- For Q4, Lexmark reported Perceptive Software revenue of $99M, which represented 37% YoY growth.
- For FY14, Lexmark reported Perceptive Software revenue of $313M or 31% growth.
- That sounds great, until you get to the fine print where it says, "Perceptive Software organic growth of -10% for Q4, excludes acquisitions completed in the past four quarters. Perceptive Software organic growth of -3% for the full year 2014. (ReadSoft and its $100M of annual revenue was the big acquisition).
- In the analyst conference call, CFO and VP David Reeder said Perceptive revenue was negatively affected by "large deal timing and a shift from perpetual license to subscription sales."
- Perceptive did, however, manage an operating income of $11M in Q4, up considerably from 2013's $2M income for Q4, and up $3M from Q3. The fourth quarter boosted Perceptive's operating income for the year to $14M - a $16M improvement from the previous year.
- Commented CEO Paul Rooke, "We also expect continued growth and margin expansion in Perceptive Software as we strengthen our solutions offerings, factor in a full year of the cost and expense reductions taken in the second half of 2014, optimize maintenance pricing, and execute the expected cost synergies with the integration of ReadSoft."
- Rooke also commented that he felt Perceptive was on target for hitting Lexmark's 2016 goals of $500M in annual revenue and 25% operating margins. "Perceptive Software revenue and operating income continued to make steady progress to our 2016 revenue and operating margin targets. We are quite pleased with the trajectory of the business as revenue and operating margin grew year-over-year and sequentially."
- As pre-reported, Kofax showed growth in both its software license sales and total revenue for its FY15 Q2.
- However, the net total revenue growth was only $4M, the bulk of which could theoretically be attributed last fall's acquisition of SoftPro last fall, which had reported $13M of revenue for 2013. So, like Perceptive, Kofax really didn't see much organic growth in the quarter.
- Unlike Lexmark, Kofax can't blame the slowed growth on a switch to more subscription sales. When asked about recurring revenue during the analyst conference call, Bish estimated that 90% of Kofax's was coming from maintenance and only 10%, from what he called "term" licenses, which I assume means subscriptions, with most of the term licenses coming from Kapow, which primarily followed a subscription model when Kofax acquired it.
- Bish also said that going forward, Kofax will no longer differentiate between "core capture" sales and sales from "mobile and new or acquired products." In the call with analysts, he explained, "Software license revenue from core capture products declined year-over-year in both the second quarter and six months ended Dec. 31, 2014, but at a lower rate in the second quarter than the first quarter. These declines were primarily driven by customers increasingly choosing to purchase Kofax TotalAgility and solutions built on that platform as well as our mobile capture, Web capture, and electronic content transformation products rather than our legacy Kofax Capture and Kofax Transformation Modules products.
"The capture market is not in a state of decline nor is Kofax losing market share. Rather, we are undergoing a rather dramatic shift in buying preferences from our legacy capture software products to our mobile and new or acquired products.
"As a result of the complexity of these issues discussed above and the challenges associated with accurately calculating Kofax's multi-channel capture revenues, we will no longer report core capture revenues or attempt to report multi-channel capture revenues. Instead, we will only report total software license revenue.
- Kofax's profitability was way up compared to its FY15 Q1 with its operating margins coming in at 17.7% for Q2, compared to just 6.3% in Q1.
- Subsequent to its earnings release, Kofax announced that its shareholders voted in favor of a plan to delist the company's shares from the LSE, so they would be listed exclusively on the Nasdaq. Plans to carry out that motion are underway.
- The deslisting was one of four matters voted on by the shareholders, with all being approved except for a call to change the company by-laws to make them more "customary for a Bermudian company with shares only listed on NASDAQ." It sounds like the Kofax board would still like to get that proposal passed.
- Nuance reported Document Imaging revenue for its FY15 Q1 of $60.1M, a slight increase over its FY14 Q1 revenue of $58.3M, but it's important to note that the previous year's Nuance's revenue did not include Notable Solutions, Inc. which was acquired this summer.
- Most likely buoyed by NSi sales, had had a very strong FY14 Q4.
- EMC's reported its 2014 Q4 revenue for its Information Intelligence Group (IIG), which includes Documentum and Captiva, as $174M, which represented an 8% YOY drop. For the year, IIG's revenue was $640M, which represented only a 1% drop.
- Also, at its recent sales meeting for the group, EMC announced it has changed the name from IIG to the Enterprise Content Division (ECD).
All quotes from analyst calls were transcripts compiled by Seeking Alpha.