S1 Corp. (SONE) filed Quarterly Report for the period ended 2009-09-30.
S1 Corporation the pioneer of Internet banking is a leading provider of innovative Internet-based financial services solutions. The company offers a broad range of applications that empower financial organizations to increase revenue strengthen customer relationships and gain competitive advantage by meeting the evolving needs of their customers across various lines of business market segments and delivery channels. Through its professional services organization S1's applications can be implemented in-house or outsourced to the S1 Data Center. (PRESS RELEASE) S1 Corp. has a market cap of $334.4 million; its shares were traded at around $6.32 with a P/E ratio of 14.1 and P/S ratio of 1.4.
Highlight of Business Operations:
Our revenue was $60.3 million for the three months ended September 30, 2009 which is an increase of $1.7 million or 3% as compared to the same period in 2008. Our revenue was $179.5 million for the nine months ended September 30, 2009 which is an increase of $9.7 million or 6% as compared to the same period in 2008. Our revenue has increased as compared to 2008 due primarily to the demand for Postilion’s payments solutions and Enterprise’s personal, business and corporate Internet banking solutions offset by a decline in projects with our largest customer, State Farm. In 2009, revenue was unfavorably impacted from foreign currency exchange rates when compared to 2008 by $840 thousand for the three months ended September 30 and $5.4 million for the nine months ended September 30. For the three months ended September 30, 2009 and 2008, our net income was $6.9 million and $6.2 million, respectively. For the nine months ended September 30, 2009 and 2008, our net income was $20.5 million and $16.5 million, respectively. Our net income increased during each of these periods in 2009 as compared to the same periods in 2008 primarily due to growth in our revenue and lower stock-based compensation expense partially offset as we continued to build out product functionality and invest in customer satisfaction initiatives during 2009.
Revenue from State Farm was 16% and 19% of our total revenue and 29% and 34% of our Enterprise segment revenue during the three months ended September 30, 2009 and 2008, respectively. Revenue from State Farm was 16% and 20% of our total revenue and 30% and 35% of our Enterprise segment revenue during the nine months ended September 30, 2009 and 2008, respectively. In 2008, we announced that we expected our relationship with State Farm to conclude by the end of 2011. We expect approximately $80 million in revenue from State Farm from 2009 until our work for them concludes by the end of 2011. We expect approximately $36 - $38 million in revenue in 2009 and approximately $25 - $26 million in revenue in 2010 from State Farm. Additional information about our business segments, geographic disclosures and major customer is presented in Note 10 to our unaudited condensed consolidated financial statements contained elsewhere in this report.
Total revenue increased by $1.7 million, or 3%, for the three months ended September 30, 2009 compared to the same period in 2008 mainly due to the growth in Software licenses and Support and maintenance revenue in both segments and Professional services revenue for the Postilion segment. For the three months ended September 30, 2009, revenue was unfavorably impacted from foreign currency exchange rates for operations in Europe by approximately $840 thousand when compared to the same period in 2008.
Our Enterprise segment revenue increased $200 thousand, or 1%, for the three months ended September 30, 2009 compared to the same period in 2008 which includes approximately $370 thousand of unfavorable impact from foreign currency exchange rates for operations in Europe. Software licenses revenue for our Enterprise segment increased 46% from the prior year’s quarter primarily due to increased licensing activity of our corporate Internet banking solution. Support and maintenance revenue for our Enterprise segment grew 14% from the prior year’s quarter primarily due to increased licensing activity of our personal, business and corporate Internet banking solutions. Professional services revenue for our Enterprise segment declined 5% from the prior year’s quarter as work with our largest customer decreased $1.6 million partially offset by growth in the number of projects for our personal and business Internet banking solutions and work related to an implementation for a large international bank. Professional services revenue in any one quarter can be impacted by the number and size of customer projects and therefore can increase or decrease significantly based on project activity. Data center revenue for our Enterprise segment declined 4% primarily due to an unfavorable foreign exchange impact for our customers in Europe.
Our Postilion segment revenue increased $1.5 million, or 6%, for the three months ended September 30, 2009 compared to the same period in 2008 which includes approximately $470 thousand of unfavorable impact from foreign currency exchange rates for operations in Europe. Software licenses revenue for our Postilion segment increased 3% from the prior year’s quarter due primarily to the conversion of self-service banking customers in North America from annual support and maintenance agreements to long-term subscription agreements, which in some cases included hosting services. Support and maintenance revenue grew 8% from the prior year’s quarter primarily due to licensing activity for our payments and full service banking solutions which more than offset the effect of converting self-service banking customers to subscription agreements. Professional services revenue for the Postilion segment increased 33% from the prior year’s quarter due to the growth in projects for our payments solutions. Professional services revenue in any one quarter can be impacted by the number and size of customer projects and therefore can increase or decrease significantly based on project activity. Data center revenue for our Postilion segment decreased 22% from the prior year’s quarter due in part to the conversion of hosted customers to long-term subscription agreements and the impact of customer attrition that occurred primarily during 2008.
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