Advertisment

Software Sector: All Round Revenue Growth

author-image
DQI Bureau
New Update

Red Hat: Profit Slides



Red Hat, developer of Linux Software and open source provider announced its

second quarter results for its fiscal 2007, ended August 31, 2006. Red Hat

showed an increase of 52% in the revenue for the quarter at $99.7 mn, as

compared to $65.8 mn in the same quarter last year and 19% from the first

quarter, due to the purchase of JBoss, an open-source application server company

along with other recent acquisitions in Argentina, Brazil and India, into its

business and increase in demand for open-source software. Subscription revenue

was $84.9 mn, up 56% y-o-y and 19% sequentially. However, this was offset by

stock-option and merger related expenses. Net profit for the quarter was $11.0

mn as compared to $16.7 mn for the same period last year.

Advertisment



Red Hat acquired JBoss for $350 mn, which affected second-quarter earnings,

as the integration cut into growth in new business and cash flow from operations

slipped to $43.9 mn from $45.8 mn in the same period last year. Operating

expenses for the quarter increased by 75% to $73.8 mn from $42.2 mn in the same

period last year. The company's total deferred revenue balance was $ 284.1 mn,

an increase of 12% as compared to the same quarter last year. Red Hat share

trades at $20.2.

Cognos: Moderate Growth



Cognos, a provider of business intelligence and performance management

solutions, provides enterprise planning and BI software and services to help

companies plan, understand and manage financial and operational performance.

Quarterly revenues stood at $229.9 mn, an increase of 8.5% as compared to

$212.0 mn for the same period last year. License revenue was $78.0 mn as

compared to $78.6 mn in the second quarter of last fiscal year. Operating income

for the quarter was $23.8 mn as compared to $28.5 mn in the same period last

year. Net profit at $23.8 mn showed a decline for the period as compared to

$24.9 mn for the same period last year.

Advertisment

On a annualized basis, the total revenue growth in America was 12% as

compared to 11% in the same period last year, other regions showed a fall as

compared to the same quarter last year. The company's outlook for the third

quarter and full fiscal year 2007 is positive with expected revenues to be in

the range of $950 to $970 mn. Cognos shares change hands at $35.1.

Adobe: Sales Revenue Up



Adobe Systems, which offers business and mobile software and services

worldwide, reported financial results for its third quarter ended August 31,

2006. The Q3 results reflect the acquisition of Macromedia in December 2005, and

are compared with pre-acquisition results. In the third quarter, the company

reported revenue of $602.2 mn, as compared to $487.0 mn in the same quarter last

year and $635.5 mn in the second quarter of fiscal 2006, a 24% revenue growth on

a y-o-y basis.

Net profit for Q3 was $94.4 mn, as compared $144.9 mn in the same period last

year, and $123.1 mn in the second quarter of fiscal 2006. Operating income was

$110.0 mn, as compared to $ 183.6 mn in the same period last year, and $147.9 mn

in the second quarter of fiscal 2006.Operating income was comparatively less due

to increase in restructuring expenses, amortization of purchased intangibles,

amortization of Macromedia deferred compensation. As a per cent of revenues,

operating income was 18.3% as compared to 37.7% in the same period last year.

Advertisment

Adobe is targeting an operating margin of approximately 21% to 24% in the

fourth quarter, and revenue to reach $655 mn to $685 mn, mainly due to the new

products to be launched during the quarter. Shares of Adobe trade at $37.

Oracle: Stellar Growth



Oracle declared its first quarter results for the fiscal 2007 ended August

31, 2006. Its revenue for the first quarter was up 30% to $3,600 mn as compared

to $2770 mn in the same quarter last year, while net profits were up 29% to $670

mn, as compared to $519 mn in the same period last year. Total software revenues

were up 29% to $2,745 mn with database and middleware new license revenues up

15% and applications new license revenues up 80%. Services revenues were up 33%

to $846 mn, compared to the same quarter last year.



Total revenues increased in the first quarter of fiscal 2007 due to gains in

market share across all product lines and geographies, incremental revenues from

acquisitions and an increased demand for service offerings. Excluding the effect

of currency rate fluctuations, software license updates and product support

revenues contributed 53% to the growth in total revenues, services revenues

contributed 26% and new software licenses contributed 21%. Excluding the effects

of currency rate fluctuations, the Americas contributed 60% to the increase in

total revenues, EMEA contributed 28% and Asia Pacific contributed 12%. Total

revenues in the Americas, specifically in the US, increased at a faster rate

than in other regions primarily due to the relative geographical mix of revenues

from our acquired companies. Shares of oracle trade at $17.6.

Advertisment