MAJESCO REPORTS ACCELERATING MOMENTUM OF CLOUD SUBSCRIPTION REVENUE, RECORD QUARTERLY EBITDA AND STRONG TOTAL SALES GROWTH FOR THIRD QUARTER FISCAL 2020.
Cloud Subscription Revenue of $6.1m up 39% year over year
Third quarter total revenue of $37.2m
Third quarter adjusted EBITDA of $5.0m
Acquisition of InsPro Technologies a U.S. based life and annuity software provider
Majesco (NASDAQ: MJCO), a global provider of cloud insurance software solutions for insurance business transformation, today announced solid financial results for the fiscal 2020 third quarter that ended December 31, 2019.
'Our third quarter financial results reinforce the continuing momentum of our cloud subscription product focus', said Adam Elster, Majesco's CEO. 'Our product business now represents more than 40% of our total revenue. The number of cloud customers continues to grow with accelerating project go-lives, as our customers are benefitting from dramatically reduced project implementation timelines. These trends clearly demonstrate Majesco's ability to rapidly deliver time-to-value to our customers while providing a modern platform for insurers to innovate new products and business models. This is the foundation for our long-term growth as we acquire, adopt and expand customers.'
'We are thrilled to announce the acquisition of InsPro Technologies, further demonstrating our product focus in the Life and Annuity market. InsPro has strong relationships with top tier customers, an experienced team, and a strong technology footprint. In addition, this acquisition expands our partnership with Capgemini as their existing TPA business is based on this platform,' concluded Mr. Elster.
Industry veteran, John Heidelberger, InsPro Technologies' Customer Delivery Leader said, 'We are delighted to join the Majesco family. We looked long and hard for a partner that shared our view of the digital future for group and individual insurance lines. As a former insurance industry CIO and long-term practitioner, I'm confident our policy processing experience coupled with Majesco's significant investments in digital solutions will allow us to offer our combined customer base a wider selection of solutions while providing even greater opportunities for our committed team.'
Key Revenue Drivers
Revenue from cloud-based customers was $16.3 million (43.8% of total revenue) for the quarter ended December 31, 2019.
Total number of cloud customers is now 63.
Total product revenue was 41.4% of total revenue for the quarter ended December 31, 2019.
Majesco's 12-month order backlog as of December 31, 2019 was $101.7 million.
Two new core platform cloud deals added from existing customers for the quarter ended December 31, 2019.
Third Quarter 2020 Financial Results
Revenue was $37.2 million, compared to $35.8 million for the same period last fiscal year.
Gross profit was $17.9 million (48.0% of revenue), compared to $17.5 million for the same period last fiscal year.
Research and development (R&D) expenses were $4.7 million (12.7% of revenue), compared to $4.9 million for the same period last fiscal year.
Selling, general and administrative (SG&A) expenses were $10.0 million (27.0% of revenue), compared to $10.3 million for the same period last fiscal year.
Adjusted EBITDA was $5.0 million (13.4% of revenue), compared to $4.8 million for the same period last fiscal year.
Net income was $3.9 million, or $0.09 per diluted share.
EBITDA and Adjusted EBITDA are non-GAAP measures. Reconciliation tables of EBITDA and Adjusted EBITDA as used in this press release to GAAP are included in the financial section of this press release.
2020 Financial Results for the Nine Months ended December 31, 2019
Revenue was $108.5 million, compared to $104.1 million for the same period last fiscal year.
Gross profit was $53.4 million (49.2% of revenue), compared to $50.8 million for the same period last fiscal year.
Research and development (R&D) expenses were $14.6 million (13.5% of revenue), compared to $14.4 million for the same period last fiscal year.
Selling, general and administrative (SG&A) expenses were $31.7 million (29.2% of revenue), compared to $29.5 million for the same period last fiscal year.
Adjusted EBITDA was $12.9 million (11.8% of revenue), compared to $12.6 million for the same period last fiscal year.
Net income was $6.1 million, or $0.14 per diluted share.
EBITDA and Adjusted EBITDA are non-GAAP measures. Reconciliation tables of EBITDA and Adjusted EBITDA as used in this press release to GAAP are included in the financial section of this press release.
Balance Sheet Highlights
Majesco had no significant debt and cash equivalents (including short term investments) of $45.5 million at December 31, 2019, compared to net cash of $11.5 million for the same period last fiscal year.
Conference Call and Webcast Information
Majesco management will conduct a live teleconference to discuss Majesco's fiscal 2020 third quarter at 5:00 pm ET on Monday, February 3, 2020. Anyone interested in participating should call 855-327-6837 if calling from the U.S., or 631-891-4304 if dialing internationally. Please use passcode: 10008458 A replay will be available until Monday, February 17, 2020, which can be accessed by dialing 844-512-2921 within the U.S. and 412-317-6671 if dialing internationally. Please use passcode: 10008458 to access the replay. In addition, the call will be webcast and will be available on the Company's website at www.majesco.com or by clicking here.
Use of Non-GAAP Financial Measures
In evaluating our business, we consider and use EBITDA as a supplemental measure of operating performance. We define EBITDA as earnings before interest, taxes, depreciation and amortization. We present EBITDA because we believe it is frequently used by securities analysts, investors and other interested parties as a measure of financial performance. We define Adjusted EBITDA as EBITDA before stock-based compensation, a reversal of accrual for contingent liability and mergers and acquisitions expenses.
The terms EBITDA and Adjusted EBITDA are not defined under U.S. generally accepted accounting principles, or U.S. GAAP, and are not a measure of operating income, operating performance or liquidity presented in accordance with U.S. GAAP. EBITDA and Adjusted EBITDA have limitations as an analytical tool, and when assessing Majesco's operating performance, investors should not consider EBITDA or Adjusted EBITDA in isolation, or as a substitute for net income (loss) or other consolidated income statement data prepared in accordance with U.S. GAAP. Among other things, EBITDA and Adjusted EBITDA do not reflect our actual cash expenditures. Other companies may calculate similar measures differently than Majesco, limiting their usefulness as comparative tools. We compensate for these limitations by relying on U.S. GAAP results and using EBITDA and Adjusted EBITDA only as supplemental.
About Majesco
Majesco (NASDAQ: MJCO) provides technology, expertise, and leadership that helps insurers modernize, innovate and connect to build the future of their business - and the future of insurance - at speed and scale. Our platforms connect people and businesses to insurance in ways that are innovative, hyper-relevant, compelling and personal. Over 200 insurance companies worldwide in P&C, L&A and Group Benefits are transforming their businesses by modernizing, optimizing or creating new business models with Majesco. Our market-leading solutions include CloudInsurer P&C Core Suite (Policy, Billing, Claims); CloudInsurer L&A and Group Core Suite (Policy, Billing, Claims); Digital1st Insurance with Digital1st eConnect, Digital1st EcoExchange and Digital1st Platform - a cloud-native, microservices and open API platform; Distribution Management, Data and Analytics and an Enterprise Data Warehouse. For more details on Majesco, please visit www.majesco.com.
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