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Incentra Solutions Reports 2Q07

BOULDER, Colo. -- Incentra Solutions, Inc.
(BULLETIN BOARD: ICNS) , a provider of complete IT and storage management solutions to enterprises and managed service providers in North America and Europe, today announced results for its second quarter and six months ended June 30, 2007.

Driven by a 60 percent increase in Services revenue and a 73 percent increase in Product revenue, total revenue from continuing operations in the
2007 second quarter increased 70 percent to $30.8 million, from $18.1 million in the 2006 second quarter. This year's second quarter revenue was up sequentially 23 percent from $25.0 million in the 2007 first quarter.
For the first six months of 2007, total revenue from continuing operations increased 111 percent to $55.8 million, from $26.5 million in the year earlier period. Services revenue for the first six months of 2007 increased
68 percent and product revenues grew by 123 percent.

Gross margin in the second quarter of this year grew at an even faster rate than revenue, increasing 73 percent to $5.9 million from $3.4 million in last year's second quarter. Gross margin in this year's first six months increased 127 percent to $11.7 million from $5.2 million in the year earlier period. Net loss from continuing operations declined in both periods.
Results from continuing operations for all periods exclude the operating results of the Company's former Front Porch Digital Broadcast and Media business, which was sold in July 2006.

Chairman and CEO Thomas P. Sweeney said Incentra is gaining considerable acceptance in the mid-tier market and is distinguishing itself from its competitors due to its ability to provide complete solutions to its customers, including a broad portfolio of services. Incentra's continued, double-digit growth in services revenue is a key indicator that the Company is on the right track. Incentra, which made two strategic acquisitions in 2006, has focused on expanding its service portfolio and its service capabilities and those efforts are beginning to pay off, he said.

"We had solid organic growth in all segments of our business during the second quarter and first six months of this year, as well as growth from a September 2006 acquisition. I am especially pleased to report strong increases in our services revenue, which includes professional services, managed services and first call maintenance services. Services continue to be an essential part of our overall strategy because of the high margins we achieve and the competitive advantage it gives us," Sweeney said. "A key objective of our acquisition strategy is to expand our services portfolio to the customer base and sales force of the companies we acquire and the significant growth we are enjoying in Services revenue demonstrates that we are making important progress. While we did not complete an acquisition in this year's second quarter, we continue to evaluate strategic acquisitions to expand both our geographic footprint and product offerings."

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