Taleo (TLEO) 8-K Taleo Reports Fourth Quarter and Fiscal 2011 Financial Results

Exhibit 99.1

Media Contact	Investor Relations Contact
Ally Zwahlen	Mike Magaro
925-452-3394	925-452-3120
azwahlen@taleo.com	mmagaro@taleo.com

Taleo Reports Fourth Quarter and Fiscal 2011 Financial Results

Dublin, Calif. – February 9, 2012 –Taleo Corporation (NASDAQ: TLEO), the global leader of SaaS-based Talent Management solutions, today announced results for its fourth quarter and fiscal year 2011.

Taleo delivered the following results for the fourth quarter and fiscal 2011:

Fourth Quarter Revenue: Subscription revenue for the fourth quarter was $70 million, an increase of 26% on a year-over-year basis. Professional services revenue for the fourth quarter was $15 million, an increase of 27% on a year-over-year basis. Total revenue for the fourth quarter was $85 million, an increase of 26% on a year-over-year basis.

Non-GAAP subscription revenue for the fourth quarter was $70.6 million, an increase of 22% on a year-over-year basis. Non-GAAP professional services revenues for the fourth quarter was $15.8 million, an increase of 18% on a year-over-year basis. Total fourth quarter non-GAAP revenue was $86.3 million, an increase of 21% on a year-over-year basis.

2011 Revenue: Total revenue for the full year 2011 was $309 million, an increase of 30% on a year-over-year basis. Subscription revenue for the full year 2011 was $257 million, an increase of 29% on a year-over-year basis. Professional services revenue for the full year 2011 was $59 million, an increase of 55% on a year-over-year basis. Total revenue for 2011 reflects a revenue reduction of $6.5 million recorded in the second quarter of 2011 related to the TSA settlement.

For the full year 2011, the company reported Non-GAAP revenue of $324 million, an increase of 34% from the prior year. Non-GAAP subscription revenue for the full year 2011 was $263 million, an increase of 30% on a year-over-year basis. Non-GAAP professional services revenue for the full year 2011 was $62 million, an increase of 57% on a year-over-year basis.

Fourth Quarter Loss per Share:Fourth quarter net loss per share was $(0.02), compared to a net loss per share of $(0.02) a year ago.

Non-GAAP net income per fully diluted share was $0.26, compared to non-GAAP net income per fully diluted share of $0.23 a year ago.

2011 Earnings per Share:For the full year 2011, net loss per share declined to $(0.35) from net income per fully diluted share of $0.01 a year ago. Non-GAAP net income per fully diluted share for the full year 2011 rose to $1.06 compared to $0.78 a year ago.

An explanation of the non-GAAP measures used in this press release is included in the section below titled “Non-GAAP Financial Measures” and a reconciliation of GAAP to the non-GAAP financial measures has been provided in the tables included as part of this press release.

Quarterly Conference Call Cancelled

As a result of the earlier announcement, Oracle Buys Taleo, Taleo is cancelling the fourth quarter and fiscal 2011 earnings conference call that was previously scheduled for Tuesday, February 14, 2012.

About Taleo

Taleo (NASDAQ: TLEO) helps organizations improve the performance of their business by unlocking the power of their people. Taleo is the only company to provide industry-leading solutions in every category of Talent Management. Through its cloud-based platform, Taleo optimizes recruiting, performance management, learning and compensation – and integrates them all so managers have the insights they need to achieve talent intelligence. Customers also plug into Taleo’s unique Talent Grid community to harness the power of proven best practices, millions of users, and Taleo-ready partner solutions. From small and medium sized businesses to large enterprises, more than 5,000 organizations rely on Taleo every day to pursue growth, innovation and customer success.

Forward-looking Statements

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 II, Item 1A of Taleo’s Quarterly Report on Form 10-Q, as filed with the SEC on November 9, 2011, 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 accounting principles generally accepted in the United States of America, or GAAP. This information includes non-GAAP revenue and non-GAAP earnings 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. The non-GAAP measures include amounts excluded from GAAP revenue due to the write down of deferred revenue associated with purchase accounting for the Worldwide Compensation, Learn.com, Cytiva, and Jobpartner acquisitions, and the reduction in GAAP revenue from the TSA settlement, and exclude costs associated with stock-

based compensation expense, amortization of acquisition-related intangibles, acquisition-related transaction costs, and TSA settlement expenses, the refundable tax credits related to 2009 and 2010, the gain on re-measurement of a previously held interest in Worldwide Compensation, the gain on settlement of the Worldwide Compensation escrow account, realized foreign exchange gain on intercompany settlement, and income taxes associated with certain non-GAAP adjustments.

Fourth quarter loss per share calculations are based on 41.4 million basic weighted average shares outstanding, while fourth quarter non-GAAP EPS calculations are based on 45.0 million fully diluted weighted average shares outstanding. Full year 2011 loss per share calculations are based on 41.0 million basic weighted average shares outstanding, while full year 2011 non-GAAP EPS calculations are based on 44.0 million fully diluted weighted average shares outstanding. The fully diluted weighted average shares outstanding used to compute non-GAAP earnings per share have been calculated without giving consideration to the treasury stock method.

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. A reconciliation of GAAP to the non-GAAP financial measures has been provided in the tables included as part of this press release.

A historical reconciliation of GAAP to non-GAAP financial measures for past periods can be located on the investor relations section ofwww.taleo.com.

Taleo Corporation

Condensed Consolidated Statements of Operations

(All amounts in thousands except per share data)

(Unaudited)

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2011			2010			2011			2010
Revenues:
Subscription and support	$	69,541		$	55,179		$	256,526		$	199,302
Professional services		15,233			12,037			58,869			37,973
TSA settlement - subscription and support		—			—			(6,500	)		—
Net revenues		84,774			67,216			308,895			237,275
Cost of revenues (Note 1):
Subscription and support		14,241			12,305			53,878			44,532
Amortization of acquisition-related intangibles		899			1,499			4,502			4,233
Total cost of subscription and support revenues		15,140			13,804			58,380			48,765
Professional services		12,301			9,204			44,992			29,671
Total cost of revenues		27,441			23,008			103,372			78,436
Gross profit		57,333			44,208			205,523			158,839
Operating expenses (Note 1):
Sales and marketing		28,022			20,478			96,626			67,445
Sales - amortization of acquisition-related intangibles		4,147			3,803			15,457			10,276
Research and development		13,839			12,257			54,591			43,431
General and administrative		12,726			13,168			55,529			42,761
Total operating expenses		58,734			49,706			222,203			163,913
Loss from operations		(1,401	)		(5,498	)		(16,680	)		(5,074	)
Interest and other income (expense), net:
Interest income		89			84			348			482
Interest expense		(139	)		(29	)		(364	)		(106	)
Other income (expense), net		761			(343	)		581			(1,073	)
Gain on remeasurement of previously held interest in Worldwide Compensation, Inc.		—			—			—			885
Gain on Worldwide Compensation, Inc. escrow settlement		—			—			350			—
Total interest and other income (expense), net		711			(288	)		915			188
Loss before provision for (benefit from) income taxes		(690	)		(5,786	)		(15,765	)		(4,886	)
Provision for (benefit from) income taxes		221			(5,166	)		(1,302	)		(5,306	)
Net income (loss) attributable to Class A common stockholders	$	(911	)	$	(620	)	$	(14,463	)	$	420
Net income (loss) per share attributable to Class A common stockholders - basic	$	(0.02	)	$	(0.02	)	$	(0.35	)	$	0.01
Net income (loss) per share attributable to Class A common stockholders - diluted	$	(0.02	)	$	(0.02	)	$	(0.35	)	$	0.01
Weighted average Class A common shares - basic		41,422			40,339			41,043			39,685
Weighted average Class A common shares - diluted		41,422			40,339			41,043			40,915
NOTES
1. Includes stock-based compensation expense
Subscription and support cost of revenue	$	379		$	226		$	1,354		$	929
Professional services cost of revenue		778			437			2,679			1,703
Cost of revenue subtotal		1,157			663			4,033			2,632
Sales and marketing operating expense		1,757			1,060			6,225			4,066
Research and development operating expense		1,419			784			4,705			2,643
General and administrative operating expense		1,928			1,425			6,933			5,598
Operating expense subtotal		5,104			3,269			17,863			12,307
Total stock-based compensation expense	$	6,261		$	3,932		$	21,896		$	14,939

Taleo Corporation

Reconciliation of GAAP measures to Non-GAAP measures

(All amounts in thousands except per share data)

(Unaudited)

Reconciliation of GAAP measures to Non-GAAP measures:

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2011			2010			2011			2010
Net Revenues:
GAAP Net revenues	$	84,774		$	67,216		$	308,895		$	237,275
Plus:
Non-GAAP subscription and support revenue		1,021			2,594			6,076			3,142
Non-GAAP professional services revenue		545			1,343			3,018			1,343
TSA settlement - subscription and support revenue		—			—			6,500			—
Non-GAAP net revenues	$	86,340		$	71,153		$	324,489		$	241,760
Gross profit:
GAAP gross profit	$	57,333		$	44,208		$	205,523		$	158,839
Percentage of GAAP gross profit to GAAP net revenues		68	%		66	%		67	%		67	%
Plus:
Non-GAAP subscription and support revenue		1,021			2,594			6,076			3,142
Non-GAAP professional services revenue		545			1,343			3,018			1,343
TSA Settlement - subscription and support revenue		—			—			6,500			—
Qualified wage credits related to 2009 and 2010		(527	)		—			(1,969	)		—
Stock-based compensation expense		1,157			663			4,033			2,632
Amortization of acquisition-related intangibles		899			1,499			4,502			4,233
Non-GAAP gross profit	$	60,428		$	50,307		$	227,683		$	170,189
Percentage of Non-GAAP gross profit to Non-GAAP revenues		70	%		71	%		70	%		70	%
Income (loss) from operations:
GAAP operating loss	$	(1,401	)	$	(5,498	)	$	(16,680	)	$	(5,074	)
Percentage of GAAP operating loss to net revenues		(1.7	%)		(8.2	%)		(5.4	%)		(2.1	%)
Plus:
Non-GAAP subscription and support revenue		1,021			2,594			6,076			3,142
Non-GAAP professional services revenue		545			1,343			3,018			1,343
TSA Settlement - subscription and support revenue		—			—			6,500			—
Acquisition - related transaction costs		1,176			3,753			8,177			6,826
TSA settlement related expenses		—			—			300			—
Qualified wage credits related to 2009 and 2010		(475	)		—			(1,771	)		—
Stock-based compensation expense		6,261			3,932			21,896			14,939
Amortization of acquisition-related intangibles		5,046			5,302			19,959			14,509
Non-GAAP operating income	$	12,173		$	11,426		$	47,475		$	35,685
Percentage of Non - GAAP operating income to Non-GAAP net revenues		14	%		16	%		15	%		15	%
Net income (loss):
GAAP net income (loss)	$	(911	)	$	(620	)	$	(14,463	)	$	420
Plus:
Non-GAAP subscription and support revenue		1,021			2,594			6,076			3,142
Non-GAAP professional services revenue		545			1,343			3,018			1,343
TSA Settlement - subscription and support revenue		—			—			6,500			—
Acquisition-related transaction costs		1,176			3,753			8,177			6,826
TSA Settlement expenses		—			—			300			—
Qualified wage credits related to 2009 and 2010		(475	)		—			(1,771	)		—
Stock-based compensation expense		6,261			3,932			21,896			14,939
Amortization of acquisition - related intangibles		5,046			5,302			19,959			14,509
Gain on remeasurement of previously held interest in Worldwide Compensation, Inc.		—			—			—			(885	)
Gain on settlement of Worldwide Compensation, Inc. escrow		—			—			(350	)		—
Realized foreign exchange gain from intercompany settlement		(1,032	)		—			(1,032	)		—
Income taxes associated with certain non-GAAP adjustments		(26	)		(6,546	)		(1,807	)		(6,546	)
Non-GAAP net income	$	11,605		$	9,758		$	46,503		$	33,748
Diluted net income (loss) per share:
GAAP diluted net income (loss) per share (a)	$	(0.02	)	$	(0.01	)	$	(0.33	)		0.01
Plus:
Non - GAAP subscription and support revenue		0.02			0.06			0.14			0.07
Non - GAAP professional services revenue		0.01			0.03			0.07			0.03
TSA Settlement - subscription and support revenue		—			—			0.15			—
Acquisition - related transaction costs		0.03			0.09			0.18			0.16
TSA Settlement expenses		—			—			0.01			—
Qualified wage credits related to 2009 and 2010		(0.01	)		—			(0.04	)		—
Stock-based compensation expense		0.14			0.09			0.50			0.34
Amortization of acquisition - related intangibles		0.11			0.12			0.45			0.34
Gain on remeasurement of previously held interest in Worldwide Compensation, Inc.		—			—			—			(0.02	)
Gain on settlement of Worldwide Compensation, Inc. escrow		—			—			(0.01	)		—
Realized foreign exchange gain from intercompany settlement		(0.02	)		—			(0.02	)		—
Income taxes associated with certain non - GAAP adjustments		—			(0.15	)		(0.04	)		(0.15	)
Non - GAAP diluted net income per share	$	0.26		$	0.23		$	1.06		$	0.78
Shares used in computing diluted Non-GAAP net income per share		44,993			43,354			43,964			43,015
Reconciliation of basic and fully diluted share count:
Basic		41,422			40,339			41,043			39,685
Add:
Weighted Average options and unreleased restricted stock, without consideration for the treasury stock method		3,571			3,015			2,921			3,330
Diluted		44,993			43,354			43,964			43,015

(a) GAAP diluted net income(loss) per share was calculated by dividing the GAAP net income (loss) by the Non-GAAP diluted weighted average shares

Taleo Corporation

Condensed Consolidated Balance Sheets

(All amounts in thousands)

(Unaudited)

	December 31, 2011			December 31, 2010
ASSETS
Current assets:
Cash and cash equivalents	$	115,974		$	141,588
Accounts receivable, net		85,810			58,120
Prepaid expenses and other current assets		22,689			18,065
Qualified wage credits receivable		11,526			6,034
Total current assets		235,999			223,807
Property and equipment, net		28,391			26,552
Restricted cash		13			218
Goodwill		243,304			206,418
Intangible assets, net		59,233			59,478
Other assets		10,786			7,363
Total assets	$	577,726		$	523,836
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	47,907		$	36,377
Deferred revenue - subscription and support and customer deposits		111,707			79,704
Deferred revenue - professional services		16,530			19,692
Capital lease obligations, short-term		40			105
Total current liabilities		176,184			135,878
Long-term deferred revenue - subscription and support and customer deposits		1,233			150
Long-term deferred revenue - professional services		4,595			10,006
Other liabilities		13,476			9,241
Capital lease obligations, long-term		7			46
Total liabilities		195,495			155,321
Stockholders’ equity:
Capital stock		1			1
Additional paid-in capital		473,596			442,514
Accumulated deficit		(91,072	)		(76,609	)
Treasury stock		(801	)		(776	)
Accumulated other comprehensive income		507			3,385
Total stockholders’ equity		382,231			368,515
Total liabilities and stockholders’ equity	$	577,726		$	523,836

Taleo Corporation

Condensed Consolidated Statements of Cash Flows

(All amounts in thousands)

(Unaudited)

	Twelve Months Ended December 31,
	2011			2010
Cash flows from operating activities:
Net income (loss)	$	(14,463	)	$	420
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		35,160			28,720
Loss on disposal of fixed assets		49			98
Amortization of debt issuance costs		109			—
Amortization of tenant inducements		(226	)		(176	)
Stock-based compensation expense		21,896			14,939
Excess tax benefits on the exercise of stock options		133			(293	)
Tax benefit recorded upon business acquisition		(1,053	)		(6,546	)
Director fees paid with stock in lieu of cash		269			240
Gain on remeasurement of previously held interest in Worldwide Compensation, Inc.		—			(885	)
Bad debt provision (recovery)		528			(83	)
Changes in assets and liabilities, net of effect of acquisitions:
Accounts receivable		(25,977	)		(11,046	)
Prepaid expenses and other assets		(3,273	)		(8,436	)
Qualified wage credits receivable		(5,826	)		(275	)
Accounts payable and accrued liabilities		4,125			8,371
Deferred revenues and customer deposits		19,952			10,744
Net cash provided by operating activities		31,403			35,792
Cash flows from investing activities:
Purchases of property and equipment		(15,871	)		(14,517	)
Change in restricted cash		204			401
Acquisitions, net of cash acquired		(46,590	)		(137,504	)
Purchase of intangible assets		(1,150	)		—
Net cash used in investing activities		(63,407	)		(151,620	)
Cash flows from financing activities:
Principal payments on capital lease obligations		(355	)		(1,652	)
Payments for expenses associated with 2009 equity offering		—			(659	)
Payments for debt issuance costs		(816	)		—
Excess tax benefits on the exercise of stock options		(133	)		293
Treasury stock acquired to settle employees withholding liability		(5,535	)		(2,824	)
Proceeds from stock options exercised and ESPP shares		14,560			17,455
Net cash provided by financing activities		7,721			12,613
Effect of exchange rate changes on cash and cash equivalents		(1,331	)		574
Decrease in cash and cash equivalents		(25,614	)		(102,641	)
Cash and cash equivalents:
Beginning of period		141,588			244,229
End of period	$	115,974		$	141,588

YTD Condensed Consolidated Statements of Operations Roll forward - GAAP
	Q1 2011			Q1		Q2’2011			Q2		Q3 2011			Q3			Q4 2011
	As reported			Reclass		As reported			Reclass		As reported			Reclass			As reported			YTD
Revenue:
Subscription and support	$	58,390				$	61,714				$	66,881					$	69,541		$	256,526
Professional services		13,107					14,495					16,034						15,233			58,869
TSA Settlement - subscription and support		—					(6,500	)				—						—			(6,500	)
Total revenue		71,497					69,709					82,915						84,774			308,895
Cost of revenue (Note 1):
Subscription and support		12,547					12,426					14,664						14,241			53,878
Amortization of acquired intangibles		1,499					1,262					842						899			4,502
Total cost of subscription and support revenue		14,046					13,688					15,506						15,140			58,380
Professional services		10,236					10,015					12,440						12,301			44,992
Total cost of revenue		24,282					23,703					27,946						27,441			103,372
Gross profit		47,215					46,006					54,969						57,333			205,523
Operating expenses (Note 1):
Sales and marketing		20,709					22,283					25,612						28,022			96,626
Sales - amortization of acquired intangibles		2,777					4,159					4,374						4,147			15,457
Research and development		13,807					12,874					14,071						13,839			54,591
General and administrative		12,129			31		15,153			189		15,720			(419	)		12,726			55,529
Total operating expenses		49,422					54,469					59,777						58,734			222,203
Loss from operations		(2,207	)				(8,463	)				(4,808	)					(1,401	)		(16,680	)
Other income / (expense):
Interest revenue		86					78					95						89			348
Interest expense		(26	)				(57	)				(142	)					(139	)		(364	)
Other income related to Kenexa settlement												19						18			37
Gain on settlement of Worldwide Compensation, Inc. escrow		—					350					—						—			350
FX revaluation					31					189					(419	)		743			544
Total other income		60					371					(28	)					711			915
Income / (loss) before provision for / benefit from income tax		(2,147	)				(8,092	)				(4,836	)					(690	)		(15,765	)
																		—
Provision for / (benefit from) income taxes		23					(4	)				(1,542	)					221			(1,302	)
Income / (loss) attributable to Class A common stockholders	$	(2,170	)			$	(8,088	)			$	(3,294	)				$	(911	)	$	(14,463	)
Income / (loss) per share attributable to Class A common stockholders - basic	$	(0.05	)			$	(0.20	)			$	(0.08	)				$	(0.02	)	$	(0.35	)
Income / (loss) per share attributable to Class A common stockholders - diluted	$	(0.05	)			$	(0.20	)			$	(0.08	)				$	(0.02	)	$	(0.35	)
Weighted average Class A common shares - basic		40,602					40,949					41,187						41,422			41,043
Weighted average Class A common shares - diluted		40,602					40,949					41,187						41,422			41,043
NOTES
1.        Includes stock-based compensation expense
Subscription and support cost of revenue	$	221				$	299				$	455					$	379			1,354
Professional services cost of revenue		524					576					801						778			2,679
Cost of revenue subtotal		745					875					1,256						1,157			4,033
																		—
Sales and marketing operating expense		1,161					1,541					1,766						1,757			6,225
Research and development operating expense		786					1,035					1,465						1,419			4,705
General and administrative operating expense		1,401					1,649					1,955						1,928			6,933
Operating expense subtotal		3,348					4,225					5,186						5,104			17,863
Total stock-based compensation expense	$	4,093				$	5,100				$	6,442					$	6,261		$	21,896

YTD Condensed Consolidated Statements of Operations Roll forward—Non—GAAP
Reconciliation of GAAP net income / (loss) and non-GAAP net income:
	Q1 2011 As reported			Q2 2011 As reported			Q3 2011 As reported			Q4 2011 As reported			YTD
GAAP net income / (loss) reported above	$	(2,170	)	$	(8,088	)	$	(3,294	)	$	(911	)	$	(14,463	)
Add back:
Revenue
Non-GAAP subscription and support revenue		1,664			1,858			1,533			1,021			6,076
Non-GAAP professional services revenue		1,098			667			708			545			3,018
TSA settlement		—			6,500			—			—			6,500
Total Non-GAAP revenue		2,762			9,025			2,241			1,566			15,594
Expenses
Revenue review
TSA Settlement expenses		—			300			—			—			300
Acquisition related transaction costs		1,547			1,971			3,483			1,176			8,177
E-Business Credit					(1,296	)		—			(475	)		(1,771	)
Stock-based compensation expense		4,093			5,100			6,442			6,261			21,896
Amortization of acquisition-related intangibles		4,276			5,421			5,216			5,046			19,959
Non-Cash income tax audit settlement
		9,916			11,496			15,141			12,008			48,561
Other income
Gain on settlement of Worldwide Compensation, Inc. escrow		—			(350	)		—			—			(350	)
Realized foreign exchange gain from intercompany settlement		—			—			—			(1,032	)		(1,032	)
		—			(350	)		—			(1,032	)		(1,382	)
Provision for/(benefit from) income taxes
Non-cash income tax valuation benefit		—			(1,403	)		—			350			(1,053	)
Non-cash income tax audit settlement		—						—			—			—
Non-cash income tax rate		(530	)		1,061			(911	)		(376	)		(756	)
Discrete Income Tax		2			—			—			—			2
Non-GAAP net income	$	9,980		$	11,741		$	13,177		$	11,605		$	46,503