) reported break even earnings in third quarter 2012, better than
the Zacks Consensus Estimate of a loss per share of 1 cent.
Revenue of $45.2 million in the third quarter increased 56.5%
from $28.9 million generated in the year-ago quarter. The top
line edged past the company's guided range of $44.7 million to
$45.0 million. The favorable outcome was backed by customer
additions and improved product adoption.
Better-than-expected revenue generation from iContact
benefited the revenues. The quarterly revenues also benefited to
a certain extent from the company's SEO new services and Facebook
apps. The newly-acquired company iContact is operating at a
Management also opined that Vocus' continuous investments and
a product launch targeting the small and mid-sized organizations
had a positive impact on the quarter's results.
Vocus added 1,015 new subscribers during the third quarter,
compared with 998 in the year-earlier quarter. Total active
subscribers were 15,131 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
Beat100, Broadhead Archery, Code Red Safety and Rental, Digiarty
Software, Down Under Endeavours, TaxConnex, Norwegian Cruise
Line, PetBookings.com, Rose Cottage Publishing, School
Improvement Network, Stars and Stripes, U.S. Customs and Border
Protection and Wargaming Europe.
Gross margin was 80.2%, down from 81.4% in the year-ago
quarter. Operating loss was $3.4 million compared with $0.3
million in the year-ago quarter. The operating loss can be traced
back to a 66.7% year-over-year rise in operating expenses, which
outpaced the 53.1% revenue growth.
Net loss on a GAAP basis was $3.8 million or 20 cents per
share, compared with a net loss of $212,000 or 1 cents in the
third quarter of 2011. Excluding one-time items, but including
stock-based compensation expense, net profit was $29,000 or 0
cent per share, compared with a net income of $913,000 or 4 cents
in the year-earlier period.
Balance Sheet & Cash Flow
Vocus exited the quarter with $30.6 million in cash and
short-term investments versus $27.6 million in the previous
quarter. Accounts receivables were $18.9 million compared with
$18.8 million in the previous quarter. The company generated $4.2
million in cash from operations, compared with $3.5 million in
the previous quarter.
For the fourth quarter of 2012, non-GAAP revenue is expected to
range approximately $47.2 million to $47.6 million. GAAP revenue
is expected roughly between $46.9 million and $47.3 million. The
company expects non-GAAP diluted EPS to be 15 cents to 16 cents
on an estimated non-GAAP weighted average 24.5 million diluted
shares outstanding and projected tax provision of $400,000. GAAP
loss per share is expected between 17 cents and 16 cents.
For full year 2012, non-GAAP revenue is estimated between
$172.8 million and $173.2 million. GAAP revenue is expected to be
roughly $170.6 million to $171.0 million. Non-GAAP diluted EPS is
estimated at 42 cents to 43 cents; whereas GAAP loss per share is
expected to be in the range of $1.20 to $1.19. Company expects
free cash flow in the range of $15.5 million to $16.5 million.
Capital expenditures are projected at $4.0 million.
Though Vocus posted a GAAP loss in the third quarter, the
company reported breakeven figures on a non-GAAP basis, which was
better than the Zacks Consensus Estimate. Also, Vocus generated
solid year-on-year revenue growth and the figure edged past the
company's estimate. The company benefited from the high revenue
generation ability of iContact and also to a certain extent from
the company's SEO new services and Facebook apps.
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 SMBs, Vocus is eyeing the 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 #3 Rank, which translates into a
short-term Hold rating.
VOCUS INC (VOCS): Free Stock Analysis Report
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