Third fiscal quarter revenues increased approximately 19 percent to $130.0 million from $109.7 million in the second quarter of fiscal 2001, and 235 percent from $38.8 million in the comparable period a year earlier. Revenues for the nine months ended March 31, 2001 increased 260 percent to $320.6 million from $89.1 million for the comparable period ended March 31, 2000.
Pro forma earnings for the third fiscal quarter were $16.3 million, or $0.09 per diluted share, excluding merger and acquisition-related charges, stock-based compensation and unrealized losses on non-marketable equity securities. The pro forma diluted earnings per share number is based on 177.8 million weighted average shares outstanding.
As of March 31, 2001, the Company had cash, cash equivalents and short-term investments of $360.4 million, excluding $20.7 million set aside as restricted cash, total assets of $1.83 billion and stockholders’ equity of $1.68 billion.
Openwave delivered a record quarter as the mobile Internet continued its global expansion, said Don Listwin, President and Chief Executive Officer. We met expectations, maintained pro forma profitability and passed a major growth milestone by achieving a run rate of over half a billion dollars in annualized revenues.
Net loss for the third fiscal quarter including merger and acquisition-related charges, stock-based compensation and unrealized losses on non-marketable equity securities was $151.2 million, or $0.91 per basic and diluted share, compared to a net loss of $228.6 million, or $1.38 per basic and diluted share for the quarter ended December 31, 2000, and a net loss of $77.5 million, or $0.56 per basic and diluted share for the third quarter in the prior fiscal year.
The Company benefited from strong wireless subscriber additions throughout the third quarter, as consumers around the world signed up for mobile Internet services. Total active mobile subscribers using Openwave products grew by 5.3 million to over 17.4 million at the end of March 2001 up from 12.1 million at the end of December 2000. This growth was evident on a global basis as the Company saw strong results from leading carriers in Japan, the Asia Pacific region, the Americas, and Europe. Additionally, with the signing of KG Telecom, Openwave has secured customer relationships with four of NTT DoCoMo’s iMODE partners including AT&T Wireless, Hutchison Telecom, and Telecom Italia Mobile.
Openwave’s messaging business continued to gain global momentum, as licensed subscribers reached an industry leading 175.9 million seats, at the end of March, with activated seats at 108.7 million. As a key component of the Services OS, the Openwave messaging platform has been recognized by leading carriers as a critical technology for the next generation of messaging services as illustrated by the 37 carriers, which have each licensed over 1 million seats.
New product announcements in the fiscal third quarter included the launch of the Openwave Services OS, a suite of open, IP-based mobile Internet software that enables mobile operators to rapidly deploy new revenue-generating services while providing mobile subscribers with a more compelling, easy-to-use, and personalized mobile Internet experience. Additionally, Openwave launched its new Mobile Access Gateway 5.0 and Next Generation Browser, as well as an end-to-end set of location services.
Financial Outlook
The following statements are forward looking and actual results may differ materially due to factors noted below, among others.
For the remainder of calendar year 2001, Openwave’s outlook is that quarterly revenues will continue to grow at 10 to 20 percent sequentially, resulting in calendar year 2001 revenues of approximately $640 million and pro forma earnings per share of approximately $0.46, excluding merger and acquisition-related charges, stock-based compensation and unrealized losses on non-marketable equity securities. The Company’s outlook is that gross profit will range between 79 and 81 percent for the calendar year 2001.
The Company’s pro forma operating profit excluding merger and acquisition-related charges and stock-based compensation was 11.6 percent for the third fiscal quarter of 2001. The Company intends to continue to improve its pro forma operating profit through calendar year 2001, with a targeted pro forma operating profit of approximately 13 percent by the fourth calendar quarter of 2001.
