From an operational perspective, Cyberplex (CYPXF.PK) beat consensus forecasts, extending the Google (GOOG)-Cyberplex trend to seven quarters.

On Tuesday, Cyberplex reported Q3 sales of $28.2 million, a 158% increase over Q3 2008 sales of $11.2 million and a 10% sequential increase over Q2 2009 sales of $25.7 million. Analysts were expecting a sequential decline in sales due to historically weak Q3s related to seasonality in media spending. Seasonality trends were broken for this quarter, and revenue was reported approximately 28% ahead of consensus forecasts. The company reported net income of $0.7 million, or $0.01 EPS for the quarter, which was a 12.5% year-over-year increase from Q3 2008 net income of $0.6 million.

Thursday morning Bridgewater Systems (BDWRF.PK) reported Q3 2009 earnings and subsequently discussed the results and outlook during an analyst call. Analysts are likely to view the results and the business outlook as positive for the stock.

Net income for the quarter was reported at $1.7 million or $0.07 EPS, ahead of consensus forecasts of $0.05 EPS. Revenue was reported at $15.8 million, a 53% increase over prior year Q3 revenue of $10.3 million and ahead of consensus forecasts of $14.6 million for the quarter. Gross Margins contracted sequentially to 64% from Q2 2009 Gross Margins of 75% and from Q3 2008 Gross Margins of 75%. The gross margins contraction is related to the deployment of the Widespan contract and activities related to various trials and deployment preparations associated with various recent contract wins - basically scaling costs. Management expects Gross Margins to continue in the mid-60s range until H2 2010, when it anticipates that Gross Margins will expand to a target of 70% where it is expected to stabilize.

Earlier this month, Bridgewater Systems (BDWRF.PK) stock peaked at $9.80 per share, more than quadrupling the share price of $2.17 as it entered 2009. It has come off those highs since and it looks like it is now trading in the mid $8 range ahead of its Q3 financial report, which is scheduled to be released at 7:00AM on November 5, 2009.

After a remarkable run since the beginning of the year, investors may wonder how much upside remains in the stock. As a reminder, performance for H1 2009 was as follows:

As mobile data usage continues to grow exponentially around the world, Bridgewater Systems' suite of policy and data management solutions should continue to become more popular among carriers as they attempt to meet the increasing demand from consumers and businesses.

On Friday, Bridgewater Systems announced a contract with Verizon (VZ.NYSE) for its Widespan product estimated to be worth over $18 million. Most of the revenue should be recognized by H2 2010, but with no impact on 2009 revenue. This should have meaningful impact on FY 2010 revenue and earnings forecasts. Forecasted revenue could increase between 12% and 18% above consensus depending upon the recognition of revenue, while EPS could be ahead of 2010 forecasts by between 80% and 100%. Expect analysts to increase targets substantially, which should continue to impact positively the share price momentum.

Cyberplex (CX.TO, CYPXF.PK) reports Q2 earnings on August 6, 2009 after close of the market. In conjunction with the release, Cyberplex will host a conference call on Thursday, August 6, 2009 at 4:30 p.m. EST to discuss the financial results.

Call details:

Last week Microsoft (MSFT) reported its first year over year decline in revenues... ever. (Call Transcript) Although the performance could be blamed on the worldwide recession, many of its peers and competitors have reported both growth in revenue and earnings despite the recession. A decade of being second or third best (or worse) in many new innovations may finally be catching up to MSFT.

For the past decade, Microsoft has attempted to use its massive cash reserves to exploit the value of technical innovation. However, it has demonstrated a curious knack for being slow to the punch, or picking the wrong horse, as new concepts have captured the imagination of the market. The company has been responding to the market instead of leading the market, often finding itself to be a distant counterpoint to the dominant player, which costs money. Here are some examples:

Some interesting numbers for technology investors interested in companies that participate in the connectivity ecosystem. Worldwide recession notwithstanding, there are some areas of significant growth which should bode well for companies in several sectors. The NASDAQ has outperformed the Dow index significantly this year, and some of the statistics below may reveal some of the reasons why.

During earnings season Apple (AAPL), IBM, Nokia (NOK), Intel (INTC), Google (GOOG) all beat consensus estimates and all but GOOG (which does not provide guidance) have indicated positive outlooks entering H2 2009. In fact, IBM has increased its guidance for the last half of the year. Investors should expect positive outlooks for both Cisco (CSCO) and Research in Motion (RIMM) when they report next, although positive outlook may have been priced into these stocks.

For 5 of the past 6 quarters, whenever Google (GOOG) beat forecasts, so did Cyberplex (CYPXF.PK). The common thread between Google and Cyberplex is that they both deliver to marketing managers measureability and performance-based ad budgets.

It is well published that GOOG beat analyst estimates for both sales and earnings for the third quarter in a row. As stated in earlier posts, there are three trends that continue to propel better than expected performance at Google:

This is a sobering analysis of current U.S. employment metrics. As per this earlier post, investors should not gain any solid conviction from these charts as to whether the worst is over, or if there is more pain and agony still to come for the American economy. Almost every positive chart is offset by a negative one, and vice versa. This helps support the potential for more short-term volatility. Crossroads.

Right now feels like those few seconds of silent suspense before something really big happens. And no one knows which way it's going to go. Whichever way it goes, the charts seem to indicate that the downside looks steep and fast, and the upside looks slow. The U.S. Treasury is likely looking at more precise data, and it does not want to risk the potentially harrowing downside. This may be why it has hinted that it is willing to step in to provide even more stimulus later this year if it needs to, despite all of the green shoots sprouting up.

As Q2 earnings season begins, the market appears to be at a crossroads. A lot of portfolio managers are humming along to the old Clash refrain "Should I Stay or Should I Go Now?" Interestingly, the song has a different meaning depending on how much cash is in the mix.

Based on a sampling of portfolio managers, it appears as though most funds are still weighted towards cash. Recent declines in the market suggest that many who dipped into the market since March have taken profits from the recent run up, and have shored up cash positions again leading into the 4th quarter.

Yesterday, Redknee (RKNEF.PK) announced its second major contract in two days, and the third in less than a month. See the post from June 6th.

The trend for Redknee continues to be international with the June contract located in the Middle East, Monday's multi-million dollar contract with a Tier1 operator in Europe, and then Tuesday's announced contract in Pacific-Asia. Investors should expect this trend to continue as operators in these regions look for mobile infrastructure and middleware solutions to support significant growing demand for mobile data services.

Friday, Bridgewater Systems (BDWRF.PK) reported Q1 2009 earnings of $2.9 million or $0.12 EPS. Earnings reported for Q1 were nearly 5% higher than full-year 2008. Sales for Q1 2009 were reported at 14.0 million, a 64% increase over Q1 2008. Earnings appear to have soundly beat analyst expectations, and investors should be pleased.

In its outlook, the Company provided forward guidance for sales of between $54.0 million and $58.0 million with earnings of between $7.0 million and $9.0 million, or $0.29 EPS and $0.36 EPS respectively. Guidance implies earnings growth of between 159% and 233% from FY2008 earnings of $2.8 million.

Earlier this week Research in Motion (RIMM) launched its proprietary mobile applications store, branded App World, presumably as a direct competitive response to the success of Apple's (AAPL) iPhone application store. RIM enters an emerging ecosystem that is both chaotic and complex and already worth approximately US$60 billion worldwide according to IDC projections.

By the end of this year, Nokia (NOK), Google (GOOG), and Microsoft (MSFT) are all expected to launch mobile app stores. Some estimate that by 2013, the market size could more than quadruple from where it is now. Today, even with the introduction of iPhone applications, 99% of downloads are still games, ringtones, and music. More interestingly, only about 20% of subscribers have ever downloaded content or applications, although market research suggests that intentions are strong towards downloadable apps. Clearly, there is huge potential, but there are a lot of intricate dynamics at play as the market emerges.

There has been a spate of recent announcements regarding the disappearance of traditional print newspapers and here is the latest from Hearst. The market is not surprised, and there is little sentimentality towards the demise of the industry.

According to the Newspaper Association of America [NAA], print advertising revenue has been in decline since 2005. The category has been in free fall since the end of 2007 with Market Research reporting a 16.4% decline in revenues for 2008. Since peaking at $47.4B during 2005, U.S. newspaper advertising expenditures have declined by 67% over a three year period to $28.4B.

Yesterday the market reacted positively to Descartes Systems Group (DSGX) results for Fiscal 2009 Fourth Quarter and Year End Financials. Despite challenging worldwide markets and currency fluctuations, which were reflected in top-line sales performance, the Company had a record quarter for EBITDA, reporting $4.5 million and a 29% EBITDA margin on Q4 sales, up from 24% reported for Q4 FY2008. Cashflow and net income from operations was also higher than expected. Descartes is demonstrating impressive leverage from its SaaS business model.

Cash and cash equivalent balances increased to $57.6 million for FY2009. The Company generated $18.7 million in cash from operations for the year, while also reporting $16.7 million in EBITDA. The TTM EV / EBITDA multiple for Descartes calculates to 5.4x based on Tuesday's closing share price. If the company sustains its EBITDA growth trajectory of 21% for FY2010, the FYE EV / EBITDA multiple would be implied at 4.5x.

Every year around this time and for nearly a decade, a debate opens regarding the feasibility and awesome potential of mobile advertising, and the speculation continues this year unabated. I am "from Missouri" on this one.

Junior exchanges everywhere are littered with the tiny little corpses of mobile advertising start-ups that barely made it out of the incubators. Even the incubators and VCs that are spawning these nascient Googles are backing up with the sick, the dying, and the "redefining". Public entities lucky enough to have relatively strong balance sheets heading into the recession are reinventing, or more likely, getting acquired as fast as Management teams can find a willing buyer.

A Reuters article over the weekend suggests that Nokia (NOK) is joining the rush towards mobile software sales. This is old news.

More interesting is that, in the article, Strategy Analytics forecasts the value of the mobile content market -- including downloadable games, ringtones, wallpapers, video, mobile TV, text alerts and mobile web browsing -- to grow 18 percent to $67 billion this year. Last week, I was writing a profile on the sector for a good friend of mine, and I was estimating that the mobile content market would range in size between $50 billion and $70 billion. I am more pessimistic than Strategy Analytics on growth forecasts for this year.

The Dow tested the November lows again last week, and held, in the face of bad economic news associated with job losses. Earnings continued to be a mixed bag with the tech sector performing a bit better than expected, consumers performing a bit worse than expected, and financials performing as badly as expected.

With the Obama stimulus package getting closer to reality, along with various other government stimulus packages enacted worldwide, there is a sense within the market that the worst is upon us now. Because the Dow often leads the economy out of recessions by a couple of quarters, the current resolve of traders may translate into a recovery in the equity markets over the coming months. Historians may look back at the first week of February 2009 as a possible tipping point in sentiment.

Thursday, Descartes Systems Group (DSGX) announced that it has acquired privately held Oceanwide Inc. for $10.4 million in cash. Oceanwide provides compliance Software-as-a-Service (SaaS) to customs brokers and sports a 90% recurring revenue stream. The acquisition extends DSG's logistics ecosystem to include customs brokers, and probably adds annualized EBITDA of between $1.2 million to $1.5 million, and initial sales of between $5.0 and $6.0 million. This is without synergies - which are likely.

With close to $60 million in the bank, and an annualized cashflow of between $14 million and $16 million (depending on how bad the recession is), this could be considered a quintessential DSG tuck-under that meets the following criteria: