In April, 2014, I evaluated NIC, Inc. (NASDAQ:EGOV), and at that time I expressed some concerns about its ability to sustain noteworthy revenue growth, as well as concerns about 12 contracts that were due to expire this year. A review of its most recent quarterly earnings statement, as well as its most recent SEC 10-Q (August 7, 2014), is adequate to allay my concerns.
For the quarter ending June 30, 2014, NIC had revenues of $71.2 million; revenues from portal operations were a record $66.8 million, up 8% YOY. Importantly, same-state revenues for the quarter were up by 8% YOY, to $61.4 million, indicating that revenue from existing contracts was not stagnant. Revenues from the Company's Software & Service operations were up 13% YOY to $4.3 million.
NIC added Connecticut as a client during the first quarter of FY 2014 (contracted through 2017). Of the 12 contracts that were due to expire during 2014, six were renewed: Colorado (2019), Iowa (2016), Kansas (2021), New Mexico Motor Vehicle Division (2016), Rhode Island (2017) and South Carolina (2019). Contracts that have been extended include Indiana (2016) and Kentucky (2015); a third contract extension was applied to West Virginia pending the completion of a new (renewed) contract.
After considering the most recent performance of the Company, and seeing its success in retaining clients (and picking up a new one, as well), I believe the Company has seen its way through the worst that 2014 held for it. It would seem to be a reasonable buy.
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