CDC Software, a unit of diversified CDC Corp., today reported revenue of $50.5 million in the first quarter ended March 31, a 17% drop compared with $60.5 million in the year-earlier period. License revenue was down 34% to $7.3 million, from $11.0 million a year earlier, while maintenance revenue of $24.2 million was nearly flat with last year. Revenue from consulting services dropped 19% to $18.7 million.
Parent company CDC Corp.’s total revenue was $79.0 million in the period, down nearly 20% compared with $98.2 million last year. President and CEO Peter Yip noted on a conference call with investors today that despite fluctuations in revenue, the company had managed to generate positive cash flow for six consecutive quarters. The company’s non-GAAP cash and cash equivalents at the end of the period stood at $137.8 million.
Yip said on the call that CDC Software has formed a pipeline of acquisition targets, including an agreement to acquire privately held manufacturing intelligence provider Informance International, a deal Yip said the company expects will help increase market share for the CDC Factory product line and expand CDC’s presence in the consumer packaged goods industry. The company also has signed an agreement to buy U.K.-based Categoric, a provider of supply chain event management and business activity monitoring software. CDC expects that transaction to close in the second quarter.
During the first quarter, CDC released Ross Enterprise 6.3.2 and CDC Factory Express, a new version of the manufacturing operations management software specifically intended for single-plant manufacturing operations.
Officials said CDC Software added 114 new customers in the quarter, which made up 20% of total software license revenue for the division.
Yip also reiterated that CDC is seeking “strategic growth alternatives” for three of its four core businesses: CDC Software, CDC Global Services, and CDC Games. Those alternatives, a company spokesperson previously said, could include a full or partial sale of certain assets, mergers, partnerships, or capital market transactions.
Company officials on the call declined to discuss the company’s plans to spin off CDC Software in an IPO. CDC on May 5 submitted a statement to the SEC for an initial public offering for CDC Software of up to $80 million worth of shares.