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Openwave's Net Loss Narrows

The company was helped by lower costs and expenses in the first quarter.

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On April 29, 2009,

Openwave Systems


reported that its Q3 FY09 net loss narrowed due to lower costs and expenses. Net loss for the quarter decreased to $7.77 million or $0.09 per share from $14.75 million or $0.18 per share in Q3 FY08. On a non-GAAP basis, earnings were $385,000 or breakeven per share, in line with the most recent consensus estimate.

Openwave Systems' revenue declined 5.0% to $44.65 million from $46.99 million a year ago due to lower revenue from the services. Services revenue decreased 31.7% to $12.54 million from $18.36 million. However, License revenue grew 21.5% to $16.69 million from $13.74 million, while Maintenance and Support revenue was $15.42 million, up 3.6% from 14.89 million in Q3 FY08. Geographically, revenue from Europe, the Middle East and Africa fell 21.7% to $6.25 million, while that from Asia decreased 24.8% to $8.48 million. However, revenue from the Americas grew 7.9% to $29.92 million from $27.73 million. In Q3 FY09, bookings totaled $37.60 million. Backlog at the end of Q3 FY09 stood at $198.00 million compared to $234.00 million at the end of Q3 FY08.

Gross profit margin improved 834 basis points to 64.82% from 56.48% in Q3 FY09, due to 23.2% decline in cost of revenue to $15.71 million. Operating margin was a negative 11.02% compared to a negative 33.76%, due to 20.1% decrease in operating expenses to $33.86 million.

Openwave Systems entered into a contract with Telstra, an Australian telecommunications and services company, to provide Openwave Integra, a mobile internet service management solution. Additionally, the company announced a 10.0% reduction of its work force under its restructuring plan. OPWV also announced the launch of Openwave Accelerator, the latest service enabler for Openwave Integra.