SAN MATEO, Calif. — (BUSINESS WIRE) — February 4, 2020 — Model N, Inc. (NYSE: MODN), the leading provider of cloud revenue management solutions for life sciences and high tech companies, today announced financial results for the first quarter fiscal year 2020 ended December 31, 2019.

“Our first quarter results exceeded our revenue and profitability guidance, and builds on the solid foundation we created over the course of fiscal year 2019,” said Jason Blessing, president and chief executive officer of Model N. “I’m very pleased with our commercial performance. It reflects the focus of our company, the continued maturation of our go-to-market and delivery teams, and emphasis on customer success. I believe our strong persistent execution sets us up well to deliver continued growth and profitability.”

Recent Highlights

• Top Multinational Life Sciences Companies Complete Cloud Transition – Our success in life sciences continues to accelerate as Biogen and Novo Nordisk completed their transitions to Model N’s Revenue Cloud. Our cloud platform is designed to provide the agility to adapt quickly to new government regulations, the flexibility to launch new business units at scale, significantly enhanced performance levels due to cloud architecture and a lower total cost of ownership.
• Multiple European Life Sciences Companies Go-live – During the quarter, we benefitted from a vibrant European market as life sciences companies Ferring International, Servier Monde, Mölnlycke Health Care went live with Global Tender Management and Global Pricing Management with multi-country roll-outs. The companies will use Model N’s products to help ensure regulatory compliance, pricing transparency and tendering excellence in the international markets.
• Leading Global Generics and Specialty Branded Pharmaceutical Company Transitioning to Model N’s Revenue Cloud – A leading pharmaceutical company and long-time customer signed a deal to transition to Model N’s Revenue Cloud platform as part of its strategy to centralize and to unify its global enterprise using technology enhancements and productivity improvements.
• Revenue Cloud Winter Release Delivers Innovation to Improve Channel Sales – High tech customers will benefit from machine learning which improves quoting and pricing across a broad and diverse set of channels. Life sciences customers will benefit from bots and other technologies that are designed to enhance the quality of their market access programs. The technology is designed to provide customers with enhanced levels of scale, speed and transparency.

First Quarter 2020 Financial Highlights

• Revenues: Subscription revenues were $28.2 million, an increase of 12% from the first quarter of fiscal year 2019. Total revenues were $38.4 million, an increase of 9% from the first quarter of fiscal year 2019.
• Gross Profit: Gross profit was $22.0 million, an increase of 19% from the first quarter of fiscal year 2019. Gross margin was 57% compared to 53% for the first quarter of fiscal year 2019. Non-GAAP gross profit was $23.5 million, an increase of 18% from the first quarter of fiscal year 2019. Non-GAAP gross margin was 61% compared to 57% for the first quarter of fiscal year 2019. Subscription gross margin was 69% compared to 65% for the first quarter of fiscal year 2019. Non-GAAP subscription gross margin was 72% compared to 69% for the first quarter of fiscal year 2019.
• GAAP Loss and Non-GAAP Income from Operations: GAAP loss from operations was $(2.5) million, an improvement of 21% from the first quarter of fiscal year 2019. Non-GAAP income from operations was $4.6 million, an increase of 87% from the first quarter of fiscal year 2019.
• Net Loss: GAAP net loss was $(3.0) million, an improvement of 37% from the first quarter of fiscal year 2019. GAAP basic and diluted net loss per share attributable to common stockholders was $(0.09) based upon weighted average shares outstanding of 33.1 million, as compared to net loss per share of $(0.15) for the first quarter of fiscal year 2019 based upon weighted average shares outstanding of 31.5 million.
• Non-GAAP Net Income: Non-GAAP net income was $4.1 million, an increase of 379% from the first quarter of fiscal year 2019. Non-GAAP net income per diluted share was $0.12 based upon diluted weighted average shares outstanding of 34.6 million, as compared to non-GAAP net income per diluted share of $0.03 for the first quarter of fiscal year 2019 based upon diluted weighted average shares outstanding of 33.2 million.
• Adjusted EBITDA: Adjusted EBITDA was $4.8 million, an increase of 64% from the first quarter of fiscal year 2019.

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 4, 2020, we are providing guidance for the second quarter of fiscal year 2020 and the full fiscal year ending September 30, 2020.

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 2020 ended December 31, 2019. 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 18, 2020, 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 13697957.