Deltek (PROJ), which has more than 12,000 customers, develops sophisticated enterprise software to help with project management. The company targets a wide array of industries like architecture & engineering (A&E), aerospace, government construction and so on.
However, as seen with the Q1 results, the business has been fairly soft. Total revenues came to $62 million, down from $69.4 million in the same period a year ago. During this time, license revenues plunged from $17 million to $11.2 million. Oh, and consulting revenues fell from $24.3 million to $20.1 million. A big hit came from the bankruptcy of Bearingpoint.
But there was a bright spot: maintenance and support revenues. These actually increased from $28.1 million to $30.6 million. Bear in mind that Deltek has a 90%+ renewal rate for its customer base.
Actually, despite all the noise, Deltek was still able to post GAAP net income of $2.7 million, or $0.06 per share. Cash flow was a hefty $17.4 million. Basically, the company has been aggressive with its cost-cutting efforts.
While the weakness will likely continue in the short run, things look hopeful for the long-term. After all, companies are gearing up to get a piece of the enormous federal infrastructure spending. And, to do this, there will be a need to leverage resources like Deltek’s. In fact, the company plans to launch a new version of its GovWin product, which is a CRM solution to boost the business of government contractors.