Seeking Alpha
Venture capitalist, tech
Profile| Send Message| ()  

Researcher TBR’s 2Q13 Business Intelligence Software Vendor Benchmark estimates the worldwide business intelligence (BI) software market will grow 4% annually over the period 2013 through 2018 to be worth more than $40 billion by 2018. In another report, Gartner estimated the BI market to have reported a growth of 6.8% over the year to $13.13 billion last year. SAP was the leading player in the segment last year with a market share of 22% followed by Oracle’s 15% market share. IBM and SAS were neck and neck with 12.4% and 12.2% market share respectively and Microsoft was the fifth-largest player with 9% market share. While these big giants surely have a bigger footprint in the market, there are other smaller players as well who are making their presence felt.

Qlik’s Financials
Qlik (QLIK) is one such business intelligence software provider, which believes that it addresses an even wider market opportunity – the use of business intelligence by small and medium-sized enterprises. Founded in Sweden in 1993, Qlik began with the mission of helping organizations of all sizes solve business critical problems. Today, Qlik is among the leading business discovery platform providers in the SMB segment. Business discovery solutions refer to user driven business intelligence offerings.

Qlik’s platform, known as QlikView, provides meaningful insight into available big data to help organizations of all sizes to take informed decisions. The platform is powered by in-memory associative search technology that delivers improved flexibility and performance at a lower cost than traditional business intelligence solutions. It is able to consolidate relevant data from multiple sources into a single application and explore relationships, trends and associations within the data. It also helps improve collaboration on the information by sharing it across levels, workgroups and divisions. Users can make informed decisions by accessing visual representations of the data, interacting with apps, dashboards and analytics tools that are even available over mobile devices.

Qlik earns revenues through sales of licenses, servers, and maintenance and training services. It has a customer base of over 29,000 organizations spread across more than 100 countries, which includes names like BP, Campbell Soup Company, Colonial Life and The Dannon Company, and also a wide range of unknown SMBs. Qlik’s revenue growth is impressive. Revenues for the recently reported quarter grew 26% over the year to $108 million, surpassing market expectations of $106.6 million. However, earnings are a different story. It ended the previous quarter with a loss of $0.02 per share compared with earnings of $0.02 per share a year ago. The Street was projecting a lower loss at a penny per share.

By segment, license revenues grew 21% over the year to $60.5 million. Maintenance revenues grew 35% to $38.4 million and professional services revenues grew 26% over the year to $9.1 million.

For the current quarter, Qlik expects revenues of $105-$109 million with EPS of $0.02-$0.04. It is looking to end the year with revenues of $473-$481 million and earnings of $0.37-$0.41 per share.

Qlik is Improving its Portfolio

To help improve product offerings, earlier this year, Qlik announced the acquisition of NComVA AB, a provider of advanced visualization technology. Sweden-based NComVA has been Qlik’s partner since 2011 and has already helped it deliver interactive visualization capabilities on its data discovery tool. But with the acquisition, Qlik will now be able to leverage NComVA’s expertise to deliver even more advanced visualization and analysis to help improve business insight, especially when the business uses multiple sources of data. Some of these advancements expected in QlikView includes features like the ability to show data through visual aids such as radar plot, scatter matrix, and fish eye bars. Users should also be able to interact with the data to visualize what-if scenarios such as changes in variables and time.

Qlik’s stock is trading at $35.74 with a market capitalization of $3.14 billion. It touched a high of $35.75 earlier this month.

Big Data is a hot sector right now, and companies like Qlik, Splunk, and others are basking in its glory. These companies are also hot acquisition targets, and the stock will continue to do well for the foreseeable future. For comparables, look at the run that earlier SaaS companies like SuccessFactors, Concur and Taleo have had. While Concur is still independent, SuccessFactors has been snapped up by SAP, and Taleo by Oracle.

Source: Swedish-Born Qlik Offers Business Intelligence To SMBs