Bob Farrell took the job of CEO of Edgar Online only about two months ago, but he is already planning to grow the company dramatically.
The Rockville, Md.-based company specializes in providing Extensible Business Reporting Language technology for SEC filings. Now that the SEC has moved into the third phase of its mandate, with even the smallest public companies expected to start filing their financials in the XBRL data-tagging format for periods ending on or after June 15, 2011, Farrell believes his company is poised to begin growing 25 percent year over year in the next few years.
Up to now, though, he admitted in an interview Thursday, the Nasdaq-traded company’s financial performance has been relatively flat in the last couple of years. That’s despite the fact that the larger public companies have already been required by the SEC to begin using XBRL to file their financials in the last two years.
“The company has been growing pretty significantly,” he said. “We added headcount of late. Some of that has been driven by our filings business. We are doing a lot to further the technology, and we are really excited about where this space is going. The company is poised for some significant growth. We publicly have stated that the company is going to grow 25 percent year over year in each of the next three years. So we’re well on the way to achieving that with our first-quarter results.”
Farrell noted that a major reason why he was hired as CEO was to stimulate growth. He came to Edgar Online from Metastorm, a developer of business process management software. He took that company from a startup to a $75 million enterprise.
Farrell is confident about Edgar Online because his predecessors have invested a significant amount of money in developing XBRL filing services and software products, and now the company can leverage the value of some of those investments. That’s especially true now that the SEC mandate is well underway and many of the kinks with the various taxonomies, including the Financial Accounting Standards Board’s U.S. GAAP Taxonomy, have been ironed out.
“I think the SEC use case is the first of many use cases for XBRL,” Farrell said. “Like any new standard, there’s a period of time where people are getting comfortable with it, where people are realizing the value.”
Farrell recently attended an international XBRL conference in Brussels, where he got the chance to meet some of the constituents who have been working in the XBRL field. He foresees XBRL being used in areas beyond financial reporting, including access to government legislative information, crime statistics for law enforcement, health care data for health providers and insurers, clinical trials and research and development in life sciences, along with risk management and risk abatement in the general corporate environment. He thinks those various applications will drive XBRL adoption exponentially in the next few years.
Edgar Online has also been signing up customers outside the U.S. too, like the Bank of France and the National Bank of Belgium. The company has also recently released a Microsoft Excel add-in for its I-Metrix product, and it has partners who have adapted Edgar Online for SAP and Oracle.
Farrell believes a lot of the early problems with the XBRL data taxonomies have already been worked out by the tier 1 and 2 filers, and that the smaller public companies who are now going to be required to submit their filings in XBRL format will be the beneficiaries of those early experiments.
“There’s a lot of focus now on efficiency and speed, generating the filings as quickly as possible and being as agile as possible,” he said.