Transcript Module Q&A 1 - NETP 2Q CC
Questioner: Stephen Sigmond of Dain, Rauscher, Wessels.
Stephen and Tom - nice quarter! Just a quick question on the gross margin. Tom, can you walk us through what happened in the gross margins in the quarter, from the prior quarter?
Tom Donnelly, CFO: The gross margin in the Services and Maintenance line, which also includes our ASP business, was down about 2%. We're scaling infrastructure for the ASP business and, as you know, we've been scaling our consulting organisation. I expect significant improvements on that side of business in the coming quarters.
OK great, and it looks like you guys are getting increasing traction, really, from the indirect channel, and I'm just wondering if you can give us a little more colour on that, and, you know, what's going into that. Are you seeing more traction from partners, from system integrators - how's that building?
Tom Donnelly, CFO: Yeah. We're seeing more traction from all of the above. You know, obviously our OEM relationships with Vignette and Xchange contribute quarter over quarter, and we are seeing more actual deals that are sold through partners. The indirect numbers I gave you do not include "influenced" business, which is also a good chunk of business, but - we're - you know - we are just reporting partners which are actually selling our products, for instance i2 - the Best Buy relationship came through i2 - in the early stages we still have some direct sales efforts in order to get these channels rolling but indirect revenues, we think, are very important to our...to the scale we can add into the model over the coming quarters.
OK, and finally, can you comment on any changes in sales cycles during the quarter?
Tom Donnelly, CFO: I didn't see significant changes in previous sales cycles that we've discussed. I would say that it was evident that some of the dot-coms were tightening their belts during the quarter. So that would be a slight change in the sales cycle. And the larger our transaction sizes gets may push them from, you know, a typical 3 months sales cycle to perhaps a 4 months sales cycle: but overall, I'd say about the same - with the exception of the dot.coms belt tightening.
OK thanks. Nice job!
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Note:
Having a transcript of the CC in our archives would be useful. From time to time, I will transcribe a module until the whole CC is available in one document. If anybody would like to check my transcipt against the audio on http:///www.netperceptions.com (go to "Investors - Audio Archives") I would welcome corrections. Also, if anybody would like to contribute a module, please do. |
