) reported fourth quarter 2012 adjusted earnings of 1 cent,
missing the Zacks Consensus Estimate by 2 cents.
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Revenues of $47.1 million in the fourth quarter increased 54.4%
from $30.5 million generated in the year-ago quarter. The
favorable outcome was backed by customer additions, strong demand
growth from existing customers and improved product adoption. The
top line however missed the company's guided range of $47.2
million to $47.6 million.
Vocus added 1,363 new subscribers during the fourth quarter
compared with 1,052 in the year-earlier quarter. Total active
subscribers were 16,494 at quarter end. A healthy mix of
customers across organizations, geographic areas and industries
was also noticed.
The company signed a host of subscription agreements with new and
existing customers. Notable among these are the agreements with
British Airways, Center Stage Productions, Colchester Zoo,
Farmers Insurance, Gentle Giant Moving, Harlem Globetrotters,
Lasio, Make-A-Wish Foundation of America, McGladrey, My Stuff
Lost and Found, PEZ Candy, The Pasadena Playhouse, Trinity
Broadcast Network and Wyndham Worldwide.
Gross margin was 81.3%, marginally up from 81.2% in the year-ago
quarter. Operating loss was $3.2 million compared to operating
income of $0.4 million in the year-ago quarter. The operating
loss can be traced back to a 70.4% year-over-year rise in
operating expenses, which offset the 54.4% revenue growth.
Operating expenses increased due to growth in direct sales
Net loss on a GAAP basis was $3.7 million or 19 cents per share
compared with a net loss of $11.8 million or 63 cents in the
fourth quarter of 2011. Excluding one-time items, but including
stock-based compensation expense, net profit was $0.15 million or
1 cent per share compared with a net income of $1.36 million or 7
cents in the year-earlier period.
Balance Sheet & Cash Flow
Vocus exited the quarter with $32.8 million in cash and
short-term investments versus $30.6 million in the previous
quarter. Accounts receivables were $29.8 million compared with
$18.9 million in the previous quarter. The company generated $7.6
million in cash from operations compared with $4.2 million in the
For the first quarter of 2013, revenues are expected in a range
of $46.3 million to $46.7 million. The company expects non-GAAP
EPS to be 9 cents to 10 cents on an estimated non-GAAP weighted
average of 24.9 million diluted shares outstanding and projected
tax provision of $550,000. GAAP loss per share is expected
between 26 cents and 25 cents.
For full year 2013, revenue is estimated between $200.3 million
and $201.8 million. Non-GAAP EPS is estimated in a range of 50-53
cents. Including one-time adjustments of $1.24 per share, GAAP
loss per share is expected to be in the range of 74-71 cents. The
company expects free cash flow in the range of $24.5 million to
$25.5 million. Capital expenditures are projected at $6.5
Apart from this, the company is optimistic about the launch of a
new version of its marketing suite. Vocus expects that the
enhanced features offered through the new version will likely
attract buyers, which could boost its billings growth by 20.0% in
Though Vocus posted a GAAP loss in the fourth quarter, the
company reported non-GAAP EPS of a penny, which came below the
Zacks Consensus Estimate. But, Vocus generated solid year-on-year
revenue growth. The company benefited from the high revenue
generation ability of its new marketing suite.
Vocus exists in a nascent market and anticipates good growth
prospects. In the absence of any real competition, the company
has been able to steadily expand its customer base. The company
has also successfully capitalized on strategic acquisitions. By
leveraging iContact's capabilities and increasing the sales team
to target small and medium sized businesses (SMBs), Vocus is
eyeing cloud-space opportunities in the SMBs. However, there
remains a concern related to margin contraction based on higher
investments in sales and marketing as well as acquisitions.
Currently, Vocus has a Zacks Rank #3 (Hold).
We recommend investors to also consider other software stocks
that are performing well and are worth buying.
) have a Zacks Rank #1 (Strong Buy), while
) has a Zacks Rank #2 (Buy).