Datawatch Announces Third Quarter 2015 Financial Results

CHELMSFORD, Mass., July 23 — Datawatch Corporation, a leading global provider of managed analytics solutions, today announced that total revenue for its third fiscal quarter of 2015 ended June 30, 2015 was $7.78 million, an increase of 4% from revenue of $7.46 million in the second fiscal quarter but a decrease of 16% from revenue of $9.23 million in the third quarter a year ago.  License revenue for the third quarter of fiscal 2015 was $4.12 million, an increase of 5% from the $3.91 million recorded in the second fiscal quarter but a decrease of 26% from the $5.58 million recorded in the comparable quarter a year ago.  Net loss for the third quarter of fiscal 2015 was ($4.12) million, or ($0.36) per diluted share, compared to a net loss of ($5.16) million, or ($0.48) per diluted share, for the year ago period.  Excluding the effects of the non-cash amortization associated with the purchase of certain intellectual property and other intangible assets, non-cash stock compensation costs, and severance costs, the Company’s non–GAAP net loss for its third fiscal quarter of 2015 was ($2.04) million, or ($0.18) per diluted share, compared to net loss of ($2.60) million, or ($0.24) per diluted share in the third fiscal quarter of 2014.

“We continue to make strides in improving our sales execution, expanding awareness of Datawatch in the market and producing meaningful innovation to our product platform,” said Michael A. Morrison, president and chief executive officer of Datawatch.  “The sequential increase in revenue performance was accompanied by an increase in win rates – which indicates that we are focused on the right kind of competitive opportunities, where our unique multi-structured data preparation, real-time visualization and enterprise governance capabilities are meaningful differentiators.”

Mr. Morrison added, “We also made important progress with our partner channel during the quarter, which is a critical element of our long-term strategic growth plan.  In April, Dell Software announced a partnership with Datawatch to OEM our visualization capabilities directly into its Statistica advanced analytics platform.  This combination of two leading technologies creates an offering without equal in the industry and represents a promising revenue generator, one where we are already beginning to see substantive potential.  We also closed new OEM deals with Lipper, Fincad and FlexTrade, and extended existing OEM deals with Bloomberg and NASDAQ.  Most encouraging, our enhanced data preparation capabilities have reinvigorated existing partners and expanded our partner pipeline with prospects whose solutions require complementary data preparation, giving us confidence in the partnership contribution model we have outlined previously.”

He concluded, “On the last day of the quarter, Datawatch announced the release of Monarch version 13, our flagship data preparation solution.  The new product release significantly extends the range of data sources that we address and provides a simple point-and-click interface built on top of the world’s most powerful data preparation engine.  This release allows a user to immediately visualize prepared data not just in Datawatch Designer, but in other popular BI and advanced analytic tools such as Dell Statistica, Tableau, Qlik, IBM Watson Analytics, Tibco Spotfire, SAS, SAP Lumira, Excel and many others.  On the one day it was available in the third quarter, more than two dozen customers made purchases.”

James L. Eliason, chief financial officer, commented, “Our non-GAAP net loss declined significantly from prior quarters of FY15 due to the full effect of the re-structuring actions we took during the first half of FY 2015, which reduced overall expenses by almost 20% compared to Q3 of FY 2014, as well as the sequential increase in overall revenues.  In addition, our deferred revenue balance increased by approximately $410,000 or 6% on a sequential basis, primarily attributable to a 95% sequential increase in deferred license revenue, driven by a change in pricing policy to a subscription basis for smaller sized Monarch orders.”

Third Quarter 2015 Business Highlights

• Datawatch released Monarch version 13, its flagship data preparation solution, with enhanced self-service data preparation capabilities, to bridge the gap between the ease-of-use and agility that business users demand and the scalability, automation and governance needed by IT.  This release includes a free Personal Edition available at http://www.datawatch.com/monarch13/.
• Datawatch and Dell Software announced an OEM partnership, under which Datawatch’s technology serves as the visualization engine for the Dell Statistica platform; the combined Dell/Statistica solution is now generally available and is being sold globally by Dell direct sales representatives and business partners.
• Datawatch continued to expand its presence with key strategic customers, including ING Bank, Vodafone, Ernst & Young, Chesapeake Energy and the Federal Deposit Insurance Corporation.
• Datawatch was named one of the “20 Most Promising Healthcare Analytics Solutions Providers” by Healthcare Tech Outlook magazine.
• Datawatch was included on CRN’s “Big Data 100” for the second consecutive year, ranking it among the top Big Data solutions in the Business Analytics category.

Third Quarter 2015 Financial Highlights

• Cash and short-term investments were $36.32 million at June 30, 2015, down 6% from $38.49 million at March 31, 2015 and down 27% from $50.17 million at June 30, 2014.
• Gross margin (excluding IP amortization expense) for the third fiscal quarter of 2015 was 90%, compared to 83% for the second fiscal quarter of 2015 and 86% for the third fiscal quarter of 2014.
• Days sales outstanding were 73 days at June 30, 2015, compared to 69 days at March 31, 2015 and 61 days at June 30, 2014.
• There were 7 six-figure deals in the third fiscal quarter this year, compared to 8 six-figure deals in the third fiscal quarter of 2014.
• The average deal size in the third fiscal quarter was $56,000 as compared to $62,000 in the third fiscal quarter of 2014.

About Datawatch Corporation

Datawatch Corporation provides the only Managed Analytics Platform that brings together self-service data preparation with visual data discovery.  Its software bridges the gap between the ease that business user’s demand and the automation and governance needed by IT. Users can quickly discover key factors that improve their business by transforming data from multi-structured sources, as well as real-time streaming data, into visually rich analytic applications. Organizations of every size, worldwide use Datawatch products, including 93 of the Fortune 100. Datawatch is headquartered in Chelmsford, Massachusetts with offices in New York, London, Frankfurt, Stockholm, Singapore, Melbourne and Manila, and with partners and customers in more than 100 countries worldwide.  Learn more at www.datawatch.com.

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Source: Datawatch