Daily Research News Online no. 5464 - MR Software Companies Continue Sales Growth

MR Software Companies Continue Sales Growth

May 3 2006

MR software companies SPSS and FIRM have both announced strong results for the first quarter of 2006. SPSS has net revenues of $62.2m, up 8% on Q1 of 2005, while new license revenues rose faster, up 15% to $29.9m. FIRM's revenue was $4.8m, representing a rise of 29% at constant currencies.

SPSS' Diluted earnings per share (EPS) were $0.24, 85% above Q1 last year ($0.13). Operating income was up from 7% to 11% of total revenues ($7.0m from $4.0m).

President and CEO Jack Noonan comments: 'We started the year on a strong note by maintaining the sales momentum built during 2005. Through disciplined execution from our sales and marketing teams, we realized an increase in the number of enterprise transactions, achieved year-over-year growth in all major product categories, and saw long-anticipated improvement in revenue from professional services. This growth occurred in each of the major geographies - the Americas, Europe and the Pacific Rim.'

Analysts see the company's position as strong, with its developing data mining and predictive analytics offerings giving scope for expansion. Gartner put the firm in its leaders' quadrant for customer data mining in a report in January 2006 (www.spss.com/pdfs/spss_magicquadrant.pdf ).

Raymond Panza, SPSS Executive Vice President and CFO, says second quarter revenues are expected to be between $61 and $63m with EPS in the range of $0.20 to $0.26; and guidance for the whole of the 2006 fiscal year puts expected revenues at between $248 and $254m.

SPSS is headquartered in Chicago, Illinois and is on the web at www.spss.com .

FIRM, the maker of Confirmit, has increased revenue 24% to US$ 4.8m in the first quarter of 2006 (Q1 2005$3.9m). At constant currencies growth was 29%. Cash flow from operations was $2.5m in the first quarter of 2006. Revenue grew 26% in EMEA and 22% in North America 22%. Revenues from licenses and transactions were up 39% while revenues from consultancy and other sources shrank 44%.

Operating profit more than doubled vs Q1 2005, to $334K, an EBIT margin of 7% compared to 4% in Q1 2005. Profit before tax for the first quarter was $308K compared to $136K in Q1 last year. The company now has 92 employees, up from 76 a year ago and 86 at the end of 2005, with most of the new employees recruited in customer facing positions.

CEO Henning Hansen comments: 'We are pleased with the performance in both Europe and USA, and are excited that even more leading companies have started using and standardizing on our strong software platform.' Analysts predict continuing strong growth for the sector and FIRM is confident of continuing growth. Taylor Nelson Sofres, the British Council and MARC Research all renewed their contracts with FIRM in Q1, and new contracts were signed with companies including Data Development Worldwide and Intrawest.

The first quarter report is available online at www.confirmit.com/pdf/firm2006q1.pdf .