ClickSoftware Technologies, Ltd. (CKSW)
Q2 2012 Earnings Call
July 25, 2012 9:00 am ET
Moshe BenBassat - Chairman and CEO
Shmuel Arvatz - CFO
Daniel Meron - RBC Capital Markets
Nathan Schneiderman - Roth Capital
Michael Martin - Small Cap Report
Nick Farwell - Arbor Group
Hugh Cunningham - Oppenheimer
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Ladies and gentlemen, thank you for standing by. Welcome to the ClickSoftware Technologies, Ltd., Second Quarter 2012 Financial Results Conference Call. All participants are at present in a listen-only mode. Following management's formal presentation instructions will be given for the question-and-answer session. (Operator Instructions). As a reminder, this conference is being recorded July 25, 2012.
With us online today are Dr. Moshe BenBassat, CEO and Chairman of the Board; and Mr. Shmuel Arvatz, CFO.
Before I turn the call over to Dr. BenBassat, I would like to remind you that during the course of the conference call, the company will be making express or implied forward-looking statements within the meaning of the Privates Securities Litigation Act of 1995 and other US federal securities laws.
These forward-looking statements include, but are not limited to, those statements regarding future results of operations and operating expenses, visibility into future periods, and probably of future revenues including our outlook for full year 2012 revenues, growth, and rates of growth, and future return on investment, cash flows, and dividends, our ability to generate profits and cash to finance our operations, growth, and any dividends payment we may declare in the future, expectations regarding operating profit and margin, pipeline growth, and winning new business growth, opportunities in the workforce management and enterprise mobility markets, future closing of contracts, future product offerings, receipts of orders, and recognition of revenues and deferred revenues.
Such forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause actual results or performance to differ materially from those projected. Achievements of these results by ClickSoftware may be affected by many factors including, but not limited to, risks and uncertainties regarding the general economic outlook, the length of or changes in ClickSoftware's sales cycle, ClickSoftware's ability to close sales to potential customers in a timely manner and maintain or strengthen the relationships with strategic partners, the timing of revenue recognition, foreign currency exchange rate fluctuation, and ClickSoftware's ability to maintain or increase its sales pipeline.
The forward-looking statements discussed on this call are subject to other risks and uncertainties including those discussed in the "Risk Factor" section and elsewhere in ClickSoftware's Annual Report on Form 20-F for the year ended December 31st, 2011, and in subsequent filings with the Securities and Exchange Commission.
Except as otherwise requested by law, ClickSoftware is under no obligation to and expressly disclaims any such obligation to update or alter its forward-looking statements whether as a result of new information, future events, or otherwise.
Also, I would like to remind you that ClickSoftware reported net income and net earnings per share on a GAAP and on an adjusted non-GAAP basis. Today's press release includes a reconciliation of non-GAAP information to the most directly comparable GAAP information and is posted in the Investor section of the company's website at www.clicksoftware.com.
Dr. BenBassat, would you like to begin?
Yes. Good morning everyone and thank you for joining ClickSoftware's earnings call for the second quarter of 2012. As usual, I shall start with a brief overview of the overall status of our business and trends and selective operational achievements with special focus on our progress with the ClickAppStore for enterprise mobility.
Shmuel Arvatz, our Chief Financial Officer, will then provide you with a more detailed review of the financial results for the quarter. We shall conclude this call with an outlook for the remainder of 2012 followed by summary comments and will then take your questions.
Clearly, the result we reported for the second quarter ending June 30 were disappointing especially since four days later after the end of the quarter we signed a very large contract valued between $10 million to $15 million, which provides very good comfort for the remainder of the year and beyond, what four days can do.
I recognize there have been some concerns in the market following our second early announcement this year. Let me start by clearly stating that while market condition in some parts of the world and especially in Europe are challenging, we believe that our business is well balanced and, therefore, we have the potential to prepare well in 2012 and beyond.
I normally do not go into fine details of our revenue composition plan for the rest of the year, but considering the uncertainty our investors feel these days I believe it is important to go into higher granularity so that you get the same comfort that we have. So here we are. Total revenue for the first two quarters of the year were slightly above $44 million. Based on signed contracts and firm commitment that we now have at hand, which includes the new contract signed since the end of Q2, we believe that an additional $48 million is achievable with very high probability. This includes deferred and committed revenues from licenses, support and professional services.
Together with the $44 million of Q1 and Q2 we reach a total of $92 million. So as you can see roughly 92% of the targeted revenues are already secured with very high probability.
I strongly believe that we should be able to deliver the last 8% in the normal course of business during the remaining five months of the year.