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Forum List » Business News and Headlines SEC Filings, Earing Reports, Press Releases  
Openwave Systems Inc Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: February 8, 2011 05:32PM
Openwave Systems Inc (OPWV) filed Quarterly Report for the period ended 2010-12-31. Highlight of Business Operations:Bookings comprise the aggregate value of all new arrangements executed during a period. We define backlog as the aggregate value of all existing arrangements less revenue recognized to date under these arrangements. For the second quarter of fiscal 2011, bookings were approximately $40.2 million, down $6.3 million, or 14%, from approximately $46.5 million for the second quarter of fiscal 2010. Backlog was approximately $174.0 million as of December 31, 2010, down from $188.5 million as of December 31, 2009. Many of our bookings include the ability for customers to cancel services or maintenance. Cancellations of bookings from prior quarters, if any, are treated as a reduction in backlog. For example, during the second fiscal quarter of 2011, our largest booking was the renewal of maintenance for several products for three years, totaling $25.4 million. After the first year, the customer may terminate the renewal for convenience. While we do not expect any material terminations from this booking, it is possible for the customer to do so without penalty. Support or hosting agreements that cover multiple years can contribute to the variability in the quarterly amount of bookings achieved, as well as the timing of revenue, billings and collections from those bookings. Generally, revenue resulting from bookings are recognized and collected over the subsequent 12 to 18 months, in accordance with our revenue recognition policy, unless the booking covers multiple years. Bookings related to royalty or usage arrangements are recognized concurrently with the related revenue and therefore do not impact backlog. Bookings that span multiple years are generally recognized, billed and collected over the same period. Since 63% of our bookings in the second quarter of fiscal 2011 related to the $25.4 million booking discussed above, this contributed to reduced accounts receivable as of December 31, 2010. As a result of this reduction, we expect collections to be lower than usual in the third quarter of fiscal 2011. We expect the mix of bookings among license, services and maintenance to return to more traditional proportions for the balance of the fiscal year.
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