Phase Forward Inc. (PFWD, Financial) filed Quarterly Report for the period ended 2009-09-30.
Phase Forward is a provider of integrated enterprise-level software products services and hosted solutions for use in the clinical trial component of its customers' global research and development initiatives. Phase Forward's customers include pharmaceutical biotechnology and medical device companies as well as academic institutions clinical research organizations and other entities engaged in clinical trials. Phase Forward Inc. has a market cap of $628.4 million; its shares were traded at around $14.54 with a P/E ratio of 45.4 and P/S ratio of 3.7.
We deferred $1.3 million and $1.4 million of set up costs and amortized $0.9 million and $0.9 million in the three months ended September 30, 2008 and 2009, respectively, and deferred $3.6 million and $4.0 million of set up costs and amortized $2.5 million and $2.8 million in the nine months ended September 30, 2008 and 2009, respectively. The amortization of deferred set up costs is a component of cost of services.
During the three months ended September 30, 2008 and 2009, we deferred $1.9 million and $3.1 million, respectively, of commissions and amortized $2.4 million and $2.2 million, respectively, to sales and marketing expense. During the nine months ended September 30, 2008 and 2009, we deferred $6.3 million and $8.2 million, respectively, of commissions and amortized $6.2 million and $5.9 million, respectively, to sales and marketing expense. Royalties are paid on a percentage of billings basis for certain of our products, and we have the right to recover royalties in the event an arrangement is cancelled. During the three months ended September 30, 2008 and 2009, we deferred $0.6 million and $0.6 million, respectively, of royalty expenditures and amortized $0.7 million and $0.5 million, respectively, to cost of license and service revenues. During the nine months ended September 30, 2008 and 2009, we deferred $2.2 million and $2.3 million, respectively, of royalty expenditures and amortized $2.0 million and $2.0 million, respectively, to cost of license and service revenues.
During the three months ending September 30, 2008 and 2009, we recorded $2.3 million and $3.0 million of aggregate stock-based compensation expense, respectively. During the nine months ending September 30, 2008 and 2009, we recorded $6.0 million and $9.2 million of aggregate stock-based compensation expense, respectively. For the three months ending September 30, 2008 and 2009, stock-based compensation expense reduced basic earnings per share by $0.03 and $0.04, respectively, and diluted earnings per share by $0.03 and $0.04, respectively. For the nine months ending September 30, 2008 and 2009, stock-based compensation expense reduced basic earnings per share by $0.09 and $0.14, respectively, and diluted earnings per share by $0.09 and $0.13, respectively. As of September 30, 2009, we had $26.5 million of unrecognized stock-based compensation expense related to options and awards that we expect to recognize over a weighted average period of 2.35 years.
Operating income for the three months ended September 30, 2009 of $2.4 million decreased 46%, or $2.0 million, compared to the same period in 2008. The operating income for the three months ended September 30, 2008 and 2009 included $2.3 million and $3.0 million of stock-based compensation expense and $0.6 million and $0.9 million of amortization expense, respectively.
As of September 30, 2009, we had $112.5 million of unrestricted cash, cash equivalents and short-term investments, a decrease of $46.9 million from $159.4 million at December 31, 2008. This decrease was primarily related to our acquisitions of Waban, Maaguzi and Covance IVRS/IWRS for $34.6 million. As of September 30, 2009, we had $34.7 million of long-term investments, an increase of $16.7 million from $18.0 million at December 31, 2008. As of September 30
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Phase Forward is a provider of integrated enterprise-level software products services and hosted solutions for use in the clinical trial component of its customers' global research and development initiatives. Phase Forward's customers include pharmaceutical biotechnology and medical device companies as well as academic institutions clinical research organizations and other entities engaged in clinical trials. Phase Forward Inc. has a market cap of $628.4 million; its shares were traded at around $14.54 with a P/E ratio of 45.4 and P/S ratio of 3.7.
Highlight of Business Operations:
Stock-Based Compensation Expenses. Our cost of service revenues, sales and marketing, research and development, and general and administrative expenses include stock-based compensation expense. Stock-based compensation expense is based on the fair value of outstanding stock options and restricted stock awards and units, which are recognized over the respective stock option and award or unit service periods. During the three months ended September 30, 2008 and 2009, we recorded $2.3 million and $3.0 million of stock-based compensation expense, respectively. During the nine months ended September 30, 2008 and 2009, we recorded $6.0 million and $9.2 million of stock-based compensation expense, respectively.We deferred $1.3 million and $1.4 million of set up costs and amortized $0.9 million and $0.9 million in the three months ended September 30, 2008 and 2009, respectively, and deferred $3.6 million and $4.0 million of set up costs and amortized $2.5 million and $2.8 million in the nine months ended September 30, 2008 and 2009, respectively. The amortization of deferred set up costs is a component of cost of services.
During the three months ended September 30, 2008 and 2009, we deferred $1.9 million and $3.1 million, respectively, of commissions and amortized $2.4 million and $2.2 million, respectively, to sales and marketing expense. During the nine months ended September 30, 2008 and 2009, we deferred $6.3 million and $8.2 million, respectively, of commissions and amortized $6.2 million and $5.9 million, respectively, to sales and marketing expense. Royalties are paid on a percentage of billings basis for certain of our products, and we have the right to recover royalties in the event an arrangement is cancelled. During the three months ended September 30, 2008 and 2009, we deferred $0.6 million and $0.6 million, respectively, of royalty expenditures and amortized $0.7 million and $0.5 million, respectively, to cost of license and service revenues. During the nine months ended September 30, 2008 and 2009, we deferred $2.2 million and $2.3 million, respectively, of royalty expenditures and amortized $2.0 million and $2.0 million, respectively, to cost of license and service revenues.
During the three months ending September 30, 2008 and 2009, we recorded $2.3 million and $3.0 million of aggregate stock-based compensation expense, respectively. During the nine months ending September 30, 2008 and 2009, we recorded $6.0 million and $9.2 million of aggregate stock-based compensation expense, respectively. For the three months ending September 30, 2008 and 2009, stock-based compensation expense reduced basic earnings per share by $0.03 and $0.04, respectively, and diluted earnings per share by $0.03 and $0.04, respectively. For the nine months ending September 30, 2008 and 2009, stock-based compensation expense reduced basic earnings per share by $0.09 and $0.14, respectively, and diluted earnings per share by $0.09 and $0.13, respectively. As of September 30, 2009, we had $26.5 million of unrecognized stock-based compensation expense related to options and awards that we expect to recognize over a weighted average period of 2.35 years.
Operating income for the three months ended September 30, 2009 of $2.4 million decreased 46%, or $2.0 million, compared to the same period in 2008. The operating income for the three months ended September 30, 2008 and 2009 included $2.3 million and $3.0 million of stock-based compensation expense and $0.6 million and $0.9 million of amortization expense, respectively.
As of September 30, 2009, we had $112.5 million of unrestricted cash, cash equivalents and short-term investments, a decrease of $46.9 million from $159.4 million at December 31, 2008. This decrease was primarily related to our acquisitions of Waban, Maaguzi and Covance IVRS/IWRS for $34.6 million. As of September 30, 2009, we had $34.7 million of long-term investments, an increase of $16.7 million from $18.0 million at December 31, 2008. As of September 30
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