Qlik Technologies Inc. (www.QlikTech.com), specialist in Business Discovery—user-driven Business Intelligence (BI), today announced financial results for the three month period ended June 30, 2011.
Lars Björk, Chief Executive Officer of QlikTech, stated, “The second quarter demonstrated strong demand for our solutions with total revenue increasing 45% year-over-year. The efforts we have made to grow our sales force and partner channel, as well as improve their effectiveness, are paying off and contributing to our strong growth. This success, combined with the expanding opportunity we see in front of us and the clear advantages of Business Discovery, gives us the confidence to continue investing in order to capture more market share.”
Björk added, “While we are again raising our revenue outlook for the year, the accelerated investments made during the first half of 2011, combined with ongoing investments in the second half of the year, will result in a higher operating expense structure than previously contemplated in our full year guidance.”
Total revenue for the second quarter of 2011 was $74.0 million, an increase of 45% from $51.1 million in the second quarter of 2010. License revenue was $45.3 million, an increase of 39% from $32.5 million in the second quarter of 2010. Maintenance revenue was $21.8 million, an increase of 61% from $13.5 million in the second quarter of 2010. Professional services revenue was $6.9 million, an increase of 37% from $5.1 million in the second quarter of 2010.
GAAP operating loss for the second quarter of 2011 was ($3.6) million, compared to GAAP operating income of $5.8 million for the second quarter of 2010. GAAP net loss was ($2.2) million, or ($0.03) per basic and diluted common share, compared to a GAAP net income of $3.5 million or $0.02 per basic and diluted common share, in the second quarter of 2010. GAAP operating loss for the second quarter 2011 includes a $2.2 million lease termination charge related to the abandonment of our previous facility in Lund, Sweden, which has been replaced by a larger facility to house our expanding research and development operation.
Non-GAAP operating income, which excludes stock-based compensation, employer payroll taxes related to stock transactions and lease termination costs, was $1.4 million for the second quarter of 2011, compared to non-GAAP operating income of $6.4 million for the second quarter of 2010. Non-GAAP net income was $1.2 million for the second quarter of 2011, compared to a non-GAAP net income of $3.7 million for the second quarter of 2010. Non-GAAP net income per basic and diluted common share for the second quarter of 2011 was $0.02 and $0.01, respectively, compared to non-GAAP net income per basic and diluted common share of $0.05 and $0.04, respectively, for the second quarter of 2010.
GAAP net loss and non-GAAP net income for the second quarter of 2011 include a $0.4 million foreign exchange gain, compared to a foreign exchange gain of $0.7 million in the prior year period.
The tables at the end of this press release include a reconciliation of GAAP to non-GAAP income (loss) from operations and net income (loss) for the three and six months ended June 30, 2011 and 2010. An explanation of these measures is also included below under the heading «Non-GAAP Financial Measures.»
Cash and cash equivalents were $174.5 million as of June 30, 2011, compared to $158.7 million as of December 31, 2010. For the six months ended June 30, 2011, net cash provided by operating activities was $12.2 million, compared to $17.4 million for the six months ended June 30, 2010.
Other Second Quarter and Recent Business Highlights:
•Announced that Joe DiBartolomeo joined as President of the Americas. Mr. DiBartolomeo joins from Dun and Bradstreet where he was the President and General Manager of Purisma, a D&B company. Prior to Purisma, he spent 19 years in numerous management roles at Oracle. He is an accomplished sales executive with a demonstrated track record of delivering superior results in the enterprise software industry.
•Ended the second quarter of 2011 with an active customer count of approximately 21,000, up from approximately 15,000 active customers at the end of the second quarter of 2010.
•Added new customers during the second quarter including EAT Limited, El Corte Ingles, Elisa Oy, FIS Healthcare, FrontPoint Security, Infrabel Belgium, Nippon Paper, Novamedia Group (Lottery), RWE AG, Sanofi-Aventis Deutschland GmbH, and SAB Miller.
•Expanded numerous customer engagements globally through our land and expand strategy including BMW AG, Canal Digital, CSL Behring, Deutsche Bank, Ecuador National Police, Foss, ING Lease, Lockton Insurance, Posten Norge AS, ThedaCare, and the US Department of Veterans Affairs.
•Revenue in the Americas was $22.7 million, up 44% over the prior year period and representing 31% of total revenue, driven by strength in the United States, our largest individual sales territory. European countries generated $44.7 million in revenue, up 40% over the prior year period and representing 60% of total revenue. Rest of World revenue was $6.6 million, up 90% over the prior year period and representing 9% of total revenue.
•Signed a global partnership agreement with Capgemini to offer its customers added-value services and solutions for the QlikView business discovery platform. The new partnership will extend across Capgemini’s Global Business Information Management (BIM) Practice of over 7,000 people.
•Announced the Business Discovery tour in 25 cities in the U.S. and Canada designed to demonstrate how Business Discovery is transforming BI initiatives, from small and medium-sized businesses to the enterprise. Capgemini is the lead sponsor for the tour, partnering with QlikTech to share how its organization can deliver value to companies by taking advantage of the QlikView Business Discovery platform.
•Hosted Qonnections, our annual partner conference. Attendance was up significantly over the prior year, with representatives from 54 countries.
Business Outlook
Based on information available as of July 28, 2011, QlikTech is issuing guidance for the third quarter and updating full year 2011 guidance as follows:
Third Quarter 2011: The company expects total revenue for the third quarter to be in the range of $69.0 million to $72.0 million, non-GAAP operating income to be in the range of $0.0 million to $2.0 million and non-GAAP net income per diluted common share to be in the range of $0.00 to $0.02. QlikTech’s expectations of non-GAAP net income per diluted common share for the third quarter exclude stock-based compensation expense and employer payroll taxes related to stock transactions and assume a tax rate of 32% and weighted average shares outstanding of approximately 88 million.
Full Year 2011: The company expects 2011 total revenue to be in the range of $310.0 million to $320.0 million, non-GAAP operating income to be in the range of $35.0 million to $40.0 million and non-GAAP net income per diluted common share to be in the range of $0.26 to $0.30. QlikTech’s expectations of non-GAAP net income per diluted common share for the full year exclude stock-based compensation expense, employer payroll taxes related to stock transactions, and lease termination costs and assume a tax rate of 32% and weighted average shares outstanding of approximately 87 million.
The foregoing guidance supersedes QlikTech’s financial guidance for the full year 2011 discussed in the press release issued by the company on April 28, 2011, which was furnished to the Securities and Exchange Commission under Item 2.02 of the Company’s Current Report on Form 8-K on April 28, 2011.
Non-GAAP Financial Measures
To supplement the consolidated financial statements presented in accordance with generally accepted accounting principles, or GAAP, QlikTech uses measures of non-GAAP operating income (loss), non-GAAP net income (loss) and non-GAAP income (loss) per share. A reconciliation of these non-GAAP financial measures to the closest GAAP financial measure, is presented in the financial tables below under the heading “Reconciliation of Non-GAAP Measures to GAAP.” QlikTech believes that the non-GAAP financial information provided in this release can assist investors in understanding and assessing QlikTech’s on-going core operations and prospects for the future and provides an additional tool for investors to use in comparing QlikTech’s financial results with other companies in QlikTech’s industry, many of which present similar non-GAAP financial measures to investors.
For the three and six months ended June 30, 2011 and 2010, non-GAAP operating income (loss) is determined by taking income or loss from operations and adding back non-cash stock-based compensation expense, employer payroll taxes related to stock transactions, and lease termination costs. Non-GAAP net income (loss) is determined by taking pretax income or loss and adding back non-cash stock-based compensation expense, employer payroll taxes on stock transactions, and lease termination costs and the result is tax affected at an estimated 32% tax rate. QlikTech believes this adjustment provides useful information to both management and investors due to the following factors:
•Stock-based compensation. Although stock-based compensation is an important aspect of the compensation of QlikTech’s employees and executives, determining the fair value of the stock-based instruments involves a high degree of judgment and estimation and the expense recorded may bear little resemblance to the actual value realized upon the future exercise or termination of the related stock-based awards. Furthermore, unlike cash compensation, the value of stock-based compensation is determined using a complex formula that incorporates factors, such as market volatility, that are beyond QlikTech’s control. Management believes it is useful to exclude stock-based compensation in order to better understand the long-term performance of QlikTech’s core business and to facilitate comparison of its results to those of peer companies.
•Employer payroll taxes on stock transactions. The amount of employer payroll taxes on stock transactions is dependent on QlikTech’s stock price and other factors that are beyond QlikTech’s control and do not correlate to the operation of its business.
•Lease termination costs. Lease termination costs include termination costs to settle lease obligations related to facilities which are no longer occupied as well as the write-off of leasehold improvements related to those facilities that are no longer in use. Management believes that these costs are generally non-recurring and do not correlate to the ongoing operation of its business.
Non-GAAP income (loss) per share is determined by taking non-GAAP net income (loss) and, for the three and six months ended June 30, 2010, adjusting the weighted average outstanding common share calculations for the automatic conversion of the convertible preferred stock and issuance of common stock in connection with the company’s initial public offering as if the offering had occurred at the beginning of the period.
This press release includes forward-looking non-GAAP financial measures under the heading “Business Outlook”. These non-GAAP financial measures were determined by excluding stock-based compensation expense, employer payroll taxes related to stock transactions, and lease termination costs and assuming an estimated long-term tax rate of 32%. We are unable to reconcile this non-GAAP guidance to GAAP because it is difficult to predict the future impact of these adjustments.
The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant elements that are required by GAAP to be recorded in QlikTech’s financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by management in determining these non-GAAP financial measures. In order to compensate for these limitations, management of QlikTech presents its non-GAAP financial measures in connection with its GAAP results. Investors are encouraged to review the reconciliation of our non-GAAP financial measures to their most directly comparable GAAP financial measure. As previously mentioned, a reconciliation of our historic non-GAAP financial measures to their most directly comparable GAAP measures has been provided below.
About QlikTech
QlikTech is a specialist in Business Discovery — user-driven Business Intelligence (BI). QlikTech’s powerful, accessible Business Discovery solution bridges the gap between traditional business intelligence solutions and standalone office productivity applications. Its QlikView Business Discovery platform enables intuitive user-driven analysis that can be implemented in days or weeks rather than months, years, or not at all. The in-memory associative search technology it pioneered allows users to explore information freely rather than being confined to a predefined path of questions. QlikView Business Discovery works with existing BI applications and adds new capabilities: insight for everyone, zero-wait analysis, mobility, an app—like model, remixability and reassembly, and a social and collaborative experience. Headquartered in Radnor, Pennsylvania, QlikTech has offices around the world serving more approximately 21,000 customers in over 100 countries.