WebMethods Narrows Loss Despite Sales Decline

WebMethods Inc., an enterprise application integration vendor, reported revenue of $45.4 million for its second quarter ended Sept. 30, down from $46.2 million for the same quarter a year ago. The net loss for the quarter was $4.5 million or 9 cents per share, a slight improvement from a loss of $4.9 million, or 10 cents per share, a year ago.

Software license revenue for the quarter was $22 million, down from $26.5 million in the year-ago quarter. But it was up slightly from $21.8 million in the first quarter.

"In the past quarter, we again demonstrated our ability to win customers, while at the same time controlling costs in our own business," said Phillip Merrick, chairman and CEO, adding that webMethods anticipates revenue of third-quarter revenue of $44 million to $49 million, with per-share loss of 6 cents to 14 cents.

Merrick noted that webMethods still had a cash and marketable securities position of $192.2 million, after making three technology acquisitions last week. One of them, The Mind Electric, provides a Web services framework around which webMethods plans to build a messaging-integration fabric based on Web standards.

WebMethods' cash asset position represented a $13.2 million drop from the previous quarter and will decrease by an anticipated total of $32 million, due to the acquisitions, which also included Dante Software, a business-process monitoring software supplier, and the former Data Channel portal technology, purchased from Netegrity Inc. The three acquisitions will be accounted for over the next three to four quarters, Merrick said.

As part of its acquisition, webMethods named Graham Glass, chairman and founder of The Mind Electric, as chief technology officer.