RightNow Announces Second Quarter 2011 Financial Results

Published on July 27, 2011 in Computer Software, Technology

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Company reports recurring revenue growth of 31%, and earnings per share ahead of guidance

BOZEMAN, Mont. (July 27, 2011) – RightNow® (NASDAQ:RNOW) today announced results for the second quarter ended June 30, 2011.

Second quarter 2011 financial highlights included:

  • Total revenue was $54.8 million, an increase of 26% over Q2 2010
  • Recurring revenue was $45.4 million, an increase of 31% over Q2 2010
  • GAAP diluted earnings per share was $0.01 and Non-GAAP diluted earnings per share was $0.15. A reconciliation of Non-GAAP measures can be found at the back of this release.
  • Non-GAAP operating margin was 11%, an increase of 200 basis points over Q2 2010
  • Current software backlog was $152 million, an increase of 43% over Q2 2010

Total revenue was $54.8 million in the second quarter of 2011, compared to $43.5 million in the second quarter of 2010, reflecting a 26% increase. Recurring revenue in the second quarter of 2011 increased 31% to $45.4 million from $34.7 million in the second quarter of 2010.

Net income in the second quarter of 2011 was $194,000 or $0.01 per diluted share, compared to net income of $1.4 million or $0.04 per diluted share in the second quarter of 2010. Non-GAAP net income in the second quarter of 2011 was $5.4 million, or $0.15 per diluted share, compared to non-GAAP net income of $3.2 million or $0.09 per diluted share in the second quarter of 2010.

“We executed well and delivered an outstanding second quarter with revenue and earnings ahead of guidance,” said Greg Gianforte, CEO and founder. “Our accelerating growth rate is allowing us to further expand our sales capacity and raise our expectations for recurring revenue growth in 2011. We continue to provide robust customer experience solutions with fast return on investment and innovative products that are easy to use, enabling us to deliver high value for our customers around the world. Market trends are creating a demand for RightNow CX and we believe we are well positioned to continue our momentum.”

Total revenue was $107.1 million for the six months ended June 30, 2011, compared to $85.6 million for the six months ended June 30, 2010, reflecting a 25% increase. Recurring revenue in the six months ended June 30, 2011 increased 29% to $87.3 million from $67.8 million in the six months ended June 30, 2010.

Net income in the six months ended June 30, 2011 was $1.6 million or $0.04 per diluted share, compared to net income of $2.0 million, or $0.06 per diluted share in the six months ended June 30, 2010. Non-GAAP net income in the six months ended June 30, 2011 was $9.1 million, or $0.26 per diluted share, compared to non-GAAP net income of $5.5 million or $0.16 per diluted share in the six months ended June 30, 2010.

Guidance

  • For the full year 2011, the Company is raising its recurring revenue growth expectation to 27% from 24%. Total revenue is expected to be approximately $226 million. Net income per diluted share for the full year 2011 is expected to be approximately $0.08. 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 $0.58 for the full year 2011. The Company expects approximately 36 million diluted shares outstanding for the full year 2011.
  • For the third quarter of 2011, total revenue is expected to be approximately $57 million. Third quarter net income per diluted share is expected to be approximately breakeven. Third 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 $0.15. The Company expects approximately 36.3 million diluted shares outstanding for the third 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 July 27, 2011 and 9:59 p.m. MT August 10, 2011 by calling (800) 642-1687 or (706) 645-9291, with Conference ID 76695707. 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 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 prior and future acquisitions; and risks associated with our offering of convertible senior notes including the potential impact on earnings per share calculations; and various other factors. Further information on potential factors that could affect our financial results is included in our Annual Report on Form 10-K, quarterly reports on Form 10-Q, and in other filings with the Securities and Exchange Commission. The forward-looking statements in this release speak only as of the date they are made. We undertake no obligation to revise or update publicly any forward-looking statement for any reason.

FRNOW

RightNow Technologies, Inc.
Consolidated Balance Sheets
(In thousands) (Unaudited)
June 30, Dec. 31,
2011 2010
Assets
Cash and cash equivalents $ 121,792 $ 181,948
Short-term investments 134,133 94,759
Accounts receivable 45,703 39,338
Allowance for doubtful accounts (1,774 ) (2,021 )
Net receivables 43,929 37,317
Deferred commissions 5,963 5,418
Prepaid and other current assets 5,488 4,662
Deferred tax assets 3,810 3,801
Total current assets 315,115 327,905
Property and equipment, net 13,003 10,702
Intangible assets, net 19,512 6,149
Goodwill 32,392 7,975
Deferred commissions, non-current 4,966 4,747
Other 4,365 4,921
Deferred tax assets, non-current 16,756 16,480
Total Assets $ 406,109 $ 378,879
Liabilities and Stockholders’ Equity
Accounts payable $ 6,819 $ 10,463
Commissions and bonuses payable 6,030 7,137
Other accrued liabilities 18,465 13,363
Current portion of deferred revenue 97,792 90,350
Total current liabilities 129,106 121,313
Deferred revenue, net of current portion 2,355 2,969
Other long-term liabilities 446
2.50% Convertible senior notes due 2030 175,000 175,000
Total liabilities 306,907 299,282
Stockholders’ equity:
Common stock 36 35
Additional paid-in capital 152,268 136,717
Treasury stock, at cost (29,149 ) (29,149 )
Accumulated other comprehensive income 4,422 1,953
Accumulated deficit (28,375 ) (29,959 )
Total stockholders’ equity 99,202 79,597
Total Liabilities and Stockholders’ Equity $ 406,109 $ 378,879
RightNow Technologies, Inc.
Consolidated Operating Statements
(In thousands, except per share amounts) (Unaudited)
Three Months EndedJune 30, Six Months EndedJune 30,
2011 2010 2011 2010
Revenue:
Recurring revenue $ 45,409 $ 34,730 $ 87,322 $ 67,755
Professional services 9,407 8,724 19,823 17,801
Total revenue 54,816 43,454 107,145 85,556
Cost of revenue:
Recurring revenue 7,746 5,952 15,072 11,831
Professional services 9,411 7,378 18,821 14,710
Total cost of revenue 17,157 13,330 33,893 26,541
Gross profit 37,659 30,124 73,252 59,015
Operating expenses:
Sales and marketing 24,913 18,777 47,463 37,501
Research and development 5,581 4,797 11,177 9,929
General and administrative 6,377 4,324 12,548 8,623
Total operating expenses 36,871 27,898 71,188 56,053
Income from operations 788 2,226 2,064 2,962
Interest and other income (expense), net (1,116 ) 19 (348 ) 202
Income (loss) before income taxes (328 ) 2,245 1,716 3,164
Benefit (provision) for income taxes 522 (841 ) (132 ) (1,175 )
Net income $ 194 $ 1,404 $ 1,584 $ 1,989
Net income per share:
Basic $ 0.01 $ 0.04 $ 0.05 $ 0.06
Diluted $ 0.01 $

Source: RightNow Technologies

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