Edgewater Technology, Inc. (EDGW) Misses Q2 EPS by 4c, Comments on Outlook

Edgewater Technology, Inc. (NASDAQ: EDGW) reported Q2 EPS of $0.04, $0.04 worse than the analyst estimate of $0.08. Revenue for the quarter came in at $30.5 million versus the consensus estimate of $30.5 million.

Management Commentary

"For the second quarter of 2015, we are reporting 9% growth in sequential quarterly service revenue, with 4% coming from our core offerings and 5% coming from our latest acquisition," commented Shirley Singleton, Edgewater's chairman, president and CEO. "The recently acquired Zero2Ten business performed nicely, with a significant number of net new customer engagements.

"Sales continue to be strong and backlog continues to build. Project start delays, primarily within our EPM/BI service offering, limited our ability to deliver year-over-year growth in second quarter service revenue. These delays resulted primarily from customers electing to expand their upcoming EPM/BI project(s) and upgrade to an 'enterprise suite' model, creating larger deal sizes and a slowing of the project launch process. The ultimate timing of these project starts has made resource planning very challenging, especially since the larger projects are expected to start off slowly and then ramp up later in the second half of 2015.

"The current challenging project start environment tempers our expectations as we look forward to third quarter service revenue. We anticipate that third quarter 2015 service revenue will be up slightly on a sequential quarterly basis and flat compared to the third quarter of 2014. We anticipate that we will see low single-digit service revenue growth for the full year 2015."

For earnings history and earnings-related data on Edgewater Technology, Inc. (EDGW) click here.

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