Interactive Data Corporation today reported its financial results for the fourth quarter and full year ended December 31, 2011.
Interactive Data's fourth-quarter 2011 revenue increased 6.8% to a record $222.1 million from $207.8 million in the fourth quarter of 2010. Fourth-quarter 2010 revenue was reduced by $1.3 million due to the purchase accounting for the amortization of acquisition-related deferred revenue. Excluding the impact of changes in foreign exchange rates and the reduction in fourth-quarter 2010 revenue associated with the acquisition-related deferred revenue adjustment, Interactive Data's organic (non-GAAP) revenue grew 6.1% from the fourth quarter in 2010.
Interactive Data's fourth-quarter 2011 income from operations was $33.2 million, compared with a loss from operations of $1.2 million in same period one year ago. Non-GAAP adjusted EBITDA (which excludes items that are either not part of the Company's ongoing core operations, or do not require a cash outlay, or are not otherwise expected to recur in the ordinary course) for the fourth quarter of 2011 was $83.5 million, a 13.6% increase over the same period one year ago.
"2011 was a successful year for Interactive Data, capped by a solid performance in the fourth quarter," stated Mason Slaine, Interactive Data's president and chief executive officer. "During the fourth quarter, we continued to drive steady revenue growth within our evaluated pricing and reference data product areas, and produced strong gains within our ultra low latency trading infrastructure services product area. We are pleased with the growth in adjusted EBITDA and our ability to sustain very strong free cash flow while making key investments in our people, products, infrastructure and technology. Our initiatives to innovate during the past year are resonating with our customers worldwide as we focus on broadening our market coverage, adding new and enhanced features and functionality, and bringing new high-value offerings to the marketplace."
Segment Reporting and Related Operating Highlights
Effective for the fourth quarter of 2011, Interactive Data's two reportable segments have been reorganized as Pricing and Reference Data, and Trading Solutions. The change was made in response to operational and organizational initiatives undertaken during the preceding year and completed in the fourth quarter and reflects the way the Company currently approaches the market and analyzes operating performance. The Pricing and Reference Data segment represents the Company's evaluated pricing, reference data and fixed income analytics product areas. The Trading Solutions segment represents the Company's real-time data feeds, ultra low latency infrastructure services, hosted web solutions and desktop solutions. Historical financial results have been reclassified to reflect this change.
Pricing and Reference Data Segment:
- Interactive Data's Pricing and Reference Data segment reported fourth-quarter 2011 revenue of $150.7 million, a 6.0% increase over the fourth quarter of 2010. Excluding the effects of foreign exchange and the reduction of $1.1 million in fourth-quarter 2010 revenue associated with the acquisition-related deferred revenue adjustment, fourth-quarter 2011 organic (non-GAAP) revenue for this business increased by 5.1% from the same period last year. The fourth-quarter 2011 organic revenue performance primarily reflects expansion in its evaluated pricing and reference data services product areas. In recent months, the Company completed its first sale of its newly launched Vantage offering, expanded its derivatives coverage, broadened its relationship with FactSet Research Systems, and added the BlackRock iShares® Exchange Traded Funds (ETFs) to the BondEdge ETF Library.
- Interactive Data's Trading Solutions segment generated fourth-quarter 2011 revenue of $71.4 million, which is 8.7% higher than the same quarter last year. Excluding the effects of foreign exchange and the reduction of $0.3 million in fourth-quarter 2010 revenue associated with the acquisition-related deferred revenue adjustment, fourth-quarter 2011 organic (non-GAAP) revenue for this business increased 8.1%. The organic revenue growth for this business primarily reflected strong growth in the ultra low latency trading infrastructure services delivered by Interactive Data 7ticks. Key segment highlights included the addition of new market coverage, ongoing progress to add new features and functionality to its hosted web solutions and workstation offerings, and the initial rollout of a customized version of Market-Q by a major bank.
Other Fourth-Quarter 2011 Financial and Operating Highlights
- Interactive Data continued to strengthen its management team in recent months. The Company has appointed new executives to lead its business operations in Germany and Japan. In addition, Dan Videtto plans to join Interactive Data in April 2012 as Managing Director, Asia Pacific to oversee the continued expansion of the Company's operations across this region. Videtto is an accomplished financial services executive who most recently served as chief operating officer of Deutsche Bank's Global Markets and Investment Banking business in Japan as well as managing director of Thomson Financial, Japan. In addition, Interactive Data has continued to add a number of senior-level sales professionals over the past several quarters.
Effects of Foreign Exchange:
- The net effect of foreign exchange on fourth-quarter 2011 operating results was immaterial.
Balance Sheet Highlights:
- As of December 31, 2011, Interactive Data had cash and cash equivalents of $262.2 million, compared with $123.7 million at the same time last year and $217.2 million at the end of the third quarter of 2011. The Company's total debt outstanding as of December 31, 2011, was approximately $2.0 billion.
Full-Year 2011 Results
- Please note that Interactive Data's full-year 2010 results detailed below are presented on a non-GAAP basis as they reflect the combination of results from the predecessor period prior to the Company's acquisition (from July 1, 2010 through July 29, 2010) and the successor period following it (from July 30, 2010 through December 31, 2010).
- For the year ended December 31, 2011, Interactive Data reported record revenue of $867.7 million, an increase of $71.1 million, or 8.9%, from $796.6 million in the same period last year. Excluding the effects of foreign exchange and the reduction of $3.7 million in revenue for 2010 associated with the acquisition-related deferred revenue adjustment, organic revenue grew by 6.9% during 2011.
Interactive Data's income from operations for 2011 was $101.7 million, compared with a loss from operations of $7.1 million in 2010. The 2010 loss from operations included merger costs of $120.0 million. Non-GAAP adjusted EBITDA (which excludes items that are not part of the Company's ongoing core operations, or do not require a cash outlay, or are not otherwise expected to recur in the ordinary course) increased by 13.8% to a record $329.3 million in 2011 from $289.4 million in the same period one year ago.