Ascential boosts Q3 revenue 47%

Ascential Software, the enterprise data integration leader, has announced a 47% leap in revenue for the third quarter ended 30 September. On a GAAP basis, revenue was $67.6 million, as against $45.9 million in the third quarter of 2003, and up 4% from the second quarter of 2004.

Licence revenue was $27.2 million in the third quarter of 2004, up 22% from the licence revenue reported in the third quarter of last year, and up 9% from the second quarter of 2004. Net income was $2.3 million, or $0.04 per share, diluted, for the third quarter of 2004, compared with net loss of $1.7 million, or ($0.03) per share, diluted, in the third quarter of 2003, and net income of $1.2 million, or $0.02 per share, diluted, in the second quarter of 2004.

On a pro forma basis net income was $4.4 million, or $0.07 per share, diluted, in the third quarter of 2004, compared with pro forma net income of $3.7 million, or $0.06 per share, diluted, in the third quarter of 2003, and up from $2.7 million, or $0.05 per share, diluted, in the second quarter of 2004. These results reflect a $0.01 per share increase in both GAAP and pro forma earnings per share from the preliminary results announced 21 October.

"The increased investments Ascential has made in its sales and services, marketing and R&D resources are paying off, enabling the company to convert market opportunities into sequential revenue and profit growth, and allowing it to continue gaining market share," says Julian Field, MD of local Ascential distributor Centerfield Software.

"Ascential`s growth is being driven by the ongoing adoption of its distinctive platform approach by customers and by the support of key channel partners, who continue to invest in their relationships with Ascential as their data integration partner of choice."

Field says Ascential also received an enthusiastic reception and endorsement from hundreds of customers and partners who attended Ascential World 2004 in October.

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At 30 September, the company had $471.5 million in cash, cash equivalents and short-term investments. It was cash flow-positive during the quarter despite cash outflow of $1.3 million related to the 2001 sale of the legacy database business and $2.7 million associated with restructuring actions on the acquisition of Mercator Software on 12 September 2003.

The company is anticipating fourth-quarter revenue between $69 million and $72 million, an increase of 7%-12% from the same period last year. For 2005, the company anticipates revenue in the range of $285 million to $295 million, compared to an estimated range of $263 million to $266 million for full year 2004. Total costs and expenses are expected to range between $68 million and $71 million per quarter.

The company`s investment in resource expansion of sales and services, marketing and R&D that took place in 2004 is expected to restrain year-over-year EPS comparisons in the early part of 2005. The company expects to begin realising improved operating leverage from these investments around midyear 2005, thereby leading to more positive earnings comparisons as the year progresses.

"Data integration is increasingly being recognised for its strategic business impact and is growing in importance across a broad range of enterprise IT initiatives," says Field. "Over time the growing sophistication of customers will cause them to become more selective and narrow the list of vendors they consider for their enterprise data integration projects. Ascential`s increased investments in product development continue to extend the capabilities and differentiation of its offerings while its investments in its field operation provide increased market coverage. The company is expecting to benefit by winning a larger share of a growing market."