Interactive Intelligence (Nasdaq: ININ), a global provider of unified IP business communications solutions, has announced results for its fourth quarter and full year ended 31 December 2010.
The company reported 2010 fourth-quarter revenue of $50.7 million, an increase of 41% from $35.9 million in the fourth quarter of 2009. Revenue for 2010 was $166.3 million, an increase of 27% from $131.4 million in 2009.
The financial results noted in this release and the accompanying financial statements, reflect a change in the company's presentation of its revenue, with three revenue lines presented: product revenue; recurring revenue, which includes support and cloud-based revenue; and services revenue, which includes professional services and education.
Fourth-quarter 2010 financial results compared to fourth quarter 2009 results include:
* Product revenue of $25 million, up 38% from $18.1 million.
* Recurring revenue of $19.9 million, up 34% from $14.8 million.
* Services revenue of $5.7 million, up 91% from $3 million.
* Gross profit margin of 69.1% versus 69.9%.
Full-year 2010 financial results compared to full-year 2009 results include:
* Product revenue of $79.8 million, up 26% from $63.3 million.
* Recurring revenue of $68.7 million, up 23% from $55.8 million.
* Services revenue of $17.8 million, up 44% from $12.3 million.
* Gross profit margins of 69.5% versus 69.6%.
“Our fourth-quarter orders were very strong from both new and existing customers, with good contributions from North America, Europe and Australia,” said Interactive Intelligence founder and CEO, Dr Donald E Brown. “Particularly impressive was the increase in the number of our transactions of $250 000 or more, which jumped from 19 in the fourth quarter of 2009 to 31 in the fourth quarter of 2010. While order activity propelled product revenue growth, recurring revenue increased significantly as well. Services revenue growth was also notable.
“For the year we recorded a 25% increase in product orders from both new and existing customers, and a 150%-plus increase in our cloud-based orders,” Brown said. “We more than doubled the number of $1 million orders, from nine in 2009 to 19 in 2010, and the number of orders over $250 000, from 55 to 90. We plan to build on this momentum by continuing to focus on moving upmarket,” Brown said.
For the fourth quarter of 2010, net income on a generally accepted accounting principles (GAAP) basis was $7.1 million, with diluted earnings per share (EPS) of $0.37, compared to net income of $2.5 million, with EPS of $0.14 in the fourth quarter of 2009. Net income on a non-GAAP* basis for the fourth quarter of 2010 was $10.4 million, with EPS of $0.54, compared to non-GAAP net income of $5.1 million and EPS of $0.28 in the fourth quarter of 2009.
For the fourth quarter of 2010, non-GAAP net income and EPS exclude purchase accounting-related adjustments of $388 000, or EPS of $0.02, charges for stock-based compensation of $974 000, or EPS of $0.05, and non-cash income tax expense of approximately $2 million, or EPS of $0.10. For the fourth quarter of 2009, non-GAAP net income and EPS exclude purchase accounting-related adjustments of $58 000, charges for stock-based compensation of $775 000, or EPS of $0.04, and non-cash income tax expense of $1.8 million, or EPS of $0.10.
Net income for 2010 on a GAAP basis was $14.9 million, with EPS of $0.79, compared to net income of $8.6 million, with EPS of $0.47 in 2009. Net income on a non-GAAP basis was $26.5 million, with EPS of $1.40, compared to non-GAAP net income of $18.2 million, and EPS of $1 in 2009.
For the full year of 2010, non-GAAP net income and EPS exclude purchase accounting-related adjustments of $475 000, or EPS of $0.03, charges for stock-based compensation of $4 million, or EPS of $0.21, and non-cash income tax expense of approximately $7.2 million, or EPS of $0.38. For 2009, non-GAAP net income and EPS exclude purchase accounting-related adjustments of $232,000, or EPS of $0.01, charges for stock-based compensation of $3.3 million, or EPS of $0.18, and non-cash income tax expense of $6 million, or EPS of $0.34.
“Looking forward, we see a healthy pipeline of business,” Brown said. “We expect 2011 revenues to be boosted by the next major release of our flagship all-in-one IP communications software suite, which is due for general availability in the first half of the year. We anticipate growth in our cloud-based orders, with increases in both recurring and services revenues. We currently expect total revenues for 2011 to increase by at least 20 percent, moving past the $200 million mark.
“Our growth strategy calls for continued investment in our cloud-based infrastructure, as well as research and development, and sales and marketing, in order to further capitalise on the momentum that we have built while achieving a non-GAAP operating margin of approximately 14%,” Brown concluded.
Other 2010 financial highlights include:
* Cash flows from operations of $28.7 million, up from $15.1 million in 2009.
* Deferred revenue totalling $54.1 million as of 31 December 2010, up from $48.2 million as of 31 December 2009.
* The acquisition of Latitude Software for net cash of $15.3 million in the fourth quarter.
* Cash and investment balances as of 31 December 2010, totalling $85.9 million, up from $65 million as of 31 December 2009, with no debt.
The company hosted a conference call Friday, 28 January at 8:30am Eastern time (EST), featuring Dr Donald E Brown, and the company's CFO, Stephen R Head. A live Q&A session followed opening remarks.
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Interactive Intelligence
Interactive Intelligence (Nasdaq: ININ) is a global provider of unified business communications solutions for contact centre automation, enterprise IP telephony, and business process automation. The company was founded in 1994 and has more than 4,000 customers worldwide. Interactive Intelligence is among Software Magazine's 2010 Top 500 Global Software and Services Suppliers, and Forbes Magazine's 2010 Best Small Companies in America. The company is also positioned in the leaders' quadrant of the Gartner Magic Quadrant for Contact Centre Infrastructure, Worldwide report (Feb. 22, 2010). Interactive Intelligence employs more than 800 people and is headquartered in Indianapolis, Indiana. It has 19 offices throughout North America, Latin America, Europe, Middle East, Africa and Asia Pacific. Interactive Intelligence can be reached at +1 317.872.3000 or info@inin.com; on the Net: http://www.inin.com.
* Non-GAAP measures
The non-GAAP measures shown in this release include revenue which was not recognised on a GAAP basis due to purchase accounting adjustments and exclude non-cash stock-based compensation expense for stock options, the amortisation of certain intangible assets related to acquisitions by the company and non-cash income tax expense. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are included with the financial information included in this press release. These measures are not in accordance with, or an alternative for, GAAP and may be different from non-GAAP measures used by other companies. Stock-based compensation expense and amortisation of intangibles related to acquisitions are non-cash and income tax expense is primarily non-cash. Management believes that the presentation of non-GAAP results, when shown in conjunction with corresponding GAAP measures, provides useful information to management and investors regarding financial and business trends related to the company's results of operations. Further, management believes that these non-GAAP measures improve management's and investors' ability to compare the company's financial performance with other companies in the technology industry. Because stock-based compensation expense, non-cash income tax expense amounts and amortization of intangibles related to acquisitions can vary significantly between companies, it is useful to compare results excluding these amounts. Management also uses financial statements that exclude stock-based compensation expense related to stock options, non-cash income tax amounts and amortisation of intangibles related to acquisitions for its internal budgets.
This release contains certain forward-looking statements that involve a number of risks and uncertainties. Among the factors that could cause actual results to differ materially are the following: rapid technological changes in the industry; the company's ability to maintain profitability; to manage successfully its growth; to manage successfully its increasingly complex third-party relationships resulting from the software and hardware components being licensed or sold with its solutions; to maintain successful relationships with certain suppliers which may be impacted by the competition in the technology industry; to maintain successful relationships with its current and any new partners; to maintain and improve its current products; to develop new products; to protect its proprietary rights adequately; to successfully integrate acquired businesses; and other factors described in the company's SEC filings, including the company's latest annual report on Form 10-K.
Interactive Intelligence Inc. is the owner of the marks INTERACTIVE INTELLIGENCE, its associated LOGO and numerous other marks. All other trademarks mentioned in this document are the property of their respective owners. ININ-G
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