Sybase Inc. today reported that its 2007 revenue topped $1 billion for the first time in seven years, as the enterprise software maker tries to fight pressure from a Wall Street hedge fund to split up the company.
Sybase's Q4 2007 revenue was $295.2 million, up 15% from the same quarter a year ago. That slightly beat analyst expectations and helped the company record $1.026 billion in sales for the year. It was the first time since 2000, during the dot-com boom, that Sybase has topped the $1 billion mark.
The sales "are a reflection that we are doing well enough running our business, that moves we engaged in in the past five years are bearing fruit," Raj Nathan, Sybase's chief marketing officer, said in an interview after the earnings were announced.
Though profitable, Sybase has not matched the growth of other enterprise software companies. It is under pressure from its second-largest investor, Sandell Asset Management Corp., to lift its languishing stock price by doing one of three things: 1) buying back $1.5 billion in stock, 2) spinning out an IPO for Sybase's fast-growing mobile software divisions -- iAnywhere and Sybase 365 -- similar to the way EMC Corp. spun out its virtualization division VMware Inc., and 3) selling Sybase to an IBM or Oracle Corp.-type company, which Sandell estimates could bring in as much as $3.7 billion.
Sandell is threatening to push its own slate of directors at Sybase's annual shareholders' meeting in Dublin, Calif., which has yet to be scheduled, Nathan said.
Sybase has reportedly hired Merrill Lynch & Co. to help it explore strategic alternatives. During the conference call, CEO John Chen said the board is "actively engaged in the company's strategy" but otherwise declined to comment.
Nathan declined to say whether the company is in buyout discussions with anyone. And he disputed Sandell's argument that spinning out Sybase's mobile divisions -- the heart of its 'unwired enterprise' strategy -- would produce long-term gains. "Here is why: Many of our customers are buying more than one component of our stack," Nathan said.
He declined to offer specifics to demonstrate that assessment. "It's hard for me to say that togetherness is worse than separateness," he said.