The Lindon, Utah-based Unix operating system vendor recorded net income of $4.5m on revenue up 38% at $21.4m for its second quarter ended April 30, 2003, compared to a net loss of $6.6m on revenue of $15.5m in the same quarter last year.

Revenue from the company’s operating system software was $13.1m, slightly ahead of expectations, while $8.3m came from its Unix licensing business. While enough to boost SCO into the black, the $8.3m SCOsource revenue was less than the $10m the company predicted back in February, but did help to increase SCO’s gross margin to $16.2m, compared to $10m in the second quarter of 2002.

SCO owns the contract rights to the Unix platform, said SCO’s president and CEO Darl McBride. As we continue to move down the path of asserting and protecting our rights to this asset, we have obviously been rewarded in the marketplace.

For the six months to April 30, SCO reported net income of $3.8m on revenue of $34.9m, compared to a net loss of $17.6m on revenue of $33.4m in the first two quarters of fiscal 2002. The company recorded a quarterly net income for the first time since it was formed when Caldera Systems acquired the server software and professional services businesses of Santa Cruz Operation Inc in May 2000 before changing its name first to Caldera International, then to The SCO Group.

SCO suspended Caldera’s traditional Linux business earlier this month as part of its ongoing investigation into the alleged illegal use of Unix IP within the Linux operating system. That decision does not appear to have had any material affect on its financial figures for the quarter.

The impact of suspending the Linux business as it related to SCO was minimal, said McBride. It really represented less than 2% of overall revenue.

The company has also, of course, launched a $1bn lawsuit against IBM Corp. Any additional costs related to that legal case are also yet to make an impact on the company’s financial figures.

Looking ahead, the company said it is expecting revenue for its third quarter to be between $19m and $21m, with two thirds coming from operating system software and one third from the SCOsource business. We’re encouraged by what the pipeline looks like, said McBride. The opportunities on the SCOsource side I would describe as significant.

Source: Computerwire