Software AG increases earnings by 33 percent
Published: 7/29/2010
- webMethods license revenue grew by 31 percent in the second quarter 2010
- Total revenues up by 52 percent to €267.3 million
- The webMethods business division is the driver of revenue growth and profitability
- Earnings per share (EPS) climb by 29 percent to €1.32
- Free cash flow increased by 22 percent to €36.3 million, a new record level
- Software AG confirms its revenue forecast for fiscal year 2010 and increased the earnings forecast from an 8 to 12 percent range to a 10 to 12 percent range
Software AG (Frankfurt TecDAX: SOW) continued to show strong growth in Q2 2010 with total revenues up by 52 percent to €267.3 million. The high growth was driven by the webMethods business division with license revenue up by 31 percent and earnings more than doubled. This confirms the trend of recent quarters that the new webMethods business division is now a driver of earnings growth as well as the traditional Enterprise Transaction Systems business. At a corporate level, operating earnings, earnings after tax and earnings per share returned double-digit growth, reaching historical record levels. The free cash flow at €36.3 million (up 22 percent) also reached a new record level. Software AG expects the increasing volume of projects in the process solutions area to continue and has confirmed its forecast for fiscal year 2010.
The business performance in the second quarter of 2010 totally confirmed the effectiveness of Software AG's growth strategy. The webMethods business division, with innovative software for integrating business applications and processes, continued to show dynamic growth. Total business division growth accelerated to 18 percent in the second quarter after a 9 percent increase in the Q1. The webMethods licensing business grew dynamically by 31 percent to €29.6 million. This growth was based on the experience and skills of the business organization operating in a growing software market and resulted in an increase in the number of large projects as well as an increase in the average deal size.
Revenue by segment
The webMethods business division reported 18 percent growth in second quarter revenue of €89.4 million. The Enterprise Transaction Systems business division (Adabas, Natural) posted revenue of €96.3 million (€100.9 million in 2009), 5 percent under Q2 2009 but 8 percent higher than the first quarter 2010 figure. The Enterprise Process Innovation division, which represents the IDS Scheer business acquired by Software AG in August 2009, contributed a total of €81.6 million to Software AG's revenue growth. Of that figure, €23.4 million came from product revenues and €57.9 million from IDS Scheer Global Consulting and product implementation.
