(all percentage changes and comparisons are year on year, unless stated otherwise, assumes conversion of RMB 8.2765 : US $1)
- Net revenue increased 59.1% to $7.7 million versus guidance of $7.1 - $7.9 million, and consensus estimate of $7.6 million (1 analyst).
- Gross margin was 92.6% versus 98.8%.
- Operating income increased 49.7% to $5.4 million.
- Operating margin was 70.1% versus 74.5%, versus guidance of 65% - 70%.
- Net income increased 80.2% to $5.9 million.
- Diluted EPS was $0.16 versus $0.12, versus guidance of $0.15 - $0.17, and consensus estimate of $0.16 (1 analyst).
- Net revenue from enterprise software sales was 83.1% of total net revenue versus 96.4%.
- Net revenue from software development services represented 16.9% of total net revenue versus 3.5%.
- Cash and equivalents of $103.8 million.
Q2 2005 Guidance
- Net revenue of $6.4 - $7.2 million.
- Net income of $4.5 - $5.2 million.
- Diluted EPS of $0.13 - $0.14.
FY 2005 Guidance (re-iterated)
- Net revenue of $31.4 - $36.2 million.
- Operating margin of 65 - 70%.
- Diluted EPS of $0.60 - $0.70.
CEO Shuang Wang
....Although the first quarter is typically a slower quarter for us, revenues came in at the high end of our prior guidance. We continued to gain new clients in the marketplace due to our proven products and services, while maintaining our focus on operating efficiencies. We benefited from the growing acceptance of the import/export e-filing process as international trade enterprises and government agencies recognize its effectiveness and are increasingly demanding its services.
....A primary focus for 2005 will be on expanding our product breadth.
There is a substantial opportunity to launch new modules and to
leverage the power of our established customer base to further extend
Ninetowns' role in the international trade value chain.
….In the immediate term, we have shifted resources previously dedicated
to iDeclare to the launch and commercialization of iProcess. We are
launching iProcess towards the end of the second quarter and we expect
sales to ramp up throughout the remainder of 2005. We believe iProcess
will become an important product for us because its targeted market is
potentially larger than the market for iDeclare.