Revenue during the quarter dropped 13.50 percent to $6.12 million from $7.07 million in the previous year period. Gross margin for the quarter expanded 484 basis points over the previous year period to 78.32 percent. Total expenses were 71.06 percent of quarterly revenues, down from 85.82 percent for the same period last year. This has led to an improvement of 1475 basis points in operating margin to 28.94 percent.

Operating income for the quarter was $1.77 million, compared with $1 million in the previous year period.

However, the adjusted EBITDA for the quarter stood at $2.08 million compared with $1.86 million in the prior year period. At the same time, adjusted EBITDA margin improved 781 basis points in the quarter to 34.05 percent from 26.24 percent in the last year period.

"Our profitability improved in each successive quarter of 2016 as we continue to benefit from our transition to a Managed Services model and LEAN methodologies, which together deliver tremendchief executive officerous economies of scale," said Thomas Thekkethala, chief executive officer. "Profitability metrics improved across the board in 2016, highlighted by sharp increases in gross margins, operating income, adjusted EBITDA, and cash flows from operations."

Debt comes down significantly
Evolving Systems, Inc. has recorded a decline in total debt over the last one year. It stood at $6 million as on Dec. 31, 2016, down 40.06 percent or $4.01 million from $10.01 million on Dec. 31, 2015. Total debt was 13.71 percent of total assets as on Dec. 31, 2016, compared with 19.84 percent on Dec. 31, 2015. Debt to equity ratio was at 0.20 as on Dec. 31, 2016, down from 0.31 as on Dec. 31, 2015. Interest coverage ratio improved to 23.60 for the quarter from 8.96 for the same period last year.