CDC Software Corporation (NASDAQ: CDCS), a global provider of
hybrid enterprise software applications and services, today
announced that, based on current financial projections and
estimates, the Company expects its Cloud Segment to report Non-GAAP
Revenue(a) of approximately $6.7 million in the first quarter of
2011, an increase of approximately 50 percent, compared to $4.4
million in the first quarter of 2010.
In addition, total SaaS secured bookings were $6.1 million in
the first quarter of 2011, the highest level since the company
started its cloud business in the fourth quarter of 2009. The
strong growth was due to the addition of new logo customers,
acquisitions, as well as a high SaaS renewal rate of greater than
90 percent from existing customers in the first quarter of 2011. As
previously disclosed, CDC Software’s first quarter 2011 Total
Contracted Backlog (TCB) was also at its highest levels since the
company started its cloud business.
“We are very pleased with the maturation of our cloud business,
as virtually all of its growth metrics have been showing very
strong signs,” said Bruce Cameron, president of CDC Software. “The
expected increase of approximately 50 percent in our Cloud
Segment’s Non-GAAP Revenue for the first quarter of 2011, which is
a record, is very gratifying. In addition, we are very pleased with
the record SaaS secured bookings, especially given that the first
calendar quarter has been traditionally a seasonally slow period
for most software companies. During the remainder of 2011, we plan
to continue focusing on investing in our core SaaS offerings to
nurture more organic growth. In addition, we expect to continue
making complementary SaaS acquisitions as part of our strategy to
develop recurring revenue streams reaching closer to 70 percent of
total revenue over the next few years.”
(a) Adjusted Financial Measures
This press release includes Non-GAAP revenue which is not
prepared in accordance with generally accepted accounting
principles in the United States (“GAAP”) (the “Non-GAAP Financial
Measure”). We believe that this Non-GAAP Financial Measure is
helpful in understanding our past financial performance and our
future results. Non-GAAP Financial Measures are not alternatives
for measures such as revenue, gross margin, net income, net income
margin, EBITDA and earnings per share prepared under GAAP. These
Non-GAAP Financial Measures may also be different from Non-GAAP
measures used by other companies. Non-GAAP Financial Measures
should not be used as a substitute for, or considered superior to,
measures of financial performance prepared in accordance with
GAAP.
Investors should be aware that these Non-GAAP Financial Measures
have inherent limitations, including their variance from certain of
the financial measurement principals underlying GAAP, should not be
considered as a replacement for GAAP performance measures, and
should be read in conjunction with our consolidated financial
statements prepared in accordance with GAAP. These supplemental
Non-GAAP Financial Measures should not be construed as an inference
that the Company's future results will be unaffected by similar
adjustments determined in accordance with GAAP. Reconciliations of
Non-GAAP Financial Measures to GAAP are provided in the Company’s
earnings press releases.
Special Note Regarding CDC Software Financial Results,
Estimates and projections
The financial results, estimates and projections provided herein
apply only to CDC Software Corporation, a subsidiary of CDC
Corporation. These financial results, estimates and projections do
not apply to, and are not indicative of, the consolidated financial
results of CDC Corporation, or the financial results of CDC Games
Corporation, China.com, Inc. or any of their respective
subsidiaries. Investors are cautioned not to place reliance on the
financial results, estimates and projections set forth herein for
purposes of any investment decision with respect to the shares of
CDC Corporation or China.com, Inc., and should read the foregoing
in conjunction with the reports and other materials filed with the
United States Securities and Exchange Commission by CDC Corporation
and CDC Software Corporation, from time to time.
About CDC Software
CDC Software (NASDAQ: CDCS), The Customer-Driven Company™, is a
hybrid enterprise software provider of on-premise and cloud
deployments. Leveraging a service-oriented architecture (SOA), CDC
Software offers multiple delivery options for their solutions
including on-premise, hosted, cloud-based SaaS or blended-hybrid
deployment offerings. CDC Software’s solutions include enterprise
requirements planning (ERP), manufacturing operations management,
enterprise manufacturing intelligence, supply chain management
(demand management, order management and warehouse and
transportation management), global trade management, eCommerce,
human capital management, government and not-for-profit, customer
relationship management (CRM), complaint management, business
intelligence/analytics and aged care solutions.
CDC Software’s recent acquisitions are part of its “integrate,
innovate and grow” strategy. Fueling the success of this strategy
is the company’s global scalable business and technology
infrastructure featuring multiple complementary applications and
services, domain expertise in vertical markets, cost effective
product engineering centers in India and China, a highly
collaborative and fast product development process utilizing Agile
methodologies, and a worldwide network of direct sales and channel
operations. This strategy has helped CDC Software deliver
innovative and industry-specific solutions to more than 10,000
customers worldwide within the manufacturing, distribution,
transportation, retail, government, real estate, financial
services, health care, and not-for-profit industries. For more
information, please visit www.cdcsoftware.com.
Cautionary Note Regarding Forward-Looking Statements
This press release includes “forward-looking statements” within
the meaning of the United States Private Securities Litigation
Reform Act of 1995. These forward-looking statements include
statements regarding our beliefs and expectations regarding Q1 2011
Non-GAAP revenue from our cloud business, our expectations
regarding trends in any metrics we may see, including TCB, and the
amount and continuation of any such trends, our plans with respect
to continued investment in our core SaaS offerings, our plans and
expectations about making complementary SaaS acquisitions in the
future, our plans with respect to recurring revenue levels, as well
as the amount and timing thereof, our expectations regarding
improvements in our acquisition and organic strategies, our beliefs
and expectations regarding increases in total contract backlog
(TCB), organic growth, as well as sales growth in our cloud product
lines, and other statements that are not historical fact, the
achievement of which involve risks, uncertainties and assumptions.
If any such risks or uncertainties materialize or if any of the
assumptions proves incorrect, our results could differ materially
from the results expressed or implied by the forward-looking
statements we make. These statements are based on management's
current expectations and are subject to risks and uncertainties and
changes in circumstances. There are important factors that could
cause actual results to differ materially from those anticipated in
the forward looking statements, including the following: (a) the
ability to realize strategic objectives by taking advantage of
market opportunities in targeted geographic markets; (b) the
ability to make changes in business strategy, development plans and
product offerings to respond to the needs of current, new and
potential customers, suppliers and strategic partners; (c) the
effects of restructurings and rationalization of operations; (d)
the ability to address technological changes and developments
including the development and enhancement of products; (e) the
entry of new competitors and their technological advances; (f) the
need to develop, integrate and deploy enterprise software
applications to meet customer's requirements; (g) the possibility
of development or deployment difficulties or delays; (h) the
dependence on customer satisfaction with the company's software
products and services; (i) continued commitment to the deployment
of the enterprise software solutions; (j) risks involved in
developing software solutions and integrating them with third-party
software and services; (k) the continued ability of the company's
enterprise software solutions to address client-specific
requirements; (l) demand for and market acceptance of new and
existing enterprise software and services, the positioning of the
company's and its partners’ solutions, as well as the success of
any of our strategies; (m) the ability of staff to operate the
enterprise software and extract and utilize information from the
company's enterprise software solutions; (n) the continued
cooperation of our strategic and business partners; (o) risks
relating to economic conditions and other matters beyond our
control; (p) the ability to complete and integrate any acquisitions
we may undertake; (q) the potential impact of any litigation or
disputes in which we, or any of our subsidiaries or affiliates are
involved; (r) the risk that the preliminary financial results
provided herein could differ from our actual results; (s) the risk
of any pending litigation proceedings involving CDC Software
Corporation or any of its affiliates. Further information on risks
or other factors that could cause results to differ is detailed in
our filings or submissions with the United States Securities and
Exchange Commission, including our Annual Report on form 20-F for
the year ended December 31, 2009, filed with the SEC on June 1,
2010, and those of our ultimate parent company, CDC Corporation,
located at www.sec.gov. All forward-looking statements included in
this press release are based upon information available to
management as of the date of the press release, and you are
cautioned not to place undue reliance on any forward looking
statements which speak only as of the date of this press release.
All estimates contained herein regarding Q1 2011 performance and
other periods, are based upon preliminary financial projections,
beliefs and estimates. The company assumes no obligation to update
or alter the forward looking statements whether as a result of new
information, future events or otherwise. Historical results are not
indicative of future performance.
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