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SuccessFactors Announces Second Quarter Fiscal 2009 Results
(Logo: http://www.newscom.com/cgi-bin/prnh/20090602/SF26086LOGO)
"In a terrible environment, the quarter wasn't," said Lars Dalgaard, chief executive officer for SuccessFactors.
"We saw some small indicators of a recovery, but most importantly in this quarter the team in most segments and geographies has found a way to systematically get deals done in this market," continued Dalgaard. "Most organizations are being very conservative about technology spending. And we don't see that changing. With that said, we feel we proved we are the best positioned company in the industry to exploit our $16 billion market opportunity."
SuccessFactors' results for the second quarter fiscal year 2009:
-- Q2 FY09 Revenue: Q209 revenue was $36.9 million, compared to prior
company guidance of $35.5 million to $35.75 million, and compared to
$25.7 million in the quarter ended June 30, 2008, an increase of 44%
year-over-year, and an increase of 5% sequentially from Q109.
-- Q2 FY09 Cash Flows Generated from Operations: For the quarter ended June
30, 2009, the company generated approximately $939,000 of cash from
operating activities, compared to the ($6.4) million use in the quarter
ended June 30, 2008. Total cash, cash equivalents and marketable
securities at June 30, 2009 was $107.8 million.
-- Q2 FY09 Net Loss per Share: On a GAAP basis, for the quarter ended June
30, 2009, the net loss per common share, basic and diluted, was $(0.04).
The non-GAAP net income per common share, basic and diluted, was $0.00,
which excludes approximately $2.4 million in stock-based compensation
expense, compared to a non-GAAP net loss per share, basic and diluted,
of $(0.10) in Q109 and $(0.33) in Q208. GAAP and non-GAAP net loss per
common share calculations are based on 56.8 million weighted average
shares outstanding during the second quarter of 2009.
Additional Second Quarter Fiscal 2009 Highlights:
-- SuccessFactors signs the world's largest enterprise cloud
deployment with Siemens AG for 420,000 users. The electronics and
electrical engineering giant has purchased a global enterprise
subscription of virtually all of SuccessFactors' modules to link
strategy and executed business results with its worldwide corporate
talent management vision, for 420,000 users across 80 countries in 20
different languages.
-- SuccessFactors leads the way among enterprise cloud applications with
more than 5.4 million users with one of the world's largest-known
enterprise cloud deployments of 300,000 users by one of the world's
largest retailers. SuccessFactors now has 4 customers with greater than
100,000 users, 12 customers with greater than 50,000 users, more than 35
customers with greater than 25,000 users, and more than 115 customers
with greater than 10,000 users resulting in the most widely-deployed
enterprise cloud application.
-- SuccessFactors hosts over 1,000 customers and prospects over a two week
period across the country for the first time bringing
SuccessFactors' annual user conference to them in the 2009
SuccessConnect Local events -- keynotes from Vail Resorts in San
Francisco, Ingersoll Rand in Chicago, and VWR International in New York
City.
-- SuccessFactors launches Employee Central, a revolutionary product for
organizational insight and social collaboration for the enterprise.
Employee Central is a new module on the SuccessFactors Performance and
Talent Management Platform that allows companies to maintain centralized
employee information with deeply integrated social networking and
collaboration, giving employees, managers and executives a single,
real-time hub to have a more complete picture of their people. For more
product information please visit:
http://www.successfactors.com/employee-central/.
-- SuccessFactors announces the general availability of SuccessFactors
Express, a complete, automated performance management solution for
companies with less than 50 employees. This on-demand solution helps
emerging, high-growth companies to instantly create a performance review
process, as well as track progress against critical company goals to
ensure success of their small business. For more product information
please visit: http://www.successfactors.com/express.
-- SuccessFactors partners with Ceridian to resell SuccessFactors Express
as Ceridian Performance Management Express. Ceridian Corporation is a
leading provider of managed human resource, employee benefits
administration, tax filing, payroll outsourcing and talent management
solutions.
-- SuccessFactors continues to gain traction in Latin America with H-E-B of
Mexico, an international supermarket retailer employing more than 6,000
people, using cloud computing and SuccessFactors' Business
Performance Suite to align goals, eliminate manual processes, prepare
succession plans and leverage employee data to make better management
decisions in order to save critical execution time and add value to the
business success.
-- SuccessFactors drives EMEA success moving Veolia Environmental Services
to SuccessFactors' Enterprise Cloud to drive business results from
strategy to execution and manage growth, while facilitating mobility
among company executives and leadership. With 2007 revenues of euro 9.2
billion, Veolia Environmental Services is the world leader in waste
management with operations on every continent. Veolia Environmental
deployed SuccessFactors to start with 3,000 executives and managers
across five countries out of 100,000 employees.
-- SuccessFactors opened registration for its inaugural 2009 SuccessConnect
Local -- Asia Pacific user conference to take place in Melbourne,
Australia on August 13th to 14th, an event expected to bring together
customers across many countries in the Asia Pacific region.
Guidance:
SuccessFactors is initiating guidance for its third quarter and is raising its full fiscal year 2009 EPS guidance.
-- Q3 FY09: Revenue for the company's third fiscal quarter is
projected to be in the range of approximately $37.2 million to $37.5
million. Non-GAAP net income per common share, basic and diluted, is
expected to be approximately breakeven. Non-GAAP net loss per common
share estimates exclude the effects of estimated stock-based
compensation expense and assume an average weighted share count of
approximately 57.2 million shares.
-- Full Year FY09: The company is raising guidance for full fiscal 2009
revenue from approximately $145 million to $146 million, or 30% annual
growth, to approximately $147 million to $148 million or 32% annual
growth. The company now expects the non-GAAP net loss per common share
for fiscal 2009 to be in the range of ($0.06) to ($0.07); previous
guidance had been in the range of ($0.18) to ($0.22). Non-GAAP net loss
per common share estimates exclude the effects of estimated stock-based
compensation expense and assume an average weighted share count of
approximately 57 million shares.
Conference Call
SuccessFactors will host a conference call to discuss its second quarter fiscal 2009 results today at 2:00 p.m. Pacific Daylight Time. A live audio webcast of the conference call, together with detailed financial information, can be accessed through the company's Investor Relations website at http://www.successfactors.com/investor. In addition, an archive of the webcast can be accessed through the same link until August 7, 2009. Participants who choose to call into the conference call can do so by dialing domestically at 866-923-9739 and internationally at 706-634-0915. A domestic replay will be available at 800-642-1687 or 706-645-9291 internationally, passcode 19382606, until August 7, 2009.
Use of Non-GAAP Financial Information
SuccessFactors provides quarterly and annual financial statements that are prepared in accordance with generally accepted accounting principles (GAAP). To help understand SuccessFactors' past financial performance and future results, SuccessFactors has supplemented its financial results that it provides in accordance with GAAP, with non-GAAP financial measures. The method SuccessFactors uses to produce non-GAAP financial results is not computed according to GAAP and may differ from the methods used by other companies. The non-GAAP measures used by SuccessFactors exclude the impact of stock-based compensation expense recorded under SFAS123R. SuccessFactors' reference to these non-GAAP financial results should be considered in addition to results that are prepared under current accounting standards but should not be considered as a substitute for, or superior to, the financial results that are presented as consistent with GAAP. SuccessFactors' management uses the supplemental non-GAAP financial measures internally to understand, manage and evaluate SuccessFactors' business and make operating decisions. These non-GAAP financial measures are among the factors SuccessFactors' management uses in planning for and forecasting future periods. Reconciliation to the nearest GAAP financial measures of the non-GAAP financial measures is included in this press release.
About SuccessFactors, Inc.
SuccessFactors is one of the fastest growing public software companies and the leading provider of on-demand employee performance and talent management solutions. The company enables organizations of every size, and across every industry and geography, to achieve high-performing workforces through goal alignment and execution, talent development and planning, and pay-for-performance initiatives. From 92 customers and approximately 282,000 end users in 2003 to more than 2,850 customers and more than 5.4 million end users today, SuccessFactors' solutions are widely deployed across 60 industries in over 185 countries in 31 languages. Founded in 2001 with offices around the world, the company employs passionate people focused on revolutionizing the future of work. For more information, visit: www.successfactors.com.
"Safe harbor" statement under the Private Securities Litigation Reform Act of 1995:
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are SuccessFactors' current expectations and beliefs.
These forward-looking statements include statements about expected revenue, non-GAAP net loss per share and the average weighted share count for the third fiscal quarter of 2009, the full fiscal year 2009, future cash flow, profitability, potential market size, growth and related items. Factors that could cause actual results to differ materially include: our ability to continue to experience high customer renewal rates; whether customers renew their agreements for additional modules or users; levels of new customers; pricing pressures; the uncertain impact of the overall global economic slowdown, including on our customers, prospective customers and partners, renewal rates and length of sales cycles; the fact that our market is at an early stage of development, and it may not develop as rapidly as we anticipate; competitive factors; outages or security breaches; our ability to develop, and market acceptance of, new services; our ability to continue to sell our services outside the HR area; our ability to manage our growth; our ability to successfully expand our sales force and its effectiveness; whether our resellers and other partners will be successful in marketing our products; our ability to continue to manage expenses; the impact of unforeseen expenses; and general economic conditions worldwide. If any such risks or uncertainties materialize or if any of the assumptions proves incorrect, our results could differ materially from the results expressed or implied by the forward-looking statements we make.
Further information on these and other factors that could affect our financial results is included in the section entitled "Risk Factors" in our Annual Report on Form 10-K for 2008 and in our most recent report on Form 10-Q and in other filings we make with the Securities and Exchange Commission from time to time.
These documents are or will be available on the SEC Filings section of the Investor Relations section of our website at www.successfactors.com/investor.
SuccessFactors, Inc. assumes no obligation and does not intend to update these forward-looking statements, except as required by law.
"SuccessFactors" is a trademark of SuccessFactors, Inc., San Mateo, California. Other names used may be trademarks of their respective owners.
CONTACTS:
Dominic Paschel
SuccessFactors, Inc.
Public & Investor Relations
415-262-4641
dpaschel@successfactors.com
SuccessFactors, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
As of
As of June 30, December 31,
2009 2008
---- ----
(unaudited) (1)
Assets:
Current assets:
Cash and cash equivalents $ 37,065 $ 69,859
Marketable securities 70,741 32,505
Accounts receivable, net
of allowance
for doubtful accounts 35,998 44,446
Deferred commissions 5,195 5,721
Prepaid expenses and other
current assets 4,408 3,224
----- -----
Total current assets 153,407 155,755
Restricted cash 1,223 1,248
Property and equipment, net 5,298 6,933
Deferred commissions, net of
current portion 5,667 6,292
Other assets 303 198
--- ---
Total assets $ 165,898 $ 170,426
======== ========
Liabilities and stockholders'
equity (deficit):
Current liabilities:
Accounts payable $ 653 $ 1,960
Accrued expenses and other
current liabilities 6,186 9,632
Accrued employee
compensation 12,240 12,159
Deferred revenue 132,550 128,940
Current portion of capital
lease obligations 38 37
---- ----
Total current
liabilities 151,667 152,728
Capital lease obligations, net
of current portion - 19
Deferred revenue, net of
current portion 17,274 20,858
Long-term taxes payable 1,161 -
Other long-term liabilities 1,068 2,197
----- -----
Total liabilities 171,170 175,802
Stockholders' equity (deficit):
Common stock 57 56
Additional paid-in capital 208,979 200,907
Accumulated other
comprehensive income (40) (74)
Accumulated deficit (214,268) (206,265)
-------- --------
Total stockholders'
equity (deficit) (5,272) (5,376)
-------- --------
Total liabilities and
stockholders' equity
(deficit) $165,898 $170,426
======== ========
(1) The condensed consolidated balance sheet as of December 31, 2008 has
been derived from the audited financial statements as of that date, but
does not include all of the information and footnotes required by
accounting principles generally accepted in the United States for
complete financial statements.
SuccessFactors, Inc.
Condensed Consolidated Statements of Operations
(unaudited, in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2009 2008 2009 2008
---- ---- ---- ----
Revenue $36,940 $25,714 $72,160 $49,175
Cost of revenue (1) 7,947 9,244 $16,436 18,580
----- ----- ------- ------
Gross profit 28,993 16,470 55,724 30,595
------ ------ ------ ------
Operating expenses: (1)
Sales and marketing 19,996 23,261 39,552 44,870
Research and development 6,073 6,250 11,624 11,459
General and administrative 5,282 6,144 12,526 13,042
Gain on settlement of
litigation, net - 684 - 878
------ ------ ------ ------
Total operating expenses 31,351 36,339 63,702 70,249
------ ------ ------ ------
Loss from operations (2,358) (19,869) (7,978) (39,654)
Interest income (expense) and
other, net 481 729 613 1,369
--- --- --- -----
Loss before provision for income
taxes (1,877) (19,140) (7,365) (38,285)
Provision for income taxes (444) (147) (638) (300)
---- ---- ---- ----
Net loss $(2,321) $(19,287) $(8,003) $(38,585)
======= ======== ======= ========
Net loss per common share, basic
and diluted $(0.04) $(0.37) $(0.14) $(0.74)
====== ====== ====== ======
Shares used in computing net loss
per common share, basic and
diluted 56,754 52,298 56,536 51,973
====== ====== ====== ======
(1) Amounts include stock-based compensation expenses as follows:
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2009 2008 2009 2008
---- ---- ---- ----
Cost of revenue $367 $227 $698 $409
Sales and marketing 966 900 2,090 1,685
Research and development 307 265 592 480
General and administrative 727 604 1,401 1,175
SuccessFactors, Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited, in thousands)
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2009 2008 2009 2008
---- ---- ---- ----
Cash flow from
operating activities:
Net loss $ (2,321) $ (19,287) $(8,003) $(38,585)
Adjustments to reconcile
net loss to net cash
provided by (used in)
operating activities:
Depreciation and
amortization 893 774 1,960 1,496
Loss on retirement/
impairment of fixed
asset (1) - (65) -
Amortization of deferred
commissions 1,838 1,574 3,614 3,167
Stock-based compensation
expense 2,367 1,996 4,781 3,749
Stock issued for services 77 - 77 -
Changes in assets and
liabilities:
Accounts receivable (571) (2,857) 8,448 8,593
Deferred commissions (1,561) (1,821) (2,463) (3,028)
Prepaid expenses and
other current assets (1,073) (975) (1,184) (2,741)
Other assets 77 9 (103) 36
Accounts payable (2,259) (568) (1,307) (2,974)
Accrued expenses and
other current
liabilities (1,596) 258 (3,433) 1,642
Accrued employee
compensation 1,822 3,719 81 (4,230)
Long-term taxes payable 1,161 - 1,161 -
Other liabilities 57 (62) 36 (123)
Deferred revenue 2,029 10,858 26 22,624
----- ------ --- ------
Net cash provided
by (used in)
operating
activities 939 (6,382) 3,626 (10,374)
--- ------ ----- -------
Cash flow from investing
activities:
Restricted cash (5) 22 24 61
Capital expenditures (275) (2,517) (348) (2,605)
Proceeds from sale of assets - - 88 -
Purchases of available-for-
sale securities (22,953) (22,353) (78,626) (33,364)
Proceeds from maturities of
available-for-sale
securities 12,955 12,503 39,803 14,503
Proceeds from sales of
available-for-sale
securities - - 546 -
------- ------- ------- -------
Net cash used in
investing
activities (10,278) (12,345) (38,513) (21,405)
------- ------- ------- -------
Cash flow from financing
activities:
Proceeds from exercise of
stock options, net 1,510 496 2,049 660
Proceeds from initial public
offering, net of offering
costs - - - (545)
Proceeds from follow-on
offering, net of offering
costs - 27,688 - 27,688
Principal payments on
capital lease obligations (9) 1 (18) (17)
--- --- ---- ----
Net cash provided
by financing
activities 1,501 28,185 2,031 27,786
----- ------ ----- ------
Effect of exchange rate changes
on cash and cash equivalents 130 (5) 62 43
--- --- --- ---
Net increase (decrease) in cash
and cash equivalents (7,708) 9,453 (32,794) (3,950)
Cash and cash equivalents at
beginning of period 44,773 68,871 69,859 82,274
------ ------ ------ ------
Cash and cash equivalents
at end of period $37,065 $78,324 $37,065 $78,324
======= ======= ======= =======
SuccessFactors, Inc.
Reconciliation of GAAP to Non-GAAP Measures
(unaudited, in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2009 2008 2009 2008
---- ---- ---- ----
-------------------------------
Net loss and net loss per share
reconciliations:
-------------------------------
GAAP net loss $(2,321) $ (19,287) $(8,003) $(38,585)
(a) Stock-based compensation
as measured under SFAS123R 2,367 1,996 4,781 3,749
----- ----- ----- -----
Non-GAAP net income (loss)
excluding stock-based
compensation expense and
other items $ 46 $ (17,291) $(3,222) $(34,836)
=== ======== ======= ========
GAAP net loss per common
share - basic and diluted $ (0.04) $ (0.37) $ (0.14) $ (0.74)
====== ====== ====== =====
Non-GAAP net income (loss)
per common share (excluding
stock-based compensation
expense) - basic and diluted $ 0.00 $ (0.33) $ (0.06) $ (0.67)
===== ====== ====== ======
GAAP shares used in computing
net loss per common share,
basic and diluted 56,754 52,298 56,536 51,973
====== ====== ====== ======
---------------------------
Total spend reconciliation:
---------------------------
GAAP total cost of revenue
and operating expenses $39,298 $ 45,583 $80,138 $ 88,829
(a) Stock-based compensation
as measured under SFAS123R 2,367 1,996 4,781 3,749
----- ----- ----- -----
Non-GAAP total cost of
revenue and operating
expenses (total spend) $36,931 $ 43,587 $75,357 $ 85,080
======= ======= ======= =======
-----------------------------
Gross profit and gross margin
reconciliations:
-----------------------------
GAAP gross profit $28,993 $ 16,470 $55,724 $ 30,595
(b) Stock-based compensation
in cost of revenue as
measured under SFAS123R 367 227 698 409
--- --- --- ---
Non-GAAP gross profit $29,360 $ 16,697 $56,422 $ 31,004
======= ======= ======= =======
GAAP gross margin percentage 78% 64% 77% 62%
=== === === ===
Non-GAAP gross margin
percentage 79% 65% 78% 63%
=== === === ===
-------------------------------
Cost of revenue reconciliation:
-------------------------------
GAAP cost of revenue $ 7,947 $ 9,244 $16,436 $ 18,580
(b) Stock-based compensation
in cost of revenue as
measured under SFAS123R 367 227 698 409
--- --- --- ---
Non-GAAP cost of revenue $ 7,580 $ 9,017 $15,738 $ 18,171
====== ====== ======= =======
------------------------
Total operating expenses
reconciliation:
------------------------
GAAP operating expenses $31,351 $ 36,339 $63,702 $ 70,249
(c) Stock-based compensation
in operating expenses as
measured under SFAS123R 2,000 1,769 4,083 3,340
----- ----- ----- -----
Non-GAAP operating expenses $29,351 $ 34,570 $59,619 $ 66,909
======= ======= ======= =======
-------------------------
Total sales and marketing
reconciliation:
-------------------------
GAAP sales and marketing $19,996 $ 23,261 $39,552 $ 44,870
(d) Stock-based compensation
in sales and marketing as
measured under SFAS123R 966 900 2,090 1,685
--- --- ----- -----
Non-GAAP sales and marketing $19,030 $ 22,361 $37,462 $ 43,185
======= ======= ======= =======
------------------------------
Total research and development
reconciliation:
------------------------------
GAAP research and development $ 6,073 $ 6,250 $11,624 $ 11,459
(e) Stock-based compensation
in research and development
as measured under SFAS123R 307 265 592 480
--- --- --- ---
Non-GAAP research and
development $ 5,766 $ 5,985 $11,032 $ 10,979
====== ====== ======= =======
-------------------------------
Total general and
administrative reconciliation:
-------------------------------
GAAP general and
administrative expenses $ 5,282 $ 6,144 $12,526 $ 13,042
(f) Stock-based compensation
in general and administrative
as measured under SFAS123R 727 604 1,401 1,175
--- --- ----- -----
Non-GAAP general and
administrative $ 4,555 $ 5,540 $11,125 $ 11,867
====== ====== ======= =======
--------------------------------
Operating margin reconciliation:
--------------------------------
GAAP loss from operations $(2,358) $ (19,869) $(7,978) $(39,654)
(b) Stock-based compensation
in cost of revenue as
measured under SFAS123R 367 227 698 409
(d) Stock-based compensation
in sales and marketing as
measured under SFAS123R 966 900 2,090 1,685
(e) Stock-based compensation
in research and development
as measured under SFAS123R 307 265 592 480
(f) Stock-based compensation
in general and administrative
as measured under SFAS123R 727 604 1,401 1,175
--- --- ----- -----
Non-GAAP income (loss) from
operations less SFAS123R $ 9 $ (17,873) $(3,197) $(35,905)
=== ======== ======= ========
Revenue $ 36,940 $ 25,714 $72,160 $ 49,175
------- ------- ------- -------
Non-GAAP operating margin
percentage 0% (70%) (4%) (73%)
=== === == ===
SOURCE SuccessFactors, Inc.
http://www.successfactors.com
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