Veritas Reaches $2 Billion Goal

The Mountain View, Calif.-based storage management and utility computing software vendor said annual revenue for 2004 was $2.042 billion, just barely over the longterm goal it had set for itself. This represents a 20 percent increase from revenue of $1.7 billion in 2003. The company earned $411 million, or 94 cents per share, in 2004, compared to $347 million, or 80 cents per share last year.

About 62 percent of revenue came from sales to end-users and VARs, 28 percent from sales through two-tier distribution and 10 percent from OEM deals, said Veritas CFO Ed Gillis.

For the fourth quarter, sales rose 14 percent to hit $574 million, up from $502 million in the same quarter last year. Net income fell 32 percent to $129 million, or 30 cents per share, compared with $191 million, or 43 cents per share, in the year-ago quarter.

Gillis said customer anticipation of Backup Exec 10.0, released last week, caused a slowdown in data protection software sales for the fourth quarter.

Veritas had 26 transactions worth $1 million or more, compared to 11 such deals in the previous, third quarter, said Gillis.

About 48 percent of Veritas' quarterly revenue came from the Unix and Linux space, compared to 40 percent from Windows. Services accounted for 42 percent of revenue for the fourth quarter and year, Gillis said.

Total U.S. revenue was up in the fourth quarter by about 2 percent compared to fourth quarter 2003, Gillis said. However, license revenue for the quarter was actually down 13 percent year-over-year, he said.

Gary Bloom, chairman, president, and CEO of Veritas, said Veritas sees no change in the competitive environment from rival EMC and its Legato software offerings. Instead, he cited IBM Tivoli and Computer Associates as his company's primary competitors, and those two, along with Veritas, account for about 90 percent of the data protection software market.

Bloom said Veritas has instituted retention and incentive plans for its sales force, aimed at maintaining momentum as the company moves toward the expected closure of its acquisition by Symantec in the second quarter. He minimized the importance of such plans, however, saying such incentives are normal during the traditionally slow first quarter sales period.

Bloom said revenue for the first quarter is expected to rise 10 percent year-over-year, or $525 million to $545 million, with per-share earnings of 18 cents to 20 cents.