Symyx Has 'A Lot of Drivers'
Symyx Technologies (SMMX) has "a lot of drivers to continue to grow revenue and the rate of profitability," CFO Jeri Hilleman said Thursday in an exclusive interview with TheStreet.com's "StreetWatch" Web cast.
Those drivers include research collaboration, expected to be 50% of revenue this year; discovery tools, approximately 33%; and the remainder from royalties, intellectual property and software licensing, Hilleman said. Over the long term, the company expects software to be an increasing portion of its overall revenue stream with a goal of $100 million in revenue in the next five years.
Recent acquisitions of IntelliChem and Synthematix have helped Symyx fill gaps in its software offerings, and while "there may be other opportunities" for M&A, Hilleman said, "we feel now we have the critical mass we need to build in that [software] arena."
In the interview, the CFO reaffirmed Symyx's forecast for 2005 revenue of $108 to $118 million. In addition to the $21.5 million of revenue recognized in the first quarter, Symyx has approximately $70 million currently under contract that it expects to recognize during the remaining three quarters.Santa Clara, Calif.-based Symyx develops and applies high-throughput research methods, instrumentation and software to help enhance the productivity of research and development for companies in the chemical, pharmaceutical, energy, automotive and materials industries. Symyx's proprietary tools, materials and technologies can help scientists "gain one day of productivity because they are freed from all those administrative things and because discoveries happen faster," Hilleman said. The CFO discussed Symyx's ongoing alliances with Exxon Mobil (XOM) and Dow Chemical (DOW); Symyx expects to receive $200 million in revenue over the five-year deal with Exxon and $120 million over the five-year agreement with Dow. Discussions with other existing customers are ongoing to create similar-type alliance agreements, Hilleman said, declining to specify. Other issues discussed in the interview include the heavy short position in Symyx's stock, recently 4.8% of its float, according to Yahoo! Finance, which Hilleman expects will prove to be a "short-term spike." The entire video interview can be found here.
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