inContact – Achieved record software segment revenue

inContact, Inc. (NASDAQ: SAAS), the leading provider of cloud-based contact center software and contact center agent optimization tools, today reported financial results for the fourth quarter and year ended December 31, 2011.

Said Paul Jarman, inContact CEO, “I’m pleased to report that in the fourth quarter, we achieved record software segment revenue, as well as a 40% increase in bookings over the fourth quarter of last year, representing the strongest software bookings in the Company’s history. We are seeing a marked shift in the size, type and number of contact centers that are choosing inContact to power their business and, during the quarter, we closed 44 new customers and 20 expansions for a total of 64 new contracts.”

Continued Jarman, “This is a true inflection point for inContact. As one of the pioneers of cloud contact center solutions, we established inContact as an early market leader, and are seeing strong results from our investments in innovation, the platform and sales and marketing.  These investments will enable us to extend our lead and increase our share in the rapidly growing cloud-based contact center market.”

Revenue

Consolidated revenue for the quarter ended December 31, 2011 was $23.8 million versus $20.3 million for the same period in 2010.  This record consolidated revenue reflects an increase of $2.3 million in Software segment revenue and an increase of $1.2 million in Telecom segment revenue over the same period in 2010.  Software segment revenue totaled $11.0 million for the quarter ended December 31, 2011, an increase of 26% from Q4 2010 and the largest organic quarterly sequential increase ever.  Telecom segment revenue totaled $12.7 million for the quarter ended December 31, 2011 and marks the third quarter in a row that Telecom segment revenue has increased year-over-year, driven by increases in software-related telecom revenue, which now represents approximately 64% of total telecom revenue.

In the fourth quarter the Company made a change in an accounting estimate with respect to the period over which it recognizes certain software professional services fees, which impacted revenue during the quarter.  Had the Company continued with the previous estimate, software segment revenue would have been $11.2 million dollars, representing 28% percent growth over Q4 of 2010.

For the full year ended December 31, 2011, Software segment revenue totaled $39.9 million, an increase of 18% from $33.7 million for 2010.  For the first time since 2005, Telecom segment revenue grew year-over-year and totaled $49.1 million, an increase of 1%.

Gross Margin

The Q4 Software segment gross margin was 56% versus 62% in Q4 2010, and excluding non-cash charges, non-GAAP Software segment gross margin was 68% for the quarter, versus 74% in Q4 2010.  This decrease in gross margin is principally attributable to investments we anticipated making in our strategic international facilities and reseller programs, as well as higher non-cash depreciation and amortization. Certain of these investments included establishing the European cloud network, as well as building the back office and infrastructure to provide us with additional leverage as we scale up to support Siemens Enterprise Communications, Verizon Business and other potential new partners. These investments were made ahead of the $5 million in guaranteed revenue from Siemens Enterprise Communications in 2012. We will leverage our 2011 investments throughout 2012, which we expect will improve our gross margin and operating results. Fourth quarter 2011 Telecom segment gross margin was 30%.

Consolidated gross margin percentage was 42% in the fourth quarter compared to 43% for the same period in 2010.  Gross margin was impacted principally by the planned Software segment investments mentioned above.  Excluding non-cash charges, consolidated gross margin was 48% for the fourth quarter compared to 49% for the same period in 2010.

More Posts by this author

• 
  Stocks End Lower
• 
  Stocks Headed for a Lower Finish
• 
  Universal Health Realty Income – Will continue to explore opportunities for growth
• 
  Tredegar Corporation – Solid quarterly performance is evidence that Bonnell’s efforts to focus on operational excellence
• 
  Bona Film Group Limited – Finished the year on a strong note and exceeded 2011 bottom-line guidance
• 
  Sprott Resource Lending – Successfully initiated over $650 million of resource loans
• 
  ITT Exelis – A year of significant transition for the company

Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.