Revenues for the first quarter were $36.6 million, an increase of $1.1 million from the first quarter of last year and $1.7 million from the fourth quarter. Revenues for the first quarter were impacted by $1.8 million on a year over year basis as a result of lower foreign exchange rates. Year over year revenue growth was 8% in the first quarter on a consistent currency basis.

Gross margin for the first quarter was $21.1 million, an increase of $1.7 million from the first quarter of last year and $1.3 million from the prior quarter. Net income for the first quarter was $1.2 million, or net income per share of $0.05.

Core net income for the first quarter was $6.8 million after excluding acquisition-related expenses of $3.7 million and equity-based compensation of $1.9 million. Core net income was more than double the $2.8 million reported in the first quarter of last year. Core earnings per share was $0.27 as compared with $0.12 in the first quarter of last year and $0.22 in the prior quarter.

"We had a very strong first quarter across all financial metrics highlighted by the achievement of an important financial milestone," said Rob Eberle, President and CEO of Bottomline Technologies. "We recorded 20% core operating margin in the quarter, a major and significant increase from the 7% level recorded a year ago. Our strong core operating income and profitability metrics demonstrate the strength of our business, viability of our model and execution against our market opportunities. Strategically, we introduced several new products, built upon a strong pipeline and completed our acquisition of Bank of America's electronic settlement network known as PayMode. It was a great start to what I believe will be a strong fiscal year."

First Quarter Customer Highlights

• Signed multi-year contracts for Bottomline's Software as a Service solution for legal spend management, Legal eXchangeTM, with three leading property and casualty insurers.
• Extended its existing relationship with Deutsche Bank, serving as the technology provider for the bank's new outsourced payment initiative. This initiative, which leverages Bottomline's WebSeries® platform, is the latest engagement between the company and Deutsche Bank to focus on increasing payment efficiency.
• Welcomed significant new customers such as Brenntag North America, Dedicated Computing, King Architectural Metals, Odeon Cinemas, RENOVO Services, RRI Energy, Salix Pharmaceuticals, State of Vermont Treasurer's Office, University of Arizona, Watson Pharmaceuticals, and a leading Canadian provider of health insurance, which selected Bottomline solutions for increased efficiency, security and visibility of payment and transactional document processes.
• Strengthened existing customer relationships through orders to expand existing implementations of Bottomline solutions from organizations such as Cabot Corporation, Cisco Systems, County of Fairfax (VA), EverBank Financial, First American, Foster Farms, Investec Asset Management, the John Lewis Partnership, Scottrade, Target, Thermo Fisher Scientific, Quincaillerie Richelleu and the YMCA of Metropolitan Los Angeles.
• Expanded adoption of its solution portfolio among hospitals and healthcare organizations through new orders and expanded deployments at Baxter Healthcare, Catholic Health East, Lourdes Health Network, MCG Health, St. Elizabeth Medical Center, Singing River Hospital and Tift Regional Medical Center.
• Selected by organizations seeking to optimize their Microsoft Dynamics® AX implementations with advanced capabilities for transactional document automation, including Greenfield Industries, Fortunique, NuCal Foods, Tribune Company and Wirtz Beverage Group.

First Quarter Strategic Corporate Highlights

• Entered into a strategic relationship with Bank of America under which Bottomline acquired the market leading network for payment and invoice automation known as PayMode®. With more than 90,000 vendors, it is one of the industry's largest and fastest-growing payment networks and positions Bottomline as the market leader for financial supply chain automation.
• Launched Bottomline C-SeriesTM, a new solution set offering corporate treasury and other finance executives with cost effective and feature-rich capabilities for liquidity and cash management, and TransformTM, the company's next-generation solution for automating transactional document processing.
• Received high marks for the breadth of security functionality inherent in the WebSeries Global Cash Management platform as part of an independent, third-party evaluation. The extensive assessment concluded that the platform has been designed to surpass user expectations for threat prevention within a global cash management solution.
• Bottomline's Chief Technology Officer Eric Campbell and Director of Global Marketing Marcus Hughes were named to Global Finance magazine's 2009 "Who's Who in Treasury and Cash Management," an annual list of the most influential individuals in the global cash management community.
• Launched a new solution for Faster Payments in the UK, which was used to make the industry's first successful live, direct submission of a corporate Faster Payment into the Direct Corporate Access service.
• Introduced powerful new functionality for its WebSeries Global Cash Management platform, adding dynamic capabilities for creating highly-customizable user experiences, and providing faster and more efficient cash reporting.