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Datawatch Corporation (NASDAQ-CM:DWCH), a leading global provider of self-service data preparation and visual analytics solutions, today announced that total revenue for its first quarter of fiscal 2016 ended December 31, 2015 was $7.06 million, an increase of 1% from revenue of $6.96 million in the first quarter of fiscal 2015.
License revenue for the first quarter of fiscal 2016 was $3.15 million, a 1% decline from the $3.17 million recorded in the comparable quarter a year ago. Net loss for the first quarter of fiscal 2016 was ($3.96) million, or ($0.34) per diluted share, compared to a net loss of ($36.88) million, or ($3.31) per diluted share, for the year ago period, which included a $32 million non-cash charge for impairment of goodwill.
Excluding the effects of the non-cash amortization associated with the purchase of certain intellectual property and other intangible assets, non-cash stock compensation costs, and severance costs, the Company’s non–GAAP net loss for its first quarter of fiscal 2016 was ($2.24) million, or ($0.19) per diluted share, compared to net loss of ($2.54) million, or ($0.23) per diluted share in the first quarter of fiscal 2015.
“In the first quarter of fiscal 2016, we continued to build momentum in penetrating the self-service data preparation market, adding 131 new customers for our market-leading Monarch data preparation solution, more than double the rate of the previous quarter,” said Michael A. Morrison, president and chief executive officer of Datawatch. “At the same time, the business we typically see from our extensive Monarch base was lower than usual due to the timing of a few of the larger forecasted opportunities. We have implemented specific programs and initiatives targeted at the Monarch installed base to ensure the proper degree of focus on this important segment of our business. Furthermore, we continue to make significant progress with our powerful visualization platform, with its unique real-time capabilities, although the timing of larger visualization transactions can be difficult to predict.”
Mr. Morrison added, “We are capitalizing on our momentum in self-service data preparation by maintaining a rapid cycle of agile innovation with the release of Monarch v13.2 at the end of December, which added significant new transformation and calculation capabilities, expanded data acquisition options and a more powerful engine and ‘just-in-time’ data preparation for large Big Data information sets. Our Monarch for data preparation solution is receiving excellent reviews from analysts and customers alike, and we are more encouraged than ever that our outstanding and highly differentiated solution is the best available to address this rapidly growing market and its business requirements.”
James L. Eliason, chief financial officer, commented, “Our balance sheet at the end of our first fiscal quarter remains strong, with our deferred license revenue up nearly 200% year over year, aided by the new subscription pricing model we instituted in Q3 of our last fiscal year, and the growing new customer ‘lands’ for self-service data preparation. We continue to be prudent in our investments, as reflected in our sequentially flat operating expenses, and we expect to maintain our targeted investment philosophy this year at approximately the same pace for the remainder of the fiscal year.”
First Quarter 2016 Business Highlights
– Datawatch extended its leadership in the financial services industry with more than 40 firms adopting Monarch for self-service data preparation, including Wells Fargo, Cigna, SunGard, China Construction Bank, Zurich North America, Bank of America and Citizens Financial Group.
– Imagine Software, an award-winning provider of real-time portfolio, risk management and regulatory solutions for financial firms, entered into an OEM agreement to embed Datawatch’s real-time visualization software in its platform.
– Datawatch entered into an exclusive partnership with DFOCUS, a Korea-based IT consulting and services provider founded by former PwC consultants, to bring Datawatch technology to the Korean market. DFOCUS has expertise with data preparation, visualization and Big Data solutions, and its customers include brand names such as Samsung, Hyundai and Allianz.
– The Marbridge Foundation, a non-profit residential community for adults with cognitive challenges, was awarded the 2015 Ventana Research Business Technology Leadership Award for its use of Datawatch’s self-service data preparation software to meet regulatory reporting requirements under the Affordable Care Act.
First Quarter 2016 Financial Highlights
– Cash and short-term investments were $33.02 million at December 31, 2015, down 6% from $35.16 million at September 30, 2015 and down 24% from $43.19 million at December 31, 2014.
– Gross margin (excluding IP amortization expense) for the first quarter of fiscal 2016 was 89%, an increase from 85% in the first quarter of fiscal 2015.
– Days sales outstanding were 78 days at December 31, 2015, compared to 81 days at December 31, 2014.
– There were 4 six-figure deals in the first quarter this fiscal year, the same as in the first quarter of fiscal 2015.
– The average deal size in the first quarter of fiscal 2016 was $29,000, compared to $36,000 in the first quarter of fiscal 2015.
