[PART I—FINANCIAL INFORMATION](index=4&type=section&id=Part%20I%E2%80%94Financial%20Information) This section presents the unaudited financial information for American Software, Inc. for the quarter ended July 31, 2022 [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements for American Software, Inc., including the balance sheets, statements of operations, shareholders' equity, and cash flows, along with detailed notes on accounting policies, revenue recognition, acquisitions, and other financial disclosures for the quarter ended July 31, 2022 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This statement provides a snapshot of the company's financial position, including assets, liabilities, and equity | Metric | July 31, 2022 (in thousands) | April 30, 2022 (in thousands) | | :----- | :--------------------------- | :---------------------------- | | Total Assets | $187,599 | $192,835 | | Cash and cash equivalents | $97,878 | $110,690 | | Total Liabilities | $54,418 | $59,859 | | Total Shareholders' Equity | $133,181 | $132,976 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This statement details the company's revenues, expenses, and net earnings over the reporting period | Metric | Three Months Ended July 31, 2022 (in thousands) | Three Months Ended July 31, 2021 (in thousands) | % Change YoY | | :----- | :---------------------------------------------- | :---------------------------------------------- | :----------- | | Total Revenue | $31,296 | $29,271 | 7% | | Subscription fees | $12,062 | $9,788 | 23% | | Operating Income | $2,557 | $1,773 | 44% | | Net Earnings | $2,133 | $2,947 | (28)% | | Basic EPS | $0.06 | $0.09 | (33)% | | Diluted EPS | $0.06 | $0.09 | (33)% | [Condensed Consolidated Statements of Shareholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders%27%20Equity) This statement outlines changes in the company's equity accounts over the reporting period | Metric | July 31, 2022 (in thousands) | April 30, 2022 (in thousands) | | :----- | :--------------------------- | :---------------------------- | | Total Shareholders' Equity | $133,181 | $132,976 | | Net earnings | $2,133 | N/A | | Dividends declared | $(3,705) | N/A | | Stock-based compensation | $1,306 | N/A | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement summarizes cash flows from operating, investing, and financing activities | Cash Flow Activity | Three Months Ended July 31, 2022 (in thousands) | Three Months Ended July 31, 2021 (in thousands) | | :----------------- | :---------------------------------------------- | :---------------------------------------------- | | Net cash (used in) provided by operating activities | $(1,518) | $3,034 | | Net cash used in investing activities | $(8,072) | $(302) | | Net cash (used in) provided by financing activities | $(3,222) | $464 | | Net change in cash and cash equivalents | $(12,812) | $3,196 | [Notes to Condensed Consolidated Financial Statements – Unaudited](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20%E2%80%93%20Unaudited) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements [A. Presentation and Summary of Significant Accounting Policies](index=9&type=section&id=A.%20Presentation%20and%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the basis of financial statement preparation and key accounting principles applied - The unaudited Condensed Consolidated Financial Statements are prepared in accordance with U.S. GAAP for interim financial information and SEC rules, relying on management estimates and assumptions[23](index=23&type=chunk)[24](index=24&type=chunk) - The company is evaluating the potential effects of ASU 2021-08, which requires recognizing and measuring contract assets and liabilities acquired in a business combination in accordance with Topic 606[26](index=26&type=chunk) [B. Revenue Recognition](index=9&type=section&id=B.%20Revenue%20Recognition) This note details the company's policies and methods for recognizing revenue from various sources - Revenue is recognized when control of promised goods or services is transferred to clients, following a five-step process, from software licenses, maintenance, professional services, and Software-as-a-Service (SaaS)[27](index=27&type=chunk)[29](index=29&type=chunk) - Subscription fees (SaaS) are recognized ratably over the arrangement term, while professional services revenue is recognized over time as performed[30](index=30&type=chunk)[32](index=32&type=chunk) | Metric | July 31, 2022 (in thousands) | April 30, 2022 (in thousands) | | :----- | :--------------------------- | :---------------------------- | | Deferred revenue, current | $38,299 | $41,953 | | Total deferred revenue | $38,299 | $41,953 | - Remaining performance obligations totaled approximately **$125 million** as of July 31, 2022, with **47%** expected to be recognized over the next 12 months[38](index=38&type=chunk) | Revenue by Geography | Three Months Ended July 31, 2022 (in thousands) | Three Months Ended July 31, 2021 (in thousands) | | :------------------- | :---------------------------------------------- | :---------------------------------------------- | | Domestic | $25,659 | $24,427 | | International | $5,637 | $4,844 | | Total Revenue | $31,296 | $29,271 | - Total deferred sales commissions were **$3.3 million** at July 31, 2022, down from **$3.4 million** at April 30, 2022, with amortization included in sales and marketing expense[42](index=42&type=chunk) [C. Declaration of Dividend Payable](index=12&type=section&id=C.%20Declaration%20of%20Dividend%20Payable) This note discloses the details of quarterly cash dividends declared by the Board of Directors - On May 25, 2022, the Board of Directors declared a quarterly cash dividend of **$0.11 per share** for Class A and Class B common stock, paid on August 26, 2022[43](index=43&type=chunk) [D. Earnings Per Common Share](index=12&type=section&id=D.%20Earnings%20Per%20Common%20Share) This note explains the calculation of basic and diluted earnings per share for common stock - The company uses the 'two-class' method for basic EPS and diluted Class B shares, and the 'if-converted' method for diluted Class A shares, due to its two classes of common stock with different dividend and convertibility rights[44](index=44&type=chunk)[46](index=46&type=chunk)[47](index=47&type=chunk) | EPS Type | Three Months Ended July 31, 2022 | Three Months Ended July 31, 2021 | | :------- | :------------------------------- | :------------------------------- | | Basic EPS (Class A & B) | $0.06 | $0.09 | | Diluted EPS (Class A) | $0.06 | $0.09 | | Diluted EPS (Class B) | $0.06 | $0.09 | - Options to purchase **3,227,891 Class A Common Shares** (2022) and **315,924 shares** (2021) were excluded from diluted EPS computation because their exercise prices exceeded the average market price[54](index=54&type=chunk) [E. Acquisitions](index=14&type=section&id=E.%20Acquisitions) This note provides details on recent business acquisitions, including purchase price and strategic rationale - Effective June 28, 2022, the company acquired certain assets of Starboard Solutions Corp., an innovator of supply chain network design software, for approximately **$6.5 million** in cash[56](index=56&type=chunk)[59](index=59&type=chunk) - The acquisition includes potential contingent earnout payments up to **$6.0 million** over a three-year period, based on subscription revenue targets[59](index=59&type=chunk) - The acquisition aims to integrate Starboard's unique supply chain visualization and optimization solution into the Logility Digital Supply Chain Platform, enhancing integrated business planning[57](index=57&type=chunk)[58](index=58&type=chunk) - A preliminary purchase price allocation assigned **$3.32 million** to goodwill, deductible for income tax purposes and assigned to the Supply Chain Management segment[59](index=59&type=chunk)[60](index=60&type=chunk) [F. Stock-Based Compensation](index=15&type=section&id=F.%20Stock-Based%20Compensation) This note describes the company's stock option plans and accounting treatment for stock-based compensation | Metric | Three Months Ended July 31, 2022 | Three Months Ended July 31, 2021 | | :----- | :------------------------------- | :------------------------------- | | Options granted (Class A shares) | 1,362,000 | 377,500 | | Stock option compensation cost | ~$1.3 million | ~$0.8 million | - Unrecognized compensation cost related to unvested stock option awards was approximately **$17.0 million** as of July 31, 2022, expected to be recognized over a weighted average period of **2.06 years**[63](index=63&type=chunk) [G. Fair Value of Financial Instruments](index=16&type=section&id=G.%20Fair%20Value%20of%20Financial%20Instruments) This note outlines the valuation methods and hierarchy used for the company's financial instruments - The company measures investments using a fair value hierarchy (Level 1, 2, 3), prioritizing market price observability[64](index=64&type=chunk) - Cash equivalents and marketable securities are primarily valued using Level 1 inputs (quoted prices in active markets)[66](index=66&type=chunk) | Asset | July 31, 2022 (in thousands) | April 30, 2022 (in thousands) | | :---- | :--------------------------- | :---------------------------- | | Cash equivalents | $91,848 | $98,459 | | Marketable securities | $16,954 | $16,826 | | Total | $108,802 | $115,285 | [H. Stock Repurchases](index=16&type=section&id=H.%20Stock%20Repurchases) This note details the company's stock repurchase programs and shares bought back - The Board of Directors authorized the repurchase of an additional **2.0 million shares** of Class A common stock on August 19, 2002[69](index=69&type=chunk) - As of July 31, 2022, a total of **4,588,632 shares** of common stock have been repurchased under all authorized plans at a cost of approximately **$25.6 million**[70](index=70&type=chunk) [I. Comprehensive Income](index=18&type=section&id=I.%20Comprehensive%20Income) This note clarifies the presentation of comprehensive income in relation to net earnings - Condensed consolidated statements of comprehensive income are not included as comprehensive income and net earnings are substantially the same[72](index=72&type=chunk) [J. Industry Segments](index=19&type=section&id=J.%20Industry%20Segments) This note provides financial information broken down by the company's operating segments - The company manages its business through three operating segments: Supply Chain Management (SCM), Information Technology Consulting (IT Consulting), and Other (including legacy ERP and unallocated corporate expenses)[74](index=74&type=chunk)[75](index=75&type=chunk) | Segment | Revenue (2022, in thousands) | Revenue (2021, in thousands) | Operating Income (2022, in thousands) | Operating Income (2021, in thousands) | | :------ | :--------------------------- | :--------------------------- | :------------------------------------ | :------------------------------------ | | Supply Chain Management | $26,182 | $24,251 | $7,179 | $5,356 | | IT Consulting | $4,515 | $4,476 | $215 | $163 | | Other | $599 | $544 | $(4,837) | $(3,746) | [K. Major Clients](index=20&type=section&id=K.%20Major%20Clients) This note discloses information regarding client concentration and revenue dependency - No single client accounted for more than **10%** of total revenue for the three months ended July 31, 2022, or 2021[77](index=77&type=chunk) [L. Contingencies](index=21&type=section&id=L.%20Contingencies) This note addresses potential future obligations arising from past events, such as indemnifications - The company indemnifies clients against intellectual property infringement claims and warrants product functionality, but historically has not incurred material costs and expects none in the future[79](index=79&type=chunk)[80](index=80&type=chunk) [M. Subsequent Event](index=21&type=section&id=M.%20Subsequent%20Event) This note reports significant events that occurred after the balance sheet date but before financial statement issuance - On August 18, 2022, the Board of Directors declared a quarterly cash dividend of **$0.11 per share** for Class A and Class B common stock, payable on December 2, 2022[81](index=81&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance, liquidity, and capital resources for the three months ended July 31, 2022. It discusses revenue and expense trends, segment performance, economic outlook, and critical accounting policies, highlighting a 7% increase in total revenue driven by subscription fees, but a 28% decrease in net earnings [FORWARD-LOOKING STATEMENTS](index=22&type=section&id=FORWARD-LOOKING%20STATEMENTS) This section cautions readers about statements regarding future events that are subject to risks and uncertainties - This report contains forward-looking statements regarding future financial performance, business strategy, and other events, which are subject to uncertainties and risks[84](index=84&type=chunk) - Actual results may differ materially from those anticipated, and the company undertakes no obligation to update these statements[85](index=85&type=chunk) [ECONOMIC OVERVIEW](index=22&type=section&id=ECONOMIC%20OVERVIEW) This section discusses the global economic environment and its potential impact on the company's operations and strategy - The company is cautious about the global economic recovery, noting that uncertain conditions and complex supply chain challenges may drive businesses to invest in solutions that improve operating margins and offer rapid return on investment, such as their supply chain solutions[86](index=86&type=chunk) - The IMF's July 2022 World Economic Outlook projects global growth to slow from **6.1%** in 2021 to **3.2%** in 2022 and **2.9%** in 2023, with global inflation anticipated to reach **6.6%** in advanced economies and **9.5%** in emerging markets this year[90](index=90&type=chunk) [COMPANY OVERVIEW](index=24&type=section&id=COMPANY%20OVERVIEW) This section provides a general description of the company's business, segments, products, and strategic focus - American Software operates through three segments: Supply Chain Management (SCM), Information Technology Consulting (IT Consulting), and Other (legacy ERP and corporate overhead), with SCM being the core market[91](index=91&type=chunk) - The Logility Digital Supply Chain Platform leverages AI and machine learning to optimize supply chain processes, addressing challenges like consumer expectations and talent shortages[92](index=92&type=chunk)[93](index=93&type=chunk)[94](index=94&type=chunk) - The company serves approximately **860 clients** in **80 countries**, with revenue derived from subscriptions, software licenses, maintenance, and services[96](index=96&type=chunk)[97](index=97&type=chunk) - Primary opportunities include selective acquisitions, while key risks involve dependence on capital spending, acquisition integration challenges, competitive technologies, and market competition[98](index=98&type=chunk)[99](index=99&type=chunk)[100](index=100&type=chunk) [COMPARISON OF RESULTS OF OPERATIONS](index=26&type=section&id=COMPARISON%20OF%20RESULTS%20OF%20OPERATIONS) This section analyzes the company's financial performance by comparing key operational metrics over different periods | Metric | Three Months Ended July 31, 2022 | Three Months Ended July 31, 2021 | % Change YoY | | :----- | :------------------------------- | :------------------------------- | :----------- | | Total Revenue | $31,296k | $29,271k | 7% | | Gross Margin | 60% | 57% | +3 ppts | | Operating Income | $2,557k | $1,773k | 44% | | Net Earnings | $2,133k | $2,947k | (28)% | [REVENUE](index=26&type=section&id=REVENUE) This section analyzes the company's revenue streams and their year-over-year changes | Revenue Source | Three Months Ended July 31, 2022 (in thousands) | Three Months Ended July 31, 2021 (in thousands) | % Change YoY | | :------------- | :---------------------------------------------- | :---------------------------------------------- | :----------- | | Subscription fees | $12,062 | $9,788 | 23% | | License | $320 | $492 | (35)% | | Professional services and other | $10,009 | $9,529 | 5% | | Maintenance | $8,905 | $9,462 | (6)% | | Total Revenue | $31,296 | $29,271 | 7% | - International revenue increased to approximately **18%** of total revenue in the three months ended July 31, 2022, up from **17%** in the prior year[108](index=108&type=chunk) [Subscription Fees](index=27&type=section&id=Subscription%20Fees) This subsection details the growth and drivers of subscription fee revenue - Subscription fees revenue increased **23%** year-over-year, driven by an increase in contracts, including those with higher cloud services annual contract value (ACV), and multi-year contracts, reflecting a successful transition to the cloud subscription model[109](index=109&type=chunk) [License Revenue](index=27&type=section&id=License%20Revenue) This subsection examines trends and factors influencing software license revenue - License fee revenue decreased **35%** year-over-year, primarily attributable to the SCM segment, with the majority of current license revenue from existing on-premise clients expanding usage[110](index=110&type=chunk) - The direct sales channel accounted for approximately **100%** of license fee revenues in the three months ended July 31, 2022, with margins after commissions increasing to approximately **90%**[111](index=111&type=chunk) [Professional Services and Other Revenue](index=28&type=section&id=Professional%20Services%20and%20Other%20Revenue) This subsection discusses the performance of professional services and other revenue streams - Professional services and other revenue increased **5%** year-over-year, driven by growth across the Other segment (**+26%**), SCM segment (**+8%**), and IT Consulting segment (**+1%**), due to increased project work and higher implementation activity[113](index=113&type=chunk) [Maintenance Revenue](index=28&type=section&id=Maintenance%20Revenue) This subsection analyzes the changes in revenue generated from maintenance contracts - Maintenance revenue decreased **6%** year-over-year, primarily in the SCM segment, due to a normal client attrition rate[114](index=114&type=chunk) [GROSS MARGIN](index=29&type=section&id=GROSS%20MARGIN) This section analyzes the company's gross margin performance across different revenue categories - Total gross margin percentage increased by **3 percentage points** to **60%** year-over-year, driven by higher margins across subscription fees, license fees, maintenance, and professional services[117](index=117&type=chunk) [Gross Margin on Subscription Fees](index=29&type=section&id=Gross%20Margin%20on%20Subscription%20Fees) This subsection details the gross margin percentage for subscription fees revenue - Gross margin percentage on subscription fees revenue increased from **67%** to **70%** year-over-year, primarily due to increased subscription revenue and related cost efficiencies[117](index=117&type=chunk)[118](index=118&type=chunk) [Gross Margin on License Fees](index=29&type=section&id=Gross%20Margin%20on%20License%20Fees) This subsection examines the gross margin percentage for license fee revenue - License fee gross margin percentage increased by **4 percentage points** to **72%** year-over-year, influenced by the level of license fee revenue, fixed computer software amortization, and the sales mix between direct and indirect channels[117](index=117&type=chunk)[119](index=119&type=chunk) [Gross Margin on Professional Services and Other](index=29&type=section&id=Gross%20Margin%20on%20Professional%20Services%20and%20Other) This subsection discusses the gross margin percentage for professional services and other revenue - Gross margin percentage on professional services and other revenue increased to **27%** year-over-year, driven by higher revenues, improved utilization, and better billing rates, despite a slight decrease in IT Consulting segment margin[117](index=117&type=chunk)[120](index=120&type=chunk) [Gross Margin on Maintenance](index=29&type=section&id=Gross%20Margin%20on%20Maintenance) This subsection analyzes the gross margin percentage for maintenance revenue - Maintenance gross margin percentage increased from **79%** to **82%** year-over-year, primarily due to increased maintenance revenue and personnel cost management[117](index=117&type=chunk)[121](index=121&type=chunk) [EXPENSES](index=29&type=section&id=EXPENSES) This section provides an analysis of the company's operating expenses, including R&D, sales, and G&A | Expense Category | Three Months Ended July 31, 2022 (in thousands) | Three Months Ended July 31, 2021 (in thousands) | % Change YoY | | :--------------- | :---------------------------------------------- | :---------------------------------------------- | :----------- | | Research and development | $4,454 | $4,424 | 1% | | Sales and marketing | $5,912 | $6,120 | (3)% | | General and administrative | $5,765 | $4,534 | 27% | | Amortization of acquisition-related intangible assets | $24 | $53 | (55)% | [Research and Development](index=30&type=section&id=Research%20and%20Development) This subsection details changes in research and development costs and their drivers - Total product research and development costs increased by **1%** year-over-year, primarily due to an increase in the use of third-party contractors[126](index=126&type=chunk) - Amortization of capitalized software development costs decreased **49%** year-over-year as some projects were fully amortized[126](index=126&type=chunk) [Sales and Marketing](index=30&type=section&id=Sales%20and%20Marketing) This subsection analyzes trends in sales and marketing expenditures - Sales and marketing expenses decreased from **21%** to **19%** of revenue year-over-year, attributed to marketing cost containment[127](index=127&type=chunk) [General and Administrative](index=30&type=section&id=General%20and%20Administrative) This subsection discusses changes in general and administrative expenses - General and administrative expenses increased from **15%** to **18%** as a percentage of revenue year-over-year, primarily due to higher personnel costs, third-party contractors, and insurance[128](index=128&type=chunk) [Operating Income/(Loss)](index=30&type=section&id=Operating%20Income%2F(Loss)) This section analyzes the operating income or loss across the company's business segments | Segment | Three Months Ended July 31, 2022 (in thousands) | Three Months Ended July 31, 2021 (in thousands) | % Change YoY | | :------ | :---------------------------------------------- | :---------------------------------------------- | :----------- | | Supply Chain Management | $7,179 | $5,356 | 34% | | IT Consulting | $215 | $163 | 32% | | Other | $(4,837) | $(3,746) | 29% | | Total Operating Income | $2,557 | $1,773 | 44% | - SCM segment operating income increased by **34%** due to improved gross margins, while IT Consulting segment operating income grew by **32%** due to higher margin project work and decreased expenses[130](index=130&type=chunk)[131](index=131&type=chunk) - The Other segment's operating loss increased by **29%** primarily due to an increase in variable compensation and stock option expenses[131](index=131&type=chunk) [Other Income](index=31&type=section&id=Other%20Income) This section details non-operating income and expenses, including investment gains and losses - Other income decreased year-over-year, mainly due to lower unrealized gains from investments (**$285k**), higher exchange rate losses (**$134k**), and higher realized investment losses (**$30k**), partially offset by a gain on interest income of **$116k**[132](index=132&type=chunk) - Investments generated an annualized yield of approximately **1.55%** for the three months ended July 31, 2022, compared to approximately **1.65%** in the prior year[132](index=132&type=chunk) [Income Taxes](index=31&type=section&id=Income%20Taxes) This section explains the company's income tax expense or benefit and effective tax rate - The company recorded an income tax expense of **$543,000** for the three months ended July 31, 2022, compared to an income tax benefit of **$737,000** in the prior year[134](index=134&type=chunk) - This shift was primarily due to lower discrete stock compensation benefits (**$34k** in 2022 vs **$1.2 million** in 2021) and a reduction in research and development credits (**4.0%** reduction in effective tax rate in 2022 vs **5.7%** in 2021)[134](index=134&type=chunk) [Operating Pattern](index=31&type=section&id=Operating%20Pattern) This section describes the typical quarterly fluctuations in the company's operating results - The company experiences an irregular pattern of quarterly operating results due to fluctuations in software license and subscription contract volumes and the timing of revenue recognition, a pattern expected to continue[135](index=135&type=chunk) [LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL CONDITION](index=31&type=section&id=LIQUIDITY%2C%20CAPITAL%20RESOURCES%20AND%20FINANCIAL%20CONDITION) This section assesses the company's ability to meet its short-term and long-term financial obligations - The company primarily funds operations and capital expenditures with cash generated from operating activities and has no debt obligations or off-balance sheet financing arrangements[136](index=136&type=chunk) - Total cash and investments were **$114.8 million** as of July 31, 2022, with a current ratio of **2.7 to 1** and Days Sales Outstanding (DSO) of **68 days**[141](index=141&type=chunk)[142](index=142&type=chunk)[143](index=143&type=chunk) - Management believes current liquidity and capital resources are sufficient to satisfy anticipated requirements for at least the next twelve months[143](index=143&type=chunk) [Sources and Uses of Cash](index=31&type=section&id=Sources%20and%20Uses%20of%20Cash) This subsection details the primary sources and applications of cash during the reporting period | Cash Flow Activity | Three Months Ended July 31, 2022 (in thousands) | Three Months Ended July 31, 2021 (in thousands) | | :----------------- | :---------------------------------------------- | :---------------------------------------------- | | Net cash (used in) provided by operating activities | $(1,518) | $3,034 | | Net cash used in investing activities | $(8,072) | $(302) | | Net cash (used in) provided by financing activities | $(3,222) | $464 | | Net change in cash and cash equivalents | $(12,812) | $3,196 | - The net decrease in cash from operating activities was primarily due to changes in deferred revenue, client accounts receivables, and lower net earnings[138](index=138&type=chunk) - Increased cash used in investing activities was mainly due to the acquisition of Starboard and increased purchases of property and equipment[139](index=139&type=chunk) - Increased cash used in financing activities was primarily due to higher dividends paid, partially offset by lower proceeds from stock option exercises[139](index=139&type=chunk) [CRITICAL ACCOUNTING POLICIES AND ESTIMATES](index=33&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES%20AND%20ESTIMATES) This section highlights accounting policies requiring significant management judgment and estimates - The preparation of financial statements requires significant management judgments and estimates, particularly in revenue recognition, which affects reported assets, liabilities, revenue, and expenses[146](index=146&type=chunk) [Revenue Recognition](index=33&type=section&id=Revenue%20Recognition) This subsection elaborates on the critical judgments involved in the company's revenue recognition policy - Critical judgments in applying ASC 606 relate to determining distinct performance obligations and evaluating the standalone selling price (SSP) for each, which can impact the timing of revenue recognition[147](index=147&type=chunk)[149](index=149&type=chunk) - For on-premise licenses, where SSP is not readily discernible, a residual approach is used to allocate the transaction price after other performance obligations are assigned their SSPs[150](index=150&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses the company's exposure to market risks, including foreign currency, interest rates, and inflation. It notes foreign currency exchange rate losses from international sales, management of interest rate risk through a high-quality, short-maturity investment portfolio, and the impact of inflation on operational expenses [Foreign Currency](index=34&type=section&id=Foreign%20Currency) This section describes the company's exposure to foreign currency exchange rate fluctuations - Approximately **18%** of revenue is generated outside the United States, with sales denominated in various foreign currencies, leading to foreign currency exchange rate losses[152](index=152&type=chunk) - The company recorded an exchange rate loss of approximately **$0.2 million** for the three months ended July 31, 2022, and does not engage in hedging activities[152](index=152&type=chunk) [Interest Rates and Other Market Risks](index=34&type=section&id=Interest%20Rates%20and%20Other%20Market%20Risks) This section details the company's management of interest rate risk and other market-related exposures - The company has no debt and manages interest rate risk by maintaining an investment portfolio of high-credit-quality, short-average-maturity instruments, including money-market instruments and various debt obligations[153](index=153&type=chunk) - The fair market value of these investments was approximately **$108.8 million** as of July 31, 2022[153](index=153&type=chunk) - Risks include declining investment income if interest rates fall and potential principal losses if fixed-rate securities are sold prematurely due to rising interest rates[155](index=155&type=chunk) [Inflation](index=34&type=section&id=Inflation) This section discusses the impact of inflation on the company's costs and pricing strategies - Inflation has affected the company through increased costs of employee compensation and other operational expenses[156](index=156&type=chunk) - The company attempts to recover these increased costs by periodically increasing prices, to the extent permitted by the marketplace[156](index=156&type=chunk) [Item 4. Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms that management, including the principal executive and financial officers, evaluated the effectiveness of the company's disclosure controls and procedures as of July 31, 2022, and concluded they were effective. No material changes in internal control over financial reporting occurred during the quarter [Management's Report on Internal Control Over Financial Reporting](index=35&type=section&id=Management%27s%20Report%20on%20Internal%20Control%20Over%20Financial%20Reporting) This section presents management's assessment of the effectiveness of the company's internal controls over financial reporting - The company's disclosure controls and procedures are designed to provide reasonable assurance that information required for SEC reports is recorded, processed, summarized, and reported timely[158](index=158&type=chunk) - The principal executive officer and principal financial officer concluded that disclosure controls and procedures were effective as of July 31, 2022[159](index=159&type=chunk) [Changes in Internal Control over Financial Reporting](index=35&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section reports any material changes in the company's internal control over financial reporting - There have been no changes in internal control over financial reporting during the fiscal quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[160](index=160&type=chunk) [PART II—OTHER INFORMATION](index=36&type=section&id=Part%20II%E2%80%94Other%20Information) This section provides additional information not covered in the financial statements, including legal, risk, and exhibit disclosures [Item 1. Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any legal proceedings that require disclosure under this item - The company is not currently involved in legal proceedings requiring disclosure[162](index=162&type=chunk) [Item 1A. Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report for fiscal 2022 - No material changes to the risk factors previously disclosed in the Annual Report for fiscal 2022[163](index=163&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=36&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities or use of proceeds to report for the period - None to report[163](index=163&type=chunk) [Item 3. Defaults Upon Senior Securities](index=36&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable to the company for the reporting period - Not applicable[163](index=163&type=chunk) [Item 4. Mine Safety Disclosures](index=36&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company for the reporting period - Not applicable[163](index=163&type=chunk) [Item 5. Other Information](index=36&type=section&id=Item%205.%20Other%20Information) There is no other information to report under this item for the reporting period - None to report[164](index=164&type=chunk) [Item 6. Exhibits](index=36&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including corporate governance documents (Amended and Restated Articles of Incorporation, By-Laws), certifications (Rule 13a-14(a)/15d-14(a), Section 906), and XBRL taxonomy documents - Exhibits include Amended and Restated Articles of Incorporation, Amended and Restated By-Laws, Rule 13a-14(a)/15d-14(a) Certifications, Section 906 Certifications, and various XBRL documents[164](index=164&type=chunk)[165](index=165&type=chunk) [Signatures](index=37&type=section&id=Signatures) The report is officially signed by the company's principal executive officer (CEO and President), principal financial officer (CFO), and principal accounting officer (Controller), affirming its submission on September 2, 2022 - The report is signed by H. Allan Dow (Chief Executive Officer and President), Vincent C. Klinges (Chief Financial Officer), and Bryan L. Sell (Controller and Principal Accounting Officer)[169](index=169&type=chunk) - The signing date for the report is September 2, 2022[168](index=168&type=chunk)

American Software, Inc. (NASDAQ:AMSWA) Q1 2023 Earnings Conference Call August 24, 2022 5:00 PM ET Company Participants Vincent Klinges – CFO Allan Dow - President and CEO Conference Call Participants Matt Pfau - William Blair Matthew Galinko - Maxim Group Zachary Cummins - B. Riley Securities Anja Soderstrom - Sidoti Operator Good day, everyone, and welcome to today's First Quarter Fiscal Year '23 Preliminary Financial Results. At this time, all participants are in a listen-only mode. Later, you will have ...

Part I [Business](index=5&type=section&id=Item%201.%20Business) American Software, Inc. operates through three segments: Supply Chain Management (SCM), IT Consulting, and Other, providing a cloud-architected SCM platform and related services [Company Overview](index=5&type=section&id=Company%20Overview) American Software, incorporated in 1970, provides software and services through three main operating segments: Supply Chain Management (SCM), IT Consulting, and an "Other" segment for legacy ERP clients - The company operates through three major segments: **Supply Chain Management (SCM)**, **IT Consulting**, and **Other (legacy ERP)**[11](index=11&type=chunk) - The core offering is the **Logility Digital Supply Chain Platform**, which uses AI and machine learning to automate business processes[12](index=12&type=chunk) - Revenue is derived from four sources: **subscriptions, software licenses, maintenance, and services**, with subscription and maintenance agreements typically lasting three to five years[15](index=15&type=chunk) [Market Opportunity and Strategy](index=6&type=section&id=Market%20Opportunity%20and%20Strategy) The company targets the growing supply chain management software market, focusing on creating sustainable supply chains, expanding partnerships, and pursuing complementary acquisitions - Gartner forecasts the Supply Chain Management software market to grow at a **14.6% CAGR**, reaching **$31 billion by 2025**[18](index=18&type=chunk) - Key company strategies include enabling client sustainability, expanding strategic partnerships, and acquiring complementary businesses and technologies[19](index=19&type=chunk)[20](index=20&type=chunk)[21](index=21&type=chunk) [Products and Services](index=8&type=section&id=Products%20and%20Services) The company offers a comprehensive, cloud-architected SCM platform covering seven key processes, alongside technology staffing and support for legacy ERP products - The SCM platform encompasses seven critical planning processes, including **Product Lifecycle Management, Demand Planning, Inventory Optimization, and Supply Planning**[22](index=22&type=chunk)[23](index=23&type=chunk)[24](index=24&type=chunk) - The company provides **24/7 support services**, which are included in subscriptions or offered via separate maintenance contracts for licensed products[28](index=28&type=chunk) - Professional services include **cloud hosting, managed services, and implementation and training**, which typically takes three to nine months[29](index=29&type=chunk)[30](index=30&type=chunk) [Competition](index=12&type=section&id=Competition) The company faces diverse competition from large ERP vendors and specialized SCM software providers, leveraging its comprehensive platform and domain expertise as key advantages - Competitors include large ERP vendors (**SAP, Oracle**), specialized SCM vendors (**Blue Yonder, o9 Solutions, Kinaxis**), and internal corporate IT departments[37](index=37&type=chunk) - Principal competitive advantages are cited as the **comprehensive solution platform, ability to generate quick business benefits, deep domain expertise, and rapid deployment**[39](index=39&type=chunk) [Human Capital, Data Privacy and Security](index=14&type=section&id=Human%20Capital%2C%20Data%20Privacy%20and%20Security) As of April 30, 2022, the company had 418 full-time employees and over 100 contractors, maintaining robust data privacy and security measures compliant with global regulations - As of April 30, 2022, the company employed **418 full-time employees** and **over 100 independent contractors**[48](index=48&type=chunk) - The company maintains compliance with data privacy laws such as **GDPR in the EU/UK and CCPA in the United States**[55](index=55&type=chunk)[56](index=56&type=chunk) - An independent third-party audit provides a **SOC 2 Type II report annually**, attesting to the effectiveness of the company's controls for security, availability, and confidentiality[59](index=59&type=chunk) - Client data in cloud solutions is hosted in a **Microsoft Azure environment**, which provides geo-redundant storage and other security measures[60](index=60&type=chunk) [Risk Factors](index=17&type=section&id=Item%201A.%20Risk%20Factors) The company identifies numerous risks that could adversely affect its business, including economic disruptions, intense competition, industry dependence, and its "controlled company" status - Economic risks include disruptions from the **COVID-19 pandemic, the invasion of Ukraine**, and potential reductions in technology spending by clients[66](index=66&type=chunk)[76](index=76&type=chunk) - The company faces intense competition from large ERP vendors (**SAP, Oracle**) and specialized SCM vendors who have significantly greater resources[67](index=67&type=chunk)[85](index=85&type=chunk) - A significant portion of revenue is derived from the **retail industry**, making the company vulnerable to downturns in that sector[68](index=68&type=chunk)[92](index=92&type=chunk) - The company is a **"controlled company"** as one shareholder, James C. Edenfield, has the right to elect a majority of the Board of Directors, which exempts it from certain NASDAQ governance requirements[71](index=71&type=chunk)[146](index=146&type=chunk)[148](index=148&type=chunk) [Properties](index=37&type=section&id=Item%202.%20Properties) The company owns its corporate headquarters in Atlanta, Georgia, and leases additional sales and technology development offices both domestically and internationally - The company owns its **100,000 sq. ft. corporate headquarters in Atlanta, Georgia**[157](index=157&type=chunk) - Leased office spaces are maintained in the US and internationally to support sales and development[157](index=157&type=chunk) [Legal Proceedings](index=38&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently a party to any material legal proceedings and believes any existing matters will not have a material adverse effect - As of the report date, the company is **not a party to any material legal proceedings**[159](index=159&type=chunk) [Mine Safety Disclosures](index=39&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's business - Not applicable[161](index=161&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities](index=41&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's Class A Common Shares trade on NASDAQ, maintains a quarterly dividend of $0.11 per share, and has an ongoing share repurchase program - The company's Class A Common Shares are listed on the **NASDAQ Global Select Market** under the symbol **"AMSWA"**[164](index=164&type=chunk) - The quarterly dividend was increased to **$0.11 per share in May 2016** and is expected to continue at this level[167](index=167&type=chunk) Equity Compensation Plan Information (as of April 30, 2022) | Plan Category | Securities to be issued upon exercise | Weighted-average exercise price | Securities remaining for future issuance | | :--- | :--- | :--- | :--- | | Equity compensation plans approved by security holders | 4,540,104 | $16.05 | 2,902,643 | - Under a 2002 board authorization, the company has authority to repurchase up to **2.0 million shares**; **946,321 shares remained available for repurchase** as of April 30, 2022[173](index=173&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=46&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In fiscal 2022, total revenue increased 14% to $127.6 million, driven by strong subscription and license fee growth, leading to significant increases in operating income and net earnings [Results of Operations](index=48&type=section&id=Results%20of%20Operations) For fiscal year 2022, total revenue increased by 14% to $127.6 million, driven by a 46% surge in subscription fees and an 80% rise in license fees Fiscal 2022 vs. 2021 Revenue Breakdown (in thousands) | Revenue Type | FY 2022 | FY 2021 | YoY Change | | :--- | :--- | :--- | :--- | | Subscription fees | $42,066 | $28,877 | +46% | | License fees | $5,390 | $2,993 | +80% | | Professional services & other | $43,476 | $39,616 | +10% | | Maintenance | $36,621 | $39,922 | -8% | | **Total Revenue** | **$127,553** | **$111,408** | **+14%** | Fiscal 2022 vs. 2021 Profitability (in thousands) | Metric | FY 2022 | FY 2021 | YoY Change | | :--- | :--- | :--- | :--- | | Gross Margin | $75,795 (59%) | $60,980 (54%) | +24% | | Operating Income | $13,156 | $4,361 | +202% | | Net Earnings | $12,782 | $8,089 | +58% | - The **SCM segment** was the primary growth driver, with revenue increasing **16%** and operating income increasing **54%** in fiscal 2022 compared to fiscal 2021[199](index=199&type=chunk)[228](index=228&type=chunk) - The increase in subscription revenue was driven by a **26% increase in Cloud Services Annual Contract Value (ACV)** to **$48.2 million**[205](index=205&type=chunk) [Liquidity and Capital Resources](index=56&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with $127.5 million in cash and investments and no debt, primarily funding operations through robust cash flow from operating activities Cash Flow Summary (in thousands) | Cash Flow | FY 2022 | FY 2021 | | :--- | :--- | :--- | | Net cash from operating activities | $29,020 | $17,756 | | Net cash used in investing activities | ($934) | ($1,298) | | Net cash used in financing activities | ($6,054) | ($7,614) | Cash and Investments Position (in thousands) | As of April 30, | 2022 | 2021 | | :--- | :--- | :--- | | Cash and cash equivalents | $110,690 | $88,658 | | Investments | $16,826 | $16,006 | | **Total cash and investments** | **$127,516** | **$104,664** | - **Days Sales Outstanding (DSO)** improved to **62 days** as of April 30, 2022, compared to 85 days at the end of the prior fiscal year[239](index=239&type=chunk) - The company has **no debt obligations** or off-balance sheet financing arrangements[232](index=232&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=57&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company is exposed to market risks from foreign currency fluctuations and interest rate changes, with international revenue accounting for 16% of total revenue in fiscal 2022 - International revenue was **16% of total revenue in fiscal 2022**, creating exposure to foreign currency risk[242](index=242&type=chunk) - A **10% change in foreign currency exchange rates** would result in an estimated exchange gain or loss of approximately **$0.3 million** for fiscal 2022[242](index=242&type=chunk) - Interest rate risk is managed with an investment portfolio of **high-credit-quality, short-maturity instruments**, and the company does not expect a 10% rate fluctuation to have a material effect[243](index=243&type=chunk)[245](index=245&type=chunk) [Consolidated Financial Statements and Supplementary Data](index=59&type=section&id=Item%208.%20Consolidated%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for fiscal year 2022, including management's assertion of effective internal controls and the auditor's unqualified opinion [Auditor's Report and Management's Assessment](index=60&type=section&id=Auditor%27s%20Report%20and%20Management%27s%20Assessment) Management concluded that the company's internal control over financial reporting was effective, and KPMG LLP issued an unqualified opinion, noting revenue testing as a critical audit matter - Management assessed internal controls over financial reporting as **effective as of April 30, 2022**, based on the COSO framework[252](index=252&type=chunk) - **KPMG LLP issued an unqualified opinion** on the consolidated financial statements and internal controls[255](index=255&type=chunk)[262](index=262&type=chunk) - A critical audit matter was identified concerning the **sufficiency of audit evidence for revenue recognition**, due to the high volume of transactions and reliance on IT systems[266](index=266&type=chunk)[267](index=267&type=chunk) [Consolidated Financial Statements](index=65&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements for fiscal year 2022 show total assets of $192.8 million, total revenue of $127.6 million, and net earnings of $12.8 million, reflecting strong financial performance Consolidated Balance Sheet Highlights (in thousands) | As of April 30, | 2022 | 2021 | | :--- | :--- | :--- | | Cash and cash equivalents | $110,690 | $88,658 | | Total Assets | $192,835 | $177,157 | | Total Liabilities | $59,859 | $54,766 | | Total Shareholders' Equity | $132,976 | $122,391 | Consolidated Statement of Operations Highlights (in thousands) | For the Year Ended April 30, | 2022 | 2021 | | :--- | :--- | :--- | | Total Revenue | $127,553 | $111,408 | | Operating Income | $13,156 | $4,361 | | Net Earnings | $12,782 | $8,089 | | Diluted EPS | $0.37 | $0.24 | [Notes to Consolidated Financial Statements](index=69&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies, segment performance, and a significant subsequent event: the acquisition of Starboard Solutions Corp. for approximately $6.5 million cash FY 2022 Segment Performance (in thousands) | Segment | Revenue | Operating Income | | :--- | :--- | :--- | | Supply Chain Management | $104,288 | $29,164 | | IT Consulting | $21,032 | $1,601 | | Other | $2,233 | ($17,609) | - As of April 30, 2022, the company had remaining performance obligations of approximately **$134.0 million**, with **47% expected to be recognized as revenue in the next 12 months**[300](index=300&type=chunk) - Subsequent to fiscal year-end, on June 28, 2022, the company acquired the assets of **Starboard Solutions Corp. for ~$6.5 million cash** plus a potential **$6.0 million earn-out over three years**[402](index=402&type=chunk)[403](index=403&type=chunk) - The effective income tax rate for fiscal 2022 was **7.6%**, down from 8.6% in 2021, primarily due to higher excess tax benefits from stock option deductions[367](index=367&type=chunk) [Controls and Procedures](index=90&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of April 30, 2022, with no material changes to internal controls during the last fiscal quarter - Management concluded that **disclosure controls and procedures were effective** as of April 30, 2022[407](index=407&type=chunk) - No material changes were made to internal controls over financial reporting during the last fiscal quarter[410](index=410&type=chunk) Part III Part III of the report, covering Items 10 through 14, incorporates information by reference from the company's Proxy Statement for the 2022 Annual Meeting of Shareholders [Directors, Executive Officers and Corporate Governance](index=92&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information required by this item is incorporated by reference from the company's Proxy Statement - Information regarding directors, executive officers, and corporate governance is **incorporated by reference from the Proxy Statement**[413](index=413&type=chunk) [Executive Compensation](index=92&type=section&id=Item%2011.%20Executive%20Compensation) Information required by this item is incorporated by reference from the company's Proxy Statement - Information regarding executive compensation is **incorporated by reference from the Proxy Statement**[414](index=414&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=92&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information required by this item is incorporated by reference from the company's Proxy Statement - Information regarding security ownership is **incorporated by reference from the Proxy Statement**[416](index=416&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=92&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information required by this item is incorporated by reference from the company's Proxy Statement - Information regarding related transactions and director independence is **incorporated by reference from the Proxy Statement**[418](index=418&type=chunk) [Principal Accountant Fees and Services](index=93&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information required by this item is incorporated by reference from the company's Proxy Statement - Information regarding principal accountant fees and services is **incorporated by reference from the Proxy Statement**[420](index=420&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=95&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the documents filed as part of the Form 10-K, including financial statements, Schedule II, and various required exhibits and certifications - Lists all financial statements, Schedule II, and exhibits filed with the report[423](index=423&type=chunk) [Form 10-K Summary](index=98&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is noted as "None," indicating no summary is provided under this section - None[432](index=432&type=chunk)

American Software, Inc. (NASDAQ:AMSWA) Q4 2022 Earnings Conference Call June 8, 2022 5:00 PM ET Company Participants Allan Dow - President & CEO Vincent Klinges - CFO Conference Call Participants Matthew Pfau - William Blair Matthew Galinko - Maxim Group Anja Soderstrom - Sidoti Zachary Cummins - B. Riley Securities Operator Good day, everyone, and welcome to today's Fourth Quarter and Fiscal Year '22 Financial Results. At this time, all participants are in a listen-only mode. Later, you have the opportunit ...

Part I—Financial Information [Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements for the three and nine months ended January 31, 2022 and 2021 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Jan 31, 2022 | Apr 30, 2021 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $98,355 | $88,658 | | Total current assets | $148,711 | $136,623 | | Total assets | $186,050 | $177,157 | | **Liabilities & Equity** | | | | Total current liabilities | $51,911 | $50,664 | | Total liabilities | $55,171 | $54,766 | | Total shareholders' equity | $130,879 | $122,391 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Statement of Operations Highlights (in thousands, except per share data) | Metric | Q3 2022 | Q3 2021 | 9 Months 2022 | 9 Months 2021 | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $32,422 | $27,683 | $92,904 | $82,842 | | Gross Margin | $18,950 | $15,261 | $54,240 | $44,319 | | Operating Income | $3,239 | $935 | $7,699 | $2,451 | | Net Earnings | $2,940 | $2,311 | $9,201 | $5,037 | | Diluted EPS | $0.09 | $0.07 | $0.27 | $0.15 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary for the Nine Months Ended Jan 31 (in thousands) | Cash Flow Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $14,050 | $13,933 | | Net cash used in investing activities | ($801) | ($1,065) | | Net cash used in financing activities | ($3,552) | ($5,961) | | **Net change in cash and cash equivalents** | **$9,697** | **$6,907** | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) - As of January 31, 2022, the company had approximately **$129 million** in remaining performance obligations, with about **46%** expected to be recognized as revenue over the next 12 months[38](index=38&type=chunk) - The company's business is organized into three operating segments: Supply Chain Management (SCM), IT Consulting, and Other, with SCM being the largest contributor to both revenue and operating income[75](index=75&type=chunk)[76](index=76&type=chunk) Revenue and Operating Income by Segment - Nine Months Ended Jan 31, 2022 (in thousands) | Segment | Revenue | Operating Income | | :--- | :--- | :--- | | Supply Chain Management | $75,692 | $19,531 | | IT Consulting | $15,544 | $1,005 | | Other | $1,668 | ($12,837) | | **Total** | **$92,904** | **$7,699** | - No single customer accounted for more than **10%** of total revenue for the three and nine months ended January 31, 2022 and 2021[81](index=81&type=chunk) - On February 16, 2022, the Board of Directors declared a quarterly cash dividend of **$0.11 per share**, payable on May 20, 2022[84](index=84&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, including revenue growth, gross margin, liquidity, and critical accounting policies [Comparison of Results of Operations](index=24&type=section&id=Comparison%20of%20Results%20of%20Operations) Total Revenue Comparison (in thousands) | Period | FY 2022 | FY 2021 | % Change | | :--- | :--- | :--- | :--- | | Three Months Ended Jan 31 | $32,422 | $27,683 | 17% | | Nine Months Ended Jan 31 | $92,904 | $82,842 | 12% | - The increase in revenue was primarily driven by significant growth in subscription fees, which rose **45%** for the quarter and **49%** for the nine-month period, reflecting the successful transition to a cloud subscription model[109](index=109&type=chunk)[112](index=112&type=chunk) - Maintenance revenue decreased by **10%** for the quarter and **9%** for the nine-month period, mainly due to customer attrition in the SCM segment as clients transition from on-premise licenses to cloud subscriptions[118](index=118&type=chunk) Gross Margin Percentage Comparison | Revenue Stream | Q3 2022 | Q3 2021 | 9 Months 2022 | 9 Months 2021 | | :--- | :--- | :--- | :--- | :--- | | Subscription fees | 68% | 59% | 68% | 58% | | License fees | 76% | 46% | 74% | 14% | | Professional services | 30% | 24% | 29% | 23% | | Maintenance | 80% | 81% | 80% | 82% | | **Total Gross Margin** | **57%** | **55%** | **58%** | **53%** | - Operating income for the SCM segment increased by **53%** for the nine months ended Jan 31, 2022, compared to the prior year, primarily due to improved gross margins[133](index=133&type=chunk)[136](index=136&type=chunk) [Liquidity, Capital Resources and Financial Condition](index=32&type=section&id=Liquidity%2C%20Capital%20Resources%20and%20Financial%20Condition) - The company has no debt obligations or off-balance sheet financing arrangements[140](index=140&type=chunk) - As of January 31, 2022, the company had **$114.8 million** in cash and investments and believes its liquidity is sufficient for at least the next twelve months[147](index=147&type=chunk) - Days Sales Outstanding (DSO) increased to **77 days** as of January 31, 2022, from **65 days** a year prior, due to the timing of billings and collections[146](index=146&type=chunk) [Critical Accounting Policies and Estimates](index=33&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - A key area of judgment is determining the standalone selling price (SSP) for products and services, using a residual approach for on-premise licenses rarely sold alone[156](index=156&type=chunk)[157](index=157&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section details the company's exposure to market risks, primarily from foreign currency and interest rate fluctuations - Approximately **16%** of revenue was generated outside the United States, where a hypothetical **10%** movement in foreign currency rates could result in a gain or loss of up to **$0.4 million** for the quarter[159](index=159&type=chunk) - The company has no debt, and interest rate risk on its investment portfolio, valued at approximately **$105.7 million**, is managed by holding high-credit-quality, short-maturity instruments[160](index=160&type=chunk) [Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of January 31, 2022 - Based on an evaluation, the principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[166](index=166&type=chunk) - There were no changes in internal control over financial reporting during the fiscal quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control[167](index=167&type=chunk) Part II—Other Information [Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) The company reports that it is not currently involved in any legal proceedings that would require disclosure under this item - The company is not currently involved in legal proceedings requiring disclosure[169](index=169&type=chunk) [Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) This section refers readers to the risk factors disclosed in the company's Annual Report for fiscal 2021, confirming that no material changes have occurred since that filing - There have been no material changes to the risk factors as previously disclosed in the company's Annual Report for fiscal 2021[170](index=170&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reports that there were no unregistered sales of equity securities during the period - None reported for the period[170](index=170&type=chunk) [Exhibits](index=38&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, which include corporate governance documents, certifications by the CEO and CFO, and XBRL data files - The report includes exhibits such as Amended and Restated Articles of Incorporation, By-Laws, Rule 13a-14(a)/15d-14(a) Certifications, Section 906 Certifications, and various XBRL documents[171](index=171&type=chunk)

American Software, Inc. (NASDAQ:AMSWA) Q3 2022 Earnings Conference Call February 23, 2022 5:00 PM ET Company Participants Allan Dow - President & CEO Vincent Klinges - CFO Conference Call Participants Matt Pfau - William Blair & Company Zach Cummins - B. Riley Securities Anja Soderstrom - Sidoti & Co Operator Good day, everyone and welcome to today's Third Quarter Fiscal Year 2022 Financial Results. At this time, all participants are in a listen-only mode. Later you'll have the opportunity to ask questions ...

American Software, Inc. (NASDAQ:AMSWA) Q2 2021 Earnings Conference Call November 18, 2021 5:00 PM ET Company Participants Allan Dow - President & CEO Vincent Klinges - CFO Conference Call Participants Matt Pfau - William Blair & Company Zach Cummins - B. Riley Securities Matthew Galinko - Sidoti & Company Operator Good day, everyone. And welcome to today's Second Quarter Fiscal Year 2022 Financial Results. At this time, all participants are in a listen only mode. Later you'll have the opportunity to ask que ...

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