UPDATED: Unix licensing pushes SCO into the black

By Matt Whipp

Posted on 28 May 2003 at 15:21

SCO has announced second quarter figures, with income from its SCOsource licensing initiative making up nearly one third of revenues.

For the quarter ending 30 April, the company reported a net income of $4.5 million, or $0.33 per diluted share, on revenues of $21.4 million. Of this, sales of its operating systems generated $13.1 million, while SCOsource made $8.3 million.

The previous quarter proved a net loss of $724,000 on revenues of $13.5 million for the company. The second quarter of 2002 also showed a net loss of $6.6 million on revenues of $15.5 million.

Darl McBride, CEO at SCO, said: 'These positive quarterly financial results, including net income for the first time in the Company's history, have strengthened our balance sheet and financial position.'

Of the ongoing work of the controversial SCOsource, McBride highlighted that these results showed the benefits of just two agreements: 'During the quarter ended April 30, 2003, the first two licensing agreements related to our SCOsource initiative, our division for licensing and protecting the Company's UNIX intellectual property, provided the Company with $8.8 million in cash and added $6.1 million to gross margin. There are over 6,000 source code licensees of our UNIX operating system, and we believe the SCOsource initiative will continue to gain momentum as we pursue enforcement of the Company's intellectual property rights.'

SCO recently announced it had reached a licensing agreement with Microsoft, which was no doubt happy enough to throw a few million dollars into the cauldron that is cooking the Linux goose.

McBride predicted SCOsource revenues will account for fully one third of revenues in the succeeding quarter. Guidance for the third quarter he set out at between $19 million and $21 million.

In a conference call, McBride said that the company would be looking to 'make some strategic acquisitions' of companies in the region of $4 to $10m that would provide a 'technology fill-in' for its SCOx Web services platform.

He said the first of these would occur 'soon' and will help it create a 'best-of-breed' platform that ties into Java and .Net, targetting the SMB market. The company hopes to penetrate between 15 to 20 per cent of this market that it values at $3.7bn.

McBride said that the first applications for SCOx will be revealed at the upcoming SCOx conference in August.

In other news, SCO has announced that it has agreed a contract with the British Army, worth more than $5.5 million, to supply a system with which it can track the life cycle of parts used in Lynx and Gazelle helicopters and later in the year Apache helicopters.

The system is based on SCO's UnixWare 7 operating system, the basis of systems used extensively by the Royal Navy.