Rightnow Technologies (RNOW)
Q2 2010 Earnings Call
July 28, 2010 4:30 pm ET
Greg Gianforte - Founder, Chairman, Chief Executive Officer and President
Michael Myer - Chief Technology Officer and Vice President of Product Development
Jeffrey Davison - Chief Financial Officer, Principal Accounting Officer, Vice President and Treasurer
Stacie Bosinoff - Director
Keith Weiss - Morgan Stanley
Ajay Kasargod - Morgan Keegan
Laura Lederman - William Blair & Company L.L.C.
J. Derrick Wood - Wedbush Securities Inc.
Nathan Schneiderman - Roth Capital Partners, LLC
Terrell Tillman - Raymond James & Associates
Ross MacMillan - Jefferies & Company, Inc.
Michael Huang - ThinkEquity
Brendon Barnicle - Pacific Crest Securities, Inc.
Tom Roderick - Stifel, Nicolaus & Co., Inc.
Philip Dionisio - Friedman, Billings, Ramsey
Previous Statements by RNOW
» Rightnow Technologies Q1 2010 Earnings Call Transcript
» RightNow Technologies, Inc. Q4 2009 Earnings Call Transcript
» RightNow Technologies Inc Q3 2009 Earnings Call Transcript
Good day, ladies and gentlemen, and welcome to RightNow Technologies' Second Quarter 2010 Conference Call. [Operator Instructions] I would now like to turn the conference over to Stacie Bosinoff. You may begin.
Good afternoon, everyone, and thank you for joining us on RightNow's Second Quarter 2010 Conference Call. Joining me on the call today is CEO and Founder, Greg Gianforte; and Chief Financial Officer, Jeff Davison.
Before turning the call over to the company, I'll read our Safe Harbor statement. During the course of this call, we may make projections of forward-looking statements regarding future conditions or events which may drive our future business, current and new products and services and their performance, the size and strength of our market and our future financial performance and outlook for the company. These forward-looking statements may include, but are not limited to statements about revenue growth and profitability, our future strategic plans and perceived growth opportunities, perceived opportunities related to the social platform, market acceptance of our products and other statements relating to our operating results.
These forward-looking statements speak only as of today and are based upon the information currently available to us. This information will likely change over time. By discussing our current perception of our market and the future performance of the company and our products with you today, we are not undertaking an obligation to provide updates in the future. We caution you that such statements are just projections and actual events and results may differ materially from what we discuss today. Please refer to the documents we file with the SEC, specifically our most recent annual report on Form 10-K and quarterly reports on Form 10-Q. These documents contain and identify important factors that could cause actual results to differ materially from those contained in our projections and forward-looking statements.
As a reminder, we are providing a supplemental data sheet for easy reference on our Investor Relations section of our website that contains historical information and other key metrics that we'll be discussing on the call today. In addition, an updated Investor Presentation has also been posted to the site. During the course of this call, we will also be discussing certain non-GAAP financial results. We direct your attention to our reconciliations of GAAP, which can be found in our company’s earnings release, which is posted on the Investor Relations portion of our website. And with that, I'll turn the call over to Greg.
Thank you, Stacie, and good afternoon, everyone. We had a very strong second quarter with continued growth in revenue, recurring revenue and EPS. There are four primary points that I'd like to cover on our call today.
First, financials. Recurring revenue grew 27%, which we believe is among the highest of the SaaS vendors. Based on the rapid growth in our highly predictable recurring revenue, we are raising our growth estimate for recurring revenue to 22% for the full year, up from 20%.
In addition, revenue and EPS were at the high end of our guidance.
Secondly, business fundamentals. The core drivers of the business are showing solid momentum, which we believe will drive continued growth in revenue, recurring revenue and EPS, as we march towards our target operating model exiting 2011.
Third, the market opportunity. We continue to see a very large opportunity in the rapidly emerging CX market, which we are uniquely positioned to serve. Customers choose RightNow because we deliver our very differentiated solution that is driving momentum in our land and expand strategy, as well as our addition of new large B-to-C customers and government agencies.
And fourth, the business outlook. We're not only confident in our outlook for the rest of the year, but also in reaching our target operating model by the end of next year.
Let me start with some of the key financial metrics. As I said, recurring revenue, which is the key measure of our growth, increased 27% over Q2 of last year. To give you some perspective, over the past six quarters, recurring revenue has grown 6% then 8%, then 15%, then 21% and now, 27% for each of the last two quarters. So you can clearly see how we're gaining leverage and momentum in the model.
Both revenue and EPS were at the high end of our guidance, despite the FX headwind. Revenue for the quarter was $43.5 million and non-GAAP EPS was $0.09.
The second key point is our strong business fundamentals. We see great momentum in our core business as customers grow their RightNow deployments, adopting more of a CX solutions across product lines, geographies and channels. We continue to broaden our solutions set across the entire CX platform by improving and adding more capabilities in the web, contact center and social channels.