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Highlights:
Total revenue increased 22% and license revenue up 12% year over year
Total database license revenues increased 18% year over year
Total iAnywhere revenues up 10% and license revenues up 16% year over year
Non-GAAP operating income up 40% year over year, non-GAAP operating margin of 22%
GAAP operating income up 39% year over year, GAAP operating margin of 17%
Non-GAAP EPS of $0.47; GAAP EPS of $0.37
Management raises full-year non-GAAP EPS to range of $1.64 to $1.66 and GAAP EPS to range of $1.25 to $1.27
Full-year cash flow guidance raised to approximately $210 million
2007 Third Quarter Results
Total revenue increased 22% to $255.3 million from $209.1 million in the third quarter of 2006. License revenue increased 12% to $85.1 million from $76.3 million in the third quarter of 2006. Services revenues were up slightly to $135.8 million, and messaging revenues were $34.3 million.
Non-GAAP operating income for the 2007 third quarter increased 40% year over year to $57.3 million, representing a 22% operating margin.
Non-GAAP net income for the quarter was $42.8 million, or earnings per diluted share (EPS) of $0.47. This compares with non-GAAP net income of $36.3 million, or EPS of $0.40 for the third quarter of 2006.
Operating income calculated in accordance with generally accepted accounting principles (GAAP) for the quarter increased 39% year over year to $44.6 million, representing a 17% operating margin.
GAAP net income was $34.1 million, or GAAP EPS of $0.37, for the quarter. This compares with GAAP net income of $25.1 million, or GAAP EPS of $0.27, for the 2006 third quarter.
Non-GAAP amounts exclude the amortization of certain purchased intangibles, stock-based compensation, and restructuring costs, and the tax effect of these and related items. Accompanying this release is a reconciliation from GAAP to non-GAAP amounts for the 2007 third quarter.
“We are extremely pleased with our performance in the third quarter, with strong contributions from each of our three business segments,” said John Chen, chairman, CEO, and president of Sybase. “Solid growth across all of our key product lines — data management, mobile middleware, and messaging services — demonstrates the growing market acceptance of our Unwired Enterprise platform.
“The strong revenue performance in each of our three business segments also demonstrates the leverage in our business model and growing cross-selling synergies in our enterprise customer base. This helped drive our sixth consecutive quarter of consolidated operating margin expansion. As a result, we are raising our outlook for full-year EPS and operating cash flow for the second time this year,” concluded Mr. Chen.
Balance Sheet and Other Data
At September 30, 2007, Sybase reported $717.3 million in cash and cash investments, including restricted cash of $6.1 million. In the third quarter, the company generated $47.1 million in cash flow from operations.
Sybase repurchased $32.8 million worth of its stock during the 2007 third quarter. As of September 30, 2007, $158.4 million remained authorized in the company’s current share repurchase program.
Days sales outstanding (DSO) for the 2007 third quarter was 75.
Management Changes
Upon filing the Form 10-Q for the 2007 third quarter, senior vice president and chief financial officer Pieter Van der Vorst will become senior vice president and general manager of the EMEA Region, reporting to Steve Capelli, president of Worldwide Field Operations. In this position, Mr. Van der Vorst will be headquartered in London with responsibility for field and business operations in the EMEA region. Mr. Van der Vorst has been with Sybase since 1991 and served as the company’s chief financial officer for the past eight years.
Jeff Ross will be promoted to senior vice president and chief financial officer of Sybase from his current role as vice president and corporate controller, a position he has held for three years at Sybase. Mr. Ross joined Sybase in 1997 as group director of tax and corporate accounting, with responsibility for the worldwide tax function and internal financial reporting. Previously, he spent 10 years at Price Waterhouse in various positions of increasing responsibility. A Certified Public Accountant, Mr. Ross earned a B.A. in business administration from University of California at Berkeley.
“Pieter has been an invaluable partner of mine over the last eight years. Given his thorough knowledge of our customer base, product lines, and business strategy, this new opportunity will allow Pieter to further expand his contribution to Sybase,” stated Mr. Chen.
“We are very pleased to promote Jeff, a 10-year veteran of the Sybase finance organization. Jeff’s promotion allows us to maintain operational continuity and demonstrates Sybase’s depth of management,” concluded Mr. Chen.
Forward Guidance
For the fourth quarter ending December 31, 2007, management anticipates non-GAAP fully diluted EPS in the range of $0.54 to $0.56 and total revenue in the range of $280.0 million to $290.0 million. GAAP EPS for the fourth quarter is expected to range from $0.44 to $0.46.
For full-year 2007, management is raising guidance for fully diluted non-GAAP EPS to a range of $1.64 to $1.66 from prior guidance of approximately $1.56. Management anticipates total revenue for 2007 will range from $1.01 billion to $1.02 billion. Management is raising guidance for GAAP EPS to a range of $1.25 to $1.27 from prior guidance of approximately $1.19.
Management is raising guidance for full-year 2007 cash flow from operations to approximately $210 million, compared with prior guidance of $195 million to $205 million.
Accompanying this release is a reconciliation from projected GAAP to non-GAAP amounts for the 2007 fourth quarter and full year. -Sybase
Posted October 26th, 2007 by harminka
