Onyx Is on the Upswing
Amidst a recent leadership change and major business moves ranging from partnerships to product enhancement, Onyx Software has announced solid results from its second quarter of 2004.
Onyx reports a second quarter revenue of $14.8 million, an increase from the $14.2 million it amassed from the year's first quarter, but a drop from its 2003 second quarter revenue of $15.8 million. License revenue remained unaffected, maintaining the $3.6 million it generated in the first quarter, which is an increase from its second quarter 2003 license revenue of $3.1 million. Onyx also reports a net income of $0.2 million for the year's second quarter, or one cent in diluted earnings per share, compared to a reported net loss of $0.9 million, a loss of seven cents per share in last year's second quarter.
Ben Kiker, senior vice president of marketing, says the company had a solid showing in comparison with its competitors: "We definitely had a solid quarter in a quarter when a number of our competitors didn't do so well, so from that standpoint we felt very good about our results. We had a net profit for the first time in a very long time; we reported revenues that increased over the first quarter of this year; and we had a 25 percent increase in our license revenue for the first six months of this year, compared to the first six months of last year. So really, across the board we felt that it was a very solid performance by the Onyx team."
According to Joe Outlaw, president and chief analyst for Outlaw Research, Onyx stabilized, showing some improvement, but not the kind of improvement he believes the company wanted to have. "Onyx has been struggling with [its] revenues for the past couple of years," Outlaw says. After a financially strong year in 2000, Outlaw says, the software giant hit a rough period, suffering from the sliding economy and the aftermath of September 11, but has seen an upsurge during the past few quarters, showing some positive movement toward profitability. The installation of former Lucent CRM executive Janice Anderson as chairman and CEO, Outlaw says, will bring Onyx "some new much sharper focus."
Outlaw also tells CRM
magazine that the CRM market itself is in the elementary stages of recovering from shifting priority, away from such issues as security and tight cost controls. "Midsize companies are cautiously looking at those things that they think they can do that are low risk that will really have clear and rapid paybacks, and so the deals aren't as big as they used to be years ago," Outlaw says. "But its getting better and I think Onyx is in a good position to capitalize on that."
According to its business outlook statement, Onyx expects "total revenues in the second half of 2004 to modestly grow beyond revenues for the first half," while it notes that "third quarter license revenue has a wide range of possible results compared to the second quarter license results. Third quarter service revenues should be in the same range of the second quarter with modest upside potential."
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