd., ARC France SAS, Argon Medical Devices, Caterpillar Inc., CoorsTek, Inc., Essilor International, GKN Plc, Harada Industry Co. Ltd., Haulotte Groupe SA, Irvin Automotive Products, Koninklijke A-ware Food Group B.V., and Visteon Corporation
QADA has launched a new Indonesian subsidiary, PT QAD Asia Indonesia, and entered into a definitive agreement to acquire the business assets of PT Iris Sistem Inforindo (PT Iris). The acquisition is scheduled to close by Aug. 31.
Qad has raised its guidance for the FY 19 to project revenue to be in the range of US$332mln to US$336mln as well as non-GAAP pre-tax income in the range of US$16mln to US$19mln.
For the fiscal third quarter of 2019, Qad expects revenue to be in the range of US$80mln to US$82mln, which includes about US$22.9mln to US$23.4mln worth of subscription revenue.