If Interactive Data and Thomson Reuters’ second quarter results are anything to go by, it seems that the data vendor community is more than adequately making ends meet in terms of its traditional reference data and pricing offerings.
Interactive Data had a strong second quarter performance in spite of its ownership change at the end of last year and the subsequent management shake up. The vendor’s second quarter 2011 overall revenue increased 11.5% to US$216.3 million from US$194.0 million in the second quarter of 2010. However, its income from operations was down on last year with US$20.2 million, compared US$35.5 million in the same period one year ago, likely as a result of acquisition costs and the like.
The vendor’s Pricing and Reference Data business reported an 11.4% increase in revenue for the quarter compared to last year’s figures to US$139.3 million. Moreover, it noted an 8.7% revenue increase related to organic growth, which was spread across the vendor’s various geographic locations. Interactive Data attributes this to “new sales, healthy customer retention and solid usage revenue trends.”
New owners Silver Lake and Warburg Pincus have, no doubt, been streamlining teams behind the scenes and the vendor has made several strategic moves in the pricing and reference data space by expanding its asset class coverage in several areas. It has also recently launched its new fixed income portal Vantage, which it is hoping will gain significant traction in light of new data transparency requirements.
Going forward, president and CEO Mason Slaine noted that the vendor would be continuing to invest in its technology and related technical infrastructure in order to ensure strong growth over the next two quarters. Thus far, the vendor has been fairly tight lipped about its plans for new functionality, but one can expect much more in the way of new product launches now that most of the restructuring has taken place.
Thomson Reuters’ Enterprise business also performed fairly well for the quarter (in comparison to other areas of the business), contributing to an overall revenue increase of 1% for the Markets division. The data giant noted particularly weak performances for its investment management and exchange traded instruments offerings during the period for the Markets division overall.
Revenues for Enterprise itself grew 10%, increasing from last year’s revenue of US$265 million to this year’s US$312 million for the quarter. This also demonstrates a stronger growth than last year’s 6% increase in revenues from 2009 figures for the quarter. This year’s increase was driven largely by a strong performance in the pricing and reference data provision business, with a 20% growth for Enterprise Content. The more front office focused real-time business also grew 9% and the Platform business grew 15%.
After much fanfare at its launch and last year’s indication that it was seeing “strong customer uptake,” the messaging around Thomson Reuters’ next gen data distribution platform Elektron seems more subdued this quarter. The data giant notes that it has “continued to gain momentum,” but seems rather less gung ho about its performance overall compared to last year.
It will be interesting to see what impact the recent restructuring to expand the Enterprise business into a new “Enterprise Solutions” division (focused on “services and infrastructure”) will have had on the business’ results this time next year.