Siebel (NASDAQ:SEBL)
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Siebel Systems, Inc. (NASDAQ:SEBL):
-- License Revenues Up 91% over Third Quarter
-- Operating Margin Exceeds 23%; Operating Income Up 203% over
Third Quarter
-- Strong Results Across Key Geographies, Industries and Products
Siebel Systems, Inc. (NASDAQ:SEBL), a leading provider of
customer-facing solutions, today announced preliminary financial
results for the fourth quarter ended December 31, 2005 that
significantly exceeded management guidance and analyst consensus
expectations, and achieved strong sequential and year over year growth
across all revenue and profit measures.
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*T
Q4 2005 Q4 2005
------------------
Preliminary Company Analyst Q3 2005 Q4 2004
($M, except %s) Results Guidance Consensus Actual Actual
--------------------------------- -------- --------- ------- --------
Revenues
License 214 110-130 124 112 161
Maintenance 131 120-126 126 125 122
Services & Other 124 110-115 114 111 109
----------- -------- --------- ------- --------
Total Revenues 469 340-360 362 348 392
Operating Income 107-111 N/A N/A 36 65
Operating Margin 23-24% 13%-16% 15% 10% 17%
Pre-Tax Income 123-127 N/A N/A 53 79
Pre-Tax Margin 26-27% N/A N/A 15% 20%
Q4 2005 Preliminary Results vs.
-----------------------------------
Company Analyst Q3 2005 Q4 2004
($M, except %s) Guidance Consensus Actual Actual
---------------------------------- -------- --------- ------- --------
Revenues
License +78% +73% +91% +33%
Maintenance +7% +4% +5% +7%
Services & Other +10% +9% +12% +14%
-------- --------- ------- --------
Total Revenues +34% +30% +35% +20%
Operating Income N/A N/A +203% +68%
Operating Margin +62% +57% +135% +38%
Pre-Tax Income N/A N/A +136% +58%
Pre-Tax Margin N/A N/A +77% +33%
Q4 2005 Guidance as of October 26, 2005. Analyst Consensus as of
January 6, 2006.
*T
The company expects total revenues for the fourth quarter of 2005
to be approximately $469 million, above analyst consensus expectations
by 30%, up 35% sequentially, and up 20% year over year. The company
expects license revenues for the quarter to be approximately $214
million, above analyst consensus expectations by 73%, up 91%
sequentially, and up 33% year over year. Maintenance revenues are
expected to be approximately $131 million, above analyst consensus
expectations by 4%, up 5% sequentially, and up 7% year over year.
Services and Other revenues are expected to be approximately $124
million, above analyst consensus expectations by 9%, up 12%
sequentially, and up 14% year over year. In addition, OnDemand total
contract value for the fourth quarter of 2005 is expected to be
approximately $16 million, up 42% sequentially and 65% year over year.
License revenues grew significantly across all major geographies,
including approximately 56% sequentially and 43% year over year in the
US, approximately 79% sequentially and 150% year over year in APAC/ROW
and approximately 162% sequentially and 5% year over year in EMEA.
Domestic business accounted for approximately 43% of license revenues
and new customers accounted for approximately 33% of license revenues.
Total transaction count, at 513 license transactions during the
quarter, increased approximately 61% sequentially and 21% year over
year. Forty-four of these transactions were over $1 million, of which
six transactions were $5 million or more and of which four
transactions representing each major business (Americas, EMEA, APAC
and Americas Public Sector) were between $10 million and $15 million.
Preliminary average license transaction size of $418,000 was up
approximately 18% sequentially and 10% year over year. Terms, sales
cycles and close rates were consistent with historical norms. Many key
products, including Siebel Business Analytics, Self Service, Customer
Data Integration, Siebel CRM Professional Edition and Siebel CRM
OnDemand, as well as key verticals, including Telecommunications,
Financial Services, Life Sciences, and Manufacturing and Distribution,
contributed strong results.
Operating margin for the fourth quarter of 2005 is expected to be
approximately 23% to 24% of total revenues and operating income is
expected to be approximately $107 million to $111 million, up
approximately 203% sequentially and 68% year over year. Pre-tax margin
is expected to be approximately 26% to 27% of total revenues and
pre-tax income is expected to be approximately $123 million to $127
million, up approximately 136% sequentially and 58% year over year.
The company is still reviewing its effective tax rate for the quarter
and thus will not provide a preliminary estimate of net income or
earnings per share at this time.
The company's cash, cash equivalents and short term investments
are expected to be approximately $2.39 billion as of December 31,
2005, reflecting net cash generated during the fourth quarter of 2005
of approximately $144 million. Deferred revenues are expected to be
approximately $409 million as of December 31, 2005, up approximately
$94 million over the third quarter. As of December 31, 2005, headcount
was 4,686.
"In the second quarter of 2005, we committed to strengthening
Siebel's leadership team and increasing accountability throughout our
organization," said George T. Shaheen, Chief Executive Officer of
Siebel Systems. "We committed to improving our revenue generation
capability, aligning our cost structure with the scale of our
business, and investing in the products and technology that would keep
Siebel Systems at the forefront of CRM and analytics. We have
delivered strongly against these objectives. I am proud of our
improvement in the second half of 2005, which yielded sequential and
year over year growth in all revenue and profit categories during the
fourth quarter. This quarter represents our best revenue, profit and
cash generation performance since the first quarter of 2002. Our
performance in the fourth quarter of 2005 represents a strong
affirmation of the market opportunity in CRM and analytics, the
improvements we've made to address the market, and customer confidence
in the future of Siebel CRM and analytics following the proposed
Oracle transaction."
Siebel Systems Secures New Customers and Repeat Orders: The
company concluded approximately 513 new software licensing agreements
with new and existing customers in the fourth quarter, including
Airbus France, Alaska Airlines, Amgen, Bank of Montreal, Barclays Bank
Plc., Blue Cross & Blue Shield of Florida, The Boeing Company, Genzyme
Corporation, ITT Flygt AB, Level 3 Communications, Lloyds TSB Bank
PLC., Maersk Sealand, Massachusetts Mutual Life Insurance Company,
Medtronic, Motorola, The New York Times Company, Neopost SA, Nissan
North America, Norwich Union Healthcare Limited, Novartis
Pharmaceuticals Corp, Rabobank Nederland, Royal Mail Group plc, Die
Schweizerische Post, Societe Generale, Telecom Italia SpA, Telstra
Corporation Limited, Trend Micro, and Warner Brothers Entertainment.
Siebel Systems will host a conference call today, Thursday,
January 12, 2006, at 5:30 a.m. Pacific. The live webcast and replay
can be accessed at www.siebel.com/investor. The company currently
expects to release its final financial results for the fourth quarter
of 2005 the week of January 23, 2006.
About Siebel Systems
Siebel Systems is a leading provider of software solutions and
services that drive value and loyalty in client-customer
relationships, providing best-in-class capabilities in on-premise and
hosted customer relationship management (CRM), business analytics, and
customer data integration. Siebel's new Customer Adaptive Solutions
enable organizations to model their customer-centric business
processes in order to drive the most effective customer interactions,
gain increased insight over time, and continually realign those
processes for systemic and consistent improvement. With more than $2
billion in R&D investments, 13 years of customer software experience,
an extensive global ecosystem of alliance partners, and more than
4,000 customers and 3.8 million live users, Siebel is the proven
choice in helping organizations of all types and sizes achieve
customer-driven business results. For more information, visit
www.siebel.com.
Siebel is a trademark of Siebel Systems, Inc. and may be
registered in certain jurisdictions.
GAAP preliminary financial results presented above include the
impact of approximately $4 million in Upshot acquisition earn out,
merger related legal fees and other charges.
This press release contains forward-looking statements that
involve risks and uncertainties. The final results for the fourth
quarter of 2005 of Siebel Systems, Inc. may differ from the
preliminary results discussed above due to factors that include, but
are not limited to, risks associated with final review of the results
and preparation of quarterly financial statements. Future operating
results of Siebel Systems, Inc. may differ from that forecasted in the
forward-looking statements due to factors that include, but are not
limited to, risks associated with our pending merger with Oracle
Corporation, financial, economic, political and other uncertainties,
the business software applications market, dependence on the Internet,
risks associated with new versions and new products and risks
associated with rapid technological change. Further information on
potential factors that could affect the financial results of Siebel
Systems, Inc. are included in its Annual Report on Form 10-K,
Quarterly Reports on Form 10-Q and its other filings with the
Securities and Exchange Commission, which are available at
www.sec.gov. Siebel Systems assumes no obligation to update the
information in this press release.