The company, as expected, posted a first-quarter loss of $4m, $0.01 a share compared to a profit of $31m, or $0.06 a share, last year. Revenue was down over 9% at $298.9m. License revenue took a 41% dive to $75m.
Our revenue is becoming more seasonal, and continues to be lumpy, hard to predict and back-end loaded, Shaheen said, explaining the license slip. Regardless, our execution has been inconsistent, and we must improve.
The results were more or less in line with guidance that had been dramatically reduced three weeks ago, shortly after the quarter closed. At the start of the year, Siebel had expected revenue to come at between $325m and $345m.
Customers have more stringent governance and purchasing requirements that make purchasing cycles more complex and lengthier than in the past, and this directly impacted our close ratio, Shaheen said. Our analysis indicates that we have not lost the business, instead we found the business is slipping into the second quarter and the second half.
The April 6 profit warning led to the ejection of CEO Mike Lawrie, barely a year into the job, and institutional investor demands for Siebel to be sold or to release some of its $2.2bn cash pile back to investors via a stock buyback.
This continued yesterday, but Siebel executives were not prepared to propose radical changes. Shaheen talked of rationalizing Siebel’s currently overly complex, overly bureaucratic sales organization, and cutting costs.
We believe our strategy is correct, we are not looking for a major strategic shift, may need some tuning, CFO Ken Goldman said. We don’t see ant strategic shifts by this company.
Siebel inked 244 licenses in the quarter, 22 of which were worth over $1m, compared to 29 deals a year ago. Only one deal was worth over $5m, Goldman said. The average deal was worth $307,000, compared to $414,000 a year earlier.
On the controversial matter of returning some Siebel cash to shareholders, Shaheen said: We will continue to gather, and we greatly appreciate, all the input we’ve received from our shareholders and advisers.
But the company is not prepared to commit to a buyback. Goldman said: I know the answer everyone wants from us, but we’re not ready to give that answer today.
