Majesco (NASDAQ: MJCO), a global provider of cloud insurance platform software, today announced strong financial results for the fiscal 2020 fourth quarter and full year ended March 31, 2020.
"We are living in unique times; times none of us have experienced before, and our number one priority is to protect the health and safety of our employees, customers, partners and the communities in which we operate", stated Adam Elster, Majesco's CEO "We were an early adopter of the 'work from home' transition, and all Majesco's global employees have been operating remotely since March 16th. We have successfully managed all customer expectations, while ensuring our business continuity, seamless focus and commitment to projects and services."
"Fiscal 2020 was a record year for Majesco, demonstrating the success of our cloud product-based strategy. 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 fuelled our growth and solidified our leadership."
"While it may be premature and difficult to predict the business impact due to the unprecedented environment caused by the COVID-19 crisis, we believe customers are likely to shift focus and investment, and move to cloud and digital experience platforms, automation, efficiency and modernization."
"We remain confident in our strategy, committed to its execution and believe we have the right platform in place to handle the near-term challenges associated with COVID-19, while continuing to pursue long-term growth opportunities."
Key Revenue Drivers:
- License, subscription, and maintenance revenue (product revenue) of $61.8 million, up 33.2% year over year, and constituted 42.2% of total revenue for fiscal 2020.
- Professional services revenue of $84.7 million, down 10.7% year over year.
- Majesco's 12-month order backlog on March 31, 2020 was $109.8 million, up 8.0% from $101.7 million on December 31, 2019 and up 13.3% from $96.9 million on March 31, 2019.
- We added 8 new clients organically for the year ended March 31, 2020.
Fourth Quarter 2020 Financial Results
- Revenue was $37.9 million, compared to $37.2 million for the same period last fiscal year. The 1.9% increase was driven by higher product revenue from existing accounts and new logos.
- Gross profit was $18.2 million (48.1% of revenue), compared to $18.0 million (48.5% of revenue) for the same period last fiscal year. Gross margins from growing product revenue was somewhat mitigated by inflationary impacts to the business, investments being made to scale the business and challenges in the international segment of the business.
- Research and development (R&D) expenses were $4.4 million (11.7% of revenue), compared to $5.0 million (13.5% of revenue) for the same period last fiscal year. Investments in R&D are focused on Majesco's product roadmap to support next generation insurance solutions and digital offerings.
- Selling, general and administrative (SG&A) expenses were $10.6 million (28.0% of revenue), compared to $10.7 million (28.7% of revenue) for the same period last fiscal year.
- Adjusted EBITDA was $5.1 million (13.5% of revenue), compared to $4.4 million (11.9% of revenue) for the same period last fiscal year.
- Net income was $3.6 million or $0.08 per diluted share as compared to net income of $1.2 million or $0.03 per diluted share, for the same period last fiscal year.
Fiscal Year 2020 Financial Highlights
- Revenue for fiscal 2020 was $146.4 million, compared to $141.3 million last fiscal year. The 3.6% increase in revenue was driven by strong growth in product revenue, which increased 33.2% and offset the 10.7% decline in professional services revenue.
- Gross profit was $71.6 million (48.9% of revenue) for fiscal 2020, compared to $68.8 million (48.7% of revenue) last fiscal year.
- R&D expenses were $19.1 million (13.0% of revenue) for fiscal 2020, compared to $19.4 million (13.7% of revenue) last fiscal year.
- SG&A expenses were $42.3 million (28.9% of revenue) for fiscal 2020, compared to $39.7 million (28.1% of revenue) last fiscal year. The increase in SG&A was led by higher sales driven activities and additions to the leadership team.
- Adjusted EBITDA for fiscal 2020 was $18.0 million (12.3% of revenue), compared to $17.0 million (12% of revenue) last fiscal year.
- Net income for fiscal 2020 was $9.7 million or $0.21 per diluted share, compared to $6.7 million or $0.16 per diluted share last fiscal year.
Shares of Majesco Ltd was last trading in BSE at Rs.298.65 as compared to the previous close of Rs. 286.4. The total number of shares traded during the day was 523 in over 74 trades.
The stock hit an intraday high of Rs. 300.7 and intraday low of 285.05. The net turnover during the day was Rs. 155196.