It's been an awful year for Saba's
Saba develops so-called "human capital management" software, which helps to improve employee productivity and education. Its roster of marquee customers includes Dell
On Thursday, Saba reported that its Q4 revenues increased 11% to $25.6 million and that it suffered a net loss of $3.1 million, or $0.11 per share. The company added 27 new customers and struck key strategic alliances, such as with Hitachi and HCL Technologies, an Indian IT-services firm.
Also during the quarter, license revenues fell 18% to $5 million. That dip was inevitable, being caused by Saba's move to a subscription-based revenue model, which also requires re-educating the sales force and building new systems to manage things. The process is far from easy, as seen with other companies, such as Concur Technologies
At current levels, Saba's shares are trading at 1.4 times revenues, and that's fairly reasonable for an enterprise software company. But with its focus on changing its business model and the volatility in its financials, it's probably still advisable for Foolish investors to stay on the sidelines for now.