As expected, British information management and search vendor Autonomy broke the $500m revenue barrier for fiscal 2008, with sales up 47% on 2007 to $503.2m.
Announcing both its twelve month and fourth quarter sales today, Autonomy said it also saw net income rise by over 110% for the year, from $62.5m to $131.7m.
Commenting on the results, Dr. Mike Lynch, CEO of Autonomy said: “2008 was another momentous year for Autonomy, with exceptional results in all areas including strong organic growth. Top line revenues, operating profits, bottom line profit before tax and EPS are all up significantly, well ahead of consensus expectations from the beginning of the year and far-and-away records for the company, despite the negative effects of foreign exchange on revenues.”
CBR recently wrote a profile of Autonomy featuring an exclusive interview with Mike Lynch – read it at http://tinyurl.com/8gh9qk.
Nearly every metric went in the right direction in Autonomy’s fiscal 2008. It saw record profit from operations, record profit before tax, record revenues, 99% cash conversion, gross margins at 91%, and it still managed to boost R&D spending by 26%.
Its fourth quarter was no disappointment either: record quarterly revenue was up 26%, its EPS was up 86% to $0.25, and its operating margin broke another record at 50%. Organic revenue growth (excluding its acquisition of Meridio) came in at a healthy 29%. The quarter marked the 23rd consecutive quarter of year-on-year growth.
Blue chip fourth quarter customer wins included JP Morgan; Citi; BBC; BAE Systems; Statoil; Société Générale; Symantec; Avaya; CNN; State of Texas; American Automobile Association; Lloyds TSB; McAfee; Bank of Thailand; Deutsche Bank; European Patent Office; Xerox; AT&T and Clifford Chance.
Autonomy also signed 12 new OEM deals including Symantec, Dassault and Tridion. More and more companies have been making Autonomy’s so-called ‘Meaning Based Computing’ technology part of their own products.
Perhaps the only slight negative in the results was the news that day sales outstanding — a measure of the average number of days that a company takes to collect revenue after a sale has been made – increased between 2007 and 2008. But DSO was only up by one day to 84 days. Deferred revenues were $99.2m at December 31, 2008 compared with $97.9m at December 31, 2007.
This is likely just a reflection of the fact it tends to take longer to convert receivables into cash, the larger the deal size (and Autonomy’s average selling price has been on the increase) as well as the increasing amount of revenue that comes from OEMs rather than end user customers.
CEO Mike Lynch was clear on the reasons that Autonomy continues to grow its business despite the current economic climate: “The fundamental driver for Autonomy is the explosion of unstructured information,” he said. “This change for the IT industry affects all areas and Autonomy’s unique ability to understand meaning gives it a unique driver.”
“Whilst this switch to unstructured information may take ten to fifteen years, in 2008 we saw two particular aspects of this bigger picture come to the fore,” said Lynch. “The first and most important of these which affects all industry sectors are regulatory changes such as the amendments to the U.S. Federal Rules of Civil Procedure.”
“The second of these effects was the increase in regulation and litigation in the financial markets as a result of recent turmoil. As regulators across the world have realized that most of their issues are found in the unstructured information we saw a raft of new regulations come in during 2008 and the announcement of new regulations which will become operative in 2009 and 2010.”
“2008 saw a series of significant technical developments in the company,” he said, “including a new architecture for Autonomy ZANTAZ Digital Safe, increasing efficiency by a factor of eight and introducing new functionality; the integration of IDOL and Meridio to produce a significant advance in the field of manage-in-place; and continuing demands for Autonomy’s industry-leading voice archiving, critical for the emergence of audio EDD.”
As for the forthcoming year, Lynch declared the firm “conservatively optimistic”.