Taleo Reports Strong Second Quarter 2008 Results
Posts Record Revenues; New Customers Reach All-Time High
Dublin, Calif. – July 31, 2008 – Taleo (NASDAQ: TLEO), the leading provider of on demand talent management solutions, today announced financial results for the second quarter ended June 30, 2008.
Quarterly Highlights Include:
| · | Record revenues of $38.8 million for the second quarter of 2008, an increase of 25% year-over-year. |
| · | Signed over 225 new customers, an all-time high. |
| · | Signed definitive agreement to acquire Vurv. |
| · | GAAP net income of $1.1 million, or $0.04 per fully diluted share. |
| · | Non-GAAP net income of $4.2 million, or $0.15 per fully diluted share. |
| · | Customer base grew to over 1,900 customers with more than 1.5 million users. |
“Taleo achieved record performance across the organization, posted record revenues, and set a record for the number of new customers. Our results highlight both the growing demand for talent management solutions in large and small companies regardless of the economic environment,” stated Michael Gregoire, Chairman and CEO of Taleo. “I am also proud that we were able to perform at this level, while simultaneously working on closing our acquisition of Vurv. Taleo’s ability to innovate and execute has helped enhance our leadership position.”
Other significant achievements during the second quarter 2008 include:
| · | Acquired 25 New Taleo Enterprise Edition™ Customers. Demand for Taleo’s talent management solutions continued with the Company signing 25 new enterprise customers bringing Taleo’s customer base to over 350 organizations around the world. New Taleo Enterprise Edition™ customers in North America included AT&T, Adobe, Allergan, Avanade, Blue Cross Blue Shield of Michigan, CSX Transportation, Cymer, Enterprise Product Partners, Harris Teeter, Herbalife, Manpower, Plantronics, The Nielsen Company and US Foodservice. |
| · | Achieved Significant International Growth. Revenues from outside of North America grew by 83% over the same period last year and represented 13% of total revenues. New international customers included Cargotec, Veolia, AirFrance, Baloise, Eiffage, Manpower and Vic Roads. |
| · | Momentum in Performance Management. Just one quarter after the general availability of Taleo PerformanceTM, the Company closed enterprise deals in North America and Europe, including InterContinental Hotels Group, Children’s Healthcare of Atlanta, and North Shore Long Island Jewish Health System. |
| · | Signed Record Number of New SMB Customers. Taleo Business Edition™, a recruiting solution targeted at companies with less than 3,000 employees, welcomed over 200 new customers further establishing Taleo as the leader for SMB Recruiting. New TBE customers include Eclipse Aviation Corp, RAND Worldwide, RightNow Technologies, Pearl Izumi, Masimo Corporation, Verified Person, Conklin Cars, Yelp, Inc., First Guaranty Bank, Taco Johns, Wolfgang Puck Express, Red Bull Australia, SABMiller (makers of MillerCoors), and the Abu Dhabi Audit Authority. |
| · | Launched Taleo Edge. Taleo Edge is a tailored offering of Taleo Enterprise for mid-market companies with between 2,500 and 10,000 employees. During the quarter, Taleo closed its first Taleo Edge deal with NetJets. |
| · | Expanded User Community. Taleo grew its global presence by adding more than 116,000 new users to bring the total number of users to over 1.5 million worldwide, working with candidates in 25 languages and over 190 countries and territories. |
| · | Recognized as Breakaway Leader. Taleo was positioned by Gartner, Inc. as the clear leader within the Leaders’ Quadrant in Gartner’s "Magic Quadrant for E-Recruitment Software, 2008" report. |
| · | Demonstrated Industry Leading Scale and Stability. Taleo processed more than 394,000 hires, from over 9.3 million applicants through its unified on demand platform. |
“Subsequent to the close of the second quarter, we completed the acquisition of Vurv, bolstering Taleo's leadership position in talent management. Vurv brings additional scale, resources and expertise to meet the growing demand for Taleo’s solutions. Together we look forward to bringing innovative new offerings to market and defining the future of talent management,” concluded Michael Gregoire, Chairman and CEO of Taleo.
Taleo delivered the following results for the second quarter ended June 30, 2008:
Revenue: Total revenue for the second quarter was $38.8 million, representing an increase of 25% on a year-over-year basis. Application revenue for the second quarter was $30.9 million, an increase of 21% on a year-over-year basis.
Net Income (Loss) and Net Income (Loss) Per Share to Common Stockholders: Net income in accordance with accounting principles generally accepted in the United States, or GAAP, was $1.1 million for the second quarter, compared to a net loss of ($1.8) million for the same period last year, driven primarily from the recording of a net, non-cash income tax reserve of $2.9 million. Net income for the second quarter of 2008 and 2007 includes share-based compensation expense of $2.8 million and $1.6 million, respectively, pursuant to the adoption on January 1, 2006 of Financial Accounting Standards Board (FASB) Statement No. 123(R), “Share-Based Payment” (SFAS 123(R)), which requires companies to expense the fair value of employee stock options and similar stock based compensation awards. Net income per fully diluted share was $0.04 for the second quarter of 2008 based on 29.1 million weighted average shares outstanding compared to net loss per fully diluted share of ($0.07) for the same period in 2007 based on 23.9 million weighted average shares outstanding.
Non-GAAP Net Income and Non-GAAP Net Income Per Share: Non-GAAP net income, which excludes share-based compensation expense pursuant to SFAS 123(R), amortization of acquired intangibles, restructuring charges, non-cash income tax reserve, and non-cash tax valuation adjustments was $4.2 million for the second quarter of 2008, compared to a non-GAAP net income of $2.8 million in the same period last year. Non-GAAP net income per fully diluted share was $0.15 for the second quarter of 2008 based on 29.1 million weighted average shares outstanding compared to non-GAAP net income per fully diluted share of $0.10 for the same period in 2007 based on 28.2 million weighted average shares outstanding.
Conference Call Details
In conjunction with this announcement, Taleo will host a conference call today at 5:00 p.m. EDT to discuss the Company's second quarter 2008 financial results. A live and replay Webcast of the call will be available at the Investor Relations section of Taleo's website at www.taleo.com. The live call may be accessed by dialing 800-901-5213 (domestic) or 617-786-2962 (international) and referencing passcode: 2831-3733. A replay of the call can also be accessed by dialing 888-286-8010 (domestic) or 617-801-6888 (international), and referencing passcode: 5357-4949.
About Taleo
Taleo (NASDAQ: TLEO) is the leader in on demand unified talent management solutions that empower organizations of all sizes, around the world to assess, acquire, develop and align their workforce for improved business performance. Following its acquisition of Vurv, more than 3,600 organizations use Taleo, including 47 of the Fortune 100 and over 150 of the Fortune 500, for talent acquisition and performance management, in 200 countries and territories. Known for its strong configurability and usability, Taleo's talent management platform runs on a world-class infrastructure and offers 99.9% availability.
Forward-looking Statements
This release contains forward-looking statements, including statements regarding Taleo’s future financial performance, new product development, market growth, the demand for Taleo’s solutions, the impact of Taleo’s acquisition of Vurv, and general business conditions. Any forward-looking statements contained in this press release are based upon Taleo's historical performance and its current plans, estimates and expectations and are not a representation that such plans, estimates, or expectations will be achieved. These forward-looking statements represent Taleo's expectations as of the date of this press announcement. Subsequent events may cause these expectations to change, and Taleo disclaims any obligation to update the forward-looking statements in the future. These forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially. Further information on potential factors that could affect actual results is included in Part I, Item 1A of Taleo’s Annual Report on Form 10-K, as filed with the SEC on March 14, 2008, in Part II, Item 1A of Taleo’s Quarterly Report on Form 10-Q, as filed with the SEC on May 12, 2008, and in other reports filed by Taleo with the SEC.
Non-GAAP Financial Measures
Taleo has provided in this release financial information that has not been prepared in accordance with GAAP. This information includes non-GAAP net income and non-GAAP net income per share. Taleo uses these non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, as a supplement to GAAP measures, in evaluating Taleo's ongoing operational performance. Taleo believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing its financial measures with other companies in Taleo’s industry, many of which present similar non-GAAP financial measures to investors. As noted, the non-GAAP financial measures discussed above exclude share-based compensation expense pursuant to SFAS 123(R), amortization of acquired intangibles, restructuring charges, non-cash income tax reserve and non-cash tax valuation adjustments. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measure as detailed above. As previously mentioned, a reconciliation of GAAP to the non-GAAP financial measures has been provided in the tables included as part of this press release.
