American Software(US:AMSWA)2024-12-06 16:03Revenue Recognition and Performance Obligations - The company recognized $33.5 million of revenue from deferred revenue during the six months ended October 31, 2024[45]. - As of October 31, 2024, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $120.0 million, with an expectation to recognize revenue on approximately 52% over the next 12 months[46]. - The company expects to recognize revenue on the remaining performance obligations after the next 12 months[46]. - The company’s revenue from Software-as-a-Service (SaaS), licenses, professional services, and maintenance is recognized based on the transfer of control of promised goods or services[34]. - The company’s deferred revenue balance as of October 31, 2024, was $38.1 million, down from $47.6 million at April 30, 2024[46]. Financial Performance - The company reported domestic revenues of $19.8 million for the three months ended October 31, 2024, compared to $20.1 million for the same period in 2023, reflecting a decrease of 1.3%[49]. - International revenues for the three months ended October 31, 2024, were $5.5 million, down from $5.6 million in the same period of 2023, a decrease of 2.5%[49]. - Total revenue for the three months ended October 31, 2024, decreased by 2% to $25,286 thousand compared to $25,690 thousand in the same period last year, primarily due to a 68% decrease in license fees[134]. - For the six months ended October 31, 2024, total revenue remained flat at $51,478 thousand compared to $51,591 thousand in the same period last year, with an 8% increase in subscription revenue[137]. - Revenue from Supply Chain Management for the three months ended October 31, 2024, was $24,507,000, a decrease of 1.3% from $24,828,000 in 2023[100]. Earnings and Losses - Basic loss per share for Class A and B common shares for the three months ended October 31, 2024, was $(0.06) each[61]. - Net loss earnings attributable to common stockholders for the three months ended October 31, 2024, was $(1,986,000) for Class A and $(32,000) for Class B[61]. - Total net earnings attributable to common stockholders for the six months ended October 31, 2023, was $4,838,000 for Class A and $273,000 for Class B[66]. - The company faced a 39% decrease in license fees for the six months ended October 31, 2024, compared to the same period last year[137]. - The company reported a 240% increase in earnings before income taxes for the three months ended October 31, 2024, compared to the same period last year[131]. Dividends and Shareholder Returns - The company declared a quarterly cash dividend of $0.11 per share, payable on November 29, 2024[53]. - Distributed earnings for Class A common shares for the six months ended October 31, 2024, totaled $7,107,000, while Class B common shares totaled $260,000[61]. - Total distributed earnings for Class A common shares for the three months ended October 31, 2023, was $3,556,000, while Class B common shares was $201,000[65]. Acquisitions and Disposals - The company disposed of its 100% equity interest in The Proven Method for approximately $2.1 million in cash in September 2023[29]. - The company acquired 100% of Garvis AI Limited for approximately $25.0 million, with $16.2 million allocated to goodwill[75][77]. - 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[80]. Cash Flow and Liquidity - Cash equivalents as of October 31, 2024, totaled $40.454 million, with U.S. Treasury securities at $39.631 million[92]. - Cash and cash equivalents decreased to $44,589 thousand as of October 31, 2024, from $62,971 thousand as of October 31, 2023[186]. - Net cash used in operating activities of continuing operations was $(7,321) thousand for the six months ended October 31, 2024, compared to $6,436 thousand for the same period in 2023[182]. Operational Metrics - Days Sales Outstanding in accounts receivable improved to 61 days as of October 31, 2024, from 72 days as of October 31, 2023[187]. - The total number of full-time personnel decreased to 392 as of October 31, 2024, from 423 as of October 31, 2023[167]. - The company serves approximately 550 clients across 80 countries, primarily in key vertical markets such as apparel, food and beverage, and consumer packaged goods[121]. Cost Management and Expenses - The company has been affected by inflation, leading to increased costs of employee compensation and operating expenses[196]. - The company attempts to recover increased costs through periodic price increases, as permitted by the marketplace[196]. - Research and development expenses remained stable at 17% of total revenue for both the three and six months ended October 31, 2024[131]. - General and administrative expenses remained relatively flat at 23% and 22% for the three and six months ended October 31, 2024, respectively[166]. Internal Controls and Compliance - The company completed remediation of a previously disclosed material weakness in internal control over financial reporting as of July 31, 2024[201]. - There were no changes in the company's internal control over financial reporting during the quarter ended October 31, 2024, that materially affected its internal controls[202].