QAD’s second-quarter profits drop despite record revenue
Shares of Summerland-based business software firm QAD fell Aug. 27 on news that the company’s second-quarter profits dropped 24.2 percent to $985,000.
QAD reported record revenues and higher operating income during the second quarter.
Its total revenue climbed 12 percent to a second-quarter record of $73.1 million, it said, up from $65.2 million in the same period last year. Revenue from its licensing segment jumped to $9 million, compared to $8.6 million a year earlier. Driven by growth in QAD’s cloud-hosted software segment, subscription revenue grew to $6.4 million, up from $4.5 million.
Maintenance and other revenue rose to $36.1 million, up from $34.3 million a year earlier. Professional services revenue increased to $21.5 million, up from $17.9 million for the second quarter.
“We are very pleased with our performance for the second quarter and first half of the year, delivering record revenues for these periods,” CEO Karl Lopker said in a statement. “Continued impressive growth in our cloud business was led by a strong performance from our European region.”
Second-quarter profits were 6 cents per diluted Class A share, compared to 8 cents last year. Per diluted Class B share, profits were 5 cents, compared with 7 cents in the same quarter last year. Class A shareholders receive 120 percent of the dividends paid to Class B shareholders.
QAD said it expects third-quarter revenue of about $71 million and earnings of about 12 cents per diluted Class A share and 10 cents per diluted Class B share. The company also raised its full-year outlook, saying it now expects revenue for its 2015 fiscal year to be about 8 percent higher than it was last year, indicating anticipated sales of about $287.6 million.
Earnings will be about the same as last year, it said, indicating profits in the $6.4 million range.
QAD’s Class B shares fell 2.2 percent to $17.08 on the earnings announcement. Its Class A shares fell 0.5 percent to $20.75.
