Revenue during the quarter grew 23.38 percent to $210.55 million from $170.65 million in the previous year period. Gross margin for the quarter contracted 47 basis points over the previous year period to 62.29 percent. Total expenses were 92.75 percent of quarterly revenues, up from 91.61 percent for the same period last year. That has resulted in a contraction of 114 basis points in operating margin to 7.25 percent.

Operating income for the quarter was $15.26 million, compared with $14.32 million in the previous year period.

However, the adjusted operating income for the quarter stood at $45.13 million compared to $37.23 million in the prior year period. At the same time, adjusted operating margin contracted 38 basis points in the quarter to 21.43 percent from 21.81 percent in the last year period.

“Our sales team closed 2016 in the fourth quarter with their strongest quarter performance in our history. With both our 2016 total and recurring revenues also coming in on the positive side of our plan, total revenues at $781 million and recurring revenues at $654 million, we are well positioned to achieve our 2017 objectives and our 2018 goals as well. We grew the number of people records in our cloud to approximately 33 million in 2016, and we maintained a year-over-year customer retention rate of approximately 97%,” said Scott Scherr, founder, president, and Chief executive officer.

For the first-quarter, Ultimate Software Group projects revenue to be $229 million. Ultimate Software Group projects revenue to grow at 24 percent for the financial year 2017. The company forecasts operating income to grow at 16 percent for the first-quarter. For financial year 2017, the company forecasts operating income to grow at 21 percent.

Cash flow from investing activities was $358.24 million from investing activities during the year as against cash outgo of $224.76 million in the last year.

The company has spent $553.72 million cash to carry out financing activities during the year as against cash inflow of $85.47 million in the last year period.

Cash and cash equivalents stood at $73.77 million as on Dec. 31, 2016, down 32.52 percent or $35.55 million from $109.32 million on Dec. 31, 2015.

Working capital drops significantly
Ultimate Software has witnessed a decline in the working capital over the last year. It stood at $72.11 million as at Dec. 31, 2016, down 28.37 percent or $28.56 million from $100.67 million on Dec. 31, 2015. Current ratio was at 1.10 as on Dec. 31, 2016, up from 1.09 on Dec. 31, 2015.

Days sales outstanding were almost stable at 35 days for the quarter, when compared with the last year period.

At the same time, days payable outstanding went up to 8 days for the quarter from 5 for the same period last year.