CallidusCloud Announces Second Quarter 2012 ResultsQ2 SaaS Revenue up 30% Year Over Year; Q2 SaaS Billings(1) up 40% Year Over Year; GAAP Gross Margin Reached 47% up From 39% Year Over Year; 147 New Subscription Customers Added in Q2
PLEASANTON, CA -- (Marketwire - August 02, 2012) - CallidusCloud® (NASDAQ: CALD), the leader in cloud based solutions for sales effectiveness, today announced financial results for the second quarter ended June 30, 2012.
"I am pleased with our performance in Q2. We had record recurring revenues, strong SaaS billings and a record number of new customers. Our Commissions business performed stronger than ever with deals signed in North America, Colombia, the UAE, and Russia. We saw demand across multiple industries with particular strength in insurance and telecommunications. The Learning, CPQ and Marketing Automation businesses all contributed to a great quarter," said Leslie Stretch, President and CEO of CallidusCloud.
Financial Highlights for the Second Quarter 2012
- Total revenue was $23.8 million for the second quarter, representing an increase of 17% compared to the same quarter last year. Total recurring revenues, which include SaaS revenues and maintenance and support, were $18.0 million, up 17% compared to the second quarter of 2011. SaaS revenues of $14.0 million were up 30%, benefitting by $740,000 from an early customer acceptance, while maintenance and support revenues of $4.0 million were down 13% as compared to the second quarter of 2011. Service and other revenues of $5.8 million were up 15% as compared to the same quarter of 2011.
- Total GAAP gross margin was 47% for the second quarter up from 39% in the same quarter in 2011.
- Non-GAAP gross margin continued at its quarterly record level of 53% for the second quarter of 2012, up from 46% for the second quarter of 2011. Non-GAAP gross margin for the second quarter of 2012 excludes $1.0 million of stock-based compensation expense and $526,000 of amortization of acquired intangibles.
- Second quarter 2012 GAAP recurring revenue gross margin was 56% up from 44% for the second quarter of 2011. Second quarter non-GAAP recurring revenue gross margin, which excludes $383,000 of stock-based compensation and $488,000 of amortization of acquired intangibles, was 61%, up from 52% for the second quarter of 2011.
- GAAP net loss was $5.4 million, or ($0.15) per share, for the second quarter of 2012, which included $4.3 million of stock-based compensation expense, a benefit of $1.8 million for an acquisition-related purchase adjustment, $837,000 of convertible note related interest and amortization expense, $785,000 of amortization of acquired intangible assets, $267,000 of acquisition-related expense and $179,000 of restructuring expense and other. This compares to a GAAP net loss of $4.7 million, or ($0.14) per share, for the second quarter of 2011, which included $3.7 million of stock-based compensation expense, $452,000 of convertible note related expense items, $278,000 of patent litigation cost, $255,000 of amortization of acquired intangible assets, and $237,000 of acquisition related expense.
- Non-GAAP net loss was ($909,000), or ($0.03) per fully diluted share, for the quarter, compared to non-GAAP net income of $165,000, for the same period last year excluding the items identified above.
Business Highlights for the Second Quarter 2012
- Acquired 6FigureJobs, a premier executive career community and job board. The acquisition extends CallidusCloud's Hiring Cloud suite into a comprehensive sales and executive focused talent recruitment solution.
- Alliances development including joining Salesforce.com's ISV Force program. This program incentivizes Salesforce.com's end users to partner with CallidusCloud apps across their business beginning with CallidusCloud CPQ from the Selling Cloud and CallidusCloud Litmos Mobile Learning from the Learning Cloud.
- The CallidusCloud® Sales Effectiveness suite was selected as a finalist for the prestigious International Business Awards -- The Stevies in the "Best Cloud Application/Service", "Best Human Capital Management Solution", and "Best Financial Management Solution" categories.
- CallidusCloud hosted C3 -- the largest Sales Performance and Effectiveness conference of its kind in May 2012 -- where it announced the launch of its gamification solution. This sales engagement solution uses a reward and scoring system to drive performance-improving behaviors and represents a significant initiative in the SPM space.
Financial Outlook
Total revenue for the third quarter of 2012 is expected to be between $22.6 million and $23.6 million. For the full year 2012 we expect total revenues to be between $94.0 million and $95.5 million. GAAP operating expenses are expected to be between $18.6 million and $19.6 million in the third quarter of 2012, which includes stock-based compensation expense of approximately $3.7 million, amortization of acquired intangibles of $800,000 and $500,000 of acquisition related costs and legal costs to defend our intellectual property.
Conference Call
A conference call to discuss the second quarter results and outlook is scheduled for 1:30 p.m. Pacific Daylight Time (PDT) today. The conference call will be available via live webcast at the Investor Relations section of CallidusCloud's website.
Webcast site: http://www.media-server.com/m/acs/899ec808f0b545f52b65d9970fd999be
Dial-in number: 800-573-4842 (International callers: 617-224-4327)
Passcode: 53540559
Replay: A webcast replay will be available after 6:30 p.m. PT on August 2, 2012 through August 10, 2012. The webcast replay will be available at the Investor Relations section of our website under Calendar of Events.
Note: (1) Billings is defined as revenue plus the change in quarterly deferred revenue.
About Callidus Software
Callidus Software Inc. (NASDAQ: CALD) is the market and technology leader in sales effectiveness cloud computing. Our customers gain a competitive advantage by maximizing sales cost efficiencies and driving improvements in sales effectiveness. CallidusCloud's award-winning multi-tenant SaaS applications set the standard for performance management of a company's sales force and channel partners. Over 2.5 million users rely on our solutions to power their performance. For more information, please visit www.calliduscloud.com.
Note on Forward-Looking Statements
The forward-looking statements included in this press release, including discussion of our commercial prospects, estimates of third quarter and full year 2012 revenues, operating expenses, stock-based compensation expense and amortization of acquired intangibles expenses 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, potential disruption of customer purchase decisions resulting from global economic conditions, timing and size of orders, potential material fluctuations in financial results and future growth rates, decreases in customer spending, uncertainty regarding purchasing trends in the SPM market, customer cancellations or non-renewal of 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 on-demand services, increased competition or new entrants in the marketplace, and other risks detailed in Callidus' reports filed with the Securities and Exchange Commission (SEC), including its Form 10-K for 2011 and its first quarter 2012 Form 10-Q which may be obtained by contacting CallidusCloud's Investor Relations department at 925-251-2248, or from the Investor Relations section of CallidusCloud's website (CallidusCloud Investor Relations). Actual results may differ materially from those presently reported. We assume no obligation to update the information contained in this release.
Non-GAAP Financial Measures
Callidus has provided in this release financial information that has not been prepared in accordance with GAAP. This information includes non-GAAP gross margin, non-GAAP recurring revenue gross margin, non-GAAP net loss and non-GAAP net loss per share. Callidus uses non-GAAP measures internally in analyzing its financial results and believes that they are useful to investors, as a supplement to GAAP measures, in evaluating Callidus' operating performance. Callidus believes that the use of these non-GAAP measures provides additional insight for investors to use in evaluation of ongoing operating results and trends and in comparing its financial measures with other companies in Callidus' industry, many of which present similar non-GAAP financial measures to investors. As noted, the non-GAAP financial measures exclude stock-based compensation expense, a benefit from a purchase acquisition-related adjustment, restructuring expense, acquisition related expense, patent litigation cost, convertible note interest expense, amortization of convertible note issuance cost and amortization of acquired intangibles. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.
©2012. Callidus Software Inc. All rights reserved. Callidus, Callidus Software, the Callidus Software logo, CallidusCloud, the CallidusCloud logo, TrueComp Manager, ActekSoft, ACom3, ForceLogix, Salesforce Assessments, iCentera, Webcom, LeadFormix, Litmos, the Litmos logo, Rapid Intake, and 6FigureJobs are trademarks, service marks, or registered trademarks of Callidus Software Inc. and its affiliates 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 ended Six months ended
June 30, June 30,
-------------------- --------------------
2012 2011 2012 2011
--------- --------- --------- ---------
Revenues:
Recurring $ 18,027 $ 15,350 $ 34,913 $ 30,052
Services and other 5,754 5,005 10,881 10,114
--------- --------- --------- ---------
Total revenues 23,781 20,355 45,794 40,166
Cost of revenues:
Recurring (1) (2) 7,902 8,537 15,460 16,497
Services and other (1) (2) 4,815 3,978 9,213 8,015
--------- --------- --------- ---------
Total cost of revenues 12,717 12,515 24,673 24,512
--------- --------- --------- ---------
Gross profit 11,064 7,840 21,121 15,654
Operating expenses:
Sales and marketing (1) (2) 8,285 4,856 15,196 9,050
Research and development (1) 4,067 2,756 8,076 5,270
General and administrative (1)
(2) (3) (4) 4,849 4,353 9,854 7,827
Acquisition-related adjustment (1,837) - (1,837) -
Restructuring 172 (2) 614 37
--------- --------- --------- ---------
Total operating expenses 15,536 11,963 31,903 22,184
--------- --------- --------- ---------
Operating loss (4,472) (4,123) (10,782) (6,530)
Interest and other income
(expense), net (5) (6) (944) (491) (1,739) (442)
--------- --------- --------- ---------
Loss before provision (benefit)
for income taxes (5,416) (4,614) (12,521) (6,972)
Provision (benefit) for income
taxes (7) 17 119 (105) 199
--------- --------- --------- ---------
Net loss $ (5,433) $ (4,733) $ (12,416) $ (7,171)
========= ========= ========= =========
Basic and diluted net loss per
share $ (0.15) $ (0.14) $ (0.36) $ (0.22)
========= ========= ========= =========
Shares used in basic and diluted
per share computation 35,235 33,048 34,674 33,079
========= ========= ========= =========
--------------------------------
(1) Stock-based compensation
included in amounts above by
category:
Cost of recurring $ 383 $ 1,037 $ 929 $ 1,791
Cost of services and other 573 362 1,050 685
Sales and marketing 1,165 452 1,940 820
Research and development 485 363 899 724
General and administrative 1,687 1,464 2,677 2,063
--------- --------- --------- ---------
Total stock-based
compensation 4,293 3,678 7,495 6,083
(2) Acquisition, acquired and
settlement related asset
amortization
Cost of recurring 488 86 974 124
Cost of services and other 38 - 44 -
Sales and marketing 202 154 413 297
General and administrative 57 15 120 24
--------- --------- --------- ---------
Total acquisition related
asset amortization 785 255 1,551 445
(3) Acquisition-related expense 267 237 637 383
(4) Patent litigation cost 7 278 620 578
(5) Interest expense on
convertible notes 703 392 1,406 392
(6) Amortization of convertible
note issuance cost 134 60 268 60
(7) Tax benefit from release of
valuation allowance - - (224) -
CALLIDUS SOFTWARE INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(unaudited)
June 30, December 31,
Assets 2012 2011
------------ ------------
Current assets:
Cash and cash equivalents $ 5,922 $ 17,383
Short-term investments 25,613 35,406
Accounts receivable, net 28,710 21,778
Deferred income taxes 110 110
Prepaid and other current assets 7,168 5,831
------------ ------------
Total current assets 67,523 80,508
Property and equipment, net 6,962 6,772
Goodwill 30,916 24,245
Intangible assets, net 23,403 17,769
Deferred income taxes, noncurrent 206 206
Deposits and other assets 3,388 3,936
------------ ------------
Total assets $ 132,398 $ 133,436
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 4,553 $ 3,515
Accrued payroll and related expenses 3,899 4,278
Accrued expenses 12,542 12,272
Deferred income taxes 596 596
Deferred revenue 32,663 30,211
Capital lease obligations 1,229 1,196
------------ ------------
Total current liabilities 55,482 52,068
Deferred revenue, noncurrent 3,216 4,257
Deferred income taxes, noncurrent 269 197
Other liabilities 1,976 2,413
Capital lease obligations, noncurrent 306 915
Convertible notes 59,215 59,215
------------ ------------
Total liabilities 120,464 119,065
------------ ------------
Stockholders' equity:
Common stock 34 33
Additional paid-in capital 248,758 238,798
Treasury stock (14,430) (14,430)
Accumulated other comprehensive income 207 189
Accumulated deficit (222,635) (210,219)
------------ ------------
Total stockholders' equity 11,934 14,371
------------ ------------
Total liabilities and stockholders' equity $ 132,398 $ 133,436
============ ============
CALLIDUS SOFTWARE INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
Six months ended, June 30,
--------------------------
2012 2011
------------ ------------
Cash flows from operating activities:
Net loss $ (12,416) $ (7,171)
Adjustments to reconcile net loss to net cash
provided by (used in)
operating activities:
Depreciation expense 1,490 1,587
Amortization of intangible assets 2,558 1,394
Provision for doubtful accounts and service
remediation reserves 52 47
Stock-based compensation 7,495 6,040
Stock-based compensation related to
acquisition - 42
Release of valuation allowance (224) -
Gain on disposal of property (5) -
Amortization of convertible note issuance
cost 268 60
Net amortization on investments 231 173
Acquisition-related adjustment (1,837) -
Changes in operating assets and
liabilities:
Accounts receivable (6,712) 1,623
Prepaid and other current assets (637) 2,064
Other assets 548 (3,172)
Accounts payable 118 (1,161)
Accrued expenses (374) 931
Accrued payroll and related expenses (379) 81
Accrued restructuring 230 (209)
Deferred revenue 1,270 (848)
Deferred income taxes 72 77
------------ ------------
Net cash provided by (used in) operating
activities (8,252) 1,558
------------ ------------
Cash flows from investing activities:
Purchases of investments (16,536) (33,569)
Proceeds from maturities and sale of
investments 26,111 10,063
Purchases of property and equipment (1,714) (982)
Proceeds from disposal of property and
equipment 5 -
Purchases of intangible assets (4,485) (1,128)
Acquisitions, net of cash acquired (7,721) (5,860)
------------ ------------
Net cash used in investing activities (4,340) (31,476)
------------ ------------
Cash flows from financing activities:
Proceeds from issuance of common stock 4,295 4,516
Repurchase of stock - (14,430)
Repurchase of common stock from employees for
payment of taxes onvesting of restricted
stock units (1,829) (681)
Payment of consideration related to
acquisition (723) (600)
Proceeds from issuance of convertible notes,
net of issuance costs - 77,369
Repayment of debt assumed through acquisition (30) -
Payment of principal under capital lease (587) (601)
------------ ------------
Net cash provided by financing activities 1,126 65,573
------------ ------------
Effect of exchange rates on cash and cash
equivalents 5 37
------------ ------------
Net increase (decrease) in cash and cash
equivalents (11,461) 35,692
Cash and cash equivalents at beginning of period 17,383 12,830
------------ ------------
Cash and cash equivalents at end of period $ 5,922 $ 48,522
============ ============
CALLIDUS SOFTWARE INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except for percentages and per share data)
(unaudited)
Three months ended Six months ended
June 30, June 30,
-------------------- --------------------
2012 2011 2012 2011
--------- --------- --------- ---------
Non-GAAP gross profit
reconciliation
Gross profit $ 11,064 $ 7,840 $ 21,121 $ 15,654
Profit margin, as a % of
total revenues 47% 39% 46% 39%
Add back:
Non-cash stock-based
compensation 956 1,399 1,979 2,476
Non-cash amortization of
acquired intangible assets 526 86 1,018 124
--------- --------- --------- ---------
Non-GAAP gross profit $ 12,546 $ 9,325 $ 24,118 $ 18,254
--------- --------- --------- ---------
Profit margin, as a % of
total revenues 53% 46% 53% 45%
Non-GAAP recurring revenue gross
profit reconciliation
Recurring revenue gross profit $ 10,125 $ 6,813 $ 19,453 $ 13,555
Recurring revenue profit
margin, as a % of recurring
revenues 56% 44% 56% 45%
Add back:
Non-cash stock-based
compensation 383 1,037 929 1,791
Non-cash amortization of
acquired intangible assets 488 86 974 124
--------- --------- --------- ---------
Non-GAAP Recurring revenue gross
profit $ 10,996 $ 7,936 $ 21,356 $ 15,470
--------- --------- --------- ---------
Recurring revenue profit
margin, as a % of recurring
revenues 61% 52% 61% 51%
Non-GAAP operating expense
reconciliation:
Operating expenses $ 15,536 $ 11,963 $ 31,903 $ 22,184
Operating expenses, as a %
of total revenues 65% 59% 70% 55%
Add back:
Non-cash stock-based
compensation (3,337) (2,279) (5,516) (3,607)
Non-cash amortization of
acquired intangible assets (259) (169) (533) (321)
Acquisition-related expense (267) (237) (637) (383)
Patent litigation cost (7) (278) (620) (578)
Acquisition-related
adjustment 1,837 - 1,837 -
Restructuring (172) 2 (614) (37)
--------- --------- --------- ---------
Non-GAAP Operating Expenses $ 13,331 $ 9,002 $ 25,820 $ 17,258
--------- --------- --------- ---------
Non-GAAP Operating expenses,
as a % of total revenues 56% 44% 56% 43%
Non-GAAP operating income (loss)
reconciliation:
Operating loss $ (4,472) $ (4,123) $ (10,782) $ (6,530)
Operating loss, as a % of
total revenues -19% -20% -24% -16%
Add back:
Non-cash stock-based
compensation 4,293 3,678 7,495 6,083
Non-cash amortization of
acquired intangible assets 785 255 1,551 445
Acquisition-related expense 267 237 637 383
Patent litigation cost 7 278 620 578
Acquisition-related
adjustment (1,837) - (1,837) -
Restructuring 172 (2) 614 37
--------- --------- --------- ---------
Non-GAAP Operating income (loss) $ (785) $ 323 $ (1,702) $ 996
--------- --------- --------- ---------
Non-GAAP Operating income
(loss), as a % of total
revenues -3% 2% -4% 2%
CALLIDUS SOFTWARE INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except for percentages and per share data)
(unaudited)
Three months ended Six months ended
June 30, June 30,
-------------------- --------------------
2012 2011 2012 2011
--------- --------- --------- ---------
Non-GAAP net loss
reconciliation:
Net loss $ (5,433) $ (4,733) $ (12,416) $ (7,171)
Net loss, as a % of total
revenues -23% -23% -27% -18%
Add back:
Non-cash stock-based
compensation 4,293 3,678 7,495 6,083
Non-cash amortization of
acquired intangible assets 785 255 1,551 445
Acquisition related expenses 267 237 637 383
Patent litigation costs 7 278 620 578
Acquisition-related
adjustment (1,837) - (1,837) -
Restructuring 172 (2) 614 37
Interest expense on
convertible notes 703 392 1,406 392
Amortization of convertible
note issuance cost 134 60 268 60
Tax benefit from release of
valuation allowance - - (224) -
--------- --------- --------- ---------
Non-GAAP Net income (loss) $ (909) $ 165 $ (1,886) $ 807
--------- --------- --------- ---------
Non-GAAP Net income (loss),
as a % of total revenues -4% 1% -4% 2%
Non-GAAP net income (loss) per
share reconciliation:
Net loss per basic and diluted
share $ (0.15) $ (0.14) $ (0.36) $ (0.22)
Add back:
Non-cash stock-based
compensation 0.12 0.11 0.22 0.18
Non-cash amortization of
acquired intangible assets 0.02 0.01 0.04 0.01
Acquisition related expenses 0.01 - 0.02 0.01
Patent litigation costs - 0.01 0.02 0.02
Acquisition-related
adjustment (0.05) - (0.05) -
Restructuring - - 0.02 -
Interest expense on
convertible notes 0.02 0.01 0.04 0.02
Amortization of convertible
note issuance cost - - 0.01 -
Tax benefit from release of
valuation allowance - - (0.01) -
--------- --------- --------- ---------
Non-GAAP net income (loss) per
basic share $ (0.03) $ - $ (0.05) $ 0.02
--------- --------- --------- ---------
Non-GAAP net income (loss) per
diluted share $ (0.03) $ - $ (0.05) $ 0.02
--------- --------- --------- ---------
Basic and fully diluted shares
reconciliation:
Basic shares 35,235 33,048 34,674 33,079
--------- --------- --------- ---------
Add back:
Weighted average effect of
dilutive securities - 15,797 - 15,508
--------- --------- --------- ---------
Diluted shares 35,235 48,845 34,674 48,587
--------- --------- --------- ---------
Investor Relations Contact
Carolyn Bass
Market Street Partners
(415) 445-3232
carolyn@marketstreetpartners.com
