Record quarterly revenue of $12.3M, Adjusted EBITDA over $2.0M

Milwaukee, Wis., December 15, 2016 – ARI Network Services, Inc. (NASDAQ: ARIS), an award-winning provider of SaaS, software tools and marketing services that help dealers, distributors and manufacturers Sell More Stuff!™, reported financial results today for its first quarter of fiscal 2017 ended October 31, 2016.

Highlights for the first quarter of fiscal 2017 included:

  • Revenue increased for the 11th consecutive quarter to $12.3 million, which compares with $11.7 million for the same period last year, a 4.6% increase. Recurring revenues increased 7.4% to $11.5 million, or 93.7% of revenue, compared with $10.7 million, or 91.2% of revenue, for the same period last year.
  • Adjusted EBITDA, a non-GAAP measure, was consistent with last year at $2.0 million for each of the quarters ended October 31, 2016 and October 31, 2015, despite expenses of approximately $140, 000 related to the acquisition of Auction123, Inc. (“Auction123”), and the Company’s proxy contest.
  • Cash generated from operations was $1.8 million, compared with $1.7 million for the same period last year.
  • Annualized churn for the quarter was 10.7% compared with 14.2% for the same period last year.The result represents the Company’s best quarterly churn performance since the second quarter of fiscal 2014 and the second best quarterly churn performance since the firm began reporting churn.

Fiscal Year 2017 First Quarter Financials
ARI achieved organic revenue growth of 4.6% as it reported revenues of $12.3 million for the first quarter of fiscal year 2017, compared with $11.7 million for the same period last year. Recurring revenue grew 7.4% organically and comprised 93.7% of total revenue versus 91.2% for the same period last year.

Gross margin for the first quarter of fiscal year 2017 was 81.3% versus 82.4% last year.

Operating income was $768, 000 for the first quarter of fiscal year 2017, compared with operating income of $808, 000 for the same period last year.

The company reported net income of $356, 000, or $0.02 per diluted share for the quarter, compared with net income of $389, 000 or $0.02 per share last year.

Financial Results

Management Discussion
Roy W. Olivier, President and Chief Executive Officer of ARI, commented, “We are off to a good start for our fiscal 2017.We posted another record quarterly revenue performance and our recurring revenue growth continues to outpace our overall revenue growth.When you combine this with the declines in churn we have achieved over the last couple of quarters, we are well positioned to expand organic growth through the remainder of the fiscal year.This growth will also be complemented by the acquisition of Auction123, which we closed on November 1, 2016.Due to our strong earnings and cash flow performance in fiscal 2016, we were able to complete this acquisition with a combination of excess cash and senior debt.We expect Auction123 to add over $3 million to our fiscal 2017 revenue, and it will be immediately accretive to our margins.All things considered, we remain on track for another record year at ARI.”

William Nurthen, Chief Financial Officer of ARI, commented, “We were able to hold operating profit and adjusted EBITDA relatively flat compared to the prior year despite experiencing approximately $140, 000 in charges related to the acquisition of Auction123 and our proxy contest matter.The quarter also included costs related to the continued scaling of our India office. We will continue to be impacted by some of these items in Q2, however, we believe the back half of our fiscal year sets up well for growth in profitability and cash flow.Overall, we continue to expect increases in each of these categories for fiscal 2017 over fiscal 2016 and are looking to expand margins in the back half of the year such that our fiscal year margin performance will be on par with or above the prior year, despite some of the charges I previously noted.”

Fiscal 2017 First Quarter Conference Call
ARI will conduct a conference call on Thursday December 15, 2016, at 4:30 p.m. EST, to review the financial results for the fiscal quarter ended October 31, 2016. Investors and interested parties can access the conference call by dialing 877.359.3639 or 408.427.3725 and referring to Conference ID: 15274635. The conference call is also being webcast and is available via the Company’s investor relations website at A replay of the webcast will be archived on the Company’s investor relations website for 60 days.

Non-GAAP Measures
Adjusted EBITDA, a non-GAAP measure, is defined as earnings before interest, income taxes, depreciation and amortization, excluding stock-based compensation. Management believes Adjusted EBITDA to be a meaningful indicator of our performance that provides useful information to investors regarding our financial condition and results of operations. While management considers Adjusted EBITDA to be an important measure of comparative operating performance, it should be considered in addition to, but not as a substitute for, net income and other measures of financial performance reported in accordance with generally accepted accounting principles (GAAP). Not all companies calculate Adjusted EBITDA in the same manner and the measure as presented may not be comparable to similarly titled measures presented by other companies. A reconciliation of net income to Adjusted EBITDA can be found in this release and at the Company’s investor relations website for all periods presented.

Reconciliation of Non-GAAP

About ARI


ARI Network Services, Inc. (ARI) (NASDAQ: ARIS) offers an award-winning suite of SaaS, software tools, and marketing services to help dealers, equipment manufacturers and distributors in selected vertical markets Sell More Stuff!™ – online and in-store. Our innovative products are powered by a proprietary data repository of enriched original equipment and aftermarket electronic content spanning more than 17 million active part and accessory SKUs and 750, 000 equipment models. Business is complicated, but we believe our customers’ technology tools don’t have to be. We remove the complexity of selling and servicing new and used vehicle inventory, parts, garments and accessories (PG&A) for customers in the automotive tire and wheel aftermarket, powersports, outdoor power equipment, marine, home medical equipment, recreational vehicles and appliance industries. More than 23, 500 equipment dealers, 195 distributors and 3, 360 brands worldwide leverage our web and eCatalog platforms to Sell More Stuff!™  For more information on ARI, visit

Additional Information

Images for media use only
Roy W. Olivier Hi Res | Roy W. Olivier Low Res
ARI Logo Hi ResARI Logo Low Res

Forward-Looking Statements
Certain statements in this news release contain “forward‐looking statements” regarding future events and our future results that are subject to the safe harbors created under the Securities Act of 1933. All statements other than statements of historical facts are statements that could be deemed to be forward-looking statements. These statements are based on current expectations, estimates, forecasts, and projects about the markets in which we operate and the beliefs and assumptions of our management. Words such as “expects, ” “anticipates, ” “targets, ” “goals, ” “projects”, “intends, ” “plans, ” “believes, ” “seeks, ” “estimates, ” “endeavors, ” “strives, ” “may, ” or variations of such words, and similar expressions are intended to identify such forward-looking statements. Readers are cautioned that these forward‐looking statements are subject to a number of risks, uncertainties and assumptions that are difficult to predict, estimate or verify. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. Such risks and uncertainties include those factors described in Part 1A of the Company’s most recent annual report on Form 10‐K, as such may be amended or supplemented by subsequent quarterly reports on Form 10-Q, or other reports filed with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward‐looking statements. The forward‐looking statements are made only as of the date hereof, and the Company undertakes no obligation to publicly release the result of any revisions to these forward‐looking statements. For more information, please refer to the Company’s filings with the Securities and Exchange Commission.

For media inquiries, contact:
Colleen Malloy, Director of Marketing, ARI, 414.973.4323,

Investor inquiries, contact:
Theresa DeNicola, ARI, 414.973.4334,