CDC Corporation's (CHINA) financial results for the fourth quarter and year-end results ending December 31, 2006 show total revenue for the fourth quarter was US$89 million, an increase of 43.0% from the same quarter in 2005.
"We are proud of the fact that we capped a very strong 2006 with our best revenue quarter ever, as we saw strong results from virtually every CDC business segment," said Peter Yip, CEO, CDC Corporation. "Our global and diversified business segments give CDC great balance. In the software business, our strategy of vertical specialization is working extremely well as we saw record license revenues for the second quarter in a row. Software license revenue from new customers hit 53%, one of the highest in the industry, and our win rates are among the best in the industry. Our organic rate of growth continues to be very healthy and we continue to make strategic tuck-in type acquisitions."
Total software revenues in Q4 2006 were US$68.1 million, an increase of 34.8% from US$50.5 million in Q4 2005. For the full year, revenues were US US$240.2 million, a 19.1% increase over 2005. For the quarter, software consulting and services revenues were US$16.6 million, software license revenues were US$14.8 million, maintenance revenues were US$16.7 million and business services revenues were US$20.0 million. The company achieved two consecutive record license revenue quarters in a row ending in 2006. Gross margin for CDC Software, excluding business services and non-cash amortization of purchase technology, during Q4 2006 was 62.3%.
Total online game revenues during Q4 2006 were US$10.7 million, an increase of 27.4% from the previous quarter. For the full year 2006, total online game revenues were US$26.8 million. Gross margin of online games in the fourth quarter of 2006 was 66.4% and 66.6% for the full year, excluding non-cash amortization of purchase technology.
Total MVAS revenues during Q4 2006 were US$7.1 million, a decline of 18.4% from US$8.7 million in Q4 2005, but up 10.9% from US$6.4 million in the previous quarter. Gross margin in Q4 2006 increased to 64.2%, from 56.6% in the previous quarter. As discussed in the company's press release in July, the mobile application industry has been impacted by regulatory changes in China. For the full year 2006, total revenues were US$31.7 million a decline of 7.8% compared to 2005. Gross margin increased to 59.0% in 2006 from 55.6% in 2005.
Total revenues for the China.com portal and Media Services during Q4 2006 were US$3.1 million, essentially flat compared to the same quarter last year, and an increase of 47.6% from US$2.1 million in previous quarter. For the full year 2006, total revenues were US$10.1 million an increase of 11.9% from 2005. Gross margin for China.com portal during Q4 2006 was 62.4%.
Based on current estimates, CDC Corporation anticipates revenues in the range of US$415 million to US$420 million for fiscal 2007, an increase of over 35% from 2006 revenues. The company anticipates adjusted net income of US$57 million to US$62 million in 2007.