Shares of hosted software vendor SuccessFactors (SFSF) are up $1.52, or almost 6%, at $27.61 in late trading after the company said it expects Q3 revenue in a range of $93 million to $95 million, up from a prior forecast of $83 million to $84 million, and EPS that will be “above breakeven,” better than its prior view for a merely breakeven quarter.
Analysts have been modeling $83.6 million and a penny per share in profit.
SuccessFactors said billings will be up 40% to 42%, year over year.
CEO Lars Dalgaard said despite “an uncertain economic climate,” the company’s market “has reached a tipping point.”
The company will report full Q3 results on October 26th.
In a note to clients this afternoon, Citigroup’s Walter Pritchard writes that the results are “good enough” to help the shares, given that there has been “controversy” around human resources software companies, including SuccessFactors, in recent months.
However, the upside in the quarter is likely coming not from the core business but rather from acquisitions the company has made:
The magnitude of the large revenue beat vs. the moderate billings beat suggests that much of the revenue upside is attributable to M&A accounting, not new business. Recall that management guided Plateau�s contribution to revenue and billings at $10M per quarter vs. Plateau�s $66M annual run rate.
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