Deal slippage prompts Interwoven to review quarter

Interwoven’s CEO has blamed European legal firms for forcing the content-management giant to review this year’s second quarter revenue predictions.

In a last-minute telephone briefing, Martin Brauns, the company’s chairman and CEO, suggested that high-level deals, key to the second quarter figures, were left unsigned due to other priorities.

“Things were tracking well until the last week of the quarter,” he said. “As we entered the last week of the quarter, it became apparent that several closing commitments we thought we had, had actually slipped.”

“We had challenges in the Americas on the enterprise side, and deal slippage on the legal side in Europe,” he added.

He suggested the sales cycle had become much more arduous, saying deals were now under “unprecedented levels of review and scrutiny”.

“These were not competitive losses and we continue to track most of these deals through our pipeline,” he said.

Interwoven predicts quarter revenue to be between $40.5m and $41.5m, with licence revenue between $14m and $15m.

The company also calculates a net loss per share of up to one cent compared to a two-cent income in Q2 last year.

Posting $42.5m in the first quarter of 2005, the company achieved a 14 per cent increase on the same period last year. Interwoven posted a revenue of $39.5m for Q2 in 2004.

In May, the California-based company agreed to integrate its Worksite document management and collaboration tool with Microsoft Office and SharePoint – a response from Microsoft to calls for better use of its own partners in improving compliance-related functionality.

With this deal still fresh, Brauns was keen to play down any effect the news would have on the company’s continued success in the sector.

“We believe enterprise content management remains a top IT spending priority worldwide,” he said. “Our sales pipeline is at its highest level in recent history.”

Chris Harris-Jones, director of information management at Ovum, explained that it was too early to tell if the announcement was a significant financial marker. “One of the problems that face companies that file quarterly figures is having to justify your existence every 12 weeks,” he said. “Things tend to slip at this time of year and the stock market over-reacts, so we are not hugely surprised. The only thing we need to watch out for is bigger slips next quarter.”