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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

000-31321
(Commission File No.)

RIGHTNOW TECHNOLOGIES, INC.
(Exact Name of Registrant as Specified in Its Charter)

40 Enterprise Boulevard
Bozeman, Montana 59718-9300
(Address of Principal Executive Offices) (Zip Code)

(406) 522-4200
(Registrant's Telephone Number, Including Area Code)

N/A
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Indicate by check mark whether the regristrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý    No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes o    No ý

The number of shares outstanding of the registrant's common stock, $0.001 par value, as of November 5, 2004 was 29,003,095.

RightNow Technologies, Inc.

Quarterly Report on Form 10-Q

For the Quarterly Period Ended September 30, 2004

INDEX

2

Part I. FINANCIAL INFORMATION

Item 1. Financial Statements

RightNow Technologies, Inc.

Consolidated Balance Sheets

(In thousands) (Unaudited)

See accompanying notes to consolidated financial statements.

3

RightNow Technologies, Inc.

Consolidated Statements of Operations

(In thousands, except per share amounts) (Unaudited)

See accompanying notes to consolidated financial statements.

4

RightNow Technologies, Inc.

Consolidated Statements of Stockholders' Equity (Deficit)

(In thousands) (Unaudited)

See accompanying notes to consolidated financial statements.

5

RightNow Technologies, Inc.

Consolidated Statements of Cash Flows

(In thousands) (Unaudited)

See accompanying notes to consolidated financial statements.

6

RightNow Technologies, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

(1)   Business Description and Basis of Presentation

Business Description

        RightNow Technologies, Inc. (the "Company" or "RightNow") is a leading provider of on-demand customer relationship management ("CRM") software solutions. The Company's comprehensive products and services, and commitment to customer success, are designed to deliver high returns on investment for its customers. More than 1,100 organizations worldwide use RightNow solutions. Founded in 1997, RightNow is headquartered in Bozeman, Montana, with additional offices in North America, Europe and Asia. The Company operates in one segment, which is the customer relationship management market.

Basis of Presentation

        The accompanying interim consolidated financial statements are unaudited. These financial statements and notes should be read in conjunction with the audited consolidated financial statements and related notes, together with management's discussion and analysis of financial condition and results of operations, contained in the Company's Amendment No. 5 to its Registration Statement on Form S-1 filed with the Securities and Exchange Commission on August 5, 2004.

        The accompanying interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States. In the opinion of management, the interim consolidated financial statements and notes have been prepared on the same basis as the audited consolidated financial statements in the Registration Statement and include all adjustments necessary for the fair presentation of the Company's financial position at September 30, 2004, its results of operations and its cash flows for the three and nine month periods ended September 30, 2003 and 2004. The interim period results are not necessarily indicative of the results to be expected for the full year.

        The preparation of financial statements in conformance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and disclosures of contingent assets and liabilities. Management evaluates these estimates and assumptions on an on-going basis. Significant estimates and assumptions made by management include revenue recognition, valuation allowances for trade receivables and deferred income tax assets, and fair values of short-term investments, property and equipment and intangible assets.

(2)   Initial Public Offering of Common Stock

        In August 2004 the Company completed the sale of 6.4 million shares of common stock, including the underwriters' exercise of an over-allotment option, at a public offering price of $7.00 per share. Net proceeds from the offering were $40.1 million after deducting underwriters' commissions and other expenses. Outstanding shares of Series A and Series B redeemable convertible preferred stock were converted into shares of common stock, on a one-for-one basis, at the closing of the offering. In addition, warrants to acquire shares of redeemable, convertible preferred stock were converted into warrants to acquire common stock.

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(3)   Reverse Stock Split

        In July 2004 the Company completed a two-for-three reverse stock split. All share information in this quarterly report has been adjusted to reflect the reverse split.

(4)   Certain Risks and Concentrations

        The Company's revenue is derived from the license, hosting and support of its software products and provision of related professional services. The market in which the Company operates is highly competitive and rapidly changing. Significant technological changes, changes in customer requirements, or the emergence of competitive products with new capabilities or technologies could adversely affect the Company's operating results. The Company has historically derived a majority of its revenue from customer service software solutions. These products are expected to continue to account for a significant portion of revenue for the foreseeable future. As a result of this revenue concentration, the Company's business could be harmed by a decline in demand for, or in the prices of, these products or as a result of, among other factors, any change in pricing model, a maturation in the markets to these products, increased price competition or a failure by the Company to keep up with technological change.

        The Company's customers are worldwide with approximately 75% of sales in the United States. No individual customer accounted for more than 10% of the Company's revenue in 2003 or the first nine months of 2004, or represented more than 10% of receivables at December 31, 2003 or September 30, 2004.

        As of September 30, 2004 and December 31, 2003, assets located outside the United States were 7% and 27% of total assets, respectively. Revenues by geographical region are as follows (in thousands):

        The loss from operations outside the United States totaled $2.0 million for the nine months ended September 30, 2004 and $1.6 million for the nine months ended September 30, 2003.

(5)   Cash Equivalents

        We consider all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents are carried at cost, which approximates market value.

(6)   Short-term Investments

        Short-term investments in debt and equity securities are classified as available for sale and are recorded at fair market value. Market values are determined based on quotations from national exchanges. Realized gains and losses are included in income. Unrealized gains and losses (excluding other-than-temporary impairments), net of tax, are recorded to Other Comprehensive Income, a component of stockholders' equity.

8

        Investments are considered to be impaired when a decline in fair value is determined to be other-than-temporary. If the cost of an investment is less than its fair value, we evaluate, among other factors, general market conditions, the duration and extent that cost is less than fair value, as well as our ability and intent to hold the investment. We also consider specific adverse conditions of the investee, including industry and sector performance, operational and cash flow factors and rating agency actions. Once a decline in fair value is determined to be other-than-temporary, an impairment charge is recorded and a new cost basis for the investment is established.

(7)   Net Income (Loss) Per Share

        A reconciliation of the denominator used in the calculation of basic and diluted net income (loss) per share is as follows (in thousands):

        The following common stock equivalents were excluded from the computation of diluted earnings per share because their impact was anti-dilutive (in thousands):

(8)   Equity-Based Compensation

        The Company has adopted the disclosure only provisions of SFAS No. 123, Accounting for Stock-Based Compensation, and SFAS No. 148, Accounting for Stock-Based Compensation—Transition and Disclosure, but applies Accounting Principles Board Opinion No. 25 (APB 25) and related interpretations in accounting for its stock plans. Under APB 25, when the exercise price of an employee stock option equals the estimated market price of the underlying stock on the date of grant, no compensation expense is recognized.

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        Pro forma information regarding results of operations has been determined as if the Company had accounted for its stock options under the fair value method. The fair value of each option grant is estimated on the date of grant using the Black-Scholes valuation model with the following assumptions:

        Had the Company recorded compensation expense in accordance with SFAS No. 123, net income (loss) would have been (in thousands, except per share data):