E.piphany Inc. reported a whopping $1.98 billion net loss in its third quarter, the company announced late Monday, but officials said brighter days are ahead.
Part of the reason for the optimism is that $1.9 billion of that $1.98 billion loss came not from operations but from write-downs of stock transactions made when the E.piphanys stock was flying high. The CRM (customer relationship management) software vendors stock has been trading in the $5 to $6 range as of late, but early last year it sold for more than $200 a share.
Still, even not taking into account one-time losses and non-cash items, E.piphany posted a loss of nearly $15 million for the three months ended Sept. 30–-more than double the $7.03 million it lost in the same year ago period. Revenues decreased from $39.1 million in the third quarter last year to $28.5 million this year. License revenues also dropped, from $21.4 million to $16.2 million.
The only silver lining was that E.piphany only burned through $12 million in cash in the quarter and still has $338 million left in the bank. Its burn rate and its losses both were better than analysts had expected. Company officials said E.piphany will continue to focus on cost-containment in the fourth quarter and expects to bring its employee headcount below 700 by the end of the year. E.piphany had 730 employees as of Sept. 30.
In the third quarter, the San Mateo, Calif., company improved service margins by 20 percent and cut costs by 18 percent, officials said.
In a statement, E.piphany president and CEO Roger Siboni played up the blue-chip customers E.piphany added during the quarter, including Epson America Inc., General Electric Co.s GE Plastics division, Johnson & Johnson Inc., and Host Marriott Corp.s Marriott Vacation Club International.
"E.piphany executed well through the continuing economic downturn, said Siboni, in the statement. "In challenging times like these, it is imperative that we focus on revenue as well as internal costs. Our improvement in service margins and low cash burn are evidence of our successful execution."