CA FOCUSES ON INVESTMENTS OVER PROFITS IN CALENDAR 1Q10 (F4Q10) - TBR COMMENTARY - Sponsored Whitepaper

As the economic environment improved, CA reported year-to-year growth of 6.6%, reaching net sales of $1.1 billion in 1Q10; however, the growth was mainly the result of its acquisitions of NetQoS, 3Tera and Nimsoft. Despite some inorganic help, the backlog is healthy, with $8.2 billion in deals waiting in the pipeline. With a subscription-based business, backlogs are a strong indicator of future growth for CA. Subscription-model businesses recognize revenue from their contracts over time, which smoothes the revenue curve, and helped the company hedge a huge drop-off in revenue through the recession. Read more to find out the downside of a subscription based model.