[November 03, 2014] |
|
Interactive Intelligence Reports 2014 Third-Quarter and Nine Months Ended Financial Results
INDIANAPOLIS --(Business Wire)--
Interactive Intelligence Group Inc. (Nasdaq: ININ), a global provider of
software and services designed to improve the customer experience, has
announced financial results for the three and nine months ended Sept.
30, 2014.
"This quarter showed further evidence of our success in generating more
revenue from our cloud-based services," said Dr. Donald E. Brown,
Interactive Intelligence founder and CEO. "Orders for our cloud
solutions not only doubled from the same quarter last year, but moved
from less than half to over two-thirds of our total orders received.
This growth and shift to the cloud occurred across all of our major
geographic markets, and was more prominent among sales to new customers
compared to existing follow-on sales.
"We continue to deploy our cloud solutions for new customers, which will
contribute to increasing cloud revenues. We expect that the first
release of our new multi-tenant PureCloud solution this quarter will
further accelerate this trend," Brown concluded.
Third-Quarter 2014 Financial Highlights:
-
Orders: Total orders increased 46 percent from the third
quarter of 2013, with cloud-based orders up 104 percent to represent
68 percent of total orders. In the third quarter of this year, 56
orders were signed over $250,000, including 12 orders over $1 million,
compared to 47 orders over $250,000, including 12 orders over $1
million in the same quarter last year.
-
Revenues: Total revenues were $89.5 million, up 15 percent from
the 2013 third quarter. Recurring revenues, including support fees
from on-premises license agreements and fees from cloud-based
customers, increased 28 percent to $48.1 million and accounted for 54
percent of total revenues. Cloud-based revenues increased 70 percent
to $14.7 million. Product revenues were $27.8 million and services
revenues $13.6 million, compared to $26.9 million and $13.5 million,
respectively, in the same quarter last year.
-
Total Deferred Revenues: As of Sept. 30, 2014, deferred
revenues were $107.5 million, compared to $108.7 million at the end of
the 2013 third quarter, and the amount of unbilled future cloud-based
revenues increased to $265.9 million from $153.0 million at the end of
the 2013 third quarter. The combination of deferred and unbilled
future cloud-based revenues grew to $373.4 million, up 43 percent from
$261.7 million at the end of the 2013 third quarter.
-
Operating Income (Loss): GAAP operating loss was $(3.5)
million, compared to GAAP operating income of $3.7 million in the 2013
third quarter. Non-GAAP* operating income was $0.5 million, compared
to non-GAAP operating income of $6.7 million in the same quarter last
year.
-
Income Taxes: Income tax benefit was $1.3 million, with an
estimated annual effective tax rate of 41.0 percent.
-
Net Income (Loss): GAAP net loss was $(2.1) million, or $(0.10)
per diluted share based on 20.9 million weighted average diluted
shares outstanding, compared to GAAP net income in the same quarter of
2013 of $1.6 million, or $0.08 per diluted share based on 21.2 million
weighted average diluted shares outstanding.
Non-GAAP net
income for the third quarter was $0.3 million, or $0.01 per diluted
share, compared to non-GAAP net income of $4.1 million, or $0.20 per
diluted share in the same quarter last year.
-
Cash, Cash Equivalents, and Investments: Cash, cash
equivalents, and investments totaled $69.6 million as of Sept. 30,
2014, compared to $86.0 million as of June 30, 2014.
-
Cash Flows: The company used $6.9 million for operating
activities in the third quarter and $4.0 million for capital
expenditures, including the continued expansion of its cloud
infrastructure, and capitalized $5.1 million for PureCloud development
costs.
* A reconciliation of GAAP to non-GAAP financial measures has been
provided in the financial statement tables included with this press
release. An explanation of these measures is also included below under
the heading "Non-GAAP Measures."
Nine Months Ended 2014 Financial Highlights:
-
Orders: Excluding the largest cloud-based order in the
company's history received during the second quarter of 2013, total
orders increased by 34 percent and cloud-based orders were up 102
percent over the first nine months of 2013. Including this large
cloud-based order, total orders increased 6 percent and cloud-based
orders were up 24 percent. Cloud-based orders represented 61 percent
of total orders during the first nine months of 2014. In this same
period, 129 orders were signed over $250,000, including 31 orders over
$1 million.
-
Revenues: Total revenues were $248.8 million, an increase of 9
percent over the first nine months of 2013. Recurring revenues
increased 28 percent to $136.1 million and accounted for 55 percent of
total revenues. Cloud-based revenues increased 76 percent to $41.6
million. Product revenues were $72.2 million, down 13 percent, and
services revenues were $40.5 million, up 6 percent compared to the
first nine months of 2013.
-
Operating Income (Loss): GAAP operating loss was $(19.8)
million for the first nine months of 2014, compared to GAAP operating
income of $7.9 million over the same period last year. Non-GAAP
operating loss was $(7.1) million for the first nine months of 2014,
compared to non-GAAP operating income of $16.7 million during the same
period last year. The year-over-year decline was primarily due to
lower than anticipated product revenues, combined with increased sales
and marketing expenses to capture cloud market share, and increased
research and development expenses to accelerate time-to-market of
PureCloud.
-
Net Income (Loss): GAAP net loss for the first nine months of
2014 was $(11.5) million, or $(0.55) per diluted share based on 20.9
million weighted average shares outstanding, compared to GAAP net
income for the same period in 2013 of $6.0 million, or $0.29 per
diluted share based on 21.0 million weighted average diluted shares
outstanding. GAAP net income for the nine months ended Sept. 30, 2013
included an income tax benefit primarily driven by a change in
transfer pricing implemented during the second quarter of 2013.
Non-GAAP
net loss for the first nine months of 2014 was $(3.8) million, or
$(0.18) per diluted share, compared to non-GAAP net income of $11.1
million, or $0.53 per diluted share during the same period in 2013.
-
Cash Flows: The company used $3.1 million in cash flow for
operations, $17.1 million for capital expenditures, which included
continued expansion of its cloud infrastructure, $9.6 million for
PureCloud development costs, and $9.2 million for an acquisition.
Additional Third-Quarter 2014 and Recent
Highlights:
-
The latest version of Interactive Intelligence's CIC 4.0 release was
certified by the Joint Interoperability Test Command (JITC), which
ensures compliance with the Department of Defense standards for faster
government sales cycles and reduced deployment time.
-
Interactive Intelligence was named by Collection Advisor Magazine
among its 2014 top collection and dialer solutions.
-
Interactive Intelligence announced availability of its contact center
and dialer software integrated with the new CallScripter™ application
for improved customer service, increased agent productivity, and
enhanced compliance.
Interactive Intelligence will host a conference call today at 4:30 p.m.
Eastern time (EST) featuring Dr. Brown and the company's CFO, Stephen R.
Head. A live Q&A session will follow opening remarks.
To access the teleconference, dial 1 877.324.1969 at least five minutes
prior to the start of the call. Ask for the teleconference by the
following name: "Interactive Intelligence third-quarter earnings call."
The teleconference will also be broadcast live on the company's investor
relations' page at http://investors.inin.com/.
An archive of the teleconference will be posted following the call.
About Interactive Intelligence Interactive Intelligence
Group Inc. (Nasdaq: ININ) is a global provider of software and services
designed to improve the customer experience. The company's 6,000-plus
customers worldwide have benefitted from its cloud and on-premises
solutions for contact center, unified communications, and business
process automation. Interactive Intelligence is among Software
Magazine's 2014 Top 500 Global Software and Service Providers, and has
received a Frost & Sullivan Company of the Year Award for the last five
consecutive years. In addition, Glassdoor honored Interactive
Intelligence with its 2014 Employees' Choice Award as one of the Best
Places to Work in the U.S., and Mashable ranked Interactive Intelligence
second on its 2014 list of the Seven Best Tech Companies to Work For.
The company was founded in 1994 and employs more than 2,000 people
worldwide. Interactive Intelligence is headquartered in Indianapolis,
Indiana and has offices throughout North America, Latin America, Europe,
Middle East, Africa and Asia Pacific. It can be reached at +1
317.872.3000 or [email protected]. Visit
Interactive Intelligence on the Web at www.inin.com;
on Twitter at www.inin.com/twitter;
on Facebook at www.inin.com/facebook;
or on LinkedIn at www.inin.com/linkedin.
Non-GAAP Measures The non-GAAP measures shown in this
release include revenue which was not recognized on a GAAP basis due to
purchase accounting adjustments, exclude non-cash stock-based
compensation expense, certain acquisition-related expenses and the
amortization of certain intangible assets related to acquisitions by the
company, and adjust for non-GAAP income tax expense. Reconciliations of
these non-GAAP measures to the most directly comparable GAAP measures
are included with the financial information included in this press
release. These measures are not in accordance with, or an alternative
for, GAAP and may be different from non-GAAP measures used by other
companies. Stock-based compensation expense and amortization of
intangibles related to acquisitions are non-cash and non-GAAP income tax
expense is pro forma based on non-GAAP earnings. Management believes
that the presentation of non-GAAP results, when shown in conjunction
with corresponding GAAP measures, provides useful information to
management and investors regarding financial and business trends related
to the company's results of operations. Further, our management believes
that these non-GAAP measures improve management's and investors' ability
to compare the company's financial performance with other companies in
the technology industry. Because stock-based compensation expense,
certain acquisition-related expenses and amortization of intangibles
related to acquisitions amounts can vary significantly between
companies, it is useful to compare results excluding these amounts. Our
management also reviews financial statements that exclude stock-based
compensation expense, certain acquisition-related expenses and
amortization of intangibles amounts related to acquisitions for its
internal budgets.
Forward Looking Statements This release may contain certain
forward-looking statements that involve a number of risks and
uncertainties. Among the factors that could cause actual results to
differ materially are the following: rapid technological changes and
competitive pressures in the industry; worldwide economic conditions and
their impact on customer purchasing decisions; the company's ability to
maintain profitability; to manage successfully its growth; to manage
successfully its increasingly complex third-party relationships
resulting from the software and hardware components being licensed or
sold with its solutions; to maintain successful relationships with
certain suppliers which may be impacted by the competition in the
technology industry; to maintain successful relationships with its
current and any new partners; to maintain and improve its current
products; to develop new products; to protect its proprietary rights and
sensitive customer information adequately; improve the company's brand
and name recognition; to successfully integrate acquired businesses; and
other factors described in the company's SEC filings, including the
company's latest annual report on Form 10-K.
Interactive Intelligence is the owner of the marks INTERACTIVE
INTELLIGENCE, its associated LOGO and numerous other marks. All other
trademarks mentioned in this document are the property of their
respective owners.
|
|
Interactive Intelligence Group, Inc.
|
Condensed Consolidated Statements of Operations and Comprehensive
Income (Loss)
|
(in thousands, except per share amounts)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
|
|
|
2014
|
|
2013
|
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Product
|
|
|
|
|
$
|
27,764
|
|
|
$
|
26,913
|
|
|
|
$
|
72,158
|
|
|
$
|
82,813
|
|
Recurring
|
|
|
|
|
|
48,095
|
|
|
|
37,537
|
|
|
|
|
136,121
|
|
|
|
106,470
|
|
Services
|
|
|
|
|
|
13,603
|
|
|
|
13,519
|
|
|
|
|
40,461
|
|
|
|
38,166
|
|
Total revenues
|
|
|
|
|
|
89,462
|
|
|
|
77,969
|
|
|
|
|
248,740
|
|
|
|
227,449
|
|
Costs of revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs of product
|
|
|
|
|
|
6,932
|
|
|
|
6,599
|
|
|
|
|
20,269
|
|
|
|
21,691
|
|
Costs of recurring
|
|
|
|
|
|
16,816
|
|
|
|
11,048
|
|
|
|
|
46,196
|
|
|
|
31,423
|
|
Costs of services
|
|
|
|
|
|
11,550
|
|
|
|
9,609
|
|
|
|
|
33,365
|
|
|
|
27,316
|
|
Amortization of intangible assets
|
|
|
|
|
|
177
|
|
|
|
49
|
|
|
|
|
363
|
|
|
|
147
|
|
Total costs of revenues
|
|
|
|
|
|
35,475
|
|
|
|
27,305
|
|
|
|
|
100,193
|
|
|
|
80,577
|
|
Gross profit
|
|
|
|
|
|
53,987
|
|
|
|
50,664
|
|
|
|
|
148,547
|
|
|
|
146,872
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
|
|
|
|
30,651
|
|
|
|
25,183
|
|
|
|
|
89,559
|
|
|
|
74,306
|
|
Research and development
|
|
|
|
|
|
15,528
|
|
|
|
12,348
|
|
|
|
|
45,233
|
|
|
|
38,040
|
|
General and administrative
|
|
|
|
|
|
10,800
|
|
|
|
8,994
|
|
|
|
|
32,124
|
|
|
|
25,192
|
|
Amortization of intangible assets
|
|
|
|
|
|
472
|
|
|
|
464
|
|
|
|
|
1,420
|
|
|
|
1,395
|
|
Total operating expenses
|
|
|
|
|
|
57,451
|
|
|
|
46,989
|
|
|
|
|
168,336
|
|
|
|
138,933
|
|
Operating income (loss)
|
|
|
|
|
|
(3,464
|
)
|
|
|
3,675
|
|
|
|
|
(19,789
|
)
|
|
|
7,939
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income, net
|
|
|
|
|
|
274
|
|
|
|
169
|
|
|
|
|
831
|
|
|
|
618
|
|
Other expense
|
|
|
|
|
|
(279
|
)
|
|
|
(476
|
)
|
|
|
|
(665
|
)
|
|
|
(1,851
|
)
|
Total other income (expense)
|
|
|
|
|
|
(5
|
)
|
|
|
(307
|
)
|
|
|
|
166
|
|
|
|
(1,233
|
)
|
Income (loss) before income taxes
|
|
|
|
|
|
(3,469
|
)
|
|
|
3,368
|
|
|
|
|
(19,623
|
)
|
|
|
6,706
|
|
Income tax benefit (expense)
|
|
|
|
|
|
1,326
|
|
|
|
(1,741
|
)
|
|
|
|
8,119
|
|
|
|
(721
|
)
|
Net income (loss)
|
|
|
|
|
$
|
(2,143
|
)
|
|
$
|
1,627
|
|
|
|
$
|
(11,504
|
)
|
|
$
|
5,985
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustment
|
|
|
|
|
$
|
(2,641
|
)
|
|
$
|
(461
|
)
|
|
|
$
|
(1,985
|
)
|
|
$
|
(340
|
)
|
Unrealized investment gain (loss) - net of tax
|
|
|
|
|
|
(95
|
)
|
|
|
78
|
|
|
|
|
(121
|
)
|
|
|
(150
|
)
|
Comprehensive income (loss)
|
|
|
|
|
$
|
(4,879
|
)
|
|
$
|
1,244
|
|
|
|
$
|
(13,610
|
)
|
|
$
|
5,495
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
|
|
$
|
(0.10
|
)
|
|
$
|
0.08
|
|
|
|
$
|
(0.55
|
)
|
|
$
|
0.30
|
|
|
|
|
|
|
|
(0.10
|
)
|
|
|
0.08
|
|
|
|
|
(0.55
|
)
|
|
|
0.29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used to compute net income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
20,904
|
|
|
|
20,112
|
|
|
|
|
20,851
|
|
|
|
19,922
|
|
Diluted
|
|
|
|
|
|
20,904
|
|
|
|
21,180
|
|
|
|
|
20,851
|
|
|
|
20,978
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interactive Intelligence Group, Inc.
|
Reconciliation of Supplemental Financial Information
|
(in thousands, except per share amounts)
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
|
|
|
2014
|
|
2013
|
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recurring revenue, as reported
|
|
|
|
|
$
|
48,095
|
|
|
$
|
37,537
|
|
|
|
$
|
136,121
|
|
|
$
|
106,470
|
|
Purchase accounting adjustments
|
|
|
|
|
|
4
|
|
|
|
44
|
|
|
|
|
14
|
|
|
|
192
|
|
Non-GAAP recurring revenue
|
|
|
|
|
$
|
48,099
|
|
|
$
|
37,581
|
|
|
|
$
|
136,135
|
|
|
$
|
106,662
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recurring revenue gross profit as reported
|
|
|
|
|
$
|
31,279
|
|
|
$
|
26,489
|
|
|
|
$
|
89,925
|
|
|
$
|
75,047
|
|
Purchase accounting adjustments
|
|
|
|
|
|
4
|
|
|
|
44
|
|
|
|
|
14
|
|
|
|
192
|
|
Non-cash stock-based compensation expense
|
|
|
|
|
|
385
|
|
|
|
213
|
|
|
|
|
1,059
|
|
|
|
588
|
|
Non-GAAP recurring revenue gross profit
|
|
|
|
|
$
|
31,668
|
|
|
$
|
26,746
|
|
|
|
$
|
90,998
|
|
|
$
|
75,827
|
|
Non-GAAP recurring revenue gross margin
|
|
|
|
|
|
65.8
|
%
|
|
|
71.2
|
%
|
|
|
|
66.8
|
%
|
|
|
71.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Services revenue gross profit as reported
|
|
|
|
|
$
|
2,053
|
|
|
$
|
3,910
|
|
|
|
$
|
7,096
|
|
|
$
|
10,850
|
|
Non-cash stock-based compensation expense
|
|
|
|
|
|
117
|
|
|
|
69
|
|
|
|
|
338
|
|
|
|
185
|
|
Non-GAAP services revenue gross profit
|
|
|
|
|
$
|
2,170
|
|
|
$
|
3,979
|
|
|
|
$
|
7,434
|
|
|
$
|
11,035
|
|
Non-GAAP services revenue gross margin
|
|
|
|
|
|
16.0
|
%
|
|
|
29.4
|
%
|
|
|
|
18.4
|
%
|
|
|
28.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue, as reported
|
|
|
|
|
$
|
89,462
|
|
|
$
|
77,969
|
|
|
|
$
|
248,740
|
|
|
$
|
227,449
|
|
Purchase accounting adjustments
|
|
|
|
|
|
4
|
|
|
|
44
|
|
|
|
|
14
|
|
|
|
192
|
|
Non-GAAP total revenue
|
|
|
|
|
$
|
89,466
|
|
|
$
|
78,013
|
|
|
|
$
|
248,754
|
|
|
$
|
227,641
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit, as reported
|
|
|
|
|
$
|
53,987
|
|
|
$
|
50,664
|
|
|
|
$
|
148,547
|
|
|
$
|
146,872
|
|
Revenue adjustments
|
|
|
|
|
|
4
|
|
|
|
44
|
|
|
|
|
14
|
|
|
|
192
|
|
Acquired technology
|
|
|
|
|
|
177
|
|
|
|
49
|
|
|
|
|
363
|
|
|
|
147
|
|
Non-cash stock-based compensation expense
|
|
|
|
|
|
502
|
|
|
|
282
|
|
|
|
|
1,397
|
|
|
|
773
|
|
Non-GAAP gross profit
|
|
|
|
|
$
|
54,670
|
|
|
$
|
51,039
|
|
|
|
$
|
150,321
|
|
|
$
|
147,984
|
|
Non-GAAP gross margin
|
|
|
|
|
|
61.1
|
%
|
|
|
65.4
|
%
|
|
|
|
60.4
|
%
|
|
|
65.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss), as reported
|
|
|
|
|
$
|
(3,464
|
)
|
|
$
|
3,675
|
|
|
|
$
|
(19,789
|
)
|
|
$
|
7,939
|
|
Purchase accounting adjustments
|
|
|
|
|
|
663
|
|
|
|
564
|
|
|
|
|
2,407
|
|
|
|
1,782
|
|
Non-cash stock-based compensation expense
|
|
|
|
|
|
3,342
|
|
|
|
2,421
|
|
|
|
|
10,278
|
|
|
|
6,956
|
|
Non-GAAP operating (loss) income
|
|
|
|
|
$
|
541
|
|
|
$
|
6,660
|
|
|
|
$
|
(7,104
|
)
|
|
$
|
16,677
|
|
Non-GAAP operating margin
|
|
|
|
|
|
0.6
|
%
|
|
|
8.5
|
%
|
|
|
|
-2.9
|
%
|
|
|
7.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
|
|
|
2014
|
|
2013
|
|
|
2014
|
|
2013
|
Net income (loss), as reported
|
|
|
|
|
$
|
(2,143
|
)
|
|
$
|
1,627
|
|
|
|
$
|
(11,504
|
)
|
|
$
|
5,985
|
|
Purchase accounting adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase to revenues
|
|
|
|
|
|
4
|
|
|
|
44
|
|
|
|
|
14
|
|
|
|
192
|
|
Reduction of operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer Relationships
|
|
|
|
|
|
427
|
|
|
|
419
|
|
|
|
|
1,285
|
|
|
|
1,260
|
|
Technology
|
|
|
|
|
|
177
|
|
|
|
49
|
|
|
|
|
363
|
|
|
|
147
|
|
Non-compete agreements
|
|
|
|
|
|
45
|
|
|
|
45
|
|
|
|
|
135
|
|
|
|
135
|
|
Acquisition Costs
|
|
|
|
|
|
10
|
|
|
|
7
|
|
|
|
|
610
|
|
|
|
48
|
|
Total
|
|
|
|
|
|
663
|
|
|
|
564
|
|
|
|
|
2,407
|
|
|
|
1,782
|
|
Non-cash stock-based compensation expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of recurring revenues
|
|
|
|
|
|
385
|
|
|
|
213
|
|
|
|
|
1,059
|
|
|
|
588
|
|
Cost of services revenues
|
|
|
|
|
|
117
|
|
|
|
69
|
|
|
|
|
338
|
|
|
|
185
|
|
Sales and marketing
|
|
|
|
|
|
1,248
|
|
|
|
821
|
|
|
|
|
3,381
|
|
|
|
2,446
|
|
Research and development
|
|
|
|
|
|
741
|
|
|
|
689
|
|
|
|
|
3,047
|
|
|
|
1,998
|
|
General and administrative
|
|
|
|
|
|
851
|
|
|
|
629
|
|
|
|
|
2,453
|
|
|
|
1,739
|
|
Total
|
|
|
|
|
|
3,342
|
|
|
|
2,421
|
|
|
|
|
10,278
|
|
|
|
6,956
|
|
Non-GAAP income tax expense adjustment
|
|
|
|
|
|
1,606
|
|
|
|
(471
|
)
|
|
|
|
5,016
|
|
|
|
(3,623
|
)
|
Non-GAAP net income (loss)
|
|
|
|
|
$
|
256
|
|
|
$
|
4,141
|
|
|
|
$
|
(3,835
|
)
|
|
$
|
11,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS, as reported
|
|
|
|
|
$
|
(0.10
|
)
|
|
$
|
0.08
|
|
|
|
$
|
(0.55
|
)
|
|
$
|
0.29
|
|
Purchase accounting adjustments
|
|
|
|
|
|
0.03
|
|
|
|
0.03
|
|
|
|
|
0.12
|
|
|
|
0.08
|
|
Non-cash stock-based compensation expense
|
|
|
|
|
|
0.16
|
|
|
|
0.11
|
|
|
|
|
0.49
|
|
|
|
0.33
|
|
Non-GAAP income tax expense adjustment
|
|
|
|
|
|
(0.08
|
)
|
|
|
(0.02
|
)
|
|
|
|
(0.24
|
)
|
|
|
(0.17
|
)
|
Non-GAAP diluted EPS
|
|
|
|
|
$
|
0.01
|
|
|
$
|
0.20
|
|
|
|
$
|
(0.18
|
)
|
|
$
|
0.53
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interactive Intelligence Group, Inc.
|
Condensed Consolidated Balance Sheets
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
|
December 31,
|
|
|
|
|
|
2014
|
|
|
2013
|
Assets
|
|
|
|
|
(unaudited)
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
$
|
30,263
|
|
|
|
$
|
65,881
|
|
Short-term investments
|
|
|
|
|
|
29,608
|
|
|
|
|
32,162
|
|
Accounts receivable, net
|
|
|
|
|
|
70,934
|
|
|
|
|
80,414
|
|
Deferred tax assets, net
|
|
|
|
|
|
30,585
|
|
|
|
|
23,684
|
|
Prepaid expenses
|
|
|
|
|
|
28,706
|
|
|
|
|
21,989
|
|
Other current assets
|
|
|
|
|
|
18,401
|
|
|
|
|
13,566
|
|
Total current assets
|
|
|
|
|
|
208,497
|
|
|
|
|
237,696
|
|
Long-term investments
|
|
|
|
|
|
9,679
|
|
|
|
|
9,787
|
|
Property and equipment, net
|
|
|
|
|
|
42,498
|
|
|
|
|
36,919
|
|
Goodwill
|
|
|
|
|
|
44,560
|
|
|
|
|
37,298
|
|
Intangible assets, net
|
|
|
|
|
|
24,208
|
|
|
|
|
20,613
|
|
Other assets, net
|
|
|
|
|
|
26,328
|
|
|
|
|
10,909
|
|
Total assets
|
|
|
|
|
$
|
355,770
|
|
|
|
$
|
353,222
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
|
|
$
|
9,297
|
|
|
|
$
|
8,727
|
|
Accrued liabilities
|
|
|
|
|
|
15,570
|
|
|
|
|
15,162
|
|
Accrued compensation and related expenses
|
|
|
|
|
|
18,421
|
|
|
|
|
17,494
|
|
Deferred product revenues
|
|
|
|
|
|
6,459
|
|
|
|
|
10,412
|
|
Deferred recurring revenues
|
|
|
|
|
|
72,193
|
|
|
|
|
70,762
|
|
Deferred services revenues
|
|
|
|
|
|
8,987
|
|
|
|
|
10,868
|
|
Total current liabilities
|
|
|
|
|
|
130,927
|
|
|
|
|
133,425
|
|
Long-term deferred revenues
|
|
|
|
|
|
19,828
|
|
|
|
|
23,914
|
|
Deferred tax liabilities, net
|
|
|
|
|
|
1,565
|
|
|
|
|
2,388
|
|
Other long-term liabilities
|
|
|
|
|
|
7,323
|
|
|
|
|
4,140
|
|
Total liabilities
|
|
|
|
|
|
159,643
|
|
|
|
|
163,867
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity:
|
|
|
|
|
|
|
|
|
Preferred stock
|
|
|
|
|
|
-
|
|
|
|
|
-
|
|
Common stock
|
|
|
|
|
|
211
|
|
|
|
|
205
|
|
Additional paid-in-capital
|
|
|
|
|
|
190,448
|
|
|
|
|
170,072
|
|
Accumulated other comprehensive loss
|
|
|
|
|
|
(3,782
|
)
|
|
|
|
(1,676
|
)
|
Retained earnings
|
|
|
|
|
|
9,250
|
|
|
|
|
20,754
|
|
Total shareholders' equity
|
|
|
|
|
|
196,127
|
|
|
|
|
189,355
|
|
Total liabilities and shareholders' equity
|
|
|
|
|
$
|
355,770
|
|
|
|
$
|
353,222
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interactive Intelligence Group, Inc.
|
Condensed Consolidated Statements of Cash Flows
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
|
|
September 30,
|
|
|
|
|
|
2014
|
|
|
2013
|
|
|
|
|
|
(unaudited)
|
Operating activities:
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
|
|
$
|
(11,504
|
)
|
|
|
$
|
5,985
|
|
Adjustments to reconcile net income (loss) to net cash (used in)
provided by operating activities:
|
|
|
|
|
|
Depreciation
|
|
|
|
|
|
11,376
|
|
|
|
|
7,665
|
|
Amortization
|
|
|
|
|
|
1,783
|
|
|
|
|
1,542
|
|
Other non-cash items
|
|
|
|
|
|
(520
|
)
|
|
|
|
1,549
|
|
Stock-based compensation expense
|
|
|
|
|
|
10,278
|
|
|
|
|
6,953
|
|
Excess tax benefit from stock-based payment arrangements
|
|
|
|
|
|
-
|
|
|
|
|
(3,352
|
)
|
Deferred income tax
|
|
|
|
|
|
(7,906
|
)
|
|
|
|
4,766
|
|
Amortization (accretion) of investment premium (discount)
|
|
|
|
|
|
193
|
|
|
|
|
(260
|
)
|
Loss on disposal of fixed assets
|
|
|
|
|
|
41
|
|
|
|
|
-
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
|
|
|
9,480
|
|
|
|
|
4,062
|
|
Prepaid expenses
|
|
|
|
|
|
(6,663
|
)
|
|
|
|
(6,522
|
)
|
Other current assets
|
|
|
|
|
|
(5,004
|
)
|
|
|
|
(12,758
|
)
|
Accounts payable
|
|
|
|
|
|
570
|
|
|
|
|
4,384
|
|
Accrued liabilities
|
|
|
|
|
|
487
|
|
|
|
|
(8,001
|
)
|
Accrued compensation and related expenses
|
|
|
|
|
|
927
|
|
|
|
|
276
|
|
Deferred product revenues
|
|
|
|
|
|
(3,957
|
)
|
|
|
|
5,732
|
|
Deferred recurring revenues
|
|
|
|
|
|
1,431
|
|
|
|
|
1,707
|
|
Deferred services revenues
|
|
|
|
|
|
(5,963
|
)
|
|
|
|
9,213
|
|
Other assets and liabilities
|
|
|
|
|
|
1,887
|
|
|
|
|
603
|
|
Net cash (used in) provided by operating activities
|
|
|
|
|
|
(3,064
|
)
|
|
|
|
23,544
|
|
|
|
|
|
|
|
|
|
|
Investing activities:
|
|
|
|
|
|
|
|
|
Sales of available-for-sale investments
|
|
|
|
|
|
35,350
|
|
|
|
|
19,776
|
|
Purchases of available-for-sale investments
|
|
|
|
|
|
(32,967
|
)
|
|
|
|
(29,390
|
)
|
Purchases of property and equipment
|
|
|
|
|
|
(17,072
|
)
|
|
|
|
(18,732
|
)
|
Capitalized internal use software cost
|
|
|
|
|
|
(13,320
|
)
|
|
|
|
(2,889
|
)
|
Acquisitions, net of cash
|
|
|
|
|
|
(9,173
|
)
|
|
|
|
(725
|
)
|
Unrealized gain on investment
|
|
|
|
|
|
(35
|
)
|
|
|
|
(20
|
)
|
Net cash used in investing activities
|
|
|
|
|
|
(37,217
|
)
|
|
|
|
(31,980
|
)
|
|
|
|
|
|
|
|
|
|
Financing activities:
|
|
|
|
|
|
|
|
|
Proceeds from stock options exercised
|
|
|
|
|
|
6,453
|
|
|
|
|
10,464
|
|
Proceeds from issuance of common stock
|
|
|
|
|
|
914
|
|
|
|
|
609
|
|
Tax withholding on restricted stock awards
|
|
|
|
|
|
(2,704
|
)
|
|
|
|
(961
|
)
|
Excess tax benefit from stock-based payment arrangements
|
|
|
|
|
|
-
|
|
|
|
|
3,352
|
|
Net cash provided by financing activities
|
|
|
|
|
|
4,663
|
|
|
|
|
13,464
|
|
Net decrease in cash and cash equivalents
|
|
|
|
|
|
(35,618
|
)
|
|
|
|
5,028
|
|
Cash and cash equivalents, beginning of period
|
|
|
|
|
|
65,881
|
|
|
|
|
45,057
|
|
Cash and cash equivalents, end of period
|
|
|
|
|
$
|
30,263
|
|
|
|
$
|
50,085
|
|
|
|
|
|
|
|
|
|
|
Cash paid during the period for:
|
|
|
|
|
|
|
|
|
Interest
|
|
|
|
|
$
|
-
|
|
|
|
$
|
4
|
|
Income taxes
|
|
|
|
|
|
2,389
|
|
|
|
|
7,196
|
|
|
|
|
|
|
|
|
|
|
Other non-cash item:
|
|
|
|
|
|
|
|
|
Purchases of property and equipment payable at end of period
|
|
|
|
|
$
|
2,944
|
|
|
|
$
|
3,271
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Data
|
(Dollars in thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2014
|
|
|
|
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
Total
|
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Margins (GAAP):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product
|
|
|
|
|
71.9%
|
|
74.2%
|
|
75.5%
|
|
78.4%
|
|
75.2%
|
|
|
70.3%
|
|
69.6%
|
|
75.0%
|
|
71.9%
|
Recurring
|
|
|
|
|
70.6%
|
|
71.4%
|
|
69.5%
|
|
67.6%
|
|
69.7%
|
|
|
67.6%
|
|
65.7%
|
|
65.0%
|
|
66.1%
|
Services
|
|
|
|
|
31.2%
|
|
25.6%
|
|
28.9%
|
|
20.6%
|
|
26.3%
|
|
|
20.3%
|
|
17.3%
|
|
15.1%
|
|
17.5%
|
Overall
|
|
|
|
|
64.9%
|
|
64.4%
|
|
64.5%
|
|
64.2%
|
|
64.5%
|
|
|
59.6%
|
|
57.5%
|
|
60.3%
|
|
59.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-year Revenue Growth (GAAP):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product
|
|
|
|
|
44.0%
|
|
41.9%
|
|
20.6%
|
|
28.3%
|
|
32.8%
|
|
|
-18.4%
|
|
-22.8%
|
|
3.2%
|
|
-12.9%
|
Recurring
|
|
|
|
|
22.4%
|
|
23.6%
|
|
28.6%
|
|
25.2%
|
|
25.0%
|
|
|
28.3%
|
|
27.1%
|
|
28.1%
|
|
27.8%
|
Services
|
|
|
|
|
100.6%
|
|
96.8%
|
|
74.1%
|
|
41.2%
|
|
73.0%
|
|
|
15.5%
|
|
3.3%
|
|
0.6%
|
|
6.0%
|
Overall
|
|
|
|
|
38.8%
|
|
39.2%
|
|
31.5%
|
|
28.7%
|
|
34.1%
|
|
|
8.5%
|
|
4.7%
|
|
14.7%
|
|
9.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Orders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Over $1 million
|
|
|
|
|
8
|
|
13
|
|
12
|
|
15
|
|
48
|
|
|
9
|
|
10
|
|
12
|
|
31
|
Between $250,000 and $1 million
|
|
|
|
|
31
|
|
30
|
|
35
|
|
48
|
|
144
|
|
|
25
|
|
29
|
|
44
|
|
98
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of new customers
|
|
|
|
|
74
|
|
89
|
|
67
|
|
86
|
|
316
|
|
|
54
|
|
70
|
|
71
|
|
195
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average new customer order:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Overall
|
|
|
|
|
$ 335
|
|
$ 272
|
|
$ 503
|
|
$ 485
|
|
$ 394
|
|
|
$ 516
|
|
$ 352
|
|
$ 887
|
|
$ 593
|
Cloud-based
|
|
|
|
|
788
|
|
427
|
|
796
|
|
836
|
|
717
|
|
|
935
|
|
472
|
|
1,841
|
|
1,123
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ININ-G
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