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10/14/2003
10:13 AM
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Plumtree Nears Profitability

The portal software vendor reports a small rise in revenue and a reduction in losses.

In a fragmented market with no established leader, Plumtree Software Inc. slowed its losses by achieving marginal improvement during a summer quarter that's typically slow for sales of portal software. During a conference call with analysts Monday, CEO John Kunze attributed the company's resilience to its evolution from a champion of portals to a proponent of "functional" portals, or those that serve up applications.

The company saw its licensing revenue, which had been falling, rise slightly, to $9.1 million from $8.5 million. That, combined with a modest increase in services revenue, resulted in 4.5% revenue growth from the previous quarter and near return to profitability.

Forrester Research analyst Laura Ramos says Plumtree is smart to take some risks, such as working with partners to develop applications designed for specific vertical markets. Ramos says other vendors, such as IBM and SAP, have taken market share from Plumtree because of their access to vast installed customer bases, but that a more specialized set of offerings will help to distinguish Plumtree in the market. At its user conference this week in Hollywood, Fla., Plumtree is introducing several such applications, as well as a Java 2 Enterprise Edition of its portal framework, previously available only as a .Net tool.

For its third quarter ended Sept. 30, Plumtree posted a loss of $373,000, or 1 cent per share, on revenue of $18.5 million, compared with a loss of $889,000, or 3 cents per share, on revenue of $17.7 million a year earlier. The company was profitable on a pro forma basis, with a profit of $603,000, compared with a profit of $562,000 for the same period last year.

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