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New Customer Wins Lift inContact's First Quarter 2010 Results

Having won numerous new contracts during the quarter, hosted call center solutions provider inContact yesterday reported first quarter 2010 revenue of $8.3 million, an increase of 22 percent from the first quarter of 2009, when it reported revenue of $6.8 million.

Consolidated revenue for the three months ended March 31, 2010 was $21.1 million, versus $21.0 million for the same period in 2009.

Net income for the quarter was $1.5 million, or $0.04 per share, as compared to a net loss of $1.7 million, or ($0.05) per share, for the same period in 2009.

During a call with investors Thursday, inContact CEO Paul Jarman attributed the increase to the fact that inContact picked up numerous new contracts during the quarter. He said the company started off the quarter "at a good pace" with 33 new contracts, 24 of which were new customers while nine were existing customers who had expanded their use of inContact's software to new locations or divisions, or by adding new applications and/or services.

In January, the company announced that one of the world's largest hotel groups had starting using inContact's hosted call center platform for its customer service and sales divisions. In April the company announced that one of its existing customers, a major global outsourcer with well over 25,000 agents in over 25 countries, had expanded its use of the company's eLearning and coaching solutions to an additional site, where they will be utilized by over 350 agents. Also in April it announced that another customer, a large global imaging and networking technology company, had expanded its use of inContact's platform to a fourth business division.

Jarman attributed these new contracts and expansions to the fact that inContact's SaaS (News - Alert)-based platform is so flexible and easy to uptake, making it simple and cost effective for organizations to deploy it to new sites, add more seats, and add new applications, features and capabilities, thanks to its unique architecture.

Although inContact reported an increase of $1.5 million in its software segment, this was partially offset by a decrease of $1.4 million in its telecom segment. (In addition to offering hosted call center software inContact also offers network connectivity services.)

Consolidated gross profit increased $1.1 million in the first quarter. Software segment gross profit increased $1 million, while telecom segment gross profit increased by $135,000. Consolidated gross margin percentage increased to 44 percent in the first quarter, compared to 39 percent for the same period in 2009.

Looking forward, Jarman said inContact plans to take more market share in 2010 by increasing its marketing efforts and boosting awareness.

"We will accelerate activities in areas already proven to increase lead flow which, after allowing for our normal sales cycle, lead to a noticeable increase in new contract wins which, in turn, drive revenues," he said.

To help carry this out, inContact recently added several key people to its leadership team, including Mariann McDonagh, formerly with Verint (News - Alert) Systems, as Chief Marketing Officer; Bassam Salem, formerly with Omniture, as Senior Vice President, Professional Services; and Neeraj Sen, formerly with Kronos (News - Alert), as Vice President Research and Development.

"We continue to attract this level of talent to our company largely because of the recent company success and significant growth potential," Jarman said. "These executives have proven track records in their respective fields and, through their vast experience with high growth companies, will be instrumental in key areas that will leverage our future success. We will continue to maintain a balanced strategy of taking market share and accelerating growth, while remaining prudent in our expenses."