Back in January, I wrote about how I was finally warming up to Callidus Software
Callidus develops software to help manage incentive compensation, quotas, territories, and so on. Its customers include Nokia
Late last week, the company reported its second-quarter results. Revenues surged 50% to $26.5 million and license revenues were up 23% to $7.3 million.
But there was a net loss of $2.8 million, or $0.10 per share, which includes $1.5 million in stock-based compensation charges.
So why the strong top-line growth? Over the past couple of years, Callidus took the necessary steps to develop an on-demand version of its software. Because it is delivered via the Net, there is seamless integration as well as generally lower costs.
Yet Callidus has kept its on-premise version, which is still attractive to major companies that want to maintain control over their data.
Another growth driver: More companies realize that they need better approaches to managing their sales forces. With the tough regulations of Sarbanes-Oxley, it's risky to use a hodgepodge of spreadsheets, for example.
My main concern about Callidus is the persistent lack of profitability. Then again, management says its revenue forecast for Q3 is $25 million to $26.5 million, which would represent a year-over-year increase of 44% to 52%, respectively. So long as the company can keep up this kind of growth, profitability should be a natural.
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