Siebels Earnings Take Nose Dive

The CRM software company posts a net loss of nearly $4 million as Q1 revenues drop below $300 million.

Siebel Systems Inc. Wednesday revealed all the gory details of its disappointing first quarter, a desultory performance that ultimately cost former CEO Michael Lawrie his job.

The CRM (customer relationship management) software company reported revenues of $298.9 million, down from $329.3 million in the same period last year. License revenue was hardest hit, dropping to just under $75 million, down from $126.8 million in the same period last year.

That led to Siebel posting a net loss of nearly $4 million, down from a $31 million profit in last years first quarter.

Lawrie resigned under pressure from the Siebel board of directors earlier this month and was replaced by longtime Siebel board member George Shaheen.

/zimages/6/28571.gifLawrie proved to be no match for Siebels troubles. Click here to read more.

"Q1 has been a call to action," said Shaheen. "Were going to focus on delivering comprehensive solutions, improved customer deployments and customer value."

Lawries strategy of growing the company by delivering more successful customer deployments seemed to be paying off in the quarter as Siebel reported 290,000 new user deployments, the most it had ever had in a single quarter. But that didnt translate into new license revenues, though the company did increase maintenance and services revenues.

Shaheen said Siebels sales organization was "overly complex" and the company needed to better plan its sales activities according to customers buying procedures that are causing deals to slip from quarter to quarter.

"While the market for enterprise applications has challenges, we have not experienced such a high level of Q4 to Q1 seasonality before," he said. "Its lumpy, hard to predict, and back-end loaded. Regardless, our execution has been inconsistent and has to improve."

Siebels average deal size in the quarter was $307,000, with only one deal over $5 million. The company generated 56 percent of revenues from new customers. It booked $10.6 million in revenues from its Siebel CRM OnDemand hosted application services business, which had 33,000 subscribers at quarters end.

Siebel expects total revenues to be in the $310 million to $330 million range in the second quarter.

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