Autonomy on target but shares slump
SOFTWARE firm Autonomy reported a record second quarter performance yesterday, but shares dropped as some analysts expressed disappointment at the firm’s cautious outlook.
The company, which specialises in meaning-based search technology, said that second quarter revenues grew by 55 per cent to £195.1m year-on-year, and profit-before-tax was up 64 per cent to £71.7m.
“Despite the continued uncertainty in the markets, we remain cautiously optimistic,” said Mike Lynch, Autonomy’s chief executive.
Lynch added that Interwoven, a US content management firm acquired for $775m in January, had been successfully integrated ahead of target.
But Panmure Gordon analyst George O’Connor said the market was expecting the firm to be more on the front foot.
“The company could have been more robust in terms of its outlook,” he said. “In addition, there is constant concern about underlying organic growth in Autonomy and although they gave the 18 per cent growth in IDOL software they didn’t any segmental information, particularly on the Interwoven wide.”
Lynch said that the Cambridge-based group would nudge up guidance as the year progressed, but he would not be drawn on timing.
“Our normal model is to upgrade through the year, one would hope as you get more information would be in a position to do that at some point,” he said. “The basic principle is there and it will unfold as it unfolds.”
In addition some analysts were disappointed by the level of deferred revenue and questioned Autonomy’s calculations regarding cash conversion. But Lynch defended the calculations, saying that they were appropriate for a rapidly growing business.