MOUNTAIN VIEW, Calif., April 19 /PRNewswire-FirstCall/ -- CyberSource
Corporation (Nasdaq: CYBS), a leading provider of electronic payment and
risk management solutions, today announced financial results for its first
quarter ended March 31, 2007.
(Photo: http://www.newscom.com/cgi-bin/prnh/19990513/CYBRSOURCELOGO )
-- Revenue in the first quarter was $22.1 million, a 42% increase over the
same period last year.
-- Net income for the first quarter of 2007 was $0.7 million on a GAAP
basis compared to $0.9 million for the first quarter of the prior year.
Non-GAAP net income, which excludes stock-based compensation expense,
the reduction in the tax allowance, the non-cash portion of the tax
provision, depreciation and amortization expense, and certain non-
recurring charges and income was $3.0 million compared to $2.5 million
for the first quarter of the prior year. A reconciliation of the
historical GAAP to non-GAAP measures is attached with the financial
statements.
-- GAAP earnings per share for the first quarter of 2007 was $0.02
compared to $0.02 in the same period last year. Non-GAAP earnings per
share for the first quarter was $0.08 compared to $0.07 in the same
period last year.
-- Transaction volumes increased to a record 264.2 million during the
quarter, a 35% increase over the 196.4 million transactions processed
in the same period last year.
-- CyberSource added approximately 2,000 new customers in the first
quarter of 2007.
First quarter 2007 financial results
Revenue
-- CyberSource's first quarter revenue was $22.1 million, surpassing prior
guidance of $20.6 million and a 42% increase compared to $15.6 million
in the same period last year.
Gross profit
-- GAAP gross profit was $10.2 million, above prior guidance of $9.3
million.
Operating expenses
-- GAAP operating expenses were $9.8 million, below the company's prior
guidance of $10.4 million.
Net income
-- GAAP net income was $0.7 million, above prior guidance of a net loss of
$0.3 million.
-- Non-GAAP net income was $3.0 million, above prior guidance of $1.4
million.
Earnings per share
-- GAAP earnings per share was $0.02, above prior guidance of a loss of
$0.01 per share.
-- Non-GAAP earnings per share was $0.08, above prior guidance of $0.04.
Balance sheet
-- Cash, cash equivalents, and short-term investments at the end of the
first quarter of 2007 were $57.7 million, compared to $54.9 million at
the end of the fourth quarter last year. The total includes $1.0
million in proceeds from employee stock option exercises and from the
purchase of common stock under the company's employee stock purchase
plan. CyberSource did not repurchase shares of the company's common
stock during the quarter.
Cash flow
-- Cash flow from operating activities was $2.3 million during the first
quarter of 2007, compared to $2.0 million during the same period last
year.
Other developments during the quarter
-- CyberSource signed approximately 2,000 new customers in the first
quarter.
-- New customers signed during the quarter include clothier JoS. A. Bank,
multiplayer online game provider K2 Network, Louis Vuitton, Midwestern
superstore chain Meijer, sports apparel provider Under Armour, a
premium jewelry retailer, and a major international airline.
-- CyberSource Ltd. (UK) completed an agreement with Lloyds TSB Bank Plc,
which named CyberSource its preferred payment service provider for
corporate customers.
-- Net new customers added this quarter increased the company's total
customer count to approximately 20,000.
-- Existing customers that added new services or renewed agreements during
the quarter included Iron Mountain Information Management, Overstock,
Pitney Bowes, Sirius Satellite Radio, and Virgin Digital.
-- Approximately 175 customers selected CyberSource for merchant acquiring
account services during the quarter. CyberSource now has approximately
1,500 acquiring customers.
-- CyberSource UK customers processed a record 44.5 million transactions
in the first quarter of 2007 which represents approximately 17% of
total transaction volume.
-- The company added payment gateways to Central and South America and is
in the process of expanding gateway and payment option support in Asia.
-- CyberSource has seen continued strong demand for its risk management
services. In the first quarter, CyberSource signed deals with a major
media company and a wireless carrier to have CyberSource manage their
order acceptance processes, including establishing fraud risk models
and managing order acceptance rules.
Guidance for the second quarter and full year 2007:
CyberSource is providing guidance for the second quarter of 2007 based
on information available as of April 19, 2007.
-- For the second quarter ending June 30, 2007: Total revenue is expected
to be $22.6 million. Transaction and support revenue is expected to be
$21.1 million, of which $0.2 million is expected from BidPay.
Enterprise software revenue is expected to be $0.6 million and
professional services revenue is expected to be $0.9 million. The
company expects to process between 262 million and 267 million
transactions in the second quarter. GAAP gross profit is expected to
be $10.3 million, while GAAP operating expenses are expected to be
$10.8 million. The company expects to record GAAP net income for the
second quarter of $0.1 million, or break even earnings per share, based
on a weighted average share count of 37.5 million shares. Non-GAAP net
income for the second quarter is expected to be $2.1 million and non-
GAAP earnings per share is expected to be $0.06 based on a weighted
average share count of 37.5 million shares.
-- For the full year 2007: CyberSource reiterates earlier guidance. Total
revenue is expected to be between $90 million and $95 million, GAAP
gross profit is expected to be between $44.0 million and $45.5 million,
and GAAP operating expenses are expected to be between $41 million and
$42.5 million. GAAP net income for 2007 is expected to be between $3.5
million and $4.0 million, or $0.09 to $0.11 per share. GAAP earnings
per share is based on a weighted average share count of 38 million
shares. Guidance does not take into account any tax benefit resulting
from reductions in the company's valuation allowance against its
deferred tax asset. CyberSource will continue to evaluate whether a
further reduction is appropriate. Non-GAAP net income for the full
year 2007 is expected to be between $13.5 million and $14.5 million or
$0.36 to $0.38 per share. Non-GAAP earnings per share is based on a
weighted average share count of 38 million shares.
Public call/web cast details
CyberSource will host a public conference call today, April 19, 2007 at
4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss the first
quarter results. The call can be accessed in either of the following ways:
Live conference call
Dial 888-542-8515 (U.S. and Canada) 706-634-2163 (International).
The call's ID number is: 4543087.A taped replay of this call will
be available through April 30, 2007. The dial-in numbers for the
taped replay are 800-642-1687 (U.S.) 706-645-9291 (local or
international). The call's ID number is 4543087.
Live web cast
http://www.cybersource.com/cgi-bin/ir.pl
A replay of this web cast will remain available at this location
through April 30, 2007.
About CyberSource
CyberSource Corporation is a leading provider of electronic payment and
risk management solutions. CyberSource solutions enable electronic payment
processing for Web, call center, and POS environments. CyberSource also
offers industry leading risk management solutions for merchants accepting
card-not-present transactions. CyberSource Professional Services designs,
integrates, and optimizes commerce transaction processing systems.
Approximately 20,000 businesses use CyberSource solutions, including half
the companies comprising the Dow Jones Industrial Average. The company is
headquartered in Mountain View, California, and has sales and service
offices in Japan, the United Kingdom, and other locations in the United
States. For more information, please visit CyberSource's web site at
http://www.cybersource.com or email info@cybersource.com.
GAAP versus non-GAAP Results and Guidance
In addition to financial results presented on a GAAP basis, the company
has provided non-GAAP measures of gross profit, operating expenses, net
income and earnings per share, which are adjusted to exclude certain
non-cash items. For purposes of this release, non-GAAP gross profit,
operating expenses, net income and earnings per share exclude stock based
compensation expense under SFAS 123R, the non-cash portion of the income
tax provision, a reduction in the tax allowance, depreciation and
amortization expense, and certain non-recurring charges and income. A
reconciliation of the historical GAAP to non-GAAP measures is attached with
the financial statements. The company believes that presentation of
non-GAAP financial measures may provide investors with additional
meaningful and relevant financial information. Management believes the
non-GAAP measures help indicate trends in the company's business, and
management uses the non-GAAP measures to plan and forecast future periods.
Non-GAAP information is not determined using GAAP and should not be
considered superior to or as a substitute for GAAP measures or data
prepared in accordance with GAAP. Furthermore, non-GAAP information may not
be comparable across companies, as other companies may use different
non-GAAP measures. The company does not provide guidance for certain
financial measures such as depreciation and stock-based compensation
expense and as a result, is not able to provide a reconciliation of GAAP
and Non-GAAP financial measures for forward-looking data. The company
intends to calculate the various Non-GAAP financial measures in future
periods consistent with the methodology used in the three months ended
March 31, 2007, as presented in this release.
"Safe Harbor" statement under the Private Securities Litigation Reform
Act of 1995
Statements in this release that are not purely historical are
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934, including, without limitation, statements regarding the company's
expectations, objectives, anticipations, plans, hopes, beliefs, intentions
or strategies regarding the future. Forward-looking statements in this
release include, without limitation, statements regarding: (1) expanding
gateway and payment options support in Asia, (2) growing demand for the
Managed Risk services, and (3) financial guidance including, without
limitation, those regarding revenue, transaction volume, gross profit,
operating expenses, net income, earnings per share, and deferred tax
assets. Factors that could cause actual results to differ materially from
the forward looking statements include risks and uncertainties such as
changes in Generally Accepted Accounting Principles and the application
thereof, changes in customer needs, new products and services offerings by
the company and its competitors, any unforeseen event or any unforeseen
system failures, and other risks indicated in our filings with the
Securities and Exchange Commission. It is important to note that actual
outcomes could differ materially from those in such forward-looking
statements. Readers should also refer to the documents filed by CyberSource
with the Securities and Exchange Commission, specifically the annual report
filed on Form 10-K for the year ended December 31, 2006, filed with the
Securities and Exchange Commission on March 13, 2007, and our quarterly
reports filed on Form 10-Q from time to time, all of which identify
important risk factors.
NOTE: CyberSource is a registered trademark in the U.S. and other
countries. BidPay is a registered trademark in the U.S. All other brands and
product names are trademarks or registered trademarks of their respective
companies.
CyberSource Corporation
GAAP Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three Months Ended
March 31,
2007 2006
Revenues:
Transaction and support $20,732 $13,595
Enterprise software 667 783
Professional services 726 1,206
Total revenues 22,125 15,584
Cost of revenues:
Transaction and support 11,458 6,438
Enterprise software 65 58
Professional services 393 649
Total cost of revenues 11,916 7,145
Gross profit 10,209 8,439
Operating expenses:
Product development 2,591 2,114
Sales and marketing 4,369 3,405
General and administrative 2,792 1,937
Total operating expenses 9,752 7,456
Income from operations 457 983
Other income 53 --
Interest income 673 482
Income before income taxes 1,183 1,465
Income tax provision 447 590
Net income $736 $875
Basic net income per share $0.02 $0.03
Diluted net income per share $0.02 $0.02
Weighted average number of shares used
in computing basic net income
per share 35,011 34,223
Weighted average number of shares used
in computing diluted net income
per share 37,242 36,880
Non-GAAP Financial Metrics:
Gross profit $10,738 $8,731
Operating expenses $8,422 $6,730
Net income $3,021 $2,450
Basic net income per share $0.09 $0.07
Diluted net income per share $0.08 $0.07
CyberSource Corporation
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share data)
(Unaudited)
Three Months Ended
March 31,
2007 2006
GAAP gross profit $10,209 $8,439
Add FAS123R expense 182 110
Add depreciation expense 325 180
Add amortization of intangible assets 22 2
Non-GAAP gross profit $10,738 $8,731
GAAP operating expenses $9,752 $7,456
Less FAS123R expense (1,209) (629)
Less depreciation expense (109) (92)
Less amortization of intangible assets (12) (5)
Non-GAAP operating expenses $8,422 $6,730
GAAP net income $736 $875
Add FAS123R expense 1,391 739
Add non-cash tax provision 426 557
Add depreciation expense 434 272
Add amortization of intangible assets 34 7
Non-GAAP net income $3,021 $2,450
GAAP basic net income per share $0.02 $0.03
Add FAS123R expense 0.04 0.02
Add non-cash tax provision 0.01 0.01
Add depreciation expense 0.02 0.01
Add amortization of intangible assets -- --
Non-GAAP basic net income per share $0.09 $0.07
GAAP diluted net income per share $0.02 $0.02
Add FAS123R expense 0.04 0.02
Add non-cash tax provision 0.01 0.02
Add depreciation expense 0.01 0.01
Add amortization of intangible assets -- --
Non-GAAP diluted net income per share $0.08 $0.07
CyberSource Corporation
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
March 31, December 31,
2007 2006
Assets
Current assets:
Cash and cash equivalents $25,753 $21,701
Short-term investments 31,975 33,243
Accounts receivable, net 10,272 9,614
Prepaid expenses and other current assets 2,120 1,823
Deferred income taxes 1,894 2,320
Total current assets 72,014 68,701
Property and equipment, net 3,659 3,618
Intangible assets, net 2,811 2,845
Non-current deferred income taxes 9,629 9,629
Other noncurrent assets 2,249 2,250
Total assets $90,362 $87,043
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $443 $409
Other accrued liabilities 6,169 6,056
Deferred revenue 2,021 1,950
Total current liabilities 8,633 8,415
Total stockholders' equity 81,729 78,628
Total liabilities and stockholders' equity $90,362 $87,043
CyberSource Corporation
Consolidated Statements of Cash Flows
(In thousands, except per share data)
(Unaudited)
Three Months Ended
March 31,
2007 2006
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $736 $875
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 468 279
Income from investment in joint venture (46) --
Stock-based compensation 1,391 739
Changes in operating assets and liabilities:
Accounts receivable (658) (286)
Prepaid expenses and other current assets (297) 878
Deferred income taxes 426 557
Other noncurrent assets 47 (280)
Accounts payable 34 (51)
Accrued liabilities 113 (787)
Deferred revenue 71 111
Net cash provided by operating activities 2,285 2,035
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (475) (309)
Acquisition of BidPay.com -- (1,990)
Purchases of short-term investments (14,783) (9,440)
Maturities of short-term investments 16,066 9,092
Net cash provided by (used in) investing activities 808 (2,647)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock 970 2,029
Net cash provided by financing activities 970 2,029
Effect of exchange rate changes on cash (11) 10
Increase in cash and cash equivalents 4,052 1,427
Cash and cash equivalents at beginning of period 21,701 14,383
Cash and cash equivalents at end of period $25,753 $15,810
SOURCE CyberSource Corporation
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Related links:
http://www.cybersource.com/
Photo Notes:http://www.newscom.com/cgi-bin/prnh/19990513/CYBRSOURCELOGO
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, photodesk@prnewswire.com
CONTACT:
Bruce Frymire of CyberSource,
+1-650-965-6042, or bfrymire@cybersource.com
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