The Datawatch transformation continues with another great
quarter. Q2 reported 04/27/12 was outstanding. Since they are at the
beginning of their transformation full financial
benefits are not going to immediately be realized for the following reasons. New sale's team
hires, purchased intellectual property, integrating new development team, one
time severance charges, new messaging of
product fit, one time marketing
costs for cancellation and change of convention strategy.
But having said all that, many if not all aspects of the Q2
accomplishments were spectacular! Total Q2 Revenue was up 47% and license revenue
up 67% over second quarter of 2011. This on top of a Q1 revenue increase of
50%. The real value creation was in the continued momentum with new
partnerships and "blue chip" large enterprise customer wins that were
also outstanding during Q1.
Specific comments made during the Q2 conference call should
give all long term stakeholders optimism for the future. During Q2 they gained
10 new Enterprise customers compared to seven in Q2 of 2011. New Enterprise
customers include American Express. Lowe’s and Northern Federal Credit Union. Q2,
there average deal size was $70,000 as
compared to $24,000 in Q2 of 2011. They had four six-figured deals in Q2 this
year compared to no six-figure deals in Q2 of FY’11. The pipeline at the end of
the quarter, or at the beginning of this quarter was the highest it’s been
since CEO Morrison has been with the company over past year. CEO stated "they have been
hiring beyond their current plan, opportunistically as we – and a lot of it is
people coming to us, they’re starting to get a buzz around what we’re doing.
You might have seen the Splunk IPO last week, and they play in a small part of
the space that we’re in – got a lot of visibility on our space. So, people are starting
to take notice, and we’re taking advantage of that, we’re being disciplined
about it. So, there’s no specific number, but I think there’s a big opportunity
that when the right people come along we’re going to take advantage of
that." They see several important OEM and reselling relationships on the
short-term horizon and expect even more to emerge as they move into FY’13.
CEO Morrison spoke about the secondary area of growth opportunity
,the cloud. The European based Logica win realized last quarter is a cloud deploying their Monarch Report Mining Server Solution. "Just
last week, Logica began rolling this offering out to additional customers."
In the coming months Datawatch promised to be updating on new initiatives with
other potential partners and customers that take advantage of their ease of use
in the cloud.
Another area of growth that has become an additional focus are
industry specific solutions. Last week's announced 835 Industry Link Report
Analytics for use in Health care will be beneficial and could potentially be purchased by some of
their 1,200 healthcare organizations that
rely on the Monarch Report Analytics
platform.
They are "actively working on other opportunities to
develop repeatable solutions that address common industry-specific or
application specific, semi-structured and machine data reporting challenges.
These industry solutions allow us to efficiently bring real-world use cases
into the market more quickly with demonstrable out-of-the-box value."
The pieces continue to quickly come together for all Datawatch
stakeholders.
