Ariba Reports Results for Second Quarter of Fiscal Year 2012

Subscription revenue grows 32% year-over-year, Network revenue up 59% year-over-year

SUNNYVALE, Calif., April 26, 2012 – Ariba, Inc. (Nasdaq: ARBA), the world’s business commerce network, today announced results for the second quarter of fiscal year 2012 ended March 31, 2012.

Quarterly Financial and Operational Highlights from Continuing Operations:

  • Subscription revenue of $89.2 million, up 32% year-over-year
  • Network revenue of $45.4 million, up 59% year-over-year
  • Total revenue of $131.5 million, up 21% year-over-year
  • Earnings of $0.02 per share from continuing operations; non-GAAP EPS of $0.25 from continuing operations, up 34% year-over-year

 “As evidenced by our strong quarterly results, Ariba continues to perform at a high level,” said Bob Calderoni, Chairman and CEO, Ariba. “We are executing our strategy, bringing to market new innovations and strategic partnerships that will make it even easier for buyers and sellers to connect and collaborate more efficiently. The combination of these factors is strengthening Ariba’s position as the leader of the Networked Enterprise.”

Results for the Second Quarter of Fiscal Year 2012

Revenue from Continuing Operations:

Total revenues from continuing operations were $131.5 million for the second quarter of fiscal year 2012, an increase of 21% compared to $108.8 million for the second quarter of fiscal year 2011. Subscription and maintenance revenues for the second quarter of fiscal year 2012 were $102.1 million, an increase of 23% compared to $82.8 million for the second quarter of fiscal year 2011. Within subscription and maintenance revenues, subscription software revenue was $89.2 million for the second quarter of fiscal year 2012, an increase of 32% compared to $67.6 million for the second quarter of fiscal year 2011. Services and other revenues for the second quarter of fiscal year 2012 were $29.4 million, an increase of 13% compared to $25.9 million for the second quarter of fiscal year 2011.

Operating Income from Continuing Operations:

Operating income from continuing operations for the second quarter of fiscal year 2012 was $4.2 million, an increase of $5.3 million compared to an operating loss from continuing operations of $1.1 million for the second quarter of fiscal year 2011. Operating income from continuing operations for the second quarter of fiscal year 2012 included expenses of $4.8 million for amortization of intangible assets and $18.0 million for stock-based compensation.  Excluding these items, non-GAAP operating income for the second quarter of fiscal year 2012 was $27.0 million, representing a 20.5% non-GAAP operating margin and an increase of 48% compared to $18.2 million of non-GAAP operating income for the second quarter of fiscal year 2011. Non-GAAP operating income for the second quarter of fiscal year 2011 excluded expenses of $3.3 million for amortization of intangible assets, $14.2 million for stock-based compensation, restructuring costs of $0.2 million, and transaction costs of $1.5 million.

Earnings Per Share from Continuing Operations:

Income from continuing operations for the second quarter of fiscal year 2012 was $1.8 million, or $0.02 per share, an increase compared to a net loss from continuing operations of $1.6 million, or $0.02 per share, for the second quarter of fiscal year 2011. Non-GAAP net income from continuing operations was $24.6 million, or $0.25 per share, an increase of 34% compared to $0.19 per share for the second quarter of fiscal year 2011.

Balance Sheet and Cash Flow

Total cash, cash equivalents, investments and restricted cash were $262.1 million at March 31, 2012, an increase of $39.5 million compared to $222.6 million at December 31, 2011.  The company generated net cash flow from continuing operations of $38.7 million for the three months ended March 31, 2012.  Total deferred revenue was $142.6 million at March 31, 2012, compared to $142.3 million at March 31, 2011 and $129.1 million at December 31, 2011.

Conference Call Information

Ariba will hold a conference call today at 5:00 p.m. ET to discuss its results for the second quarter of fiscal year 2012. To join the call, please dial 877-407-8031 in the United States and Canada, or 201-689-8031 internationally. The conference call will also be webcast live and can be accessed on the investor relations section of the company's website at www.ariba.com or by logging in at www.vcall.com.

A replay of the conference can be accessed by calling 877-660-6853 in the United States and Canada or 201-612-7415 internationally and entering account number 286 and conference ID number: 392221.

About Ariba, Inc
Ariba, Inc. is the world’s business commerce network. Ariba combines industry-leading cloud-based applications with the world's largest web-based trading community to help companies discover and collaborate with a global network of partners. Using the Ariba® Network, businesses of all sizes can connect to their trading partners anywhere, at any time from any application or device to buy, sell and manage their cash more efficiently and effectively than ever before. Companies around the world use the Ariba Network to simplify inter-enterprise commerce and enhance the results that they deliver. Join them at: www.ariba.com
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Safe Harbor Statement under the Private Securities Litigation Reform Act 1995: Information and announcements in this release involve Ariba's expectations, beliefs, hopes, plans, intentions or strategies regarding the future and are forward-looking statements that involve risks and uncertainties. All forward-looking statements included in this release are based upon information available to Ariba as of the date of the release, and we assume no obligation to update any such forward-looking statements. These statements are not guarantees of future performance and actual results could differ materially from our current expectations. Factors that could cause or contribute to Ariba's operating and financial results to differ materially from current expectations include, but are not limited to: the impact of the credit crises on Ariba's results of operations and financial condition; delays in development or shipment of new versions of Ariba's products and services; lack of market acceptance of Ariba's existing or future products or services; inability to continue to develop competitive new products and services on a timely basis; introduction of new products or services by major competitors; the impact of any acquisitions, including difficulties with the integration process or the realization of benefits of a transaction; the impact of our disposition, including the potential disruption of our ongoing business; the ability to attract and retain qualified employees; long and unpredictable sales cycles and the deferrals of anticipated orders; declining economic conditions, including the impact of a recession; inability to control costs; changes in the company's pricing or compensation policies; significant fluctuations in our stock price; the outcome of and costs associated with pending or potential future regulatory or legal proceedings; the impact of our acquisitions and dispositions, including the disruption or loss of customer, business partner, supplier or employee relationships; and the level of costs and expenses incurred by Ariba as a result of such transactions. Factors and risks associated with its business, including a number of the factors and risks described above, are discussed in Ariba's Form 10-Q filed with the SEC on May 04, 2012.

For More Information

Karen Master
Ariba, Inc.
412-297-8177
John Duncan
Ariba, Inc.
(678) 336-2980