Collaboration Proves Profitable

MatrixOne reports profitable quarter

CHELMSFORD, MASS. -- January 24, 2001 -- Collaborative commerce solution provider MatrixOne reported increased revenues and even a tidy little profit for its second quarter ending December 30, 2000.

The company reported total revenues for the quarter of $34.3 million, up 112 percent over the same period of the previous year. MatrixOne also reported net income of $2.2 million, or $0.04 per share (net income excluding stock-based compensation was $3.2 million, or $0.06 per share), compared to a net loss of $2.1 million, or $0.06 per share on a pro forma basis, in the same period of the previous year.

MatrixOne's software license revenues for the quarter increased 160 percent, to a record $21.8 million. Significantly, software license revenues for the quarter represented 64 percent of total revenues, compared to 52 percent in the same period last year.

In announcing its quarterly results, MatrixOne noted "significant customer orders" that had come in from Adidas, Applied Materials, General Electric, Philips CE and Takata.

Our strong growth is a clear validation of the ability of our collaborative solutions to leverage the potential of the Internet to transform our customers' businesses, said Mark O'Connell, MatrixOne president and CEO, in the company's announcement.

At least one Internet financial analyst seems to agree in principle with O'Connel's assertion. Rakesh Sood, a general partner of the Sprout Group, Credit Suisse First Boston's venture capital affiliate, wrote in a recent column for that, despite much negative talk about the future of Net markets, Internet infrastructure companies can take advantage of "a window of opportunity" by providing specific types of functionality in vertical markets and by focusing their business model on software licensing or subscriptions rather than transaction-related revenue. Sood cited MatrixOne as one example of such an infrastructure provider and noted the company's work with NCR and Philips Electronics.

MatrixOne has said its strategy is focused on adding collaboration capabilities to the buy-sell transactions available through private and public net markets.