American Software(AMSWA) - 2025 Q1 - Quarterly Report

Revenue Recognition and Financial Performance - The Company recognized $19.4 million of revenue from deferred revenue during the three months ended July 31, 2024[34]. - As of July 31, 2024, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately$125.0 million, with an expectation to recognize revenue on approximately 51% over the next 12 months[35]. - The Company reported total revenues of $26.2 million for the three months ended July 31, 2024, compared to$25.9 million for the same period in 2023, reflecting a year-over-year increase[37]. - Domestic revenue for the three months ended July 31, 2024, was $20.5 million, slightly down from$20.5 million in 2023, while international revenue increased to $5.7 million from$5.4 million[37]. - Total revenue for the three months ended July 31, 2024, was $26,192,000, a 1$25,901,000 in the same period of 2023[109]. - Subscription fees increased by 7% to $14,791,000, representing 56$3,870,000, driven by increased bookings in recent quarters[115]. - License revenue decreased by 17% to $241,000, primarily due to a shift from on-premise licensed software to SaaS[114]. - Maintenance revenue fell by 11$7,290,000, constituting 28% of total revenue[109]. - The Supply Chain Management (SCM) segment generated revenue of $25,359,000 for the three months ended July 31, 2024, compared to$24,969,000 for the same period in 2023, reflecting a growth of 1.6%[79]. Earnings and Shareholder Returns - Basic earnings per share for Class A Common Shares for the three months ended July 31, 2024, was $0.06, down from$0.08 in the same period of 2023, representing a 25% decrease[45]. - Total distributed earnings for the three months ended July 31, 2024, was $3,462,000, compared to$3,558,000 for the same period in 2023, a decrease of approximately 2.7%[45]. - The diluted EPS for Class A Common Shares for the three months ended July 31, 2024, was $0.06, consistent with the previous year[47][48]. - The Company repurchased a total of 5,534,953 shares of common stock at a cost of approximately$35.8 million as of July 31, 2024[70]. - A quarterly cash dividend of $0.11 per share was declared on May 30, 2024, payable on August 30, 2024[40]. - A quarterly cash dividend of$0.11 per share was declared on August 20, 2024, payable on November 29, 2024[84]. Operational Changes and Strategic Decisions - The Company disposed of its 100% equity interest in The Proven Method for approximately $2.1 million in cash in September 2023[23]. - The company disposed of its IT staffing firm, TPM, for approximately$2.1 million in cash, allowing a focus on core supply chain planning business[58]. - The company acquired Garvis AI Limited for approximately $25.0 million, with$16.2 million allocated to goodwill, enhancing its AI capabilities in supply chain management[54][56]. - The Company expects to provide enhanced reportable segment financial disclosures starting with its Annual Report on Form 10-K for the year ending April 30, 2025, following the issuance of ASU 2023-07[24]. Cost Management and Expenses - The Company capitalizes incremental costs of obtaining contracts, with deferred commission costs amortized ratably over the economic benefit period[39]. - Research and development expenses increased by 3% to $4,364,000, representing 17$1.3 million for the three months ended July 31, 2024, compared to $1.4 million in 2023[62]. - Inflation has impacted the company through increased costs of employee compensation and operating expenses, prompting efforts to recover these costs through price adjustments[156]. Market and Investment Performance - As of July 31, 2024, the total fair value of marketable securities was$86,403,000, an increase from $77,782,000 as of April 30, 2024, representing an increase of approximately 10.4$86.4 million as of July 31, 2024, from $110.5 million a year earlier, reflecting market conditions affecting investment valuations[153]. - Unrealized losses from investments amounted to approximately$0.5 million, while realized gains were approximately $0.6 million for the three months ended July 31, 2024[135]. - The company has no debt and believes its liquidity and capital resources are sufficient for at least the next twelve months, although it may need to seek additional capital in the future[147]. Operational Efficiency and Workforce - The company recorded a net cash used in operating activities of$(1,799,000) for the three months ended July 31, 2024, compared to $7,168,000 provided in the same period last year[142]. - The total number of full-time personnel decreased to 410 from 489 year-over-year, indicating a reduction in workforce[132]. - Days Sales Outstanding in accounts receivable improved to 61 days as of July 31, 2024, down from 76 days as of July 31, 2023, indicating better cash collection efficiency[146]. Segment Performance - Operating income from the SCM segment was$6,577,000 for the three months ended July 31, 2024, up from $6,170,000 in the prior year, indicating an increase of 6.6$7,105,000 for the three months ended July 31, 2024, compared to $6,416,000 in the prior year, marking an increase of 10.7$6,577,000, while the Other segment's operating loss decreased by 1% to $(4,733,000)[133]. - The SCM segment's capital expenditures were$7,000 for the three months ended July 31, 2024, significantly lower than $350,000 in the same period last year[79]. - The SCM segment accounted for 94$92,000 for the three months ended July 31, 2024, compared to $65,000 for the same period in the prior year, indicating potential currency risk exposure[152]. - The company has not engaged in any hedging activities, which may expose it to additional risks from foreign currency fluctuations[152].