Ultimate Software Group Hits Estimates in Solid Quarter

Ultimate Software Group (Nasdaq: ULTI  ) reported earnings on Feb. 7. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Ultimate Software Group met expectations on revenues and earnings per share.

Compared to the prior-year quarter, revenue increased significantly and GAAP earnings per share improved significantly.

Margins grew across the board.

Revenue details
Ultimate Software Group chalked up revenue of $72.7 million. The 16 analysts polled by S&P Capital IQ predicted sales of $72.1 million. Sales were 20% higher than the prior-year quarter's $60.4 million.

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

EPS details
Non-GAAP EPS came in at $0.24. The 16 earnings estimates compiled by S&P Capital IQ predicted $0.24 per share on the same basis. GAAP EPS of $0.07 for Q4 were 40% higher than the prior-year quarter's $0.05 per share.

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 58.6%, 190 basis points better than the prior-year quarter. Operating margin was 10.7%, 290 basis points better than the prior-year quarter. Net margin was 2.7%, 30 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $75.9 million. On the bottom line, the average EPS estimate is $0.12.

Next year's average estimate for revenue is $329.9 million. The average EPS estimate is $1.02.

Investor sentiment
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 81 members out of 112 rating the stock outperform, and 31 members rating it underperform. Among 39 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 25 give Ultimate Software Group a green thumbs-up, and 14 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Ultimate Software Group is outperform, with an average price target of $63.42.

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