Received Mark's email and it sounds very positive. But analysts are describing a different outcome. Did OT have a solid FY?
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Here's a short and sweet summary for why he got his sorry A** canned.
Total revenue for fiscal year 2025, ended June 30, fell by 10.4 percent to $5.17 billion. GAAP earnings were down 3.5 percent year-over-year to $1.65 per share, while non-GAAP earnings were down 8.4 percent to $3.82 per share.
Mark in his last interview still can’t clearly explain what Titanium X is https://youtu.be/73xlJWzNIKQ
Layoffs + spin off or sell off a BU ahead
@d5 They have a track record of recategorizing on-prem to cloud to fit the financials they want. sounded like they hit a wall on the call this morning.
It's a stinker. They're hiding behind the cloud (see what I did there?)
Press release Headline:
$1.86B of Cloud Revenues, 2.0% Y/Y growth
Announces 5% increase of dividend
New $300 million share repurchase program
The real deal:
Annual Total revenues: $5.168 billion, -10.4% Y/Y or -3.0% when adjusted for AMC
Annual Recurring Revenues (ARR): $4.191 billion, -7.6% Y/Y
Cloud revenues: $1.856 billion, +2.0% Y/Y [Cloud is the future - the growth engine!]
Enterprise cloud bookings(2): $773 million, +10.1% Y/Y [bookings does not = revenue]
GAAP-based net income: $436 million, -6.3% Y/Y, margin of 8.4%
Q4 - Total revenues: $1.311 billion, -3.8% Y/Y or -0.7% when adjusted for the AMC divestiture
Annual recurring revenues (ARR): $1.055 billion, -3.5% Y/Y or -0.8% when adjusted for the AMC divestiture
Net income: GAAP $29 million, -88.4% Y/Y, Non-GAAP(3) $250 million, -6.6% Y/Y
My guess:
- higher than expected churn.
- Few if any migrations to the Cloud. No one wants to move from OT's on prem to the cloud. If you are going to do that you will buy something new and shinier than just an OT lift and shift.
- Heavily discounted multi-year deals (hence what seems like a healthy bookings number).
- AI "investment" is not panning out. Plus it's a terrible marketing campaign. Those little Aviator trolls. Cringe.
I would look for them to sell off a business unit or two - maybe Cybersecurity since they separated it. With all of the sophisticated cloud-native players OT is antiquated and not very competitive. Maybe DevOps or ITOps? Keep the original OT and Content related stuff.
Oh yeah. And probably another 5-10% layoff and some office closures to lighten Opex.
No. 60% of layoffs still to cone. Is being engineered to go sideways.
Earning for share went from around 0.97 per share to around 0.17 per share.
Stupidly increasing dividends and buying back shares instead of investing in the company.
Revenue down, cloud sales slightly up.
Stagnant in short. Expect Mark to do his usual and lay off 5% again sometime in the next 6 months.