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Interactive Intelligence Group (ININ)
Q2 2013 Earnings Call
August 05, 2013 4:30 pm ET
Stephen R. Head - Chief Financial Officer, Principal Accounting Officer, Senior Vice President of Finance & Administration, Treasurer and Secretary
Donald E. Brown - Co-Founder, Chairman, Chief Executive Officer and President
Raghavan Sarathy - Dougherty & Company LLC, Research Division
Jeffrey Van Rhee - Craig-Hallum Capital Group LLC, Research Division
Craig Nankervis - First Analysis Securities Corporation, Research Division
Shyam Patil - Wedbush Securities Inc., Research Division
Tavis C. McCourt - Raymond James & Associates, Inc., Research Division
Michael Latimore - Northland Capital Markets, Research Division
Nathan Schneiderman - Roth Capital Partners, LLC, Research Division
Previous Statements by ININ
» Interactive Intelligence Group Inc. - Analyst/Investor Day
» Interactive Intelligence Group Management Discusses Q1 2013 Results - Earnings Call Transcript
» Interactive Intelligence Group Management Discusses Q4 2012 Results - Earnings Call Transcript
Stephen R. Head
Thank you. Good afternoon, and thank you for joining us today to review Interactive Intelligence's Second Quarter 2013 Financial Results.
With me on the call today is Don Brown, our Chairman of the Board, President and CEO. Don will begin with a high-level review of our second quarter performance in addition to providing an update on our key initiatives. I will then review our second quarter financial results in more detail, finishing with commentary regarding the financial outlook for Interactive Intelligence. We will then open the call for questions.
Please note that over the course of this conference call, we will make predictive statements about our results, performance, plans and objectives in an effort to assist you in understanding our company. The enterprise software industry, combined with the rapidly evolving uncertainties in the economic environment, makes predictions challenging and problematic. These predictive statements are forward-looking statements under federal securities laws.
Our actual results could differ materially from the information presented during this call, and you should review the section on forward-looking statements contained in today's earnings release, as well as our 2012 Form 10-K and other public filings with the SEC, which describe factors, risks and uncertainties that could cause our actual results to differ materially. The company disclaims any obligation or undertaking to update or revise any forward-looking statement.
Also, during this call, we will refer to non-GAAP financial measures. These non-GAAP results eliminate the impact of noncash stock-based compensation expense, purchase accounting-related adjustments and includes pro forma tax expense. Management uses these non-GAAP financial measures in analyzing the business.
And with that, I'll turn the call over to Don.
Donald E. Brown
Thanks, Steve, and thanks, everybody for joining us on the call today to review our second quarter results. We are once again very pleased with the ongoing momentum of our business as we continue to see robust demand across all geographies for our cloud-based solutions. The -- is that number right, Steve? 469% year-over-year growth in cloud-based orders during the second quarter was driven by our continued execution in winning large up-market deals with some of the world's most recognizable brands and our closing the largest order in the company's history.
Taking a look at some of the summary level stats in the financials. Total orders increased 115% year-over-year with cloud-based orders -- as I said, I just want to say it again -- increasing 469% and representing approximately 64% of total orders. We won 89 new customers during the quarter, up 33% compared to 67 in the year-ago quarter. We also had 14 orders that were over $1 million, which included the largest cloud contract in the company's history, that compares to 8 in the year-ago quarter. And we had an additional 29 orders that were between $0.25 million and $1 million compared to 28 in the second quarter of last year. The average dollar amount of new cloud-based customer orders was $456,000 in the second quarter and that doesn't include the big order. And the average dollar amount of new premises-based customer orders was $221,000.
Our second quarter non-GAAP revenues were $76.3 million, up 39% compared to last year, and non-GAAP operating income for the second quarter was $3.8 million or 5% of revenue, both of which were well above expectations.
We continue to execute on our strategy to improve the long-term financial profile of the company during the quarter as recurring revenues, which includes both maintenance contracts and cloud-based revenues, represented 46% of total revenues. In addition, the growth in our cloud-related business resulted in revenues being deferred to future quarters, which contributed to the overall growth of our yet-to-be-recognized future cloud revenue. Our overall deferred revenue and unbilled contracts increased 90% on a year-over-year basis to $244 million.
From a geographic perspective, we experienced strong customer demand in orders across the Americas and APAC during the second quarter. EMEA came in under our forecast. However, we've seen quarter-to-quarter fluctuations in the EMEA results over the last 6 quarters. We did receive increased EMEA orders in the first half of 2013 and continue to expect order growth for the full year.
Similar to past quarters, we continue to benefit from the growth of cloud-based contact-center adoption as the shift to the cloud remains one of the most powerful market drivers that we've seen in the history of the company. Specifically, T-Mobile Netherlands selected our solution based on our innovative single platform, multichannel architecture and secure scalable cloud infrastructure. This deal is on top of a T-Mobile Australia win last year, when we displaced Aspect, Avaya and Genesys.