CRM Earnings Upbeat

We've heard it over and over that times are tough. But in the midst of the economic gloom and doom, some CRM vendors are offering a glimmer of positive news.

Despite posting flat revenue for its fourth quarter, Informatica Corp., a provider of business analytics software, Thursday reported pro forma earnings that beat Wall Street's consensus by a penny.

For its fourth quarter, ended December 21, 2002, the Redwood City, CA-based company announced revenue of $50.1 million, virtually unchanged from the $50.3 million recorded in the fourth quarter of 2001.

Net income for the fourth quarter was $1.5 million, or 2 cents per share, compared to a net loss of $8.5 million, or 11 cents per share, for the same quarter a year ago. The 2002 fourth quarter figure does not include amortization of stock- based compensation, goodwill, other intangible assets, or restructuring charges.

Pro forma net income for the quarter was $1.8 million, or 2 cents per share, up from its pro forma net loss of $1.5 million, or 2 cents per share, for the corresponding quarter of 2001.

Thomson First Call's survey of 13 analysts had predicted the company would post pro forma earnings of 1 cent.

Informatica is benefiting from a boom in analytics. A recent study by AMR Research states that many organizations are starting to use analytics - specifically customer fulfillment, supply chain management, and enterprise performance management applications. In a recent report polling technology-buying decision-makers at 100 U.S. companies with 2,500 employees or more, at least 40 percent of all participants say they will invest in all three applications in 2003.

During a conference call with press and analysts Thursday following the release of its earnings, Gaurav Dhillon, president and CEO of Informatica attributed the company's return to profitability to contracts with new and repeat customers. The company signed contracts with 72 new customers and inked deals with 87 repeat customers. In addition, Dhillon also cited fourth quarter product highlights such as unveiling its PowerAnalyzer business intelligence platform.

Year-end revenue for 2002 was $195.4 million, down from $200.1 million in 2001. The overall net loss for fiscal 2002 was $15.6 million, or 20 cents per share, compared to a net loss of $45.0 million, or 58 cents per share, in 2001.

Pro forma net income for 2002 was $2.8 million, or 3 cents per share, compared to a pro forma net loss of $4.5 million, or 6 cents per share, for the prior year.

One analyst credits the company's results to its largest licensing revenue sequential increase in two years, strong sales of analytics, and big deals. "You put that all together and you have a pretty strong quarter," says Nathan Schneiderman, an analyst for Wedbush Morgan Securities in Los Angeles.

He also notes that the company gave aggressive revenue guidance for 2003. Speaking on a conference call with press and analysts, Informatica officials say they expect 2003 revenue to be from $210 million to $218 million. Schneiderman says that is significantly above the analysts' consensus, but reflects how strongly management feels the company is doing.

Six in a row and counting
Another company with upbeat financial news is SupportSoft, Inc., a provider of service and support automation software to corporate enterprises and broadband service providers. Thursday the Redwood City, CA-based developer reported its sixth consecutive quarter of revenue growth.

SupportSoft posted revenue for its fourth quarter, ended December 31, 2002, of $11.1 million, up 39 percent from $8.5 million for the same period last year. Net income for the quarter was $948,000, or 3 cents per share, compare with a net loss of $4.2 million, or 13 cents per share for the fourth quarter of 2001. There are no differences between GAAP and pro forma earnings in the fourth quarter of 2002.

Highlights for the quarter included adding 10 new customers and signing deals with 15 repeat customers, which brings the customer total to 170.

For the year ended December 31, 2002, revenues increased 35 percent to $41.2 million, compared to $30.4 million in the previous year. Net loss for the year 2002 was $1.5 million or 5 cents per share, versus a net loss of $21.1 million, or 68 cents per share, for 2001.

That figure does not include the amortization of intangibles and deferred compensation. On a GAAP basis, net loss was $3.6 million, or 11 cents per share, for the year ended December 31, 2002, compared to a net loss of $28.2 million, or 91 cents per share, for 2001.

Profit Doubling
Business performance management software maker Hyperion Solutions Corp. Thursday announced that net income for its second fiscal quarter of 2003 has doubled, while revenue rose just six percent.

Cost cutting measures in 2001 helped the Sunnyvale, CA-based company post a net income of $7.6 million, or 21 cents per diluted share, for the quarter, compared to net income of $3.7 million, or 11 cents per diluted share, for the second quarter of fiscal 2002.

Revenue for its second quarter of fiscal 2003, ended December 31, 2002, was $126 million, a six percent increase over the same period a year ago.

Software license revenue increased 11 percent to $51.1 million, compared to $46.2 million for the same period a year ago. Licensing revenue accounted for 41 percent of overall revenue for the quarter. Maintenance and services revenue increased three percent to $74.9 million, compared to $72.7 million for the same period a year ago.

CEO Jeffrey Rodek attributed much of the boost in net income to Hyperion's lower operating costs, which came from a 2001 company restructuring. The results reported Tuesday included a one-time $596,000 charge carried forward from that restructuring.

Sweet Sixteen
RightNow Technologies, a privately held provider of hosted customer service and support solutions, is expected to announce on Monday that it enjoyed its sixteenth consecutive quarter of revenue growth.

During the three months ended December 31, 2002, The Bozeman, MT, company saw a 25 percent revenue increase above the comparable quarter in 2001. RightNow added more than 200 customers in 2002. New customer acquisitions for the fourth quarter include ACCO, Meyer Corporation, Prudential Financial Inc., RealtyTrac, and Svenska Spel.

Sheryl Kingstone, program manager, customer relationship management strategies at Yankee Group, says that RightNow and other companies embracing the hosted model are getting significant traction in this market, which is clear proof of both its appeal and its practicality.