“While battling an unfavorable dollar-euro exchange rate and a challenging IT spending climate, we were able to deliver 16% revenue growth and saw strong demand across all our product lines,” said ILOG Chairman and CEO, Pierre Haren. “We benefited from a strong sales pipe going into the quarter for all of our products and a very favorable response from customers and prospects to our proposed acquisition by IBM. We also gained from a high renewal rate from both end-users and Independent Software Vendors (ISV) customers.”
Revenue Trends
Geographically, the U.S. led ILOG’s revenue growth in the fiscal first quarter, growing 26%, driven by strong demand for the company’s optimization and business rule management system (BRMS) products, as well as many contract renewals across product lines. Europe also grew well at 6%.
From a product standpoint, license and maintenance revenues for optimization tools and engines grew 46% highlighted by several significant wins with ISV customers, such as Oracle and Manhattan Associates, along with a large deal with a leading U.S. financial firm for a strategic investment portfolio planning application. Solid royalty revenues also contributed to the increase.
BRMS grew 27% (license and maintenance) due to an important activity with leading banks and insurers, including a major deal with a leading European financial services group for customer relationship management. Insurance deals figured prominently in the first quarter, with new business from Travelers and the branch of one of the largest health benefits companies in the U.S. Other significant business in the banking sector included a major Swiss investment bank for several projects and a leading U.S. bank, which expanded the use of ILOG JRules for its mortgage lending operations.
Visualization license and maintenance revenues grew 13%. Significant deal activity included a renewal with a leading telecom equipment company, which uses ILOG visualization technology for network management. ISV renewal and new business also helped boost visualization revenues.
ILOG’s supply chain applications business grew 116% year over year driven by large deals with a leading international oil company and the world’s sixth-largest food company which expanded its use of ILOG LogicTools Inventory Analyst to set safety stock targets in its SAP SCM system. Similarly, in another large deal, Miller Coors expanded its use of ILOG LogicNet Plus XE along with ILOG services for the redesign of their supply chain for both due diligence and post acquisition work, as well as for ongoing use for network planning.