Q2 revenue: $11.9 million, net income: $1.4 million, 2,600 new customers added during quarter
MOUNTAIN VIEW, Calif., July 20, 2005 CyberSource Corporation (NASDAQ: CYBS), a leading provider of electronic payment and risk management solutions, today announced financial results for its second quarter ended June 30, 2005.
• Revenue grew to $11.9 million, a 38% increase over the same period last year.
• Net income increased to $1.4 million, a 151% increase over $558,000 in the same period last year.
• Earnings per share was $0.04 per share, a 100% increase over the $0.02 in the same period last year.
• Transaction volumes increased to 147.2 million, a 47% increase over the 100 million transactions processed in the same period last year.
• CyberSource added approximately 2,600 new customers in the second quarter, a 333% increase over the approximately 600 customers added in the second quarter of 2004.
• The company is reaffirming guidance for the full year.
Second Quarter 2005 financial results
Revenue: Revenue was $11.9 million compared to $8.6 million in the same period last year, surpassing the company`s previous guidance of $11.8 million.
Gross profit: Gross profit was $7.0 million compared to $6.0 million in the same period last year.
Gross margin: Gross margin was 59% compared to 70% in the same period last year, and less than guidance of 63%. The decline in gross margin is due in part to an increase in global acquiring revenue which has a lower associated gross margin, but higher gross profit contribution per transaction compared to our gateway services. Global acquiring revenue represented approximately 20% of total CyberSource revenue in the second quarter of 2005 compared to approximately 5% in the same period last year.
Operating expenses: Operating expenses were $5.9 million compared to $5.6 million in the same period last year, and less than guidance of $6.5 million.
Net income: Net income was $1.4 million compared to $558,000 in the same period last year, surpassing guidance of $1.1 million.
Earnings per share: Earnings per share was $0.04 compared to $0.02 in the same period last year, surpassing guidance of $0.03.
Balance sheet: Cash, cash equivalents, and short-term investments at the end of the second quarter in 2005 were $43.9 million. The company has no long term debt. No stock was repurchased during the quarter.
Highlights for the quarter
• CyberSource signed approximately 2,600 new customers in the second quarter of 2005 including: Air Canada, American Bar Association, Ask Jeeves, Pitney-Bowes, Samsung, and Trane Company. New customers added this quarter increase the company`s total customer count to approximately 10,000.
• Existing customers that added new services or renewed agreements during the quarter include Casio, Columbia House, Georgetown University, Kohl`s Department Store, L`Occitane, Macromedia, Match.com, Nike, and UC Berkeley.
• CyberSource UK customers processed a record 17.1 million transactions in the second quarter of 2005, a 25% increase over the prior quarter.
Customer satisfaction. The company`s customer satisfaction level, derived from independent third party surveys, continues to be excellent. During the second quarter of 2005, 96% of enterprise and mid-sized customers contacted said the company had met or exceeded their expectations. Of that 96%, 89% said CyberSource customer support "excelled" or "exceeded" expectations. System uptime. CyberSource uptime for the second quarter was 99.99%.
Six month period financial results
For the six months ended June 30, 2005, total revenue was $23.1 million, a 35% increase over $17.1 million for the six months ended June 30, 2004. The company recorded net income of $2.4 million or $0.07 per share for the six months ended June 30, 2005. This represents a 104% increase over net income of $1.2 million or $0.03 per share for the same period last year.
CyberSource is providing guidance for the third quarter of 2005 and is reaffirming guidance for the full year 2005 based on information available as of July 20, 2005.
• For the third quarter, ending September 30, 2005: Total revenue is expected to be $12.5 million. Transaction and support revenue is expected to be $10.5 million, while enterprise software and professional services revenues are expected to be $1.0 million each. Gross margin is expected to be 58%. Operating expenses are expected to be $6.3 million, and net income for the third quarter is expected to be $1.2 million or $0.03 per share based on an estimated average of 36 million diluted shares.
• Guidance for the full year 2005: Total revenue is expected to be $49 million, consistent with guidance provided on April 20, 2005. Gross margin is expected to be 60% compared to prior guidance of 62%. Operating expenses are expected to be $24.8 million, compared to prior guidance of $25.7 million. Net income for 2005 is expected to be $5.8 million or $0.16 per share. Earnings per share is based on an estimated average of 36 million diluted shares.
Public call/web cast details
CyberSource will host a public conference call today, July 20, 2005, at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss the second quarter results and current business developments. The call can be accessed in either of the following ways:
Live web cast http://www.cybersource.com/cgi-bin/ir.pl A replay of this web cast will remain available at this location through July 31, 2005.
Live conference call
Dial 888-542-8515 (U.S. and Canada) 706-634-2163 (International). The call`s ID number is: 7574824.
A taped replay of this call will be available until July 31, 2005. The dial-in numbers for the taped replay are 800-642-1687 (U.S.) 706-645-9291 (Non U.S.). The call`s ID number is 7574824.