Despite lukewarm license revenues and guidance, Veritas Software Corp. (Nasdaq: VRTS) execs say they're on track. And they maintain the company has suffered no ill effects from the EMC Corp. (NYSE: EMC) purchase of Legato last year.
In its earnings report last night, Veritas reported a profit of $105.3 million for the fourth quarter, compared to a loss of $49.4 million in the same quarter last year (see Veritas Posts Q4 Returns). Its revenue rose to $512.8 million, up 26 percent from $405.7 million last year and 14 percent from $451 last quarter.
Analysts have been dwelling on a negative tucked inside these positives. To wit: Revenue from newly issued software licenses was $308.9 million, representing an increase of 17 percent year-over-year and 6 percent sequentially. In contrast, revenue from the maintenance of existing software was $204 million, up 44 percent year-over-year and 27 percent sequentially. Bottom line? Veritas had more success with customer renewals than selling new software.
On top of this, Veritas gave next-quarter revenue guidance between $455 million and $470 million -- even though many on Wall Street were expecting around $469 million. The company's projected earnings per share ranged from $0.18 to $0.21, with most analysts expecting $0.21. Veritas's fourth-quarter EPS was $0.25.
We certainly dont think we have a problem, Veritas CFO Ed Gillis told analysts in a conference call. I think weve had a good strong second half of the year, and weve got a lot of momentum as we go into '04.