CyberSource Corporation (Nasdaq: CYBS), a leading provider of electronic payment and risk management solutions, today announced financial results for its third quarter ended September 30, 2007.
- Third quarter revenue was a record $26.5 million, surpassing prior guidance of $23.8 million, a 53% increase compared to $17.4 million in the same period last year.
- On a GAAP basis, net income for the third quarter of 2007 was $347,000 or $0.01 per share, a 21% increase compared to $286,000 or $0.01 per share for the third quarter of 2006.
- Non-GAAP net income was $3.5 million or $0.09 per share, a 57% increase compared to $2.2 million or $0.06 per share for the third quarter of 2006. Non-GAAP net income 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. A reconciliation of the historical GAAP to non-GAAP measures is attached.
- Cash flow from operating activities was $5.2 million during the third quarter of 2007, a 53% increase compared to $3.4 million during the same period last year.
"We are very pleased with our record results this quarter, which reflect the strength of our broadening customer base and our momentum within the eCommerce market. We processed a record 287 million transactions during the quarter, a 41% increase over the same period last year. Our global acquiring business generated approximately $12.0 million of revenue in the quarter, up 105% over last year," said Bill McKiernan, Chairman and Chief Executive Officer of CyberSource. "CyberSource added approximately 2,000 new customers in the quarter, increasing our customer base to approximately 22,000."
Cash, cash equivalents, and short-term investments at the end of the third quarter of 2007 were $60.1 million, compared to $54.5 million at the end of the third quarter last year. During the third quarter, CyberSource generated $1.0 million in proceeds from employee stock option exercises and used $4.7 million to repurchase 390,400 shares of the company's common stock.
- International: CyberSouerSource now supports over 25 international payment types and processed transactions in over 65 different currencies in the third quarter. CyberSource's European operations contributed a record 55.1 million transactions in the third quarter of 2007, approximately 19% of total transaction volume. CyberSource continues to win significant international customers. CyberSource recently announced Jet Airways of India as the first airline in India to implement an automated online risk management solution. CyberSource Decision Manager automatically evaluates transactions in real-time, and based on a combination of rules customized by Jet Airways, the airline is able to automate the process of determining whether the online ticket purchase should be accepted, rejected or reviewed. Jet Airways selected CyberSource's Decision Manager based on the product's proven flexibility, reliability, scalability, as well as CyberSource's reputation in the payment and risk management industries.
- Global acquiring: The company achieved significant growth in its global acquiring services during the third quarter. Approximately 150 customers selected CyberSource for global acquiring services during the period. CyberSource now has over 1,800 global acquiring customers.
- Progress on Authorize.Net acquisition: In September 2007, CyberSource and Authorize.Net delivered proxy statements to each of its respective stockholders regarding the proposed acquisition. Stockholder meetings will be held as follows: at CyberSource headquarters in Mountain View, CA on October 23, 2007; at Authorize.Net Holdings headquarters in Marlborough, MA on October 25, 2007. Votes will be tallied and announced following these meetings.
- Customers: CyberSource's total customer count increased to approximately 22,000. Customers added during the quarter include Beach Camera, Diane Von Furstenberg, Magellan Navigation, Perry Ellis, Silversea Cruises, Tibco Software, and Underwriters Laboratories. Existing customers that added new services or renewed agreements during the quarter included Cornell University, Holland-America Westours, Intel Corporation, J.C. Penney, and Kodak Imaging Network.
- BidPay: BidPay has acquired approximately 483,000 customers since its launch in June of 2006, up from 410,000 at the end of the second quarter. 55,000 sellers have registered with the company, up from 49,000 at the end of the second quarter. BidPay exited the quarter linked to over 500,000 eBay listings. At the end of the quarter, BidPay launched the BidPay application programming interface which allows third party auction services and individual sellers to offer BidPay as a payment option inside their checkout pages. CyberSource is currently exploring strategic options for BidPay.
Guidance for the fourth quarter and full year 2007
Given that the company's acquisition of Authorize.Net is still pending stockholder approval, the guidance provided below for the fourth quarter and full year 2007 is for CyberSource on a standalone basis. Guidance also does not take into account any further reductions in the company's valuation allowance against its deferred tax asset, which would result in a tax benefit during the period of the reduction. CyberSource will continue to evaluate whether a further reduction is appropriate.
For the fourth quarter ending December 31, 2007: Total revenue is expected to be $31.5 million. Transaction and support revenue is expected to be $30.4 million, of which $1.0 million is expected from BidPay.com, Inc. Enterprise software revenue is expected to be $0.4 million and professional services revenue is expected to be $0.7 million. The company expects to process between 340 million and 345 million transactions in the fourth quarter. GAAP gross profit is expected to be $13.2 million, while GAAP operating expenses are expected to be $11.3 million. The company expects GAAP net income for the fourth quarter of $1.7 million, or $0.04 per share, based on a weighted average share count of 38 million shares. Non-GAAP net income for the fourth quarter is expected to be $4.7 million and non-GAAP earnings per share is expected to be $0.12 based on a weighted average share count of 38 million shares.
For the full year 2007: Based on the fourth quarter guidance provided, total revenue is expected to be $103.1 million, GAAP gross profit is expected to be $45.4 million, and GAAP operating expenses are expected to be $43.8 million. GAAP net income for 2007 is expected to be $2.9 million or $0.08 per share. Non-GAAP net income for the full year 2007 is expected to be $13.6 million or $0.36 per share. GAAP and Non-GAAP earnings per share are based on a weighted average share count of 38 million shares.
Read the full statement here:Download the document now 35.8 kb (PDF File)