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Corporate Executive Board (CEB)
Q2 2013 Earnings Call
July 30, 2013 9:00 am ET
Richard S. Lindahl - Chief Financial Officer and Principal Accounting Officer
Thomas L. Monahan - Chairman and Chief Executive Officer
Paul Ginocchio - Deutsche Bank AG, Research Division
Tobey Sommer - SunTrust Robinson Humphrey, Inc., Research Division
Timothy McHugh - William Blair & Company L.L.C., Research Division
Joseph D. Foresi - Janney Montgomery Scott LLC, Research Division
Steven Shui - Stifel, Nicolaus & Co., Inc., Research Division
Jeffrey Rossetti - Janney Montgomery Scott LLC, Research Division
David Ridley-Lane - BofA Merrill Lynch, Research Division
Previous Statements by CEB
» Corporate Executive Board Company's CEO Hosts 2013 Investor Day (Transcript)
» Corporate Executive Board Management Discusses Q1 2013 Results - Earnings Call Transcript
» Corporate Executive Board Management Discusses Q4 2012 Results - Earnings Call Transcript
This conference call may also contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements, among others, regarding CEB's expected quarterly and annual financial performance for fiscal 2013 or beyond.
For this purpose, any statements made during this call that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing discussions of forecasts, estimates, targets, plans, beliefs, expectations and the like are intended to identify forward-looking statements.
You are hereby cautioned that these statements may be affected by important factors, among others, set forth in CEB's filings with the Securities and Exchange Commission and in it's second quarter news release.
Consequently, actual operations and results may differ materially from the results discussed in the forward-looking statements. The company undertakes no obligation to update any forward-looking statements, whether with as a result of new information, future events or otherwise.
At this time, for opening remarks, I'd like to turn the conference over to the company's Chief Financial Officer, Mr. Richard Lindahl. Please go ahead, sir.
Richard S. Lindahl
Thank you, Scott, and good morning, everyone. I'm Rich Lindahl, CFO of CEB. Thank you for calling or logging into our second quarter 2013 earnings report.
On today's call, I'll review our second quarter financial results and discuss our 2013 guidance. Tom Monahan, our Chief Executive Officer, will then takeover to share additional insight on our operations in the quarter and our priorities for the year ahead. Then we'll take your questions.
Please turn to Slide 3 of our presentation and we'll start with a quick summary of today's report. We posted another solid quarter that validates the strategy we shared with you at the beginning of the year and discussed in more detail at our Investor Day in June. Our results were driven by double-digit organic revenue growth. We also were pleased to see the initial returns on the tactical investments we've made in the SHL segment, which posted high single-digit growth. We continued to deploy growth investments, which, as expected, led to sequential increases in operating expenses. And overall, we're pleased with our progress and reaffirming our current guidance with risks and opportunities still balanced toward the midpoint of our ranges.
Let's turn to Slide 4 for a summary recap of our results. Revenue was $204.6 million in the second quarter of 2013, an increase of 50.8% on a year-over-year basis. Adjusted EBITDA margin was 24.6% in the second quarter, compared to 25.9% in the second quarter of 2012. Diluted earnings per share were $0.40, and non-GAAP diluted earnings per share increased 32.7% to $0.73 for the second quarter of 2013.
Now let's turn to Slide 5 to review our key operating metrics, which were solid across-the-board. I'll share some of the numbers with you now and Tom will add more color at the market level in his remarks. CEB segment contract value at June 30, 2013 was $567.2 million, up 10.6% versus June 30, 2012 and reflecting solid bookings growth over the past year.
For the SHL segment, adjusted revenue was $50.7 million in the second quarter, an increase of 8.6%, compared to the second quarter of 2012. Growth was only modestly impacted by exchange rates during the quarter. As on a constant-currency basis, SHL adjusted revenue growth was 8.7%.
CEB segment Wallet retention rate was 99% at June 30, 2013, in the normal range and down slightly compared to 100% in the prior year. SHL segment Wallet retention rate was 96% at June 30, also in the normal range and continuing to reflect the strong recurring revenue in that part of our business.
Total CEB segment member institutions grew 4.7% to 6,189 in the second quarter, and we continue to add institutions in both our middle market and large corporate memberships.
Finally, CEB segment Contract Value per member institution was $91,600 at June 30, a 5.6% over the second quarter of 2012.