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Cognos exceeded its own revenue and profit estimations in its fiscal fourth quarter as the business intelligence software company drew closer to its stated goal of exceeding the billion-dollar revenue mark.
For the quarter ending Feb. 28, Cognos Inc. reported revenues of $256.3 million, up from $202.1 million in the same period a year ago. License revenue surged to $129.9 million, up from $93.5 million year over year.
That helped net income climb to $54.3 million from $46.1 million in the same period a year ago. For fiscal year 2005, Cognos total revenues came in at $825.5 million and net income at $136.6 million, up from $683.1 million and $100.9 million respectively over the previous fiscal year.
“I think that we came in well over expectations,” said Ottawa-based Cognos chief financial officer Tom Manley. “Our revenue expectations were around $240 million, we came in at $256.3 million; our earnings-per-share projection was 47 cents, we came in at 58 cents.”
License revenue was the big reason for Cognos success, Manley said.
“Certainly our license growth is the big news story,” he said. “It was up 39 percent from a year ago and drove our overall revenue performance.”
Cognos ReportNet enterprise reporting platform was once again the star, along with Cognos planning solutions.
Quarterly revenues for ReportNet climbed 83 percent year over year, while planning solutions revenues were up 53 percent.
Cognos also secured its first contract over $10 million in the quarter, one of 18 deals over $1 million the company booked.
“It was a public-sector deal led by planning, but it involved all of our products,” said Manley. “It wasnt a standardization deal, it was a CPM [corporate performance management] deal.”
Challenges remain for Cognos though. The strength of the Canadian dollar, which has risen 13 percent in the past year, makes the companys software more expensive outside of Canada.
“Certainly, when you look at our Q1 guidance, we are having to absorb the Canadian dollar,” said Manley. “That puts downward pressure on our EPS, until we adjust our business model.”
But the long-term outlook for Cognos remains healthy, with the company projecting fiscal 2006 revenues in the $930- to $950-million range, putting the magical billion-dollar revenue mark within reach.
“Its a little early for me to be commenting on that, but our outlook gets us in the 930- to 950-million range, so were getting close,” Manley said.