Ariba Reports Results for Third Quarter of Fiscal Year 2012
Subscription revenue grows 25% year-over-year or 28% in constant currency
Network revenue up 27% year-over-year or 34% in constant currency
SUNNYVALE, Calif., July 26, 2012 – Ariba, Inc. (Nasdaq: ARBA), the world’s business commerce network, today announced results for the third quarter of fiscal year 2012 ended June 30, 2012.
Quarterly Financial and Operational Highlights from Continuing Operations:
- Subscription revenue of $95.3 million, up 25% year-over-year or 28% in constant currency.
- Network revenue of $47.3 million, up 27% year-over-year or 34% in constant currency.
- Total revenue of $137.0 million, up 12% year-over-year or 15% in constant currency.
- Loss of $0.01 per share from continuing operations; non-GAAP EPS of $0.25 from continuing operations, up 25% year-over-year.
Since providing third quarter guidance on April 26, 2012, currency rate fluctuations negatively impacted third quarter total revenue by approximately $1 million, primarily in Network revenue.
Results for the Third Quarter of Fiscal Year 2012
Revenue from Continuing Operations:
Total revenues from continuing operations were $137.0 million for the third quarter of fiscal year 2012, an increase of 12% or 15% in constant currency compared to $121.9 million for the third quarter of fiscal year 2011. Subscription and maintenance revenues for the third quarter of fiscal year 2012 were $108.0 million, an increase of 19% or 22% in constant currency compared to $91.0 million for the third quarter of fiscal year 2011. Within subscription and maintenance revenues, subscription software revenue was $95.3 million for the third quarter of fiscal year 2012, an increase of 25% or 28% in constant currency compared to $76.4 million for the third quarter of fiscal year 2011. Services and other revenues for the third quarter of fiscal year 2012 were $29.0 million compared to $30.9 million for the third quarter of fiscal year 2011.
Operating Income from Continuing Operations:
Operating income from continuing operations for the third quarter of fiscal year 2012 was $2.7 million, an increase of $13.6 million compared to an operating loss from continuing operations of $10.9 million for the third quarter of fiscal year 2011. Operating income from continuing operations for the third quarter of fiscal year 2012 included expenses of $4.7 million for amortization of intangible assets, $18.8 million for stock-based compensation, and M&A transaction expenses of $2.7 million. Excluding these items, non-GAAP operating income for the third quarter of fiscal year 2012 was $28.8 million, representing a 21% non-GAAP operating margin and an increase of 39% compared to $20.7 million of non-GAAP operating income for the third quarter of fiscal year 2011. Non-GAAP operating income for the third quarter of fiscal year 2011 excluded expenses of $4.3 million for amortization of intangible assets, $14.0 million for stock-based compensation, and restructuring costs of $13.4 million.
Earnings Per Share from Continuing Operations:
The loss from continuing operations for the third quarter of fiscal year 2012 was $1.1 million, or $0.01 per share, compared to a loss from continuing operations of $12.3 million, or $0.13 per share, for the third quarter of fiscal year 2011. Non-GAAP net income from continuing operations was $25.1 million, or $0.25 per diluted share, an increase of 25% compared to $0.20 per diluted share for the third quarter of fiscal year 2011.
Balance Sheet and Cash Flow
Total cash, cash equivalents, investments and restricted cash were $286.6 million at June 30, 2012 up $24.5 million from March 31, 2012. The company generated net cash flow from continuing operations of $26.6 million for the three months ended June 30, 2012. Total deferred revenue was $138.6 million at June 30, 2012, compared to $134.5 million at June 30, 2011 and $142.6 million at March 31, 2012.
Constant Currency Information
We calculate constant currency revenue measures by translating foreign currencies using the average exchange rates from the previous year instead of the current year. We believe presenting revenue growth with constant currency revenue measures helps investors understand how currency exchange rate fluctuations have affected our revenue growth. We recognize, however, that constant currency measures have limitations, particularly as the currency effects that are eliminated constitute a significant element of our revenue and could materially impact our performance. We caution the readers of our financial reports to consider constant currency measures only in addition to, and not as a substitute for or superior to, changes in revenue, operating expenses, operating profit, or other measures of financial performance prepared in accordance with GAAP.
