QAD, a Santa Barbara-based cloud software company for the manufacturing industry, beat analysts’ expectations with its earning for the first quarter of its 2021-22 fiscal year on May 26.
QAD’s net income for the quarter was $1.8 million, or 7 cents per share, compared to a loss of $410,000 in the same quarter a year ago. This is about 5% more than what analysts at Zacks’ Consensus Estimate had projected for QAD in the first quarter.
QAD’s stock gained 4.1% on May 27, the first day of trading after the earnings announcement, to close at $70.41.
QAD saw revenue in the first quarter of the fiscal year grow from $74.1 million a year ago to $83 million this year. The rise in revenue could be attributed to growth in the company’s subscription package, which grew 19% from the same quarter a year ago, accounting for 44% of the total revenue generated in the first quarter of 2021-22. QAD generated $36.7 million in subscription revenue, up from $30.8 million in the same quarter a year ago.
Licensing revenue for the company was up to $3.1 million in the first quarter of 2022, while professional services revenue totaled $16.6 million and maintenance revenue was at $26.6 million.
Each sector’s revenue total was up from the same quarter a year ago.
“Improvements in subscription and professional services margins over last year’s Q1 contributed to another good performance from a bottom line perspective and put us ahead of our guided profitability number,” CEO Anton Chilton said during the company’s earnings call.
QAD also closed 33 new cloud deals in the first quarter of 2022, including 23 for new customers. The company closed 14 new cloud deals in the same quarter last year.
“With those partners focused on cloud sales or supporting our professional services capability, this represents a significant step in our strategic vision and expands our ecosystem around the world,” Chilton said.
On the May 26 conference call, QAD executives also discussed the company’s two latest acquisitions, both of which “fill out requirements that customers are requesting and help with our competitive positioning,” said Pam Lopker, QAD’s founder and president.
QAD acquired the German company Allocation Network in December 2020 to “complete our supply side, supply chain, providing a single place for the manufacturer,” Lopker said.
And in the first quarter of 2021-22, QAD announced the acquisition of FTZ, a leader in foreign trade zone software based in Alabama.
“Combining FTZ with QAD precision, global trade and transportation execution division’s portfolio capabilities strengthens our competitive offering and provides the ability to expand FTZ globally,” Lopker said. “We see many synergies in the cross-selling and installed bases and have been building our funnel to expand the QAD precision FTZ solution to free trade zones around the world.”
QAD ended the quarter with $153 million in assets including cash and cash equivalents, up from $142 million at the same time last year.