Lawson develops software to help companies manage inventory, payroll, HR, and other tasks. It's an intensely competitive space that includes biggies like Oracle
Fiscal third-quarter revenue surged 118% to $191.2 million. However, roughly 84% of that owes to Lawson's acquisition of Intentia. Because of smaller deal sizes and longer sales cycles, Lawson has posted weaker license revenues over the past couple of quarters. This is always troubling, because these revenues lead to ongoing service and maintenance fees.
Yet things looked better in the third quarter, as Lawson snagged five deals that each exceeded $1 million. Over the past year, quarterly license revenues also spiked 75.1% to $26.4 million.
Lawson has expanded its reseller arrangement with IBM
Lawson has also restructured its global operations, establishing facilities in the Philippines and cutting 350 jobs companywide. These activities cost the company a $11.5 million charge in the third quarter; Lawson registered a net loss of $9.8 million, or $0.05 per share. Compare that with net income of $10 million, or $0.09 per share, in the year-ago period.
Despite the run-up in the stock, Lawson still trades at a reasonable valuation of two times revenues. With the Intentia deal integrated and cost savings kicking in, its business -- and its long-beleaguered stock price -- will likely gain greater momentum.