Zendesk, Inc. (ZEN) saw its loss narrow to $26.99 million, or $0.28 a share for the quarter ended Mar. 31, 2017. In the previous year period, the company reported a loss of $27.17 million, or $0.30 a share. On the other hand, adjusted net loss for the quarter narrowed to $5.06 million, or $0.05 a share from a loss of $7.28 million or $0.08 a share, a year ago. Revenue during the quarter surged 35.86 percent to $93.01 million from $68.46 million in the previous year period. Gross margin for the quarter expanded 121 basis points over the previous year period to 69.78 percent. Operating margin for the quarter stood at negative 29.22 percent as compared to a negative 38.98 percent for the previous year period.
Operating loss for the quarter was $27.17 million, compared with an operating loss of $26.69 million in the previous year period.
However, the adjusted operating loss for the quarter stood at $5.24 million compared to operating loss of $6.79 million in prior year period.
“We’re honored that so many organizations of all sizes trust us with their customer relationships at a time when those relationships have never been more important,” said Mikkel Svane, Zendesk Chief executive officer, chairman and founder. “With the Outbound team now joining Zendesk, we will be able to more rapidly build out our product family and accelerate our promise to deliver a single, seamless customer experience.”
For the second-quarter, Zendesk expects revenue to be in the range of $98 million to $100 million. Zendesk expects revenue to be in the range of $417 million to $425 million for financial year 2017. The company expects adjusted operating income to be in the range of $5 million to $7 million for the second-quarter. For fiscal year 2017, the company expects adjusted operating income to be in the range of $16 million to $20 million.
Operating cash flow improves significantly
Zendesk has generated cash of $7.15 million from operating activities during the quarter, up 55.79 percent or $2.56 million, when compared with the last year period. The company has spent $7.14 million cash to meet investing activities during the quarter as against cash outgo of $7.74 million in the last year period.
Cash flow from financing activities was $15.38 million for the quarter, up 215.79 percent or $10.51 million, when compared with the last year period.
Cash and cash equivalents stood at $109.26 million as on Mar. 31, 2017, down 49.83 percent or $108.53 million from $217.79 million on Mar. 31, 2016.
Working capital declines
Zendesk has witnessed a decline in the working capital over the last year. It stood at $128.65 million as at Mar. 31, 2017, down 22.75 percent or $37.88 million from $166.53 million on Mar. 31, 2016. Current ratio was at 1.73 as on Mar. 31, 2017, down from 2.34 on Mar. 31, 2016.
Days sales outstanding went down to 32 days for the quarter compared with 33 days for the same period last year.
At the same time, days payable outstanding went down to 24 days for the quarter from 33 for the same period last year.
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