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Cerner Management Discusses Q2 2012 Results - Earnings Call Transcript

The company undertakes no obligation to update publicly any forward-looking statement, whether as a result of new information, future events or otherwise.

At this time, I'd like to turn the call over to Marc Naughton, Chief Financial Officer of Cerner Corporation. Please proceed.

Marc G. Naughton

Thank you, Melanie. Good afternoon, everyone. Welcome to the call. I'll lead off today with a review of the numbers. Zane Burke, Executive Vice President of our Client Organization, will follow me with sales highlights and marketplace trends. Mike Nill, Executive Vice President and Chief Operating Officer, will discuss operations and provide an update on our corporate imperatives. Jeff Townsend, Executive Vice President and Chief of Staff; and Neil Paterson, our Chairman, CEO and President are traveling today. Now I will turn to our results.

We delivered strong results in the second quarter. Bookings were above the midpoint of our guidance range. Our income statement performance was good, with revenue at the top end of our guidance range and continued margin expansion, driving strong earnings growth. We also delivered very strong cash flow performance.

Moving to the details. Our total bookings revenue in Q2 was $701 million, which is a record for our second quarter. Bookings were above the midpoint of our guidance range and were up 8% from a very strong result in Q2 '11 when bookings grew 39%. Bookings margin in Q2 was $577 million, or 82% of total bookings. As Zane will discuss, the strength of bookings in Q2 span across several business models and included a new ITWorks contract.

Our bookings performance drove a 20% increase in total backlog to $6.51 billion. Contract revenue backlog of $5.8 billion is 22% higher than a year ago. Support revenue backlog totaled $714 million, up 5% year-over-year. Revenue in the quarter was $637.4 million, which is up 22% over Q2 of '11. The revenue composition for Q2 was $195 million in system sales, $150 million in support and maintenance, $276 million in services and $16 million in reimbursed travel.

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