News
SuccessFactors' Revenue up 95% for 2007 -- Announces Fourth Quarter and Fiscal 2007 Results
SAN MATEO, Calif.-(Business Wire)-February 13, 2008 - SuccessFactors, Inc. (NASDAQ:SFSF), the global leader in on-demand performance and talent management solutions, today announced results for its fourth quarter and fiscal year 2007 ended December 31, 2007.
"95% revenue growth in 2007, and passing $100 million in annual bookings in our first six years, is an extraordinary achievement," said Lars Dalgaard, president and CEO, SuccessFactors. "We did this through our colleagues' passionate execution and our customers' unwavering commitment. Global demand for our products has never been stronger. Even in a challenging economy, customers have a large appetite for products that increase revenue and decrease costs. We do both."
SuccessFactors' results for the fourth quarter of fiscal year 2007 were as follows:
— Q4 FY07 Revenue: Revenue was $19.2 million, an increase of 70% on a year-over-year basis and an increase of 15% on a quarter-over-quarter basis compared to the third quarter of 2007.
— Q4 FY07 Bookings: Bookings, defined as revenue plus change in total deferred revenue during the period, was $45.7 million, an increase of 69% on a year-over-year basis and an increase of 65% on a quarter-over-quarter basis compared to the third quarter of 2007.
— Q4 FY07 Customers: Customers rose approximately 350, a new record, during the quarter and totaled approximately 1,750 as of December 31, 2007, an increase of 106% from December 31, 2006, and an increase of 25% from September 30, 2007.
— Q4 FY07 Net Loss per Share: On a GAAP basis, the net loss per common share, basic and diluted, was $1.11. The non-GAAP net loss per common share, basic and diluted, was $0.49, which excludes approximately $1.8 million in stock-based compensation, $1.2 million of other expense related to the fair value of our previously outstanding convertible preferred stock warrants, and $1.6 million of debt issuance and related costs associated with these warrants. For the basis of GAAP and non-GAAP net loss calculations, there were 23.7 million and 43.9 million weighted average shares outstanding during the quarter, respectively. Together, these items reduced reported GAAP net loss per common share, basic and diluted, by $0.62 per share.
— Q4 FY07 Total Deferred Revenue: Total deferred revenue as of December 31, 2007 was $101 million, an increase of 93% compared to December 31, 2006 and 36% compared to September 30, 2007.
Results for the fiscal year 2007:
— FY2007 Revenue: Revenue was $63.4 million, an increase of 95% on a year-over-year basis.
— FY2007 Bookings: Bookings were $112 million, an increase of 88% on a year-over-year basis.
— FY2007 Cash: Cash used in operations for fiscal 2007 was $28.5 million. Total cash, cash equivalents, and marketable securities at the end of the year were $90.8 million.
— FY2007 Customers: Customers rose approximately 900, to a new record of approximately 1,750 as of December 31, 2007, an increase of 106% from the end of 2006.
— FY2007 Net Loss per Share: On a GAAP basis, the net loss per common share, basic and diluted, was $8.35. The non-GAAP net loss per common share, basic and diluted, was $1.73, which excludes approximately $4.4 million in stock-based compensation, $2.5 million of other expense related to the fair value of our previously outstanding convertible preferred stock warrants, and $1.9 million of debt issuance and related costs associated with these warrants. For the basis of GAAP and non-GAAP net loss calculations, there were 9.0 million and 38.5 million weighted average shares outstanding during the year, respectively. Together, these items reduced reported GAAP net loss per common share, basic and diluted, by $6.62 per share.
Additional Fourth Quarter and Fiscal 2007 Highlights:
— Examples of customer wins and additional product deployments in 2007 include Toyota, Goldman Sachs, Thomson Learning, Meridian Health, Fannie Mae, Mylan Laboratories, Sepracor, Baylor Health Care System, Transocean, Barrick Gold, Tesoro Petroleum, Suncor Energy, Avery Dennison, Canadian Pacific Railway, Premier Farnell, Cadbury Schweppes, Lincoln Financial Group, Eclipse Aviation, NFL Players Association, Northwest Airlines, Johnson & Johnson, Gambro, and La Poste.
— In 2007, 135 deals exceeded $250,000 in total contract value, 62 deals exceeded $500,000 in total contract value, and 15 deals exceeded $1 million in total contract value.
— Announced one of the world's largest software-as-a-service deployments, Wachovia Bank, with more than 85,000 employees, is actively utilizing the SuccessFactors Performance and Talent Management Suite.
— Honored nationally as one of the 50 Best Companies to Work For in America by the Society of Human Resource Management and the Great Place To Work Institute.
— Recognized as one of the Top 100 Best Places to Work in Greater Bay Area by the San Francisco Business Times, Silicon Valley/San Jose Business Journal, and East Bay Business Times.
— Successfully achieved SAS 70 Type I and II compliance.
— In November, SuccessFactors launched a new program called OneVoice to help enable constant, ongoing collaboration between our customers and product teams. With more than 1000 members, OneVoice is a community of customers focused on driving the direction of SuccessFactors' products, helping the company to prioritize its development decisions.
Guidance
SuccessFactors is initiating guidance for its first quarter and for its full fiscal year 2008.
— Q1 FY08: Revenue for the Company's first fiscal quarter is projected to be in the range of approximately $20.5 million to $21.5 million. Non-GAAP net loss per common share, basic and diluted, is expected to be in the range of approximately ($0.40) to ($0.42). Non-GAAP net loss per common share estimates exclude the effects of stock-based compensation expense and assume an average weighted share count of 51.8 million shares.
— Full Year FY08: The Company expects full year revenue for fiscal 2008 to be approximately $101 million to $103 million. The company also expects non-GAAP net loss per common share, basic and diluted, for fiscal 2008 to be in the range of approximately ($1.63) to ($1.67). Non-GAAP net loss per common share estimates exclude the effects of stock-based compensation expense and assume an average weighted share count of 53.1 million shares.
Conference Call
SuccessFactors will host a conference call to discuss its fourth quarter and fiscal 2007 results at 2:00 p.m. Pacific Standard Time today. A live audio webcast of the conference call, together with detailed financial information, can be accessed through the company's Investor Relations website at http://www.successfactors.com/investor. In addition, an archive of the webcast can be accessed through the same link until February 22, 2008. Participants who choose to call into the conference call can do so by dialing domestically at 866-923-9739 and internationally at 706-634-0915. A domestic replay will be available at 800-642-1687 or 706-645-9291 internationally, passcode 30758194, until February 22, 2008.
About SuccessFactors, Inc.
SuccessFactors is the leading provider of on-demand employee performance and talent management solutions that enable organizations of every size, across every industry and geography, to achieve high-performing workforces by enabling goal alignment and execution, talent development and planning, and pay-for-performance initiatives. SuccessFactors currently has more than 1,750 customers across more than 60 industries, with more than 3 million end users in over 156 countries using the application in 22 languages. Founded in 2001 with offices around the world, the company employs more than 700 people, all passionately focused on revolutionizing the future of work. For more information, visit: http://www.successfactors.com.
"Safe harbor" statement under the Private Securities Litigation Reform Act of 1995:
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are SuccessFactors' current expectations and beliefs.
This release contains forward-looking statements about expected revenue and non-GAAP earnings per share for the first fiscal quarter of 2008, the full fiscal year 2008, related items, and demand for our products. Factors that could cause actual results to differ materially include: our ability to continue to experience high customer renewal rates; whether customers renew their agreements for additional modules or users; pricing pressures; the fact that our market is at an early stage of development, and it may not develop as rapidly as we predict; competitive factors; outages or security breaches; our ability to develop, and market acceptance of, new services; our ability to manage our growth; our ability to improve our internal controls; our ability to successfully expand our sales force and its effectiveness; and general economic conditions. If any such risks or uncertainties materialize or if any of the assumptions proves incorrect, our results could differ materially from the results expressed or implied by the forward-looking statements we make.
Further information on these and other factors that could affect our financial results is included in the section entitled "Risk Factors" in our Registration Statement on Form S-1 and in the reports on Form 10-K, 10-Q and in other filings we make with the Securities and Exchange Commission from time to time.
These documents are or will be available on the SEC Filings section of the Investor Information section of our website at www.successfactors.com/investor.
SuccessFactors, Inc. assumes no obligation and does not intend to update these forward-looking statements, except as required by law.
SuccessFactors is a trademark of SuccessFactors, Inc., San Mateo, California. Other names used may be trademarks of their respective owners. -0- *T SuccessFactors, Inc. Condensed Consolidated Balance Sheets (in thousands) As of December 31, ———————————- 2006 2007 —————- —————- (1) (unaudited) Assets: Current assets: Cash and cash equivalents $ 26,172 $ 82,274 Marketable securities - 8,513 Accounts receivable, net of allowance for doubtful accounts 22,804 42,072 Deferred commissions 2,532 4,199 Prepaid expenses and other current assets 1,038 2,347 —————- —————- Total current assets 52,546 139,405 Restricted cash 934 964 Property and equipment, net 3,082 6,532 Deferred commissions, net of current portion 3,115 7,343 Other assets 1,067 300 —————- —————- Total assets $ 60,744 $ 154,544 =========== =========== Liabilities, Convertible Preferred Stock and Stockholders' Equity (Deficit): Current liabilities: Accounts payable $ 1,608 $ 3,595 Accrued expenses and other current liabilities 2,400 7,016 Accrued employee compensation 11,566 18,265 Deferred revenue 42,023 84,624 Current portion of capital lease obligations 36 34 —————- —————- Total current liabilities 57,633 113,534 Capital lease obligations, net of current portion 90 56 Long-term debt 9,711 - Deferred revenue, net of current portion 10,331 16,386 Convertible preferred stock warrant liability 1,496 - Other long-term liabilities 289 4,625 —————- —————- Total liabilities 79,550 134,601 Convertible preferred stock 45,289 - Stockholders' equity (deficit): Common stock 6 51 Additional paid-in capital 1,758 161,150 Notes receivable from stockholders (9) - Accumulated other comprehensive income 9 55 Accumulated deficit (65,859) (141,313) —————- —————- Total stockholders' equity (deficit) (64,095) 19,943 —————- —————- Total liabilities, convertible preferred stock and stockholders' equity (deficit) $ 60,744 $ 154,544 =========== =========== (1) The condensed consolidated balance sheet as of December 31, 2006 has been derived from the audited financial statements as of that date, but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. *T -0- *T SuccessFactors, Inc. Condensed Consolidated Statements of Operations (in thousands, except per share data) Three months ended Year ended December 31, December 31, ———————————- ——————————- 2006 2007 2006 2007 —————- —————- ————- —————- (unaudited) (unaudited) (1) (unaudited) Revenue $ 11,329 $ 19,211 $ 32,570 $ 63,350 Cost of revenue (2) 4,168 9,128 14,401 26,341 —————- —————- ————- —————- Gross profit 7,161 10,083 18,169 37,009 —————- —————- ————- —————- Operating expenses: (2) Sales and marketing 10,854 21,536 32,317 70,963 Research and development 3,339 5,312 10,622 16,725 General and administrative 2,130 6,028 7,483 19,091 —————- —————- ————- —————- Total operating expenses 16,323 32,876 50,422 106,779 —————- —————- ————- —————- Loss from operations (9,162) (22,793) (32,253) (69,770) Interest income 198 475 637 1,055 Interest expense (170) (2,333) (458) (3,692) Other income (expense) 39 (1,335) 70 (2,622) —————- —————- ————- —————- Loss before provision for income taxes (9,095) (25,986) (32,004) (75,029) Provision for income taxes (14) (305) (42) (425) —————- —————- ————- —————- Net loss $ (9,109) $ (26,291) $(32,046) $ (75,454) =========== =========== ========= =========== Net loss per common share, basic and diluted $ (3.32) $ (1.11) $ (13.39) $ (8.35) =========== =========== ========= =========== Shares used in computing net loss per common share, basic and diluted 2,747 23,688 2,393 9,036 =========== =========== ========= =========== Non-GAAP net loss per common share, basic and diluted (3) (unaudited) $ (0.26) $ (0.60) $ (0.97) $ (1.96) =========== =========== ========= =========== Shares used in computing Non-GAAP net loss per common share, basic and diluted (3) (unaudited) 35,293 43,855 32,957 38,463 =========== =========== ========= =========== (1) The condensed consolidated statements of operations for the year ended December 31, 2006 has been derived from the audited financial statements as of that date, but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. (2) Amounts include stock-based compensation expenses in accordance with SFAS123(R) as follows: Three months ended Year ended December 31, December 31, ———————————- ——————————- 2006 2007 2006 2007 —————- —————- ————- —————- Cost of revenue $ 35 $ 189 $ 94 $ 448 Sales and marketing 149 879 351 2,269 Research and development 39 208 77 512 General and administrative 121 501 295 1,189 (3) Non-GAAP basic and diluted net loss per common share have been computed to give effect to the conversion of the convertible preferred stock into common stock using the if-converted method as though the conversion had occurred on the original date of issuance. *T -0- *T SuccessFactors, Inc. Condensed Consolidated Statements of Cash Flows (in thousands) Year Ended December 31, ——————————- 2006 2007 ————- —————- (1) (unaudited) Cash flow from operating activities: Net loss $(32,046) $ (75,454) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 868 2,173 Loss on retirement and write off of fixed assets - 156 Amortization of deferred commissions 2,042 4,063 Stock-based compensation expense 817 4,418 Amortization of debt issuance costs 177 1,916 Adjustment to fair value of convertible preferred stock warrants (54) 2,510 Issuance of preferred stock warrants in connection with executive search 13 - Changes in assets and liabilities: Accounts receivable (13,372) (19,268) Deferred commissions (5,295) (9,958) Prepaid expenses and other current assets (554) (1,309) Other assets (1,241) (296) Accounts payable 805 1,791 Accrued expenses and other current liabilities 675 4,165 Accrued employee compensation 4,964 6,699 Other liabilities 1,248 1,270 Deferred revenue 27,142 48,656 ——————————- Net cash used in operating activities (13,811) (28,468) ——————————- Cash flow from investing activities: Restricted cash (639) (30) Capital expenditures (2,102) (5,475) Purchase of available-for-sale securities - (11,218) Sale of available-for-sale securities - 2,705 ——————————- Net cash used in investing activities (2,741) (14,018) ——————————- Cash flow from financing activities: Proceeds from issuance of convertible preferred stock, net of issuance costs 24,906 - Proceeds from exercise of stock options 144 553 Proceeds from early exercise of stock options, net - 4,674 Proceeds from exercise of common stock warrants 70 - Proceeds from exercise of preferred stock warrants - 20 Proceeds from initial public offering, net of offering costs - 104,602 Proceeds from advance on line of credit 10,000 10,000 Repayment of line of credit - (21,272) Principal payments on capital lease obligations (107) (36) ——————————- Net cash provided by financing activities 35,013 98,541 ——————————- Effect of exchange rate changes on cash and cash equivalents 9 47 ——————————- Net increase in cash and cash equivalents 18,470 56,102 Cash and cash equivalents at beginning of year 7,702 26,172 ——————————- Cash and cash equivalents at end of year $ 26,172 $ 82,274 ===================== (1) The condensed consolidated statements of cash flows as of December 31, 2006 has been derived from the audited financial statements as of that date, but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. *T -0- *T SuccessFactors, Inc. Reconciliation of GAAP to Non-GAAP Measures (in thousands, except per share data) Three months ended Year ended December 31, December 31, ———————————- ——————————- 2006 2007 2006 2007 —————- —————- ————- —————- (unaudited) (unaudited) (1) (unaudited) ———————————— Bookings reconciliation: ———————————— Revenue $ 11,329 $ 19,211 $ 32,570 $ 63,350 Ending total deferred revenue 52,354 101,010 52,354 101,010 Less: Beginning total deferred revenue 36,598 74,486 25,212 52,354 —————- —————- ————- —————- Change in total deferred revenue 15,756 26,524 27,142 48,656 —————- —————- ————- —————- —————- —————- ————- —————- Bookings (revenue plus change in total deferred revenue) $ 27,085 $ 45,735 $ 59,712 $ 112,006 =========== =========== ========= =========== ———————————— Net loss and net loss per share reconciliations: ———————————— GAAP net loss $ (9,109) $ (26,291) $(32,046) $ (75,454) (a) Stock-based compensation as measured under SFAS123R 344 1,777 817 4,418 (b) Adjustment to fair value of convertible preferred stock warrants (54) 1,200 (54) 2,510 (c) Amortization of debt issuance costs 78 1,616 177 1,916 —————- —————- ————- —————- Non-GAAP net loss excluding stock-based compensation expense and other items $ (8,741) $ (21,698) $(31,106) $ (66,610) =========== =========== ========= =========== GAAP net loss per common share - basic and diluted $ (3.32) $ (1.11) $ (13.39) $ (8.35) =========== =========== ========= =========== Non-GAAP net loss per common share (excluding stock- based compensation expense and other items) - basic and diluted $ (0.25) $ (0.49) $ (0.94) $ (1.73) =========== =========== ========= =========== GAAP shares used in computing net loss per common share, basic and diluted 2,747 23,688 2,393 9,036 =========== =========== ========= =========== Non-GAAP shares used in computing net loss per common share - basic and diluted 35,293 43,855 32,957 38,463 =========== =========== ========= =========== ———————————— Total spend reconciliation: ———————————— GAAP total cost of revenue and operating expenses $ 20,491 $ 42,004 $ 64,823 $ 133,120 (a) Stock-based compensation as measured under SFAS123R 344 1,777 817 4,418 —————- —————- ————- —————- Non-GAAP total cost of revenue and operating expenses (total spend) $ 20,147 $ 40,227 $ 64,006 $ 128,702 =========== =========== ========= =========== ———————————— Gross profit and gross margin reconciliation: ———————————— GAAP gross profit $ 7,161 $ 10,083 $ 18,169 $ 37,009 (d) Stock-based compensation in cost of revenue as measured under SFAS123R 35 189 94 448 —————- —————- ————- —————- Non-GAAP gross profit $ 7,196 $ 10,272 $ 18,263 $ 37,457 =========== =========== ========= =========== GAAP gross margin percentage 63% 52% 56% 58% =========== =========== ========= =========== Non-GAAP gross margin percentage 64% 53% 56% 59% =========== =========== ========= =========== ———————————— Cost of revenue reconciliation: ———————————— GAAP cost of revenue $ 4,168 $ 9,128 $ 14,401 $ 26,341 (d) Stock-based compensation in cost of revenue as measured under SFAS123R 35 189 94 448 —————- —————- ————- —————- Non-GAAP cost of revenue $ 4,133 $ 8,939 $ 14,307 $ 25,893 =========== =========== ========= =========== ———————————— Total operating expenses reconciliation: ———————————— GAAP operating expenses $ 16,323 $ 32,876 $ 50,422 $ 106,779 (e) Stock-based compensation in operating expenses as measured under SFAS123R 309 1,588 723 3,970 —————- —————- ————- —————- Non-GAAP operating expenses $ 16,014 $ 31,288 $ 49,699 $ 102,809 =========== =========== ========= =========== ———————————— Total sales and marketing reconciliation: ———————————— GAAP sales and marketing $ 10,854 $ 21,536 $ 32,317 $ 70,963 (f) Stock-based compensation in sales and marketing as measured under SFAS123R 149 879 351 2,269 —————- —————- ————- —————- Non-GAAP sales and marketing $ 10,705 $ 20,657 $ 31,966 $ 68,694 =========== =========== ========= =========== ———————————— Total research and development reconciliation: ———————————— GAAP research and development $ 3,339 $ 5,312 $ 10,622 $ 16,725 (g) Stock-based compensation in research and development as measured under SFAS123R 39 208 77 512 —————- —————- ————- —————- Non-GAAP research and development $ 3,300 $ 5,104 $ 10,545 $ 16,213 =========== =========== ========= =========== ———————————— Total general and administrative reconciliation: ———————————— GAAP general and administrative expenses $ 2,130 $ 6,028 $ 7,483 $ 19,091 (h) Stock-based compensation in general and administrative as measured under SFAS123R 121 501 295 1,189 —————- —————- ————- —————- Non-GAAP general and administrative $ 2,009 $ 5,527 $ 7,188 $ 17,902 =========== =========== ========= =========== (1) The GAAP numbers as of December 31, 2006 has been derived from the audited financial statements as of that date, but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. *T
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