SuccessFactors Announces 52 Percent Revenue Growth In First Quarter Fiscal 2011…from SuccessFactors

 

— Q1 FY11 Non-GAAP revenue grows to a record $68.0 million, up 52 percent year-over-year.
— Q1 FY11 billings grows to $62.7 million, up 31 percent year-over-year.
— Raises Fiscal 2011 revenue guidance.
— Announces definitive agreement to acquire Plateau Systems Ltd., a leading learning management system (LMS), a Next Generation Portal technology, and CaaS – Content as a Service. Adds core LMS functionality to the existing social learning capabilities from recently acquired Jambok, and significantly enhances the SuccessFactors Business Execution (BizX) software suite.

HRchitect featured SuccessFactors in our release of The Suite Life of Integrated Talent Management and also includes them in our list of top Talent Management Systems vendors that businesses should consider. HRchitect is proud to sponsor the 2011 SuccessConnect event in San Francisco.

If you are looking for a new Talent Management System, or any HR system, don’t rely solely on “recommendations” or published reports. Do yourself a huge favor and talk to HRchitect first. After 14 years, HRchitect has unparalleled knowledge of the HR and Talent Management vendor community and can save you time and money in selection and implementation. Simply put, do not invest in any kind of HR technology without consulting with the experts first. HRchitect is always available to help!

SuccessFactors, Inc. (NASDAQ: SFSF) recently announced results for its first quarter fiscal 2011 which ended March 31, 2011.

“Despite very strong compares, SuccessFactors delivered strong growth in Q1, while hiring aggressively for future growth and customer investment,” said Lars Dalgaard, founder and CEO of SuccessFactors. “SuccessFactors leads the very large market that we created in BizX cloud-computing. We continue to win market share while simultaneously expanding our total available market through new innovations and acquisitions. By acquiring Plateau Systems Ltd., which was eagerly requested by our sales reps and many customers, we will add learning to SuccessFactors’ scalable and secure platform and further expand our total available market. Plateau Systems Ltd. brings us a spectacular group of enterprise customers with one of the highest renewal rates in the industry at approximately 99%. By combining Plateau’s products with our Jambok social mobile video learning acquisition, we will be able to provide customers a truly unique offering, further solidifying SuccessFactors’ position as an innovator.”

Results for the First Quarter Fiscal 2011:

  • Q1 FY11 Non-GAAP Revenue: For the quarter ended March 31, 2011, non-GAAP revenue was $68.0 million, compared to the company’s prior guidance of $62.5 million to $63.5 million, and compared to $44.7 million in the quarter ended March 31, 2010, an increase of approximately 52 percent year-over-year and an increase of 10 percent sequentially from Q410.
  • Q1 FY11 Non-GAAP Operating Income: For the quarter ended March 31, 2011, the Company recognized non-GAAP operating income of $0.5 million and GAAP operating income from operations of $0.8 million. The non-GAAP operating income excludes $11.0 million in stock-based compensation expense, amortization of intangibles, future cash consideration of acquisitions and deal related costs and a gain of approximately $11.7 million revaluation of contingent consideration for the quarter ended March 31, 2011.
  • Q1 FY11 Total Deferred Revenue: Total deferred revenue as of March 31, 2011 was $229.6 million, compared to $234.4 million at December 31, 2010 and up approximately 24 percent year-over-year from $184.9 million at March 31, 2010.
  • Q1 FY11 Cash Flow Generated from Operations: For the quarter ended March 31, 2011, cash flow generated from operating activities was $10.4 million, compared to $13.1 million in the quarter ended March 31, 2010.
  • Q1 FY11 Net Income per Common Share: For the quarter ended March 31, 2011, on a GAAP basis, net income per common share basic and diluted were $0.04 and $0.03, respectively. On a non-GAAP basis, net income per common share, basic and diluted, was $0.01. Non-GAAP net income per common share, both basic and diluted, excludes $11.0 million in stock-based compensation expense, amortization of intangibles, future cash consideration of acquisitions and deal related costs, approximately $11.7 million revaluation gain of contingent consideration related to business combinations, $0.5 million unrealized foreign exchange gain on an intercompany acquisition loan related to Inform, and approximately $1.2 million tax benefit related to Jambok. This compares to non-GAAP net income per common share of $0.00 in the fourth quarter of 2010 which excluded approximately $9.1 million of stock-based compensation expense, amortization of intangibles, future cash consideration of acquisitions and deal related costs, a $4.8 million revaluation gain of contingent consideration related to business combinations and $1.5 million unrealized foreign exchange gain on an intercompany acquisition loan related to Inform, and non-GAAP net income per common share of $0.02 in the first quarter of 2010 which excluded approximately $5.0 million of stock-based compensation. For the first quarter of 2011, GAAP net income per common share calculation assumed a weighted average share count of approximately 77.5 million for basic and 83.0 million for diluted. For the fourth quarter of 2010, GAAP net loss per common share calculation assumed a weighted average share count of approximately 76.4 million. For the first quarter of 2010, GAAP net loss per common share calculation assumed average weighted share count of approximately 72.0 million.

Plateau Systems Ltd. Acquisition:

Today, SuccessFactors announced it has entered into a definitive agreement to acquire Plateau Systems Ltd. the leading learning management system (LMS), a Next Generation Portal technology, and CaaS- Content as a Service. This acquisition forms a symbiotic combination with SuccessFactors’ acquisition of social video mobile learning provider Jambok.

Customers will now have the ability to further increase employee development and business execution by implementing a comprehensive social and traditional learning strategy that includes evangelizing internal experts, utilizing easy-to-use video creation and sharing tools, as well as managing, developing, and deploying online, instructor-led, and self-study training.

Under the terms of the acquisition agreement, SuccessFactors will pay $145 million in cash plus $145 million in stock, of which $15 million is for employee stock options and RSUs, for Plateau Systems Ltd.. The acquisition is subject to various closing conditions, including filings under the Hart-Scott-Rodino Antitrust Improvements Act and the issuance of a permit from the California Department of Corporations, and is currently expected to close during summer 2011.

Guidance:

SuccessFactors is initiating guidance for its second quarter fiscal 2011 and updating its outlook for the full fiscal year 2011, as of April 26, 2011. 

  • Q2 FY11: Non-GAAP revenue for the company’s second fiscal quarter is projected to be in the range of approximately $69.0 million to $70.0 million. Note that non-GAAP revenue includes the effect of deferred revenue from acquired companies that is required to be written down for GAAP purposes under purchase accounting rules. Non-GAAP net income per common share, basic and diluted, is expected to be breakeven. This guidance does not take into account the proposed acquisition of Plateau Systems Ltd. Non-GAAP net income per common share estimates exclude the effects of estimated stock-based compensation expense, amortization of intangible assets, future cash consideration of acquisitions, deal related costs and revaluation of contingent consideration related to business combinations and any unrealized foreign exchange gains/losses on an intercompany acquisition loan and assumes average weighted basic and diluted share counts of approximately 78.6 million shares and 85.4 million shares, respectively.
  • Full Year 2011: Non-GAAP revenue for the company’s full fiscal 2011 is now expected to be in the approximate range of $275 million to $280 million, which is an increase of approximately 30 percent when compared to fiscal 2010. The company expects non-GAAP net income per common share for fiscal 2011 to be approximately breakeven. This guidance does not take into account the proposed acquisition of Plateau Systems Ltd. Non-GAAP net income per common share estimates exclude the effects of estimated stock-based compensation expense, amortization of intangible assets, future cash consideration of acquisitions, deal related costs and revaluation of contingent consideration related to business combinations and any unrealized foreign exchange gains/losses on an intercompany acquisition loan and assumes average weighted basic and diluted share counts of approximately 79.3 million shares and 85.7 million shares, respectively.

For more information on SuccessFactors, please visit www.successfactors.com
Matt Lafata, HRchitect

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