Cognos announced its full year results, notably seeing a recovery in license revenues to USD 118M in their fourth quarter (i.e. Q1 2006) after the disappointing Q4 2005 results. It was also important to note that the company closed 18 deals over a million dollars in size, which was another marked improvement on the previous quarter. Profit margins were a healthy 18%. Still, license revenue was actually down compared to the same quarter a year ago (USD 130M) while overall revenues at USD 253M for the quarter was slightly down on the same period last year. Actually shrinking is not generally a cause for celebration in a software company, so it is a measure of just how bad Cognos' previous quarter was that these results were generally greeted with relief.
This (relative) recovery all bodes well for the broader sector, and indicates that Cognos' stumble at the end of 2005 was to do more with company-specific issues (limited deployment of its new product line) than with any general slow-down in the business intelligence market (which just about every analyst predicts will grow at a healthy clip in 2006). In the medium term, Cognos faces the same issues as other BI suppliers: the relative saturation of the market, and the ever-growing threat from Microsoft.