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8-K - FORM 8-K - TALEO CORP | d8k.htm |
Exhibit 99.1
Media Contact | Investor Relations Contact | |
Mary Jo Rose | Mike Magaro | |
925-452-3252 | 925-452-3120 | |
mrose@taleo.com | mmagaro@taleo.com |
Taleo Announces Record Quarterly Revenues of $67.2 million, up 33% Year-Over-
Year; Application Revenue Growth of 24% to $55.2 million
| Record Quarterly Non-GAAP Revenue of $71.2 million, up 41% Year-Over-Year; Non-GAAP application revenue of $57.8 million, up 30% Year-Over-Year |
| Record Full Year GAAP Revenue of $237.3 million, up 20% Year-Over-Year; Non-GAAP Revenue of $241.8 million, up 21% Year-Over-Year |
Dublin, Calif. February 9, 2011 Taleo Corporation (NASDAQ: TLEO), the leading provider of on-demand Talent Management solutions, today announced record-setting results for its fiscal fourth quarter and the year ended December 31, 2010, completing a year of break-through performance.
Taleos Talent Intelligence value propositionproviding insight for organizations to better know their people and grow their businessis putting talent management at the front of the business agenda, said Michael Gregoire, Chairman and CEO of Taleo. Our performance in 2010 reflects tremendous market adoption of our talent management suite of Recruiting, Performance, Compensation and Learning wrapped around powerful analytics
Taleo delivered the following results for the fourth quarter and full year 2010:
Fourth Quarter Revenue: Total revenue for the fourth quarter was $67.2 million, an increase of 33% on a year-over-year basis. Application revenue for the fourth quarter was $55.2 million, an increase of 24% on a year-over-year basis. Services revenue for the fourth quarter was $12.0 million, an increase of 101% on a year-over-year basis.
Total fourth quarter non-GAAP revenue was $71.2 million, an increase of 41% on a year-over-year basis. Non-GAAP application revenue for the fourth quarter was $57.8 million, an increase of 30% on a year-over-year basis. Non-GAAP services revenues for the fourth quarter was $13.4 million, an increase of 123% on a year-over-year basis.
2010 Revenue: Total revenue for the full year 2010 was $237.3 million, an increase of 20% on a year-over-year basis. Application revenue for the full year 2010 was $199.3 million, an increase of 15% on a year-over-year basis. Services revenue for the full year 2010 was $38.0 million, an increase of 52% on a year-over-year basis.
For the full year 2010, the company reported Non-GAAP revenue of $241.8 million, an increase of 21% from the prior year. Non-GAAP application revenue for the full year 2010 was $202.4 million, an increase of 16% on a year-over-year basis. Non-GAAP services revenue for the full year 2010 was $39.3 million, an increase of 58% on a year-over-year basis.
Fourth Quarter Earnings per Share: Fourth quarter loss per share was $(0.02), compared to net income per fully diluted share of $0.13 a year ago. Non-GAAP income per fully diluted share was flat year-over-year at $0.23. The companys non-GAAP results include amounts excluded from GAAP revenue due to the write down of the deferred revenue associated with purchase accounting for Worldwide Compensation and Learn.com, and exclude the effects of $3.9 million in stock-based compensation expense, $5.3 million in amortization of acquired intangibles, and $3.8 million in acquisition related transaction costs. GAAP fourth quarter EPS calculations are based on 40.3 million basic weighted average shares outstanding, while non-GAAP fourth quarter EPS calculations are based on 43.4 million fully diluted weighted average shares outstanding. The fully diluted weighted average shares outstanding used to compute non-GAAP earnings per share have been calculated without giving consideration to the treasury stock method.
2010 Earnings per Share: For the full year 2010, net income per fully diluted share declined to $0.01 from $0.04 a year ago. Non-GAAP net income per fully diluted share for the full year 2010 rose to $0.78 compared to $0.77 a year ago. The companys non-GAAP results include amounts excluded from GAAP revenue due to the write down of the deferred revenue associated with purchase accounting for Worldwide Compensation and Learn.com, and exclude the effects of $14.9 million in stock-based compensation expense, $14.5 million in amortization of acquired intangibles, and $6.8 million in acquisition related transaction costs. GAAP full year 2010 EPS calculations are based on 40.9 million fully diluted weighted average shares outstanding, while non-GAAP full year 2010 EPS calculations are based on 43.0 million fully diluted weighted average shares outstanding. The fully diluted weighted average shares outstanding used to compute non-GAAP earnings per share have been calculated without giving consideration to the treasury stock method.
Customers: In the fourth quarter, 304 new businesses chose Taleos Talent Management solutions for recruiting, performance, learning and/or compensation management, including: DHL Global, Panda Restaurant Group, Southern California Edison, St. Joseph Health systems and Universal City Studios. A record 16 new contracts in the fourth quarter were larger than $250,000 in first year application revenue, underscoring the market interest in larger, global deployments and in multiple component suite solutions. The performance management product line performed exceptionally well with a record 57 deals in our fourth quarter and over 170 deals in 2010.
Cash: Cash from operations for full year 2010 was $35.8 million, down 29% from $50.7 million in 2009. Cash flow from operations was down in 2010 due primarily to the impact of operating liabilities assumed in our 2010 acquisitions of Worldwide Compensation and Learn.com, and the timing of fourth quarter 2010 billings. Total cash and cash equivalents finished the year at $141.6 million, a decrease of $102.6 million from the prior year, which includes approximately $137.5 million in net outflow from the companys acquisitions of Worldwide Compensation and Learn.com in 2010.
Quarterly Conference Call
Taleo will host a conference call to discuss its fourth quarter fiscal year 2010 results at 1:30 p.m. Pacific Time today. A live audio webcast of the conference call, together with detailed financial information, can be accessed through the companys Investor Relations Web site at http://www.taleo.com/ir. Please join the conference call at least 10 minutes early to register. A replay of the conference call will be available until midnight PT on February 13, 2011 at www.taleo.com, or via dial-in at 800-642-1687 or 706-645-9291. The pass code for the replay is 37598073.
About Taleo
Taleos (NASDAQ: TLEO) cloud-based talent management platform unites products and an ecosystem to drive business performance through talent intelligence. Over 5,000 customers use Taleo for talent acquisition, performance and compensation management, including 47 of the Fortune 100. Further, Taleos Talent Grid cloud community harnesses the expertise of Taleo customers, more than 200 million candidates to date, and 140 partners and industry experts.
Forward-looking Statements
This release contains forward-looking statements, including statements regarding Taleos future financial performance, market growth, the demand for and benefits from the use of Taleos solutions, and general business conditions. Any forward-looking statements contained in this press release are based upon Taleos historical performance and its current plans, estimates and expectations and are not a representation that such plans, estimates, or expectations will be achieved. These forward-looking statements represent Taleos expectations as of the date of this press announcement. Subsequent events may cause these expectations to change, and Taleo disclaims any obligation to update the forward-looking statements in the future. These forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially. Further information on potential factors that could affect actual results is included in Part II, Item 1A of Taleos Quarterly Report on Form 10Q, as filed with the SEC on November 5, 2010, and in other reports filed by Taleo with the SEC.
Non-GAAP Financial Measures
Taleo has provided in this release financial information that has not been prepared in accordance with GAAP. This information includes non-GAAP revenue and non-GAAP earnings per share. Taleo uses these non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, as a supplement to GAAP measures, in evaluating Taleos ongoing operational performance. Taleo believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing its financial measures with other companies in Taleos industry, many of which present similar non-GAAP financial measures to investors. The non-GAAP measures include amounts excluded from GAAP revenue due to the write down of the deferred revenue associated with purchase accounting for the Worldwide Compensation, Vurv and Learn.com acquisitions, and exclude costs associated with our 2009 restatement-related revenue review, acquisition related transaction costs, stock-based compensation expense, amortization of acquired intangibles, an income tax benefit related to the acquisition of Learn.com, a non-cash income tax audit settlement, the gain on re-measurement of a previously held interest in Worldwide Compensation, the write-off of the Worldwide Compensation purchase option, and settlement of the Vurv escrow account. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measure. A reconciliation of GAAP to the non-GAAP financial measures has been provided in the tables included as part of this press release.
A historical reconciliation of GAAP to non-GAAP financial measures for past periods can be located on the investor relations section of www.taleo.com.
Taleo Corporation
Condensed Consolidated Statements of Operations
(All amounts in thousands except per share data)
(Unaudited)
Three Months Ended December 31, |
Twelve Months Ended December 31, |
|||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Revenue: |
||||||||||||||||
Application |
$ | 55,179 | $ | 44,507 | $ | 199,302 | $ | 173,495 | ||||||||
Consulting |
12,037 | 5,993 | 37,973 | 24,917 | ||||||||||||
Total revenue |
67,216 | 50,500 | 237,275 | 198,412 | ||||||||||||
Cost of revenue (Note 1): |
||||||||||||||||
Application |
12,305 | 9,816 | 44,532 | 38,435 | ||||||||||||
Amortization of acquired intangibles |
1,499 | 761 | 4,233 | 3,043 | ||||||||||||
Total cost of application revenue |
13,804 | 10,577 | 48,765 | 41,478 | ||||||||||||
Consulting |
9,204 | 5,856 | 29,671 | 24,614 | ||||||||||||
Total cost of revenue |
23,008 | 16,433 | 78,436 | 66,092 | ||||||||||||
Gross profit |
44,208 | 34,067 | 158,839 | 132,320 | ||||||||||||
Operating expenses (Note 1): |
||||||||||||||||
Sales and marketing |
20,478 | 13,385 | 67,445 | 54,488 | ||||||||||||
Sales - amortization of acquired intangibles |
3,803 | 2,810 | 10,276 | 11,243 | ||||||||||||
Research and development |
12,257 | 8,709 | 43,431 | 34,847 | ||||||||||||
General and administrative |
13,511 | 7,410 | 43,834 | 33,152 | ||||||||||||
Total operating expenses |
50,049 | 32,314 | 164,986 | 133,730 | ||||||||||||
Income (loss) from operations |
(5,841 | ) | 1,753 | (6,147 | ) | (1,410 | ) | |||||||||
Other income (expense): |
||||||||||||||||
Interest and other income |
84 | 83 | 482 | 329 | ||||||||||||
Interest expense |
(29 | ) | (36 | ) | (106 | ) | (166 | ) | ||||||||
Worldwide Compensation, Inc. purchase option write-off |
| | | (1,084 | ) | |||||||||||
Gain on remeasurement of previously held interest in Worldwide Compensation, Inc. |
| | 885 | | ||||||||||||
Settlement of Vurv escrow account |
| 2,471 | | 2,471 | ||||||||||||
Total other income |
55 | 2,518 | 1,261 | 1,550 | ||||||||||||
Income (loss) before provision for (benefit from) income taxes |
(5,786 | ) | 4,271 | (4,886 | ) | 140 | ||||||||||
Benefit from income taxes |
(5,166 | ) | (322 | ) | (5,306 | ) | (1,153 | ) | ||||||||
Income (loss) attributable to Class A common stockholders |
$ | (620 | ) | $ | 4,593 | $ | 420 | $ | 1,293 | |||||||
Income (loss) per share attributable to Class A common stockholders - basic |
$ | (0.02 | ) | $ | 0.13 | $ | 0.01 | $ | 0.04 | |||||||
Income (loss) per share attributable to Class A common stockholders - diluted |
$ | (0.02 | ) | $ | 0.13 | $ | 0.01 | $ | 0.04 | |||||||
Weighted average Class A common shares - basic |
40,339 | 34,425 | 39,685 | 31,507 | ||||||||||||
Weighted average Class A common shares - diluted |
40,339 | 35,594 | 40,915 | 32,406 | ||||||||||||
NOTES |
||||||||||||||||
1. Includes stock-based compensation expense |
||||||||||||||||
Application cost of revenue |
$ | 226 | $ | 167 | $ | 929 | $ | 647 | ||||||||
Consulting cost of revenue |
437 | 320 | 1,703 | 1,195 | ||||||||||||
Cost of revenue subtotal |
663 | 487 | 2,632 | 1,842 | ||||||||||||
Sales and marketing operating expense |
1,060 | 833 | 4,066 | 3,011 | ||||||||||||
Research and development operating expense |
784 | 402 | 2,643 | 1,516 | ||||||||||||
General and administrative operating expense |
1,425 | 1,142 | 5,598 | 4,660 | ||||||||||||
Operating expense subtotal |
3,269 | 2,377 | 12,307 | 9,187 | ||||||||||||
Total stock-based compensation expense |
$ | 3,932 | $ | 2,864 | $ | 14,939 | $ | 11,029 | ||||||||
Taleo Corporation
Condensed Consolidated Statements of Operations (continued)
(All amounts in thousands except per share data)
(Unaudited)
Reconciliation of GAAP net income (loss) to non-GAAP net income:
Three Months Ended December 31, |
Twelve Months Ended December 31, |
|||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
GAAP net income (loss) reported above |
$ | (620 | ) | $ | 4,593 | $ | 420 | $ | 1,293 | |||||||
Add back: |
||||||||||||||||
Revenue |
||||||||||||||||
Non-GAAP application revenue |
2,594 | 15 | 3,142 | 841 | ||||||||||||
Non-GAAP service revenue |
1,343 | | 1,343 | 13 | ||||||||||||
Total Non-GAAP revenue |
3,937 | 15 | 4,485 | 854 | ||||||||||||
Expenses |
||||||||||||||||
Revenue review |
| | | 1,631 | ||||||||||||
Acquisition related transaction costs |
3,753 | | 6,826 | | ||||||||||||
Stock-based compensation expense |
3,932 | 2,864 | 14,939 | 11,029 | ||||||||||||
Amortization of acquired intangibles |
5,302 | 3,571 | 14,509 | 14,286 | ||||||||||||
Non-Cash income tax audit settlement |
| | | (1,335 | ) | |||||||||||
12,987 | 6,435 | 36,274 | 25,611 | |||||||||||||
Other income (expense) |
||||||||||||||||
Gain on remeasurement of previously held interest in Worldwide Compensation, Inc. |
| | (885 | ) | | |||||||||||
Worldwide Compensation, Inc. purchase option write-off |
| | | 1,084 | ||||||||||||
Settlement of Vurv escrow account |
| (2,471 | ) | | (2,471 | ) | ||||||||||
| (2,471 | ) | (885 | ) | (1,387 | ) | ||||||||||
Provision for (benefit from) income taxes |
||||||||||||||||
Income tax benefit related to acquisition of Learn.com |
(6,546 | ) | | (6,546 | ) | | ||||||||||
Non-GAAP net income |
$ | 9,758 | $ | 8,572 | $ | 33,748 | $ | 26,371 | ||||||||
Non-GAAP net income per share |
||||||||||||||||
Basic |
$ | 0.24 | $ | 0.25 | $ | 0.85 | $ | 0.84 | ||||||||
Diluted |
$ | 0.23 | $ | 0.23 | $ | 0.78 | $ | 0.77 | ||||||||
Reconciliation of basic and fully diluted share count: |
||||||||||||||||
Basic |
40,339 | 34,425 | 39,685 | 31,507 | ||||||||||||
Add: |
||||||||||||||||
Weighted Average - options and unreleased restricted stock, without consideration for the treasury stock method |
3,015 | 2,938 | 3,330 | 2,331 | ||||||||||||
Weighted Average - Vurv escrow shares |
| 127 | | 344 | ||||||||||||
Diluted |
43,354 | 37,490 | 43,015 | 34,182 | ||||||||||||
Taleo Corporation
Condensed Consolidated Balance Sheets
(All amounts in thousands)
(Unaudited)
December 31, 2010 |
December 31, 2009 |
|||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 141,588 | $ | 244,229 | ||||
Restricted cash |
8 | 409 | ||||||
Accounts receivable, net |
58,120 | 43,928 | ||||||
Prepaid expenses and other current assets |
18,460 | 10,126 | ||||||
Investment credits receivable |
6,033 | 5,499 | ||||||
Total current assets |
224,209 | 304,191 | ||||||
Property and equipment, net |
26,552 | 23,510 | ||||||
Restricted cash |
210 | 210 | ||||||
Goodwill |
206,418 | 91,027 | ||||||
Other intangibles, net |
59,478 | 30,544 | ||||||
Other assets |
1,562 | 6,895 | ||||||
Total assets |
$ | 518,429 | $ | 456,377 | ||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||
Current liabilities: |
||||||||
Accounts payable and accrued liabilities |
$ | 36,377 | $ | 23,592 | ||||
Deferred revenue - application services and customer deposits |
79,704 | 60,140 | ||||||
Deferred revenue - consulting services |
19,692 | 17,523 | ||||||
Capital lease obligation, short-term |
105 | 412 | ||||||
Total current liabilities |
135,878 | 101,667 | ||||||
Long-term deferred revenue - application services and customer deposits |
150 | 201 | ||||||
Long-term deferred revenue - consulting services |
10,006 | 13,220 | ||||||
Other liabilities |
3,834 | 3,973 | ||||||
Capital lease obligation, long-term |
46 | 107 | ||||||
Total liabilities |
149,914 | 119,168 | ||||||
Stockholders equity: |
||||||||
Capital stock |
1 | 1 | ||||||
Additional paid-in capital |
443,256 | 414,106 | ||||||
Accumulated deficit |
(76,609 | ) | (77,029 | ) | ||||
Treasury stock |
(1,518 | ) | (2,471 | ) | ||||
Accumulated other comprehensive income |
3,385 | 2,602 | ||||||
Total stockholders equity |
368,515 | 337,209 | ||||||
Total liabilities and stockholders equity |
$ | 518,429 | $ | 456,377 | ||||
Taleo Corporation
Consolidated Statements of Cash Flows
(All amounts in thousands)
(Unaudited)
Twelve Months Ended December 31, |
||||||||
2010 | 2009 | |||||||
Cash flows from operating activities: |
||||||||
Net income |
$ | 420 | $ | 1,293 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
Depreciation and amortization |
28,720 | 27,437 | ||||||
Loss disposal of fixed assets |
98 | 17 | ||||||
Amortization of tenant inducements |
(176 | ) | (152 | ) | ||||
Tenant inducements from landlord |
| 114 | ||||||
Stock-based compensation expense |
14,939 | 11,029 | ||||||
Excess tax benefits from employee stock plans |
(293 | ) | (301 | ) | ||||
Director fees paid with stock in lieu of cash |
240 | 247 | ||||||
Gain on remeasurement of previously held interest in Worldwide Compensation, Inc. |
(885 | ) | | |||||
Worldwide Compensation, Inc. purchase option write-off |
| 1,084 | ||||||
Bad debt expense (reversal) |
(83 | ) | 840 | |||||
Settlement of Vurv escrow account |
| (2,471 | ) | |||||
Changes in assets and liabilities, net of effect of acquisitions: |
||||||||
Accounts receivable |
(11,046 | ) | 4,440 | |||||
Prepaid expenses and other assets |
(3,030 | ) | (1,576 | ) | ||||
Deferred income taxes |
(6,546 | ) | | |||||
Investment credit receivable |
(275 | ) | 1,471 | |||||
Accounts payable and accrued liabilities |
2,965 | (2,249 | ) | |||||
Deferred revenue and customer deposits |
10,744 | 9,449 | ||||||
Net cash provided by operating activities |
35,792 | 50,672 | ||||||
Cash flows from investing activities: |
||||||||
Purchases of property and equipment |
(14,517 | ) | (9,140 | ) | ||||
Change in restricted cash |
401 | 418 | ||||||
Acquisition of business, net of cash acquired |
(137,504 | ) | | |||||
Net cash used in investing activities |
(151,620 | ) | (8,722 | ) | ||||
Cash flows from financing activities: |
||||||||
Principal payments on loan and capital lease obligations |
(1,652 | ) | (1,591 | ) | ||||
Payments for expenses associated with 2009 equity offering |
(657 | ) | | |||||
Net proceeds from stock offering |
| 144,444 | ||||||
Excess tax benefits from employee stock plans |
293 | 301 | ||||||
Treasury stock acquired to settle employee withholding liability |
(2,824 | ) | (1,066 | ) | ||||
Treasury stock issued to employees for ESPP |
3,777 | | ||||||
Proceeds from stock options exercised and ESPP shares |
13,676 | 9,640 | ||||||
Net cash provided by financing activities |
12,613 | 151,728 | ||||||
Effect of exchange rate changes on cash and cash equivalents |
574 | 1,089 | ||||||
Increase in cash and cash equivalents |
(102,641 | ) | 194,767 | |||||
Cash and cash equivalents: |
||||||||
Beginning of period |
244,229 | 49,462 | ||||||
End of period |
$ | 141,588 | $ | 244,229 | ||||