Ariba, Inc. (Nasdaq: ARBA), the leading spend management
solutions provider, today announced results for the second quarter
of fiscal year 2010 ended March 31.
Quarterly Financial and Operational Highlights:
- Total revenues of $87.1
million
- GAAP EPS of $0.06 and non-GAAP
EPS of $0.19 per fully-diluted share
- Subscription software revenue of
$42.3 million, up 16% year-over-year
- 12-month subscription software
backlog of $140 million, up 9% year-over-year
- Cash flow from operations of
$26.4 million, ending cash and investments of $222.9 million
- Number of on-demand deals up 38%
year-over-year
“Cost reduction remains a top priority for all companies, and
increasingly they recognize the need to collaborate with their
suppliers across the value chain. The Ariba Supplier Network is
enabling this collaboration and we continue to see strong growth in
network volumes,” said Bob Calderoni, Chairman and CEO, Ariba. “The
network growth, coupled with the strong financial performance we
delivered in the second quarter puts us in a position to deliver
revenue, cash flow and EPS towards the high end of our previously
issued guidance for Fiscal 2010, while also building momentum for
accelerated growth in Fiscal 2011.”
Results for the Second Quarter of Fiscal Year 2010
Revenue:
Total revenues for the second quarter of fiscal year 2010 were
$87.1 million, as compared to $84.7 million for the second quarter
of fiscal year 2009. Subscription and maintenance revenues for the
current quarter were $58.8 million, as compared to $54.9 million
for the second quarter of fiscal year 2009. Within subscription and
maintenance revenues, subscription software revenue was $42.3
million for the current quarter, as compared to $36.4 million for
the second quarter of fiscal year 2009. Services and other revenues
for the current quarter were $28.4 million, as compared to $29.8
million for the second quarter of fiscal year 2009.
Earnings Per Share:
Net income for the second quarter of fiscal year 2010 was $5.8
million, or $0.06 per fully-diluted share as compared to a net loss
for the second quarter of fiscal year 2009 of $4.7 million, or
$0.06 per fully-diluted share. Net income for the second quarter of
fiscal year 2010 included charges of $1.0 million for amortization
of intangible assets, $11.2 million for stock-based compensation,
$8.6 million for restructuring related to the Company’s Sunnyvale
campus, and benefits of $3.1 million from the reversal of a tax
accrual, and $7 million from the receipt of a litigation judgment.
Excluding these items, non-GAAP net income for the quarter was
$16.5 million, or $0.19 per diluted share.
Balance Sheet and Cash:
Total cash, investments and restricted cash were $222.9 million
at March 31, 2010, up $23.4 million from December 31, 2009. Net
cash flow from operations for the three months ended March 31, 2010
was $26.4 million, as compared to $16.3 million for the three
months ended March 31, 2009. Accounts receivable, on an average
days-sales-outstanding basis, were 21 days for the second quarter
of fiscal year 2010, as compared to 26 days for the second quarter
of fiscal year 2009, and flat with the previous quarter. Total
deferred revenues were $125.4 million at March 31, 2010, up $5.9
million from December 31, 2009.
Customer Acquisition and Transactions for the
Quarter:
During the quarter, 211 companies of all sizes purchased Ariba
solutions to drive their spend management strategies, including:
BNP Paribas, Fomento de Construcciones y Contratas, S. A., Howard
Hughes Medical Center, Masco Corporation, Tomkins Industries Inc.,
Union Bank and Zurich Financial Services. Ariba added 35 new
customers in the second quarter of fiscal year 2010 and closed 13
transactions over $1 million, including 7 deals with a software
component of greater than $1 million. On-demand product deals
totalled 194.
Conference Call Information
Ariba will hold a conference call today at 5:00 p.m. ET / 2:00
p.m. PT to discuss its results for the second quarter of fiscal
year 2010. To join the call, please dial (877) 407-8031 in the
United States and Canada, or (201) 689-8031 if calling
internationally. The conference call also will be webcast live, and
can be accessed on the investor relations section of the company’s
website at www.ariba.com.
A replay of the conference call will be available for two weeks
by calling (877) 660-6853 in the United States and Canada or (201)
612-7415 internationally and entering account number: 286 and
conference ID number: 348632.
About Ariba, Inc.
Ariba, Inc. is the leading provider of on-demand spend
management solutions. Our mission is to transform the way companies
of all sizes, across all industries, and geographies operate by
delivering software, service, and network solutions that enable
them to holistically source, contract, procure, pay, manage, and
analyze their spend and supplier relationships. Delivered on
demand, our enterprise-class offerings empower companies to achieve
greater control of their spend and drive continuous improvements in
financial and supply chain performance. More than 1,000 companies,
including more than half of the companies on the Fortune 500, use
Ariba solutions to manage their spend from sourcing and orders
through invoicing and payment. For more information, visit
www.ariba.com
Copyright © 1996 – 2010 Ariba, Inc.
Ariba, the Ariba logo, AribaLIVE, SupplyWatch, Ariba.com,
Ariba.com Network and Ariba Spend Management. Find it. Get it. Keep
it. are registered trademarks of Ariba, Inc. Ariba Spend
Management, Ariba. This is Spend Management, Ariba Solutions
Delivery, Ariba Analysis, Ariba Buyer, Ariba Category Management,
Ariba Category Procurement, Ariba Contract Compliance, Ariba
Contracts, Ariba Contract Management, Ariba Contract Workbench,
Ariba Data Enrichment, Ariba eForms, Ariba Invoice, Ariba Payment,
Ariba Sourcing, Ariba Spend Visibility, Ariba Travel and Expense,
Ariba Procure-to-Pay, Ariba Workforce, Ariba Supplier Network,
Ariba Supplier Connectivity, Ariba Supplier Performance Management,
Ariba Content Procurement, Ariba PunchOut, Ariba QuickSource,
PO-Flip, Ariba Spend Management Knowledge Base, Ariba Ready, Ariba
Supply Lines, Ariba Supply Manager, Ariba LIVE, It’s Time for Spend
Management and Supplier Lifecycle Management are trademarks or
service marks of Ariba, Inc. All other brand or product names may
be trademarks or registered trademarks of their respective
companies or organizations in the United States and/or other
countries.
Ariba Safe Harbor
Safe Harbor Statement under the Private Securities Litigation
Reform Act 1995:
Information and announcements in this release involve Ariba's
expectations, beliefs, hopes, plans, intentions or strategies
regarding the future and are forward-looking statements that
involve risks and uncertainties. All forward-looking statements
included in this release are based upon information available to
Ariba as of the date of the release, and we assume no obligation to
update any such forward-looking statements. These statements are
not guarantees of future performance and actual results could
differ materially from our current expectations. Factors that could
cause or contribute to Ariba's operating and financial results to
differ materially from current expectations include, but are not
limited to: the impact of the credit crises on Ariba’s results of
operations and financial condition; delays in development or
shipment of new versions of Ariba's products and services; lack of
market acceptance of Ariba's existing or future products or
services; inability to continue to develop competitive new products
and services on a timely basis; introduction of new products or
services by major competitors; the ability to attract and retain
qualified employees; difficulties in assimilating acquired
companies, long and unpredictable sales cycles and the deferrals of
anticipated orders; declining economic conditions, including the
impact of a recession; inability to control costs; changes in the
company's pricing or compensation policies; significant
fluctuations in our stock price; the outcome of and costs
associated with pending or potential future regulatory or legal
proceedings; the impact of our acquisitions, including the
disruption or loss of customer, business partner, supplier or
employee relationships; and the level of costs and expenses
incurred by Ariba as a result of such transactions. Factors and
risks associated with its business, including a number of the
factors and risks described above, are discussed in Ariba's Form
10-Q filed with the SEC on February 5, 2010.
Ariba, Inc. and Subsidiaries Condensed Consolidated Balance Sheets
(Unaudited; in thousands)
March 31,
September 30,
2010 2009 ASSETS Current assets: Cash and cash equivalents $
151,078 $ 130,881 Short-term investments 21,594 12,169 Accounts
receivable, net 19,927 19,660 Prepaid expenses and other current
assets 12,653 11,235 Total current assets 205,252 173,945
Property and equipment, net 16,390 14,418 Long-term investments
21,007 23,155 Restricted cash, less current portion 29,241 29,241
Goodwill 406,507 406,507 Other intangible assets, net 15,204 17,660
Other assets 3,572 3,245 Total assets $ 697,173 $ 668,171
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts
payable $ 7,986 $ 7,758 Accrued compensation and related
liabilities 19,659 29,010 Accrued liabilities 13,328 17,010
Restructuring obligations 17,131 17,964 Deferred revenue 117,936
101,172 Total current liabilities 176,040 172,914 Deferred
rent obligations 11,813 14,539 Restructuring obligations, less
current portion 31,974 31,098 Deferred revenue, less current
portion 7,463 9,288 Other long-term liabilities 6,627 6,281 Total
liabilities 233,917 234,120 Stockholders' equity: Common
stock 180 179 Additional paid-in capital 5,210,537 5,189,566
Accumulated other comprehensive loss (3,431 ) (3,688 ) Accumulated
deficit (4,744,030 ) (4,752,006 ) Total stockholders' equity
463,256 434,051 Total liabilities and stockholders' equity $
697,173 $ 668,171 Ariba, Inc. and Subsidiaries Condensed
Consolidated Statements of Operations (Unaudited; in thousands,
except per share data) Three Months
Ended Six Months Ended March 31, March 31, 2010
2009 2010 2009 Revenues:
Subscription and maintenance $ 58,756 $ 54,856 $ 117,129 $ 108,937
Services and other 28,374 29,837
55,672 61,843 Total revenues 87,130
84,693 172,801 170,780
Cost of revenues: Subscription and maintenance 12,639
11,832 25,313 23,480 Services and other 19,954 18,524 39,416 38,322
Amortization of acquired technology and customer intangible assets
1,025 1,387 2,352
2,775 Total cost of revenues 33,618
31,743 67,081 64,577 Gross
profit 53,512 52,950 105,720
106,203 Operating expenses: Sales and
marketing 28,641 25,927 56,943 53,504 Research and development
11,344 10,451 22,490 21,355 General and administrative 5,756 12,212
16,453 23,815 Litigation benefit (7,000 ) - (7,000 ) - Insurance
reimbursement - - - (7,527 ) Amortization of other intangible
assets - 210 104 420 Restructuring costs 8,579
7,698 8,579 9,399 Total
operating expenses 47,320 56,498
97,569 100,966 Income (loss) from
operations 6,192 (3,548 ) 8,151 5,237 Interest and other income
(expense), net 74 (739 ) 395
(5,755 ) Income (loss) before income taxes 6,266 (4,287 )
8,546 (518 ) Provision for income taxes 515
449 570 791 Net income
(loss) $ 5,751 $ (4,736 ) $ 7,976 $ (1,309 )
Net income (loss) per share - basic $ 0.07 $ (0.06 ) $ 0.09 $ (0.02
) Net income (loss) per share - diluted $ 0.06 $ (0.06 ) $ 0.09 $
(0.02 ) Weighted average shares - basic 86,578 82,416 85,869 81,681
Weighted average shares - diluted 88,753 82,416 88,507 81,681
Ariba, Inc. and Subsidiaries Cash Flows (Unaudited; in
thousands) Three Months Ended March 31,
2010 2009 Operating activities: Net income (loss) $ 5,751 $ (4,736
) Adjustments to reconcile net income (loss) to net cash provided
by operating activities: Provision for doubtful accounts 267 759
Depreciation 2,011 1,899 Amortization of intangible assets 1,025
1,597 Impairment of fixed assets - 4,277 Stock-based compensation
11,229 8,096 Restructuring costs 8,579 7,698 Changes in operating
assets and liabilities: Accounts receivable (528 ) 1,776 Prepaid
expense and other assets (1,120 ) (4,328 ) Accounts payable 269
(2,820 ) Accrued compensation and related liabilities 3,144 2,099
Accrued liabilities (5,949 ) (438 ) Deferred revenue 5,937 6,659
Restructuring obligations (4,210 ) (6,238 ) Net cash
provided by operating activities 26,405 16,300
Investing activities: Purchases of property and
equipment (4,436 ) (1,150 ) Purchases of investments, net of sales
495 (11 ) Allocation from restricted cash, net - 386
Net cash used in investing activities (3,941 ) (775 )
Financing activities: Proceeds from issuance of common
stock, net 2,057 2,147 Repurchase of common stock (808 ) (696 )
Net cash used in financing activities 1,249
1,451 Effect of exchange rates on cash
and cash equivalents 32 115 Net change in cash and cash
equivalents 23,745 17,091 Cash and cash equivalents at
beginning of period 127,333 95,405 Cash and cash
equivalents at end of period $ 151,078 $ 112,496
Non-GAAP Financial Measures
The accompanying press release dated April 29, 2010 contains
non-GAAP financial measures. The following table reconciles the
non-GAAP financial measures in the press release to the most
directly comparable financial measures prepared in accordance with
Generally Accepted Accounting Principles in the United States of
America (GAAP). These non-GAAP financial measures include non-GAAP
revenues, non-GAAP cost of revenues, gross profit, operating
expenses, income (loss) from operations, net income (loss) and net
income (loss) per share amounts.
Non-GAAP financial measures should not be considered as a
substitute for, or superior to, GAAP financial measures, which
should be considered as the primary financial metrics for
evaluating our financial performance. Significantly, non-GAAP
financial measures are not based on a comprehensive set of
accounting rules or principles. Instead, they are based on
subjective determinations by management designed to supplement our
GAAP financial measures. They are subject to a number of important
limitations and should be considered only in conjunction with our
consolidated financial statements prepared in accordance with GAAP.
For example, our non-GAAP financial measures have the effect of
excluding a purchase accounting adjustment, costs and expenses from
our operating results that should be properly considered under a
system of accrual accounting. In addition, our non-GAAP financial
measures differ from GAAP measures with the same names, may vary
over time and may differ from non-GAAP financial measures with the
same or similar names used by other companies. Accordingly,
investors should exercise caution when evaluating our non-GAAP
financial measures.
Despite these limitations, we believe our non-GAAP financial
measures provide meaningful supplemental information about our
operating results, primarily because they exclude a purchase
accounting adjustment and costs and expenses that we do not believe
are indicative of the ongoing operating performance of our business
and our senior management. Although these items should properly be
considered in our GAAP financial measures, we believe they should
be excluded when evaluating our current operating performance. The
non-GAAP financial measures disclosed in the accompanying press
release are used by our Board of Directors and senior management to
evaluate our current operating performance, are used in evaluating
the performance of our senior management, and are used in our
budget and planning processes. We believe that our non-GAAP
financial measures are helpful to investors by facilitating
comparisons of our current and prior operating results and by
facilitating comparisons of our operating results with those of
other software companies.
Ariba, Inc. and Subsidiaries Reconciliation of GAAP to
Non-GAAP Operating Results (Unaudited; in thousands, except per
share data)
The following tables reconcile the
specific items excluded from GAAP in the
calculation of non-GAAP operating
results for the period indicated below:
Three Months Ended Three Months Ended March 31, 2010 March
31, 2009
Expense reconciliation: GAAP revenue $ 87,130
$ 84,693 Less: GAAP net income (loss) 5,751
(4,736 ) Total GAAP expenses 81,379 89,429 Amortization of
intangible assets (1,025 ) (1,597 ) Stock-based compensation
(11,229 ) (8,096 ) Tax accrual reversal 3,089 - Litigation benefit
7,000 - Restructuring costs (8,579 ) (7,698 ) Total
non-GAAP operating expenses $ 70,635 $ 72,038
Three Months Ended Three Months Ended March 31, 2010 March
31, 2009
Net income reconciliation: GAAP net income
(loss) $ 5,751 $ (4,736 ) Amortization of intangible assets 1,025
1,597 Stock-based compensation 11,229 8,096 Tax accrual reversal
(3,089 ) - Litigation benefit (7,000 ) - Restructuring costs
8,579 7,698 Non-GAAP net income $ 16,495
$ 12,655 Three Months Ended Three
Months Ended March 31, 2010 March 31, 2009
Net income per
share reconciliation: GAAP net income (loss) per share -
basic $ 0.07 $ (0.06 ) Amortization of intangible assets 0.01 0.02
Stock-based compensation 0.13 0.10 Tax accrual reversal (0.04 ) -
Litigation benefit (0.08 ) - Restructuring costs 0.10
0.09 Non-GAAP net income per share - basic $ 0.19
$ 0.15 Non-GAAP net income per share - diluted
$ 0.19 $ 0.15 Weighted average shares - basic 86,578 82,416
Weighted average shares - diluted 88,753 84,645 Ariba, Inc.
and Subsidiaries Reconciliation of GAAP to Non-GAAP Operating
Results (Unaudited; in thousands, except per share data)
The following tables reconcile the
specific items excluded from GAAP in the
calculation of non-GAAP operating
results for the period indicated below:
Six Months Ended Six Months Ended March 31, 2010 March 31,
2009
Revenue reconciliation: GAAP revenue $ 172,801 $
170,780 Purchase accounting adjustment - 355
Total non-GAAP revenues $ 172,801 $ 171,135
Six Months Ended Six Months Ended March 31, 2010
March 31, 2009
Expense reconciliation: GAAP revenue $
172,801 $ 170,780 Less: GAAP net income (loss) 7,976
(1,309 ) Total GAAP expenses 164,825 172,089
Amortization of intangible assets (2,456 ) (3,195 ) Stock-based
compensation (24,752 ) (17,622 ) Tax accrual reversal 3,089 -
Litigation benefit 7,000 - Restructuring costs (8,579 ) (9,399 )
Other-than-temporary decline in long-term investment -
(1,414 ) Total non-GAAP operating expenses $ 139,127
$ 140,459 Six Months Ended Six Months
Ended March 31, 2010 March 31, 2009
Net income
reconciliation: GAAP net income (loss) $ 7,976 $ (1,309 )
Purchase accounting adjustment - 355 Amortization of intangible
assets 2,456 3,195 Stock-based compensation 24,752 17,622 Tax
accrual reversal (3,089 ) - Litigation benefit (7,000 ) -
Restructuring costs 8,579 9,399 Other-than-temporary decline in
long-term investment - 1,414 Non-GAAP
net income $ 33,674 $ 30,676 Six Months
Ended Six Months Ended March 31, 2010 March 31, 2009
Net
income per share reconciliation: GAAP net income (loss) per
share - basic $ 0.09 $ (0.02 ) Purchase accounting adjustment -
0.00 Amortization of intangible assets 0.03 0.04 Stock-based
compensation 0.29 0.22 Tax accrual reversal (0.04 ) - Litigation
benefit (0.08 ) - Restructuring costs 0.10 0.12
Other-than-temporary decline in long-term investment -
0.02 Non-GAAP net income per share - basic $
0.39 $ 0.38 Non-GAAP net income per share -
diluted $ 0.38 $ 0.36 Weighted average shares - basic 86,578
81,681 Weighted average shares - diluted 88,753 84,344
Discussion of Specific Items Excluded From Non-GAAP Financial
Measures
Our non-GAAP financial measures include a purchase accounting
adjustment related to deferred revenues and generally exclude costs
and expenses for (i) amortization of intangible assets related to
acquisitions, (ii) stock-based compensation, (iii) restructuring
costs, (iv) litigation benefit, (v) tax accrual reversal and (vi)
other-than-temporary impairment of long-term investments. We
exclude these items because we believe they are not closely related
to the ongoing operating performance of our business and the
performance of our senior management and are generally excluded
from our budget and planning process. In addition to these reasons,
we believe our non-GAAP financial measures are also helpful to
investors by facilitating comparisons of our operating results over
different time periods and by facilitating comparisons of our
financial performance with that of other companies. In addition,
except for costs and expenses related to restructuring and
integration, these items are non-cash items that do not affect cash
flows.
(1) Purchase accounting adjustment –
deferred revenue. As announced on December 17, 2007, Ariba acquired
Procuri, Inc. In accordance with the fair value provisions,
acquired deferred revenue of approximately $4.5 million was
recorded on the opening balance sheet, which was approximately $5.9
million lower than the historical carrying value. Although this
purchase accounting requirement has no impact on the Company's
business or cash flow, it adversely impacts the Company's reported
GAAP revenue primarily for the first twelve months post-
acquisition. In order to provide investors with financial
information that facilitates comparison of both historical and
future results, the Company has provided non-GAAP financial
measures which exclude the impact of the purchase accounting
adjustment. The Company believes that this non-GAAP financial
adjustment is useful to investors because it allows investors to
(a) evaluate the effectiveness of the methodology and information
used by management in its financial and operational decision-making
and (b) compare past and future reports of financial results of the
Company as the revenue reduction related to acquired deferred
revenue will not recur when related subscription terms are renewed
in future periods.
(2) Amortization of Acquired Intangible
Assets. In accordance with GAAP, we amortize intangible assets
acquired in connection with acquisitions over the estimated useful
lives of the assets. We exclude these amortization costs in our
non-GAAP financial measures because they (i) result from prior
acquisitions, rather than the ongoing operating performance of our
business, and (ii) absent additional acquisitions, are expected to
decline over time as the remaining carrying amounts of these assets
are amortized. We believe excluding these costs helps investors
compare our financial performance with that of other companies with
different acquisition histories. However, as with impairment
charges, we recognize that amortization costs provide a helpful
measure of the financial impact and performance of prior
acquisitions and consider our non-GAAP financial measures in
conjunction with our GAAP financial results that include
amortization costs.
(3) Stock-Based Compensation Expenses. We
exclude stock-based compensation expense associated with stock
options and stock granted to employees and non-executive directors
in our non-GAAP financial measures. While stock-based compensation
is a significant component of our expenses, we believe that
investors wish to be able to exclude the effects of stock-based
compensation expense in comparing our financial performance with
that of other companies.
(4) Restructuring costs. We recorded
restructuring related to lease abandonment accruals and/or
severance and related benefits in the three months and six months
ended March 31, 2009 and the three months and six months ended
March 31, 2010. We exclude this from our non-GAAP financial
measures because it is unrelated to our ongoing operations and is
significantly impacted by factors outside our control. We believe
excluding restructuring costs helps investors compare our operating
performance with that of other companies. We recognize, however,
that restructuring costs will impact cash flows and that we and
investors should carefully consider the impact of these costs on
future cash flows.
(5) Litigation benefit. We received $7.0
million from Emptoris in relation to a patent litigation judgment
which we recorded as income in the three months and six months
ended March 31, 2010. We exclude this from our non-GAAP financial
measures because it is unrelated to our ongoing operations. We
believe excluding the litigation benefit helps investors compare
our operating performance with that of other companies. We
recognize, however, that the litigation benefit impacts cash flow
and that we and investors should carefully consider the impact of
this on cash flow.
(6) Release of tax reserve. We released a
tax reserve of approximately $3.1 million in the three months and
six months ended March 31, 2010. We exclude this from our non-GAAP
financial measures because it is unrelated to our ongoing
operations. We believe excluding the tax reserve release helps
investors compare our operating performance with that of other
companies.
(7) Other-than-temporary impairment of
long-term investments. We recorded an other-than temporary
impairment of a long-term investment in the six months ended March
31, 2009. We exclude this from our non-GAAP financial measures
because it is unrelated to our ongoing operations. We believe
excluding the other-than-temporary impairment helps investors
compare our operating performance with that of other companies. We
recognize, however, that the other-than-temporary impairment may
impact cash flows and that we and investors should carefully
consider the impact of these costs on future cash flows.
Ariba (NASDAQ:ARBA)
Historical Stock Chart
Von Jun 2024 bis Jul 2024
Ariba (NASDAQ:ARBA)
Historical Stock Chart
Von Jul 2023 bis Jul 2024