Majesco announces record First Quarter

Majesco (NASDAQ: MJCO), a global provider of cloud insurance platform software, today announced strong financial results for the fiscal 2021 first quarter ended June 30, 2020.

"Q1 FY21 was a record quarter for Majesco across all our key performance metrics of Total Revenue, Product Revenue, New Sales and Margin", stated Adam Elster, Majesco's CEO. "Companies of all sizes are turning to Majesco to partner with on their digital transformation journey and the team demonstrated excellent performance against our cloud product-based strategy. Our relentless focus on delivering innovation and customer success has fuelled our growth and solidified our leadership."

"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", Elster continued.

"We are extremely excited to partner with Thoma Bravo, a firm with an established track record working with companies transitioning to the cloud."

Key Revenue Drivers:

- License, subscription, and maintenance revenue (product revenue) of $19.9 million, up 24.6% for the same period last fiscal year, and constituted 48.2% of total revenue for the first quarter 2021.

- Professional services revenue of $21.3 million, down 5.4% compared to the same period in the previous fiscal as a percentage of total revenue.

- Majesco's total order backlog on June 30, 2020 was $254 million. Previously Majesco was reporting a 12 month executable backlog only.

First Quarter 2021 Financial Results

- Revenue was $41.2 million, compared to $37.3 million for the same period last fiscal year. The 10.6% increase in revenue is primarily due to the inclusion of the Inspro business.

- Gross profit was $19.4 million (47.0% of revenue), compared to $19.9 million (53.3% of revenue) for the same period last fiscal year. The primary reason for the decline is that in the period ended June 30, 2019, there was a one-time license fee which impacted the Gross Margin.

- Research and development (R&D) expenses were $3.8 million (9.3% of revenue), compared to $5.4 million (14.7% of revenue) for the same period last fiscal year. The company has rationalized its R&D investments in the international business through transition from a geographical investment approach to a more global product management and development structure and repurposed some of the teams to deliver new business.

- Selling, general and administrative (SG&A) expenses were $11.6 million (28.2% of revenue), compared to $11.8 million (31.7% of revenue) for the same period last fiscal year.

- Net income was $1.3 million or $0.03 basic and diluted per share as compared to net income of $1.3 million or $0.03 basic and diluted per share, for the same period last fiscal year. Net Income for the period was impacted by one time M&A expenses of $ 1.8 million for the Inspro acquisition.

- Adjusted EBITDA was $6.0 million (14.5% of revenue), compared to $4.7 million (12.7% of revenue) for the same period last fiscal year.

Other Highlights

- Majesco had cash and cash equivalents, including short term investments of $30.9 million at June 30, 2020, compared to $51.5 million at March 31, 2020. The drop was primarily on account of funding of the Inspro transaction.

- Majesco had $ 1.1 million in indebtedness as of June 30, 2020, compared $ 0.1 million as of March 31, 2020. This indebtedness consisted primarily of software and equipment lease liabilities assumed in the acquisition of Inspro Technologies.

- 11 successful Go-Lives during the first quarter of fiscal 2021.

- 2 new customer additions and 1 customer signed up to migrate from On-Prem to Cloud.

- Cloud customer count stood at 79 at the end of first quarter 2021.

- The Company successfully acquired Inspro Technologies, a Philadelphia based insurance software business. This transaction closed on April 1, 2020.

Given the pending transaction with Thoma Bravo, Majesco will not be hosting a Q1 earnings call.

Shares of Majesco Ltd was last trading in BSE at Rs.677.9 as compared to the previous close of Rs. 645.65. The total number of shares traded during the day was 369 in over 17 trades.

The stock hit an intraday high of Rs. 677.9 and intraday low of 677.9. The net turnover during the day was Rs. 250145.

Source : Equity Bulls

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