Interactive Data Q2 income rises

Source: Interactive Data

Interactive Data Corporation (NYSE: IDC) today reported its financial results for the second quarter ended June 30, 2007. Second-quarter 2007 revenue grew 12.4% to $170.0 million from $151.2 million in the second quarter of 2006.

Net income for the second quarter of 2007 was $29.1 million, or $0.30 per diluted share, a 32.8% increase from $21.9 million, or $0.23 per diluted share, in the same quarter last year.

"We enjoyed a strong second quarter," stated Stuart Clark, president and chief executive officer. "Our revenue growth this quarter primarily reflects continued progress in our Pricing and Reference Data business, a steady acceleration in the growth of our Real-Time Services business, improved results at eSignal and the initial contribution from the Xcitek market data business we acquired at the beginning of May. We also enjoyed outstanding net income growth in the second quarter of 2007 due mainly to a combination of our revenue growth, prudent spending and a lower effective tax rate."

Clark continued, "We are seeing that many institutional customers are turning to Interactive Data to help them address an array of mission-critical challenges across their enterprises. Our organic revenue growth in the second quarter of 2007 was 9.2% due mainly to sustained demand for our evaluated pricing services, reference data, real-time datafeed services and managed solutions. Renewal rates at our institutionally oriented businesses remained at approximately 95%. It is also exciting to see the collaboration taking place across our core businesses in areas such as sales, marketing and product development."

"Our performance this quarter highlights the power of our business model as we converted strong revenue growth into improved margin performance, higher profit growth and significant cash flow from operations," commented Andrew Hajducky, Interactive Data's executive vice president and chief financial officer. "We returned $11.8 million to stockholders through our regular quarterly dividend and repurchased $6.1 million of our common stock during the second quarter. We also paid $25.1 million in cash to acquire the Xcitek assets. Our solid financial foundation is enabling us to invest wisely in initiatives that we expect will strengthen and expand our core businesses, and further enhance our compelling value proposition to customers."

"We have made good, steady progress against our plans during the first half of 2007," Clark concluded. "Just as important, our offerings and capabilities correlate well to a number of powerful trends impacting our customers such as new regulatory mandates, increasing complexity of alternative financial instruments, and the drive to automate key processes, including trading operations. As a result, we are updating our outlook for 2007 as we expect to exceed our original revenue and profit targets. We believe that 2007 will be a year of excellent growth for Interactive Data."

Other Second-quarter and Recent Operating and Financial Highlights

Effects of Foreign Exchange:
Interactive Data's second-quarter 2007 revenue was positively impacted by $3.8 million due to the effects of foreign exchange. Second-quarter 2007 revenue before the effects of foreign exchange grew by $15.0 million, or 9.9%, over the comparable period in 2006. Total costs and expenses in the second quarter of 2007 were negatively impacted by $3.0 million due to the effects of foreign exchange. Second-quarter 2007 total costs and expenses before the effects of foreign exchange increased by $7.2 million, or 6.2%, over the second quarter of 2006.

Institutional Services Segment:
  • Interactive Data Pricing and Reference Data reported second-quarter 2007 revenue of $105.6 million, a 13.8% increase over the prior year's second quarter (or an increase of 11.6% before the effects of foreign exchange). Excluding the $1.1 million contribution from the recently acquired Xcitek market data business and the effects of foreign exchange, second-quarter 2007 revenue increased 10.4% over the same period last year. North American revenue, including Xcitek, for the second quarter of 2007 increased 12.0% over the second quarter of 2006. Second-quarter 2007 European revenue increased by 18.9% (or increased by 9.4% before the effects of foreign exchange) from the second quarter of last year. Revenue growth in both North America and Europe continued to be driven primarily by increased sales of fixed income evaluations and reference data services. Interactive Data Pricing and Reference Data's Asia-Pacific second-quarter 2007 revenue increased 28.7% (or increased 17.4% before the effects of foreign exchange) compared with the prior year's second quarter. During the second quarter, the Pricing and Reference Data business introduced a new service that will automate the delivery of independent valuations of interest rate swaps and announced two technology solutions providers as redistributors of its content and services. Additionally, integration of the recently acquired Xcitek market data business is now underway.
  • Interactive Data Real-Time Services generated second-quarter 2007 revenue of $34.0 million, an increase of 12.5% over the same quarter last year (or an increase of 7.3% before the effects of foreign exchange). The increase reflects strong growth in the real-time datafeed business combined with more modest expansion of the Managed Solutions business in Europe. In the second quarter of 2007, this business announced the first new customer for DirectPlus(SM), a new fully managed ultra-low latency direct exchange data service. Also during the quarter, Interactive Data Managed Solutions introduced MiFID Advisor Suite, a customizable, web-based offering designed to help financial advisors more efficiently comply with elements of a new European regulatory mandate and develop strategies for improving the quality of their investment advice.
  • Interactive Data Fixed Income Analytics reported revenue for the second quarter of 2007 of $8.2 million, which was up 1.5% from last year's second quarter (or an increase of 1.3% before the effects of foreign exchange). New sales and increased business with existing customers were mostly offset by the impact of cancellations, due in part to client consolidation activities. During the second quarter, this business completed 9 new BondEdge installations and announced that its new fixed income analytics datafeed service, Analytix Direct(SM), is now available to Interactive Data's evaluated pricing clients in North America.


Active Trader Services Segment:
eSignal's second-quarter 2007 revenue of $22.1 million increased 10.2% from the same quarter last year (or an increase of 9.5% before the effects of foreign exchange). This increase reflects modest growth in the eSignal direct subscriber base, higher online advertising revenue and the deferral of revenue in the second quarter of 2006 related to direct sales of certain software-based offerings. eSignal ended the second quarter of 2007 with over 62,200 direct subscription terminals. Second-quarter 2007 highlights included the continued integration of the Quote.com operations, enhancements to the Quote.com website and the launch of Market-Q, a powerful new real-time desktop solution for financial institutions.

Six-Month Results
For the six months ended June 30, 2007, Interactive Data reported revenue of $332.5 million versus $294.6 million for the comparable period in 2006, an increase of $37.9 million, or 12.9%. Total costs and expenses rose 9.8%, or $22.4 million, to $249.7 million in the first six months of 2007. Net income for the first six months of 2007 increased 31.1% to $54.8 million, or $0.57 per diluted share, from $41.8 million, or $0.44 per diluted share, in the comparable period of 2006. The tax rate for the first six months of 2007 was 36.9% compared with 40.2% in the same period last year and 38.1% for the full year 2006.

Cash Position, Stock Buyback Activities, and Quarterly Cash Dividend:
  • As of June 30, 2007, Interactive Data had no outstanding debt and had cash, cash equivalents and marketable securities of $214.9 million. During the second quarter of 2007, Interactive Data spent $6.1 million to repurchase 221,800 shares of common stock at an average purchase price of $27.70 per share as part of its existing October 2006 share buyback program. Entering the third quarter of 2007, 1,482,200 shares remained available for repurchase under the existing October 2006 share buyback program.
  • During the second quarter of 2007, Interactive Data spent $11.8 million to pay its second-consecutive quarterly cash dividend of $0.125 per share of common stock to stockholders of record on June 7, 2007.


Acquisition of Xcitek Market Data
On May 2, 2007, Interactive Data announced the closing of its acquisition of the assets comprising the market data division of Xcitek LLC, as well as the market data assets of its affiliate Xcitax LLC, for $25.1 million in net cash.

2007 Outlook
  • We anticipate that market conditions in 2007 will be similar to those experienced in 2006. We expect that institutional spending on financial market data and related services in 2007 may increase modestly over 2006 levels as customers spend prudently on such services. Based on our results to date, we are updating our outlook for 2007 from prior guidance that was issued in February 2007 and reaffirmed in April 2007. Our updated outlook for 2007 includes the impact associated with the acquisition of the assets comprising Xcitek's market data business.
  • 2007 revenue growth over 2006 on a percentage basis is now expected to be in the range of 10% to 12%, compared with original guidance that called for revenue growth in the 6% to 9% range.
  • Our 2007 effective tax rate is now expected to be in the range of 37% to 38%.
  • 2007 net income is now expected to grow in the range of 20% to 24%, compared with original guidance for net income growth on a percentage basis in the high single digit to low double digit range.
  • Capital expenditures in 2007 are still expected to be in the range of $35 million to $37 million.


Read the statement here:Download the document now 15.1 kb (PDF File)

Comments: (0)

sponsored