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CLOUD MIGRATION CUTS QAD REVS Featured

The migration from desktop to the cloud took a bite out of results for QAD for its third quarter ended October 31. QAD was in line with other vendors as desktop revenue continued to slip, falling 28.8 percent while cloud subscriptions were up by 14.4 percent.

Net income for the most ended quarter was $125,000, sharply down from nearly $3 million a year earlier. Revenue was $77.8 million, down 2.2 percent from slightly more than $80 million in last year’s corresponding period. In the last two years, license revenue has moved up and down. License revenue fell to $3.3 million down from $4.6 million. Subscription revenue was $27.3 million, up from $23.7 million. But CFO Daniel Lender said during the recent earnings webcast those days are over. “We are not expecting to see seasonably higher license number,” Lender said Executives said the mix of new cloud business remains split about 50-50 between the installed base and new customers with both segments increasing. ”There is a groundswell of momentum in the existing base,” Lender said. Like other vendors, QAD is seeing a decrease in services revenue during the cloud migration. Revenue from that segment was $17.5 million in the recent quarter, down 15.5 percent from $20.7 million.

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