Despite the downturn in the markets, it seems that Interactive Data had a good end to 2008 in terms of financial results. The data vendor’s fourth quarter results for last year indicate that its revenue was up 6.6% on previous year’s figures to US$194.1 million from US$182.1 million in the fourth quarter of 2007. “Despite the unprecedented events across the global financial marketplace that occurred during the fourth quarter, our business remained resilient,” says Stuart Clark, president and CEO of Interactive Data, who is due to retire in March.
Income from operations grew 27% to US$57.1 million in the fourth quarter of 2008 from US$45.0 million in the same period in 2007. Net income for the fourth quarter of 2008 was US$40.1 million, a 25.8% increase over net income of US$31.9 million in the previous year.
According to Clark, new sales in the fourth quarter of 2008 were strong and renewal rates across the vendor’s institutionally oriented business were approximately 95%.
Clark says that the overall growth was primarily driven by new sales, higher usage and the revenue contribution from acquired businesses. The vendor was particularly acquisitive last year within its Pricing and Reference Data business with the purchase of businesses in Italy and Japan.
The vendor purchased Italian provider of reference data, Kler’s Financial Data Service, in August 2008, which contributed revenue of US$1.8 million in the fourth quarter of 2008. The vendor also acquired an 80% majority interest in NDF, a provider of securities pricing, reference data and related services to financial institutions in Japan, in the fourth quarter. This business contributed US$0.5 million to the revenue for the quarter.
Andrew Hajducky, Interactive Data’s executive vice president and chief financial officer, indicates that the vendor will be seeking to acquire more businesses over the course of 2009. He describes the vendor as “well positioned” to expanding the business in this manner.
Clark adds: “Moving forward, we expect to continue encountering uncertain market conditions in 2009. Customers will likely be grappling with their need to contain or reduce costs while adapting to powerful trends affecting their businesses that may require additional market data or related services. These trends include heightened scrutiny on their valuation processes, increased regulation, the proliferation of automated trading systems and the need to differentiate their wealth management platforms.”
On a geographic basis, the fourth quarter saw the biggest growth in the Asian region with an increase of 13% on the previous year’s figures, to US$4.7 million from US$4.1 million. This was closely followed by North America with an increase of 8.2% to US$138.2 million from US$127.7 million in the same period last year. Europe brought up the rear for the quarter in terms of growth with 2% to US$51.2 million from US$50.2 million in the comparable period one year ago.
As a business unit, Interactive Data Pricing and Reference Data reported a fourth quarter 2008 revenue of US$124.5 million, a 9% increase over the prior year’s fourth quarter.