Callidus Software Inc (NASDAQ:CALD) shares soared sharply higher by more than 10%, amid the news that SAP agreed to acquire Callidus for $2.4 billion. Callidus Software has been impressing investors over the last couple of quarters, supported by the strong growth in its SaaS, maintenance, and professional services revenue.
SAP said: “It will pay $36 a share for Dublin, California-based Callidus, known as CallidusCloud, to give Europe’s biggest software company access to new sales analytic and customer engagement tools.” The company is looking to expand its growing cloud business through the Callidus Software acquisition.
Callidus Software is among the growing providers of cloud software. In the past three years, its average revenue growth was standing at 22.5%. The company generated sales growth of 22% in the previous quarter, beating the consensus estimate by $1.9 million.
Its SaaS revenue increased 31% Y/Y to $50.7M, while maintenance and professional services revenue was standing around $450K, $12.9M in the third quarter.
On the other hand, Callidus introduced several new products in the latest quarter, including new augmented intelligence capabilities in sales and learning, OrientDB, Graph Data Base technology, and Revsym ASC 606 cloud solution.
Additionally, the company impressed investors by presenting higher than expected guidance for the final quarter. Callidus expects fourth-quarter revenue to hover in the range of $66M, compared to the consensus estimate for $65.23M.
On the back of improving sales for its SaaS segments and introduction of new technologies, the company expects to generate a sustainable growth in revenue and earnings. It expects full-year 2018 revenue in the range of $296M to $303M, higher from the forecasted revenue of $249.6M for FY2017.
Analysts have also increased the price target for Callidus stock following the announcement of an acquisition. Lake Street increased Callidus Software price target by $6 to $36. Callidus share volume surged to 10.7 million shares in Tuesday’s trade, up considerably from the daily average of 390,686 shares.
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