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Zix Corporation's CEO Discusses Q2 2011 Results - Earnings Call Transcript

Stocks in this article: ZIXI

Rick and Mike will refer to various non-GAAP financial measures such as adjusted gross profit, adjusted operating expenses, adjusted earnings and adjusted EBITDA. You can find in our earnings press release, and on our website, detailed explanations of our non-GAAP financial measures along with reconciliations of our adjusted items to the most directly comparable GAAP financial measure.

Now, I am pleased to turn the call over to Rick Spurr. Rick.

Rick Spurr

Thank you Jeff. Good afternoon everyone and thank you for joining us today to discuss our 2011 second quarter financial results. I am very pleased to report another strong quarter for the company.

We generated revenue of $9.4 million in the second quarter, up 15% year over year and above our guidance of $9 million to $9.2 million. The revenue growth that we delivered reflects the solid and predictable business that we have built based on our successful subscription model and our leadership in email encryption.

As we anticipated, new first year orders rebounded from a soft first quarter and reached $2 million in Q2, a 37% improvement sequentially and down only 3% from $2.1 million in the second quarter of 2010. As we stated on the last call, we believe the shortfall we experienced in new first year orders during the first quarter was related to several one-time occurrences, which excluding the impact of the tragedy in Japan, are now behind us. In fact, we are very confident that new first year orders in the back half of 2011 will be stronger than first half.

Total bookings in the second quarter were $12.5 million compared to $9 million in Q1. Our bookings backlog at the end of June was a company record $52.6 million, up 15% over Q2 2010.

We continued to deliver strong bottom line results, achieving our sixth consecutive quarter of GAAP profitability. GAAP net income for the second quarter was $2.6 million, which is a 74% increase over the $1.5 million we reported in the second quarter of last year.

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