NEWS5 August 2009

IBM target SPSS reports second-quarter revenue down 8%

Financials North America Technology

US— IBM takeover target SPSS saw revenue and profit fall 8% and 12% respectively in the second quarter of 2009 as a promising “full pipeline” of business proved difficult to convert into actual sales, according to Jack Noonan, CEO of the survey and analytics software firm.

Revenue for the period was $69.7m versus $75.7m last year. Operating income was up 3.6% to $11.3m, a margin of 16% – the company’s best Q2 results in its history. However, net income came in at $6.2m, down $800,000 year-on-year.

Licence revenue was down 13% to $30.3m while maintenance revenue was up 1% to $33.6m.

Noonan said: “Mid- and low-priced transactions of our statistical products continue to account for the majority of our licence revenue and, as expected, we had a lower number of larger sales of combined products, particularly in Europe, which weakened our second quarter results.”

The US also posted “a slight decline” in licence revenue while sales were up in Asia Pacific, particularly in Japan where Noonan said SPSS had made “significant gains”.

Six-month revenue was down 8% to $141.8m, while net income fell 3% to $15.1m.

IBM has bid $1.2bn – or $50 a share – to buy SPSS. The takeover is expected to be completed later this year, subject to approval by SPSS shareholders, applicable regulatory clearances and other customary closing conditions.