Pivotal, Chordiant Top Expectations
CRM vendors Pivotal Corp. and Chordiant Software Inc. both reported March quarter financial results slightly above Wall street's estimates, bucking a slew of negative news from industry heavyweights Siebel Systems Inc. and PeopleSoft Inc.
Mid-market enterprise vendor Pivotal reported $17.7 million in sales for its fiscal third quarter ended March. Although this is down from the $26.6 million in sales the company logged for the same quarter last year, these results were slightly better than analysts' estimates of $17.5 million in revenue for the quarter and a shade higher than the $16.7 million in its previous second fiscal quarter.
Similarly, Pivotal's licensing revenue hit $7.5 million in the most recent three-month period, down from $16.4 million in the same quarter a year ago, but up slightly from $6.9 million in licensing revenue from its second fiscal quarter.
The company narrowed its loss to $1.8 million, or seven cents a share, for the March quarter, compared with a loss of $7.4 million, or 31 cents a share, for its second quarter. This was a move in the right direction for the company and a bit better than the nine cent a share loss Wall street was expecting, according Thomson Financial First Call estimates.
Pivotal Chief Executive Bo Manning said the soft economy played a negative part in the March quarter sales performance, however, Pivotal is on track to just about break even for its fourth quarter ending June. "Our expectations for the quarter went the right way," Manning told CRM magazine. "The thing that went wrong in a minor way is that the economy softened a bit and that tempered our results. But that is a short-term phenomenon," he said.
Recently PeopleSoft said the soft economic climate would cause the company to miss Wall street's revenue expectations for its March quarter. PeopleSoft now expects March quarter sales to be in the $130 million range, down from the $160 million many analysts were expecting. PeopleSoft will officially reveal its financial results on April 25.
Similarly, Siebel's also experienced a revenue shortfall for its March period and company Chief Executive Tom Siebel said he does not expect much growth in the market until the second half of the year.
However, Manning has a different take. Because both PeopleSoft and Siebel are large enterprise CRM vendors they will experience slower growth than Pivotal, which is entirely focused on the mid-market.
"Both Siebel and PeopleSoft are very large and focus on the top end of the market," Manning said. "Our particular market has a unique set of deployment requirements and we are 100 percent committed to addressing those requirements."
Pivotal also ended the quarter with $42 million in cash in the bank. Manning said the company will use that money to possibly purchase smaller CRM vendors that have very specific products targeting specific customers. Manning would not be specific except to say he is currently evaluating some of these opportunities.
Meanwhile, Chordiant continued its nine-quarter winning streak of either meeting or exceeding revenue expectations by posting $22.8 million in sales for its first quarter. This came in at the high side of the $22million to $23 million most analysts were expecting.
The first quarter earning report from the Cupertino, Calif. CRM vendor marks a year over year increase of 70 percent from the first quarter of 2001. First-quarter license revenues were $11.1 million, up from $6.8 million year over year. Service revenues were $11.7 million, up from $6.6 million last year.
"For nine quarters, we have consistently met or exceeded our guidance for revenue growth, and met our corporate objectives for expense control, cash management, and progress toward profitability," said Stephen Kelly, chief executive officer of Chordiant in a statement. "These results are especially pleasing given the widely recognized difficult business environment."
During the quarter, Chordiant inked 20 agreements with new and existing customers, including USAA, Littlewoods, Direct Line Insurance, Gallerie Lafayette France, CVS and BSkyB.