Their business outlook for the rest of 2012 and into 2013
As I stated, 2012 is not affected by appShield. I looked at the conf call again, made some notes, what appeals to me to consider:
"We are also exploring other ways to use the *currently developed* appShield technology *separate from* the individual consumer whitelisting market, such as SMB or SCADA malware protection."
(We heard a hint about this on the last conference call in August 2012:
"We will be selling appShield predominantly to the consumer and SMB businesses. But, it’s also getting interest from a product perspective that when they don’t have a management console or don’t need a management console for individual devices, as an example, there’s interest from people in the SCADA business to control infrastructure for individual SCADA computer devices, which a power grid will have literally thousands of SCADA devices.")
So they can use the software as is for SCADA systems. We should have asked do they need to do beta testing of "appShield for SCADA systems" before this; I assume yes; and what would be a timeline to market. It's a good opportunity because those systems don't require a management console either in enterprise form (Bouncer) or in individual consumer form (appShield). So it would be a new version for SCADA systems with a management console. So that prob can be ready to go before the 'individual consumer version' of appShield comes out, you would think.
"Plainly put, we are very disappointed with the prior appShield delays and the performance of Coretrace under our agreement. However, our business remains very strong and the Coretrace events do not change our positive outlook for the rest of the year and into 2013."
On positive outlook, the website traffic is picking up. It goes through cycles of way up and then down, prob with sales cycles and lead generation cycles plus weekends factored in. But sales appear to be good from the metrics I can see. I think we are seeing a strong Q4 in progress.
We believe the increase in M&S revenue reflects high customer satisfaction with our solution, which to me is a tribute to our Engineering and Support team and to the Professional Services team that helps customers get up and stay running smoothly.
As we look forward to 2013, we anticipate a new release of CuteFTP in the coming weeks. We believe the release of a improved CuteFTP (Version 9) may allow us to slow or *possibly even reverse* the decline in our consumer revenue in recent years. While consumer revenue represents less than 5% of our total revenue today, we believe our prior issuance of 2 million CuteFTP licenses provides a valuable market footprint that we will work to leverage with CuteFTP 9 and extend to other product lines.
On our last earnings call in August, I mentioned that we are looking forward to record-setting revenue again this year. With our Q3 results released today, we are *on track to achieve this goal*. While we are not in a position to forecast 2013 financial performance today, I want to add that we are confident that the actions we have taken this year to improve and expand our product base and sales opportunities should lead to a continued revenue growth in the next year (2013).
I don't think I have yet to receive an email from Globalscape saying, You have used/owned our CuteFTP product in the past and we want to let you know about another exciting consumer product we recently introduced, TappIn. I suppose that will happen as they leverage the emails of all the past/current Cuteftp subscribers.
We look forward to further enhancements to our EFT Server, including the potential integration with our other products.
We also increased revenue in Q3 from Other products, such as Mail Xpress, Managed Solutions, and TappIn. We released the TappIn Professional Edition last month and continue to develop and extend additional go-to-market relationships with Original Equipment Manufacturers (OEMs) such as Seagate, Toshiba, QNAP, ESET and others.
Another trend in recent months has been the rapid growth in Maintenance and Support (M&S) contract revenue. M&S grew 51%. They pointed out their high percentage growth in M&S contracts reflects their customer satisfaction with their products. They are now signing two-three year contracts where appropriate and the team works on renewals that come up to ensure those continue. They are proactive in developing and strengthening their M&S relationships. At 51% growth, in the quarter, accounting for over one million dollars growth over the former two million, it's not a statistical numbers game, but real solid growth for them.
I would add to their comments to say that it also reflects customer satisfaction not only with their products, but with their new subscription based offering plans. That is clearly a success they are enjoying. With the high-growth of EFT Server totals at 20%, it's significant in the millions as the deferred comes onto the stream of cash. They will continue to add to cash on the balance sheet.