Majesco Announces Record Fourth Quarter and Full Year Fiscal 2019 Results
Bill Sinn | May 07, 2019
Majesco (NASDAQ: MJCO), a global provider of cloud insurance platform software, today announced strong financial results for the fiscal 2019 fourth quarter and full year that ended March 31, 2019.
“We had a great year for revenue, EBITDA and new sales,” stated Adam Elster, Majesco’s CEO. “Companies of all sizes are turning to Majesco to partner with us on their digital transformation journey. I am more excited than ever about the opportunity ahead, the future of Majesco and the insurance industry. Our relentless focus on delivering innovation and customer success has fueled our growth and solidified our leadership.”
“I am excited by our momentum, and as we look to fiscal 2020 we remain committed to leveraging our technology, expertise and leadership to help insurers modernize, innovate and connect to build the future of their business – and the future of the insurance industry – at speed and scale.”
Key Revenue Drivers
- Revenue from cloud-based customers was $56.8 million (40.6% of total revenue) for the year ended March 31, 2019, up 52.6% as compared to $37.2 million (30.3% of total revenue) during the year ended March 31, 2018.
- Total number of cloud customers is now 54.
- Total recurring revenue was at $45.8 million (32.8% of total revenue) for the year ended March 31, 2019, up 38.8% as compared to $33.0 million (26.8% of total revenue) for the year ended March 31, 2018.
- Majesco’s 12-month order backlog as of March 31, 2019 was $96.9 million, up 13.5% from $85.4 million on December 31, 2018.
- The company added 19 new clients organically for the year ended March 31, 2019.
Fourth Quarter 2019 Financial Results
- Revenue was $36.9 million, compared to $32.9 million for the same period last fiscal year. The 11.9% increase in revenue was driven by footprint expansion in existing accounts, new logos, and the acquisition of Exaxe.
- Gross profit was $17.9 million (48.5% of revenue), compared to $15.4 million (46.9% of revenue) for same period last fiscal year. The 160-basis point increase in gross profit margin was driven by a higher margin mix of revenue.
- Research and development (R&D) expenses were $5.0 million (13.5% of revenue), compared to $4.6 million (13.9% of revenue) for the same period last fiscal year. Investments in R&D were focused on Majesco’s product roadmap to support next generation insurance solutions and digital offerings.
- Selling, general and administrative (SG&A) expenses were $10.5 million (28.5% of revenue), compared to $10.0 million (30.4% of revenue) for the same period last fiscal year. The reduction in SG&A as a percent of revenue reflects improved operating leverage.
- Adjusted EBITDA was $4.4 million (12.0% of revenue), compared to $2.9 million (8.8% of revenue) for the same period last fiscal year.
- Net income was $1.2 million, or $0.03 per diluted share as compared to net income of $0.4 million, or $0.01 per diluted share, for the same period last fiscal year. Net income was significantly higher due to increases in revenue and profitability.
Fiscal Year 2019 Financial Highlights
- Revenue for fiscal 2019 was $139.9 million, compared to $123.0 million last fiscal year. The 13.7% increase in revenue was driven by expansion within existing accounts, new logos, and the acquisition of Exaxe.
- Gross profit was $68.5 million (49.0% of revenue) for fiscal 2019, compared to $55.9 million (45.4% of revenue) last fiscal year. The 360 basis point increase in gross profit margin was driven by a higher margin mix of revenue.
- R&D expenses were $19.3 million (13.8% of revenue) for fiscal 2019, compared to $17.3 million (14.0% of revenue) last fiscal year.
- SG&A expenses were $39.1 million (28.0% of revenue) for fiscal 2019, compared to $41.0 million (33.4% of revenue) last fiscal year. The decrease in SG&A was driven by improved control of G&A expenses and higher operating efficiencies.
- Adjusted EBITDA for fiscal 2019 was $17.2 million (12.3% of revenue), compared to $5.7 million (4.6% of revenue) last fiscal year.
- Net income for fiscal 2019 was $6.9 million or $0.18 per diluted share, compared to a net loss of $5.0 million or $(0.14) per share last fiscal year.
- 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 cash and cash equivalents of $39.4 million at March 31, 2019, compared to $14.5 million at December 31, 2018, and $9.2 million as at March 31, 2018.
- Majesco was debt free at March 31, 2019, compared to $13.7 million in total debt at December 31, 2018, and $13.6 million at March 31, 2018.
- The company announced the acquisition of the India based insurance software business from its parent company, Majesco Limited. The transaction received shareholder approval on April 30, 2019, and the acquisition is expected to close in mid-May.
- On February 25, 2019, Majesco completed a rights offering pursuant to which it received approximately $43.5 million in gross proceeds from the sale of 6,123,463 shares of the company’s common stock to shareholders who exercised their subscription rights (including both basic and over-subscriptions) in the rights offering.
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