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inContact Inc. Reports Operating Results (10-Q)

November 04, 2011 | About:
10qk

10qk

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inContact Inc. (SAAS) filed Quarterly Report for the period ended 2011-09-30.

Incontact Inc. has a market cap of $176.1 million; its shares were traded at around $4.06 with and P/S ratio of 2.2.

Highlight of Business Operations:

Total revenues increased $1.9 million or 9% to $22.2 million during the three months ended September 30, 2011 compared to revenues of $20.3 million for the same period in 2010. The increase relates to an increase of $1.7 million in Software segment revenue due to our continued focus on sales and marketing efforts of our all-in-one inContact suite of software services. Telecom segment revenue increased $135,000 as the increase of Telecom revenue associated with our inContact suite customers exceeded the attrition of our Telecom only customers.

Total revenues increased $3.3 million or 5% to $65.2 million during the nine months ended September 30, 2011 compared to revenues of $61.9 million for the same period in 2010. The increase relates to an increase of $3.9 million in Software segment revenue due to our continued focus on sales and marketing efforts of our all-in-one inContact suite of software services. This increase is offset by a decrease of $500,000 in Telecom segment revenue due to expected attrition of our telecom-only customers.

Direct selling and marketing expenses in the Software segment increased $1.4 million or 36% to $5.4 million during the three months ended September 30, 2011 compared to $4.0 million for the same period in 2010. This increase is a result of headcount additions for employees focused on managing and enhancing our partner relationships. We also continue to develop the software services provided in the Software segment by investing in research and development. During the three months ended September 30, 2011, we incurred $1.4 million in direct research and development costs compared to $1.3 million for the same period in 2010 and have capitalized an additional $1.4 million of costs incurred during the three months ended September 30, 2011 related to our internally developed software compared to $787,000 for the same period in 2010. Indirect expenses, which consist of overhead, such as compensation, rent, utilities and depreciation on property and equipment, increased $212,000 or 7% to $3.2 million during the three months ended September 30, 2011 from $3.0 million for the same period in 2010 due to more indirect costs being allocated to the Software segment with the continued shift in revenue mix from the Telecom segment to the Software segment and the overall increase in indirect expenses.

Direct selling and marketing expenses in the Software segment increased $3.7 million or 35% to $14.2 million during the nine months ended September 30, 2011 compared to $10.5 million for the same period in 2010. This increase is a result of headcount additions for employees focused on managing and enhancing our partner relationships. We also continue to develop the software services provided in the Software segment by investing in research and development. During the nine months ended September 30, 2011, we incurred $3.9 million in direct research and development costs compared to $3.4 million during the same period in 2010 and have capitalized an additional $3.5 million of costs incurred during the nine months ended September 30, 2011 related to our internally developed software compared to $2.6 million during the nine months ended September 30, 2010. Indirect expenses, which consist of overhead, such as compensation, rent, utilities and depreciation on property and equipment, increased $1.5 million or 19% to $9.2 million during the nine months ended September 30, 2011 from $7.7 million for the same period in 2010 due to more indirect costs being allocated to the Software segment with the continued shift in revenue mix from the Telecom segment to the Software segment and the overall increase in indirect expenses.

Overall Telecom segment revenue decreased $532,000 or 1% to $36.4 million during the nine months ended September 30, 2011 from $36.9 million for the same period in 2010. This decrease is due to the attrition of our telecom-only customers in the first quarter of 2011 exceeding the increase of Telecom revenue associated with our inContact suite customers. In the second and third quarters of 2011, Telecom revenue associated with our inContact suite customer offset the attrition of our Telecom only customers. Our costs of revenue increased 1% due to higher direct Telecom costs attributable to international infrastructure and call traffic. Selling and marketing expenses decreased $88,000 or 3% during the nine months ended September 30, 2011 as compared to the same period in 2010, primarily due to a decrease in commissions as a result of decreased revenue. Indirect expenses, which consist of overhead, such as compensation, rent, utilities and depreciation on property and equipment, decreased $233,000 or 9% during the nine months ended September 30, 2011 compared to the same period in 2010. The decrease in indirect expenses is primarily due to more indirect costs being allocated to the Software segment.

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10qk
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