25 January 2002 PeopleSoft’s challenge to Oracle for the number two slot in the enterprise resource planning (ERP) software market has faltered after the release of strong, but unspectacular revenue and net income figures for its fourth quarter.
CEO Craig Conway nevertheless remained bullish. “The year 2001 was an exceptional year of financial performance for PeopleSoft, including record total revenue, record income from recurring operations and more than $500 million of cash and investments generated,” he said.
In the three months to the end of December, PeopleSoft posted revenues up 6% to $528.16 million (€610m), compared to $497.78 million (€575.2m) achieved in the same period in 2000. Net income rose to $57.77 million (€66.87m), from $44.23 million (€51.19m) achieved in the fourth quarter of 2000.
Conway was particularly buoyed by the increase in license revenues, up 5.8% to $174.1 million (€201.2m).
However, despite some analysts suggesting that PeopleSoft could potentially overhaul Oracle to grab second place in the ERP software market this year, PeopleSoft quarterly license revenues remain 40% less than Oracle’s license revenues for Oracle Applications and total quarterly revenues are behind by $125.3 million (€145m).
For the full year, PeopleSoft increased total revenues by 19.4% to $2.07 billion (€2.4bn) from $1.74 billion (€2.01bn) in 2000. Net income increased to $191.55 million (€221.73m), compared to $145.69 million (€168.64m) in the previous year.
By comparison, Oracle reported total ERP revenues of $2.87 billion (€3.32bn) in its fiscal year to the end of July 2001.
Nevertheless, PeopleSoft’s results stood out in a year in which many other software vendors saw their revenues collapse. Conway attributed PeopleSoft’s success to the launch of a number of new products. These included “PeopleSoft 8 CRM”, its customer relationship management module, and “PeopleSoft Enterprise Service Automation”.
Conway also plans to pay $90 million (€104.22m) to buy back Momentum Business Applications, the research and development arm that it floated off in 1998. That had been a controversial decision that analysts had criticised as a ruse to move R&D spending off its books.
Momentum had been specifically set-up and spun-off to develop products such as PeopleSoft 8 on behalf of PeopleSoft, which would, in turn, pay royalties to Momentum. Although legal at the time, US regulators have since banned such arrangements.
Craig Conway will be one of the keynote speakers in Infoconomy’s Collaborative Commerce conference on 31 January and 1 February. For more information and to reserve your place, please click here.