RightNow Technologies Inc. (RNOW) recently posted a second-quarter profit of $36,000, or breakeven on a per-share basis, on sales of $36.3 million, consistent with its prior guidance.
Recurring revenue was $27.4 million, up 5% from $26 million in the first quarter and a 7.5% increase over the $25.5 million reported a year ago. On a constant currency basis, recurring revenue grew about 4% sequentially and 13% from the year-ago period.
Professional service revenue was $9 million for the quarter, a fall of nearly $1 million sequentially. The quarterly sales mix across geographies was 72% from the Americas, 19% from the Europe, Middle East and Africa region, and 9% from Asia Pacific.
For the second quarter, the average first-year contract value was approximately $100,000, up sequentially and from the fourth quarter of 2008. RightNow recorded ten deals of over $1 million, 60 deals worth between $100,000 and $1 million each and 421 deals for less than $100,000 each. The average contract length in the second quarter increased to 27 months. This increase reflects that several of the large transactions in the quarter were multiyear deals. Key verticals during the quarter included media and entertainment, high-tech, public sector, telecommunications and retail.
Total gross margins were 70% in the quarter compared to 67% in the first quarter and 64% a year ago. Quarterly operating margin was 7% of revenue, which is consistent with that achieved in the first quarter.
Cash generated from operations was $2.1 million for the quarter. Capital expenditures were $1.8 million for the second quarter. RightNow ended the quarter with total cash and investments of $94.6 million. The company does not have long-term debt and its shareowner’s equity is $30.6 million.
The company expects third-quarter sales in the range of $37 million to $38 million and breakeven earnings on a per-share basis. It sees revenue for the full year between $147 million and $151 million. The current Zacks Consensus Estimate for the third quarter is 2 cents a share. For 2009, the Zacks Consensus Estimate is pegged at 8 cents a share.
RightNow Technologies is a leading provider of on-demand customer relationship management (CRM) software solutions, designed to optimize customer service operations for businesses of all sizes.
Read the full analyst report on “RNOW”
Zacks Investment Research
