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capture and business process management (BPM) vendor Kofax has reversed the improving picture in Q412 (see Better Q4 for Kofax), with a slump in software licence sales and professional services in Q113. Headline revenue for the three months to 30 September, fell 0.8% in organic constant currency (OCC) to $60.1m, meanwhile the EBITDA margin fell slightly to 10.3% vs. 10.7% last time. QoQ Kofax's revenue was down 20% (OCC).
Software licences and professional services were the culprits – down 10% (OCC) to $22.1m and 6.5% (OCC) to $8.1m respectively. Only maintenance revenue kept things more buoyant with growth of 8.7% (OCC). Unfortunately maintenance growth is more an indicator of past performance, while software licence sales are a much better indicator of future performance.
Seasonality was blamed for both software and professional services declines. While that certainly holds true for software (revenue fell 11% in the same quarter last year), that doesn’t tally with Kofax’s professional services past performance - last year it had a bumper Q1 with 16% growth.
Despite these anomalies, Kofax is sticking with its FY13 guidance for mid to high single digit revenue growth (OCC) and an adjusted EBITDA margin of at least that in FY12 – i.e. above 18.5%.