LNUX.....'There is a lot of the point-and-click crowd out there that saw the (net loss) of 50 cents and said, 'Oh they missed the
number,''' said Walter Winnitzki, an analyst with Chase Hambrecht & Quist. ''The earnings were right where they should
be...The quality of those sales is really good to see.''
In after-hours trading, VA Linux shares were trading at around 119 13/4, slipping from their closing price of 124 3/4, down 2
3/8 on the Nasdaq. The results were released after the regular U.S. trading ended.
The stock had opened at 300 on its first day of trading after an IPO price of $30 a share.
Revenues in the second quarter surged to $20.2 million from $3.17 million a year ago, as the company signed up new Internet
companies as customers.
''We beat analysts' estimates on revenue, we beat estimates on gross margins and we were consistent with estimates for
expenses,'' VA Linux founder and chief executive Larry Augustin said in a phone interview. ''Linux is growing fairly strong
and we are growing faster than Linux.''
In the quarter, new customers accounted for 49 percent of total revenues, including companies such as NetLedger Inc.,
Vstream, Abba Technologies and Cnet Inc.
VA said services accounted for 1.5 percent of revenues in the second quarter, up from 0.2 percent in the first quarter.
Executives on the conference call said they expected services to represent about 5 percent of revenues in the third quarter,
based on the current backlog of orders.
''Their services business is really starting to have momentum,'' Winnitzki said.
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