Saba Software Misses on Revenues but Beats on EPS

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Saba Software (NAS: SABA) reported earnings on Jan. 5. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Nov. 30 (Q2), Saba Software missed on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue improved, and earnings per share contracted.

Margins dropped across the board.

Revenue details
Saba Software chalked up revenue of $30 million. The five analysts polled by S&P Capital IQ expected a top line of $32 million. Sales were 2.8% higher than the prior-year quarter's $29 million.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at -$0.10. The five earnings estimates compiled by S&P Capital IQ forecast -$0.11 per share on the same basis. GAAP EPS were -$0.16 for Q2 versus -$0.03 per share for the prior-year quarter.

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Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 62.1%, 290 basis points worse than the prior-year quarter. Operating margin was -17.6%, 1,530 basis points worse than the prior-year quarter. Net margin was -15.0%, 1,270 basis points worse than the prior-year quarter.

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Source: S&P Capital IQ. Quarterly periods.

Looking ahead
What does the future hold?

Next quarter's average estimate for revenue is $33 million. On the bottom line, the average EPS estimate is -$0.04.

Next year's average estimate for revenue is $131 million. The average EPS estimate is -$0.21.

Investor Sentiment
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 56 members out of 75 rating the stock outperform, and 20 members rating it underperform. Among 20 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 14 give Saba Software a green thumbs-up, and six give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Saba Software is buy, with an average price target of $11.88.

At the time this article was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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