Commtouch to Transition from Tech firm to Service
Ken Nagy, CFA
On May 2, 2012,
Commtouch Software Ltd. (
a cloud-based Internet security provider, reported financial
results for its first quarter ended March 31, 2012.
Commtouch reported solid results with year over year first quarter
revenues increasing $381,000 or nearly 7 percent to a record first
quarter revenue amount of $5.896 million from $5.515 million for
the comparable quarter of 2011.
First quarter 2012 GAAP net income jumped 18.4 percent or $188,000
to $1.209 million from $1.021 million during the three months ended
March 31, 2011.
The improvement was primarily due to slightly higher revenues as
well as improved gross margin during the quarter.
Gross margin improved by 50 basis points year over year to 82.2
percent from 81.7 percent for the three months ended March 31,
Based on a weighted average number of diluted common shares of
24.889 million, GAAP diluted net income per share resulted in $0.05
per share for the first quarter fiscal 2012. This compares to
diluted net income per share of $0.04 on a weighted average number
of diluted shares of 24.752 million during the three months ended
March 31, 2011.
Non-GAAP net income for the first quarter of 2012 increased year
over year by 14.4 percent to $1.586 million and non-GAAP earnings
per diluted share for the first quarter of 2011 were stable at
$0.06 compared to $0.06 for the three months ended March 31, 2011.
Commtouch's balance sheet continued to improve with cash and
equivalents increasing by $1.170 million year over year to $22.038
million and working capital improving by $1.858 million year over
year to $19.199 million for the period ended March 31, 2012.
Also, operating cash flow for the first quarter fiscal 2012
improved year over year to $1.2 million from $1.1 million for the
first quarter ended March 31, 2011.
Commtouch expects the improved financial strength to enable the
Company to continually invest in the long term growth of its
business by pursuing further business opportunities, both
internally and in the market place.
Similarly, it should be noted that management stated that the
Company has been re-defining its long-term strategy and vision to
take the business to the next level.
The recent appointment of Mickey Avram as VP of Sales Operations,
Brett Wilson as VP of Products and Haniel Ilouz as VP of Global
Engineering, reflect initial steps Commtouch is taking in regards
to the new strategy.
What's more, the updated vision includes Commtouch's evolution from
a technology company into a solutions provider of white label
cloud-driven 'security as a service' offerings.
Likewise, management intends to continue to grow its core business
as well as make material investments in the coming year that are
aimed at developing and deploying complementary value added
solutions to set the stage for accelerated long-term growth.
Last, Company reaffirmed that it expects its full year 2012 revenue
to grow by a double-digit percentage rate over full year 2011
Furthermore, Commtouch anticipates non-GAAP net income for full
year 2012 to be at, or above, $5.0 million as a result of the
higher levels of investment the Company is making in the areas of
research and development, sales, and marketing to support the
development and deployment of Commtouch's next generation
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