Outlook upbeat for Autonomy
By Philip Stafford
Published: October 15 2008 18:02 | Last updated: October 15 2008 18:02
Mike Lynch, chief executive of Autonomy, predicted business for the search software company would remain strong for the rest of the year in spite of the economic slowdown.
As the group unveiled earnings at the top of expectations, Mr Lynch said most purchases were made due to regulatory-driven demand from banks and financial authorities, with both often gearing up for potential lawsuits.
“After death and taxes, the next best bet is litigation,” Mr Lynch joked. “We’re seeing sales up 300 per cent there.” He added that he was “comfortable” with the group’s outlook.
Autonomy had already announced it expected record third-quarter results as it benefited from a US legal decision at the start of the year, which ruled that lawyers had just 99 days to decide what electronic data could be used as evidence in a lawsuit. Autonomy’s products help businesses archive and retrieve materials such as e-mails and phone calls. The financial crisis and consolidations of banks during the past six weeks had helped business, Mr Lynch added.
Like many companies in the IT sector, shares in Autonomy have been hit by concerns of a broader economic slowdown.
But Rajeev Bahl, an analyst at Piper Jaffray, said: “The stock has everything you’d want, from revenue growth to rising margins, strong cash flow and a decent backlog – it ticks all the boxes.
“It’s just that the multiple the market is willing to pay for growth stocks has come down.”
Third-quarter revenues to September 30 rose 42 per cent to $127m. Pre-tax profit increased 162 per cent to $47.8m, while earnings per share rose from $0.06 to $0.16.
The average selling price for Autonomy’s technology was $395,000, up from $375,000. Shares in the company closed up 1p at 829p.
Copyright The Financial Times Limited 2008
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