MicroStrategy Inc. reported a 31% surge in first-quarter revenue, fueled by sales to more than 150 new customers and at least one multimillion-dollar deal.
For the quarter ended March 31, the company on Tuesday reported sales of $49.1 million, up 31% from the same period last year, while net income rose to $10.4 million, or 60 cents a share, from $665,000, or 5 cents a share, one year ago.
License revenue was up 14% to $18.8 million, the sixth consecutive quarter of year-over-year license-revenue growth. The company is benefiting from a strong new-product cycle, says CEO Michael Saylor, including the MicroStrategy Report Services enterprise-reporting application that debuted late last year. Earlier this month, the company shipped MicroStrategy Office, which gives users access to MicroStrategy's analysis software using Microsoft desktop applications.
Service revenue was up 45% to $30.3 million in the quarter from $20.9 million last year, while service-related expenses were up only $1 million. "So this was a very, very, highly profitable expansion of approximately $10 million per quarter," Saylor says.
MicroStrategy added 156 new customers in the quarter and signed one deal worth $4.6 million, including $3.5 in license revenue, although it did not name the customer. Ace Hardware Corp., a MicroStrategy customer since 2001, is standardizing on the vendor's business-intelligence software and during the quarter signed a new multimillion-dollar deal for MicroStrategy software and services for 6,400 users.
MicroStrategy's results are in stark contrast to the 1999-2000 timeframe, when the company fell on hard times. With its healthy finances, new products, and expanding customer base, "MicroStrategy is perhaps in the strongest position in its 14-year history," says chief operating officer Sanju Bansal.
MicroStrategy expects revenue for the current quarter to come in between $43 million and $47 million and net income of between $3.5 million and $7.0 million. For all of 2004, the company expects revenue between $190 million and $200 million and net income between $32.3 million and $36.8 million.