Perficient, Inc. (PRFT)
Q2 2010 Earnings Call Transcript
August 5, 2010 9:00 am ET
Jeff Davis – President and CEO
Paul Martin – CFO
Jon Maietta – Needham & Company
Louis Miscioscia – Collins Stewart
Matt McCormack – BGB Securities
Good day, ladies and gentlemen. And welcome to the second quarter 2010 Perficient earnings conference call. My name is Michelle, and I will be your operator for today. At this time, all participants are in listen-only mode. We will be conducting a question-and-answer session towards the end of today conference. (Operator Instructions)
As a reminder, this conference is being recorded for replay purposes. I will now turn the presentation over to your host for today’s call, to Mr. Jeff Davis, CEO and President. Please proceed, sir.
Thank you. This is Jeff Davis and with me on the phone this morning is Paul Martin, our CFO. I want to thank all of you for your time this morning and we get about as typical about 10, 15 minutes of prepared comments, after which we’ll open the call for question, of course. Before we begin, I’d like to ask Paul to read the Safe Harbor statement? Paul?
Thanks, Jeff and good morning, everyone. Some of the things we will discuss in today's call concerning future company performance will be forward-looking statements within the meaning of the securities laws. Actual results may materially differ from those discussed in these forward-looking statements and we encourage you to refer to the additional information contained in our SEC filings concerning factors that could cause those results to be different than contemplated in today's discussion.
In addition, our earnings press release including a reconciliation of certain non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with Generally Accepted Accounting Principles, or GAAP, is posted on our website at www.perficient.com under News and Events. We have also posted a reconciliation of certain non-GAAP goals to the most directly comparable financial measures prepared in accordance with GAAP on our website at www.perficient.com under Investor Relations. Jeff?
Thanks, Paul. And again, thanks everyone for joining. We’re very glad to be with you today. We’ve got some excellent results to report. You know, Perficient built on our first question of 2010 success with really outstanding second quarter. We realized our third quarter of consecutive sequential revenue growth up 6.7% over the first quarter of this year. And that actually reflects year-over-year revenue growth of 11.4%, that’s a phase we haven’t seen here since the fourth quarter of 2007. Revenues and earnings came in about estimates in addition to the very strong services revenue, which we’re pleased with obviously, we also realized a solid quarter software sales which can be a pretty decent leading indicator of future services.
We spoke on last quarters call about the impressive Q1 sales for year, we had set a record for Q1 sales bookings in the first quarter. And while Q2 normalize a bit as we expect in – I mentioned in the first quarter call that we thought that would happened still our first half 2010 sales performance overall, bookings was very strong with services sales revenue or bookings running nearly 40% higher than the year ago period. I think its worth mentioning also that in the second quarter alone, like I said even though normalize a bit as we thought it would after insurgence in the first quarter we were still 25% up year-over-year in the second quarter sales over Q2 2009.
Key metrics also improved sequentially, average bill rate was up from $99 to $102 excluding subcontractors that number actually improved from a 105 to 107 and if you exclude offshore resources which is a growing part of our business we’re excited about, it does effects rates however, our rates actually increased from 116 to 120, excluding those resources.
So we continue to stress with our sales team, the important and improving rates and we’re actually pleased that we are finding the ability to do that in this market, we talked about not loosing deals based on rates or pricing, a couple of years back had debt due to recession and now we’re actually able to recover some of that rate depression that we allow to occur during that timeframe, obviously we think that’s another anecdotal sign of an improving environment for the domain perspective.
Employee utilization excluding subcontractors was always up, 85% up 2% sequentially from the first quarter and up more than 10% year-over-year. We increase our use subcontractors during the quarter, in this high growth period but at the same time we are adding a number of employees in several areas of the business.
We closed 10 deals from a sales perspective over a $0.5 million that’s a key metric we often talk about in this call, that consistent with the results from the second quarter of 2009 in terms of number of deals over a $0.5 million, but the average size of those deals was up 20% this year, over about $1 million last year, the year ago quarter up to 1.2 million this year, so that is to say that, 10 deals closed in the quarter over a $0.5 million and the average size of those is 1.2 million compared to $1 million a year ago, so again, about a 20% increase there consistent with and supporting that 25% year-over-year increase sales for the quarter that I mentioned earlier. And we also closed considerably more deals obviously below that to support that overall 25% increase.