Fresh off a deal to buy IDS Scheer for €477 million, Software AG this week revealed upbeat second-quarter numbers, as both the top and bottom lines improved year over year.
Total revenue for the IT infrastructure and business process management vendor rose 5% to $176.4 million in the period ended June 30, compared with $168.8 million in the prior-year quarter. The sales boost trickled down to the bottom line, as net income grew 7% to $28.9 million, from last year’s $27.1 million.
The revenue rise came courtesy of maintenance sales, which increased 20% to $73.9 million. That buoyant performance was mollified by slower license sales — off 3% to $59.8 million — and services revenue, which fell 7% to $41.7 million.
Software AG maintains two business divisions: Enterprise Transaction Systems and its webMethods unit, which markets its flagship business process management (BPM) software. During the second quarter, ETS enjoyed a 10% spike in revenue, taking in $100.9 million compared with $92.1 million during the previous Q2. Meanwhile, webMethods revenue sagged 2% to $75.5 million.
New customer engagements were driven mainly by BPM software, the company revealed in a statement. From a geographic perspective, Software AG singled out Brazil and South Africa for improved performances, and said that Japan and the United States were laggards in the quarter.
Software AG said the IDS Scheer acquisition complicates the forecast for the remainder of the year.
“Originally, Software AG’s forecast for the full year anticipated an increase in revenue by between 4% and 8% … The forecast will change due to the takeover bid,” according to the statement, but the company did not update the revenue growth targets.
A week after the announcement, Software AG said it has acquired more than 10% of IDS Scheer’s common stock. Coupled the 48% stake promised it by Scheer’s majority stakeholders, Software AG will become the majority stakeholder pending antitrust clearance, the company said.