Irishman’s tech firm reports US$25.4m sales


3 Nov 2005

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A software firm started by an Irishman when he was 22 with a £2,000 sterling bank loan has this morning reported revenues of US$25.4m for the third quarter, a 76pc increase on the previous year. The company reported gross profits for the quarter of US$23.7m, up 71pc on the year, and a net profit of US$3.6m, up from US$1.1m last year.

The company was established by Irish-born Dr Mike Lynch when he obtained a £2,000 sterling loan to start his first company Neurodynamics. Now a global success story, Autonomy has succeeded in being profitable and cash generative throughout the market downturn. With dual headquarters in San Francisco and Cambridge, the company at one point soared to a value of £8bn sterling and today employs more than 200 people.

The company’s software has been used by some of the world’s biggest corporations and more recently has been used by the US Government in its ‘fight against terrorism’. Up to 200,000 employees across various agencies responsible for homeland security functions in the US will use Autonomy technology to more efficiently analyse, assess and share information from multiple repositories related to suspected terrorist groups.

Cambridge-based and London Stock Exchange-listed Autonomy develops infrastructure technology that has been adopted by enterprises to process information across all internal and external data sources and counts customers such as US federal government agencies, Cisco Systems, the US Library of Commerce, ABN Amro, Forbes, Johnson & Johnson and Banco de Espana.

This morning the company reported a 76pc hike in revenues from US$14.5m for the third quarter last year to US$25.5m in revenues generated in the US, Europe and Asia Pacific.

The company reported gross profits for the quarter of US$23.7m, up 71pc from US$13.8m last year. Gross profits for the nine months ended 30 September were US$60.9m, up 39pc from US$43.9m for the same period last year.

Net profit for the third quarter was US$3.6m, up from US$1.1m last year. The company revealed that it has a cash balance of US$75.5m, an increase of US$1.6m from the prior quarter.

Commenting on the results, Lynch said: “We’ve achieved these results despite Q3 seasonally being our quietest quarter.”

Lynch continued: “The first nine months of 2005 has illustrated the high-operational gearing inherent in our business model, ensuring that operating margins have surged as revenues grow with the consequential beneficial effect on our bottom-line performance. The integration of our Etalk acquisition is now complete and our blended gross margins have returned to normal levels. At the same time the technology integration is now complete with Etalk’s Qfiniti 3.0 ready to ship and overseas expansion planned.

“We have also seen returns from our recent technology investments, such as the availability of our consumer web index and a significant license of our IPTV technology to a major media group. With record results from our core business, successful integration of Etalk and the continued development of exciting opportunities for our consumer technologies, 2005 to date has been an extremely exciting time for Autonomy, and we remain confident in our long-term outlook,” Lynch concluded.

By John Kennedy