SALT LAKE CITY – August 9, 2012 – inContact, Inc. (NASDAQ: SAAS), the leading provider of cloud contact center software and contact center agent optimization tools, today reported financial results for the second quarter ended June 30, 2012.
inContact Reports Second Quarter 2012 Financial Results
Said Paul Jarman, inContact CEO, “I’m pleased to announce another record quarter for inContact, providing us with strong progress towards our 2012 objectives. During the quarter, we closed 42 new customers and 27 expansion deals for a total of 69 contracts representing an all-time high for total contract adds. We continue to see an increase in the size and number of contact centers choosing inContact, and the estimated annual value of contracts closed in Q2 represents a 41% increase over the same period a year ago. Additionally, in Q2 2012, we saw 35% year-over-year quarterly Software revenue growth. Moreover, Q2 marked the seventh sequential quarter of total revenue growth.”
Software segment revenue totaled $12.8 million for the quarter ended June 30, 2012, an increase of 35% from Q2 2011 and an increase of 4% from $12.3 million in Q1 2012. Telecom segment revenue for Q2 2012 was $13.4 million, an increase of $1.2 million or 9% from $12.2 million in Q2 2011. This increase marks the seventh consecutive quarter that software related telecom revenue has increased.
Consolidated revenue for the quarter ended June 30, 2012 was $26.2 million versus $21.7 million for the same period in 2011, an increase of 21%. This reflects an increase of $3.3 million in Software segment revenue and an increase of $1.2 million in Telecom segment revenue.
For the six months ended June 30, 2012, Software segment revenue totaled $25.1 million, an increase of 33% from $18.9 million for 2011. For the six months ended June 30, 2012, Telecom segment revenue totaled $26.8 million, an increase of 10% from $24.2 million for 2011.
The Q2 Software segment gross margin was 59% versus 58% in Q2 2011, and excluding non-cash charges, non-GAAP Software segment gross margin was 72% for the quarter, versus 70% in Q2 2011. This increase in gross margin is principally attributable to increased revenue in 2012 to help offset the costs attributable to international infrastructure. Second quarter 2012 Telecom segment gross margin was 31% versus 29% in Q2 2011.
Consolidated gross margin percentage was 45% in the second quarter compared to 42% for the same period in 2011. Excluding non-cash charges, consolidated gross margin was 52% for the second quarter compared to 48% for the same period in 2011.
Earnings before interest, taxes, depreciation and amortization and stock-based compensation (“EBITDAS”) for the second quarter was $1.2 million versus $54,000 during the same period in 2011. Our increase in EBITDAS is primarily due to the increase in margins discussed above. EBITDAS is a non-GAAP measure management believes provides important insight into our operating results (see reconciliation of non-GAAP measures below).
GAAP net loss for quarter ended June 30, 2012 was $1.7 million, or ($0.04) per share, as compared to a net loss of $2.1 million, or ($0.06) per share for the same period in 2011. This decrease in net results is primarily due to increased revenues.
Jarman concluded, “With another record quarter behind us, we continue to demonstrate our leadership in the growing cloud contact center market. As the cloud market opportunity continues to expand, we are successfully meeting the demand created by contact centers of all sizes, and we continue to take market share and see more enterprise opportunities than ever before.”
CONFERENCE CALL INFORMATION
We will host a conference call to discuss our second quarter 2012 financial results later today, August 9, 2012, at 4:30 p.m. Eastern time (1:30 p.m. Pacific).
Dial-in Number: 1-800-862-9098
International Dial-in Number: + 1-785-424-1051
Conference ID#: INCONTACT
Webcast URL: http://investor.inContact.com
An audio file of the call will be available after August 9, 2012 on the inContact Investor Relations website at http://investor.incontact.com, in the Webcasts and Presentations section. A replay of the call will be available via telephone after 7:30 p.m. Eastern time today and until August 16, 2012:
Toll-free replay number: 1-877-870-5176
International replay number: + 1-858-384-5517
Replay Pin Number: 12328
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 inContact’s current expectations, estimates and projections about inContact’s industry, management’s beliefs, and certain assumptions made by management, 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 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, risks associated with inContact’s business model; our ability to develop or acquire, and gain market acceptance for new products, including our new sales and marketing and voice automation products, in a cost-effective and timely manner; the gain or loss of key customers; competitive pressures; its ability to expand operations; fluctuations in its earnings as a result of the impact of stock-based compensation expense; interruptions or delays in our hosting operations; breaches of our security measures; its ability to protect our intellectual property from infringement, and to avoid infringing on the intellectual property rights of third parties; and its ability to expand, retain and motivate our employees and manage its growth. Further information on potential factors that could affect our financial results is included in inContact’s annual report on Form 10-K, quarterly reports of 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. inContact undertakes no obligation to revise or update publicly any forward-looking statement for any reason.
We operate under two business segments: Software and Telecom. The Software segment includes all monthly recurring revenue related to the delivery of our software applications, plus the associated professional services and setup fees and revenue related to quarterly minimum purchase commitments through the year ended 2013, from a related party reseller. The Telecom segment includes all voice and data long distance services provided to customers.
For segment reporting, we classify operating expenses as either “direct” or “indirect.” Direct expense refers to costs attributable solely to either selling and marketing efforts or research and development efforts. Indirect expense refers to costs that management considers to be overhead in running the business. Management evaluates expenditures for both selling and marketing and research and development efforts at the segment level without the allocation of overhead expenses, such as rent, utilities and depreciation on property and equipment.
Operating segment revenues and profitability for the three and six month ended June 30, 2012 and 2011 were as follows (in thousands):
RECONCILIATION of NON-GAAP MEASURES:
“EBITDAS” is Earnings Before deductions for Interest, Taxes, Depreciation and Amortization and Stock-Based Compensation. “Gross Margin Before deductions for Depreciation and Amortization and Stock-Based Compensation” is Gross Margin before deductions for Depreciation and Amortization and Stock-Based Compensation. Neither are measures of financial performance under generally accepted accounting principles (GAAP). EBITDAS and Gross Margin Before deductions for Depreciation and Amortization and Stock-Based Compensation are provided for the use of the reader in understanding our operating results and are not prepared in accordance with, nor does it serve as an alternative to GAAP measures and may be materially different from similar measures used by other companies. While not a substitute for information prepared in accordance with GAAP, management believes that this information is helpful for investors to more easily understand our operating financial performance. Management also believes these measures may better enable an investor to form views of our potential financial performance in the future. These measures have limitations as analytical tools, and investors should not consider these measures in isolation or as a substitute for analysis of our results prepared in accordance with GAAP.
inContact (NASDAQ:SAAS) helps contact centers around the globe create profitable customer experiences through its powerful portfolio of cloud contact center software solutions. The company’s services and solutions enable contact centers to operate more efficiently, optimize the cost and quality of every customer interaction, create new pathways to profit and ensure ongoing customer-centric business improvement and growth. To learn more, visit www.inContact.com.
inContact® is the registered trademark of inContact, Inc.