PCSK1N

DUBLIN--( BUSINESS WIRE )--The "World Market for Laboratory Information Systems (LIS): Software, Hardware, and Implementation for Clinical Labs, 2022-2027" report has been added to ResearchAndMarkets.com's offering. This new report examines the current and potential world opportunity for healthcare laboratory information system (LIS) software, hardware, and implementation. The focus of this report is on the market for LIS in clinical diagnostic and healthcare-related labs, although LIMS in pharmaceutical drug discovery laboratories, and other drug research and development labs, are discussed as well. Coverage includes: key trends and other facts about LIS and end-user usage in diagnostic and other clinical laboratories; global and regional revenues for clinical LIS, 2022-2027; CLIA registered laboratories by type of facility, 2015 & 2023; growth in US clinical laboratories, 1997-2023; growth in US hospital laboratory locations, 2011-2023; growth in US independent laboratory facilities, 2011-2023; key LIS selection issues; profiles of selected LIS/LIMS vendors; recent key collaborations and other deals; and key vendor mergers and acquisitions, 2011-2023 This market review examines LIS revenue growth in the clinical LIS area, including: global revenues and marketplace revenues by region, 2022-2027 (United States/North America, Europe, APAC, ROW). The report also reviews the nature and direction of trends and research, and gives insight into some issues facing the industry. Further, large manufacturers that have made names for themselves in the field, as well as smaller firms with market niches are highlighted. These include: Accelerated Technology Laboratories Apex Healthware Aspyra Clinical Software Systems Cerner (Oracle) Clinical Systems Clinisys CLTech International CompuGroup Medical Data Unlimited International Epic Systems LabVantage Solutions LabWare LIMSABC McKesson Ocimum Biosolutions Orchard Software PerkinElmer Psyche Systems Sapio Sciences SCC Soft Computer StarLIMS Technidata Thermo Fisher Scientific XiFin Key Topics Covered: CHAPTER 1: EXECUTIVE SUMMARY WORLD MARKET SUMMARY MARKET OVERVIEW AND POTENTIAL CHAPTER 2: INTRODUCTION OVERVIEW Laboratory Informatics in Flux Connecting the Laboratory and the Patient Variations of LIS/ LIMS Variations For the Drug Industry Variations of LIS For Clinical Laboratories Range of Possible Functions Key Functionality Functionality - Crossover of Features Functionality - Clinical Laboratories Functionality - Verifying Workflow Automation and Competitiveness Opportunities to Expand Integration and Interconnectivity Clinical Diagnostic Integration Electronic Medical Records Point of Care Testing Implications for LIS The Integration Challenge Enterprise Capability Automating Software Benefits and Tradeoffs of LIS Improving Data Management Improved Trackability The Impact of Personalized Medicine CHAPTER 3: TRENDS AND ISSUES TRENDS EMERGING TRENDS - INFORMATICS NO LONGER A SIDE ISSUE Spanning the Interface Data Mobility Robust and Adaptable Commercial Off-the-Shelf Systems COTS - Virtues and Drawbacks COTS - Some Customization Needed Software-as-a-Service (SaaS) SaaS - Changing the Face of the Industry Open Architecture Open Source - Customization For the Clinical Lab Reducing Costs Cost Reduction - Standardization Cost Reduction - Rental Option Significant Laboratory Challenges Challenging Choice of Systems Challenge of Evolving Technology Key Questions from Users Vendor Challenges and Concerns The Interface Challenge Configurability Desired CHAPTER 4: MARKET POTENTIAL MARKET REVENUE AND FORECAST Perspective Managing the Data Tsunami Harnessing Sequencing Data REPLACEMENT MARKET OPPORTUNITIES Adaptability Is Key LABORATORY MARKET SYNOPSIS Structure Types of Testing Laboratory Types and Growth Demographics Push Demand Reimbursement Trends International Laboratory Growth Trends MARKETPLACE IMPETUS GROWTH DRIVERS THE CLINICAL LABORATORY MARKET MARKET FORECAST THE GROWING NGS MARKET FOR LIMS CHAPTER 5: MARKET PARTICIPANTS Accelerated Technology Laboratories Apex Healthware Aspyra Clinical Software Systems Cerner (Oracle) Clinical Systems Clinisys CLTech International CompuGroup Medical Data Unlimited International Epic Systems LabVantage Solutions LabWare LIMSABC McKesson Ocimum Biosolutions Orchard Software PerkinElmer Psyche Systems Sapio Sciences SCC Soft Computer StarLIMS Technidata Thermo Fisher Scientific XiFin For more information about this report visit https://www.researchandmarkets.com/r/2arih4 About ResearchAndMarkets.com ResearchAndMarkets.com is the world's leading source for international market research reports and market data. We provide you with the latest data on international and regional markets, key industries, the top companies, new products and the latest trends.

CHICAGO--(BUSINESS WIRE)-- Veradigm, Inc. (NASDAQ: MDRX), a leading provider of healthcare data and technology solutions, announced today that it will now offer a conversational artificial intelligence (AI) agent for Practice Fusion Billing Services, a Veradigm Network solution. Created to quickly answer questions in a conversational format designed to meet client needs, this enhancement will help simplify the billing process and optimize financial management for independent healthcare providers. Billing processes have long been a complex and time-consuming challenge for many independent practices. Through its integration with Microsoft and the Azure-based software solution from Zammo.ai Microsoft accelerator software vendor, Practice Fusion Billing Services customers can now benefit from instant conversation responses and feedback directly from the Practice Fusion EHR platform. Practice Fusion Billing Services integrates Microsoft Azure AI Search and Azure OpenAI Service. The AI has been trained in a closed system, based upon a comprehensive billing knowledge base, and will generate normalized real time responses to Practice Fusion Billing Services questions. “We are dedicated to helping independent medical practices optimize their financial management efforts,” said Tom Langan, President and Chief Commercial Officer of Veradigm. “This is a testament to our commitment to simplifying complex processes and improving the financial health of independent practices.” “We are witnessing a generational transformation in healthcare,” added Ian Maurer, VP of Development at Veradigm. “Artificial Intelligence can enhance practice productivity, reduce provider fatigue, and improve patient outcomes. Through the Veradigm integration with Microsoft Azure OpenAI Service using the Zammo.ai SaaS Accelerator our team was able to rapidly develop and deploy this generative AI solution for Practice Fusion Billing Services in weeks, not months. We see this solution as a foundational enhancement with exciting future potential.” “A wide variety of industries are rapidly adopting conversational AI solutions to better meet customer needs while increasing engagement, lowering costs, and boosting productivity,” said Tyler Bryson, CVP, US Health & Public Sector Industries, Microsoft. “Through our collaboration with Veradigm and the power of Microsoft Azure AI capabilities, we are helping accelerate innovation and transforming the way clinicians within the Veradigm Network get answers and solve billing challenges.” About Veradigm® Veradigm is a healthcare technology company that drives value through its unique combination of platforms, data, expertise, connectivity, and scale. The Veradigm Network features a dynamic community of solutions and partners providing advanced insights, technology, and data-driven solutions for the healthcare provider, payer, and biopharma markets. For more information about how Veradigm is fulfilling its mission of Transforming Health, Insightfully, visit , or find Veradigm on LinkedIn, Facebook, Twitter, and YouTube. © 2023 Veradigm Inc. and/or its affiliates. All Rights Reserved.

Total Revenue Grew 13% Year-over-Year SaaS ARR Grew 28% Year-over-Year SAN MATEO, Calif.--(BUSINESS WIRE)-- Model N, Inc. (NYSE: MODN), the leader in cloud revenue management solutions, today announced financial results for the third quarter of fiscal year 2023 ended June 30, 2023. “Our third quarter results beat expectations across the board – we exceeded guidance for total revenue, subscription revenue, and professional services revenue. Overall, Q3 was another strong quarter and underscores our commitment to driving profitable growth,” said Jason Blessing, president and chief executive officer of Model N. “A key highlight during the quarter was our 19th annual customer conference, Rainmaker. Our customers, team members, and partners alike came out of Rainmaker very energized and excited for the future. We’re seeing strong product pipeline, compelling customer engagement, and healthy customer satisfaction. I came away feeling good about how both our value proposition and customer-centric approach are resonating well across our customer base.” Recent Company Highlights Model N hosted Rainmaker23, the Company’s annual customer conference in Nashville. In June, Fortune Media and Great Place to Work® honored Model N as one of this year’s Best Workplaces in the Bay Area. In July, Fortune and Great Place to Work® honored Model N as one of this year’s Best Workplaces for Millennials. Model N released its Spring 2023 product release for life sciences and high-tech customers. This latest semi-annual release delivers new products and platform enhancements to help pharmaceutical, medical technology, and high-tech manufacturers further optimize revenue operations and strengthen compliance across the enterprise. Third Quarter 2023 Financial Highlights Revenues: Total revenues were $63.7 million, an increase of 13% from the third quarter of fiscal year 2022. Subscription revenues were $45.8 million, an increase of 13% from the third quarter of fiscal year 2022. Gross Profit: Gross profit was $36.5 million, an increase of 16% from the third quarter of fiscal year 2022. Gross margin was 57% for the third quarter of fiscal year 2023 compared to 56% for the third quarter of 2022. Non-GAAP gross profit was $39.2 million, an increase of 13% from the third quarter of fiscal year 2022. Non-GAAP gross margin was 61% for the third quarter of fiscal year 2023 compared to 62% for the third quarter of fiscal year 2022. Subscription gross margin was 65% compared to 63% for the third quarter of fiscal year 2022. Non-GAAP subscription gross margin was 69% compared to 68% for the third quarter of fiscal year 2022. GAAP Income and Non-GAAP Income from Operations: GAAP income from operations was $2.9 million compared to loss from operations of $2.1 million for the third quarter of fiscal year 2022. Non-GAAP income from operations was $13.3 million, an increase of 35% from the third quarter of fiscal year 2022. GAAP Net Income: GAAP net income was $2.8 million compared to a net loss of $6.2 million for the third quarter of fiscal year 2022. GAAP diluted net income per share attributable to common stockholders was $0.07 based upon diluted weighted average shares outstanding of 38.6 million compared to net loss per share of $0.17 for the third quarter of fiscal year 2022 based upon weighted average shares outstanding of 36.9 million. Non-GAAP Net Income: Non-GAAP net income, was $13.6 million, an increase of 60% from the third quarter of fiscal year 2022. Non-GAAP net income per diluted share was $0.35 based upon diluted weighted average shares outstanding of 38.6 million compared to non-GAAP net income per diluted share of $0.23 for the third quarter of fiscal year 2022 based upon diluted weighted average shares outstanding of 37.1 million. Adjusted EBITDA: Adjusted EBITDA was $13.5 million, an increase of 35% from the third quarter of fiscal year 2022. Adjusted EBITDA margin was 21% compared to 18% for the third quarter of fiscal year 2022. SaaS ARR and SaaS Net Dollar Retention: SaaS ARR hit $129.2 million, representing growth of 28% year-over-year. Trailing 12-month SaaS net dollar retention increased to 126% from 123% year-over-year. A reconciliation of GAAP to non-GAAP financial measures has been provided in the financial tables included in this press release. Guidance As of August 8, 2023, we are providing guidance for the fourth quarter and the full fiscal year ending September 30, 2023. (in $ millions, except per share) Fourth Quarter Fiscal 2023 Full Year Fiscal 2023 Total revenues 61.6 - 62.6 247.1 - 248.1 Subscription revenues 45.6 - 46.1 180.5 - 181.0 Non-GAAP income from operations 10.8 - 11.8 41.8 - 42.8 Non-GAAP net income per share 0.28 - 0.31 1.08 - 1.10 Adjusted EBITDA 11.0 - 12.0 42.9 - 43.9 Quarterly Results Conference Call Model N will host a conference call today at 2:00 PM Pacific Time (5:00 PM Eastern Time) to review the company’s financial results for the third quarter fiscal year 2023 ended June 30, 2023. The conference call can be accessed by dialing 877-407-4018 from the United States or +1-201-689-8471 internationally. A live webcast and replay of the conference call can be accessed from the investor relations page of Model N’s website at investor.modeln.com. Following the completion of the call through 11:59 p.m. ET on August 22, 2023, a telephone replay will be available by dialing 844-512-2921 from the United States or +1-412-317-6671, internationally, with recording access code 13735136. About Model N Model N is the leader in revenue optimization and compliance for pharmaceutical, medtech, and high-tech innovators. Our intelligent platform powers your digital transformation with integrated technology, data, analytics, and expert services that deliver deep insight and control. Our integrated cloud solution is proven to automate pricing, incentive, and contract decisions to scale business profitably and grow revenue. Model N is trusted across more than 120 countries by the world’s leading pharmaceutical, medical technology, semiconductor, and high-tech companies, including Johnson & Johnson, AstraZeneca, Stryker, Seagate Technology, Broadcom, and Microchip Technology. For more information, visit . Forward-Looking Statements This press release contains forward-looking statements including, among other things, statements regarding Model N’s fourth quarter and full year fiscal 2023 financial results, Model N’s profitability, future planned enhancements to our products and benefits from our products. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” and similar expressions are intended to identify forward-looking statements. These forward-looking statements are subject to risks, uncertainties, and assumptions. If the risks materialize or assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. Risks include, but are not limited to: (i) delays in closing customer contracts; (ii) our ability to improve and sustain our sales execution; (iii) the timing of new orders and the associated revenue recognition; (iv) adverse changes in general economic or market conditions; (v) delays or reductions in information technology spending and resulting variability in customer orders from quarter to quarter; (vi) competitive factors, including but not limited to pricing pressures, industry consolidation, entry of new competitors and new applications and marketing initiatives by our competitors; (vii) our ability to manage our growth effectively; (viii) acceptance of our applications and services by customers; (ix) success of new products; (x) the risk that the strategic initiatives that we may pursue will not result in significant future revenues; (xi) changes in health care regulation and policy and tax in the United States and worldwide; (xii) our ability to retain customers; and (xiii) adverse impacts on our business and financial condition due to macroeconomic and geopolitical factors, such as inflation, rising interests, pandemics, banking system instability and geopolitical conflicts. Further information on risks that could affect Model N’s results is included in our filings with the Securities and Exchange Commission (“SEC”), including our most recent quarterly report on Form 10-Q and our annual report on Form 10-K for the fiscal year ended September 30, 2022, and any current reports on Form 8-K that we may time to time. Should any of these risks or uncertainties materialize, actual results could differ materially from expectations. Model N assumes no obligation to, and does not currently intend to, update any such forward-looking statements after the date of this release. Non-GAAP Financial Measures We have provided in this release financial information that has not been prepared in accordance with accounting standards generally accepted in the United States of America (“GAAP”). We use these non-GAAP financial measures internally in analyzing our financial results and believe they are useful to investors, as a supplement to GAAP measures, in evaluating our ongoing operational performance. We believe that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends, and in comparing our financial results with other companies in our industry, many of which present similar non-GAAP financial measures to investors. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures below. A reconciliation of our non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the financial statement tables included below in this press release. Our reported results include certain non-GAAP financial measures, including non-GAAP gross profit, non-GAAP gross margin, non-GAAP subscription gross profit, non-GAAP subscription gross margin, non-GAAP income from operations, non-GAAP net income, non-GAAP net income per share, adjusted EBITDA and free cash flow. Non-GAAP gross profit and subscription gross profit excludes stock-based compensation expenses and amortization of intangible assets as they are often excluded by other companies to help investors understand the operational performance of their business. Non-GAAP income from operations excludes stock-based compensation expense and amortization of intangible assets. Non-GAAP net income excludes stock-based compensation expense, amortization of intangible assets, amortization of debt discount and issuance costs, and loss on extinguishment of debt. Additionally, stock-based compensation expense varies from period to period and from company to company due to such things as valuation methodologies and changes in stock price. Adjusted EBITDA is defined as net income (loss), adjusted for depreciation and amortization, stock-based compensation expense, interest income (expense), net, other income (expenses), net, provision for income taxes, and loss on extinguishment of debt. Reconciliation tables are provided in this press release. SaaS ARR is defined as the annualized value of our SaaS revenue, which is derived by dividing the SaaS portion of our recurring subscription revenue for the quarter by the number of days in the quarter, and multiplying it by 365 to get an annualized number. SaaS Net Dollar Retention uses the same SaaS ARR calculations to measure the percentage change in SaaS ARR from customers that are in both the current period and the year-ago period. SaaS ARR that has been added from new customers that were not in the year-ago calculation is excluded from the SaaS Net Dollar Retention calculation. SaaS ARR and SaaS Net Dollar Retention should be viewed independently of revenue, deferred revenue, and remaining performance obligations, and are not intended to be a substitute for, or combined with, any of these items. Free cash flow is defined as net cash provided by operating activities less cash used for purchase of property plant and equipment. We have not reconciled guidance for non-GAAP financial measures to their most directly comparable GAAP measures because certain items that impact these measures are uncertain, out of our control and/or cannot be reasonably predicted or estimated, such as the difficulties of estimating certain items such as charges to stock-based compensation expense. Accordingly, a reconciliation of the non-GAAP financial measure guidance to the corresponding GAAP measures is not available without unreasonable effort. Model N, Inc. Condensed Consolidated Balance Sheets (in thousands) As of June 30, 2023 As of September 30, 2022 Assets Current assets Cash and cash equivalents $ 299,581 $ 193,524 Funds held for customers 117 603 Accounts receivable, net 51,866 49,121 Prepaid expenses 4,181 5,772 Other current assets 8,574 12,516 Total current assets 364,319 261,536 Property and equipment, net 1,260 1,838 Operating lease right-of-use assets 11,030 15,392 Goodwill 65,665 65,665 Intangible assets, net 31,902 37,362 Other assets 9,134 10,454 Total assets $ 483,310 $ 392,247 Liabilities and Stockholders’ Equity Current liabilities Accounts payable $ 4,615 $ 5,820 Customer funds payable 117 603 Accrued employee compensation 13,205 26,712 Accrued liabilities 5,966 6,860 Operating lease liabilities, current portion 4,577 4,651 Deferred revenue, current portion 59,825 62,282 Total current liabilities 88,305 106,928 Long-term liabilities Long term debt 279,895 135,417 Operating lease liabilities, less current portion 7,786 12,142 Other long-term liabilities 3,693 3,139 Total long-term liabilities 291,374 150,698 Total liabilities 379,679 257,626 Stockholders’ equity Common stock 6 6 Additional paid-in capital 403,218 421,473 Accumulated other comprehensive loss (2,104 ) (2,413 ) Accumulated deficit (297,489 ) (284,445 ) Total stockholders’ equity 103,631 134,621 Total liabilities and stockholders’ equity $ 483,310 $ 392,247 Model N, Inc. Condensed Consolidated Statements of Operations (in thousands, except per share amounts) Three Months Ended June 30, Nine Months Ended June 30, 2023 2022 2023 2022 Revenues Subscription $ 45,789 $ 40,554 $ 134,928 $ 116,885 Professional services 17,947 15,618 50,566 44,109 Total revenues 63,736 56,172 185,494 160,994 Cost of revenues Subscription 15,841 14,869 47,568 43,249 Professional services 11,424 9,938 33,588 28,260 Total cost of revenues 27,265 24,807 81,156 71,509 Gross profit 36,471 31,365 104,338 89,485 Operating expenses Research and development 11,361 11,797 36,528 35,035 Sales and marketing 13,332 11,795 40,531 34,873 General and administrative 8,849 9,857 31,021 27,618 Total operating expenses 33,542 33,449 108,080 97,526 Income (loss) from operations 2,929 (2,084 ) (3,742 ) (8,041 ) Interest expense (income), net (731 ) 3,794 (878 ) 11,420 Loss on extinguishment of debt — — 29,493 — Other expenses (income), net 102 (271 ) 120 (283 ) Income (loss) before income taxes 3,558 (5,607 ) (32,477 ) (19,178 ) Provision for income taxes 740 611 2,074 1,345 Net income (loss) $ 2,818 $ (6,218 ) $ (34,551 ) $ (20,523 ) Net income (loss) per share: Basic $ 0.07 $ (0.17 ) $ (0.91 ) $ (0.56 ) Diluted $ 0.07 $ (0.17 ) $ (0.91 ) $ (0.56 ) Weighted average number of shares used in computing net income (loss) per share: Basic 38,278 36,935 37,906 36,591 Diluted 38,610 36,935 37,906 36,591 Model N, Inc. Condensed Consolidated Statements of Cash Flows (in thousands) Nine Months Ended June 30, 2023 2022 Cash Flows from Operating Activities: Net loss $ (34,551 ) $ (20,523 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 6,254 6,725 Stock-based compensation 29,362 25,186 Amortization of debt discount and issuance costs 1,047 8,211 Loss on extinguishment of debt 29,493 — Deferred income taxes 20 414 Amortization of capitalized contract acquisition costs 3,663 3,152 Other non-cash charges 1,251 (515 ) Changes in assets and liabilities, net of acquisition: Accounts receivable (3,960 ) 4,908 Prepaid expenses and other assets 7,500 (1,611 ) Accounts payable (1,211 ) (1,516 ) Accrued employee compensation (8,461 ) (794 ) Other current and long-term liabilities (4,192 ) (3,020 ) Deferred revenue (2,751 ) (3,284 ) Net cash provided by operating activities 23,464 17,333 Cash Flows from Investing Activities: Purchases of property and equipment (237 ) (486 ) Net cash used in investing activities (237 ) (486 ) Cash Flows from Financing Activities: Proceeds from exercise of stock options and issuance of common stock under employee stock purchase plan 2,555 2,507 Proceeds from issuance of 2028 Notes 253,000 — Payment of debt issuance cost for 2028 Notes (7,525 ) — Repayments of 2025 Notes (165,210 ) — Net changes in customer funds payable (486 ) (142 ) Net cash provided by financing activities 82,334 2,365 Effect of exchange rate changes on cash and cash equivalents 10 (335 ) Net increase in cash and cash equivalents 105,571 18,877 Cash and cash equivalents Beginning of period 194,127 165,783 End of period $ 299,698 $ 184,660 Model N, Inc. Reconciliation of GAAP to Non-GAAP Operating Results (in thousands, except per share amounts) Three Months Ended June 30, Nine Months Ended June 30, 2023 2022 2023 2022 Reconciliation from GAAP net income (loss) to adjusted EBITDA GAAP net income (loss) $ 2,818 $ (6,218 ) $ (34,551 ) $ (20,523 ) Reversal of non-GAAP items Stock-based compensation expense 8,596 9,878 29,362 25,186 Depreciation and amortization 1,992 2,246 6,254 6,725 Interest (income) expense, net (731 ) 3,794 (878 ) 11,420 Loss on extinguishment of debt — — 29,493 — Other (income) expense, net 102 (271 ) 120 (283 ) Provision for income taxes 740 611 2,074 1,345 Adjusted EBITDA $ 13,517 $ 10,040 $ 31,874 $ 23,870 Three Months Ended June 30, Nine Months Ended June 30, 2023 2022 2023 2022 Reconciliation from GAAP gross profit to non-GAAP gross profit GAAP gross profit $ 36,471 $ 31,365 $ 104,338 $ 89,485 Reversal of non-GAAP expenses Stock-based compensation (a) 2,285 2,574 7,132 5,989 Amortization of intangible assets (b) 427 709 1,563 2,127 Non-GAAP gross profit $ 39,183 $ 34,648 $ 113,033 $ 97,601 Percentage of revenue 61.5 % 61.7 % 60.9 % 60.6 % Three Months Ended June 30, Nine Months Ended June 30, 2023 2022 2023 2022 Reconciliation from GAAP subscription gross profit to non-GAAP subscription gross profit GAAP subscription gross profit $ 29,948 $ 25,685 $ 87,360 $ 73,636 Reversal of non-GAAP expenses Stock-based compensation (a) 1,265 1,380 3,909 3,303 Amortization of intangible assets (b) 427 709 1,563 2,127 Non-GAAP subscription gross profit $ 31,640 $ 27,774 $ 92,832 $ 79,066 Percentage of subscription revenue 69.1 % 68.5 % 68.8 % 67.6 % Three Months Ended June 30, Nine Months Ended June 30, 2023 2022 2023 2022 Reconciliation from GAAP professional services gross profit to non-GAAP professional services gross profit GAAP professional services gross profit $ 6,523 $ 5,680 $ 16,978 $ 15,849 Reversal of non-GAAP expenses Stock-based compensation (a) 1,020 1,194 $ 3,223 $ 2,686 Non-GAAP professional services gross profit $ 7,543 $ 6,874 $ 20,201 $ 18,535 Percentage of professional services revenue 42.0 % 44.0 % 39.9 % 42.0 % Three Months Ended June 30, Nine Months Ended June 30, 2023 2022 2023 2022 Reconciliation from GAAP operating income (loss) to non-GAAP operating income GAAP operating income (loss) $ 2,929 $ (2,084 ) $ (3,742 ) $ (8,041 ) Reversal of non-GAAP expenses Stock-based compensation (a) 8,596 9,878 29,362 25,186 Amortization of intangible assets (b) 1,726 2,008 5,460 6,024 Non-GAAP operating income $ 13,251 $ 9,802 $ 31,080 $ 23,169 Numerator Reconciliation between GAAP net income (loss) and non-GAAP net income GAAP net income (loss) $ 2,818 $ (6,218 ) $ (34,551 ) $ (20,523 ) Reversal of non-GAAP expenses Stock-based compensation (a) 8,596 9,878 29,362 25,186 Amortization of intangible assets (b) 1,726 2,008 5,460 6,024 Loss on extinguishment of debt (c) — — 29,493 — Amortization of debt discount and issuance costs (d) 418 2,819 1,047 8,211 Non-GAAP net income $ 13,558 $ 8,487 $ 30,811 $ 18,898 Denominator Reconciliation between GAAP net income (loss) and non-GAAP net income per share Shares used in computing GAAP net income (loss) per share: Basic 38,278 36,935 37,906 36,591 Diluted 38,610 36,935 37,906 36,591 Shares used in computing non-GAAP net income per share Basic 38,278 36,935 37,906 36,591 Add: effect of shares for stock plan activity 332 172 503 240 Add: effect of shares related to convertible senior notes — — 324 — Diluted 38,610 37,107 38,733 36,831 GAAP net income (loss) per share Basic and diluted $ 0.07 $ (0.17 ) $ (0.91 ) $ (0.56 ) Non-GAAP net income per share Basic $ 0.35 $ 0.23 $ 0.81 $ 0.52 Diluted $ 0.35 $ 0.23 $ 0.80 $ 0.51 Three Months Ended June 30, Nine Months Ended June 30, 2023 2022 2023 2022 Amortization of intangibles assets recorded in the statements of operations Cost of revenues Subscription $ 427 $ 709 $ 1,563 $ 2,127 Total amortization of intangibles assets in cost of revenue (b) 427 709 1,563 2,127 Operating expenses Sales and marketing 1,299 1,299 3,897 3,897 Total amortization of intangibles assets in operating expense (b) 1,299 1,299 3,897 3,897 Total amortization of intangibles assets (b) $ 1,726 $ 2,008 $ 5,460 $ 6,024 Three Months Ended June 30, Nine Months Ended June 30, 2023 2022 2023 2022 Stock-based compensation recorded in the statements of operations Cost of revenues Subscription $ 1,265 $ 1,380 $ 3,909 $ 3,303 Professional services 1,020 1,194 3,223 2,686 Total stock-based compensation in cost of revenue (a) 2,285 2,574 7,132 5,989 Operating expenses Research and development 1,659 1,826 5,311 4,616 Sales and marketing 2,172 2,223 7,121 5,669 General and administrative 2,480 3,255 9,798 8,912 Total stock-based compensation in operating expense (a) 6,311 7,304 22,230 19,197 Total stock-based compensation (a) $ 8,596 $ 9,878 $ 29,362 $ 25,186 Three Months Ended June 30, Nine Months Ended June 30, 2023 2022 2023 2022 Free cash flow Net cash provided by operating activities $ 29,614 $ 14,405 $ 23,464 $ 17,333 Purchases of property and equipment (131 ) (137 ) (237 ) (486 ) Free cash flow $ 29,483 $ 14,268 $ 23,227 $ 16,847 Use of Non-GAAP Financial Measures To supplement our condensed consolidated financial statements presented on a GAAP basis, we use non-GAAP measures of adjusted EBITDA, gross profit, gross margin, income from operations, net income, weighted average shares outstanding and net income per share, which are adjusted to exclude stock-based compensation expense, amortization of intangible assets, depreciation of fixed assets, amortization of debt discount and issuance costs, loss on extinguishment of debt and include dilutive shares where applicable. We believe these adjustments are appropriate to enhance an overall understanding of our past financial performance and also our prospects for the future. These adjustments to our current period GAAP results are made with the intent of providing both management and investors a more complete understanding of our underlying operating results and trends and our marketplace performance. The non-GAAP results are an indication of our baseline performance that are considered by management for the purpose of making operational decisions. In addition, these non-GAAP results are the primary indicators management uses as a basis for our planning and forecasting of future periods. The presentation of this additional information is not meant to be considered in isolation or as a substitute for operating loss, net loss or basic and diluted net loss per share prepared in accordance with generally accepted accounting principles in the United States. Non-GAAP financial measures are not based on a comprehensive set of accounting rules or principles and are subject to limitations. While a large component of our expenses incurred in certain periods, we believe investors may want to exclude the effects of these items in order to compare our financial performance with that of other companies and between time periods: (a) Stock-based compensation is a non-cash expense accounted for in accordance with FASB ASC Topic 718. We believe that the exclusion of stock-based compensation expense provides for a better comparison of our operating results to prior periods and to our peer companies. (b) Amortization of intangible assets resulted principally from acquisitions. Intangible asset amortization is a non-cash item. As such, we believe exclusion of these expenses provides for a better comparison of our operating results to prior periods and to our peer companies. (c) The repurchase of our 2.625% convertible senior notes due 2025 was accounted for as a debt extinguishment. The Company recorded a $29.5 million loss on extinguishment of debt on its consolidated statements of operations during the fiscal quarter ended March 31, 2023 and the nine months ended June 30, 2023, which includes the write-off of related deferred issuance costs of $2.3 million. We believe exclusion of these expenses provides for a better comparison of our operating results to prior periods and to our peer companies. (d) Amortization of debt discount and issuance costs. Prior to the adoption of ASU 2020-06, Debt with Conversion and Other Options, on October 1, 2022 we were required to recognize non-cash interest expense related to amortization of debt discount and issuance costs. Subsequent to the adoption of ASU 2020-06, Debt with Conversion and Other Options, we only recognize non-cash interest expense related to amortization of issuance costs. We believe exclusion of these expenses provides for a better comparison of our operating results to prior periods and to our peer companies. View source version on businesswire.com: Contacts Investor Relations Contact: Carolyn Bass Market Street Partners investorrelations@modeln.com Source: Model N, Inc. View this news release online at: