Interactive Intelligence reports record third quarter revenue

Interactive Intelligence (Nasdaq: ININ), a global developer of business communications solutions, reported record results for the quarter and nine-month period ended 30 September 2007.

For the third quarter, revenue in 2007 was a record $28.7 million, up 29% over revenue of $22.2 million in 2006.

Operating income for the third quarter increased 23% to $2.1 million in 2007, from $1.7 million in 2006, which included stock-based compensation expense of $812 000 in 2007 and $451 000 in 2006.

Diluted earnings per share (EPS) for the third quarter were $0.13 in 2007. EPS in the same quarter last year were $0.36, including a non-cash income tax benefit of $5 million, or $0.26 per share, recorded to reduce the valuation allowance for deferred tax assets.

For the third quarter, non-GAAP (generally accepted accounting principles) net income was $3.3 million in 2007, or EPS of $0.17, compared to non-GAAP net income of $2.2 million in 2006, or EPS of $0.12. The non-GAAP differences were due to exclusion of the non-cash income tax benefit recorded in the third quarter of 2006 and stock-based compensation expense recorded in both years.

"We are seeing growth in all major geographies," said Interactive Intelligence founder and CEO, Dr Donald E Brown. "During the quarter, we experienced strength in large contact centre sales, as well as a rise in the licensing of our foundational voice over IP products, such as our gateways and media servers. This higher revenue is driving steady increases in profitability while we continue to invest in the development of new technology."

For the nine months ended 30 September, revenue in 2007 was a record $79.9 million, up 35% over revenue of $59.4 million in 2006. Operating income for the nine months ended 30 September increased 48% to $5.4 million in 2007, from $3.7 million in 2006, which included stock-based compensation expense of $2.3 million in 2007 and $1.6 million in 2006. EPS for the nine months ended 30 September were $0.33 in 2007. EPS for the same period in 2006 were $0.48, including the non-cash income tax benefit of $5 million.

Cash and short-term investments as of 30 September 2007 totalled $34.4 million, up from $27.1 million on 31 December 2006. Cash flow from operations for the first nine months of 2007 was $9.8 million, compared to $6.6 million for the first nine months of 2006.

As further testament to its success in the contact centre market, industry analyst firm Gartner positioned Interactive Intelligence in the leaders` quadrant of its recently published Contact Centre Infrastructure report.

An additional benchmark of the company`s continued growth was a jump this year of 21 spots to rank 209th among Software Magazine`s 500 largest global software and services suppliers.

Interactive Intelligence was also added earlier this year to the Russell 2000 Index, a listing of US stocks from industry-leading small-cap companies.

Interactive Intelligence hosted a conference call on 29 October, at 4:30pm EDT, which featured Dr Brown and the company`s CFO, Stephen R Head. A live Q&A session followed opening remarks.