From Briefing.com via Ragin' Bull forum. ARBA is one of the largest holdings in the BHH:
Briefing.com's Take on ARBA & B2B Sector
09:06 ET ******
Ariba (ARBA) 72: It was hard not to be impressed with Ariba's
earnings report last night. Not only did Ariba beat consensus
EPS estimates by two cents with its $0.06 loss, but its top-line
of $40.0 mln was ahead of both the $36-38 mln
preannouncement from April 4 and the well ahead of analysts'
estimates prior to that preannouncement. In addition to listening
in on the conference call, Briefing.com also interviewed CEO
Keith Krach following the call. What came across most clearly
in both calls was that despite the market's trashing of the
B2B sector of late, the underlying momentum in B2B has
been phenomenal. We asked Mr. Krach about market
concerns that the trends in B2B might be leading away from
transactions-based pricing models, to which he responded
that Ariba was "not seeing that at all." He emphasized that
businesses are interested primarily on fast time to market with
B2B exchanges and creating liquidity in those markets, and that
they were open to many types of partnerships -- including equity
ownership of exchanges and transactions-based revenues -- to
achieve those goals. In addition to easing fears about the
model, Krach also made it clear that Ariba's business is
booming. The Q2 revenue number was not the only impressive
figure in the report. Deferred revenues rose to $85 mln from $47
mln in the prior quarter. Unlike most software companies, Ariba
does not report total licensing fees upon installation. Because
they use transactions-based pricing and subscriptions to the
Ariba Network, revenues are reported over the life of the
contract, which typically ranges from 12-24 months. This gives
Ariba greater revenue visibility, and clearly the $38 mln jump in
deferred revenues during Q2 was exceptional. Ariba also
reported that the fastest growing component of revenues was
what it refers to as subscriptions, which were up 405%
year/year. Subscriptions include both subscriptions to the Ariba
Network and transactions-based revenues. Finally, Ariba now
has 211 customers, over 100 marketplaces, and has seen a
tripling in customer accounts at recent acquisitions Tradex and
Trading Dynamics following the definitive acquisition
agreements. Krach claimed that Ariba is beginning to see the
benefits of network effects, as more companies -- including
even small and mid-sized businesses -- are seeking out Ariba
due to the critical mass being built in its marketplaces. Ariba's
momentum is impressive, and the sell-side analysts on the call
were clearly impressed. Merrill Lynch has already come
through with an upgrade to NT BUY from ACCUMULATE
this morning, and more positive comments should be
expected. Ariba is the B2B leader right now, and the word
from the CEO is that despite doubts in the market, Ariba's
B2B model is solid and business momentum is tremendous.
- GJ
rally4roi
Source: Story Stocks by Briefing.com
Updated: 13-Apr-00
Quotes at time of story, top stories today: (KLAC 11:40)
(AMTD 10:05) (ARBA 09:06) (AMD 08:50)
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