Sybase reported record financial results for the first quarter of this year, the best quarter in the company's history.
Revenue
Total revenue for the first quarter this year increased 13 percent to $260.1 million from $230 million in the first quarter of 2007. License revenue grew 13 percent to $78.1 million from $69.4 million in the first quarter of 2007. Services revenue increased 8 percent to $139.4 million from $129.7 million a year ago. Messaging revenue grew 37 percent to $42.6 million from $31.0 million a year ago.
Income
For the first quarter, operating income calculated in accordance with generally accepted accounting principles (GAAP) increased 69 percent year over year to $36.2 million, representing an operating margin of 14 percent. This compares with GAAP operating income of $21.4 million and an operating margin of 9 percent a year ago.
GAAP net income increased 60 percent year over year to $24.2 million from $15.1 million a year ago. GAAP earnings per diluted share (EPS) increased 65 percent to 27 cents for the 2008 first quarter from 16 cents for the first quarter of 2007.
Non-GAAP operating income for the first quarter increased 44 percent year over year to $49 million, representing a 19 percent operating margin. This compares with non-GAAP operating income of $33.9 million, representing a 15 percent operating margin, in the 2007 first quarter.
Non-GAAP net income for the 2008 first quarter increased 42 percent to $35.3 million from $24.9 million for the first quarter of 2007. Non-GAAP EPS for the 2008 first quarter increased 46 percent to 39 cents from 27 cents for the first quarter of 2007.
Non-GAAP amounts exclude the amortization of certain purchased intangibles, stock-based compensation, restructuring costs, non-cash charges related to the write-down of auction rate securities, and the tax effect of these and related items. Accompanying this release is a reconciliation from GAAP to non-GAAP amounts for the first quarter of 2008.
Chairman 's Reaction
"I am extremely pleased with our start to 2008," stated John Chen, chairman, CEO and president of Sybase. "Our momentum in the marketplace continues, driven by the market-leading Unwired Enterprise platform, combined with our consistently strong execution. As a result, we delivered the best first quarter in Sybase's history, which follows our record 2007 performance."
Added Chen, "Looking toward the balance of 2008, our compelling suite of products and services addresses the highest-priority information technology needs facing enterprises today. Growth drivers for the upcoming year and beyond include our enterprise database cluster option, risk analytics platform, mobile banking and payments solutions, and a new MMS content delivery gateway. Additionally, our latest release of Information Anywhere Suite now supports the Apple iPhone and Google Android platforms, as well as Symbian, Microsoft, RIM, and Palm.
"Despite current uncertainty in the macro-economic environment, our business pipelines remain healthy, and we remain confident in our outlook for the year. As a result, we are raising our expectation for full-year 2008 earnings, and we anticipate revenue and cash flow toward the high end of our most recent full-year guidance," concluded Chen.
Cash on Hand
At March 31, Sybase reported $841.3 million in cash and cash investments, including long-term cash investments of $23.9 million and restricted cash of $3.7 million. In the first quarter, the company generated $94.6 million in cash flow from operations.
On April 15, 2008, the company completed its previously announced modified "Dutch auction" tender offer to purchase $300 million of its common stock. There remains $82.9 million authorized under the company's current share repurchase program.
Days sales outstanding (DSO) for the first quarter was 76.
Management Projections
For the second quarter ending June 30, management anticipates total revenue in the range of $255 million to $265 million. Management anticipates non-GAAP fully diluted EPS in the range of 40 cents to 45 cents and GAAP EPS in the range of 30cents to 35 cents.
Management is raising guidance for full-year 2008 EPS due to the company's stronger-than-expected performance in the 2008 first quarter and including approximately 4 cents of incremental EPS accretion related to its recently completed Dutch tender. Non-GAAP EPS is now anticipated in the range of $1.94 to $1.99, and GAAP EPS is anticipated in the range of $1.51 to $1.56. Management also anticipates full-year 2008 total revenue toward the high end of its previously stated guidance range of $1.075 billion to $1.090 billion and cash flow from operations toward the high end of its previously stated guidance in the range of $220 million to $240 million.
About Sybase, Inc.
Sybase is among the largest enterprise software and services companies exclusively focused on managing and mobilizing information. With its global solutions, enterprises can extend their information securely and make it useful for people anywhere using any device. The world's most critical data in commerce, finance, government, healthcare, and defense runs on Sybase. For more information, visit the Sybase Website at http://www.sybase.com/.
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