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OpenTable, Inc. Reports Operating Results (10-Q)

August 06, 2012 | About:
10qk

10qk

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OpenTable, Inc. (OPEN) filed Quarterly Report for the period ended 2012-06-30.

Opentable Inc has a market cap of $892.6 million; its shares were traded at around $40.58 with a P/E ratio of 38 and P/S ratio of 6.4.

Highlight of Business Operations:

We provide solutions that form an online network connecting reservation-taking restaurants and people who dine at those restaurants. Our solutions for restaurants include our proprietary Electronic Reservation Book, or ERB, and Connect. Our solutions for diners include our popular restaurant reservation websites, www.opentable.com and www.toptable.co.uk, as well as a variety of mobile applications. We refer to www.opentable.com, www.toptable.co.uk and related websites as the OpenTable websites. The OpenTable network includes more than 25,000 OpenTable restaurant customers spanning all 50 states as well as select markets outside of the United States. Since our inception in 1998, we have seated over 350 million diners through OpenTable reservations, and during the three months ended June 30, 2012, we seated an average of more than 10 million diners per month. Restaurants that use our ERB pay us a one-time installation fee for onsite installation and training, a monthly subscription fee for the use of our software and hardware and a fee for each restaurant guest seated through online reservations. Restaurants that use Connect pay us a fee for each restaurant guest seated through online reservations. Diners can use our online restaurant reservation service for free. For the three months ended June 30, 2012 and 2011, our net revenues were $39.6 million and $34.3 million, respectively. For the six months ended June 30, 2012 and 2011, our net revenues were $78.9 million and $68.0 million, respectively. For the three months ended June 30, 2012 and 2011, our reservation revenues accounted for 56% and 53% of our total revenues, respectively, and 57% and 53% of total revenues for the six months ended June 30, 2012 and 2011, respectively. For the three months ended June 30, 2012 and 2011, our subscription revenues accounted for 35% and 37% of our total revenues, respectively, and 35% and 36% of revenues for the six months ended June 30, 2012 and 2011, respectively.

In 2004, we began to selectively expand outside of North America into countries that are characterized by large numbers of online consumer transactions and reservation-taking restaurants. To date, we have concentrated our international efforts in Germany, Japan and the United Kingdom. Our revenues outside of North America for the three months ended June 30, 2012 and 2011 represented 13% and 15% of our total revenues, respectively, and for the six months ended June 30, 2012 and 2011, represented 14% and 15% of our total revenues, respectively. We intend to continue to incur substantial expenses in advance of recognizing material related revenues as we attempt to further penetrate our existing international markets and selectively enter new markets. Some international markets may fail to meet our expectations, and we may decide to realign our focus.

Total revenues increased $5.3 million, or 15%, for the three months ended June 30, 2012 compared to the three months ended June 30, 2011 and $10.9 million, or 16%, for the six months ended June 30, 2012 compared to the six months ended June 30, 2011. Reservation revenues increased $4.0 million, or 22%, for the three months ended June 30, 2012 compared to the three months ended June 30, 2011 and $8.7 million, or 24%, for the six months ended June 30, 2012 compared to the six months ended June 30, 2011. Reservation revenues increased as a result of the increase in seated diners. Subscription revenues increased $1.4 million, or 11%, for the three months ended June 30, 2012 compared to the three months ended June 30, 2011 and $2.9 million, or 12%, for the six months ended June 30, 2012 compared to the six months ended June 30, 2011. Subscription revenues increased as a result of the increase in installed restaurants. Other revenues decreased $0.1 million, or 3%, for the three months ended June 30, 2012 compared to the three months ended June 30, 2011 and $0.7 million, or 9%, for the six months ended June 30, 2012 compared to the six months ended June 30, 2011 primarily as a result of a decrease in third-party restaurant coupon sales, partially offset by an increase in online advertising.

Our operations and support expenses increased $0.7 million, or 7%, for the three months ended June 30, 2012 compared to the three months ended June 30, 2011, and $1.7 million, or 9%, for the six months ended June 30, 2012 compared to the six months ended June 30, 2011. The increase in operations and support expense was primarily attributable to an increase of $0.5 million for the three months and $1.2 million for the six months in headcount-related costs, including stock-based compensation expense and an increase of $0.2 million for the three months and $0.5 million for the six months in cost at our outsourced customer support center. Also contributing to the increase was an increase of $0.2 million for the three months and $0.5 million for the six months in depreciation of capitalized website and software development costs and an increase of $0.1 million for the three months and $0.2 million for the six months in depreciation on restaurant hardware which were partially offset by a decrease of $0.1 million for the three months and $0.5 million for the six months in costs associated with third-party restaurant coupon sales.

Our sales and marketing expenses increased $2.1 million, or 32%, for the three months ended June 30, 2012 compared to the three months ended June 30, 2011, and $3.1 million, or 22%, for the six months ended June 30, 2012 compared to the six months ended June 30, 2011. The increase in sales and marketing expenses for both the three and six month periods was primarily attributable to increases in headcount-related costs, including stock-based compensation expense.

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