Update: NIC, Inc. Improves Position

Aug. 9.14 | About: NIC Inc. (EGOV)


NIC, Inc. reported MRQ (April 1 - June 30) 2014 revenues up YOY, and on pace to beat FY expectations.

Company has added one new client, renewed six clients, and extended three.

The performance of the Company seems to satisfy concerns I had in my initial assessment, making it a reasonable "buy.".

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.

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.