Ultimate Software Group (ULTI) has reported an 18.60 percent fall in profit for the quarter ended Sep. 30, 2016. The company has earned $4.76 million, or $0.16 a share in the quarter, compared with $5.85 million, or $0.20 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $23.69 million, or $0.78 a share compared with $20.53 million or $0.69 a share, a year ago. Revenue during the quarter grew 26.83 percent to $196.99 million from $155.32 million in the previous year period. Gross margin for the quarter contracted 11 basis points over the previous year period to 61.34 percent. Total expenses were 95.62 percent of quarterly revenues, up from 92.53 percent for the same period last year. That has resulted in a contraction of 309 basis points in operating margin to 4.38 percent.
Operating income for the quarter was $8.63 million, compared with $11.61 million in the previous year period.
However, the adjusted operating income for the quarter stood at $38.90 million compared to $33.77 million in the prior year period. At the same time, adjusted operating margin contracted 200 basis points in the quarter to 19.75 percent from 21.74 percent in the last year period.
"We executed as planned in this year’s third quarter, putting us in good position to achieve our 2016 and longer-term objectives. Both our recurring and total revenues were on target, and our operating margin came in slightly above projections," said Scott Scherr, chief executive officer, president, and founder of Ultimate.
For the fourth-quarter 2016, Ultimate Software Group projects revenue to be $210 million.
Operating cash flow improves
Ultimate Software Group has generated cash of $115.35 million from operating activities during the nine month period, up 13.71 percent or $13.90 million, when compared with the last year period. Cash flow from investing activities was $448.89 million for the nine month period, up 16.22 percent or $62.64 million, when compared with the last year period.
The company has spent $579.50 million cash to carry out financing activities during the nine month period as against cash outgo of $471.90 million in the last year period.
Cash and cash equivalents stood at $94.79 million as on Sep. 30, 2016, down 22.39 percent or $27.35 million from $122.14 million on Sep. 30, 2015.
Working capital declines
Ultimate Software Group has witnessed a decline in the working capital over the last year. It stood at $86.90 million as at Sep. 30, 2016, down 22.62 percent or $25.41 million from $112.31 million on Sep. 30, 2015. Current ratio was at 1.14 as on Sep. 30, 2016, down from 1.22 on Sep. 30, 2015.
Days sales outstanding went down to 60 days for the quarter compared with 68 days for the same period last year.
At the same time, days payable outstanding was almost stable at 11 days for the quarter, when compared with the previous year period.
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