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Advent Software Q1 2010 Earnings Call Transcript

Advent Software Q1 2010 Earnings Call Transcript

Advent Software (ADVS)

Q1 2010 Earnings Call

April 28, 2010 5:00 pm ET


Heidi Flaherty – VP Finance, Investor Relations

Stephanie DiMarco – Chief Executive Officer

James Cox – Chief Financial Officer

David Peter Hess - President


Andrey Glukhov – Brean Murray

Jonathan Maietta – Needham & Company

Tim Fox – Duetsche Bank

Gil Luria – Wedbush Securities

[Rene Defursta – Janney Montgomery]

David Scharff – JMP Securities


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Welcome to the first quarter 2010 Advent Software earnings conference call. (Operator Instructions) I would now like to turn the call over to Miss Heidi Flaharty.

Heidi Fla


Good afternoon. I’m Heidi Flaharty Vice President of Finance and Investor Relations. Thank you for joining us today for Advent’s first quarter 2010 earnings call. Hosting our call today are Stephanie DiMarco, Advent’s Chief Executive Officer and Jim Cox, Advent’s Chief Financial Officer. Also with us today is our President, Pete Hess.

Most of you participating in this call are aware of the regulations regarding forward-looking statements. Accordingly, we would like to note that during the course of this conference call, we will make forward-looking statements regarding events or the future performance of the company. We wish to caution you that such statements are predictions that involve risks and uncertainties and that actual events or results could differ materially.

We discuss a number of these risks in detail in the company’s SEC reports including our quarterly report on Form 10-Q and our 2009 annual report on Form 10-K, and any forward-looking statements must be considered in the context of such risks and uncertainties.

The company disclaims any intention or obligation to publicly update or revise any forward-looking statements whether as a result of events or circumstances after the date hereof, or to reflect the occurrence of unanticipated events.

As a reminder, we include non-GAAP financial measures in our disclosures. These non-GAAP financial results are not meant to be considered in isolation or as a substitute for results prepared on a GAAP basis. Please refer to the tables entitled Reconciliation of Selected GAAP measures to non-GAAP measures in our earnings release which was filed with the SEC on a Form 8-K and available on our website for a reconciliation of GAAP to non-GAAP financial measures.

Finally, I would like to take this opportunity to extend an invitation to our Analyst Day event in New York City on May 13, from 9:00 am through noon, followed by lunch. There will be presentations by Stephanie, Pete and Jim as well as product presentations by the heads of our various business units. Please contact me directly to register. We look forward to seeing you there.

I’ll now turn the call over to Stephanie.

Stephanie DiMarco

Thanks Heidi and welcome everyone. Thank you for joining us this afternoon. I’m pleased to report that Advent had a very strong first quarter. Revenues from continuing operations were $67 million, new annual combined term contract bookings or ACV, were $7.3 million, up 65% year over year.

We’re now including our Advent on Demand bookings in ACV, which were $1 million in the quarter. GAAP operating income from continuing operations was $7 million and non-GAAP operating income from continuing operations was $13 million, representing a margin of 19%.

Diluted earnings per share from continuing operations were $0.16 on a GAAP basis and $0.29 on a non-GAAP basis. Operating cash flow from continuing operations was $12.5 million.

The strength of our first quarter performance results from increasing demand for our market leading suite of software and services from customers around the world. It’s a continuation of the improved demand we’ve experienced in the second half of last year.

Our product portfolio is compelling and we are seeing a lot of interest in our solutions around the world. Later in the call, I’ll take more about our accomplishments and highlights, but first let me turn the call over to Jim who will provide further details on the numbers.

James Cox

Thanks Stephanie. There are four areas I’ll cover today; first, bookings and revenue, second, expenses and profitability, third, cash and cash flows and finally, guidance.

Customer demand remains strong with a $7.3 of annual contract value or ACV of term license and Advent on Demand contracts signed during the first quarter. This is a 65% increase over the $4.4 million booked in the first quarter of last year. Both these figures include Advent on Demand bookings, which we now include in our ACV metric.

Advent on Demand delivers the same Advent software via the SAS model. With more customers choosing to deploy our solutions through Advent on Demand, we’ve updated our disclosures to include both types of bookings. For comparability, we provided the 2009 Advent on Demand bookings by quarter within our earnings slides.

As Stephanie mentioned, first quarter 2010 Advent on Demand bookings were $1 million and first quarter ’09, Advent on Demand bookings were $1.1 million.

Stephanie will provide more detail about our great ACV performance, but in summary, the ACV numbers reflect strong booking across all of our geographies and within all of our product lines.

Revenue for the first quarter was $66.7 million, up 1% over the first quarter of 2009 driven by growth within our other recurring revenue line. Other recurring revenues increases year over year as a result of the Axys Data services and Fidelity on-demand contracts going live last September.

Term license revenues decreased primarily as a result of the net deferral of our revenues from our term service deferral. As a reminder, we defer all revenue on our new bookings until our implementation services are complete. In the first quarter, we had a net deferral of term license and professional services revenue of $500,000.

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