Q3 Revenues $25.4 Million; Up 46% Year Over Year
Record Q3 On-Demand ACV Bookings; Up Over 270% Year Over Year
SAN JOSE, CA -- 10/25/2007 -- Callidus Software Inc. (NASDAQ: CALD), the leading provider of Sales Performance Management (SPM) software and services, today announced financial results for the third quarter ended September 30, 2007.
Total third quarter revenues were up 46% to $25.4 million, compared to the same quarter last year. Third quarter license revenues were up 7% to $6.2 million and third quarter services, maintenance and on-demand revenues were up 65% to $19.2 million, in each case, compared to the third quarter of 2006. In addition, the net new Annual Contract Value (ACV) of on-demand bookings in the quarter was up over 270% to $2.6 million, compared to the same quarter last year.
Third quarter net loss was $3.4 million, or ($0.12) per share, and included $1.2 million of stock-based compensation expense. This compares to a net loss of $2.5 million, or ($0.09) per share, for the third quarter of 2006, which included $1.1 million of stock-based compensation expense.
Cash and investments totaled $50.2 million at September 30, 2007, a decrease of $2.7 million from December 31, 2006.
"This is our fourth consecutive quarter with year over year revenue growth of 40% or more. In addition to this revenue growth, we achieved a record level of on-demand bookings in the quarter and added over 11,500 on-demand payees. This roughly doubles the total number of payees signed-up for the on-demand service compared to the end of the second quarter of 2007. We now have nearly 23,000 payees signed-up for Callidus OnDemand. Perpetual license revenues were seasonally light and results were disappointing in Europe and Asia Pacific. We expect to see improved growth in perpetual license revenues in the fourth quarter. Our operating expenses were lower than planned and we saw some improvement in our services gross margin as expected," said Robert Youngjohns, president and CEO at Callidus Software.
"I am pleased at the speed with which we were able to innovate and meet the growing demand for Software as a Service (SaaS). In less than two years since launching our on-demand offering we now believe we are the clear leader in the on-demand SPM space. Our on-demand customers range from 100 payees to over a thousand payees and span many industries and countries. Our ability to offer our market leading solutions on-premise, on-demand, or as a managed service sets us apart and is an important differentiator in serving customers," Youngjohns concluded.
Recent Business Highlights
- -- Callidus signed up over 11,500 payees to its on-demand service in the third quarter doubling the number of payees compared to the end of the second quarter of 2007. Callidus now has nearly 23,000 payees signed-up for its hosted on-demand service. - -- Callidus was one of only three vendors to receive a "Positive" rating from Gartner, Inc., the highest rating given in the firm's MarketScope for Sales Incentive Compensation Management Software, 2007. In the report, Gartner evaluated eleven sales incentive compensation management vendors. - -- Callidus made its first appearance at the Salesforce.com 2007 Dreamforce conference as a Gold Sponsor. Robert Youngjohns led a breakout session at the conference on SPM. In the second quarter, Callidus announced the availability of TrueComp® Suite for AppExchange. Customers now can get a single view of their Callidus sales incentive and performance management applications through the salesforce.com user interface. TrueComp® Suite for AppExchange is the first and only SPM solution available both on-demand and on-premise that integrates with Salesforce.com. - -- Callidus continued its progress in the health care insurance market, adding one of the nation's largest publicly traded health benefits companies as a customer in the third quarter. Callidus now claims 4 of the top 5 health care insurance companies in the United States as customers.
Q4 2007 Financial Outlook
- -- Total revenues for the fourth quarter of 2007 are expected to be between $28.0 million and $30.0 million. This would represent a 16% to 25% increase compared to fourth quarter 2006 revenues of $24.1 million. - -- Operating expenses, including stock-based compensation of approximately $1.0 million, are expected to be between $16.5 million and $17.5 million as compared to $14.9 million in the third quarter of 2007.
Conference Call
A conference call to discuss the third quarter results and outlook is scheduled for today at 1:30 p.m. Pacific Daylight Time (PDT). The conference call will be available via live-webcast at the Investor Relations section of Callidus' website at www.callidussoftware.com. To participate in the call by telephone, the dial-in number is 866-770-7125 (international +1-617-213-8066), passcode 48356620.
A webcast replay and telephone playback of the conference call will be available after 3:30 p.m. PDT today through November 1, 2007. The webcast replay will be available at the Investor Relations section of Callidus' website under Calendar of Events. The telephone replay will be available by calling 888-286-8010 (international: +1-617-801-6888), passcode 26316911.
About Callidus Software®
Callidus Software (www.callidussoftware.com) (NASDAQ: CALD) is a leading provider of on-premise and on-demand Sales Performance Management (SPM) solutions to global companies across a broad range of industries. Our software allows innovative enterprises of all sizes to strategically manage incentive compensation, set quota targets, administer producers, and align territories, resulting in improved sales and distribution performance. Over 1.7 million salespeople, brokers, and channel representatives have their sales performance managed by Callidus Software's products.
Note on Forward-Looking Statements
The forward-looking statements included in this press release, including expected growth in perpetual license revenues and estimates of fourth quarter 2007 total revenues, operating expenses and stock-based compensation expense, reflect management's best judgment based on factors currently known and involve risks and uncertainties. These risks and uncertainties include, but are not limited to, timing and size of software license orders, potential material fluctuations in financial results and future growth rates, decreases in customer spending, uncertainty regarding the new and rapidly evolving SPM market, customer cancellations or non-renewal of software maintenance contracts or on-demand services, our potential inability to manage effectively any growth we experience, uncertainty regarding the demand for and profitability of our hosted on-demand offering, increased competition or new entrants in the marketplace, litigation and other risks detailed in Callidus' reports filed with the Securities and Exchange Commission (SEC), including its Form 10-K and its Form 10-Q for the second quarter ended June 30, 2007, copies of which may be obtained by contacting Callidus Software's Investor Relations department at 408-808-6577, or from the Investor Relations section of Callidus Software's website (www.callidussoftware.com). Actual results may differ materially from those presently reported. We assume no obligation to update the information contained in this release.
© 1998-2007 Callidus Software Inc. All rights reserved. Callidus Software, the Callidus Software logo, Callidus TrueAllocation, TrueAnalytics, TrueComp, TrueComp Grid, TrueComp Manager, TrueConnection, TrueFoundation, TrueInformation, TrueMBO, TruePerformance, TruePerformance Index, TruePerformance Indicator, TrueProducer, TrueQuota, TrueReferral, TrueResolution, and TrueService+ are trademarks, servicemarks, or registered trademarks of Callidus Software Inc. in the United States and other countries. All other brand, service or product names are trademarks or registered trademarks of their respective companies or owners.
CALLIDUS SOFTWARE INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except for per share data) (unaudited) Three months Nine months ended ended September 30, September 30, --------- --------- --------- --------- 2007 2006 2007 2006 --------- --------- --------- --------- Revenues: License revenues $ 6,200 $ 5,776 $ 21,869 $ 18,669 Services, maintenance and on-demand revenues 19,170 11,649 54,883 33,377 --------- --------- --------- --------- Total revenues 25,370 17,425 76,752 52,046 Cost of revenues: License revenues 191 105 646 389 Services, maintenance and on-demand revenues (1) 14,238 8,205 41,474 24,570 --------- --------- --------- --------- Total cost of revenues 14,429 8,310 42,120 24,959 --------- --------- --------- --------- Gross profit 10,941 9,115 34,632 27,087 Operating expenses: Sales and marketing (1) 7,293 5,570 23,156 17,929 Research and development (1) 3,688 3,612 11,781 10,832 General and administrative (1) 3,951 3,195 11,372 9,274 --------- --------- --------- --------- Total operating expenses 14,932 12,377 46,309 38,035 --------- --------- --------- --------- Operating loss (3,991) (3,262) (11,677) (10,948) Interest and other income, net 657 754 2,239 1,997 --------- --------- --------- --------- Income (loss) before provision for income taxes (3,334) (2,508) (9,438) (8,951) Provision (benefit) for income taxes 36 - 144 - --------- --------- --------- --------- Income (loss) before cumulative effect of a change in accounting principle (3,370) (2,508) (9,582) (8,951) Cumulative effect of a change in accounting principle - - - 128 --------- --------- --------- --------- Net Income (loss) $ (3,370) $ (2,508) $ (9,582) $ (8,823) ========= ========= ========= ========= Basic net income (loss) per share $ (0.12) $ (0.09) $ (0.33) $ (0.32) ========= ========= ========= ========= Diluted net income (loss) per share $ (0.12) $ (0.09) $ (0.33) $ (0.32) ========= ========= ========= ========= Shares used in basic per share computation 29,175 27,888 28,901 27,500 ========= ========= ========= ========= Shares used in diluted per share computation 29,175 27,888 28,901 27,500 ========= ========= ========= ========= (1) Stock-based compensation included in amounts above by category: Cost of Services, maintenance and on-demand revenues $ 288 $ 250 $ 809 $ 760 Sales and marketing 333 264 874 794 Research and development 205 217 737 682 General and administrative 379 335 1,529 1,429 --------- --------- --------- --------- Total stock-based compensation $ 1,205 $ 1,066 $ 3,949 $ 3,665 ========= ========= ========= ========= CALLIDUS SOFTWARE INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (unaudited) September 30, December 31, Assets 2007 2006 ------------- ------------- Current assets: Cash and cash equivalents $ 13,286 $ 12,082 Short-term investments 36,935 40,857 Accounts receivable, net 26,090 23,064 Prepaid and other current assets 3,118 3,939 ------------- ------------- Total current assets 79,429 79,942 Property and equipment, net 4,456 4,086 Deposits and other assets 4,533 1,166 ------------- ------------- Total assets $ 88,418 $ 85,194 ============= ============= Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 4,044 $ 899 Accrued payroll and related expenses 5,936 6,647 Accrued expenses 7,590 3,721 Deferred revenue 13,222 13,726 ------------- ------------- Total current liabilities 30,792 24,993 Long-term deferred revenue 1,208 1,578 Other liabilities 1,250 1,243 ------------- ------------- Total liabilities 33,250 27,814 ------------- ------------- Stockholders’ equity Common stock 29 28 Additional paid-in capital 201,006 193,499 Accumulated other comprehensive income 421 408 Accumulated deficit (146,288) (136,555) ------------- ------------- Total stockholders’ equity 55,168 57,380 ------------- ------------- Total liabilities and stockholders’ equity $ 88,418 $ 85,194 ============= =============
Investor Relations Contact: Jon Pexton 408-808-6577 ir@callidussoftware.com Press Contact: Jock Breitwieser 408-975-6683 pr@callidussoftware.com