) second quarter 2012 adjusted loss per share of 4 cents was better
than the Zacks Consensus Estimate of a loss per share of 7 cents.
Shares fell 2.94% in the day's trade.
The adjusted earnings figure excludes amortization of intangible
assets, fair value adjustments to deferred revenue and
acquisition-related expenses, but includes stock-based compensation
Revenue of $43.6 million in the second quarter increased 53.1% from
$28.5 million generated a year ago. The top line was within the
company's guided range of $43.5 million to $43.8 million and
roughly in line with the Zacks Consensus Estimate of $44.0 million.
The favorable outcome was backed by customer additions and improved
Management believes that Vocus' continuous investments and a
product launch targeting the small and mid-sized organizations have
boosted the quarter's results.
Vocus added 1,013 new subscribers during the second quarter,
compared with 601 in the year-earlier quarter. Total active
subscribers were 14,116 at quarter end. A healthy mix of customers
across organizations, geographic areas and industries was also
The company signed a host of subscription agreements with new and
existing customers. Notable among these are Bhumi Makeup Brushes,
Bullfrog Spas, Cash For Cars Quick, Dwell Magazine, EyeMaginations,
France Publications, Marque Medical, Miracle Botanicals, Sprout
Healthy Vending, Tripwire, University of Cambridge, University of
Pennsylvania, Wake County Public School System and Westinghouse
Gross margin was 80.1%, down from 81.4% in the year-ago quarter.
Operating loss was $4.8 million compared to $1.2 million in the
year-ago quarter. The operating loss can be traced back to a 62.8%
year-over-year rise in operating expenses, which outpaced the 53.1%
Net loss on a GAAP basis was $5.2 million or 27 cents per share,
compared with $755,000 or 4 cents in the second quarter of 2011.
Excluding one-time items, but including stock-based compensation
expense, net loss was $0.94 million or 4 cents per share, compared
with a net income of $526,000 or 2 cents in the year-earlier
Balance Sheet & Cash Flow
Vocus exited the quarter with $27.6 million in cash and short-term
investments versus $25.8 million in the previous quarter. Accounts
receivables were $18.8 million. The company generated $3.5 million
in cash from operations, flat with the previous quarter. Capital
expenditure was $1.2 million. Apart from these, the company
repurchased its outstanding common shares for $0.031 million.
For the third quarter of 2012, non-GAAP revenue is expected in the
range of $44.7 million to $45.0 million, while GAAP revenue is
expected in the range of $44.2 million to $44.5 million. Non-GAAP
EPS is expected in the range of 10-11 cents assuming an estimated
non-GAAP weighted average diluted share count of 24.5 million. GAAP
loss per share is expected in the range of 24-23 cents assuming an
estimated GAAP weighted average diluted share count of 19.6
Vocus raised its fiscal 2012 guidance. For full-year 2012, non-GAAP
revenue is forecast between $172.0 million and $173.0 million
(previously $171.3 million and $172.5 million). Non-GAAP EPS is
expected in the range of 40 cents to 42 cents (previously 38 cents
to 40 cents) assuming an estimated non-GAAP weighted average,
diluted share count of 24.0 million shares (previously 24.5 million
shares). On a GAAP basis, the expected total revenue is $169.8
million to $170.8 million and loss per share of $1.21 and $1.19.
The GAAP weighted average diluted share count is projected at 19.5
Vocus continues to expect free cash flow in the range of $15.5
million to $16.5 million and capital expenditure to remain $4.0
Vocus posted loss in the second quarter, but the result was better
than the Zacks Consensus Estimate. On the other hand, Vocus
generated solid revenue growth and the figure was roughly in line
with our estimate. But the company provided better sequential
guidance and raised the fiscal guidance for revenue and earnings on
its growth momentum reflected by continuous customer wins and
synergies from strategic acquisitions.
Vocus vies 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. We believe
that the complete integration of iContact (in February 2012) will
further boost product adoption.
By leveraging iContact's capabilities and increasing the sales team
to target SMBs, Vocus is eyeing the cloud-space opportunities in
the SMBs. But there remains a concern related to margin contraction
based on higher investments in sales and marketing as well as
Currently, Vocus has a Zacks #3 Rank, which translates into a
short-term Hold recommendation.
VOCUS INC (VOCS): Free Stock Analysis Report
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