RE:ASC 606 requirements = 9% drop in share price This quotation from Capelli shows, that the revenue drop in enterprise-software revenue came not only from the switch to ASC 606. It was partly an organic drop.
Chief financial officer Steven Capelli said on a conference call with analysts that with the new standards, “there’s a one-time cumulative transition adjustment, increasing our deferred revenue balance by approximately $100-million, with an equal decrease to retained earnings.”
However, he conceded that if ASC 606 standards were applied to the year-ago quarter, the company still would have seen an “apples to apples” enterprise-software revenue drop of 11 per cent. That is really shocking.
Yasch, what do you think about this? How can you be so optimistic?