On June 6, 2024, American Software Inc (AMSWA, Financial) released its 8-K filing detailing the financial results for the fourth quarter and fiscal year 2024. American Software Inc develops enterprise management and supply chain-related software and services, primarily generating revenue from its Supply Chain Management (SCM) segment.
Performance Overview
American Software Inc (AMSWA, Financial) reported a mixed performance for Q4 and fiscal year 2024. The company saw an 8% increase in subscription fees for Q4, reaching $14.1 million, compared to $13.0 million in the same period last year. However, total revenues for the quarter decreased by 5% to $25.4 million, missing the analyst estimate of $25.12 million. This decline was primarily due to a reduction in license fees, services, and maintenance fee revenue.
Key Financial Highlights
| Metric | Q4 2024 | Q4 2023 | Change |
|---|---|---|---|
| Subscription Fees | $14.1M | $13.0M | 8% |
| Total Revenues | $25.4M | $26.8M | -5% |
| GAAP Net Earnings | $2.3M | $2.9M | -21% |
| Adjusted Net Earnings | $4.0M | $4.2M | -4% |
| EBITDA | $1.5M | $3.0M | -50% |
Challenges and Achievements
Despite the growth in subscription fees, American Software Inc faced several challenges. Maintenance revenues decreased by 9% to $7.4 million, and professional services and other revenues fell by 23% to $3.7 million. The decline in these areas was attributed to lower seasonal project work and outsourcing of services.
On the positive side, the company reported a 10% increase in subscription fees for the fiscal year, reaching $55.3 million. Additionally, recurring revenue streams for Maintenance and Subscriptions accounted for 85% of total revenues in Q4, up from 79% in the same period last year.
Financial Metrics and Analysis
American Software Inc's operating earnings for Q4 were $0.7 million, down from $2.2 million in the same period last year. GAAP net earnings from continuing operations were $2.3 million, or $0.07 per fully diluted share, compared to $2.9 million, or $0.09 per fully diluted share, in Q4 2023. Adjusted net earnings from continuing operations were $4.0 million, or $0.12 per fully diluted share, consistent with the previous year.
The company's EBITDA from continuing operations was $1.5 million, a significant decrease from $3.0 million in Q4 2023. Adjusted EBITDA also declined to $3.1 million from $4.3 million in the same period last year.
Commentary and Outlook
“Fiscal 2024 was a pivotal year for our company, as we divested several non-core assets, introduced next-generation AI-first supply chain planning solutions, and reached a definitive agreement to eliminate our dual class structure,” said Allan Dow, CEO and President of American Software.
Looking ahead, American Software Inc anticipates total revenues of $104.0 million to $108.0 million for fiscal year 2025, with total recurring revenues of $87.0 million to $89.0 million. The company expects adjusted EBITDA to range between $15.0 million and $16.4 million.
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Explore the complete 8-K earnings release (here) from American Software Inc for further details.
