Over the past two weeks, we have looked at the CRM and talent management sectors in the SaaS market. The talent management sector is consolidating at a fast pace and even SaaS CRM is seeing acquisitions in social networking. In August, Citrix (NASDAQ:CTXS), a leader in virtualization, acquired VMLogix, a provider of virtualization management for private and public clouds, while NetSuite (NYSE:N) and Concur (NASDAQ:CNQR) have not had any M&A activity in the recent past.
In its latest third quarter, Citrix reported revenue of $472 million, up 18%. Net income was $88 million or $0.46 per share versus $53 million or $0.29 per share last year. The company repurchased shares for $125 million and ended the quarter with $1.6 billion in cash and marketable securities.
New license sales were $149 million, up 15% from last year, driven by growth in both the Desktop and Data Center businesses. Revenue from product licenses grew 18% to $152 million, license updates increased 15% driven by strong year-to-date demand in the XenDesktop Trade-up program, and Technical Services grew 30%. Revenue from Citrix’s Online SaaS services grew 16% to $92 million led by the collaboration products in the GoToMeeting family.
Revenue from the company’s Desktop business, which includes both Application and Desktop Virtualization solutions, was $277 million, up 15%. Revenue from the Data Center and Cloud Computing business, which provides Application Networking and Server Virtualization solutions, was up 47% to $84 million led by NetScaler products.
Citrix expects fourth quarter revenue of $500 million to $510 million and EPS of $0.47 to $0.49. For fiscal year 2011, Citrix expects revenue to range from $2.04 billion to $2.07 billion. Its annual revenue in 2009 was $1.58 billion, and the company expects revenue of $1.845 billion to $1.855 billion for fiscal year 2010. The stock is trading around $70 with market cap of about $13 billion. It hit a 52-week high of $71 on September 24.
Concur is a SaaS provider in the niche area of expense management and has annual revenue of $247.6 million. In its fourth quarter results, the company reported revenue of $77.5 million, up 20%. Net income was $3.5 million, or $0.06 per share, down from $5.9 million, or $0.11 per share last year. For fiscal year 2010, revenue was $292.9 million, up 18%, and net income was $20.6 million, or $0.39 per share compared to $25.7 million, or $0.50 per share, for fiscal year 2009. Cash and investments, net of customer funding liabilities and debt, increased approximately $70 million by quarter end including the exercise by American Express of its $50 million warrant.
Concur expects first quarter revenue to increase 17% y-o-y and net income per share to be $0.05. It expects the fiscal year 2011 revenue growth rate to be higher than the fiscal 2010 revenue growth rate. The stock is trading around $54 with market cap of about $2.8 billion. Its 52-week range is $36.98–$55.37.
NetSuite is a SaaS ERP vendor with annual revenue of $166.5 million. Enterprise resource planning (ERP) is the third-largest SaaS revenue generator with $1.3 billion revenue in 2009. NetSuite for its third quarter reported revenue of $49.7 million, up 19%. Net loss was $7 million or $0.11 per share compared to a loss of $8 million or $0.13 per share last year and non-GAAP EPS was $0.04 per share. The company ended the quarter with $101.12 million in cash and cash equivalents.
NetSuite raised its 2010 outlook to revenue of about $192 million and EPS of $0.12 to $0.13. Its earlier revenue guidance was $188 million to $190 million. The stock is trading around $26.5 with market cap of about $1.7 billion. Its 52-week range is $11.62–$27.41.
The SaaS market had worldwide revenues of $13.1 billion in 2009, and IDC expects revenues to reach $40.5 billion by 2014. The market seems to be resuming its growth story and SaaS stocks are trading close to their 52-week highs. And as growth continues, more consolidation will follow.