Fiscal 2016 revenue increases 18% to $47.7M, Adjusted EBITDA increases 29% to $8.5M

 Milwaukee, Wis., October 27,  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 fiscal fourth quarter and fiscal year ended July 31, 2016.

Highlights for the fiscal year 2016 included:

  • Revenue increased 17.9% to $47.7 million, which compares with $40.4 million for the same period last year. Recurring revenues increased 20.4% and were $43.9 million, or 92.1% of revenue, compared with $36.5 million, or 90.2% of revenue, for the same period last year.
  • Operating income was $3.5 million, compared with $2.3 million for the same period last year, an increase of 53.2%. Net income was $1.7 million, compared with net income of $1.1 million last year. The Company produced earnings per share of $0.10 versus $0.07 in the prior year.
  • Adjusted EBITDA, a non-GAAP measure, was $8.5 million or 17.8% of revenue compared with Adjusted EBITDA of $6.6 million or 16.3% of revenue in the same period last year, an increase of 29.3%.
  • Cash generated from operations was $7.7 million, compared with $6.3 million for the same period last year, an increase of 22.4%.

Highlights for the fourth quarter of fiscal 2016 included:

  • Revenue increased 12% to $12.2 million, which compares with $10.9 million for the same period last year. Recurring revenues were $11.4 million, or 93.1% of revenue, which compares with $9.8 million, or 90.1% of revenue for the same period last year. The quarter marked our tenth consecutive quarter of revenue growth.
  • Operating income was $942, 000, compared with $686, 000 for the same period last year an increase of 37.3%. Net income increased 24.5% to$458, 000, or $0.03 per share, compared with $368, 000, or $0.02 per share for the same period last year.
  • Adjusted EBITDA was $2.2 million, or 18.0% of revenue compared with Adjusted EBITDA of $1.8 million, or 16.5% of revenue in the same period last year, an increase of 22.2%.
  • Cash generated from operations was $2.2 million, compared with $1.7 million for the same period last year, an increase of 27.0%.

Fiscal Year 2016 Financials
Fiscal 2016 was another record year for ARI. The Company achieved record results in total revenues, operating income, Adjusted EBITDA and cash flow from operations.

Recurring revenues grew faster than overall revenue and increased as a total percentage of revenue. In addition, operating income and Adjusted EBIDTA continued to grow at a pace exceeding our growth in revenue, indicating the leverage in the Company’s operating model.

Financial Results

Management Discussion
Roy W. Olivier, President and Chief Executive Officer of ARI, commented, “I am proud of the ARI team who have worked hard to consistently deliver improving performance throughout the year. We continue to focus on executing our strategy, and the Company’s financial performance in the fourth quarter and fiscal 2016 are representative of our continued ability to deliver outstanding results. In the fourth quarter, I am delighted to report that our annualized churn rates trended down to 13.1%, the lowest rate in the last seven quarters. This gives us further confidence in our ability to grow organic revenues at a faster pace as we head into fiscal 2017.”

William Nurthen, Chief Financial Officer of ARI, commented, “In fiscal 2016, we focused on integrating the acquisitions we completed in fiscal 2015. The result was that we were able to expand our margins and improve our cash flow performance. Through the course of fiscal 2016, we generated cash from operations of $7.7 million and reduced our net debt by $4.5 million. We accomplished all this, while at the same time making significant investments in product development and operational scale, which leaves us well positioned to continue to grow and leverage the business in the years to come.”

Fiscal 2016 Conference Call
ARI will conduct a conference call on Thursday October 27, 2016, at 4:30 p.m. EDT, to review the financial results for the year ended and fiscal quarter ended July 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: 79342981. 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 Res| ARI 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,