Autonomy boosts profits twelve-fold

Autonomy Corporation, the technology group, yesterday showcased new software that comprehends both the spoken word and written prose as it posted a twelve-fold increase in quarterly profits.

Autonomy Corporation, the technology group, yesterday showcased new software that comprehends both the spoken word and written prose as it posted a twelve-fold increase in quarterly profits.

The company moved into voice recognition in May with the acquisition of SoftSound, a privately owned software house based near Autonomy in Cambridge. Mike Lynch, chief executive, said: "We have a basic product that treats voicemail like e-mail and can tie two relevant messages together."

Dr Lynch said the company would be in a position to ship a finished product within "several quarters".

Autonomy posted better-than-expected second-quarter pre-tax profits of $5.09m (£3.4m), including $1.8m from currency shifts, up from $440,000 in the first quarter. Sales were $14.6m, up from $11.7m. The gross margin slipped to 90 per cent from 93 per cent in the first quarter.

"When you do the maths you'll see that if you have margins in the nineties, someone only has to sneeze for the margin to slip," said Dr Lynch, a former Cambridge University research fellow in maths.

Contracts from PepsiCo, Hewlett Packard and Sun Microsystems drove sales higher. Sun now uses Autonomy's software, whereas previously it had been only a software reseller for Autonomy.

Autonomy said it was looking to open an office in Latin America and buy companies which would bring entrenched relationships with potential customers.

Julian Morse, analyst at Beeson Gregory, said: "Autonomy has shown it can keep signing up very good deals. That makes it hard for everyone else to compete."