What happened Shares of American Software (NASDAQ: AMSWA) were trading up by almost 24% as of 2 p.m. EDT Wednesday after the company reported fiscal fourth-quarter earnings that demonstrated its progress in transitioning toward a recurring-revenue model. So what For the period, which ended April 30, total revenue declined by 2% to $28.6 million, but that contraction was a function of how revenue gets recognized under a subscription model. American Software's subscription fees jumped by 28% to $8.1 million, and its cloud services annual contract value (ACV) increased by 45% to $38.3 million. Recurring revenue streams for maintenance and cloud subscriptions comprised 60% of total sales, up from 57% a year ago. That all resulted in adjusted net earnings jumping by 185% year over year to $3.6 million, or $0.11 per share. Image source: Getty Images. "In the midst of the economic uncertainty resulting from the pandemic, we exited the year on a strong note with both net new Cloud Services ACV and total bookings more than doubling our prior highs for a quarter," CEO Allan Dow said in a statement. "Our performance reflects increasing adoption of cloud-based supply chain transformation solutions and our backlog as measured by our Remaining Performance Obligations (RPO) increased 51% to $116 million in the fourth quarter when compared to last year, which demonstrates the longer-term commitment of our customers to our platform and services." Now what The technology company does not provide formal guidance, but CFO Vince Klinges said on the conference call with analysts that American Software is generally targeting revenue growth in the low double-digit percentages, which should allow the company to achieve adjusted EBITDA margins of around 12% to 15%. 10 stocks we like better than American SoftwareWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and American Software wasn't one of them! That's right -- they think these 10 stocks are even better buys. See the 10 stocks *Stock Advisor returns as of June 7, 2021 Evan Niu, CFA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.Source