Autonomy’s profits soar; Chinese State TV joins its Chinese video search
Complex search software specialists Autonomy Corporation plc (AU.L) today reported burgeoning profits in the traditionally quieter third quarter of the year to end September.
Q3 revenue rose 137% to $60.2m from the same period last year and pre-tax profits were up 220% to reach a record $15.9m.
This was achieved on a healthy gross margin of 91% and a doubling of R&D spending.
Group CEO Mike Lynch (pictured) said: "These record results once again bear testament to our unmatched market leadership position, with success during the quarter underpinned by strong up-sell into historic customer bases with products such as with the now IDOL-based K2-7."
"The strength of our business during Q3 is exemplified by both the number of new multi-million dollar enterprise standardization contracts we continue to see, as well as our continued almost complete market-share ownership of the OEM market, including this quarter's large deal with EMC. With record results from our core business, 2006 to date has been an extremely exciting time for Autonomy, business remains strong, and we remain confident in our outlook."
The strong Q3 result has also helped drive the performance for the first nine months of the year into record territory that saw sales up 175% and operating profit more than tripling to $43.6m
Share price down
Early morning trading pushed Autonomy’s share price down 2.5% to 500p, probably as some investors decided to take their profits. It has gained over 40% since the market nadir of mid-June this year. The Cambridge-headquartered firm is now valued at around £900m.
The company said the record revenues were from a combination of strong organic growth and the acquisition of Verity in Q4 2005.
In the third quarter of 2006, sales in America reached $40.5m, two thirds of total revenues.
The Group is now debt free. In Q3 it boosted cash in the bank by $15.2m to $107.0m.
Chinese Internet
In a separate announcement, Autonomy said its Chinese joint venture has rapidly expanded and established itself as the world's leading Chinese language video search service.
The JV has entered its next phase of development with the involvement of CCTV, China's state broadcaster.
The JV is providing video search to a range of companies and has launched its own digital video service now operating under the brand OpenV, featuring extensive content from CCTV. OpenV has over 5 million pages views per day and one million users a day.
Autonomy said OpenV has reinforced its position as the world's leading Chinese-language video site by completing agreements with the leading content providers, such as CCTV, Beijing TV, Shanghai Media Group, Hunan TV, ZheJiang TV, JiangXi TV and NeiMengGu TV, in many cases on an exclusive basis. OpenV also has available web content from all major Chinese video sharing sites and web broadband sites.
OpenV's service is now or will shortly be available on a syndicated basis through leading Chinese internet sites including CCTV.com (the largest Chinese TV broadband site), QQ (the largest Chinese community site), Yahoo! China, Nusports (the largest Chinese sports site), XinHua net (largest Chinese news agency site), China Radio International (the largest Chinese radio site) and SMGBB (the second largest Chinese TV broadband site), as well as numerous other smaller sites.
OpenV has launched advertising and is now working in partnership with advertising agencies, including WPP, AC Nielsen and Chang Rong (Charm Communication Group).
24th October 2006
