Model N, Inc.

Q1 fiscal 2024 total revenue was $63.5 million, up 7% year over year. Subscription revenue was $47.7 million, up 8%, and professional services revenue was $15.8 million, up 6%. Non-GAAP gross profit was $38.3 million, with gross margin of 60.3%; non-GAAP subscription gross margin was 68.4% and professional services gross margin was 35.8%. Adjusted EBITDA was $9.9 million, or 15.5% margin, and non-GAAP EPS was $0.28 on 39.1 million diluted shares. SaaS ARR was $134.8 million, up $19 million or 16% year over year, and SaaS net retention was 115%. Cash and equivalents ended at $303 million, and trailing 12-month free cash flow was $43.5 million, up 172% year over year. For full-year fiscal 2024, Model N guided to total revenue of $260.5 million to $263.5 million, subscription revenue of $193.5 million to $195.5 million, professional services revenue of $67 million to $68 million, adjusted EBITDA of $48 million to $51 million, and non-GAAP EPS of $1.25 to $1.32. For Q2, guidance was total revenue of $63.5 million to $64.5 million, subscription revenue of $48.5 million to $49 million, professional services revenue of $15 million to $15.5 million, adjusted EBITDA of $9 million to $10 million, and non-GAAP EPS of $0.24 to $0.27.

Jason Blessing said Q1 beat guidance across total revenue, subscription revenue, professional services revenue, and adjusted EBITDA, and he emphasized that the company is seeing tangible progress from its business model transformation. He pointed to new logo wins, customer expansions, and new product adoption as evidence that the long-term growth levers are maturing. His tone was constructive and confident, especially around the stability of the demand environment and the visibility to the remaining SaaS transitions.

John Ederer highlighted Q1 revenue of $63.5 million, adjusted EBITDA of $9.9 million, and gross margin of 60.3%, noting that results were above expectations. He also pointed to $303 million in cash and equivalents, $43.5 million in trailing 12-month free cash flow, and RPO of $349 million, with current RPO up 11% year over year to $160 million. On guidance, he raised the full-year outlook for total revenue and subscription revenue, held EBITDA and EPS guidance, and said Q2 will be the low watermark for EBITDA margin because of payroll taxes and other benefits.

Analysts pressed on the durability of SaaS growth after difficult comps, the pace of the remaining SaaS conversions, and whether the stronger Q1 bookings signal a more offensive buying environment among customers. Management said the demand backdrop has not deteriorated, regulatory change still supports demand, and it has visibility into the “handful” of customers left to convert, including that more than 80% had already been converted or were in process. Questions also focused on the new High Tech price management product and the upcoming data and analytics products; management said those offerings are being co-developed with customers and that some are slated for Q3 release.