Openwave Systems, Inc. (
F1Q2010 Earnings Call
October 28, 2010
Ken Denman - Chief Executive Officer
Anne Brennan - Chief Financial Officer
Mike Bishop – Investor Relations
Chris Cohen - Stifel Nicolaus
Scott Sutherland - Wedbush Securities
Charlie Anderson - Doughtery and Company
Paul Treiber - RBC Capital Markets
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Good day ladies and gentlemen, thank you for standing by. Welcome to the Openwave's First Quarter Fiscal Year 2011 Earnings Conference Call. During today’s presentation all parties will be in a listen-only mode. (Operator Instructions) This conference is being recorded today, Thursday, October 28, 2010. I would now like to turn this conference over to Mike Bishop. Please go ahead, sir.
Thank you. Good afternoon everyone and thank you for joining us today to discuss the results of Openwave's Systems first quarter of fiscal year 2011. Joining me today from Redwood City are Ken Denman, Chief Executive Officer and Anne Brennan, Chief Financial Officer.
Before we discuss the results for the quarter, I want to remind everyone that we are operating under the rules of Regulation FD. The first quarter financial results' press release was distributed at the close of the market today and if you have not yet seen a copy you can find one at our website at openwave.com. For your convenience this call is being recorded and will be available for playback from our website for three months.
Before we begin, I would like to remind you that any remarks made on this call or in our earnings press release about future expectations, plans or prospects for the company may constitute forward-looking statements for the purpose of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.
The actual results may differ materially from those indicated by the forward-looking statements as the result of various important factors. These factors include the specific risk factors discussed on the Company's press release that was distributed today, and in the Company's filings with the SEC including, but not limited to, the fiscal 2010 financial results on Form 10-K, and any other reports subsequently filed with the SEC.
We intend to make forward-looking statements based on management's outlook as of today. We do not intend to update these statements until the release of Openwave's next quarterly earnings report and disclaim any obligation to do so prior to that time. We reserve the right to update the outlook for any reason during the quarter.
I would like to note that during the discussion of the financial results, unless otherwise indicated, gross margin expense and earnings related items are reported on a non-GAAP basis, which excludes stock-based compensation, impairment on investments, amortization of intangibles, restructuring expense, and amounts related to unusual events.
Please access our financial metrics summary, which is available on the Investor section of openwave.com to review Openwave's historical financial performance and reconciliation of the non-GAAP measures we report to the corresponding GAAP measures. And with that I'd like to turn the call over to Ken.
Thanks, Mike, and good afternoon everyone. Thanks for joining us to discuss our first quarter results. First a quick overview, revenue for the first quarter was $41.5 million and we recorded bookings of $42.4 million. Non-GAAP EPS was effectively breakeven.
I'd like to begin by discussing our plans for delivering shareholder value. As a technology company it is critically important we attain the number one leadership position in the markets we are targeting, specifically mobile data software’s infrastructure for traffic/data management and ecosystem monetization. This leadership is critical, and we continue to invest in our R&D efforts to best position Openwave as the obvious choice for customers and partners. This is most readily evident in the validation of our Integra platform as the foundation for key valued services.
The initial traction in our trial program with operators who are investing their own resources to test our products, and also just this week by Sprint announcement to build a browser-based ecosystem powered by Openwave, which has the potential to be a new standard for open application development across carriers.
I'd like to spend the time on the call today addressing four key areas. First, our media optimization trial program. Second, our plans to grow our reach to an enhanced partner strategy. Third, an update on our plan to monetize our intellectual property, and lastly, new product and customer momentum.
First, I'd like to provide an update on our trial program for media optimizing. As of today, we have 34 service providers who have completed or are committed to a trial. More than 50% of these carriers are new prospects to Openwave. These trials are allowing our current and prospective customers to witness firsthand that they can maximize bandwidth and reduce costs with our video optimization solution without degradating the user experience.
We’ve completed a total of 14 trials, eight of which were completed during the first quarter of fiscal 2011. One trial that we are currently conducting is a live production trial, meaning the product is being tested in a live environment with over 80,000 subscribers assessing Web and Media sites and receiving data optimized by Openwave. This real world trial positions us well for a rapid deployment should the customer decide to move forward.
As of the launch of our trial program, few buying decisions have been made one of which we won, which was DU in Dubai whom we mentioned in our last quarter's call, and was secured in the fourth quarter of fiscal 2010 as a direct result of our trial program. The other was a deal in APAC last quarter that we lost due to a very late entry into the process. We are aware of a couple of other optimization decisions that have been made outside our trial program with Tier 2 and Tier 3 level operators. Obviously, our aim with the trial program is to be as all encompassing as we can.