ClickSoftware Technologies Ltd. (CKSW)
Q3 2012 Earnings Call
October 31, 2012 9:00 AM ET
Moshe BenBassat - Chairman of the Board and Chief Executive Officer
Shmuel Arvatz - Chief Financial Officer
Daniel Meron - RBC Capital Markets
Nathan Schneiderman - Roth Capital
Nick Farwell - Arbor Group
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Before I turn the call over to Dr. BenBassat, I would like to remind you that during the course of this conference call, the company will be making express or implied forward-looking statements within the meaning of the Privates Securities Litigation Act of 1995 and other U.S. federal securities laws.
These forward-looking statements include, but are not limited to, those statements regarding future results of operations and operating expenses, visibility into future periods, including our outlook for full year 2012 revenues, the possibility of future dividends, visibility into future periods and pipeline, growth opportunities in the workforce management and enterprise mobility markets, and rates of growth, markets in hand, and the results of our increased investment to address set market demand, license revenues as a percentage of total revenues, cash flows, effective tax rates and expectations regarding operating profit and margins, future closing of contracts, future product offerings, receipts of orders, and recognition of revenues and deferred revenues.
Such forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause actual results or performance to differ materially from those projected. Achievements of these results by ClickSoftware may be affected by many factors including, but not limited to, risks and uncertainties regarding the general economic outlook, more attractive investments than dividends that may become available, the length of or changes in ClickSoftware's sales cycle, ClickSoftware's ability to close sales to potential customers in a timely manner and maintain or strengthen relationships with strategic partners, the timing of revenue recognition, foreign currency exchange rate fluctuation, and ClickSoftware's ability to maintain or increase its sales pipeline.
The forward-looking statements described on this call are subject to other risks and uncertainties including those discussed in the Risk Factors section and elsewhere in ClickSoftware's Annual Report on Form 20-F for the year ended December 31, 2011, and in subsequent filings with the Securities and Exchange Commission.
Except as otherwise required by law, ClickSoftware is under no obligation to and expressly disclaims any other obligation to update or alter its forward-looking statements whether as a result of new information, future events, or otherwise.
I'd also like to remind you that ClickSoftware reported net income and net earnings per share on both a GAAP and on an adjusted non-GAAP basis. Today's press release includes a reconciliation of non-GAAP information to the most directly comparable GAAP information and is posted in the Investor's Section of the company's website at www.clicksoftware.com.
Dr. BenBassat, would you like to begin?
Yes. Thank you, and good morning everyone, and thank you for joining ClickSoftware's 2012 third quarter's earnings call. Before we begin today, I'd like to send out our thoughts out to all those who have been impacted by Hurricane Sandy. Our hearts go out to you all at this disclosing time, and we hope the recovery will be smooth and speedy.
As usual, I shall start with a brief overview of the financial results and operational achievements. Shmuel Arvatz, our CFO, will then provide you with a more detailed review of the financial results. And we will conclude this call with an outlook for the fourth quarter of 2012 and summary before opening the call for your questions.
We are very pleased with the strong results for the third quarter. Our results have grown by just about any metric. Revenues in the third quarter were a record $27.3 million, an 18% year-over-year growth with a strong showing for our license revenues. Profitability came in a nice non-GAAP net income of $3.7 million, an $0.11 EPS.
During the quarter, we generated $4.5 million in cash from operating activities, and after paying our quarter's dividend, we now have $51.6 million in cash. This is an increase of $1.7 relative to the end of the prior quarter, which shows our strengths in generating cash flow from our operations.
Software and backlog and deferred revenues for the next 12 months were about $32.2 million at the end of the quarter, a nice increase relative to the $30.5 million at the end of last quarter. To summarize this part, significant operational progress, healthy bookings and strong pipeline of new business provide us with confidence in our guidance for 2012 and long-term strategy.
We continue to invest in our growth engines, specifically our mobility and cloud offerings, and we finished the quarter with 496 employees, an increase of 71 people relative to 465 at the end of Q2. The staff increase is primarily in certain business development to support our expansion in new territories, and mobility and cloud-based products, and our professional services to increase deployment solution capacity for new customers.
These investments are already starting to payoff as we recently implemented a successful deployment at Halliburton, which included a major large-scale iPhone-based mobility solution supporting thousands of resources. Geographically, the growing market demand in Russia and the Americas, particularly South America has more than offset any weakness we have seen in Europe.