Commerce One Inc - (CMRC) Message Board

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Technology Stocks : Commerce One Inc - (CMRC)

CMRC 4.300

+1.9%

Dec 24 12:59 PM EST

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To: bob zagorin who wrote (1652)	1/18/2001 5:52:27 PM
From: Logain Ablar	Read Replies (3) of 1938

Bob & Thread: Here are my notes on Commerce One’s call. Garbled and incomplete with my own comments and analysis thrown in (plus I had two calls during cc) so do your own listening <gg>. Overall sounded pretty good except still break even next year but the revenue forecast jumps by 100M. Revenues of $191.4 Million (from $112.7 last quarter) $401M for the year. 70% sequential License fees of $89.3M (from 65.9 & 41 in June) Services of 102.1 (from 46.8, Appnet was only one month last quarter) Network service fees were $15 M vs. 10M last Q (the ramp is slowly but surely starting). Deferred Revenue $112.3 (from 94.5 & $62.3 in June) - Proforma eps of (.05) 5 cents. LAST QUARTER the company forecast 4th qtr. Sales of $173 - $177, a loss of 7 cents. For 2001 the old forecast was for sales in the $800 to $825M range, with 2nd quarter being profitable). 1) Strong financial results 2) Extend market leadership in sector and region <hidden dig @ ARBA> 3) Build for long term success. I take this to mean expense remain high <gg> 4) Still on track to be profitable in 2nd quarter of 2001. 5) SAP partnership 30% of license revenue. Remaining partners 10% totaling 40% of licensing revenue. 6) License revenue accelerating faster than expected. 7) Market leadership in 2000 and 2001. 8) E-marketplaces supports complex business process. Not just procurement. Every business application will connect to marketplace. 9) Covinsint – completed $1.8 B in transactions in 2000. Renault and borg added 10) 42% of revenue outside U.S. 11) Commerce 141 mkt. place worldwide (71 in US). 12) 504 customers (excludes partner customers) 13) Strongly believe opportunities are stronger than they have ever been. Continues to win majority share of business. 14) Only B2B with total solution. 15) Wide lead is durable foundation for a great company. Peter: 1) Majority of licenses is perpetual. CMRC has not changed its revenue recognition policy (arba changed to meet #'s). 2) Cash of $341M. 3) DSO to 73 (from 76). Appnets were in 80’s (why it went to 76 last Q) and goal is to be back into high 60’s (isn’t arba moving towards the mid 70’s) 4) Forecast 1qt 2000. Sales of $205 to $210. Loss of $7 to $9M (4 cents a share). Sequential around 8% (similar to ARBA's sequental). 5) Forecast 2001. Sales (900 to 925M) <hey this is a 100M increase over last Q’s forecast, too bad eps is keep @ breakeven. 6) Gross margins now @ 57% next year 58 to 60% with 2nd half of next year in mid 60’s%. Analysts Morgan Stanley – Chuck Q3 & Q4 timeframe before company sees kick in of market Piper Jaffery - John Dot.com marketplace. Exposure is limited (less than 5% of customer basis). Targeting the S&P 3000. Goldman Sachs – Tom 7 megaexchanges – amount of pipeline of opportunity? We haven’t quantified on a per marketplace but have a GM @ each marketplace with a sales team. Every pipeline is very healthy. Salomon – Gretchen great, good quarter. Inflection point 29 deals with regional exchanges last quarter. Similar to license and revenue share. Conflicts with any SAP? Working very closely with SAP. Good relationships around the world. Synergy with marketplaces. Credit Suiss Chris – great quarter Supplier enablement in the quarter. Working to accelerate this How much of megaexchange license fees was on financial statement this quarter (not a material amount). Recognize this over the next several qtrs. Deutch Bank Jim Inflecting point mid year and liquidity with mega exchanges. Gov’t just approved so they are still developing. Start to kick in 1st part of year with significant acceleration in 2nd half. Customers do term base licenses? All on subscription and transaction based. Customers prefer pet Wasserstien David Congrats. Good quarter. Revenue up but eps still break even? Where are the additional expenses coming from? Sales and marketing and global services. Why not going to cash? Way we feel we need to grow our business. Once @ breakeven we’ll have a positive cash flow Needem - Richard Appnet staff – Where is this going towards C business. 100 former appnet working on C. 500 in process of being moved and map 80% to C by end of 2001. Now with full quarter better operational view. Synergies. Thomas Weisel Robert Doubtful accounts (will be on 10k but the % has stayed the same all year) Average deal size? ASP increased for all products. Not sure if it’s a trend but as we move in more complex market ASP should increase. All but Robert @ TW congratulated management on the quarter. We'll the company has left itself room to exceed forecasts again. Now if they can only start generating a profit. With the 100M increase in sales and increasing margins you would think they would generate a few cents a share <gg>. Now to see how the stock reacts. tim

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