ARI Network Services, Inc. (NASDAQ:ARIS), an award-winning provider of SaaS, software tools and marketing services that help dealers, distributors and manufacturers Sell More Stuff!, reported financial results today for its fiscal 2016 second quarter ended January 31, 2016.
Highlights for the fiscal second quarter included:
- Eighth consecutive quarter of revenue growth for the firm.
- Revenue increased 15.9 percent to $11.8 million, which compares with $10.1 million for the same period last year and $11.7 million in 1Q16. Recurring revenue growth outpaced overall revenue growth as it increased 17.0 percent to $10.8 million, which compares with $9.2 million for the same period last year and $10.7 million in 1Q16.
- Operating income was $873,000, compared with $670,000 for the same period last year and $808,000 in 1Q16.
- Adjusted EBITDA, a non-GAAP measure, increased 20.3 percent to $2.1 million, or 17.8 percent of revenue. This compares with Adjusted EBITDA of $1.7 million, or 17.2 percent of revenue in the same period last year and $2.0 million, or 17.2 percent of revenue in 1Q16.
- Cash generated from operations was $1.2 million, compared with $1.1 million for the same period last year and $1.7 million in 1Q16.
Fiscal Year 2016 Second Quarter Financials
ARI achieved 15.9 percent revenue growth as it reported revenues of $11.8 million for the second quarter of fiscal year 2016, compared with $10.1 million for the same period last year. Recurring revenue comprised 91.6 percent of total revenue versus 90.8 percent for the same period last year.
Gross margin for the second quarter of fiscal year 2016 was 82.4 percent versus 81.6 percent last year.
Operating income was $873,000 for the second quarter of fiscal year 2016, compared with operating income of $670,000 for the same period last year, a 30.3 percent increase.
The company reported net income of $448,000, or $0.03 per diluted share for the quarter, compared with net income of $260,000 or $0.02 per share last year.
Roy W. Olivier, President and Chief Executive Officer of ARI, commented, “The second quarter results continue to demonstrate that we are successfully executing against our strategy as operating income and Adjusted EBITDA increased at a faster rate than our overall revenue. Further, our total bookings remain strong and in Q2 were up 24 percent, which we believe will allow us to accelerate organic revenue growth in the back half of the fiscal year.”
William Nurthen, Chief Financial Officer of ARI, commented, “As we reach the midpoint of our fiscal year, we continue to experience year-over-year improvements in both profitability and cash flow. In the second quarter of fiscal 2016, the Company produced record operating income and our highest EPS since the fourth quarter of fiscal 2012. We also experienced another strong quarter of cash flow, while at the same time continuing to transition some of our customers from annual to monthly billing. Despite increased debt repayments in the quarter related to the TCS acquisition, we maintained our cash balance at $3.2 million which continues to leave us well-positioned to execute on future investment opportunities that align with our growth strategy.”