Model N, Inc. (MODN): history, ownership, mission, how it works & makes money

A Brief History of Model N, Inc. (MODN)

Founding and Early Years

Model N, Inc. was founded in 1999 by Chris O'Neill and a team of technology experts primarily to provide revenue management solutions tailored for the life sciences and high-tech industries. The company's initial focus was on revenue management software designed to automate and optimize pricing, contracts, and compliance.

Initial Public Offering (IPO)

On June 13, 2014, Model N went public, trading on the New York Stock Exchange under the ticker symbol MODN. The IPO was priced at $13 per share, raising approximately $75 million.

Acquisitions and Growth

• In 2018, Model N acquired the revenue management company, Revitas, expanding its footprint in the life sciences sector.
• In 2021, the company announced the acquisition of Qstream, a sales performance platform, further enhancing its offerings.

Recent Financial Performance

For the fiscal year ending October 31, 2022, Model N reported total revenues of $129 million, which represented a growth of approximately 18% compared to the previous year.

As of the most recent quarter, Q3 2023, Model N announced revenue of $31 million for the quarter, showing a year-over-year increase of 15%.

Stock Performance

The stock price of Model N has experienced growth, with shares closing at $36.50 on October 20, 2023. The company's market capitalization at this price point was approximately $1.2 billion.

Key Financial Metrics

Strategic Vision and Future Outlook

Model N aims to continue enhancing its suite of revenue management solutions while focusing on the life sciences and high-tech sectors. The company is investing heavily in cloud-based solutions to adapt to the evolving market dynamics. By leveraging advanced analytics and machine learning, Model N seeks to improve customer engagement and drive growth.

A Who Owns Model N, Inc. (MODN)

Shareholder Composition

The ownership structure of Model N, Inc. varies among institutional investors, retail investors, and insiders. As of Q3 2023, the following is a breakdown of the major shareholders:

Major Institutional Investors

The largest institutional shareholders of Model N, Inc. include:

Insider Ownership

Insider ownership is an important metric, as it reflects the confidence executives have in their own company. The following table shows the key insider shareholders:

Recent Stock Performance

As of October 2023, Model N, Inc. has shown fluctuations in its stock price, impacted by various market conditions:

Recent Changes in Ownership

Significant changes in ownership reflect investor confidence or strategic shifts:

• In Q2 2023, BlackRock increased its stake by 1.5 million shares.
• The Vanguard Group reduced its holdings by 500,000 shares in Q3 2023.
• Insider purchases were reported by Jason Blessing totaling 50,000 shares in August 2023.

Conclusion on Ownership Dynamics

Overall, the ownership of Model N, Inc. is characterized by a strong institutional presence, with key stakeholders playing substantial roles in the company's governance and direction.

Model N, Inc. (MODN) Mission Statement

Overview

Model N, Inc. specializes in revenue management solutions for the life sciences and high-tech industries. The company's mission is to deliver comprehensive cloud-based software that helps clients optimize their revenue, manage compliance, and enhance operational efficiency.

Mission Statement Details

The mission statement of Model N focuses on enabling businesses to:

• Enhance revenue realization through improved pricing, contracting, and rebate management.
• Ensure compliance with regulations and standards in revenue management.
• Provide solutions that drive operational efficiency and reduce the cost of revenue.
• Utilize data analytics to make informed decisions about pricing and market strategies.

Financial Overview

For the fiscal year 2022, Model N reported:

• Total Revenue: $141.3 million
• Net Income: $2.5 million
• Adjusted EBITDA: $22.4 million
• Gross Margin: 66.4%

Key Performance Indicators (KPIs)

Model N tracks several KPIs to ensure alignment with its mission:

Strategic Initiatives

Model N has outlined several strategic initiatives to fulfill its mission:

• Investment in R&D: Allocating approximately $15 million annually to enhance product features and expand capabilities.
• Partnership Development: Collaborating with key players in the life sciences and technology sectors to broaden market reach.
• Customer Education Programs: Offering webinars and training sessions aimed at improving customer engagement and product knowledge.

Market Positioning

As of 2022, Model N holds a significant position in the revenue management software market:

• Market Share: Approximately 12% in the life sciences sector.
• Projected Market Growth: Expected increase in revenue management software demand to $10 billion by 2026.
• Competitive Edge: Strong focus on compliance solutions, leveraging AI and machine learning for data analysis.

Client Testimonials

Model N has received positive feedback from its clients:

• Client A: "Model N's solutions have streamlined our processes significantly." - Revenue Management Director
• Client B: "Their compliance management tools are unparalleled in the industry." - Chief Financial Officer
• Client C: "We've seen a notable increase in revenue since implementing Model N." - Business Operations Manager

Future Goals

Model N aims to achieve the following by 2025:

• Increase revenue: Targeting $200 million in total revenue.
• Expand customer base: Aiming to add 100+ new customers, focusing on mid-sized companies.
• Enhance product offerings: Launching at least three new software modules aimed at specific industry needs.

How Model N, Inc. (MODN) Works

Company Overview

Model N, Inc. (MODN) specializes in revenue management cloud solutions. The company was founded in 1999 and operates primarily in the life sciences and technology sectors. As of July 2023, Model N had a market capitalization of approximately $670 million.

Revenue Model

Model N generates revenue through subscription fees for its software services, professional services, and license fees. In the fiscal year 2022, the company's revenue was reported at $113.5 million, an increase from $98.4 million in 2021.

Key Clients and Markets

Model N primarily serves clients in the life sciences and technology sectors, including pharmaceutical companies and high-tech equipment manufacturers. The company has established partnerships with leading organizations such as:

• Pfizer
• Johnson & Johnson
• AbbVie
• Oracle

Financial Performance

For the third quarter of fiscal 2023, Model N reported a net income of $5.2 million, compared to a net loss of $1.8 million in the same quarter of 2022. The adjusted EBITDA was $12.0 million, an increase from $6.5 million a year prior.

Product Offerings

Model N's product suite includes:

• Revenue Cloud
• Pricing and Contract Management
• Comprehensive Rebate Management
• Analytics and Reporting Tools

Market Trends

The revenue management market is projected to grow at a CAGR of 14.2% from 2023 to 2030, driven by increasing demand for software solutions that improve operational efficiency and compliance.

Conclusion of Financial Position

As of the end of fiscal Q3 2023, Model N reported total assets of $288 million and total liabilities of $78 million, resulting in a net asset position of $210 million. The total cash and cash equivalents were approximately $45 million.

Shareholder Information

As of October 2023, Model N's stock is listed on the New York Stock Exchange under the ticker symbol MODN. The company’s shares have shown an increase of approximately 30% year-to-date.

Future Growth Opportunities

Model N is focusing on expanding its offerings in artificial intelligence and machine learning to enhance its revenue management solutions. The company plans to invest in research and development with an expected budget allocation of $10 million for fiscal year 2024.

How Model N, Inc. (MODN) Makes Money

Revenue Streams

Model N, Inc. generates revenue primarily through its subscription-based software solutions, which cater to life sciences and high-tech industries. The company offers a comprehensive suite of services designed to help businesses manage their revenue operations effectively.

Subscription Revenue

The largest portion of Model N's revenue comes from its subscription fees. For the fiscal year 2022, the company reported total subscription revenue of $88 million. This revenue is derived from:

• Cloud Subscriptions: Approximately $70 million
• On-Premises Subscriptions: Approximately $18 million

Professional Services Revenue

In addition to subscription revenue, Model N earns income through professional services. This includes consulting, implementation, and support services. The total revenue from professional services in 2022 was $12 million.

Key Clients and Partnerships

Model N serves a wide range of clients including Fortune 500 companies. Notable clients include:

• Johnson & Johnson
• Pfizer
• Merck
• Novartis

Strategic partnerships with technology firms and consulting organizations also contribute to revenue generation, allowing Model N to expand its market reach.

Market Position and Competitive Advantage

As of 2023, Model N holds approximately a 20% market share in the revenue management software sector for life sciences. The unique value propositions of its software solutions include:

• Comprehensive compliance management
• Enhanced analytics capabilities
• Streamlined contract management

Financial Performance

In the fiscal year ending September 2022, Model N reported the following key financial figures:

This trend indicates a steady growth trajectory for the company.

Future Growth Opportunities

Model N is poised for growth by:

• Expanding its offerings in the cloud-based services market
• Entering new geographical markets
• Investing in AI and machine learning technologies

Projected growth rates for the revenue management software market are estimated at 10% CAGR through 2027, providing ample growth opportunities for Model N.