Zendesk, Inc. (ZEN) saw its loss widen to $25.83 million, or $0.27 a share for the quarter ended Sep. 30, 2016. In the previous year period, the company reported a loss of $18.92 million, or $0.22 a share. On the other hand, adjusted net loss for the quarter narrowed to $3.87 million, or $0.04 a share from a loss of $4.25 million or $0.05 a share, a year ago. Revenue during the quarter surged 45.02 percent to $80.72 million from $55.66 million in the previous year period. Gross margin for the quarter expanded 104 basis points over the previous year period to 70.43 percent. Operating margin for the quarter stood at negative 32.48 percent as compared to a negative 33.79 percent for the previous year period.
Operating loss for the quarter was $26.21 million, compared with an operating loss of $18.81 million in the previous year period.
However, the adjusted operating loss for the quarter stood at $4.26 million compared to operating loss of $4.13 million in prior year period.
For the fourth-quarter, Zendesk projects revenue to be in the range of $86 million to $88 million. Zendesk projects revenue to be in the range of $309 million to $311 million for financial year 2016. The company projects operating income to be in the range of $29 million to $30 million for the fourth-quarter. For fiscal year 2016, the company projects operating income to be in the range of $108.50 million to $109.50 million. The company projects adjusted operating income to be in the range of $5 million to $6 million for the fourth-quarter. For fiscal year 2016, the company projects adjusted operating income to be in the range of $22 million to $23 million.
Working capital drops significantly
Zendesk has witnessed a decline in the working capital over the last year. It stood at $122 million as at Sep. 30, 2016, down 42.90 percent or $91.66 million from $213.66 million on Sep. 30, 2015. Current ratio was at 1.83 as on Sep. 30, 2016, down from 3.12 on Sep. 30, 2015. Days sales outstanding went down to 30 days for the quarter compared with 32 days for the same period last year. At the same time, days payable outstanding went down to 18 days for the quarter from 23 for the same period last year.
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