Siebel Systems (SEBL) - strong buy? Message Board

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Technology Stocks : Siebel Systems (SEBL) - strong buy?

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To: Trader Dave who wrote (2870)	6/25/1999 1:04:00 PM
From: Lee L.	Read Replies (1) of 6974

Siebel recognizes software revenue when a customer signs an order letter. The order letter is a legal commitment to purchase a fixed number of seats for a documented price. It may take a customer months to put these seats into production, but the production status has no bearing on revenue recognition. In the order letter, a customer's payment terms may indicate a phased payment plan ($500,000 now; $500,000 in six months, $500,000 in nine months..) As long as these payment terms are absent of any conditions (i.e., the last $500,000 paid when the customer goes live), Siebel will recognize all revenue from all payments. Their DSO goes up as they accept these kinds of payment terms. When I dealt with Siebel, they were open to payment terms, but they didn't like payment to stretch out beyond six months. Payments from custom development that Siebel does for a company: this revenue is only recognized once seats are put into production. So a customer my pay millions to Siebel to develop a new module, however none of this money is recognized immediately in SW revenue. That's how it works with Siebel.

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