SOURCE: Eloqua

Eloqua

October 24, 2012 16:05 ET

Eloqua Announces Record Third Quarter 2012 Results

Third Quarter Total Revenue Increases 30% to $23.8 Million; Third Quarter Subscription and Support Revenue Increases 32% to $21.6 Million

VIENNA, VA--(Marketwire - Oct 24, 2012) - Eloqua (NASDAQ: ELOQ), the marketing system of record for modern marketers, today announced financial results for the three month period ended September 30, 2012.

Joe Payne, Chief Executive Officer of Eloqua, stated, "Our continued strong execution, combined with the increasing demand for our Modern Marketing solutions and our ability to deliver proven value, enabled us to grow subscription and support revenue by 32% year-over-year. By managing a company's interactions with buyers through the entire purchasing process, our unmatched solutions are increasing marketing and sales effectiveness and enabling dramatically more predictable and profitable revenue growth for our customers." Payne added, "We are excited to have completed our initial public offering, which marked a major milestone in our history. This further enhances our brand and increases the resources we have available to execute our long-term plans and drive significant levels of growth." 

Financial Highlights for the Third Quarter Ended September 30, 2012

Total revenue for the third quarter of 2012 was a record $23.8 million, an increase of 30% from $18.3 million in the third quarter of 2011. Subscription and Support revenue was $21.6 million, an increase of 32% from $16.4 million in the third quarter of 2011. Professional Services revenue was $2.2 million, an increase of 12% from $1.9 million in the third quarter of 2011. 

GAAP operating loss for the third quarter of 2012 was $(2.0) million, compared to GAAP operating loss of $(1.1) million for the third quarter of 2011. GAAP net loss attributable to common stockholders was $(51.2) million or $(2.46) per basic and diluted share, based on 20.8 million weighted average shares outstanding. GAAP net loss attributable to common stockholders for the third quarter of 2012 includes $49.1 million of accretion of redeemable preferred stock expense. This compares to a GAAP net loss attributable to common stockholders of $(3.2) million or $(3.53) per basic and diluted share, based on 0.9 million weighted average shares outstanding, for the third quarter of 2011. GAAP net loss attributable to common stockholders for the third quarter of 2011 includes $2.0 million of accretion of redeemable preferred stock expense.

Non-GAAP operating loss for the third quarter of 2012 was $(0.9) million, compared to a non-GAAP operating loss of $(0.7) million for the third quarter of 2011. Non-GAAP net loss was $(1.0) million or $(0.03) per basic share, based on 33.8 million pro forma weighted average shares outstanding compared to a non-GAAP net loss of $(0.7) million for the third quarter of 2011, or $(0.02) per basic share, based on 32.6 million pro forma weighted average shares outstanding.

Cash and cash equivalents were $85.5 million as of September 30, 2012, compared to $5.0 million as of June 30, 2012 and $7.2 million as of December 31, 2011. The increase in cash was primarily the result of approximately $84.3 million in net proceeds that were raised through the Company's initial public offering, which was completed on August 7, 2012. Net cash used by operating activities was $(2.2) million for the third quarter of 2012, compared to net cash generated from operating activities of $1.5 million for the third quarter of 2011. Free cash flow used was $(4.1) million for the third quarter of 2012, compared to free cash flow of $0.8 million generated in the third quarter of 2011.

Other Third Quarter Business Highlights:

  • Announced that Chatter inside Eloqua was officially in beta with several customers currently using the product. Chatter inside Eloqua integrates Salesforce Chatter within the Eloqua platform, and is the first time that collaboration technology has been embedded into a marketing automation solution, demonstrating the advantages of Eloqua's open, modern platform. 
  • Participated at Salesforce.com's Dreamforce 2012, the industry's largest cloud computing and enterprise technology conference. Eloqua's presence was widespread with many senior executives leading sessions, including taking part in 3 keynotes. 
  • Announced promotion of Alex Shootman. In his role as President, Alex is responsible for Eloqua's customer-facing activities including sales, account management, customer success, industry solutions, professional services, support and channels.

Business Outlook

Based on information available as of October 24, 2012, Eloqua is issuing guidance for the fourth quarter and full year 2012 as follows:

Fourth Quarter 2012: The company expects total revenue for the fourth quarter to be in the range of $24.8 million to $25.2 million, non-GAAP operating loss to be in the range of $(0.6) million to $(1.0) million, and non-GAAP net loss per basic share to be in the range of $(0.02) to $(0.04). Eloqua's expectations of non-GAAP net loss per basic share for the fourth quarter exclude stock-based compensation expense, change in fair value of warrants, and income taxes, and assumes pro forma weighted average shares outstanding of approximately 34.2 million.

Full Year 2012: The company expects total revenue for the full year 2012 to be in the range of $93.6 million to $94.0 million, representing year-over-year growth of approximately 32%, non-GAAP operating loss to be in the range of $(5.3) million to $(5.7) million, and non-GAAP net loss per common share to be in the range of $(0.17) to $(0.19). Eloqua's expectations of non-GAAP net loss per common share for the full year exclude stock-based compensation expense, changes in fair value of warrants, accretion of preferred stock and income taxes, and assumes pro forma weighted average shares outstanding of approximately 33.4 million.

Earnings Conference Call

Eloqua will host a conference call today, October 24, 2012 at 5:00 p.m. Eastern Time (ET) to discuss the company's third quarter financial results and its business outlook. To access this call, dial 877-705-6003 (domestic) or +1-201-493-6725 (international). The presentation will be webcast live and available in the investors section on the Company's website at http://investor.eloqua.com under "Events & Presentations."

Following the conference call, a telephone replay will be available until October 31, 2012 at 877-870-5176 (domestic) or +1-858-384-5517 (international). The replay pass code will be 401196. An archived web cast of this conference call will also be available in the investor relations section on the Company's website at http://investor.eloqua.com under "Events & Presentations."

Forward Looking Statements

This release contains forward-looking statements, including statements regarding Eloqua's future financial performance, market growth, the demand for and benefits from the use of Eloqua's solutions, and general business conditions. Any forward-looking statements contained in this press release are based upon Eloqua's historical performance and its current plans, estimates and expectations and are not a representation that such plans, estimates, or expectations will be achieved. These forward-looking statements represent Eloqua's expectations as of the date of this press announcement. Subsequent events may cause these expectations to change, and Eloqua disclaims any obligation to update the forward-looking statements in the future. These forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially. Further information on potential factors that could affect actual results is included in Eloqua's final prospectus related to its initial public offering filed pursuant to Rule 424b under the Securities Act with the SEC on August 2, 2012, and in other reports filed by Eloqua with the SEC.

Non-GAAP Financial Measures

Eloqua has provided in this release financial information that has not been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP. This information includes non-GAAP operating loss, non-GAAP net loss, non-GAAP net loss per share, pro forma weighted average shares outstanding and free cash flow. Non-GAAP operating loss is based on GAAP operating loss and excludes stock-based compensation expense; non-GAAP net loss is based on GAAP net loss and excludes accretion of dividends on redeemable preferred stock, stock-based compensation expense, change in fair value of warrants and income tax (benefit) expense; free cash flow is based on net cash (used in) provided by operating activities less purchases of property and equipment. Eloqua uses these non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, as a supplement to GAAP measures in evaluating Eloqua's ongoing operational performance.

Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measure. A reconciliation of GAAP to the non-GAAP financial measures has been provided in the tables included as part of this press release.

About Eloqua

Eloqua (NASDAQ: ELOQ) is the marketing system of record for modern marketers. The company's cloud software, professional services and education programs provide marketers with the technology and expertise needed to help marketing drive revenue. More than 100,000 global users from companies both large and small, rely on the marketing automation power of Eloqua to improve demand generation and lead management while driving more qualified leads. Eloqua's customers include AON, Dow Jones, ADP, Fidelity, Polycom, and National Instruments. The company is headquartered in Vienna, Virginia. For more information, visit www.eloqua.com, subscribe to the It's All About Revenue blog, call 866-327-8764, or email demand@eloqua.com.

   
ELOQUA, INC.  
UNAUDITED CONSOLIDATED BALANCE SHEETS  
(IN THOUSANDS, EXCEPT SHARE DATA)  
             
    September 30, 2012     December 31, 2011  
ASSETS                
Current assets:                
  Cash and cash equivalents   $ 85,473     $ 7,240  
  Accounts receivable, net of reserve of $550 and $725, respectively     19,926       18,228  
  Deferred commissions and other deferred costs     1,831       2,680  
  Deferred tax asset     780       781  
  Prepaid expense and other assets     3,594       4,153  
    Total current assets     111,604       33,082  
  Property and equipment, net of depreciation and amortization     5,063       3,721  
  Deferred commissions and other deferred costs     717       902  
  Deferred tax asset     3,631       3,800  
      Total assets   $ 121,015     $ 41,505  
                 
LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT)                
Current liabilities:                
  Accounts payable   $ 1,709     $ 3,263  
  Accrued and other current liabilities     9,344       11,337  
  Deferred revenue, current portion     32,476       28,863  
  Current portion of long-term debt     -       834  
    Total current liabilities     43,529       44,297  
  Long-term debt, net of current portion     -       1,458  
  Non current deferred revenue and other liabilities     2,759       1,943  
      Total liabilities     46,288       47,698  
  Redeemable convertible preferred stock:                
    Series A preferred stock, $0.0001 par value, 12,124,650 shares authorized, issued and outstanding at December 31, 2011 and no shares outstanding at September 30, 2012; liquidation preference of $39,406 at December 31, 2011     -       39,406  
    Series B preferred stock, $0.0001 par value, 17,678,926 shares authorized, issued and outstanding at December 31, 2011 and no shares outstanding at September 30, 2012; liquidation preference of $57,456 at December 31, 2011     -       57,456  
    Series C preferred stock, $0.0001 par value, 21,483,563 shares authorized, and 19,766,821 shares issued and outstanding at December 31, 2011 and no shares outstanding at September 30, 2012; liquidation preference of $64,242 at December 31, 2011     -       64,242  
      Total redeemable convertible preferred stock     -       161,104  
Stockholders' equity (deficit)                
  Eloqua, Inc. stockholders' equity (deficit):                
                   
    Common stock, $0.0001 par value; 100,000,000 and 90,000,000 shares authorized, 34,010,609 and 1,063,368 shares issued and outstanding at September 30, 2012 and December 31, 2011     3       -  
    Additional paid-in capital     315,609       -  
    Accumulated deficit     (240,885 )     (169,259 )
      Total Eloqua, Inc. stockholders' equity (deficit)     74,727       (169,259 )
  Noncontrolling interest     -       1,962  
      Total stockholders' equity (deficit):     74,727       (167,297 )
      Total liabilities, redeemable preferred stock and stockholders' equity (deficit)   $ 121,015     $ 41,505  
   
   
ELOQUA, INC.  
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS  
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)  
                         
    Three months ended September 30,     Nine months ended September 30,  
    2012     2011     2012     2011  
                                 
Revenue:                                
  Subscription and support   $ 21,624     $ 16,426     $ 61,027     $ 45,297  
  Professional services     2,162       1,923       7,772       4,744  
    Total revenue     23,786       18,349       68,799       50,041  
Cost of revenue:                                
  Subscription and support     4,409       3,252       11,438       9,139  
  Professional services     2,264       2,574       7,764       7,303  
    Total cost of revenue     6,673       5,826       19,202       16,442  
Gross profit     17,113       12,523       49,597       33,599  
Operating expenses:                                
  Research and development     3,272       2,964       9,843       8,472  
  Marketing and sales     11,474       7,697       28,992       21,410  
  General and administrative     4,334       2,939       14,310       7,723  
  Litigation Settlement     -       -       3,500       -  
    Total operating expenses     19,080       13,600       56,645       37,605  
Loss from operations     (1,967 )     (1,077 )     (7,048 )     (4,006 )
  Other expense, net:     (212 )     (55 )     (323 )     (470 )
Loss before benefit (provision) for income taxes     (2,179 )     (1,132 )     (7,371 )     (4,476 )
Benefit (provision) for income taxes     69       (122 )     (198 )     (276 )
Net loss     (2,110 )     (1,254 )     (7,569 )     (4,752 )
Accretion of dividends on redeemable preferred stock     (49,075 )     (1,983 )     (66,920 )     (72,308 )
Net loss attributable to common stockholders   $ (51,185 )   $ (3,237 )   $ (74,489 )   $ (77,060 )
                                 
Net loss per share attributable to common stockholders, basic and diluted   $ (2.46 )   $ (3.53 )   $ (9.54 )   $ (100.57 )
Weighted average common shares outstanding, basic and diluted     20,768,196       917,772       7,812,134       766,211  
   
   
ELOQUA, INC.  
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS  
(IN THOUSANDS)  
                         
    Three months ended September 30,     Nine months ended September 30,  
    2012     2011     2012     2011  
Cash flows from operating activities:                                
Net loss   $ (2,110 )   $ (1,254 )   $ (7,569 )   $ (4,752 )
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:                                
  Depreciation and amortization     541       432       1,524       1,366  
  Stock-based compensation expense     1,036       415       2,351       1,130  
  Foreign currency transaction gain     (58 )     95       (44 )     21  
  Change in fair value of Series C warrants     146       3       189       213  
  Deferred income taxes     (69 )     100       127       212  
  Change in operating assets and liabilities:                                
    Accounts receivable, net     (3,939 )     (397 )     (1,698 )     4,635  
    Prepaid expenses and other assets     593       477       (958 )     (917 )
    Deferred commissions and other deferred costs     164       (878 )     1,034       (1,064 )
    Accounts payable and accrued and other current liabilities     (2,109 )     741       (3,167 )     454  
    Deferred revenue     3,281       1,790       3,613       2,922  
    Noncurrent deferred revenue and other liabilities     285       (17 )     860       (517 )
      Net cash (used in) provided by operating activities     (2,239 )     1,507       (3,738 )     3,703  
Cash flows from investing activities:                                
  Purchases of property and equipment     (1,821 )     (734 )     (2,866 )     (2,229 )
      Net cash used in investing activities     (1,821 )     (734 )     (2,866 )     (2,229 )
Cash flows from financing activities:                                
  Proceeds from initial public offering, net of underwriting offering expenses     85,759       -       85,759       -  
  Repayment of long-term debt     (1,875 )     -       (2,292 )     -  
  Principal payments under capital lease obligations     -       2       -       (169 )
  Common stock issued     586       103       1,326       362  
      Net cash provided by financing activities     84,470       105       84,793       193  
Effect of exchange rate changes of cash and cash equivalents     58       (95 )     44       (21 )
Net increase in cash and cash equivalents     80,468       783       78,233       1,646  
Cash and cash equivalents at beginning of the period     5,005       8,412       7,240       7,549  
Cash and cash equivalents at end of the period   $ 85,473     $ 9,195     $ 85,473     $ 9,195  
 
 
ELOQUA, INC.
UNAUDITED SUMMARY OF STOCK-BASED COMPENSATION INCLUDED IN THE CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS)
                 
    Three months ended September 30,   Nine months ended September 30,
    2012   2011   2012   2011
                         
Cost of revenue   $ 161   $ 82   $ 377   $ 195
Marketing and sales     329     119     700     337
Research and development     116     90     305     222
General and administrative     430     124     969     376
Total stock-based compensation expense   $ 1,036   $ 415   $ 2,351   $ 1,130
   
   
ELOQUA, INC.  
UNAUDITED NON-GAAP OPERATING LOSS, NON-GAAP NET LOSS, NON-GAAP NET LOSS PER SHARE AND FREE CASH FLOW RECONCILIATIONS TO GAAP  
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)  
                         
    Three months ended September 30,     Nine months ended September 30,  
    2012     2011     2012     2011  
                                 
Reconciliation of loss from operations to non-GAAP operating loss                                
                                 
Loss from operations   $ (1,967 )   $ (1,077 )   $ (7,048 )   $ (4,006 )
Adjustments to loss from operations:                                
    Stock-based compensation expense     1,036       415       2,351       1,130  
      Non-GAAP operating loss   $ (931 )   $ (662 )   $ (4,697 )   $ (2,876 )
                                 
                                 
                                 
                                 
Reconciliation of net loss to non-GAAP net loss per share                                
                                 
Net loss   $ (2,110 )   $ (1,254 )   $ (7,569 )   $ (4,754 )
  Accretion of dividends on redeemable preferred stock     (49,075 )     (1,983 )     (66,920 )     (72,308 )
Net loss attributable to common stockholders     (51,185 )     (3,237 )     (74,489 )     (77,062 )
Adjustments to net loss attributable to common stockholders:                                
  Accretion of dividends on redeemable preferred stock     49,075       1,983       66,920       72,308  
  Stock-based compensation expense     1,036       415       2,351       1,130  
  Change in fair value of warrants     146       3       189       213  
  Income tax (benefit) expense     (69 )     122       198       276  
    Total adjustments to net loss from common stockholders     50,188       2,523       69,658       73,927  
      Non-GAAP net loss   $ (997 )   $ (714 )   $ (4,831 )   $ (3,135 )
Pro forma weighted average common shares outstanding, basic**     33,789,511       32,572,376       33,177,824       32,422,066  
Non-GAAP net loss per share   $ (0.03 )   $ (0.02 )   $ (0.15 )   $ (0.10 )
                                 
                                 
** The pro forma weighted average common shares outstanding reflects 1) the conversion of preferred stock into common stock 2) the conversion of exchangeable shares into common stock and 3) the 8.2 million shares of common stock issued upon the initial public offering completed on August 7, 2012 as if these shares were outstanding for all periods included in the calculation.  
                                 
Reconciliation of net cash (used in) provided by operating activities to free cash flow                          
                                 
Net cash (used in) provided by operating activities   $ (2,239 )   $ 1,507     $ (3,738 )   $ 3,703  
  Less:                                
    Purchases of property and equipment     (1,821 )     (734 )     (2,866 )     (2,229 )
Free Cash Flow   $ (4,060 )   $ 773     $ (6,604 )   $ 1,474  

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