Miles P. Jennings, Jr.

It's Neck-n-Neck at the Turn: Donnelley and Bowne in the XBRL Filing Lead

Rivet Software is broadly involved in not just XBRL filings but also analytic products that use XBRL data.

As of Sept. 14th, Rivet had provided creation software for 58 of the 427 XBRL filings made. Since Vintage has not yet stated exactly how many of those 58 filings were done by them, it is not possible for me to know that information.

Bowne has a business connection to Rivet as well, and I estimate about 30 of those 58 Rivet filings were the result of their connection to Bowne's work.

When Vintage discloses the number of XBRL filings it has actually made, I will include them in the results. Yesterday, for instance, Merrill disclosed their filings for the first time for the recent period, and I added them to the list.

Donnelley and Bowne filed 269 of the 427 XBRL filings as of Sept. 14th, or 63% of the filings made. As the filing base broadens over the next couple of years, I assume that their joint market share will not be as dominant.


On Sep 23 03:16 PM Benjamin Blascoe wrote:

> I think you folks are leaving out a very important player in all
> of this - Vintage Filings. They have formed best, fastest and most
> cost-efficient software with Rivet Software - the company who designed
> the standard for the SEC's XBRL conversion. I see them taking off!
> They have roughly 7 more years of XBRL filing experience than any
> other Financial Printer/Service. I just wonder how Merill, Bowne
> and Donnelley are going to keep up...

EDGAR Online Is Running with the Elephants

I like the Cloud approach of noting the "Creation Software" used in the filing. For EDGAR Online, Bowne, and EDGARfilings, we know that they are also the filers since that is their business. EDGAR Online and Donnelley have an exclusive deal, and Bowne's business is directed at the financial publishing business. And of course EDGARfilings has traditionally filed the SEC reports.

As to the other filing agents for Fujitsu, Rivet, and Clarity, that seems to be an open issue. However, following the competition between Fujitsu and Rivet is better than the Yankees and Red Sox.

Like most businesses---including financial printing, I suspect the XBRL filings business will have a few large market leaders with large market shares and then a large cluster of smaller filing agents. The Cloud report seems to be an excellent proxy for tracking the early leaders.

EDGAR Online Is Running with the Elephants

If you consult the source document definition (the last column on the right at xbrlcloud.com/edgar/ed...), you will see that the column heading is labeled, "Creation Software." So technically, the filing agents simply enter the software tool they used. That is why, for instance, Business Wire or Merrill might not enter their name in the filing.

However, a company like EDGAR Online has their own XBRL rendering tool and also files the SEC reports. The purpose of my report was to determine which filing companies are garnering the major filings business market share. When Fujitsu is listed, it is not possible for me to know which company used that equipment to file. So the Cloud Data is accurate for the information now available.

If companies like Business Wire and Merrill Corp. note their names in future reports, it will be possible to get a better fix on the market share data. Although we are missing the names of the filing companies on 29.5% of the data, this is the first time we have had information on 70.5% of the companies as to the names of the filers.

As of last night here is a current update:
Clarity 5, Rivet 51, Fujitsu 60
BW 2, EDGARizer 52, Bowne 83, EOL 139
Other 1

Also, from a competitive standpoint, some filing companies may prefer to state just the tool used.


On Aug 29 04:32 AM Dominic Jones wrote:

> Some additional info. Rivet doesn't list Business Wire as a partner.
> (see www.rivetsoftware.com/...)
>
>
> Fujitsu does not list Business Wire as a partner (Merrill Corp. is
> one of theirs) see: www.fujitsu.com/global...
>
>
> Clarity Systems does not either https://claritysystems.com/Par...
>
>
> So, it doesn't look like Business Wire's claim that it was the agent
> for more than 2 filings can be accounted for by any of the above.
>
>
> I look forward to Tom Becktold of Business Wire providing us with
> the true numbers. He claims the author has his facts wrong, but hasn't
> provided anything to back up his claim.

EDGAR Online Is Running with the Elephants

Tom-

The total number of filings is correct since it is sourced from the SEC feed. I am guessing that BW is the agent for some of the companies listed under the Fujitsu, Clarity or Rivet filings, since BW might use their XBRL tools to file. Similarly, I am confident that the reason why Merrill Corp. is not listed at all is probably they too might use Fujitsu, Rivet, or Clarity tools as well to make their filings.

I think this data is the only comprehensive listing of filers and their agents. Hopefully, agents will add their names in future reports.

Miles


So, the numbers given will be the minimum filings by each company except for Fujitsu, Clarity, and Rivet.

EDGAR Online: More than Just a 'Financial iPod'

Inflection point---nice way of expressing it. My view is that current levels of subscriptions will be dwarfed by the XBRL filings business. As to just the decline of subscription revenue as you asked, say - $2,052,000 annualized for 2009/2008 year-over-year, that would represent the revenue on just 137 new XBRL filing clients. I assume they receive around $15,000 per XBRL filings client per year.

Now the question is, what is the likelihood that the company will win at least 137 new filings clients over the next year. Well, if you take a look at xbrlcloud.com/edgar/ed... (the very last column to the right), you will see that EDGR now has the leading XBRL filings market share. I have followed this for awhile, and it looks like about 40% share. Since there are 1,800 new companies who will have to file starting after 6/15/10, that would possibly suggest that EDGR's share at 40% might be around 720, far in excess of the 137 needed to cover the shortfall in subscription revenue noted above.

Using a lower market share of 30% for the 1,800 and the 40% for the 500 this year, that would equal 740 clients, suggesting around $11.1 million in annual revenue. In fact, due to their highly automated XBRL conversion approach and years of experience, I suspect their share will stay at current levels or higher. And with about 10,000 additional companies required to file in 2011 (and many choosing to file early), I suspect these 2009 and 2010 numbers to be very low vs. long-term industry filings business.

But don't rule out subscriptions business. CPAs and attorneys are conservative and tend not to use a new service until it is "legit". Now that the SEC has mandated XBRL, and with Thomson Reuters selling EDGR's high-end I-Metrix suite of products, the case could be made for rising subscription product sales.

You refer to a possible financing. Maybe it will not be just money. What if their strategic financing partner also got certain rights as to the sale of certain of EDGR's XBRL database products?

EDGR has the XBRL database but it also knows how to extract and capture data so that it is usable in their analytic programs. Those proprietary data-mining tools represent real value to companies in the business of financial information.


On Aug 10 12:03 PM Ian Cassel wrote:

> Miles: Great writeup first of all. What are your thoughts on XBRL
> revenue increases vs subscription losses. It seems the company will
> be plagued by this through year end at least ie subscription losses
> drowning out XBRL successes. I wonder when the inflection point
> will be when the tide reverses ?
>
> A very interesting company. I've been watching it for some time.
> I'm also waiting to see what terms they get for the obvious financing
> they will need.

EDGAR Online: More than Just a 'Financial iPod'

I wonder if you have used I-Metrix Pro. As a subscriber, I found their comparative analytics, ratio analyses, and fundamental data to be exactly right. Also, I receive fundamental XBRL data feeds from them, and I have run extensive checks on their data.

Your statement "They only have Fundamental database in XBRL" amuses me. The company built that database at a cost of around $20-40 million and designed analytics programs that run on that database. I agree, of course, they cannot cover every area in the world of data. They are focused on this unique XBRL area---where they helped to build the taxonomies and established proprietary data-mining ways to capture and use data from the SEC's EDGAR System. Now that the SEC has established the XBRL standard for the US, EDGR's database has taken on new value and relevancy for information providers.

As to non-US XBRL data-sets, they do stream Korean, Japanese, and two exchanges in China. These countries have converted to XBRL. I assume that as other countries convert to XBRL, EDGAR Online will provide even broader international fundamental data-sets.

With 70 million page-views per month and their analytics an add-in to Excel and a module in Thomson Reuters, they seem to be doing a lot right.

Non-fundamental data is not their focus. Their database is for full SEC reports rendered in the SEC's XBRL taxonomy. They have identified and executed products around their fundamental database.

They are expanding the number of analytics programs that they support with their XBRL fundamental data. If you check Google, MSN, Yahoo, Nasdaq, MarketWatch, etc., you will see that the Street's reliance on their fundamental data-sets is pretty extensive. What you don't see is a breakdown of the over 250+ clients (algo, hedge, private) that use their data and which provide over 50% of their revenue.

So far, EDGAR Online is the leader in the conversion of US companies to XBRL data per SEC mandate. We will all learn more about this over the next few years, as competitive data becomes available. As to new areas besides fundamental corporate data, the company has been a strong advocate of using XBRL data in areas like MBS, Mutual Funds, Munis, Events, etc. And now, the data required by SEC is just the Ks, Qs. New filing areas like 4s, 3s, 13s, risks, etc. should open up major new areas where their database can be employed.

Good luck.

p.s. I am long EDGR stock and my company uses EDGR's data-sets in its web app.




On Aug 03 04:05 AM NOTAEOL wrote:

>
> I read with excitement your article on Edgar Online. First and foremost
> as you have stated you are long Edgar Online. I read this as long
> user of EOL. Let me enlighten you on what Edgar Online Cannot Do:
>
>
> 1. They only have Fundamental database in XBRL. As a matter of fact
> even in non XBRL they only have that information and their parsing
> effort probably uses something like Netowl (from html to db) which
> their 10-K states.
> 2. Download their information for BAC, or VZ and you will see they
> cannot even Identify a Income statement properly.
> 3. They cannot and will not go beyond Fundamental tables as they
> lack technology sophistication.
> 4. They claim they can convert in 15 mins -6 hrs. Really? thats too
> slow for many useful apps in the Algo trading world
> 5. They can only do US based companies.
> 6. They could be a big player in the conversion world but lets wait
> for requirement to span all information than just Fundamental tables
> and few years (you dont need a $10K per year conversion and filing
> fee).
>
> Finally, there are up and coming products that will blow EOL out
> of water. Who they are you find out as time goes but they are there.
>
>
> NOTAEOL

Is EDGAR Online Just a 'Financial iPod' or a Much Larger Play?

Update:

After the market closed today, August 4, 2009, EDGAR Online announced the hiring of Jordan, Edmiston Group to explore identifying strategic partners so EDGR may expand their opportunities in the recently mandated XBRL SEC financial reporting standard. The announcement (also see: tinyurl.com/lf8cmv) was made in their conference call after EDGR reported 09Q2 earnings.

In the June quarter EDGAR Online reported XBRL Filings revenue of $768,000 or 16.8% of total revenue for the period. (See tinyurl.com/mfbwxt) Approximately 500 companies are now required to file in XBRL with the balance of over 11,000 companies phased in over the next two years. RR Donnelley (RRD) is their XBRL partner.

Adjusted EBITDA for the period was $553,000 vs. $210,000 for year-over-year period.

EDGAR Online: More than Just a 'Financial iPod'

Fortunately, with EDGR we know that the database costs and analytics costs are behind them. Shareholders have absorbed years and years (between 2002 - 2007) of conversion costs to convert the SEC pdf files to usable XBRL interactive data files---massive costs. And they absorbed large additional costs to build the I-Metrix suite of XBRL-powered analytics. Now, database costs are stable. All they need is top-line growth. Now, with their 75% gross margin, revenue will plummet to the bottom line.

How they stayed the course in building the XBRL database in face of no government XBRL standardization is beyond me. As you know, it was a multi-year commitment and a real "bet-the-ranch" move based on their advanced XBRL data handling capabilities. I've heard that the database has cost between $30-40 million. Now at $40 mil cap and $30 mil NOLs, the stock seems to be priced way to cheap vs. potential XBRL markets.

Now with the SEC mandate, EDGR's XBRL unique and proprietary XBRL database positions the company as having "the only hardware store in a gold rush."


On Jul 22 09:15 AM User 458196 wrote:

> I will get excited about EDGR as a stock investment when I see several
> quarters of GAAP profitibility and positive cash flow, something
> this company has never experienced.

EDGAR Online: More than Just a 'Financial iPod'

If XBRL becomes a household name and XBRL conversion merely a "checkbox", that would be the best scenario for EDGAR Online. The reason is that their I-Metrix suite of XBRL products all hinge on the success of the XBRL standard. For example, their high-end I-Metrix Pro web-based subscription product now sells for $4,800 per year. Just a thousand subscriptions equals 25% of their current annual sales. Professional analysts tend to use programs which meet US accounting standards.

I'd rather not debate what happens in year 3 and 4 since it is not only speculative but also I suspect that other large US XBRL markets will have emerged by then. However, the 3rd year will be the first filing year for about 10,000 US companies. So, it is my guess that those new companies will have the usual first-year issues for compliance; and they will most likely outsource that conversion. Also, I used 20% share based on RR Donnelley's market share for printing. EDGAR Online may actually have a larger share than 20%. The Donnelley partnership, I think, is for U.S. markets only. For instance, EDGAR Online has already signed up Canadian News Wire as its partner in Canada to address the XBRL filings market there---as it develops. (It is hard to guess pricing 3 years out, but it does seem that the complexity and compliance issues of SEC XBRL filing will tend to justify the Company's price levels.)

In the long run, the current large SEC XBRL filings business will be dwarfed by other areas of conversion and the broadening out of business intelligence, auditing, and analytic products.

I take my hat off to the Company for building this massive XBRL database and product suite over the last 5-7 years, a time when their cash flow was tight and there was NO assurance XBRL would emerge as the SEC standard. It was a bold move to singlehandedly create a database of 12,000 companies, 6,000+ data-elements deep, and 10 years of financial history long---plus products that employ the XBRL data. They have developed, as Moyer stated, a set of 1.5 - 2.0 million rules that control the automated XBRL conversion process. Their independence, automation, consistency, and around 7 years of actual conversion are key competitive factors.

You might like to take a look at one of their patent applications to get a sense of the issues here. For instance, how will EDGAR Online's early commitment to XBRL and their related patent applications affect their future business? Conceivably, they may have certain intellectual property rights related to the use of XBRL by other XBRL service companies. Below is US Patent application 20070192265: www.freshpatents.com/S...
They also have a basic application on Viewing as well as one for the Microsoft Excel I-Metrix add-in.

Note: EDGAR Online does single-line its XBRL filings revenue, so we may get a sense of pricing over time.

Miles





On Jul 21 04:44 AM User 212321 wrote:

> Miles,
>
> You said "Using 20% share, $15,000 price, and assuming the number
> of SEC-required filers to be 12,000, that would suggest an annual,
> recurring XBRL filings business of about $36 million per year---phased
> in between now and 2011. EDGAR Online had TTM revenue for March 2009
> of $18.7 million."
>
> Experience is showing that first-time creation of XBRL data is in
> that range, but that subsequent periods the effort plumets. I expect
> the first two annuals from companies will be something in that range
> (two years because in the second year there will need to be detailed
> tagging at the footnote level).
>
> In outyears however, I would expect the XBRL to almost be a check-box
> selected output format, with the corresponding filing costs also
> plummeting.
>
> Growth will come from expanding the range of reporting in XBRL, not
> from extrapolating year-1 filing costs.
>
> Cheers,
> Dan

Nasdaq's Portal Platform To Launch This Summer

Tom-
What's the status of Nasdaq's 144a market anyway? I do see that they updated their price for reference data but don't know the portal's status.

Maybe someone on SA could write a short status report on the Nasdaq 144a Portal Market.

EDGAR Online: XBRL's Only Pure Play

The SEC's XBRL phased-in conversion schedule is now law. Moreover, with the government now calling for greater transparency in financial reporting, further applications of XBRL will be introduced---e.g., EMMA and Mortgage-Backeds.

EDGAR Online has recurring revenue of around 90% with 80%+ gross margin. Companies like Google, Yahoo, MSN, MarketWatch, S&P, Factset, Nasdaq, etc. purchase EDGR's XBRL data-sets to support their services. EDGR is the "Intel Inside" for the web-based financial analytics markets.

The XBRL conversion business is new incremental sales potential for EDGR. However, their XBRL database on over 12,000 companies for over 10 years is unique, proprietary and their major asset. The database allows users to reach into over 6,000 data points of companies' financial reports---which all can be delivered electronically to support in-house or web-based programs. You might like to check their 10-K for data-licensing business description.

Beyond their leading database services, EDGR now has their own I-Metrix advanced analytics programs. And, Thomson-Reuters offers their I-Metrix (in its "Checkpoint" product) to reach the CPA and legal market.

I hope you're wrong about any companies' making a pass at EDGR. The XBRL markets are just now only opening up, and they have the "only hardware store in a gold rush."












On Apr 16 03:42 PM contact user wrote:

> Interesting take ... While I agree with your assessment of the firm's
> upside, they do not have the balance sheet to take full advantage
> of their market opportunity and first-mover advantage. My guess
> is that IF xbrl is fully implemented under current timelines (a BIG
> if right now given all that SEC has on its plate), EDGR gets acquired
> at a good premium over where the stock is trading today. If xbrl
> is slowrolled, they are going to have to sell parts or all of the
> company at a distressed valuation.

Patience Wears Thin on Lazare Kaplan

correction: should be: "Diamonds aren't even a girl's best friend anymore!"

Patience Wears Thin on Lazare Kaplan

Diamonds are even a girl's best friend anymore!

Just saw the 10-Q on LKI for the 2009 Feb. quarter. Interesting to see that on April 13th they authorized a buyback of up to 2.0 million shares (They have 8.2 mil outstanding.)

LKI $1.20
(Long the stock.)

Patience Wears Thin on Lazare Kaplan

Diamonds are even a girl's best friend anymore!

Just saw the 10-Q on LKI for the 2009 Feb. quarter. Interesting to see that on April 13th they authorized a buyback of up to 2.0 million shares (They have 8.2 mil outstanding.)

LKI $1.20
(Long the stock.)

Goldman Releases Earnings Early; Has World Gone Crazy?

Maybe they had to provide the March 31st data to comply with SEC registration reqs re stock sale...


On Apr 14 06:11 AM Moon Kil Woong wrote:

> That is downright odd. Thanks for the highlighting strange disclosures
> since analysts and the press so often avoid asking any materially
> significant questions besides saying, "Thanks for calling on me,
> please give me your magic target forecast for next quarter's earnings
> so I can keep my job."