This summary is based on the first quarter fiscal 2007 earnings call conducted by Interactive Data Corp. (IDC) on 26th April, 2007.
President and Chief Executive Officer: Stuart Clark
Executive Vice President, Chief Financial Officer, and Treasurer: Andrew Hajducky
Vice President and General Counsel: Andrea Loew
Chief Operating Officer: John King
Key Investor Isues
- Net income increased 29.2% from a year earlier.
- Cash dividend of 12.50 cents was paid per common share, a 46% dividend yield.
- Revenue was $162.5 million, up 13.3% from the first quarter of 2006
- Organic revenue growth was 8.9%, the highest rate of organic growth in the past two years primarily due to the strong performances in reference data and Real-Time Services business
First Quarter 2007 Highlights
- The organic revenue growth combined with proven underlying spending helped drive higher profit margins within the core businesses and produce non-GAAP operating profit growth of 16.2%.
- The market conditions in the quarter were consistent with what the company experienced during the second half of 2006.
- There were increases in spending by institutional customers for financial market value for services. These were influenced by continuing impact to those customers on their ongoing cost containment initiatives.
Awareness of Interactive Data continues to grow, following the kickoff of our global branding initiative earlier this year. Overall renewal rights for the businesses in institutional services segment remained at approximately 95% during the first quarter of 2007.
Institutional services segment surpassed $100 million in quarterly revenue milestone on 11.4% growth from a year ago, or 8.7% before the effects of foreign exchange.
- The pricing on reference data business grew 8.8% in the North America during the quarter.
- In Europe, this business reported revenue growth 19.4% from a year ago or 7.2% before the impacted foreign exchange.
- In the Asia-Pacific region there was a 26.3% increase in revenue from a year ago or 19.8% before the impact of foreign exchange. Much of the growth came from the sales of fixed income evaluated pricing and reference data services to existing customers as well as to new customers.
The company continues to invest resources in broadening its market coverage and enhancing data collection and evaluation processes, as well as the delivery platform.
- The company has expanded its coverage of evaluation for European asset-backed securities and mortgage-backed securities to approximately 3000 tranches.
- The company later plans to add coverage of interest rate swaps. It will also protect the proprietary processes used in its evaluation.
In the first quarter of 2007, the company was awarded a patent for the fair value pricing of its financial asset.
This forms a foundation for the company’s fair value information service. The company made important progress in the first quarter to expand its reference to business and to enhance its capabilities and offerings in this area.
In addition to working directly with customers to address their reference data needs, the company also is winning business with redistributors and software companies who require a trusted resource of high quality reference data.,
The company is acquiring the assets comprising Xcitek’s market data businesses for $25.3 million in cash.
Xcitek’s market data business provides a broad range of North American corporate actions data, including reorganization information, as well as valuable cost basis and class action data through a variety of delivery platform including electronic datafeed services, proprietary web-based offerings and an extensive network of redistributors.
Xcitek’s market data business is a natural bolt-on acquisition for the company’s pricing and reference data business that will serve to enhance our support of departmental and enterprise-wide financial applications and help us continue automating key data collection and delivery processes.
With Xcitek’s capabilities and content to the company will be able to assist institutions who are increasingly seeking to centralized data administration and utilize reference data content to support their risk management and compliance applications. The Xcitek transaction to be completed during the second quarter of 2007.
The company’s real-time services business reported first quarter 2007 revenue of $32.4 million, a 21.5% increase over the same period last year, or 14.7% excluding the impact of foreign exchange.
- Real-time services business consists of two components, real-time datafeeds business and interactive data managed solutions business.
- The growth reflects healthy expansion within these units, even factoring in the deferral of $1.6 million of revenue in the first quarter of 2006 for our managed solutions business.
- In the managed solutions business, the company added more than 20 new customers in North America during the past year, bringing its customer total to more than 40 in this region.
- The real-time business generated first quarter 2007 organic revenue growth of over 7%, excluding the effects of foreign exchange and inter-company elimination related to providing real-time services to quote.com prior to acquiring this business.
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