Growth in Subscriptions & Transactions Revenues and Cloud Acquisition Highlight Third Quarter
Bottomline Technologies (NASDAQ: EPAY), a leading provider of cloud-based payment, invoice and banking solutions, today reported financial results for the third quarter ended March 31, 2012.
Revenues for the third quarter were $55.3 million, an increase of $6.5 million, or 13%, from the third quarter of last year. Subscriptions and transactions revenue increased 51% from the third quarter of last year to $20.4 million.
Gross margin for the third quarter was $29.1 million, an increase of $3.5 million from the third quarter of last year. Net loss for the third quarter was $1.3 million, or net loss per share of $0.04.
Core net income for the third quarter was $7.3 million. Core net income excludes acquisition-related expenses, including amortization of intangible assets, of $4.4 million, restructuring expenses of $0.5 million and equity-based compensation of $3.7 million. Core earnings per share was $0.21.
“We advanced the business strategically and executed operationally during the quarter,” said Rob Eberle, President and CEO of Bottomline Technologies. “Our focus on recurring revenue was evidenced by 51% growth in subscription and transaction revenues. The quarter was highlighted by the acquisition of Intuit’s cloud-based commercial banking business, which accelerates our entry into new adjacent markets and the transition of our banking offerings to cloud-based delivery and revenue models. With this acquisition, we are increasing our focus and investment in innovative cloud-based solutions which provide exceptional value to our customers and compelling economics for Bottomline. Our expanding cloud-based solution set leaves us well positioned to drive long term growth and margin expansion.”
Revenues for the nine months ended March 31, 2012 increased 21% to $162.9 million as compared with $135.1 million in the same period last year. Net income for the nine months ended March 31, 2012 was $2.9 million, or net income per share of $0.08.
Core net income for the nine months ended March 31, 2012 was $25.7 million after excluding acquisition-related expenses of $12.1 million, restructuring expenses of $0.6 million and equity-based compensation of $10.3 million. Core earnings per share was $0.73 for the nine months ended March 31, 2012.
Third Quarter Customer Highlights
Third Quarter Strategic Corporate Highlights
Bottomline has presented supplemental non-GAAP financial measures as part of this earnings release. 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. Core net income and core earnings per share are non-GAAP financial measures. The non-GAAP financial measures exclude certain items, specifically amortization of intangible assets, impairment losses on equity investments, equity-based compensation, acquisition-related expenses (including acquisition-related earn-outs) and restructuring related costs. Acquisition-related expenses include legal and professional fees and other transaction costs associated with business and asset acquisitions, costs associated with integrating acquired businesses, including transition service agreement costs, and other charges incurred as a direct result of our acquisition and integration efforts. 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, including more meaningful comparisons of financial results to historical periods and to the financial results of less acquisitive peer and competitor companies. Bottomline’s executive management team uses these same non-GAAP financial measures internally to assess the ongoing performance of the company. Additionally, the same non-GAAP information is used for planning purposes, including the preparation of operating budgets, and in communications with the board of directors in respect of financial performance. 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. A reconciliation of the GAAP results to the non-GAAP results for the three and nine month periods ended March 31, 2012 and 2011 is as follows:
Three Months Ended
Nine Months Ended
|(in thousands)||(in thousands)|
|GAAP net (loss) income||$||(1,332||)||$||1,095||$||2,873||$||5,835|
|Amortization of intangible assets||3,734||2,786||11,051||8,572|
|Core net income||$||7,336||$||8,740||$||25,748||$||25,498|
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