ADVS » Topics » Operating Overview

This excerpt taken from the ADVS 10-K filed Mar 12, 2010.

Operating Overview

        Operating highlights of 2009 include:

    Expanded customer relationships and continued acceptance of our product offerings. We experienced continued demand for both our newest and largest portfolio management and accounting platforms: Advent Portfolio Exchange ("APX") and Geneva. We signed 72 APX contracts, bringing the total number of licenses sold globally to 353, and we signed 38 new Geneva clients which brings the total number of Geneva licenses sold to 242 as of December 31, 2009. We sold Tamale RMS to numerous firms including asset managers, endowment managers and funds of funds.

    New and incremental bookings.  The term license contracts signed in 2009 will contribute approximately $21.8 million in annual revenue ("annual term license contract value" or "ACV") once they are fully implemented.

    Tamale product release.  We released Tamale RMS 4.0 which introduced an open flexible framework that allows firms to customize the application to meet their specific research process workflow requirements.

    Further expansion into Asia Pacific.  We opened a new office in Beijing, China. The office is staffed with more than 50 employees who were previously part of the company's contract workforce. It is our largest office outside of North America.

    Repurchase of common stock.  We repurchased 0.7 million shares under our Board authorized share repurchase program for a total cash outlay of $14.6 million and an average price of $21.13 per share.
This excerpt taken from the ADVS 10-Q filed May 7, 2009.

Operating Overview

 

Operating highlights of our first quarter of 2009 include:

 

·                  Expanded customer relationships and acceptance of our product offerings. We experienced continued demand for both our newest and largest portfolio management and accounting platforms: Advent Portfolio Exchange (“APX”) and Geneva. We signed 12 APX contracts, bringing the total number of licenses sold globally to 294, and we added 9 new Geneva clients which brings the total number of Geneva licenses sold to 213 as of March 31, 2009.

 

·                  New and incremental bookings. The term license contracts signed in the first quarter of 2009 will contribute approximately $3.3 million in annual revenue (“annual term license contract value” or “ACV”) once they are fully implemented.

 

·                  Product Release. We released Tamale RMS 4.0 which introduced an open flexible framework that allows firms to customize the application to meet their specific research process workflow requirements.

 

These excerpts taken from the ADVS 10-K filed Mar 12, 2009.

2008 Operating Overview

        In 2008, we achieved a variety of operating accomplishments, including the following:

    Expanded customer relationships and acceptance of our product offerings.  In fiscal 2008, we experienced continued strong demand for both our newest and largest portfolio management and accounting platforms: Advent Portfolio Exchange ("APX") and Geneva, respectively. We sold 89 new APX licenses during fiscal 2008 compared to 109 new licenses during 2007 and 63 new licenses in 2006, bringing the total number of licenses sold globally to 282. We also added 47 new Geneva clients during fiscal 2008 compared to 55 new customers during 2007 and 34 new customers in 2006, bringing the total number of Geneva licenses sold to 204 as of December 31, 2008.

    Selected by TIAA-CREF to build a service to address new regulatory challenges faced by 403(b) retirement plan administrators.  The service will use Advent's custodial data (ACD) infrastructure to aggregate data from multiple vendors to help prevent non-compliant transactions before they

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      occur and enable plan providers to verify compliance. Launch of the service is subject to milestones and acceptance, so we do not expect revenue to be recognized until the fourth quarter of 2009 or early 2010, and we expect this contract to substantially increase our "other recurring revenues" beginning in 2010. Since we will bill and collect fees as milestones are achieved, we expect deferred revenues and operating cash flows related to this contract to grow starting from the third quarter of 2008 until we begin to recognize revenues.

    Achieved strong bookings.  The term license contracts signed in 2008 will contribute approximately $28.1 million of annual revenue ("annual term license contract value" or "ACV") once they are fully implemented, compared to ACV of $27.6 million in 2007.

      The TIAA-CREF contract, noted above, is for data services rather than a term license, and as such is not included in ACV for 2008. The annual revenue from this contract, when combined with the hosted services contract previously announced with Fidelity Investments, are expected to contribute at least an additional $8 million to $10 million per year in recurring revenue beginning in the year 2010.

    Acquired Tamale Software ("Tamale").  Tamale provides software solutions designed specifically to help portfolio managers and analysts easily capture, manage and share their investment ideas more effectively and access all of the firm's research more easily. We currently have a robust portfolio of middle and back office software solutions and the acquisition of Tamale represents a significant step in expanding our footprint into the front office.

    Repurchased our common stock.  During 2008, we repurchased 2.3 million shares under our Board authorized share repurchase programs for a total cash outlay of $61.6 million and an average price of $26.42 per share.

2008 Operating Overview



        In 2008, we achieved a variety of operating accomplishments, including the following:





    Expanded customer relationships and acceptance of our product
    offerings.
      In fiscal 2008, we experienced continued strong demand for both our newest and largest portfolio management and accounting
    platforms: Advent Portfolio Exchange ("APX") and Geneva, respectively. We sold 89 new APX licenses during fiscal 2008 compared to 109 new licenses during 2007 and 63 new licenses in 2006, bringing the
    total number of licenses sold globally to 282. We also added 47 new Geneva clients during fiscal 2008 compared to 55 new customers during 2007 and 34 new customers in 2006, bringing the total number
    of Geneva licenses sold to 204 as of December 31, 2008.



    Selected by TIAA-CREF to build a service to address new regulatory challenges faced by 403(b) retirement plan
    administrators.
      The service will use Advent's custodial data (ACD) infrastructure to aggregate data from multiple vendors to help
    prevent non-compliant transactions before they


39









HREF="#bg10501a_main_toc">Table of Contents






      occur
      and enable plan providers to verify compliance. Launch of the service is subject to milestones and acceptance, so we do not expect revenue to be recognized until the fourth quarter of 2009 or
      early 2010, and we expect this contract to substantially increase our "other recurring revenues" beginning in 2010. Since we will bill and collect fees as milestones are achieved, we expect deferred
      revenues and operating cash flows related to this contract to grow starting from the third quarter of 2008 until we begin to recognize revenues.





    Achieved strong bookings.  The term license contracts
    signed in 2008 will contribute approximately $28.1 million of annual revenue ("annual term license contract value" or "ACV") once they are fully implemented, compared to ACV of
    $27.6 million in 2007.





      The
      TIAA-CREF contract, noted above, is for data services rather than a term license, and as such is not included in ACV for 2008. The annual revenue from this contract, when combined with
      the hosted services contract previously announced with Fidelity Investments, are expected to contribute at least an additional $8 million to $10 million per year in recurring revenue
      beginning in the year 2010.





    Acquired Tamale Software ("Tamale").  Tamale provides
    software solutions designed specifically to help portfolio managers and analysts easily capture, manage and share their investment ideas more effectively and access all of the firm's research more
    easily. We currently have a robust portfolio of middle and back office software solutions and the acquisition of Tamale represents a significant step in expanding our footprint into the front office.



    Repurchased our common stock.  During 2008, we repurchased
    2.3 million shares under our Board authorized share repurchase programs for a total cash outlay of $61.6 million and an average price of $26.42 per share.



This excerpt taken from the ADVS 10-Q filed Nov 7, 2008.

Operating Overview

 

Highlights of our third quarter of 2008 include:

 

·                  Acquired Tamale Software, Inc. (“Tamale”). In September 2008, we signed a definitive agreement to acquire privately held Tamale Software which provides software solutions designed specifically to help investment professionals manage their investment ideas more effectively and access all of the firm’s research easily. On October 1, 2008, we completed the acquisition of Tamale.

 

·                  Advent Client Conference. We held our Advent Client Conference in September 2008 which was our largest Client Conference to date, and included executives from the many market segments we serve including: asset managers, financial advisors, hedge funds, prime brokers, fund administrators, family offices, banks, broker dealers and trusts.

 

·                  Expanded customer relationships and acceptance of our product offerings. We experienced continued demand for both our newest and largest portfolio management and accounting platforms: Advent Portfolio Exchange (“APX”) and Geneva. We signed 29 APX contracts, bringing the total number of licenses sold

 

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globally to 266, and we added 10 new Geneva clients which brings the total number of Geneva licenses sold to 186 as of September 30, 2008.

 

·                  Strong Bookings. Total term license contract value (“TCV”), including APX migrations, was $18.1 million. Although a decrease of 12% from TCV of $20.5 million in the third quarter of 2007, with an average term of 2.9 years, these contracts will add approximately $6.2 million in annual revenue (“annual term license contract value” or “ACV”) once they are fully implemented, an increase of 5% over the same period last year.

 

·                  We have expanded our global footprint. We currently have a strong EMEA pipeline and our license business had a record third quarter. We also had significant customer wins in the United Kingdom and Middle East, and signed our first client in India.

 

·                  Common Stock Repurchases. During the third quarter of 2008, we repurchased 360,000 shares under our Board-authorized share repurchase plans for a total cash outlay of $15.0 million and an average price of $41.76. In October 2008, we repurchased the remaining 640,000 shares under the stock repurchase program authorized by the Board in May 2008 at an average price of $30.41 per share. On October 30, 2008, our Board authorized a share repurchase program of up to an additional 3.0 million shares.

 

This excerpt taken from the ADVS 10-Q filed Aug 7, 2008.

Operating Overview

 

Highlights of our second quarter of 2008 include:

 

·      Selected by TIAA-CREF to build a service to address new regulatory challenges faced by 403(b) retirement plan administrators. The service will use Advent’s custodial data (ACD) infrastructure to aggregate data from multiple vendors to help prevent non-compliant transactions before they occur and enable plan providers to verify compliance. Launch of the service is subject to milestones and acceptance, so we do not expect revenue to be recognized until the fourth quarter of 2009 or early 2010, and we expect this contract to substantially increase our “other recurring revenues” beginning in 2010. Since we will bill and collect fees as milestones are achieved, we expect deferred revenues and operating cash flows related to this contract to grow starting in the third quarter of 2008 until we begin to recognize revenues.

 

·      Expanded customer relationships and acceptance of our product offerings. We experienced continued demand for both our newest and largest portfolio management and accounting platforms: Advent Portfolio Exchange (“APX”) and Geneva. We signed 25 APX contracts, bringing the total number of licenses sold globally to 237, and we added 12 new Geneva clients which brings the total number of Geneva licenses sold to 176 as of June 30, 2008.

 

·      Continued growth in term license contract value (TCV). Total TCV, including APX migrations, was $21.2 million, an increase of 15% from $18.5 million in the second quarter of 2007. With an average term of 3.1

 

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years, these contracts will add approximately $6.9 million in annual revenue (“annual contract value”) once they are fully implemented, up 9% over the same period last year.

 

The TIAA-CREF contract, noted above, is for data services rather than a term license, and as such is not included in TCV for the second quarter of 2008. However, after meeting certain milestones and acceptance, we expect the total value of this five-year agreement with TIAA-CREF to significantly exceed the TCV reported for the second quarter of 2008. The annual revenue from this contract, when combined with the hosted services contract previously announced with Fidelity Investments, are expected to contribute at least an additional $8 million to $10 million per year in recurring revenue by the year 2010.

 

·      Increased headcount. Total Company headcount at June 30, 2008 was 997 which increased from headcount of 982 and 946 from March 31, 2008 and December 31, 2007, respectively. The majority of these new hires were in our sales and client services groups to support our recent term license contracts.

 

This excerpt taken from the ADVS 10-Q filed May 8, 2008.

Operating Overview

 

Financial highlights of our first quarter of 2008 include:

 

·                  Expanded customer relationships and acceptance of our product offerings. We experienced continued demand for both our newest and largest portfolio management and accounting platforms: Advent Portfolio Exchange (“APX”) and Geneva. We achieved a first quarter record in licenses sold for APX and Geneva. We signed 19 APX contracts, bringing the total number of licenses sold globally to 212, and we added 7 new Geneva clients which brings the total number of Geneva licenses sold to 164 as of March 31, 2008.

 

·                  Continued growth in term contract value. Total term contract value, including APX migrations, was $15.7 million, an increase of 41% from $11.1 million in the first quarter of 2007. With an average term of 2.8 years, these contracts will add approximately $5.5 million, up 64% over the same period last year, in annual revenue (“annual contract value”) once they are fully implemented.

 

·                  Increased headcount. Total company headcount at March 31, 2008 was 982 which represented an increase of 36 new employees from December 31, 2007. The majority of these new hires were in our sales and client services groups to support our new bookings.

 

16



 

These excerpts taken from the ADVS 10-K filed Mar 13, 2008.

Operating Overview

        During fiscal 2007, we:

    Expanded customer relationships and acceptance of our product offerings. We experienced continued strong demand for both our newest and largest portfolio management and accounting platforms: Advent Portfolio Exchange ("APX") and Geneva, respectively. We sold 109 APX licenses, bringing the total number of licenses sold globally to 193. We also achieved a significant milestone with Geneva as we added 55 new Geneva clients during fiscal 2007 compared to 34 new customers during 2006 and 17 new customers in 2005, bringing the total number of Geneva licenses sold to 157 as of December 31, 2007.

    Renewed our focus on our trading and order management products.

    Released several new products and product upgrades.

    Released APX 2.0 with enhanced fixed income functionality and new performance analytics functionality which includes performance attribution, contribution and ex-post risk statistics. We believe this added functionality will provide our clients the tools to deliver more robust reporting and client service without increasing operational costs or overhead.

    Released Geneva 7.0 which provides a completely new user interface, data browser, data access, workflow improvements and reporting infrastructure to provide timely, accurate integrated critical information.

    Launched Advent Revenue Center, an automated billing and revenue management solution. Advent Revenue Center automates and improves a client's operational efficiency by simplifying the costly and lengthy billing process from managing multiple and diverse billing structures. This product integrates with both APX and Axys.

    Released Moxy 6.0, the latest version of our trade order management system, which features a more scalable .NET architecture, as well as improved workflow and a new user interface.

    Launched Advent Rules Manager, our new solution for pre- and post-trade compliance, which brings our trading and compliance offerings to the next level. This product extends the footprint of our suite with a solution that helps our clients manage their compliance practices.

    Increased term contract value. We achieved record bookings with term contract value of $81.3 million, and an average term of 3.4 years, which translates to annual contract value for the full year of approximately $24.1 million. In 2006, we achieved term contract value of

36


      $48.8 million with an average of 3.0 years, which translates to annual contract value for the full year of $16.4 million.

    Increased headcount. Total company headcount at December 31, 2007 was 946 which represented an increase of 122 new employees from December 31, 2006. The majority of these new hires were in our product development, sales, and implementation and client services groups to support our new bookings.

    Acquired Vivid Orange Limited ("Vivid Orange") through our MicroEdge subsidiary. Vivid Orange is a leading provider of corporate community involvement and employee giving technology in the United Kingdom. Vivid Orange's SmartChange(SM) is a web-based solution that helps companies and charities manage their corporate community involvement and employee giving initiatives. We believe it is the leading product of its type in the U.K. The acquisition of Vivid Orange adds significant depth to MicroEdge's already robust portfolio of corporate philanthropy solutions accelerates its ability to deliver a hosted platform and expands MicroEdge's leadership position in the global corporate-giving sector.

Operating Overview



        During fiscal 2007, we:





    Expanded
    customer relationships and acceptance of our product offerings. We experienced continued strong demand for both our newest and largest portfolio management and
    accounting platforms: Advent Portfolio Exchange ("APX") and Geneva, respectively. We sold 109 APX licenses, bringing the total number of licenses sold globally to 193. We also achieved a significant
    milestone with Geneva as we added 55 new Geneva clients during fiscal 2007 compared to 34 new customers during 2006 and 17 new customers in 2005, bringing the total number of Geneva licenses sold to
    157 as of December 31, 2007.


    Renewed
    our focus on our trading and order management products.


    Released
    several new products and product upgrades.




    Released
    APX 2.0 with enhanced fixed income functionality and new performance analytics functionality which includes performance attribution, contribution and
    ex-post risk statistics. We believe this added functionality will provide our clients the tools to deliver more robust reporting and client service without increasing operational costs or
    overhead.


    Released
    Geneva 7.0 which provides a completely new user interface, data browser, data access, workflow improvements and reporting infrastructure to provide timely, accurate
    integrated critical information.


    Launched
    Advent Revenue Center, an automated billing and revenue management solution. Advent Revenue Center automates and improves a client's operational efficiency by
    simplifying the costly and lengthy billing process from managing multiple and diverse billing structures. This product integrates with both APX and Axys.


    Released
    Moxy 6.0, the latest version of our trade order management system, which features a more scalable .NET architecture, as well as improved workflow and a new user
    interface.


    Launched
    Advent Rules Manager, our new solution for pre- and post-trade compliance, which brings our trading and compliance offerings to the next
    level. This product extends the footprint of our suite with a solution that helps our clients manage their compliance practices.



    Increased
    term contract value. We achieved record bookings with term contract value of $81.3 million, and an average term of 3.4 years, which translates to
    annual contract value for the full year of approximately $24.1 million. In 2006, we achieved term contract value of


36











      $48.8 million
      with an average of 3.0 years, which translates to annual contract value for the full year of $16.4 million.





    Increased
    headcount. Total company headcount at December 31, 2007 was 946 which represented an increase of 122 new employees from December 31, 2006. The
    majority of these new hires were in our product development, sales, and implementation and client services groups to support our new bookings.


    Acquired
    Vivid Orange Limited ("Vivid Orange") through our MicroEdge subsidiary. Vivid Orange is a leading provider of corporate community involvement and employee giving
    technology in the United Kingdom. Vivid Orange's SmartChange(SM) is a web-based solution that helps companies and charities manage their corporate community involvement and employee giving
    initiatives. We believe it is the leading product of its type in the U.K. The acquisition of Vivid Orange adds significant depth to MicroEdge's already robust portfolio of corporate philanthropy
    solutions accelerates its ability to deliver a hosted platform and expands MicroEdge's leadership position in the global corporate-giving sector.



This excerpt taken from the ADVS 10-Q filed Nov 8, 2007.

Operating Overview

 

During the third quarter of 2007, we continued to execute on our strategy of strengthening and growing our core business of delivering mission-critical software and services to the investment management community by winning new customers, expanding our product footprint with existing customers, growing our services organization and investing in innovation to increase the reach of our product suite.

 

We grew our core business by signing 14 new customers for Geneva and 26 new contracts for Advent Portfolio Exchange (“APX”). Term contract bookings were $18.3 million, representing growth of 73% from the third quarter of 2006.

 

17



 

The average term of our third quarter bookings was 3.6 years, reflecting four large Geneva contracts signed with prime brokers and hedge fund administrators, which had 5-year terms. We also held our Advent Client Conference in September 2007. This was our largest annual Client Conference with nearly 1,200 participants, including executives from the many market segments we serve including: asset managers, financial advisors, hedge funds, prime brokers, fund administrators, family offices, banks, broker dealers and trusts.

 

We also launched two major new releases of our most important accounting platforms. We launched APX 2.0 with enhanced fixed income functionality and new performance analytics functionality which includes performance attribution, contribution and ex-post risk statistics. We believe this added functionality will provide our clients the tools to deliver robust reporting and client service without increasing operational costs or overhead. Additionally, we released Geneva 7.0 during the third quarter which provides a completely new user interface, data browser, and reporting infrastructure.

 

During the third quarter, we continued the expansion of our services organization to address the general increase in the volume of consulting and training services demanded as a result of higher license bookings. Gross margins are negatively affected by headcount additions in our client services and consulting groups as new employees undergo a training period, typically of six months before becoming fully billable. Additionally, the deferral of professional services revenues and costs associated with our term license implementations also negatively affects our gross margin as we defer only the direct costs associated with the services performed. However, we believe our gross margins will improve as the deferred professional services revenue and expense associated with term licenses flow back into our operating results.

 

We continued to invest in innovation to increase the breadth of our product suite during the three months ended September 30, 2007. Product development expenses, net of capitalized costs of $2.1 million, were $9.3 million during the third quarter of 2007, which represented 17% of total net revenues, as compared to $8.8 million (net of capitalized costs of $4,000), or 19% of total net revenues, in the same quarter of 2006. We are currently preparing for the fourth quarter release of Advent Rules Manager, our new solution for pre- and post-trade compliance, which is in beta testing at several client sites.

 

We will continue to increase headcount and invest in product development, sales, implementation and client services capacity to support our new bookings.

 

This excerpt taken from the ADVS 10-Q filed Aug 9, 2007.

Operating Overview

During the second quarter of 2007, we continued to execute on our strategy of strengthening and growing our core business of delivering mission-critical software and services to the investment management community by winning new customers, expanding our product footprint with existing customers, and investing in innovation to increase the reach of our product suite.

We grew our core business by signing 87 new customer agreements, including 15 new customers for Geneva and 21 new customers for Advent Portfolio Exchange (“APX”). Term contract bookings were $17.0 million, representing growth of 32% from the second quarter of 2006.

In the second quarter, we released Moxy 6.0, the latest version of our trade order management system, which features a more scalable dot-net architecture, as well as improved workflow and a new user interface. We also continued to see healthy demand for Advent Revenue Center, the product we launched in the first quarter of 2007.

We continued to invest in innovation to increase the reach of our product suite during the second quarter of 2007.  Product development expenses were $10.8 million during the second quarter of 2007, which represented 21% of total net revenues, as compared to $8.8 million, or 20% of total net revenues, in the same quarter of 2006.  We are planning the third quarter launch of our new solution for pre- and post-trade compliance that is currently in beta testing at several client sites. We also expect to release Geneva 7.0, which offers enhanced reporting functionality, improved workflow and a new user interface in the latter half of 2007. We continue to develop and test our performance analytics capabilities, which will be tightly integrated with APX 2.0. Rather than release as a standalone product, we will include the analytics functionality in the planned release of APX 2.0 in the latter half of 2007, giving managers a single source for accurate performance data and the ability to analyze and communicate not only the “how” but also the “why” of portfolio performance.

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