Needham & Company Maintains a 'Hold' on Openwave Systems (OPWV) After Mixed SeptQ

Needham & Company maintains a 'Hold' on Openwave Systems (NASDAQ: OPWV).

Needham analyst says, "The Openwave SeptQ (F1Q12) results were surprising, in that a material patent settlement with Microsoft (Nasdaq: MSFT) (Not/Rated) was released concurrently with earnings; the patent revenue of $15m drove significant overage, but was tempered by the down-draft in OPWV bookings, which at
$24m, (actually $8.7m, when backing out the MSFT legal settlement) was down q/q from $29m in JuneQ and $48m in MarQ. The core business of OPWV, now relying on media optimization, seems to remain modest, despite the explosion of video traffic in networks – SeptQ mediation revenue was $18.7m. The newer patent effort (first unveiled 1 year ago with a $4m settlement, but dormant until today’s news with MSFT) is unclear in value, in our opinion. For us to change our opinion on the franchise value of OPWV due to patents, we would need to see material, ongoing revenue streams that could be extracted from the 200+ patents OPWV seeks to license."

For more ratings news on Openwave Systems click here and for the rating history of Openwave Systems click here.

Shares of Openwave Systems closed at $1.57 yesterday.

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