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July 24, 2014

Datawatch Announces Third Quarter Financial Results

CHELMSFORD, Mass., July 24 — Datawatch Corporation, a leading global provider of visual data discovery solutions, today announced that total revenue for its third fiscal quarter ended June 30, 2014 was an all-time high of $9.23 million, an increase of 18% from revenue of $7.83 million in the third quarter a year ago.  License revenue for the third quarter of fiscal 2014 was $5.58 million, an increase of 11% from the $5.01 million recorded in the comparable quarter a year ago.  Net loss for the third quarter of fiscal 2014 was ($5.20) million, or ( $0.48) per diluted share, compared to a net loss of ($666,000), or ($0.10) 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 and non-cash stock compensation costs, the Company’s non-GAAP net loss for its third fiscal quarter of 2014 was ($2.61) million, or ($0.24) per diluted share, compared to non-GAAP net income of $617,000, or $0.09 per diluted share in the third fiscal quarter of 2013.

“We focused our energies on sales execution in the third fiscal quarter, and this will remain an area of emphasis as we build our business and go-to-market model for the long-term,” said Michael A. Morrison, president and chief executive officer of Datawatch.  “During the third quarter, we made important progress increasing awareness in the market for our highly differentiated visual data discovery solution.  Last quarter, we introduced an entirely re-designed website to better engage our customers, prospects, and partners. In tandem with the launch of the new website, we also unveiled a new online Datawatch Community, a social network platform designed to help customers, prospects and partners experience the full value of Datawatch software.”

Mr. Morrison continued, “As we build broader awareness for our visual data discovery solutions in the market, we are seeing particular traction in the emerging area of Big Data related to ‘fast data’ – that is, data in motion, or streaming real-time data.  Our unique ability to extend the value of real-time streaming platforms such as IBM Streams, Informatica Vibe and EMC Pivotal GemFire, with our real-time visual data discovery solution, has opened up a wide range of high value applications for us.  And, since Datawatch is the only company in the next generation analytics market that can deliver visual data discovery solutions using real-time, streaming data in motion, we intend to continue to invest in this fast-developing area of the market where our solution is uniquely differentiated.”

Third Quarter Business Highlights

Datawatch announced a global relationship with Informatica Corporation, the world’s leading independent provider of data integration software, to deliver a real-time streaming data connector to Informatica Vibe Data Stream, Informatica RulePoint Complex Event Processing and Informatica Ultra Messaging, enabling organizations to realize the full value of operational intelligence through visual data discovery of real-time, streaming data.

  • The NASDAQ OMX Group, the world’s leading provider of market technology, announced the launch of MiQ, a new advanced analytics solution for global capital market operators based upon Datawatch’s visual data discovery technology, which provides exchanges, clearinghouses, central security depositories, and other financial market operators a centralized data management solution tailor-made for supporting the trade lifecycle, reducing the challenges associated with data volumes, processing, storing and retrieval, and speed of extraction.
  • Datawatch and GTA Information Technology Co., Ltd. of Shenzen, China entered into a strategic alliance for GTA to resell Datawatch’s visual data discovery solution throughout the higher education market in China, covering more than 3,000 institutions of higher learning.
  • Datawatch announced the latest release of its award-winning visual data discovery solution, which includes a high performance in-memory intelligent cache, built-in support for predictive and advanced analytics through Map R and Python support, expanded Big Data connectivity to sources such as Hadoop Hive and Cassandra, geospatial analysis and enhanced support for additional IBM data management products, including Cognos.
  • Datawatch announced its newest solution, developed in cooperation with First Florida Credit Union, which provides financial institutions governed by the National Credit Union Association with a fast, accurate and efficient way to manage their quarterly ‘5300’ submission filings, enabling credit unions to eliminate many manual aggregation, reconciliation and formatting processes by consolidating call report data in a single, auditable environment.
  • Datawatch launched a new corporate website, focused on offering customers, partners and prospects access to more visual data discovery resources, including the new Datawatch Community, which includes discussion forums, demos, videos, blogs, product documentation and white papers to help users of Datawatch solutions be more productive.

Third Quarter Financial Highlights

  • Cash and short-term investments were $50.17 million at June 30, 2014, down 7% from $53.92 million at March 31, 2014 and up 387% from $10.31 million at September 30, 2013.
  • Gross margin (excluding IP amortization expense) for the third fiscal quarter of 2014 was 86%, compared to 88% for the second fiscal quarter of 2014 and 91% for the third fiscal quarter of 2013.
  • Days sales outstanding were 61 days at June 30, 2014, compared to 57 days at March 31, 2014 and 60 days at June 30, 2013.
  • The percentage of license revenue from partners in the third fiscal quarter of 2014 was 7%, as compared to 14% in the second fiscal quarter of 2014.
  • There were 8 six-figure revenue deals in the third fiscal quarter of 2014, as compared to 5 six-figure revenue deals in the second fiscal quarter of 2014 and 3 six-figure revenue deals in the third fiscal quarter of 2013.
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