Sybase (NYSE: SY), the largest enterprise software and services company exclusively focused on managing and mobilising information, today reported financial results for the third quarter ended September 30, 2008.
- Total revenue of $284.0 million, up 11% year over year
- Database license revenue increased 15% year over year
- Messaging revenue increased 30% year over year
- GAAP operating margin of 19%, versus 17% a year ago; non-GAAP operating margin of 24%, versus 22% a year ago
- GAAP net income of $34.7 million, up 2% year over year; GAAP EPS up 8% year over year
- Non-GAAP net income of $47.2 million, up 10% year over year; non-GAAP EPS up 17% year over year
- Cash flow from operations of $53.7 million, up 14% year over year
- Management raises full-year guidance for revenue, earnings, and cash flow from operations
2008 Third Quarter Results
Total revenue for the third quarter of 2008 increased 11% to $284.0 million from $255.3 million in the third quarter of 2007. License revenue grew 9% to $92.9 million from $85.1 million in the third quarter of 2007. Services revenue increased 8% to $146.3 million from $135.8 million a year ago. Messaging revenue grew 30% to $44.7 million from $34.3 million a year ago.
For the third quarter, operating income calculated in accordance with generally accepted accounting principles (GAAP) increased 19% year over year to $52.9 million, representing an operating margin of 19%. This compares with GAAP operating income of $44.6 million and an operating margin of 17% a year ago.
GAAP net income increased 2% year over year to $34.7 million from $34.1 million a year ago. GAAP earnings per diluted share (EPS) increased 8% to $0.40 for the 2008 third quarter from $0.37 for the third quarter of 2007.
Non-GAAP operating income for the third quarter increased 18% year over year to $67.7 million, representing a 24% operating margin. This compares with non-GAAP operating income of $57.3 million, representing a 22% operating margin, in the 2007 third quarter.
Non-GAAP net income for the 2008 third quarter inncreased 10% to $47.2 million from $42.8 million for the third quarter of 2007. Non-GAAP EPS for the 2008 third quarter increased 17% to $0.55 from $0.47 for the third quarter of 2007.
Non-GAAP amounts exclude the amortisation of certain purchased intangibles, stockbased compensation, restructuring costs, charges related to the impairment of auction rate securities, and the tax effect of these and related items. Accompanying this release is a reconciliation from GAAP to non-GAAP amounts for the third quarter of 2008.
"I am extremely pleased with our ongoing momentum in the market and our fourth consecutive quarter of record performance. Our success is attributable to strength in our core database products and messaging services, as well as our diverse business model," stated John Chen, chairman, CEO and president of Sybase.
Added Mr. Chen, "Customers are responding well to our new productivity-enhancing solutions, such as risk analytics, enterprise mobile computing, mobile banking, and mobile commerce. Our Unwired Enterprise strategy is key to our strong competitive position and expanding market share in today's macro-economic climate.
"The company's strong business pipeline, combined with our proven ability to execute, enable us to raise our 2008 financial targets for the third time this year," concluded Mr. Chen.
Balance Sheet and Other Data
At September 30, 2008, Sybase reported $583.9 million in cash and cash investments, including long-term cash investments of $19.3 million and restricted cash of $3.3 million. In the third quarter, the company generated $53.7 million in cash flow from operations.
For the fourth quarter ending December 31, 2008, management anticipates total revenue in the range of $295 million to $305 million. Management anticipates non-GAAP fully diluted EPS in the range of $0.60 to $0.62 and GAAP EPS in the range of $0.51 to $0.53.
Management is raising guidance for full-year 2008 revenue, earnings, and cash flow from operations due to the company's stronger-than-expected performance in the third quarter of 2008. Management now anticipates total revenue in the range of $1.122 billion to $1.132 billion. Non-GAAP EPS is now anticipated in the range of $2.02 to $2.04, and GAAP EPS is anticipated in the range of $1.54 to $1.56. Management now anticipates cash flow from operations to exceed $250 million.
The company's updated guidance also accounts for an adverse foreign currency impact based on current exchange rates compared to exchange rates at the time the company previously provided full-year guidance on July 23, 2008.