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A-Team Insight Blogs

Endace “To Review Options” After Revenue Hit

In a trading update issued on Monday, networking and latency monitoring specialist Endace said that expected full year revenues would fall short of estimates by 10% and that it had appointed Deutsche Bank to “review options for the future.” That usually means a company is open to being – or looking to be – acquired.

In its statement, the company noted that it is transitioning to a “systems business” with ongoing revenue, but that “decision-making by a number of its clients remains slow. Budget restraints, particularly in the UK Government customer base, have resulted in a shortfall of expected purchases.”

On the numbers, the company said that “despite delivering year on year growth, revenue for the year ended 31 March 2012 is expected to be short of market expectations by approximately 10%.” It now expects to deliver revenues of $40 million, compared to 2011 revenues of $38.4 million.

If the company is looking for a new owner, it would probably be one from the world of mainstream networking, looking for Endace’s expertise in monitoring and cyber security – as opposed to its more focused latency measurement business. So some market dynamics might shift in the low latency management space down the road.

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