E-mail protection provider Zix Corporation (NASDAQ:ZIXI) reported a solid 1Q2016 in which both EPS and revenue exceeded expectations. The management also set forth positive tone for 2Q2016 and full-year 2016. Nevertheless, new first year orders disappointed.
What did Zix achieve in the quarter?
Revenue of $14.3 million rose 9.6% YoY and non-GAAP EPS of $0.06 was up 47.8% YoY. With that, the company was able to generate cash flow from operations of $4 million, a significant increase from $1.5 million in the year ago quarter.
Zix Corporation (NASDAQ:ZIXI)’s cash and equivalents increased by $2.2 million from the previous year quarter to $27.1 million at the end of 1Q2016. That was despite the company spending $5.2 million from its balance sheet to buyback a portion of its shares during the quarter.
What about other metrics
Zix Corporation (NASDAQ:ZIXI) issues a detailed earnings report and 1Q2016 was no exception. Besides EPS, revenue and cash updates, the company also disclosed how its backlog changed and how new first year orders trended. Concerning backlog, the company said the metric increased 7.4% YoY to $75.5 million. Total orders in the quarter also rose 9.9% to $15.7 million. But new first year orders didn’t impress as the metric decreased 5.2% to $1.9 million.
What’s the management saying?
CEO, David Wagner admitted that new first year orders missed their expectations. But that doesn’t mean there is any cause for alarm. For example, the management maintains that the company will still meet its annual revenue and earnings targets. To reach there, Zix Corporation (NASDAQ:ZIXI) is hoping to ride the cloud email wave.
Looking forward, Zix Corporation (NASDAQ:ZIXI) expects revenue in 2Q2016 to be in the band of $14.6 to $14.8 million. EPS for the quarter is expected to be $0.06. For the full year, the company restated its previously issued headline projection of $59.5 million to $61.0 million. Non-GAAP EPS for the full year is expected to be $0.24.