Written by Ken Nagy, CFA
Commtouch Software ( CTCH ) a provider of email defense and URL filtering solutions to enterprise customers and OEM distribution partners. The firm’s “in the cloud” technology has the ability to analyzes 2.5 billion messages a day, which is far superior to the competition’s static solutions which have little chance of catching new outbreaks. During late 2008, the Company released its URL filtering services. The web has more than double the revenue potential of the messaging market. The firm’s OEM business model gives Commtouch the advantage of recurring revenue, higher margins and less exposure to the end markets.
On November 3rd 2010 CTCH announced results for the third quarter of fiscal year 2010 ending September 2010. Revenue for the period was $4.60 million rising 12.2% sequentially from $4.10 million and up 18.0% year over year.
During the quarter Commtouch completed the acquisition of Command antivirus. Revenues attributed to the Command acquisition amounted to approximately $300 thousand for the month of September, and are expected to be in the range of $3.5 to $4 million in the initial year.
Management provided an update to its guidance for 2010 results. Full year revenues are expected to be at the top end of the previously published guidance of $17 to 18 million. Management expects full year net income to reach a range of $5.4 to $5.5 million on a non-GAAP basis, which exceeds the previously forecasted net income full year guidance of approximately $5 million.
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