Saba Announces Fourth Quarter and Record Fiscal Year 2011 Results…from Saba

 

  • Record total bookings of $125.4 million in fiscal year 2011, up 13% year-over-year
  • Record deferred revenue of $45.8 million at the end of fiscal year 2011, up 24% year-over-year
  • Annual contract value of new SaaS bookings grew 276% in the fourth quarter of 2011 and grew 210% in fiscal year 2011 over the respective year ago periods
  • SaaS revenue grew 59% in the fourth quarter of fiscal year 2011 and 33% in fiscal year 2011 over the respective year ago periods
  • Added 153 new enterprise customers in fiscal year 2011; 40 in the fourth quarter

HRchitect featured Saba in our May 2008 release of The Suite Life of Integrated Talent Management and also includes them in our list of top Talent Management Systems and top Learning Management Systems vendors that businesses should consider. A.G. Lambert, the VP of Marketing with Saba appeared on the HRchitect WebMingle on August 14, 2009. Matt Lafata with HRchitect attended the 2010 Saba Global Summit and Analyst Day in Boston, MA. Matt Lafata & Tiffany Appleby attended the Saba Global Sales Rally FY12 in June 2011 in Redwood City, CA.

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!

Saba (NASDAQ: SABA), the premier People Cloud provider, today reported financial results for its fourth quarter and fiscal year ended May 31, 2011.

“We grew our SaaS bookings 276% and SaaS revenue 59% in the fourth quarter of fiscal year 2011.  We now have one of the fastest growing SaaS businesses among public companies,” said Bobby Yazdani, Chairman and CEO of Saba.  “We signed four of the five largest transactions in our history during the fiscal year, with all four customers selecting Saba People Cloud Applications.  The transformation of our business to SaaS from license is well ahead of plan.  I want to take this opportunity to thank the Saba team for all their hard work and dedication, and congratulate them on their success in enabling Saba to become a world-class SaaS company.”

SaaS revenue steadily increased during fiscal year 2011, growing 8% in the first quarter, 19% in the second quarter, 42% in the third quarter, and 59% in the fourth quarter over the respective year-ago periods.  Nine of our 12 largest deals in the fourth quarter were for SaaS offerings.  The number of new SaaS transactions over $50,000 increased almost three-fold in fiscal year 2011 over fiscal year 2010. 

Results for the Fourth Quarter and Fiscal Year 2011

Revenues: Total GAAP revenues were $29.9 million in the fourth quarter of fiscal year 2011, up 1% from $29.6 million in the same quarter last year.  Total Non-GAAP revenues in the fourth quarter of fiscal year 2011 were $30.0 million, up 1%, compared to $29.6 million in the same quarter last year.  Non-GAAP revenues reflect the exclusion of the fair value adjustments to deferred revenue due to acquisitions.

For fiscal year 2011, total GAAP revenues increased to $116.7 million from $109.6 million in the year ago period.  Total Non-GAAP revenues for fiscal year 2011 increased 7% to $116.7 million from $109.6 million in the year ago period.

Deferred Revenue: Total Deferred revenue increased to a record $45.8 million at the end of the fourth quarter of 2011, growing 24% year-over-year and 8% sequentially.

Fourth Quarter Investments:  During the fourth quarter, we accelerated our investments in a number of key areas by approximately $2.0 million or $0.07 per share to support our fiscal year 2012 growth initiatives.  Areas of investment included:

Sales Force Expansion — added country managers in Canada, India, and China and continued expansion of sales capacity and management in existing and new markets

International Expansion — launched our operations in China and grew our operations in Latin America and Asia Pacific

Cloud Operations  — invested in our global cloud operations in preparation for the major release of our new People Cloud Applications which is planned for this Fall and invested in a number of new technological innovations that are planned to be released throughout fiscal year 2012.  We also added key executives to run our Cloud business including Shawn Farshchi as Executive Vice President and Chief Operating Officer and Daniel Lipkin, Vice President of Technology

Acquisitions — closed our acquisition of two leading testing and assessment software companies

Earnings (Loss) per Share: GAAP loss per share was $0.17 in the fourth quarter of fiscal year 2011 compared to fully diluted earnings per share of $0.03 in the same period last year.  Non-GAAP loss per share was $0.10 in the fourth quarter of fiscal year 2011 compared to non-GAAP fully diluted earnings per share of $0.08 in the fourth quarter of last year. 

For fiscal year 2011, GAAP loss per share was $0.26 compared to fully diluted earnings per share of $0.09 in fiscal year 2010.  Non-GAAP loss per share was $0.02 in fiscal year 2011 compared to non-GAAP fully diluted earnings per share of $0.29 in fiscal year 2010.

Our non-GAAP results are calculated by adjusting GAAP results for the impact of certain items including (i) non-cash amortization of intangibles, (ii) non-cash charges related to share-based compensation expenses, (iii) non-operating reorganization costs, (iv) fair value adjustments to deferred revenue due to acquisitions and (v) other acquisition related costs for legal and accounting services.  A reconciliation of GAAP to non-GAAP results is included in the financial statements accompanying this press release.  

Cash: Cash flow from operations was $4.0 million in fiscal year 2011, and cash and cash equivalents at May 31, 2011 were $25.9 million.  

Share Repurchase: The Company repurchased 243,648 shares of common stock during the quarter for $2.3 million, bringing the total number of shares repurchased under its share repurchase program to 777,291 shares for an aggregate purchase price of approximately $5.5 million.  The Company now has approximately $4.5 million remaining under the repurchase program.    

Customers: We added 40 new enterprise customers in the quarter including Fiat/Chrysler, Shire Pharmaceuticals, Fitch Ratings, and Kumon Institute of Education.  

In addition, we expanded our footprint with a number of our existing customers in the quarter including W.W. Grainger, Five Guys, Union Bank, Bio-Rad, Novartis, France Telecom, and Kronos. 

Partners:  We added 14 partners in the fourth quarter including Aon/Hewitt, Satyam, and British Telecom.   We have signed 36 new partners in fiscal year 2011 bringing our total number of partners to 107.  Our partners once again contributed over 50% of our new business in the quarter. 

Acquisitions:  We acquired Pedagogue Solutions and Comartis, two leading software companies in the testing and assessment market.  These companies provide the foundation of our new Testing and Assessment offerings.  “The ability to test and assess skill levels and learning effectiveness is an essential element of any learning management system,” said Bobby Yazdani, Chairman and CEO of Saba.  “Organizations need to understand how effectively their people are trained and whether the imparted knowledge and developed skills are being successfully applied.  In addition, our new testing and assessment offerings  broaden our market opportunities beyond the traditional talent management space.” 

Business Outlook           

The following statements are based on current expectations as of the date of this release. These statements are forward-looking, and actual results may differ materially.  Saba does not undertake any obligations to update these forward-looking statements.

For fiscal year 2012, ending May 31, 2012, we are forecasting total GAAP revenues in the range of $130 million to $133 million. 

We are forecasting total bookings to grow approximately 16% to 18% in fiscal year 2012 over fiscal year 2011 with SaaS bookings growth in excess of 110% in fiscal year 2012 over fiscal year 2011. 

We expect our operating income in fiscal year 2012 to be impacted by our recent success in selling multi-hundred thousand subscribers on the Cloud.  As part of the adoption of Financial Accounting Standards Board standard for multiple-element revenue arrangements,  ASU 2009-13, for certain transactions, we are required to recognize a portion of the respective professional services revenue ratably over the life of the contract while incurring the professional services expense upfront.  We estimate this to negatively impact our earnings per share by $0.06 to $0.08 in fiscal year 2012. 

As such, we are forecasting GAAP net loss to range from $0.39 to $0.45 per share and non-GAAP net loss to range from $0.17 to $0.23 per share.

Fiscal year 2012 non-GAAP outlook excludes non-cash amortization of intangibles, charges related to stock-based compensation expenses and the impact to revenue for fair value adjustments to deferred revenue due to acquisitions.

For more information on Saba, please visit www.saba.com

 
Matt Lafata, HRchitect

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