Spend management solutions provider Ariba, Inc. (ARBA) reported Thursday a 35% year-over-year drop in profit for the first quarter, hurt by higher expenses as well as a revenue decline. On an adjusted basis, non-GAAP earnings per share decreased 10%, but topped analysts' estimates by a penny.
In a statement, chairman and chief executive officer, Bob Calderoni said, "As evidenced by our strong first quarter results, Ariba is delivering solutions that meet customer demands for fast results, low risk and more variable cost structures. Customers are increasingly turning to Ariba for their business needs and our solutions are helping to drive their recovery."
The Sunnyvale, California-based company reported net income of $2.23 million or $0.03 per share for the first quarter, lower than $3.43 million or $0.04 per share in the prior-year quarter.
The results or the latest quarter include charges of $1.43 million or $0.02 per share for amortization of intangible assets and $13.52 million or $0.16 per share for stock-based compensation. The year-ago quarter included net charges of $0.18 per share.
Excluding items, non-GAAP net income for he quarter declined to $17.18 million or $0.19 per share from $18.02 million or $0.21 per share in the year-ago quarter. On average, 11 analysts polled by Thomson Reuters expected the company to earn $0.18 per share for the first quarter. Analysts' estimates typically exclude special items.
Total revenues for the quarter edged down to $85.67 million from $86.09 million in the same quarter last year. Eleven Wall Street analysts had a consensus revenue estimate of $85.06 million for the quarter.
Segment-wise, subscription and maintenance revenues increased 8% to $58.37 million from $54.08 million in the year-ago quarter, as subscription software revenue grew 15% to $41.2 million from last year. Services and other revenues declined 15% to $27.30 million from $32.01 million a year ago.
Income from operations for the quarter plunged to $1.96 million from $8.79 million in the prior-year quarter. Total operating expenses grew to $50.25 million from $44.47 million in the year-ago quarter.
The company ended the first quarter with cash and cash equivalents of $127.33 million, compared to $95.55 million at end of the prior-year quarter.
ARBA closed Thursday's regular trading session at $11.80, down $0.21 or 1.75% on a volume of 0.68 million shares, lower than the three-month average volume of 0.79 million shares.
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