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.
- 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
- 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.
- GAAP gross profit was $10.2 million, above prior guidance of $9.3 million.
- GAAP operating expenses were $9.8 million, below the company's prior guidance of $10.4 million.
- 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.
- 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 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.
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