Interactive Data Corporation today reported its financial results for the fourth quarter and full year ended December 31, 2013. Interactive Data's fourth-quarter 2013 revenue was a record $232.2 million, a 3.5% increase from $224.3 million in the fourth quarter of 2012.
Excluding the impact of changes in foreign exchange rates, Interactive Data's organic (non-GAAP) revenue for the fourth quarter of 2013 grew by 3.7% from the fourth quarter in 2012.
Interactive Data's fourth-quarter 2013 income from operations was $41.8 million, an increase of 51% over income from operations of $27.8 million in the 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 2013 was $89.1 million, compared with $93.7 million in the same period one year ago.
"Interactive Data finished 2013 with record fourth-quarter revenue," stated Stephen Daffron, Interactive Data's president and CEO. "Our organic revenue growth of 3.7% this quarter was driven by continued expansion of our Pricing and Reference Data segment. Interactive Data's strong growth in fourth-quarter income from operations was consistent with our expectations entering the quarter, although it did not result in adjusted EBITDA growth primarily as a result of higher incentive compensation compared with the prior-year quarter, higher hardware expense associated with client implementations, and the timing and magnitude of certain credit reversals that occurred in the fourth quarter of 2012."
Daffron concluded, "Since joining the Company, I have been impressed with the knowledge, expertise and commitment of the Interactive Data team, the relationships we have built with our customers and the opportunities that lie ahead to further expand our business around the world. We took important steps earlier this month to better align key resources across our organization in ways that propel Interactive Data into 2014. We plan to build on this momentum to further fortify and expand our relationships with customers worldwide as we advance key product and technology initiatives, and implement a range of sales, marketing and support activities."
Segment Reporting and Related Operating Highlights
Pricing and Reference Data Segment:
Interactive Data's Pricing and Reference Data segment reported fourth-quarter 2013 revenue of $162.9 million, a 4.9% increase over the fourth quarter of 2012. Excluding the impact of changes in foreign exchange rates, fourth-quarter 2013 organic (non-GAAP) revenue for this business increased by 5.3% from the same period last year. The segment's performance primarily reflects growth in the Company's evaluated pricing and reference data services in North America. During the fourth quarter, Interactive Data released a comprehensive reference data offering to assist financial services firms as they prepare to comply with the U.S. Foreign Account Tax Compliance Act (FATCA). In addition, Interactive Data surpassed the 100-client milestone for Vantage(SM), which provides transparency into Interactive Data's evaluation services and facilitates pricing validation workflows.
Trading Solutions Segment:
Interactive Data's Trading Solutions segment generated fourth-quarter 2013 revenue of $69.3 million, which was essentially unchanged from the same quarter last year. During the fourth quarter of 2013, higher revenue from the Trading Infrastructure Services product area was offset by softness in the Hosted Web Applications product area. Among the highlights in this segment were the expansion of real-time OTC content via relationships with BGC Partners and ICAP, the availability of new energy and commodities data for the FutureSource workstation, the launch of a comprehensive suite of web analytics tools, and the introduction of PrimeTerminal mobile for Apple iOS and Android smartphone devices.
Other Fourth-Quarter 2013 Financial and Operating Highlights
Effects of Foreign Exchange:
The net effect of changes in foreign exchange rates increased fourth-quarter 2013 income from operations by $2.0 million.
Balance Sheet Highlights:
As of December 31, 2013, Interactive Data had cash, cash equivalents and short-term investments of $360.2 million, compared with $313.6 million last quarter and $248.2 million at the end of 2012. The Company's total debt outstanding as of December 31, 2013 was approximately $2.0 billion.
In January 2014, Interactive Data made a series of organizational changes to better support the Company's global growth and technology plans. Mark Hepsworth, formerly president of Interactive Data Pricing and Reference Data, is relocating to London where he succeeds Roger Sargeant as president, Europe. Andrew Hausman, who most recently served as president of Interactive Data's BondEdge Solutions business, was appointed president of Interactive Data Pricing and Reference Data. To help oversee key product technology and information systems initiatives across the company, Al Pastro, an experienced technology manager at top banks such as Morgan Stanley, Merrill Lynch and Goldman Sachs, joined the Company as chief information officer, applications.
In addition, Sean Brown was appointed president of 7ticks in January 2014, bringing an array of senior leadership experience gained in both start-up and public company environments. He was most recently senior vice president of product management at CSG International ( NASDAQ : CSGS ).
Full-Year 2013 Results
For the full year ended December 31, 2013, Interactive Data reported revenue of $905.1 million, an increase of $25.0 million, or 2.8%, from $880.2 million in 2012. Excluding the effects of changes in foreign exchange rates, organic revenue grew by 3.3% during 2013 due to solid, consistent expansion within the Company's Pricing and Reference Data segment throughout the year.
For the full year ended December 31, 2013, Interactive Data's income from operations grew 33.5% to $176.0 million from $131.9 million in 2012. 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) was $348.4 million in 2013, compared with $342.6 million in 2012. The Company's 2013 adjusted EBITDA growth reflects higher investment in new product development and technology infrastructure initiatives.