Science & Technology
Science and Technology
Science and Technology
Thu, October 29, 2009
Wed, October 28, 2009
DUBLIN, CA--(Marketwire - October 28, 2009) - Taleo Corporation (
Summary quarterly highlights:
-- GAAP revenues of $50.7 million for the third quarter of 2009, an increase of 9% year-over-year. -- GAAP application revenue increased to $44.9 million, growth of 20% year-over-year and 5% quarter-over-quarter. -- GAAP net loss of $(1.1) million or $(0.04) per share. -- Non-GAAP net income of $6.7 million, or $0.20 per fully diluted share. -- Cash flow from operations of $13.6 million; total year-to-date cash flow from operations increases to $30.1 million. -- Signed 167 new customers, including 17 new Taleo Enterprise customers and 150 new Taleo Business Edition customers. -- Closed 7 large enterprise deals with annual contract values in excess of $250,000. -- Signed more than 40 new performance management customers across both enterprise and SMB segments, increasing the company's total performance management customer base to more than 160. -- Announced an agreement to acquire the remaining shares of strategic partner Worldwide Compensation, Inc. -- Launched the Talent Grid 'cloud community' set of online exchanges to the market, and announced plans to deliver Taleo 10 in the fourth quarter of 2009.
"Strategic talent management is driving innovation, growth and business success for companies of all sizes," said Michael Gregoire, Taleo Chairman and CEO. "Those that are locking in their growth plans for 2010 are choosing Taleo to transform how they optimize their businesses by using the most advanced talent management system, Taleo. An example of this is Harris Teeter, the grocery store chain, which standardized their recruiting on Taleo in Q2 2008, and based on the positive impact on their business, expanded their use of Taleo this quarter."
Significant achievements included:
-- Acquired 17 new enterprise customers, and closed 7 large enterprise deals with annual contract values in excess of $250,000. New enterprise customers include: Cognizant Technology Solutions, Shaw Industries, U.S. Cellular, Lifespan, Xcel Energy, Itron, Atmos Energy, and Centegra Health System. -- Signed 150 new small and medium-sized customers. Taleo Business Edition, a talent management solution targeted at companies with less than 5,000 employees, now has more than 3,500 customers. New Taleo Business Edition customers include: Skymall, Medical Management Resource Group, Wesley Homes, vCustomer Corp., RQ Construction, Lakeside Schools, TIB Bank, Talyst and Communications Infrastructure Group. -- Received Human Resource Executive magazine's Product of the Year award for Taleo Perform, the company's performance management solution for small- to-medium sized businesses. -- Continued momentum in enterprise talent management suite sales. Sales this quarter included both new and existing customers, with several long- standing Taleo recruiting customers choosing to power their talent management initiatives with Taleo's performance management solutions and new customer Penske Truck Leasing selecting Taleo to start with a unified offering. -- Strong quarter in new performance management deals across both enterprise and SMB segments. Taleo now has more than 160 performance management customers, up from roughly 120 at the end of the second quarter of 2009. New enterprise performance management customers include: RSC Equipment Rental, SavaSeniorCare, Talisman Energy and a Fortune 500 customer closed through IBM. -- Hosted its annual user conference, Taleo WORLD, in Las Vegas to its largest audience of customers, prospects, partners and industry influencers. -- Announced plans to deliver to market a complete Talent Management suite of solutions for enterprise and small-to-medium sized businesses, called Taleo 10. The enterprise solution includes a unified interface across all components, and new capabilities in recruiting, development planning, and also mobile/social networking enablement. The SMB solution will add compensation management functionality. Taleo 10 is expected to be generally available in the fourth quarter of 2009. -- Launched the Talent Grid to offer customers and partners online access to a broad collection of talent management domain expertise. The Talent Grid is comprised of the Knowledge Exchange, providing an online customer community for best practices; the Solution Exchange, providing a wide range of partner solutions; and the Talent Exchange, providing a global network of candidates and careers. -- Announced plans to acquire the remaining shares of strategic partner Worldwide Compensation, Inc., adding best-in-class compensation management functionality to our suite of unified talent management applications. -- Continued to achieve Vurv customer conversions and commitments to convert to Taleo. Recent Vurv customers committing to Taleo include: Northrup Grumman, Perot Systems, Magellan Health Services, Adventist Health System, United Stationers, Harland Clarke and Total System Services.
Taleo delivered the following financial results:
Revenue: Total revenue for the third quarter was $50.7 million, representing an increase of 9% on a year-over-year basis. Application revenue for the third quarter was $44.9 million, an increase of 20% on a year-over-year basis.
Net Income (Loss) and Net Income (Loss) Per Share to Common Stockholders: Net loss was $(1.1) million for the third quarter, compared to a net loss of $(5.9) million for the same period last year. Net loss includes $3.6 million in amortization expense related to the acquisition of Vurv, stock-based compensation expense of $3.1 million and $1.1 million of other expense related to the write-off of the Worldwide Compensation purchase option. Net loss per share was $(0.04) for the third quarter of 2009 based on 30.9 million weighted average shares outstanding compared to a net loss per share of $(0.20) for the same period in 2008 based on 29.4 million weighted average shares outstanding.
Non-GAAP Net Income and Non-GAAP Net Income Per Share: Non-GAAP net income was $6.7 million for the third quarter of 2009, compared to non-GAAP net income of $5.1 million in the same period last year. Non-GAAP net income includes amounts excluded from GAAP revenue due to the write down of the deferred revenue associated with purchase accounting for the Vurv acquisition, and excludes stock-based compensation expense, amortization of acquired intangibles, restructuring and severance expense and the write-off of the Worldwide Compensation purchase option. Non-GAAP net income per fully diluted share was $0.20 for the third quarter of 2009 based on 33.9 million weighted average shares outstanding compared to non-GAAP net income per fully diluted share of $0.15 for the same period in 2008 based on 33.3 million weighted average shares outstanding.
Conference Call Details
The company will issue a pre-recorded webcast and transcript of prepared remarks regarding the quarter at 1:30pm PDT (4:30pm EDT), both of which will be available on the Investor Relations section of [ www.taleo.com ]. The company will then host a live Q&A call at 2:30pm PDT (5:30pm EDT), with Michael Gregoire, Chairman and CEO, and Katy Murray, CFO. This call will also be available via webcast on the Investor Relations section of [ www.taleo.com ].
About Taleo
Taleo Corporation (
Forward-looking Statements
This release contains forward-looking statements, including statements regarding Taleo's future financial performance, new product development, the release of Taleo 10, market growth, the demand for Taleo's solutions, the impact of Taleo's acquisition of Vurv, and general business conditions. Any forward-looking statements contained in this press release are based upon Taleo's historical performance and its current plans, estimates and expectations and are not a representation that such plans, estimates, or expectations will be achieved. These forward-looking statements represent Taleo's expectations as of the date of this press announcement. Subsequent events may cause these expectations to change, and Taleo disclaims any obligation to update the forward-looking statements in the future. These forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially. Further information on potential factors that could affect actual results is included in Part II, Item 1A of Taleo's Quarterly Report on Form 10-Q/A, for the period ending June 30, 2009, as filed with the SEC on October 27, 2009, and in other reports filed by Taleo with the SEC.
Non-GAAP Financial Measures
Taleo has provided in this release financial information that has not been prepared in accordance with GAAP. This information includes non-GAAP revenue, non-GAAP net income and non-GAAP net income per share. Taleo uses these non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, as a supplement to GAAP measures, in evaluating Taleo's ongoing operational performance. Taleo believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing its financial measures with other companies in Taleo's industry, many of which present similar non-GAAP financial measures to investors. As noted, the non-GAAP revenue discussed above includes amounts excluded from GAAP revenue due to the write down of the deferred revenue associated with purchase accounting for the Vurv acquisition, and other non-GAAP measures include amounts excluded from GAAP revenue due to the write down of the deferred revenue associated with purchase accounting for the Vurv acquisition and exclude costs associated with the restatement-related revenue review, stock-based compensation expense, amortization of acquired intangibles, restructuring and severance expense, non-cash tax valuation adjustment and non-cash income tax audit settlement. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measure as detailed above. As previously mentioned, a reconciliation of GAAP to the non-GAAP financial measures has been provided in the tables included as part of this press release.
A historical reconciliation of GAAP to non-GAAP financial measures for past periods can be located on the investor relations section of [ www.taleo.com ] (see [ www.taleo.com ] -- About Taleo -- Investor Relations -- Restated Financials GAAP & Non-GAAP Reconciliation, and [ www.taleo.com ] -- About Taleo -- Investor Relations -- Quarterly Report to Restated Financials GAAP & Non-GAAP Reconciliation).
Taleo Corporation Condensed Consolidated Statements of Operations (All amounts in thousands except per share data) (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, ------------------ ------------------ 2009 2008 2009 2008 -------- -------- -------- -------- As As Revenue: restated restated -------- -------- Application $ 44,870 $ 37,469 $128,988 $ 98,362 Consulting 5,866 9,177 18,924 22,015 -------- -------- -------- -------- Total revenue 50,736 46,646 147,912 120,377 -------- -------- -------- -------- Cost of revenue (note 1): Application 9,838 9,106 28,620 21,690 Amortization of acquired intangibles 761 760 2,281 831 -------- -------- -------- -------- Total cost of application revenue 10,599 9,866 30,901 22,521 Consulting 6,203 7,245 18,758 18,607 -------- -------- -------- -------- Total cost of revenue 16,802 17,111 49,659 41,128 -------- -------- -------- -------- -------- -------- -------- -------- Gross profit 33,934 29,535 98,253 79,249 -------- -------- -------- -------- Operating expenses (note 1): Sales and marketing 13,671 13,844 41,103 36,289 Sales - amortization of acquired intangibles 2,810 2,035 8,433 2,182 Research and development 8,666 8,444 26,138 22,948 General and administrative 8,486 9,430 25,742 23,147 Restructuring and severance - 1,330 - 1,611 -------- -------- -------- -------- Total operating expenses 33,633 35,083 101,416 86,177 -------- -------- -------- -------- -------- -------- -------- -------- Income / (loss) from operations 301 (5,548) (3,163) (6,928) -------- -------- -------- -------- Other income / (expense): Interest income 52 261 246 1,556 Interest expense (42) (58) (130) (144) Worldwide Compensation purchase option write-off (1,084) - (1,084) - -------- -------- -------- -------- Total other income / (expense) (1,074) 203 (968) 1,412 -------- -------- -------- -------- Loss before provision / (benefit) for income tax (773) (5,345) (4,131) (5,516) Provision / (benefit) for income taxes 329 561 (831) 89 -------- -------- -------- -------- Loss attributable to Class A common stockholders $ (1,102) $ (5,906) $ (3,300) $ (5,605) ======== ======== ======== ======== Loss per share attributable to Class A common stockholders - basic and diluted $ (0.04) $ (0.20) $ (0.11) $ (0.21) ======== ======== ======== ======== Weighted average Class A common shares - basic and diluted 30,883 29,388 30,540 26,818 ======== ======== ======== ======== NOTES 1. Includes stock-based compensation expense Application cost of revenue $ 189 $ 158 $ 480 $ 428 Consulting cost of revenue 346 252 875 704 -------- -------- -------- -------- Cost of revenue subtotal 535 410 1,355 1,132 Sales and marketing operating expense 846 858 2,178 2,470 Research and development operating expense 441 380 1,114 1,071 General and administrative operating expense 1,241 1,354 3,518 3,795 -------- -------- -------- -------- Operating expense subtotal 2,528 2,592 6,810 7,336 -------- -------- -------- -------- Total stock-based compensation expense $ 3,063 $ 3,002 $ 8,165 $ 8,468 ======== ======== ======== ======== Taleo Corporation Condensed Consolidated Statements of Operations (Continued) (All amounts in thousands except per share data) Reconciliation of GAAP net loss and non-GAAP net income: Three Months Ended Nine Months Ended September 30, September 30, ------------------ ------------------ 2009 2008 2009 2008 -------- -------- -------- -------- As As restated restated -------- -------- GAAP net loss reported above $ (1,102) $ (5,906) $ (3,300) $ (5,605) Add back: Revenue Non-GAAP application revenue 53 3,619 825 3,619 Non-GAAP service revenue - 233 13 233 -------- -------- -------- -------- Total Non-GAAP revenue 53 3,852 838 3,852 Expenses Revenue review expense - - 1,631 - Stock-based compensation expense 3,063 3,002 8,165 8,468 Amortization of acquired intangibles 3,571 2,795 10,714 3,013 Restructuring and severance expense - 1,330 - 1,611 Non-cash tax valuation adjustment - - - (332) Non-cash income tax audit settlement - - (1,335) - -------- -------- -------- -------- 6,634 7,127 19,175 12,760 Other Expense - Worldwide Compensation purchase option write-off 1,084 - 1,084 - -------- -------- -------- -------- Non-GAAP net income $ 6,669 $ 5,073 $ 17,797 $ 11,007 ======== ======== ======== ======== Non-GAAP net income per share Basic $ 0.22 $ 0.17 $ 0.58 $ 0.41 ======== ======== ======== ======== Diluted $ 0.20 $ 0.15 $ 0.55 $ 0.36 ======== ======== ======== ======== Reconciliation of basic and fully diluted share count: -------- -------- -------- -------- Basic 30,883 29,388 30,540 26,818 -------- -------- -------- -------- Add: Weighted Average - Series B common stock - 462 - 495 Weighted Average - options and unreleased restricted stock 2,715 2,940 1,390 2,954 Weighted Average - Vurv escrow shares 300 478 418 160 -------- -------- -------- -------- Diluted 33,898 33,268 32,348 30,427 -------- -------- -------- -------- Taleo Corporation Condensed Consolidated Balance Sheets (All amounts in thousands) (Unaudited) September 30, December 31, 2009 2008 ------------- ------------- ASSETS As restated ------------- Current assets: Cash and cash equivalents $ 76,513 $ 49,462 Restricted cash 617 521 Accounts receivable, net 46,155 49,167 Prepaid expenses and other current assets 10,622 10,977 Investment credits receivable 6,973 6,087 ------------- ------------- Total current assets 140,880 116,214 Property and equipment, net 24,198 25,250 Restricted cash 210 515 Goodwill 91,027 91,626 Other intangibles, net 34,116 44,802 Other assets 5,470 4,782 ------------- ------------- Total assets $ 295,901 $ 283,189 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $ 21,094 $ 24,877 Deferred revenue - application services and customer deposits 55,714 54,421 Deferred revenue - consulting services 16,841 16,221 Capital lease obligation, short-term 573 1,101 ------------- ------------- Total current liabilities 94,222 96,620 Long-term deferred revenue - application services and customer deposits 631 777 Long-term deferred revenue - consulting services 12,424 9,594 Other liabilities 4,239 3,258 Capital lease obligation, long-term 162 519 ------------- ------------- Total liabilities 111,678 110,768 ------------- ------------- Stockholders' equity: Capital stock - - Additional paid-in capital 264,224 250,168 Accumulated deficit (81,622) (78,322) Treasury stock (543) - Accumulated other comprehensive income 2,164 575 ------------- ------------- Total stockholders' equity 184,223 172,421 ------------- ------------- Total liabilities and stockholders' equity $ 295,901 $ 283,189 ============= ============= Taleo Corporation Consolidated Statements of Cash Flows (All amounts in thousands) (Unaudited) Nine Months Ended September 30, 2009 2008 ------------- ------------- As restated ------------- Cash flows from operating activities: Net loss $ (3,300) $ (5,605) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 20,581 10,582 Loss on disposal of fixed assets 17 - Amortization of tenant inducements (114) (114) Tenant inducements from landlord 6 - Stock-based compensation expense 8,165 8,468 Director fees settled with stock 186 172 Worldwide Compensation purchase option write-off 1,084 - Bad debt expense 704 259 Changes in working capital accounts: Accounts receivable 2,248 (4,539) Prepaid expenses and other assets (845) (2,483) Investment credit receivable (112) (2,055) Accounts payable and accrued liabilities (2,744) (3,413) Deferred revenue & customer deposits 4,175 12,412 ------------- ------------- Net cash provided by operating activities 30,051 13,684 ------------- ------------- Cash flows from investing activities: Purchases of property and equipment (7,720) (5,853) Restricted cash - decrease 210 210 Purchase of investment - (2,498) Acquisition of business, net of cash acquired - (49,646) ------------- ------------- Net cash used in investing activities (7,510) (57,787) ------------- ------------- Cash flows from financing activities: Principal payments on loan and capital lease obligations (1,376) (344) Treasury stock acquired to settle employee withholding liability (661) (791) Excess tax benefit from stock options 257 - Proceeds from stock options exercised and ESPP shares 5,566 8,221 ------------- ------------- Net cash provided by financing activities 3,786 7,086 ------------- ------------- Effect of exchange rate changes on cash and cash equivalents 724 (114) ------------- ------------- Increase in cash and cash equivalents 27,051 (37,131) Cash and cash equivalents: Beginning of period 49,462 86,135 ------------- ------------- End of period $ 76,513 $ 49,004 ============= ============= Supplemental cash flow disclosures: Cash paid for interest $ 54 $ 33 ------------- ------------- Cash paid for income taxes $ 273 $ 207 ------------- ------------- Supplemental disclosure of non-cash financing and investing activities: Property and equipment purchases included in accounts payable and accrued liabilities $ 1,530 $ 2,691 Class B common stock exchanged for Class A common stock $ - $ 96 Stock and stock options issued in connection with Vurv acquisition $ - $ 75,189
