PLEASANTON, CA -- (Marketwire) -- 11/01/12 --
- Q3 Total Revenues up 14% Year over Year
- Q3 SaaS Revenue up 19% Year over Year
- Q3 SaaS Bookings highest in 11 Quarters
- Total Contracted Value Exceeded $100 Million
- Non-GAAP Recurring Revenue Gross Margin a record 65%
- 157 New Subscription Customers added in Q3
Callidus Software Inc. (NASDAQ: CALD), a leading provider of hiring, learning, marketing and selling cloud software today announced financial results for the third quarter ended September 30, 2012.
"I am pleased with our third quarter performance. This is the eighth consecutive double-digit revenue growth quarter for CallidusCloud," said Leslie Stretch, President and CEO, CallidusCloud. "Our Selling, Marketing, Learning and Hiring clouds all performed well. We had another strong SaaS bookings quarter and we exceeded the top end of our revenue guidance. We expanded our Non-GAAP recurring revenue gross margins again to a record of 65%. We added a record number of new subscription customers and signed two of the world's largest telcos for our Commissions solution making us the de-facto standard for SPM in this important vertical. We also saw increased instances of multi-product and cross-sell contracts. We were recognized as the leader in the SPM sector by Gartner Group with the only 'Strong Positive' rating in the history of the sector and we received no less than 10 International and American business awards."
Financial Highlights for the Third Quarter 2012
- Total revenue was $23.9 million for the third quarter, representing an increase of 14% compared to the same quarter last year. Total recurring revenues, which include SaaS revenues and maintenance and support, were $17.5 million, up approximately 10% compared to the third quarter of 2011. SaaS revenues of $13.6 million were up 19%, while maintenance and support revenues of $3.9 million were down 14% as compared to the third quarter of 2011. Service and other revenues of $6.4 million were up 27% as compared to the same quarter of 2011 driven by perpetual licenses of $2.0 Million in the quarter.
- Total GAAP gross margin was 50% for the third quarter up from 42% in the same quarter in 2011.
- Non-GAAP gross margin was 56% for the third quarter of 2012 up from 48% for the third quarter of 2011. Non-GAAP gross margin for the third quarter of 2012 excludes $931,000 of stock-based compensation expense and $464,000 of amortization of acquired intangibles.
- Third quarter 2012 GAAP recurring revenue gross margin was 61% up from 48% for the third quarter of 2011. Third quarter non-GAAP recurring revenue gross margin, which excludes $353,000 of stock-based compensation and $472,000 of amortization of acquired intangibles was 65%, up from 53% for the third quarter of 2011.
- GAAP net loss was $6.5 million, or ($0.18) per share, for the third quarter of 2012, which included $3.5 million of stock-based compensation expense, $837,000 of convertible note related interest and amortization expense, $824,000 of amortization of acquired intangible assets, $232,000 of acquisition-related expense and $113,000 of patent litigation defense and restructuring costs. This compares to a GAAP net loss of $4.6 million, or ($0.14) per share, for the third quarter of 2011, which included $2.8 million of stock-based compensation expense, $1,031,000 of convertible note related expense items, gain on extinguishment of debt of $904,000, $697,000 of acquisition related expense, a tax benefit from release of valuation allowance of $572,000, $494,000 of patent litigation cost, $409,000 of amortization of acquired intangible assets, impairment of marketable securities for $375,000 and $99,000 of restructuring expense.
- Non-GAAP net loss was $946,000, or ($0.03) per fully diluted share, for the quarter, compared to non-GAAP net loss of $130,000, for the same period last year excluding the items identified above.
Business Highlights for the Third Quarter 2012
- CallidusCloud was the only vendor to receive the highest "Strong Positive" rating in the 2012 MarketScope for SPM Software by Gartner, the world's leading information technology research and advisory company. The report, which estimates the SPM market size at $1.5-$2 billion during 2012 and 2013, focused on vendors that provide technology for managing training, coaching, hiring, onboarding, territories, quotas and incentive compensation.
- CallidusCloud collected 10 awards at the American Business Awards and International Business Awards including favorite company, best website, best new product and best new financial management cloud app for CallidusCloud's Commissions solution.
- CallidusCloud's CPQ solution joined the Oracle ISV program following on from its addition to the salesforce.com ISV program.
- CallidusCloud sponsored key industry events including Dreamforce, Cloudforce, Oracle Open World, Aberdeen Marketing Leadership Summit, Sales 2.0, Sales Management Association Sales Productivity Conference and the World at Work, Spotlight on Sales Compensation conference.
Financial Outlook
Total revenue for the fourth quarter of 2012 is expected to be between $24.8 million and $25.8 million. For the full year 2012 this translates to total revenues of between $94.5 million and $95.5 million. GAAP operating expenses are expected to be between $20.0 million and $21.0 million in the fourth quarter of 2012, which includes stock-based compensation expense of approximately $3.6 million, approximately $1.0 million in one-time transfer fees related to converting our Hyderabad contractors to employees, amortization of acquired intangibles of $825,000 and $340,000 of patent litigation defense costs.
Conference Call
A conference call to discuss the third 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 Callidus Software's website.
Webcast site: http://www.calliduscloud.com/about-us/investor-relations/
Dial-in: 800-561-2693 (International callers: 617-614-3523)
Passcode: 79945512
Replay information: A webcast replay will be available on the Investor Relations section of our website under Calendar of Events.
For more information, please visit: http://www.calliduscloud.com/about-us/investor-relations/
About CallidusCloud
Callidus Software Inc. (NASDAQ: CALD), doing business as CallidusCloud, is a leading provider of cloud software. CallidusCloud enables organizations to drive performance and productivity across their business with our hiring, learning, marketing and selling clouds. From back office to the field, from desktop to mobile, we ensure organizations have the right tools to be more effective and perform better. The combined power of our clouds, our people, and our partners fuels growth, empowers the work force and delivers real value. CallidusCloud drives performance and productivity for over 1500 leading organizations. Small, medium and large enterprises across multiple industries and geographies rely on CallidusCloud for quicker hiring, simpler learning, better marketing, and smarter selling.
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 fourth 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 second quarter 2012 Form 10-Q which may be obtained by contacting Callidus Software's Investor Relations department at 925-251-2248, or from the Investor Relations section of Callidus Software'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 defense 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 Nine months ended
September 30, September 30,
---------------------- ----------------------
2012 2011 2012 2011
---------- ---------- ---------- ----------
Revenues:
Recurring $ 17,533 $ 16,015 $ 52,446 $ 46,067
Services and other 6,393 5,044 17,273 15,158
---------- ---------- ---------- ----------
Total revenues 23,926 21,059 69,719 61,225
Cost of revenues:
Recurring (1) (2) 6,923 8,363 22,365 24,860
Services and other (1) (2) 5,084 3,937 14,271 11,952
---------- ---------- ---------- ----------
Total cost of revenues 12,007 12,300 36,636 36,812
---------- ---------- ---------- ----------
Gross profit 11,919 8,759 33,083 24,413
Operating expenses:
Sales and marketing (1)
(2) 8,351 5,253 23,573 14,303
Research and development
(1) (2) 4,023 3,145 12,116 8,416
General and administrative
(1) (2) (3) (4) 4,831 4,673 14,685 12,500
Acquisition-related
adjustment 50 - (1,787) -
Restructuring (53) 99 561 136
---------- ---------- ---------- ----------
Total operating expenses 17,202 13,170 49,148 35,355
---------- ---------- ---------- ----------
Operating loss (5,283) (4,411) (16,065) (10,942)
Interest and other income
(expense), net (5) (6) (8)
(9) (737) (638) (2,476) (1,079)
---------- ---------- ---------- ----------
Loss before provision
(benefit) for income taxes (6,020) (5,049) (18,541) (12,021)
Provision (benefit) for
income taxes (7) 444 (478) 213 (279)
---------- ---------- ---------- ----------
Net loss $ (6,464) $ (4,571) $ (18,754) $ (11,742)
========== ========== ========== ==========
Basic and diluted net loss
per share $ (0.18) $ (0.14) $ (0.53) $ (0.36)
========== ========== ========== ==========
Shares used in basic and
diluted per share
computation 35,853 32,327 35,070 32,826
========== ========== ========== ==========
----------------------------
(1) Stock-based compensation included
in amounts above by category:
Cost of recurring $ 353 $ 731 $ 1,282 $ 2,523
Cost of services and other 578 370 1,623 1,054
Sales and marketing 1,026 502 2,971 1,320
Research and development 485 366 1,384 1,090
General and administrative 1,070 843 3,747 2,907
---------- ---------- ---------- ----------
Total stock-based
compensation 3,512 2,812 11,007 8,894
(2) Acquisition, acquired and
settlement related asset amortization
Cost of recurring 472 163 1,378 286
Cost of services and other (8) - 36 -
Sales and marketing 233 222 646 519
Research and development 68 - 136 -
General and administrative 59 24 180 47
---------- ---------- ---------- ----------
Total acquisition
related asset
amortization 824 409 2,376 852
(3) Acquisition-related
expense 182 697 820 1,080
(4) Patent litigation cost 166 494 786 1,072
(5) Interest expense on
convertible notes 703 874 2,110 1,265
(6) Amortization of
convertible note issuance
cost 134 157 402 216
(7) Tax benefit from release
of valuation allowance - (572) (224) (572)
(8) Gain on extinguishment
of convertible note - (904) - (904)
(9) Impairment of asset - 375 - 375
CALLIDUS SOFTWARE INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(unaudited)
September 30, December 31,
Assets 2012 2011
------------- -------------
Current assets:
Cash and cash equivalents $ 6,631 $ 17,383
Short-term investments 19,856 35,406
Accounts receivable, net 29,490 21,778
Deferred income taxes 110 110
Prepaid and other current assets 7,773 5,831
------------- -------------
Total current assets 63,860 80,508
Property and equipment, net 9,827 6,772
Goodwill 31,213 24,416
Intangible assets, net 22,362 17,769
Deferred income taxes, noncurrent 206 206
Deposits and other assets 3,212 3,936
------------- -------------
Total assets $ 130,680 $ 133,607
============= =============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 5,040 $ 3,515
Accrued payroll and related expenses 4,011 4,278
Accrued expenses 12,118 12,272
Deferred income taxes 596 596
Deferred revenue 32,794 30,211
Capital lease obligations 1,107 1,196
------------- -------------
Total current liabilities 55,666 52,068
Deferred revenue, noncurrent 3,450 4,257
Deferred income taxes, noncurrent 308 197
Other liabilities 1,881 2,413
Capital lease obligations, noncurrent 128 915
Convertible notes 59,215 59,215
------------- -------------
Total liabilities 120,648 119,065
------------- -------------
Stockholders' equity:
Common stock 34 33
Additional paid-in capital 252,948 238,798
Treasury stock (14,430) (14,430)
Accumulated other comprehensive income 282 189
Accumulated deficit (228,802) (210,048)
------------- -------------
Total stockholders' equity 10,032 14,542
------------- -------------
Total liabilities and stockholders' equity $ 130,680 $ 133,607
============= =============
CALLIDUS SOFTWARE INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
Nine months ended
September 30,
--------------------
2012 2011
--------- ---------
Cash flows from operating activities:
Net loss $ (18,754) $ (11,742)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation expense 2,184 2,338
Amortization of intangible assets 3,818 2,284
Provision for doubtful accounts and service
remediation reserves 188 88
Stock-based compensation 11,007 8,852
Stock-based compensation related to acquisition - 42
Release of valuation allowance (350) -
Gain on disposal of property and equipment (6) -
Impairment of investments - 375
Amortization of convertible note issuance cost 402 217
Gain on extinguishment of convertible notes - (904)
Net amortization on investments 310 351
Acquisition-related adjustment (1,787) -
Changes in operating assets and liabilities:
Accounts receivable (7,628) (593)
Prepaid and other current assets (1,875) 1,594
Other assets 322 (2,923)
Accounts payable (114) (302)
Accrued expenses 742 (257)
Accrued payroll and related expenses (267) 313
Accrued restructuring 37 (251)
Deferred revenue 1,635 (1,648)
Deferred income taxes 111 144
--------- ---------
Net cash used in operating activities (10,025) (2,022)
--------- ---------
Cash flows from investing activities:
Purchases of investments (16,536) (47,864)
Proceeds from maturities and sale of investments 31,811 22,595
Purchases of property and equipment (4,927) (1,827)
Proceeds from disposal of property and equipment 6 -
Purchases of intangible assets (4,485) (1,381)
Acquisitions, net of cash acquired (7,721) (12,237)
--------- ---------
Net cash used in investing activities (1,852) (40,714)
--------- ---------
Cash flows from financing activities:
Proceeds from issuance of common stock 5,223 5,424
Repurchases of common stock - (14,430)
Repurchase of common stock from employees for
payment of taxes onvesting of restricted stock
units (2,079) (1,046)
Payment of consideration related to acquisitions (1,160) (1,175)
Repurchase of convertible notes - (19,188)
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 (887) (896)
--------- ---------
Net cash provided by financing activities 1,067 46,058
--------- ---------
Effect of exchange rates on cash and cash equivalents 58 1
--------- ---------
Net increase (decrease) in cash and cash equivalents (10,752) 3,323
Cash and cash equivalents at beginning of period 17,383 12,830
--------- ---------
Cash and cash equivalents at end of period $ 6,631 $ 16,153
========= =========
CALLIDUS SOFTWARE INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except for percentages and per share data)
(unaudited)
Three months ended Nine months ended
September 30, September 30,
------------------- ------------------
2012 2011 2012 2011
--------- -------- -------- --------
Non-GAAP gross profit reconciliation
Gross profit $ 11,919 $8,759 $33,083 $24,413
Profit margin, as a % of total
revenues 50% 42% 47% 40%
Add back:
Non-cash stock-based compensation 931 1,101 2,905 3,577
Non-cash amortization of acquired
intangible assets 464 163 1,414 286
--------- -------- -------- --------
Non-GAAP gross profit $ 13,314 $10,023 $37,402 $28,276
--------- -------- -------- --------
Profit margin, as a % of total
revenues 56% 48% 54% 46%
Non-GAAP recurring revenue gross
profit reconciliation
Recurring revenue gross profit $ 10,610 $7,652 $30,081 $21,207
Recurring revenue profit margin,
as a % of recurring revenues 61% 48% 57% 46%
Add back:
Non-cash stock-based compensation 353 731 1,282 2,523
Non-cash amortization of acquired
intangible assets 472 163 1,378 286
--------- -------- -------- --------
Non-GAAP Recurring revenue gross
profit $ 11,435 $8,546 $32,741 $24,016
--------- -------- -------- --------
Recurring revenue profit margin,
as a % of recurring revenues 65% 53% 62% 52%
Non-GAAP operating expense
reconciliation:
Operating expenses $ 17,202 $13,170 $49,148 $35,355
Operating expenses, as a % of
total revenues 72% 63% 70% 58%
Add back:
Non-cash stock-based compensation (2,581) (1,711) (8,102) (5,317)
Non-cash amortization of acquired
intangible assets (360) (246) (962) (566)
Acquisition-related expense (182) (697) (820) (1,080)
Patent litigation cost (166) (494) (786) (1,072)
Acquisition-related adjustment (50) - 1,787 -
Restructuring 53 (99) (561) (136)
--------- -------- -------- --------
Non-GAAP Operating Expenses $ 13,916 $9,923 $39,704 $ 27,184
--------- -------- -------- --------
Non-GAAP Operating expenses, as a
% of total revenues 58% 49% 57% 44%
Non-GAAP operating income (loss)
reconciliation:
Operating loss $ (5,283) $(4,411) $(16,065) $(10,942)
Operating loss, as a % of total
revenues
-22% -21% -23% -18%
Add back:
Non-cash stock-based compensation 3,512 2,812 11,007 8,894
Non-cash amortization of acquired
intangible assets 824 409 2,376 852
Acquisition-related expense 182 697 820 1,080
Patent litigation cost 166 494 786 1,072
Acquisition-related adjustment 50 - (1,787) -
Restructuring (53) 99 561 136
--------- -------- -------- --------
Non-GAAP Operating income (loss) $ (602) $100 $(2,302) $1,092
--------- -------- -------- --------
Non-GAAP Operating income (loss),
as a % of total revenues -3% 0% -3% 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 Nine months ended
September 30, September 30,
------------------ ------------------
2012 2011 2012 2011
-------- -------- -------- --------
Non-GAAP net loss reconciliation:
Net loss $ (6,464) $ (4,571) $(18,754) $(11,742)
Net loss, as a % of total revenues -27% -22% -27% -19%
Add back:
Non-cash stock-based compensation 3,512 2,812 11,007 8,894
Non-cash amortization of acquired
intangible assets 824 409 2,376 852
Acquisition related expenses 182 697 820 1,080
Patent litigation costs 166 494 786 1,072
Acquisition-related adjustment 50 - (1,787) -
Restructuring (53) 99 561 136
Interest expense on convertible
notes 703 874 2,110 1,265
Amortization of convertible note
issuance cost 134 157 402 216
Tax benefit from release of
valuation allowance - (572) (224) (572)
Gain on extinguishment of
convertible note - (904) - (904)
Impairment of asset - 375 - 375
-------- -------- -------- --------
Non-GAAP Net income (loss) $ (946) $ (130) $ (2,703) $ 672
-------- -------- -------- --------
Non-GAAP Net income (loss), as a %
of total revenues -4% -1% -4% 1%
Non-GAAP net income (loss) per share
reconciliation:
Net loss per basic and diluted share $ (0.18) $ (0.14) $ (0.53) $ (0.36)
Add back:
Non-cash stock-based compensation 0.10 0.09 0.31 0.27
Non-cash amortization of acquired
intangible assets 0.02 0.01 0.07 0.03
Acquisition related expenses 0.01 0.02 0.02 0.03
Patent litigation costs - 0.02 0.02 0.03
Acquisition-related adjustment - - (0.05) -
Restructuring - - 0.02 -
Interest expense on convertible
notes 0.02 0.03 0.06 0.04
Amortization of convertible note
issuance cost - - 0.01 0.01
Tax benefit from release of
valuation allowance - (0.02) (0.01) (0.02)
Gain on extinguishment of
convertible note - (0.03) - (0.03)
Impairment of asset - 0.01 - 0.01
-------- -------- -------- --------
Non-GAAP net income (loss) per basic
share $ (0.03) $ (0.01) $ (0.08) $ 0.01
-------- -------- -------- --------
Non-GAAP net income (loss) per
diluted share $ (0.03) - $ $ (0.08) $ 0.02
-------- -------- -------- --------
Basic and fully diluted shares
reconciliation:
Basic shares 35,853 32,327 35,070 32,826
-------- -------- -------- --------
Add back:
Weighted average effect of
dilutive securities - 10,740 - 6,877
-------- -------- -------- --------
Diluted shares 35,853 43,067 35,070 39,703
-------- -------- -------- --------
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