RightNow Announces First Quarter 2011 Financial Results

Published on April 27, 2011 in Data Management, Technology

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Company reports recurring revenue growth of 27%.

BOZEMAN, Mont. (April 27, 2011) – RightNow® (NASDAQ:RNOW) today announced results for the first quarter ended March 31, 2011.

First quarter 2011 financial highlights included:

  • Total revenue was $52.3 million, an increase of 24% over Q1 2010
  • Recurring revenue was $41.9 million, an increase of 27% over Q1 2010
  • GAAP diluted earnings per share was $0.04 and Non-GAAP diluted earnings per share was $0.10. A reconciliation of Non-GAAP measures can be found at the back of this release.
  • Non-GAAP operating margin was 10%, an increase of 400 basis points over Q1 2010
  • Current software backlog was $142 million, an increase of 38% over Q1 2010

Total revenue was $52.3 million in the first quarter of 2011, compared to $42.1 million in the first quarter of 2010, reflecting a 24% increase. Recurring revenue in the first quarter of 2011 increased 27% to $41.9 million from $33.0 million in the first quarter of 2010.

Net income in the first quarter of 2011 was $1.4 million or $0.04 per diluted share, compared to net income of $585,000 or $0.02 per diluted share, in the first quarter of 2010. During the first quarter of 2011, the Company recorded a $1.8 million foreign currency gain associated with the Q-go acquisition, which was excluded from non-GAAP net income and non-GAAP net income per share. Non-GAAP net income in the first quarter of 2011 was $3.7 million, or $0.10 per diluted share, compared to non-GAAP net income of $2.3 million or $0.07 per diluted share, in the first quarter of 2010.

New, renewed and expanded customer relationships during the first quarter of 2011 included Activision, Arbor Networks, Cabela’s, CARFAX, The Container Store, CyberDefender, DeVry, Electronic Arts, Ellie Mae Inc., Equifax, HauteLook, KLM/AirFrance, and Logitech.

“We carried strong momentum from 2010 into the first quarter, executing against our strategy by expanding our presence with global organizations and growing our product footprint with the acquisition of Q-go,” said Greg Gianforte, CEO and founder. “We are well-positioned to continue our success, as customers recognize our unique ability to help them manage their customer experiences and demonstrate measurable returns on their investments.”

Jeff Davison, CFO, said, “We are pleased to report 27% growth in recurring revenue and a significant increase in operating income over the first quarter of 2010. We are leveraging our solid execution and strong balance sheet to increase investments in sales and marketing to continue to drive further profitable growth.”

Guidance

  • For the full year 2011, the Company expects total revenue to be approximately $226 million, with recurring revenue growth expected to be approximately 24%. Net income per diluted share for the full year 2011 is expected to be approximately $0.06. Non-GAAP net income per diluted share, which excludes stock-based compensation, acquisition costs and amortization of acquired intangible assets, amortization of debt issuance costs, and a foreign currency gain related to the Q-go acquisition, is expected to be approximately $0.55 for the full year 2011. The Company expects approximately 36 million diluted shares outstanding for the full year 2011.
  • For the second quarter of 2011, total revenue is expected to be approximately $54 million. Second quarter net loss per diluted share is expected to be approximately $(0.02). Second quarter non-GAAP net income per diluted share, which excludes stock-based compensation, amortization of acquired intangible assets, and amortization of debt issuance costs, is expected to be approximately $0.12. The Company expects approximately 36 million diluted shares outstanding for the second quarter of 2011.

Please refer to our “Forward-Looking Guidance Reconciliation” table for complete details on adjustments between GAAP and non-GAAP guidance.

Quarterly Conference Call

RightNow Technologies will discuss its quarterly results today via teleconference at 2:30 p.m. Mountain Time (4:30 p.m. Eastern Time). To access the call, please dial 877-638-9569, or outside the U.S. 914-495-8536, at least five minutes prior to the 2:30 p.m. MT start time. A live webcast of the call will also be available at http://investor.rightnow.com/index.cfm under the Events & Presentations menu. An audio replay will be available between 5:30 p.m. MT April 27, 2011 and 9:59 p.m. MT May 11, 2011 by calling 800-642-1687 or 706-645-9291, with Conference ID 55927048. The replay will also be available during the same time period on the Company’s website at http://investor.rightnow.com.

About RightNow Technologies

RightNow is helping rid the world of bad experiences one consumer interaction at a time, eight million times a day. RightNow CX, the customer experience suite, helps organizations deliver exceptional customer experiences across the web, social networks and contact centers, all delivered via the cloud. With more than ten billion customer interactions delivered, RightNow is the customer experience fabric for nearly 2,000 organizations around the globe. To learn more about RightNow, go to www.rightnow.com.

RightNow is a registered trademark of RightNow Technologies,

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:

All statements included in this press release, other than statements or characterizations of historical fact, are forward-looking statements. These forward-looking statements are based on our current expectations, estimates and projections about our industry, management’s beliefs, and certain assumptions made by us, all of which are subject to change. Forward-looking statements can often be identified by words such as “anticipates,” “expects,” “intends,” “plans,” “predicts,” “believes,” “seeks,” “estimates,” “may,” “will,” “should,” “would,” “could,” “potential,” “continue,” “ongoing,” similar expressions, and variations or negatives of these words and include, but are not limited to, statements regarding projected results of operations, business and profit growth and management’s future strategic plans. These forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause our actual results to differ materially and adversely from those expressed in any forward-looking statement.

The risks and uncertainties referred to above include, but are not limited to, our business model; our success in transitioning to a new President and Chief Operating Officer; our ability to develop or acquire and gain market acceptance for new products and enhancements to existing products in a cost-effective and timely manner; general economic conditions; fluctuations in foreign currency exchange; the gain or loss of key customers; competitive pressures and other similar factors such as the availability and pricing of competing products and technologies and the resulting effects on sales and pricing of our products; our ability to expand or contract operations, manage expenses and grow profitability; the rate at which our present and future customers adopt our existing and future products and services; fluctuations in our operating results including our revenue mix and our rate of growth; fluctuations in backlog; the risk that our investments in partner relationships and additional employees will not achieve expected results; interruptions or delays in our hosting operations; breaches of our security measures; our ability to protect our intellectual property from infringement, and to avoid infringing on the intellectual property rights of third parties; any unanticipated ambiguities in fair value accounting standards; the amount and timing of any stock repurchases under our stock repurchase program; fluctuations in our operating results from the impact of stock-based compensation expense; our ability to manage and expand our partner relationships; our ability to hire, retain and motivate our employees and manage our growth; the risks associated with our recent acquisition of Q-go, including our ability to retain and motivate Q-go’s

FRNOW

RightNow Technologies, Inc. Consolidated Balance Sheets (In thousands) (Unaudited)
March 31, Dec. 31,
2011 2010
Assets
Cash and cash equivalents $ 131,998 $ 181,948
Short-term investments 117,659 94,759
Accounts receivable 34,558 39,338
Allowance for doubtful accounts (1,800 ) (2,021 )
Net receivables 32,758 37,317
Deferred commissions 5,461 5,418
Prepaid and other current assets 5,406 4,662
Deferred tax assets 3,806 3,801
Total current assets 297,088 327,905
Property and equipment, net 12,644 10,702
Intangible assets, net 19,115 6,149
Goodwill 31,953 7,975
Deferred commissions, non-current 4,649 4,747
Other 4,669 4,921
Deferred tax assets, non-current 16,713 16,480
Total Assets $ 386,831 $ 378,879
Liabilities and Stockholders’ Equity
Accounts payable $ 12,114 $ 10,463
Commissions and bonuses payable 4,678 7,137
Other accrued liabilities 15,193 13,363
Current portion of deferred revenue 86,244 90,350
Total current liabilities 118,229 121,313
Deferred revenue, net of current portion 1,939 2,969
Other long-term liabilities 453
2.50% Convertible senior notes due 2030 175,000 175,000
Total liabilities 295,621 299,282
Stockholders’ equity:
Common stock 36 35
Additional paid-in capital 145,359 136,717
Treasury stock, at cost (29,149 ) (29,149 )
Accumulated other comprehensive income 3,533 1,953
Accumulated deficit (28,569 ) (29,959 )
Total stockholders’ equity 91,210 79,597
Total Liabilities and Stockholders’ Equity $ 386,831 $ 378,879
RightNow Technologies, Inc. Consolidated Operating Statements (In thousands, except per share amounts) (Unaudited)
Three Months EndedMarch 31,
2011 2010
Revenue:
Recurring revenue $ 41,913 $ 33,025
Professional services 10,416 9,077
Total revenue 52,329 42,102
Cost of revenue:
Recurring revenue 7,326 5,879
Professional services 9,410 7,332
Total cost of revenue 16,736 13,211
Gross profit 35,593 28,891
Operating expenses:
Sales and marketing 22,550 18,724
Research and development 5,596 5,132
General and administrative 6,171 4,299
Total operating expenses 34,317 28,155
Income from operations 1,276 736
Interest and other income (expense), net 768 183
Income before income taxes 2,044 919
Provision for income taxes (654 ) (334 )
Net income $ 1,390 $ 585
Net income per share:
Basic $ 0.04 $ 0.02
Diluted $ 0.04 $ 0.02
Shares used in the computation:
Basic 32,585 31,929
Diluted 35,482 33,431
Supplemental information of stock-based compensation expense included in:
Cost of recurring revenue $ 204 $ 113
Cost of professional services 298 114
Sales and marketing 977 751
Research and development 307 257
General and administrative 953 520
Total stock-based compensation $ 2,739 $ 1,755
RightNow Technologies, Inc. Consolidated Statements of Cash Flow (In thousands) (Unaudited)
Three Months EndedMarch 31,
2011 2010
Operating activities:
Net income $ 1,390 $ 585
Non-cash adjustments:
Depreciation and amortization 2,802 2,065
Stock-based compensation 2,739 1,755

Source: RightNow Technologies

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