Iona aims for USD17 million quarterly revenue

05-04-2007

by Charlie Taylor

Irish software giant Iona Technologies said on Thursday it expects to report first quarter revenue of USD17 million.

This compares to revenue of USD22.8 million for the fourth quarter of 2006 -- slightly up on the USD16.9 million recorded for the same three-month period a year ago.

The Irish company, which develops middleware and web services software, will formally announce first quarter results for 2007 on 24 April.

Iona said it expects total expenses for the first quarter 2007, including cost of revenue, operating expenses and stock-based compensation expense, to be in the range of USD19 million to USD19.5 million. The firm forecasts that its first quarter cash balance will be between USD55 million and USD56 million.

Iona's chief executive officer Peter Zotto voiced disappointment at the expected results in a statement, pointing out the results highlighted the challenge of fitting its business neatly into three-month periods. Zotto also said that some transactions didn't close as expected, although he predicted they would be resolved in the coming quarters.

"While we are not satisfied with the level of financial performance for the first quarter, our underlying business, and the demand for our products, is strong. The Artix business continues to perform well, and we achieved, in Q1, year-over-year, Artix licence revenue growth of greater than 90 percent."

Zotto also made reference to Iona's acquisition of data management firm C24 in March. This was the company's first purchase for a number of years. Zotto said the acquisition, together with the successful launch of an active Registry/Repository product, gave customers the advanced data services and Service Oriented Architecture governance capabilities required for performance-demanding SOA deployments.

"These strategic product investments extend the market reach and value of both Artix and Celtix, and the uniformly positive reaction we have received from our customers, partners, and the industry analyst community is further evidence of our continued business and market momentum," said Zotto.

Iona was hit by a slowdown in enterprise software spending which began in 2001, but has seen its fortunes turnaround of late thanks to the success of its Artix range.

In January 2007, the company announced that fiscal 2006 had been its most profitable year since 2000 with revenues of USD77.8 million. Net income and earnings per share for 2006 reached USD7.1 million, or USD0.19 earnings per share.

Zotto moved to reassure investors that Iona has every intention of staying in profit and added that the firm expects total revenue for the second quarter of 2007 to be in the range of USD20 million to USD22 million.

"We remain confident about the year, excited about the continued growth of Artix, encouraged about the very positive customer response to our recent acquisition of C24 and the launch of our active Registry/Repository product, and pleased with the progress we have made in our open source initiative. All these positive developments reinforce that we have the right strategy and have every reason to believe that we are on the same growth trajectory that we expected going into the year." Zotto concluded.

Iona, which was first established on the campus of Trinity College, Dublin in 1991, employs 347 people worldwide. Approximately 115 staff are employed at the firm's headquarters in Ireland.