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Cognos Wraps Up Boffo Year With Solid Quarter

The software vendor reported solid gains in sales and earnings, and says deal sizes and support revenue are getting bigger.
Cognos Inc. wrapped up a good year by reporting significant growth in sales and earnings for its fourth quarter. The company also reported significant increases in deal sizes and support-related revenue, signs that its business-intelligence and performance-management applications are becoming more strategic to its customers, the company says.

Total revenue for the quarter ended Feb. 28 was $163.7 million, up 15% from the same period a year ago, while net income nearly tripled to $29.6 million, or 33 cents per share. Product license sales, a key growth indicator, increased nearly 6%, to $79.6 million, from the year-ago quarter. Product-support revenue grew more than 27%, to $59.4 million, with services contributing another $24.8 million to the top line.

"In a difficult environment, we continue to do well--to exceed expectations, in fact," says Robert Ashe, president and chief operating officer. About 10% of the revenue growth came from the vendor's core business-intelligence products, while another 5% came from Adaytum, the financial-management software vendor Cognos acquired during the quarter.

The vendor closed six deals worth more than $1 million during the quarter, while the number of deals valued at $50,000 and $200,000 were up 33% and 43%, respectively. Those numbers could rise further, following a deal with IBM disclosed Tuesday under which IBM Business Consulting Services will market and resell Cognos software.

For the fiscal year that ended Feb. 28, Cognos reported sales growth of 12%, to $551.0 million. Net income grew nearly fourfold, to $73.1 million, or 81 cents per share. For the current quarter, Cognos expects to report revenue of $146 million to $150 million and earnings of between 12 and 14 cents per share.