Interactive Data Corporation (NYSE: IDC) today reported its financial results for the third quarter ended September 30, 2007. Third-quarter 2007 revenue increased 11.7% to $175.0 million from $156.7 million in the third quarter of 2006. Net income for the third quarter of 2007 was $39.3 million, or $0.40 per diluted share, a 46.7% increase from $26.8 million, or $0.28 per diluted share, in the same quarter last year.
“We delivered another strong operating performance in the third quarter, plus our results benefited from a significant decrease in our effective quarterly tax rate,” stated Stuart Clark, Interactive Data’s president and chief executive officer. “Our revenue growth continues to be driven primarily by our two largest institutionally oriented businesses, Pricing and Reference Data, and Real-Time Services, both of which produced very good revenue growth and new sales in the third quarter. Our third-quarter 2007 net income growth was noteworthy for two reasons. First, we generated improved profitability as a result of our top-line growth and, second, our effective quarterly tax rate decreased substantially to 21.7%. By comparison with the effective tax rate for our first-half 2007 results, the reduction in our third-quarter 2007 effective tax rate contributed over $7 million, or approximately $0.07 per diluted share, to our third-quarter 2007 net income.”
Clark commented, “Our organic revenue growth in the third quarter of 2007 was 8.0% due in large part to the strong results posted by our Pricing and Reference Data, and Real-Time Services businesses. In particular, Real-Time Services has become our fastest-growing business during 2007, producing its highest organic growth rates since we acquired this business in 2003. Renewal rates at our institutionally oriented businesses remained at approximately 95%. We also continued to bring innovative new services to the marketplace by taking advantage of the collective capabilities, content and expertise resident across our organization.”
“Our third-quarter 2007 effective tax rate and revised outlook for our full-year effective tax rate reflects favorable changes in German tax rates, the impact of a recently completed R&D tax credit initiative spanning both 2006 and 2007, the release of certain tax reserves associated with the expiration of the statute of limitations in various tax jurisdictions and other discrete items,” commented Andrew Hajducky, Interactive Data’s executive vice president and chief financial officer. “Our net cash provided by operating activities of $63.4 million in the third quarter of 2007 was outstanding. As a result, our cash position at the end of the third quarter increased by nearly $37 million from the prior quarter even as we returned $27.4 million to stockholders through our regular quarterly dividend and stock repurchase activities.”
“We are continuing to see the benefits resulting from collaboration across all key areas of our global organization,” Clark concluded. “Looking ahead, we are positioning our Pricing and Reference Data and Real-Time Services businesses to more effectively support the enterprise-wide needs of our clients. We have changed our organizational structure to unify these two institutionally oriented businesses under a single management structure such that we can accelerate innovation, strengthen and expand strategic customer relationships, and respond decisively to emerging market opportunities.”