(all percentage changes and comparisons are year on year, unless stated otherwise)
- Gross revenue decreased 8% to $29.4 million.
- Net revenue (total revenues net of third party hardware cost) increased 54% to $23.2 million. Company guided for $21 - 22 million. Consensus was $21.99 million.
- Revenue from software products and solutions rose 66% to $16.0 million.
- Service revenue rose 51% to $6.8 million.
- Lenovo-AsiaInfo contributed 27% to software products and solutions revenue and 39% to service revenue.
- Gross margins increased to 39% from 29% due to reduced hardware passthrough and increased high-margin software revenue.
- Total operating expenses increased 48% to $10.8 million.
- R&D expenses rose 57% to $3.2 million.
- Operating profit decreased 60% to $800,000.
- Net income decreased 30% to $1.4 million.
- EPS was $0.03 per basic share versus $0.04. Company guided for $0.01 - $0.02. Consensus was $0.02.
Steve Zhang, AsiaInfo's New President and Chief Executive Officer:
....Driven by strong sales orders in our software business last quarter, we are pleased to have exceeded our revenue guidance for the quarter. We also saw an increase in net income compared with the previous quarter as we realized benefits from the smooth integration of Lenovo-AsiaInfo."
We were also encouraged by the growth of our telecom software business as OpenBOSS version 1.5 continued to gain momentum in the market. We expect to maintain this growth as telecom carriers focus their spending on improving operational efficiencies. Lenovo-AsiaInfo was a strong contributor to our revenue this quarter, meeting our expectations. As China's IT services market maintains its rapid growth, we are confident that Lenovo-AsiaInfo will continue to expand its leading position.Q2 Guidance:
- Net revenue of $21 - $23 million.
- Earnings per basic share of $0.01 - $0.02.
ASIA Stock Market Performance: