As expected, Siebel Systems Inc. on Wednesday reported a decline in revenues and profits for its second quarter ended June 30, a performance that will prompt a number of new initiatives at the company to boost performance, including cost cutting.
Revenues have fallen year-over-year at Siebel for 12 consecutive quarters. In the second quarter, total revenues slid to $301.1 million from $333.3 million in last years second quarter. License revenue fell from $109.9 million to $94.8 million year-over-year.
Siebel had reversed a falling license revenue trend in the first quarter of this year as several large deals failed to close before the end of the quarter.
Net income fell to $8.2 million from $9.8 million in the same period a year ago. New CEO Michael Lawrie made it clear that Siebels performance in the second quarter was unacceptable.
"Ill be the first to acknowledge that we did not perform well for our shareholders," Lawrie said in his first Siebel earnings call. He vowed to do better and said Siebel will focus on improving the companys revenue-generating capabilities, financial structure and leadership.
"Were prepared to act to improve our performance and our capabilities," he said.
To that end, Siebel has formed a new SMB (small and midsized business) division, rehiring former marketing executive Bruce Cleveland to head the group. It will include the companys Siebel CRM OnDemand hosted service.
Lawrie also promised increased investments in vertical markets—especially retail banking, a business Siebel is building around its acquisition of Eontec Ltd. during the quarter—and analytics.
Better sales management and pipeline visibility are also necessary, Lawrie said, a candid acknowledgment coming from a company that develops software designed to help companies manage their sales operations better.
"We saw a lot of deals slip during the quarter, so we put additional processes in place to improve visibility," Lawrie said. Many of the deals that slipped in the second quarter have already closed this month, he said.