New from PTN - Earnings Highlights: Amazon Web Services delivers big again; Qlik down 13% after hours on "revenue slippage"; Updated for Unisys & Quality Systems

Tom Paine

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Amazon Web Services, a part of Amazon (NASDAQ: AMZN) and a big part of its earnings, once again (now that its broken out) produced extraodinary results for the 3rd quarter, as revenue grew 78% year over year and profit margins reached 25%. I've already written about AWS' successes.

The AWS story reminds me, on a larger scale, of First Round Capital's Josh Kopelman's "market shrinkage theory" (nothing to do with Seinfeld). That's when you use disruptive technology (Kopelman uses Microsoft's Encarta on CD-ROM as an example) to metaphorically blow up a market and shrink it through lower pricing, hopefully growing volume through the reduced pricing and coming out as market leader in a smaller market. (Those are my words, not his.)

Whst AWS is doing to the computer industry is remarkable. I assume its momentum will slow somewhat, or else there are going to be many computer sales people out of work.




Locally based QLIK Technologies reported third quarter total revenue of $141.2 million, an increases of 8% year-over-year and 20% in constant currency (still trying to get my head around that.) The Radnor-based BI vendor produced a GAAP net loss of $16.4 million, up slightly from the year before.

For the full year, it expects revenue of between $613 and $618 million, a 10% to 11% increase over last year, and non-GAAP income from operations of $50 to $53 million. Cash and equivalents were $321.2 million at the end of the quarter.

Barron's Tech Trader Daily reported that Qlik fell 13% after hours. CEO Lars Björk said on the earnings call:

"We continue to experience healthy selling trends as strong customer appreciation for our product into September […] We did experience some slippage of larger desktop particularly in Asia-Pacific […] While we are disappointed to finish at the lower-end of our revenue guidance range, our profit performance in the quarter were strong."

QLIK shares fell another 11% on Friday.



Old-line enterprise systems provider Unisys (perhaps the oldest) saw its revenue drop 16% for the quarter, but its stock went up 15% the next day.

"There was nothing radically new," said Wm Smith & Co. analyst Ned Davis, as quoted by the website CRN about a report which preceded a late-afternoon conference call with analysts. "The company seems to be clearly on track, and that is encouraging."

I'm not quite certain where the optimism originated from, but CEO Peter Altabef seemed to convey a better grasp of Unisys' cash flow needs and indicated that the company would stop competing for some very low margin services business it had gone for in the past.




Quality Systems (NASDAQ:QSII), parent of Horsham-based NextGen Healthcare (once a high-growth star), stock was up nearly 8% at midday Friday after reaching a two-month high of 16 earlier in the day.

Quality Systems beat earnings estimates by 50%, though revenue was up only 4%. Quality also announce the borrd's decision to sell NextGen's Hospital Solutions Division. NextGen is big in mostly outpatient ambulatory care, but built
and acquired pieces of a Hospital division that many said it needed to compete for larger contracts. But it didn't take off, and thus the sale to Virginia-based QuadraMed Affinity Corp. The price wasn't disclosed.

Revenues for the fiscal 2016 second quarter reached $125.4 million, and net income was $8.3 million. Most of Quality's revenue comes from NextGen.

NextGen Healthcare (Horsham) parent Quality Systems settles with activist investor; Could sale be in the future?

Tom Paine

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Quality Systems, Inc., the Irvine, California-based corporation whose primary business unit is Horsham-based NextGen Healthcare, may be looking for a buyer, according to some reports.

Speculation was heightened by an agreement announced on Wednesday between Quality and activist investor Clinton Group, in which Quality is expected to add three of the investor's nominees to its board, two of whom will also serve on a transaction committee which will evaluate Quality Systems' strategy and direction.

Quality Systems, which provides electronic health record (EHR) systems and related services, was riding the wave of "meaningful use" funding authorized by the Federal stimulus program to incentivize medical practices to adopt electronic record keeping. The stock hit $48.50 in September 2011, but closed at $22.01 (NASDAQ: QSII ) on Friday as growth has lagged behind several other EHR providers, giving it a current market value of $1.3 billion.

Qaulity reported revenue of $460.2 million for its fiscal year ending March 31, 2013, an increase of 7% over the prior year. Net income was $42.7 million, a decrease of 44% from the prior year. Revenue generated by NextGen's operating units account for well over 90% of Quality's total revenue.

An analyst quoted in an Med City News article names Siemens, whose Malvern-based Healthcare IT unit already partners with NextGen in certain areas, as one possible buyer should it be sold.

Patrick B.Cline co-founded Clinitec, based in Horsham, in 1994; it was acquired by Quality Systems two years later and became the foundation of NextGen Healthcare. Cline retired from NextGen and Quality at the end of 2011, and is currently CEO of Irving, Texas-based Lightbeam Health Solutions.

Daily Links 8/24/2012: NextGen Healthcare founder, former Quality Systems President Cline elected to Qaulity Systems board

An entrepreneurial spirit grows in Phila. (Philadelphia Inquirer)

Quality Systems, Inc. Announces Results of Annual Shareholders Meeting (Business Wire)
Patrick B. Cline, co-founder of Clinitec (now NextGen Healthcare) and former President of Quality Systems, joins Quality's board as member of dissident shareholder Ahmed Hussein's slate, after last week's proxy vote. This follows the just announced departure of NextGen President Scott Decker. NextGen Healthcare, based in Horsham, is a unit of Quality Systems and a provider of Electronic Health Records (EHRs) and systems.

Salesforce.com: 5 nagging questions ahead (ZDNet Blogs)

The Dreamforce party dampener (Dennis Howlett/ZDNet)

Salesforce.com Future Includes a Marketing Cloud, Deeper Workday Links and More HTML5 (PC World)



SAP Co-CEO: European Crisis, Germany & Acquisitions/Interview with Bill McDermott (Video: CNBC)


No Wi-Fi or backhaul restrictions in FCC's approval of Verizon's cable deals (FierceCable)

Comcast scores stay of FCC order in Tennis Channel fight (LA Times: Company Town)
This seemingly unending volley just keeps on going back and forth.

Penn amps up role in Coursera online-education effort (Philadelphia Inquirer)



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Daily Links 8/23/2012: Quality Systems Elects Two Directors Nominated by Dissident Board Member

Quality Systems Elects Two Directors Nominated by Dissident Board Member (Dow Jones Newswires via Fox Business)

Google's audacious bet on fiber -- and why it could work (Fortune Tech)

Verizon-Cable Spectrum Deal Said to Get Unanimous FCC Vote (Bloomberg)

Verizon Wireless's Cable Cold Zones (Light Reading Cable)

Appeal could delay resolution of class action against Comcast (Philadelphia Inquirer)

Virginia Beach spokesman: Comcast guaranteed pro team (Sacramento Bee)


Comcast Adds Live Disney Channels to Xfinity.com/tv
Provides live online streams of Disney Channel, Disney Junior and Disney XD to authenticated subs (Broadcasting & Cable)

Salesforce.com Reports Q2 Revenues Up 34% With EPS Of 42 Cents (TechCrunch)

Salesforce.com Profit Forecast Misses Estimate as Rivals Move In (Bloomberg)

Ten ways Workday looks like the Apple for enterprise (Dennis Howlett/ZDNet Blogs)

Analysis: Cisco, EMC partnership turning into rivalry (Reuters)

CEO Vs. CIO: Big Data Security Battle
Many execs don't see eye-to-eye on new cloud computing environments now, but who has the advantage in the long term? (Information Week)
Interview with Ryan Caplan, president and CEO of Wayne-based Coldlight Solutions.

Small-Business Finance Platform On Deck Raises $100 Million (All Things Digital)
First Round Capital was an early backer of On Deck, with SAP Ventures getting in later.



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Daily Links 7/30/2012: Quality Systems (NextGen Healthcare parent) director lashes out at company

LeadiD Secures $1.7 Million in Funding Led By Genacast Ventures (PR Web)

Comcast to charge $10 for 50 GB to subscribers who bust data cap (FierceCable)
Starting in Nashville.

Twitter Suspended a Critic of NBC For Sharing NBC Executive's Email (The Atlantic Wire)

Earnings Preview: Comcast to report 2Q earnings Wednesday (AP via Business Week)

Quality Systems director lashes out at company (MarketWatch)
See my post on Quality Systems from last week.

SAP's Ugly (ByDesign) Baby Gets Prettier (Information Week)

SAP offers free mobile SDK, partner program to push mobile development (SearchSAP)

Unisys and VCE Team to Deliver Secure, Easily Managed Cloud Infrastructure
Unisys Secure Private Cloud Solution available on VCE(TM) Vblock(TM) Systems (PR Newswire via MarketWatch)

Oracle Buys Xsigo To Boost Cloud Prowess (Information Week)

Lokadot Announces Philadelphia Arts and Cultural Organizations Embracing Its Location-based Audio Platform for Smartphones (PR Web)

Club Tech's festival brings young digital minds to Philadelphia (Philadelphia Daily News)



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Quality Systems, QlikTech earnings reports

What are probably the two hottest publicly traded tech companies with a major presence in the Philadelphia area announced quarterly results yesterday.

Quality Systems, Inc. is not actually based here, but in Irvine, CA, though virtually all of its revenue generating business comes out of its Horsham-based NextGen Healthcare unit. NextGen provides electronic health record (EHR) systems to health practices and hospitals, though it has historically gotten most of its business from smaller practices. It has benefitted from the up to $19 billion in subsidies offered through the HITECH Act (part of the stimulus package) that go to physicians who convert to electronic records and achieve what the government defines as "Meaningful Use".

In its Q1 2012 results reported yesterday, Quality Systems announced its first $100 million quarter, as revenue grew 21% and net income increased 57%, beating estimates. The company also announced that its Board had approved a two-for-one stock split. Quality Systems is now trading at $89.30, giving it a market value of $2.6 billion.

The other significant announcement yesterday is that Quality Systems' President (and former NextGen President), Patrick B. Cline, is retiring at the end of the year. Cline, who is a fairly young guy, said during NextGen's conference call that his only plans for now were to spend more time with his family, although he might consider taking on something else in the future. Cline co-founded Clinitec, based in Horsham, in 1994; it was acquired by Quality Systems two years later and became the foundation of NextGen Healthcare. Cline is widely respected in the industry. No successor has been named.

QlikTech, the Radnor-based in-memory Business Intelligence vendor that did its IPO a year ago, announced that revenue grew 45% in its second quarter to $74 million. The company posted a small GAAP loss (and a tiny non-GAAP profit) as it continued to push the accelerator down to achieve growth. Headcount is now at 967, up 49% from a year ago, of which over 100 are based in Radnor, a company spokeperson says. (QlikTech was started in Sweeden before moving its headquarters here).

QlikTech now has 21,000 customers, up from 15,000 a year ago, and is seeing more deals in excess of $100,000, from both new and existing customers. As it moves more into the core of the enterprise, QlikTech has needed to enhance its higher level sales resources. It announced yesterday that it had named Joe DiBartolomeo as President of the Americas. DiBartolomeo was a long-time Oracle exec who most recently was heading a unit at Dun & Bradstreet.

QlikTech raised its revenue guidance for 2011; it now expects revenue in excess of $300 million. However, QlikTech also raised its full year operating expense outlook. While it is aggressively spending and expanding to go after the large market opportunity it sees, there are certainly some analysts who have concerns about the expense growth rate and think that maybe a $300 million software company ought to be showing a little more profit.

QlikTech is now trading at over $30, up about 5% on the day, and its market value is $2.45 billion.



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Quality Systems and its Horsham-based NextGen Healthcare continue rapid growth; NextGen reports first payment to client for "Meaningful Use"

Quality Systems, whose business consists primarily of NextGen Healthcare of Horsham, reported its earnings last week. For its 4th quarter, net income was up 42% on revenue growth of 24%. For the full 2011 fiscal year, revenue reached $353.4 million, up 21%, and net income was $61.6 million, an increase of 27%.


Quality Systems' market value is now $2.5 billion; its shares are up to $86 from $56 a year ago.


NextGen Healthcare, whose electronic health record (EHR) systems are targeted primarily towards smaller medical practices, is benefitting from the Obama Administration's HITECH Act of 2009, which offers significant subsidies to physicians who convert to EHRs and achieve the government criteria for "meaningful use". NextGen reported last week that one of its clients just became one of the first providers to receive payment for demonstrating meaningful use.


NextGen Healthcare says it has more than 1200 employees.



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