Bottomline Technologies (NASDAQ: EPAY), a leading provider of collaborative payment, invoice and document automation solutions, today reported financial results for the first quarter ended September 30, 2008.
Revenues for the first quarter were $35.5 million, an increase of 13%, or $4.1 million, from the first quarter of last year. The growth in revenues included a 20% increase in subscription and transaction revenues over the first quarter of last year to $8.2 million in the quarter.
Gross margin for the first quarter was $19.5 million, an increase of $2.6 million from the first quarter of last year. Net loss for the first quarter was $3.8 million, or net loss per share of $0.16. During the first quarter, operating expenses of $23.7 million included amortization of intangible assets of $4.4 million and stock-based compensation expense of $2.2 million. Excluding acquisition-related and stock compensation items, non-GAAP net income for the first quarter was $2.8 million, or non-GAAP net income per share of $0.12.
“Bottomline executed well in the first quarter, achieving our financial targets and at the same time advancing new initiatives and key strategic relationships which will drive future growth. A prime example is the partnership with SWIFT, which serves as a recognition of our leading technology and global payments capabilities. While the SWIFT relationship did not generate Q1 revenues, with a subscription and revenue share model it will be a source of future predictable revenues,” said Rob Eberle, President and CEO of Bottomline Technologies. “The quarter’s financial results were highlighted by subscription and transaction revenues of $8.2 million for the quarter, which were up 20% year over year. With our current pipeline, significant backlog and predictable model, we are confident in our continued ability to achieve financial targets and execute against our strategic plan.”
First Quarter Customer Highlights
• Announced an agreement with SWIFT to serve as the principal technology partner on the development of Alliance Lite, a Web-based connectivity option offering SWIFT members direct, secure and low-cost access to its financial messaging network worldwide. SWIFT is a member-owned cooperative that provides the communications platform, products and services to connect over 8,300 banking organizations, securities institutions and corporate customers in more than 208 countries.
• Added significant new customers, including AmeriServ Trust and Financial Services, Avery Dennison Corporation, Bombardier Aeronautique, Constellation Brands, Lafarge North America, Western Refining Company L.P., and Kayaba, a division of Japan’s KYB Group, which selected Bottomline solutions to increase the security, efficiency, visibility and control of transactional processes.
• Expanded existing deployments of Bottomline’s award-winning payments and document process automation solutions at Coty USA, Firestone Tube Company, Ghirardelli Chocolate, John Lewis Partnership, The NORDAM Group, Publicis, TD Ameritrade, Trust Industrial Bank and UK-based Norwich Union, an Aviva company.
• Increased adoption of Bottomline’s global payments and cash management platform through new relationships and expanded implementations at large banks and financial institutions in North America, Europe and Asia-Pacific.
• Continued momentum in the healthcare vertical with new orders for Bottomline’s medical forms automation solutions from Community Hospital Anderson, Emergency Consultants, MedStar Health, MetroSouth Medical Center, San Juan Health Services District, Our Lady of Lourdes Regional Medical Center and Wellmont Health System.
First Quarter Strategic Highlights
• Introduced Legal eXchange™ Explorer, a sophisticated new tool that builds on the strengths of Legal eXchange, Bottomline’s Software as a Service solution, to enable users to conduct comparative, multi-level invoice review and law firm and matter trend analysis.
• Expanded Bottomline’s global banking presence with the appointment of industry veteran and company executive, Chris Peck, to Managing Director of Banking for Europe, the Middle East and Africa.
• Received a patent from the United States Patent and Trademark Office for technology related to automated, rules-based validation of inbound invoices, further strengthening Bottomline’s competitive differentiators for electronic invoice management.
• Delivered MedEx® 2.0, a next-generation medical forms automation solution that allows healthcare providers of all sizes to accelerate the creation and delivery of documents and form sets, including those associated with admissions, patient consent, clinical compliance, payments and billing.
• Hosted third annual Legal Spend Management Customer Advisory Board Conference in Boston, bringing together industry executives from some of the nation’s largest property & casualty insurers and Fortune 500 organizations.
• Announced expanded support for the Microsoft® Dynamics portfolio of ERP systems with new capabilities for automating business-critical transactional processes within Microsoft Dynamics NAV.
Bottomline has presented supplemental non-GAAP financial measures and statements as part of this earnings release. The non-GAAP financial measures and statements exclude certain items, specifically amortization of intangible assets, stock-based compensation and acquisition-related expenses. The presentation of this non-GAAP financial information should not be considered in isolation from, or as a substitute for, the financial results presented in accordance with GAAP. Bottomline believes that these supplemental non-GAAP financial measures are useful to investors because they allow for an evaluation of the company with a focus on the performance of its core operations. Bottomline’s executive management team uses these same non-GAAP financial measures and statements internally to assess the ongoing performance of the company. Since this information is not a GAAP measurement of financial performance, there are material limitations to its usefulness on a stand-alone basis, including the lack of comparability of this presentation to the GAAP financial results of other companies.
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