reported a net loss of $4 million in the first quarter of 2005 thanks in large part to a drop in license revenues, company execs announced Wednesday.
License revenues year-over-year dropped $52 million from the first quarter of 2004 compared to the first quarter of 2005, from $127 million to $75 million. The revenue drop was offset by modest gains in maintenance, services and other revenues, but overall total revenues dropped from $329 million to $299 million.
The results were mostly in line with the preliminary results posted by the company earlier this month. The exception was its net loss figure; officials had originally expected to report a $7 million to $9 million loss for the quarter.
Licensing revenues woes come at a time when the San Mateo, Calif., CRM giant, is executing a C-level shuffle. Two weeks ago the Siebel board gave J. Michael Lawrie, Siebel CEO since May 2004, his walking papers and named long-time board member George Shaheen as his replacement.
Shaheen said Siebel can execute better than it has in recent times and vowed to turn the company around, though the lack of details of exact changes didn’t endear him to investors.
In an investor’s conference Wednesday afternoon, Shaheen said executives were disappointed by the results and said the license revenue drop was partly due to more complex agreements that force the company close the deal and recognize revenues after the first quarter.
“[The first quarter] has been a call to action,” Shaheen said. “We plan maintain our focus on delivering comprehensive solutions, successful customer deployments and measurable customer value. We are fixing our revenue-generating capability, we are right-sizing our business with an eye towards improved profitability and performance and we will focus on the largest markets with the greatest growth opportunities.”
Details were scarce on what exactly company officials would do to turn around their operations, with Shaheen saying more details would be made available at an analyst’s day event May 5.
He said Siebel’s activities will focus on three areas: improving revenue recognition, aligning the company’s infrastructure to the business and focusing on products to maintain their market leadership in the CRM space. The company will also scale back on administrative, research & development, and sales and marketing expenses and should largely be completed by the end of April.
Shaheen said the company is also launching a new marketing campaign with the motto, “It’s all about customer,” to reflect Siebel’s commitment to deliver value to its potential and existing customer base.