CDC Software Reports Third Quarter 2011 Results

CDC Software Corporation (OTC:CDCS), a global enterprise software provider of on-premise and cloud deployments, today announced financial results for the quarter ended September 30, 2011. For the third quarter of 2011, Non-GAAP revenue ^(a) was $53.4 million and Non-GAAP net income ^(a) was $4.6 million, or $0.17 per share, compared to Non-GAAP revenue of $54.2 million and Non-GAAP net income of $6.9 million, or $0.24 per share in the third quarter of 2010.

In the third quarter of 2011, Adjusted EBITDA ^(a) was $6.7 million, compared to $4.9 million in the second quarter of 2011 and $9.9 million in the same period in Q3 2010. In the third quarter of 2011, compared to the same quarter last year, CDC Software continued to invest in sales and marketing and research and development (R&D) for both its on-premise and cloud segments. GAAP gross profit was $31.2 million and gross margin was 58 percent in the third quarter of 2011, compared to $29.3 million in gross profit and gross margin of 55 percent in the third quarter of 2010. DSO (days sales outstanding) in the third quarter of 2011 was 63 days, compared to 69 days for the third quarter of 2010.

Total Non-GAAP recurring revenue ^(a), which CDC Software defines as Non-GAAP maintenance ^(a) plus SaaS revenue was $30.2 million in the third quarter of 2011, compared to $30.4 million in the third quarter of 2010. Non-GAAP services revenue was $13.7 million for the third quarter 2011, compared to $14.2 million for the third quarter of 2010. During the third quarter of 2011, approximately 36 percent of license revenue was derived from North America, 49 percent from EMEA, and 15 percent from Asia/Pacific.

Application sales, which is comprised of license revenue plus Secured Total Contract Value (STCV) for Software-as-a-Service (SaaS) sales secured, was $13.2 million during the third quarter of 2011 and $14.0 million in the third quarter of 2010. Application sales for the third quarter of 2011 included license revenue of $8.3 million and STCV, or bookings, for Software-as-a-Service (SaaS) sales of $4.9 million, compared to license revenue of $9.0 million and STCV of $5.0 million in the third quarter of 2010. STCV is the contract dollar amount for the duration of the contracts for all SaaS contracts secured, including new logo contracts, upsell, rental, as well as all renewals received by the end of the quarter.