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December 21, 2004

Cognos profits surge 42% in Q3

Canadian business intelligence software maker Cognos Inc ended the calendar 2004 year with some solid third quarter figures that beat most analyst estimates hands down.

By CBR Staff Writer

Ottawa-based Cognos, which is seen by many as a bellweather firm for the business intelligence (BI) software sector, reported revenue up 22%, to $210.4 million in its third fiscal quarter. Net income for the same quarter also jumped an impressive 42% to $34.5 million. The figures sailed way past analyst consensus estimates of $201.2 million revenue.

Much of the growth during the quarter was down to the strong and large sales of Cognos’ key business analysis tools.

Significantly license revenue, a key indicator of organic growth, was up 26% to $91.6 million. This total factors in foreign exchange and revenue gained from the acquisition of Frango AB in October. Excluding these factors the growth stood at 18%.

North America posted a healthy 45% increase in license revenue growth.

The results end an impressive first six-months for newly appointed CEO Rob Ashe, who remains confident about Cognos’ outlook.

With the steady advancement of BI as a strategic asset and the growing momentum for CPM [corporate performance management], and with product leadership in both these areas, we’re well positioned for future growth, Ashe said in a statement.

He singled out Cognos’ new enterprise reporting application as key factor in the company’s recent success. ReportNet continues to excel, driving our success in competitive engagements, Ashe said.

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ReportNet once again led the way during the quarter, generating $35.5 million of revenue. Eleven of the 15 million dollar-plus deals reported during the quarter were led by ReportNet. ReportNet revenue for the year-to-date stands at $99 million.

Ashe also said that the company’s enterprise planning application grew 40% in 2004, which is double what the company expected.

The solid results prompted Cognos to hike up its guidance for its full fiscal year well above the current analyst consensus, with revenue now expected to fall in the range of $804 million to $809 million.

Cognos shares closed up $2.4% at $43.28 on Nasdaq. Shares rose another 1% to $43.70 in after hours trading.

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