Consolidated revenues for the first quarter totaled
€95.7 million, €103.1 million in the same period
of 2003. More than 28 percent of revenues were
posted in US dollars. As a result, the weak dollar
had a significant impact on reported figures.
Adjusted for currency translation effects, quarterly
revenues were 2 percent lower than in 2003.
Product sales remain stable
Product revenue, compromising of both license and
maintenance services, remained the main source of
revenue. Product revenues totaled €67.4 million
(€69.2 million in Q1 2003). Adjusted for currency
translation effects, this represents an increase of
Licensing revenues developed particularly positively.
Adjusted for currency translation effects, sales
increased by 11 percent to €23.3 million. This
growth was primarily attributable to the Enterprise
Transaction Systems (ETS) Business Line, which
contributed more than 76 percent of all licensing
ETS revenues exceed forecasts
The business line ETS Modernization generated
licensing sales of €17.8 million, an increase of
31 percent. This reflects both the slightly improved
willingness of customers to invest in IT, but also
the impact of our intensified marketing efforts. The
new strategic focus takes into account the importance
of ETS products. Moreover, this clear long-term
commitment provided a boost to the morale
of the ETS sales force.
Nevertheless, customers remain cautious
with regard to investment in new technologies.
XML Business Integration license sales fell to
€3.8 million (€6.1 million in Q1 2003) in the first
quarter. However, the launch of our new XML
Integration Packages in the second quarter is
expected to lead to improvement over the remainder
of the year.
Fall in revenues from professional services
Before currency translation effects, revenues from
maintenance services remained unchanged year-on-
year, contributing €44.1 million to product sales.
Project services contributed revenues of €28.0 million,
with market oversupply playing a significant
role in this lower figure. In addition, Software AG
has deliberately focused professional services on
high-margin areas since 2003. The fall in revenues
for this segment is a direct result of the reduction
in the consultant headcount. IT consultant utilization
was unchanged in comparison to 2003.
Increased revenues from licensing in the regions
Three of Software AG’s regional subsidiaries posted
increased revenues from licensing. In northern
Europe, Asia/Pacific, and South Africa, license sales
from new software increased by almost a third to
€7.4 million. In Central and Eastern Europe, the
increase was 21 percent. In Southern and Western
Europe, revenues from licensing rose 19 percent to
€5.3 million. In the Americas, the weak dollar led
to a drop in revenues from licensing to €5.2 million
in comparison to €7.4 million over the same period