Business at web-based software vendor Intraware Inc has continued its strong growth, as the company posted second quarter revenue up 134% year-over year at $19.2m. On a sequential basis, the improvement over the first quarter was 16.4%. The bottom line provided a huge upside surprise as well, with the net loss after charges coming in at $0.17 per share, when analysts surveyed by First Call were expecting a much wider loss of $0.39. Reported net loss was $4.6m, or $0.20. In the year-ago quarter, the company saw a net loss of $2.1m ($0.60), excluding charges.
During the quarter, the Orinda, California-based company added several blue-chip software vendors to its list of partners, including Hewlett-Packard Co, Novell Inc and Macromedia Inc. Chief executive Peter Jackson said the company’s business model is beginning to click on all cylinders, compared to about a year ago when it was working hard to attract partners. Vendors are now saying, ‘where do I sign?’ according to Jackson. On the other end, Customers increased to 3,300 and web site membership – comprising those who research and evaluate software and services at the site – rose to 150,000.
For the past six months or so, customers have been spending an average of $16,000 with the company, a figure which Jackson happily characterizes as ridiculously high. That figure should track down over time, though, as the company sees more customers and more transactions. As it stands, sales are starting to include multiple software and services, which leads Jackson to believe that the average deal might actually tick higher before it naturally heads down to a more realistic and sustainable level.
As for profitability, Wall Street isn’t expecting Intraware to make any money for at least the next six quarters. And while Jackson says he would be disappointed if the four-year-old company doesn’t begin turning a profit by 2002, he claims to have built the business on the principle that achieving critical mass in terms of technology, partners and customers is all-important as the market matures.
Online services brought in $2.9m in the latest quarter and accounted for 15% of overall revenue. Going forward, those numbers should increase along with the expected incline in opportunity and become a key metric to watch for the company.
For now, Jackson claims he’s still losing less than analysts have allowed for in their models, as evidenced by the bottom line surprise for the quarter. When asked about his guidance to analysts, Jackson said I don’t spend a lot of time on Wall Street. I don’t spend a lot of time spinning the company. Instead, he claims that he concentrates more closely on the business and exercises caution when projecting future performance.
