FAST's Third Quarter Results
FAST has announced financial results for the third quarter ended September 30, 2004.
"In the third quarter of 2004, FAST continued to demonstrate its ability to deliver a strong revenue performance with record level enterprise search revenues of $16.5 million," commented Dr. John M. Lervik, FAST's chief executive officer. "In Q3 of this year, we delivered strong growth of 17% over last quarter and 51% over the same quarter last year. We are encouraged that FAST continues to outperform in the Enterprise Search industry in the face of a challenging market. FAST is growing its market share and maintains strong quarter on quarter growth. With our focus on FAST ESP, FAST SDAs and the clear opportunities in the OEM space, FAST is well positioned to create and take additional market share."
Ali I. Riaz, chief financial officer and chief operating officer at FAST, remarked, "Our financial performance continued to strengthen in Q3 indicated by the growth in new and recurring business, which resulted in top line growth of 51% and an increase in EBITDA of 56% over last year. On a year-to-date basis, revenues grew by an impressive 44%, EBITDA shot up by 68% and the EBITDA to revenue margin pushed upward from 20% to 24%. In summary, FAST reached significant financial milestones in Q3 2004 with the fastest growing revenues and leading profitability in the industry," added Riaz.
With FAST's third quarter acquisition of NextPage's Publishing Applications business unit, the Company executed upon its overall strategy to explore M&A opportunities that yield accelerated growth within the enterprise search sector. FAST focuses on companies with a strong search focused customer base, subject matter expertise towards an SDA, and/or technologies that augment the value of the FAST enterprise search platform.
FAST's acquisition of NextPage's Publishing Applications Business Unit includes the NXT, Folio, LivePublish and GetSmart product lines, as well as 500 revenue-generating NextPage customers (including six of the world's top nine professional publishers, three of the world's top four accounting firms, and many of the world's leading financial services institutions). This acquisition allows FAST to further expand its global presence in the Publishing market, and accelerate the development of a new Search Derivative Application (SDA) for the Publishing sector based upon FAST's award-winning Enterprise Search Platform, FAST ESP. While FAST already has a strong customer base and deep experience in the Publishing sector, the integration of NextPage's technology with FAST's Enterprise Search platform technology will expand FAST's offerings to publishers by providing them with the most advanced solutions for searching, retrieving, managing, and distributing their business-critical content.
In Q3, many global organizations including AutoTrader, DnB NOR, InfoData/Schlumberger, OKO Bank, and Verizon Information Services signed on or expanded their agreements with FAST as enterprise customers to use FAST's search technology and expand their utilization by deploying additional applications. These deals demonstrate FAST's ability to retain and enhance existing client relationships against stiff competition.
FAST continues to enjoy increased market visibility and recognition for its corporate growth and superior enterprise search offerings. In Q3, the Company was included in Software magazine's annual Software 500 listing as one of the world's leading software vendors based on its strong revenues. FAST was also recognized for outstanding achievement in technology innovation by VARBusiness magazine in its 2004 VARBusiness Tech Innovator Awards, and was honored by KM World magazine as one of its Trend-Setting Products of 2004. Furthermore, FAST was recognized for the second consecutive year in the Europe's 500, Europe's only independent, pan-European listing of high growth, job-creating companies.
Industry analyst groups such as Gartner, IDC, Jupiter, and Delphi Group continue to support and applaud the strategic directions and innovative solutions that FAST continues to unveil to the market.
"FAST is working with its customers and partners to expand the role and business impact of enterprise search and to provide them with specialized search applications that meet their specific needs," commented Lervik. In the past quarter, the Company unveiled FAST AdVisor, an enterprise-wide software solution that facilitates the introduction between buyers and suppliers for Internet Yellow Pages (IYP), Business to Consumer (B2C) and Business to Business (B2B) verticals, online classifieds, and traditional publishers. Leveraging FAST ESP, FAST's award-winning enterprise search platform, FAST AdVisor aggregates information from any structured and unstructured data source, including not only the publisher's own proprietary content, but also advertiser, third-party and web content.
The high profile product launch of FAST AdVisor demonstrated our innovative and scalable technology, market leadership in the sector, and the Company's increased focus upon delivering solutions-oriented product offerings. At the time of launch, the application generated strong praise and endorsements from industry analysts as well as immediate interest from the envisioned target market.
FAST also launched FAST InStream, the first enterprise search solution developed specifically for Independent Software Vendors (ISVs). FAST InStream enables ISVs to empower their users, extend and strengthen their applications' functionality, and accelerate their competitive advantage. FAST InStream is designed to increase the value of enterprise applications and boost ROI for the ISV's customers by extending the power of FAST ESP within OEM environments. Supporting both structured and unstructured data, FAST InStream provides unique value across all types of software applications, including: Enterprise Portals, Content and Document Management systems, Customer Relationship Management (CRM) solutions, Enterprise Resource Planning (ERP) solutions, Business Intelligence (BI) suites and applications and Storage and Archiving solutions.
FAST's focus upon strategic partnerships is a cornerstone of its future growth. FAST's Q3 strategic OEM agreements with EMC, Orchestria and Stellent are key examples of the types of partnerships it plans to develop to further expand its presence in a wider variety of markets.
"We strongly believe that our channels and alliances partners are central to the long-term success of FAST. We are dedicated to offering them the most extensive and flexible search solutions based on our FAST ESP technology. Whether licensed directly or deployed as a hosted applications, FAST delivers solutions that meets our partners' business needs," said Riaz.
Q4 2004 Business Focus
"We are encouraged that FAST continues to deliver strong financial results in the face of a slowly recovering global economic environment," added Lervik. "Our performance validates our approach to the market. Our exceptionally strong technology, increased market recognition, as well as our rapidly growing, top-tier, global client and partner base position FAST well for the remainder of 2004."
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