CFOs at US technology companies expect revenue to rise in 2012, but they have set the bar much lower than they did a year ago.
Nearly three in four participants in the fifth annual “BDO Technology Outlook Survey” expect their company’s revenue to increase by about 2.6% – significantly short of the 10.4% jump projected in last year’s poll.
It’s the first time since 2009 that tech CFOs have predicted smaller revenue growth than they forecast the previous year.
“Based on recent economic and marketplace volatility, technology executives are cautious in their revenue projections,” Aftab Jamil, partner and director of the Technology & Life Sciences practice at BDO USA, said in a news release.
While revenue projections are lower, 75% of tech CFOs expect more mergers and acquisitions in 2012. That’s down slightly from 81% in 2010 and 78% in 2011.
Competition among cloud-computing companies, such as providers of software as a service (SaaS), will make the software space the most active tech sector for M&A activity, according to 39% of the CFOs surveyed. A third of the CFOs expect the media/telecom segment to produce the most deals.
“M&A remains an attractive opportunity,” Jamil said. “The fiercely competitive environment is pushing companies to aggressively target the best and brightest technologies. Among middle-market tech companies, there’s an ‘acquire or be acquired’ mentality.”
—Jeff Drew (email@example.com) is a CGMA Magazine senior editor.