Xata: Customers Shifting to Mobile Solutions

August 06, 2012

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Xata Corp. saw a drop in revenue for its fiscal 2012 third quarter as it shifted its focus to more mobile-based software platforms.

Xata reported total revenue of $15.6 million for the quarter ended June 30. This is a drop when compared with the company's revenue of $17 million during the same period in 2011. Xata said the loss was due to impairment and realignment charges of $5.7 million, which allowed the company to balance its investment in its legacy systems and in mobile-based software platforms.

The company added that revenue from higher-margin software increased, as the market is moving from hardware systems to lower-cost mobile solutions (smartphones and tablets). For example, fiscal 2012 third quarter software revenue made up approximately 76% of total revenue, compared to 67% for the same period of fiscal 2011.

The company also recorded a non-cash impairment charge of $3.5 million associated with intangible assets originally recorded as part of Xata's 2008 acquisition of Geologic Solutions Inc.

Overall, for the nine months ended June 30, total revenue was consistent when compared with the same period during 2011, Xata says. Software revenue for the company increased by 3%, however, as a result of growth in Xata Turnpike (a 40% increase) and XataNet (a 7% increase) revenue. This change is reflected in the company's revenue for that period, with software revenue making up 2 more percentage points out of the company's total revenue.

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