S1 Corp. has withdrawn its financial guidance as it shifts to a new model of reporting revenue.
S1, of Norcross, Ga., said last week that it is beginning to recognize its software licensing revenue under a "percentage of completion" method better suited to accounting for earnings from the more complex contracts it is pursuing.
"Although we expect to gain greater visibility and predictability in our business model once this transition is completed, it has negatively impacted our current and near-term financial results and made it more difficult to forecast our 2010 financial performance," Johann Dreyer, S1's chief executive, said in a press release. "Consequently, we are withdrawing our prior annual financial guidance."
In May, S1 predicted its 2010 revenue would be $242 million to $248 million, a range it said had already been reduced to account for its new business model.
Dreyer talked up the company's pipeline, predicting better earnings. "We expect to enter 2011 with a greater amount of revenue backlog, which we believe will translate to our bottom line in future periods," he said. S1's second-quarter revenue fell 15% year over year, to $51.8 million. Its net loss narrowed to $1.8 million from $4.6 million.