Saba Software Inc. reported flat first-quarter revenue Tuesday, indicating that the slowing demand for enterprise software has finally reached the online learning market. The supplier of learning-management systems also reported that Sebastian Grady, president and chief operating officer, would resign immediately for personal reasons.
During a conference call, CEO and founder Bobby Yazdani said that although Saba added 16 new customers in the first quarter of fiscal year 2002, sluggish corporate spending resulted in flat revenue. "We've seen a significant delay on spending decisions," he said of potential customers, noting that three multimillion-dollar deals were put on hold in the first quarter.
For the quarter ended Aug. 31, Saba reported a net loss of $11.2 million, or 25 cents a share, on revenue of $14.5 million. That compares with a net loss of $19.1 million, or 46 cents per share, on revenue of $10 million for the same period last year. In June, Saba reported a net loss of $10.4 million, or 24 cents a share, on revenue of $15.5 million for the fourth quarter of fiscal year 2001.
Ed Bierdeman, senior VP of analyst firm Moors & Cabot, sees some good news for Saba despite the flat quarter and thinks the overall outlook for the company is positive. As an example, he noted that during the quarter, Saba expanded its relationships with existing customers such as biotechnology developer Allos Therapeutics, General Motors, and Best Buy.
Bierdeman says, "Grady's departure is disconcerting, given that he was highly touted as a major player to management, but I'm confident they could continue successfully with their existing strong team."