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Mark Gomes
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With over 20 years of professional experience, Mark Gomes has grown to become one of the world's most experienced technology stock analysts. He is also a Masters Track & Field world record holder and U.S. Gold medalist (http://www.fasterthanforty.com/hello-world/). Currently, Mr. Gomes is... More
My company:
PTT Research & Pipeline Data, LLC
My blog:
Poised To Triple
My book:
Faster Than Forty
  • Attunity's Shows Sharp Q3 Profit Improvement 9 comments
    Oct 24, 2013 9:09 AM | about stocks: ATTU

    This is a LIVE draft of my upcoming analysis of ATTU's Q3 results. I will be adding and making changes to it as the conference call and other information unfolds. Also, I'm scheduled to speak with the management team at 11:30AM ET. Overall, I'm impressed, as you will read below...

    Here's my quick take on Attunity's (NASDAQ:ATTU) Q3 press release:

    After digging through the Q3 release and comparing every line to its Q2 release, it's clear that some exciting things happened for ATTU this quarter.

    The company posted a bigger profit than I expected. The direct sales force is clearly not fully ramped yet, but it appears that strong partner revenue drove higher margins and much higher operating income. Operating income was up 1,000% versus Q2. Wow.

    So, ATTU's partner channel KILLED it (bullish). Gross profits vs Q2 = wow. The only weakness I see is direct sales. Revenue LOOKS light, but it really isn't. Partners take their cut BEFORE giving ATTU their share, so the mix of revenue was strong for partners (which is almost 100% profit) and light for direct sales (which is much less profitable, and therefore not as important).

    I should have explained this possibility in yesterday's preview. Mea culpa.

    In other words, EMC, HPQ, IBM, MSFT, ORCL, etc are driving business to ATTU rapidly. This is a VERY good sign and a bullish earnings release. Don't be fooled by the revenue line. All the action happened beneath it.

    I'd rate it a 100, but have to subtract 10 points for the direct sales force. Thus, I give it a 90, which is an A-. Thumbs up.

    UPDATE: The earnings call was quite bullish. My exclusive call with management was even more so. I'm busy with getting the new pick to triple ready to go out (today at 2PM ET!), but will provide details on both calls ASAP. Suffice it to say, I'm a buyer today!

    Stay tuned to PTT Research. Our next pick to triple will be announced there today!

    Disclosure: I am long ATTU.

    Stocks: ATTU
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Comments (9)
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  • Mark Gomes
    , contributor
    Comments (1815) | Send Message
     
    Author’s reply » As a reminder, this will be a LIVE document until I complete it (later today, after the earnings call and my meeting with management).
    24 Oct 2013, 09:22 AM Reply Like
  • New Investor25
    , contributor
    Comments (128) | Send Message
     
    Thank you. I also enjoy PTTresearch and have become a life long member. Thanks again.
    24 Oct 2013, 09:42 AM Reply Like
  • PalawanIslands
    , contributor
    Comments (7) | Send Message
     
    Me too am a life long Member of PTT Research

     

    i got in today attu for 8.99 per share
    24 Oct 2013, 10:59 AM Reply Like
  • 7810991
    , contributor
    Comments (4) | Send Message
     
    Hello mark
    what is the main reason that attu down yesterday and all the week
    after the price 11.22 $
    if the third quarter were good
    25 Oct 2013, 06:50 AM Reply Like
  • New Investor25
    , contributor
    Comments (128) | Send Message
     
    Certainly wasn't any specific event related to the company. Company is thriving. Get used to ups and downs. Wall street is a big casino stocks will always go up and down. TC
    25 Oct 2013, 09:39 AM Reply Like
  • slash32is4
    , contributor
    Comments (117) | Send Message
     
    but if u treat it for what it is... ownership in businesses ur the one counting the cards...
    25 Oct 2013, 12:46 PM Reply Like
  • Mark Gomes
    , contributor
    Comments (1815) | Send Message
     
    Author’s reply » Lot of questions on ATTU. I've been busy explaining the quarter to my paying customers, but provided some commentary here:

     

    http://bit.ly/H7Cr2S
    25 Oct 2013, 06:38 PM Reply Like
  • 7810991
    , contributor
    Comments (4) | Send Message
     
    Mark
    i dont understand your answer to Protect
    If some of your license revenue comes in net of those costs, then license revenue CAN lie.
    This is the case for ATTU. They have partners that sell the product and take out their cut before giving you them the rest (which carries almost zero operating costs).
    is ATTU work for free
    and whay new license revenue and through the first 9 months of 2013 the license revenue is down $2 million compared to 2012 and total revenue is down $1 million
    28 Oct 2013, 01:31 AM Reply Like
  • Mark Gomes
    , contributor
    Comments (1815) | Send Message
     
    Author’s reply » The answer is because the rest of ATTU's revenue comes from direct sales people.

     

    If a 50/50 partner makes a $100,000 sale and a direct sales person makes a $100,000 sale, ATTU will book $150,000 of revenue ($200,00 - the 50% cut taken by the partner before giving ATTU the other 50%). They will also book sales (and other) expenses, mainly from compensating the sales person.

     

    Now, if the partners make TWO $100,000 sales and the direct sales force only makes a $45,000 sale, ATTU will book $145,000 in revenue...a DECREASE from the first example. However, it is clear that more sales took place ($245,000 vs $200,000). Also, the expenses will be much less, because the direct sales person will get less commission (while the partners have already taken their cut).

     

    The second example is much more favorable to ATTU. Of course, it also means that they need to make their direct sales force more productive. However, on the conference call, management told us that this has ALREADY happened and that many direct deals have now closed as a result. So, now both groups (partners and direct sales) are doing well.
    28 Oct 2013, 10:33 AM Reply Like
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