DUBLIN, Calif., Nov. 1, 2007 (PRIME NEWSWIRE) -- Taleo (Nasdaq:TLEO), the leading provider of on demand talent management solutions, today announced financial results for the third quarter ended September 30, 2007.
Third Quarter Highlights Include:
* Total revenues of $33.7 million, an increase of 36% year-over-year, and 9% quarter-over-quarter, driven by a record 35% year-over-year increase in application revenue and a 37% year-over-year increase in services revenue. * GAAP net income of $2.2 million, or $0.08 per fully diluted share, as compared to a GAAP net loss of $(0.8) million or $(0.04) per fully diluted share in the third quarter of 2006. * Non-GAAP net income of $4.2 million, or $0.15 per fully diluted share, as compared to non-GAAP net income of $0.9 million, or $0.04 per fully diluted share reported in the third quarter of 2006. * Customer base grew to over 1,380 customers with more than one million application users.
"We are extremely pleased with the company's performance," commented Michael Gregoire, president and CEO of Taleo. "Demand for Taleo's leading talent management solution is robust and initial reaction to our innovative new performance management product has been very positive. The company continues to experience strong organic growth across a wide range of verticals. We now serve over 1,000 small and medium-size businesses, 35 of the Fortune 100 and 103 of the Fortune 500, reinforcing our position of strength in this growing talent management market."
Additional Third Quarter Business Highlights:
* Signed 208 new customers, including 17 new Taleo Enterprise Edition customers, and 191 new Taleo Business Edition (TBE) customers, bringing Taleo's customer base to over 1,380 organizations around the world. * Taleo's TBE group surpassed the 1000th customer milestone. * New customers include: Abercrombie and Fitch, AT Kearney, Boston Medical Center, the City of Edmonton, Jefferson Wells, Macy's Inc., Southern Company and Tesoro Corporation. * Strong international customer acquisition including Ericsson and Barco in Europe, and Qantas Airlines and Rio Tinto in the Asia-Pacific region. * Hosted its largest annual customer event to date, Taleo WORLD 2007, where over 740 attendees gathered to discuss strategies for winning the war for talent, aligning talent to business goals and driving higher performance. * Taleo built and delivered a TBE application on Facebook(r) Platform to allow TBE customers to source passive candidates through their trusted networks. * Strengthened leading position within the retail industry with the acquisition of WetFeet. * Processed more than 316,000 hires from over 9.4 million applicants.
"Taleo continues to lead the on-demand talent management market by delivering deep functionality along with our enterprise class scalability, availability and high level of service and support," stated Gregoire. "Our SMB Business Unit continues to accelerate its growth and reach new milestones, surpassing the 1,000 customer mark during the third quarter. Taleo's strength and momentum allows us to focus on innovation and execution in the fourth quarter and throughout 2008 as we bring our performance management product, Taleo Performance, to market."
Taleo delivered the following results for the quarter ended September 30, 2007:
Revenue: Total revenue for the third quarter was $33.7 million, representing an increase of 36% on a year-over-year basis. Application revenue for the third quarter was $27.4 million, an increase of 35% on a year-over-year basis. Services revenue for the third quarter was $6.3 million, an increase of 37% on a year-over-year basis, driven by milestone-based engagements for which milestones were met in the third quarter.
Net Income / (Loss) and Net Income / (Loss) Per Share to Common Stockholders: Net income in accordance with accounting principles generally accepted in the United States, or GAAP, was $2.2 million for the third quarter of 2007. This compares to a GAAP net loss of $(0.8) million in the same period last year. Net income per fully diluted share was $0.08 for the third quarter of 2007 based on 28.8 million weighted average shares outstanding compared to net loss per fully diluted share of $(0.04) for the same period in 2006 based on 20.4 million weighted average shares outstanding.
Non-GAAP Net Income and Non-GAAP Net Income Per Share to Common Stockholders: Non-GAAP net income, which excludes restructuring charges, share-based compensation expense pursuant to SFAS 123(R), amortization of acquired intangibles, and non-cash income tax and tax valuation adjustments, was $4.2 million for the third quarter of 2007, compared to non GAAP net income of $0.9 million for the same period last year. Non-GAAP net income per fully diluted share was $0.15 for the third quarter of 2007 based on 28.8 million weighted average shares outstanding compared to non-GAAP net income per fully diluted share of $0.04 for the same period in 2006 based on 25.7 million weighted average shares outstanding.
Conference Call Details
In conjunction with this announcement, Taleo will host a conference call today at 4:30 p.m. EDT to discuss the company's third quarter 2007 financial results. To access this call, dial 866-825-1692 using passcode 82408371. A replay of this conference call will be available through November 8, 2007 at 888-286-8010. The replay passcode is 27992920. A live webcast of this conference call will be available on the "Investor Relations" page of the company's Web site, (www.taleo.com) and a replay will be archived on the Web site as well.
About Taleo
Taleo (Nasdaq:TLEO) is the leader in on demand, web-based talent management solutions that empower organizations of all sizes, around the world to assess, acquire, develop and align their workforce for improved business performance. More than 1,380 organizations use Taleo, including 35 of the Fortune 100, for talent acquisition and performance management, with over 1 million users processing 71 million candidates from over 100 countries. Requiring no capital investment, Taleo's software as a service and on demand delivery offers 99.9% availability.
Forward-looking Statements
This release contains forward-looking statements, including statements regarding Taleo's future performance, new product development and market growth. Any forward-looking statements contained in this press release are based upon Taleo'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 Taleo's expectations as of the date of this press announcement. Subsequent events may cause these expectations to change, and Taleo 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, including the long sales cycle for our software; failure to develop new software products or enhance existing products; failure to retain key staff; and the failure to properly protect our proprietary rights and intellectual property. Further information on potential factors that could affect actual results is included in Part I, Item 1A of Taleo's Annual Report on Form 10-K, as filed with the SEC on March 16, 2007, in Part II, Item 1A of Taleo Quarterly Report on Form 10-Q, as filed with the SEC on August 9, 2007, and in other reports filed by Taleo with the SEC.
Non-GAAP Financial Measures
Taleo has provided in this release financial information that has not been prepared in accordance with GAAP. This information includes non-GAAP net income and non-GAAP net income per share. Taleo 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 Taleo's ongoing operational performance. Taleo believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing its financial measures with other companies in Taleo's industry, many of which present similar non-GAAP financial measures to investors. As noted, the non-GAAP financial measures discussed above exclude restructuring charges, share-based compensation expense pursuant to SFAS 123(R), amortization of acquired intangibles, and non-cash income tax and tax valuation adjustments.
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 as detailed above. As previously mentioned, a reconciliation of GAAP to the non-GAAP financial measures has been provided in the tables included as part of this press release.
Taleo Corporation
Condensed Consolidated Balance Sheets
(All amounts in thousands)
(Unaudited)
September 30, December 31,
2007 2006
------------- ------------
ASSETS
Current assets:
Cash and cash equivalents $ 78,667 $ 58,785
Restricted cash 288 2,722
Accounts receivable, net 31,167 25,952
Prepaid expenses and other current
assets 4,850 3,657
Investment credit receivable 4,511 4,395
--------- ---------
Total current assets 119,483 95,511
Property and equipment, net 18,947 12,928
Restricted Cash 838 1,048
Other assets 2,643 1,448
Goodwill 9,749 6,028
Other Intangibles, net 1,515 457
--------- ---------
Total assets $ 153,175 $ 117,420
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued
liabilities $ 22,362 $ 18,708
Customer deposits 824 80
Deferred revenue 29,871 18,547
Capital lease obligation, short-term 69 381
--------- ---------
Total current liabilities 53,126 37,716
Customer deposits and long term deferred
revenue -- 360
Other liabilities 5,502 1,101
Capital lease obligation, long-term 21 17
Class B Redeemable Common Stock -- --
--------- ---------
Total liabilities 58,649 39,194
--------- ---------
--------- ---------
Exchangeable share obligation 367 796
--------- ---------
Stockholders' equity:
Capital stock -- --
Additional paid-in capital 146,358 133,610
Accumulated deficit (53,882) (56,329)
Treasury stock (158) (158)
Accumulated other comprehensive income 1,841 307
--------- ---------
Total stockholders' equity 94,159 77,430
--------- ---------
Total liability and stockholders' equity $ 153,175 $ 117,420
========= =========
Taleo Corporation
Condensed Consolidated Statements of Operations
(All amounts in thousands except per share data)
(Unaudited)
Three Months Nine Months
Year Ended Year Ended
September 30 September 30
------------------ ------------------
2007 2006 2007 2006
-------- -------- -------- --------
Revenue:
Application $ 27,429 $ 20,274 $ 76,680 $ 57,521
Consulting 6,315 4,609 16,735 12,998
-------- -------- -------- --------
Total revenue 33,744 24,883 93,415 70,519
-------- -------- -------- --------
Cost of revenue (note 1):
Application 5,476 4,754 15,845 13,563
Amortization of acquired
intangibles 36 250 107 748
-------- -------- -------- --------
Total cost of application
revenue 5,512 5,004 15,952 14,311
Consulting 4,799 3,084 13,258 9,617
-------- -------- -------- --------
Total cost of revenue 10,311 8,088 29,210 23,928
-------- -------- -------- --------
-------- -------- -------- --------
Gross profit 23,433 16,795 64,205 46,591
-------- -------- -------- --------
Operating expenses (note 1):
Sales and marketing 9,949 7,391 26,937 21,663
Research and development 5,620 4,844 16,515 14,444
General and administrative 6,267 5,792 18,143 15,566
Restructuring cost and other
charges -- 426 -- 426
-------- -------- -------- --------
Total operating expenses 21,836 18,453 61,595 52,099
-------- -------- -------- --------
-------- -------- -------- --------
Income / (loss) from
operations 1,597 (1,658) 2,610 (5,508)
-------- -------- -------- --------
Other income / (expense):
Interest income 757 746 2,106 2,232
Interest expense (42) (24) (71) (67)
-------- -------- -------- --------
Total other income 715 722 2,035 2,165
-------- -------- -------- --------
Income / (loss) before
provision / (benefit) for
income tax 2,312 (936) 4,645 (3,343)
Provision / (benefit) for
income taxes 79 (179) 3,257 (164)
-------- -------- -------- --------
Net income / (loss)
attributable to Class A
common stockholders $ 2,233 $ (757) $ 1,388 $ (3,179)
======== ======== ======== ========
Net income / (loss) per share
attributable to Class A
common stockholders - basic $ 0.09 $ (0.04) $ 0.06 $ (0.16)
======== ======== ======== ========
Net income / (loss) per share
attributable to Class A
common stockholders -
diluted $ 0.08 $ (0.04) $ 0.05 $ (0.16)
======== ======== ======== ========
Weighted average Class A
common shares - basic 24,638 20,384 23,790 19,477
======== ======== ======== ========
Weighted average Class A
common shares - diluted 28,771 20,384 28,225 19,477
======== ======== ======== ========
NOTES
1. Includes share-based
compensation expense
pursuant to SFAS 123(R)
Application COS $ 95 $ 55 $ 237 $ 143
Service COS 126 68 337 159
-------- -------- -------- --------
COS Subtotal 221 123 574 302
Sales & Marketing
Operating Cost 470 287 1,233 750
R&D Operating Cost 308 217 836 494
G&A Operating Cost 832 555 2,153 1,848
-------- -------- -------- --------
SG&A Subtotal 1,610 1,059 4,222 3,092
-------- -------- -------- --------
Total share-based
compensation expense $ 1,831 $ 1,182 $ 4,796 $ 3,394
======== ======== ======== ========
Taleo Corporation
Condensed Consolidated Statements of Operations (Continued)
(All amounts in thousands except per share data)
Reconciliation of GAAP net income / (loss) and non-GAAP net income:
Three Months Nine Months
Year Ended Year Ended
September 30 September 30
------------------ ------------------
2007 2006 2007 2006
-------- -------- -------- --------
GAAP net income / (loss)
reported above $ 2,233 $ (757) $ 1,388 $ (3,179)
Add back:
Restructuring Cost and other
charges -- 426 -- 426
Loss on disposal of fixed
assets -- -- -- 181
Share-based compensation
expense (SFAS 123(R)) 1,831 1,182 4,796 3,394
Amortization of acquired
intangibles 108 250 257 748
Non-cash income tax reserve -- (183) 2,899 (183)
-------- -------- -------- --------
1,939 1,675 7,952 4,566
-------- -------- -------- --------
Non-GAAP net income $ 4,172 $ 918 $ 9,340 $ 1,387
======== ======== ======== ========
Non-GAAP net income per share
Basic $ 0.17 $ 0.05 $ 0.39 $ 0.07
======== ======== ======== ========
Diluted $ 0.15 $ 0.04 $ 0.33 $ 0.05
======== ======== ======== ========
Reconciliation of basic and
fully diluted share count:
-------- -------- -------- --------
Basic 24,638 20,384 23,790 19,477
-------- -------- -------- --------
Add: Weighted Average -
Series B common stock 804 2,919 1,249 3,567
Weighted Average -
warrants & options 3,329 2,381 3,186 2,534
-------- -------- -------- --------
Diluted 28,771 25,684 28,225 25,578
-------- -------- -------- --------
Taleo Corporation
Consolidated Statement of Cash Flows
(all amounts in thousands)
(Unaudited)
Nine Months Ended
September 30,
2007 2006
-------- --------
Cash flows from operating activities:
Net income / (loss) $ 1,388 $ (3,179)
Adjustments to reconcile net income / (loss) to
net cash provided by operating activities:
Depreciation and amortization 4,683 3,505
Loss on disposal of fixed assets -- 398
Amortization of tenant inducements (167) (170)
Stock-based compensation expense 4,796 3,394
Director fees settled with stock 177 --
Bad debt expense 512 85
Interest earned on restricted cash 1 --
Changes in working capital accounts:
Accounts receivable (5,287) (9,197)
Prepaid expenses and other assets (969) (971)
Investment credit receivable 587 1,145
Accounts payable and accrued liabilities 3,806 314
Deferred revenues and customer deposits 11,139 6,193
-------- --------
Net cash provided by operating activities 20,666 1,517
-------- --------
Cash flows from investing activities:
Acquisition of property and equipment (7,645) (8,777)
Restricted cash - decrease 2,657 31
Acquisition of business (3,301) --
-------- --------
Net cash used in investing activities (8,289) (8,746)
-------- --------
Cash flows from financing activities:
Principal payments on capital lease
obligations (319) (444)
Proceeds from stock options and warrants
exercised 7,268 1,255
-------- --------
Net cash provided by financing activities 6,949 811
-------- --------
Effect of exchange rate changes on cash and
cash equivalents 556 61
-------- --------
Increase in cash and cash equivalents 19,882 (6,357)
Cash and cash equivalents:
Beginning of period 58,785 59,346
-------- --------
End of period $ 78,667 $ 52,989
======== ========
Supplemental cash flow disclosures:
Cash paid for interest $ 9 $ 34
-------- --------
Cash paid for income taxes $ 124 $ --
-------- --------
Supplemental disclosure of non-cash financing
and investing activities:
Property and equipment purchases included in
accounts payable and accrued liabilities $ 2,637 $ 615
Contingent shares issuable $ -- $ 80
Contingent shares issued $ -- $ 81
Class B common stock exchanged for Class A
common stock $ 21,508 $ 22,752
Treasury stock issued to employees under ESPP $ 450 $ --
Treasury stock acquired to settle payroll
taxes $ 451 $ 86