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, 2009.
- Third quarter revenue was $65.7 million, a 14% increase compared to $57.7 million in the same period the previous year.
- On a GAAP basis, net income for the third quarter of 2009 was $2.7 million and earnings per share was $0.04, compared to net income of $207,000 and breakeven earnings per share in the third quarter of 2008.
- Non-GAAP net income for the third quarter was $14.8 million, a 26% increase compared to $11.7 million for the third quarter of 2008. Non-GAAP earnings per share for the third quarter was $0.20, a 25% increase compared to $0.16 earnings per share for the third quarter of 2008. Non-GAAP net income excludes stock-based compensation expense, the non-cash portion of the tax provision, depreciation and amortization expense, and certain non-recurring items. A reconciliation of certain historical GAAP to non-GAAP measures is attached.
- During the third quarter, CyberSource processed a record 611 million billable transactions, a 30% increase over the same period the previous year. The value of transactions processed was $29.0 billion, a 6% increase over Q3 2008.
- CyberSource signed 35,000 new customers in the quarter, up 26% over the prior year, increasing its customer base to approximately 284,000 active customers.
"Our strong results this quarter reflect our expanding customer base and our successful expansion internationally. Even with a turbulent economy, our transaction volumes were up 30% over the prior year, to a record 611 million transactions, and we added 35,000 new customers and over 500 new channel partners. I am very pleased with the strength and underlying trend of these numbers, which reflect our broad base of channel partners and the growth of new business formation in eCommerce. Our GAAP Gross Profit was $34.8 million, and Non-GAAP Gross Profit was $38.5 million, both up 18% over last year, primarily as a result of the strength in our gateway and small business offerings," said Bill McKiernan, Chairman and Chief Executive Officer of CyberSource.
"I am also very excited to announce that effective January 1, 2010, the Board of Directors has promoted Michael Walsh to President & Chief Executive Officer of CyberSource. Mike has been with CyberSource for over ten years and has served as Senior Vice President of Worldwide Sales for the last five years. Prior to CyberSource, Mike was at Oracle and Merrill Lynch. Mike's sharp intellect, knowledge of the payment space, and embodiment of CyberSource values, make him the perfect candidate to be our new CEO," said Bill McKiernan, Chairman and Chief Executive Officer of CyberSource. "I founded CyberSource and have been CEO for the last 15 years, and I believe that change is good for an organization as it brings in new perspectives and fresh ideas. On January 1, I will give up the CEO role and focus on my duties as Executive Chairman. We have an excellent team with highly experienced leaders in all the key areas, and I'm confident that with Mike as CEO, we will keep the things that have made the company successful, and he will challenge all of us to achieve even greater success. In addition, Scott Cruickshank, our President and COO, will be leaving the company. We thank Scott for his many contributions to the business, and we wish him well in his future endeavors."
- Customers: CyberSource added approximately 35,000 new customers in the quarter, bringing its customer base to approximately 284,000. New enterprise customer wins this quarter include: GE Consumer & Industrial, Make A Wish International, Palm Inc., Rosetta Stone, Sierra Trading Post, and Sur La Table. Existing customers that added new services or renewed agreements during the quarter include: American Cancer Society, Citrix Online a division of Citrix Systems, and Check Point Software Technologies.
- International: CyberSource continues to drive strong growth outside the U.S. CyberSource's European operations processed a record 156.0 million transactions in the third quarter, an increase of 52% over the same period last year. The Company's European business is comprised of revenue generated by customers domiciled outside the US, and represented about 8% of revenue in the quarter.
- Global acquiring: CyberSource generated $20.3 million of global acquiring revenue during the third quarter, up 5% sequentially and 1% over the prior year. CyberSource added approximately 800 new acquiring customers during the quarter, and now has over 6,000 global acquiring customers.
- Channel Partners: CyberSource's partner program of over 4,500 resellers and affiliate partners continues to be a major driver for new customer leads and provides an increasingly broad base of partners selling CyberSource services. In the third quarter, CyberSource signed over 500 new Independent Sales Organizations (ISOs) and affiliate partners.
During the third quarter, we did not repurchase any shares of our common stock.
Guidance for the fourth quarter and full year 2009
CyberSource is providing guidance for the fourth quarter of 2009 and full year 2009 based on information available as of October 22, 2009. We assume no duty to update these numbers at any time.
For the fourth quarter ending December 31, 2009:
- Total revenue is expected to be between $73.0 and $74.0 million.
- The company expects to process between 670 and 680 million billable transactions.
- GAAP gross profit is expected to between $36.7 and $37.0 million, while GAAP operating expenses are expected to be between $32.7 and $33.0 million. The company expects to record GAAP net income in the fourth quarter of between $2.1 and $2.6 million and earnings per share of between $0.03 and $0.04 based on a weighted average share count of 74 million shares.
- Non-GAAP net income for the fourth quarter is expected to be between $14.7 and $15.2 million and non-GAAP earnings per share to be between $0.20 and $0.21 based on a weighted average share count of 74 million shares.
For the full year 2009:
- Total revenue for 2009 is expected to be between $262.0 and $263.0 million, compared to prior guidance of between $260.0 and $263.0 million.
- GAAP net income for 2009 is expected to be between $7.9 and $8.4 million, compared to prior guidance of between $6.5 and $7.0 million.
- GAAP earnings per share is expected to be $0.11 per share, based on a weighted average share count of 73 million shares, compared to prior guidance of between $0.09 and $0.10 per share.
- Non-GAAP net income for the full year 2009 is expected to be between $55.8 and $56.3 million, compared to prior guidance of $54.0 and $55.0 million. Non-GAAP earnings per share is expected to be between $0.76 and $0.77, based on a weighted average share count of 73 million shares, compared to prior guidance of between $0.74 and $0.75.