Siebel Systems Inc.s business continues to sputter in the slowing economy as first-quarter license revenues were less than half of what they were in the same period the previous year.
Siebel, the acknowledged market leader in customer relationship management software, saw software license revenues, the heart of its business, plummet to $112.1 million from $246 million in last years first quarter. That drop-off brought overall first-quarter sales down to $332.8 million from $477.8 million in the same period last year.
The San Mateo, Calif., company did return to profitability in the quarter after two straight quarters of losses brought on by restructuring charges. But its net income of $4.6 million was paltry compared with last years $64.6 million first-quarter profit.
Siebel Systems Chairman and CEO Tom Siebel said the company saw “significant economic deterioration all around the world” throughout the quarter. Still, he said, the company was on target to meet or exceed its forecasts in the quarter until several large deals fell through in the final week of March.
Siebel blamed the deals collapse on outside factors such as continuing economic uncertainty, war in Iraq and the SARS outbreak. He declined to comment on whether or not the deals would close in the second quarter, though he said the companys license revenues in this quarter would be in the $120 million to $140 million range.
“Clearly, our biggest competitor in the quarter was the economy,” Siebel said.
As he has for the last seven quarters when Siebels revenue has fallen on a year-to-year basis, Siebel said the company is consolidating market share and is well-positioned to the grow when the economy rebounds.
“If the economy expands … then Siebel Systems will grow significantly,” he said. “If not, then Siebel Systems will not grow significantly.”
To continue to rein in expenses, Siebel will cut approximately 250 jobs, or 5 percent of its workforce, this quarter, Chief Financial Officer Ken Goldman said. Those employees scored in the bottom 5 percent in employee evaluations, employees that the company culls every six months, Goldman explained. However, they will not be replaced this time around as they normally are, he said.
The company added more than 160 new customers in the quarter, with the average deal size at $282,000. It increased its cash position during the quarter by $59.2 million.
Other Earnings News
In other software company earnings news Wednesday:
- CRM vendor E.piphany Inc. actually saw a slight increase in total revenues, from $22.1 million to $22.5 million. License revenue was down only slightly from $10.9 million to $10.4 million. The San Mateo, Calif., company shaved its net loss to $10.9 million from $17 million in last years first quarter.
- BroadVision Inc. reported revenues of $24.5 million, down from $30.5 million in last years first quarter. License revenues fell from $8.2 million to $8 million. The Redwood City, Calif., portal software developer returned to profitability though, with net income of $1.3 million after a $36.1 million loss in the same period a year ago.
- Content management software developer Vignette Corp. saw revenues fall to $40.8 million from $46.4 million in last years first quarter. License revenues dropped from $20.5 million to $16.5 million. The Austin, Texas, company lost $7.5 million after a $37.9 million loss in the same period last year.
- News was better at knowledge management and collaboration software developer Open Text Corp., which saw revenues increase from $37 million to $44 million as license revenues climbed from $15.5 million to $19 million. The Waterloo, Ontario, company also recorded an increase in net income, from $4.3 million to $6.8 million.
- FileNet Corp. also weathered the storm, as its revenues were up from $86.2 million to $87 million with license revenue leading the way, up from $31.2 million to $35.5 million. The Costa Mesa, Calif., enterprise content management software developer saw net income remain nearly steady at $1.34 million after coming in at $1.36 million in last years first quarter.
- Business intelligence software developer Business Objects SA saw total revenues surge from $107.5 million to $118.5 million year-to-year. Software license revenues fell from $63.2 million to $56.2 million, though license update and support revenues increased from $31 million to $46 million. Net income for the San Jose, Calif., company dropped from $11 million to $8.8 million.
- Brio Software Inc. managed a revenue increase as well, from $25.4 million to $26.7 million. License revenue was up slightly from $10.96 million to $11 million. Restructuring costs from past layoffs and facility closures increased the Santa Clara, Calif.-based business intelligence software vendors net loss to $13.4 million from $3.8 million in the same period last year.
- Knowledge management software developer Primus Knowledge Solutions Inc. saw overall revenues drop to $5.5 million from $6 million in last years first quarter. License revenues were off only slightly, from $2.5 million to $2.4 million. The Seattle-based company lost $1.1 million after a $4.8 million loss in last years first quarter.