CA Technologies Q2 revenue dips 3% due to poor sales in all biz areas

Enterprise IT vendor CA Technologies today said its second quarter revenue in fiscal 2015 dropped 3 percent to $1.08 billion.

Total revenue declined primarily due a decrease in subscription and maintenance revenue, which was largely due to a decrease in Mainframe Solutions revenue and, to a lesser extent, a decrease in professional services revenue.

CA Technologies said its Q2 revenues from mainframe dipped 3 percent to $610 million, enterprise solutions declined 2 percent to $378 million, and services dropped 8 percent to $91 million.

Q2 renewals of CA Technologies were down nearly low 20s. CA Technologies said renewal bookings increased and decreased due to the timing of large transactions. The renewal yield during the quarter was in the low 90s. Total bookings decreased primarily due to an expected year-over-year decrease in renewals from the timing of the renewal portfolio within subscription and maintenance bookings.

North America revenue was $693 million, while the remaining came from international markets.

The company executed 6 license agreements with incremental contract values in excess of $10 million each, for an aggregate contract value of $217 million. CA Technologies executed 12 license agreements with incremental contract values in excess of $10 million each, for an aggregate contract value of $320 million.

CA Technologies CEO Mike Gregoire

Mainframe Solutions revenue decreased primarily due to insufficient revenue from prior period new sales to offset the decline in revenue contribution from renewals.

Enterprise Solutions revenue decreased due to a decrease in revenue that is recognized on an up-front basis in the current period. This decline was primarily due to an increase in the percentage of our Enterprise Solutions new sales sold in connection with renewals.

Services revenue decreased as a result of a decrease in the size and number of services engagements during the first quarter of fiscal 2015.

Mike Gregoire, chief executive officer, CA Technologies said: “Our sales execution was mixed by both geo and customer segmentation. North America overall performed. EMEA enterprise solutions new sales grew year-over-year and we are seeing signs of continued improvement in sales outside of our platinum accounts.”

No bright outlook

CA Technologies continues to expect fiscal 2015 renewals to be down high-single digits year-over-year as compared to fiscal 2014, and flat year-over-year excluding the large system integrator renewal that closed in Q3 of fiscal 2014. It expects Q3 renewals to be down year-over-year, but up year-over-year in Q4.

Pix source: NewsDay

Rajani Baburajan
[email protected]

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