Prior post from Vocco on Raging Bull re earnings:
By: vocco $$$$
Reply To: 10802 by sunnyboy $$ Saturday, 15 Jul 2000 at 11:50 AM EDT
Post # of 10812
sunny: KD1 -1Q had only 2 months of KD1 not 3. However, I concede that those 2 months gave it an unusual bump up in 1Q which cannot be replicated in 2Q. 2Q will, however, get the benefit of that 1 KD1 month not included in 1Q. In addition, although NETP said KD1 was fully integrated by 1Q results I find that hard to believe. It will have hit its full stride in 2Q and would have produced more mutual cross-selling of KD1 and classic NETP customers in 2Q. I also think that fully integrated its sales would cost less.
There was a sharp increase of revenues from (a) overseas and (b) indirect in 1Q. I think both these trends should continue in 2Q. The introduction of the ASP's in 2Q should help with (b) and to a lesser extent with (a) - although the ASP operations will not have hit full stride. The deal with ORCL and HWP might produce a postive surprise although I think that in both cases, the ramping up will take place in a month or two.
2Q there were new products in documentation, ad targeting and e-mail. Perhaps there was not enough time in 2Q to sell them in quantity but they would be a new source of revenue if they were sold to the existing customer list.
At the end of the 1Q, the CEO said that there were several undisclosed customers of Knowledge Management and he emphasised that demand was "very strong". Since then only one additional new customer has been disclosed. Even a few new KM customers would bump up revenues significantly because KM is a big ticket item. I do not know whether the CEO included the undisclosed KM customers in the 190+ given at the end of 1Q. I am assuming not.
The sales force was almost doubled between 3Q and the beginning of the 2Q. The bulk of the newcomers would have completed their 90 training and orientation period by 2Q.
The shortage in consulting staff had been put right by the end of 1Q so this would allow greater revenues in 2Q from consulting.
The business software sector is seasonally bouyant in 2Q following the initiation of new corporate budgets. Results from other companies show strong growth in internet and customer relations sales.
The 1Q did not have the benefit of any interest earned on the $100 million raised in the SPO. Since then, short term debt has been restructed and with the new interest, there could be an improvement on this front of between $750,000 and $1.5 million.
I agree that none of the above is compelling evidence for expecting 60% growth. It was 54% in 1Q and has been around 50% for the last four quarters. The factors I have enumerated suggest that it ought to continue at those levels and if NETP is to keep pace with its peers in CRM - it has got to have some quarters in excess of 60% and even 70%. ARIBA just had one of nearly 100%. However, the higher the previous month's comparison, the harder it will be to maintain sequentially hyper-growth. Growth of 30% would be still very acceptable - if disappointing.
My estimate is a guess based on inadequate information and guidance from the company.
Since we have been told of only 3 new customers in 2Q then any guess from 4 upwards would be logical. A distinction should be made between direct customers and indirect customers who buy through re-sellers. I once wrote to IR and asked if their count of customers included indirect customers and I never received a reply. |
