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Articles 

Taleo Corp. Reports Operating Results (10-K)

February 29, 2012 | About:

Taleo Corp. (TLEO) filed Annual Report for the period ended 2011-12-31.

Taleo Corp-a has a market cap of $1.9 billion; its shares were traded at around $45.82 with a P/E ratio of 78.8 and P/S ratio of 6.1.

Highlight of Business Operations:

Professional services revenue recognized in 2011 and 2010 relating to multi-element arrangements entered into prior to 2010 was approximately $10.0 million and $13.4 million, respectively. During 2011 and 2010, we deferred additional revenue of $0.6 million and $8.3 million, respectively, for services performed related to multi-element arrangements entered into prior to 2010.

Subscription and support revenue increased due to sales to new customers, successful renewals of existing customers, sales of additional applications and broader roll out of our applications by existing customers and the addition of customers through our acquisition of Jobpartners on July 1, 2011, Cytiva on April 1, 2011, and Learn.com on October 1, 2010. Subscription and support revenue from our products for medium and larger, more complex organizations increased by $36.9 million for 2011 as compared to 2010. Subscription and support revenue from our small business product lines increased by $20.3 million for 2011 as compared to 2010. We expect total subscription and support revenue to increase for 2012 as we continue to increase our sales of new and existing applications into our installed customer base, to new customers and to additional customers added through the acquisition of Jobpartners on July 1, 2011 and Cytiva on April 1, 2011. However, unexpected events, such as significant staff reductions within our customer base, may negatively impact our renewal trends.

Professional services revenue that is recognized as services are performed increased in 2011 when compared to 2010 resulting from the higher demand for services from an increased number of customers. However, the increase was offset in part by a decrease in professional services revenue recognized for professional services that were delivered prior to 2010 but recognized in later periods. Professional services revenue recognized in 2011 and 2010 relating to multi-element arrangements entered into prior to 2010 were approximately $10.0 million and $13.4 million, respectively.

The higher gross profit percentage on professional services revenue in 2011 compared to 2010 resulted primarily from professional services revenue associated with new product implementations delivered before 2010 that are being recognized ratably. During 2011 and 2010, we benefited from recognizing revenue, net of additional deferrals, of $9.4 million and $5.1 million, respectively, for which the related expense was recorded in the prior years. Additionally, as described above, we initially recorded $1.2 million in qualified wage credits under the current Quebec program to the cost of professional services revenue in 2011, of which $0.9 million related to the projected refund amounts for 2009 and 2010. Please refer to Note 1 Description of Business and Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements in this Form 10-K for the detail on the Revenue Quebec audit of the 2009 qualified wage credits.

Subscription and support revenue increased due to sales to new customers, successful renewals of existing customers, sales of additional applications and broader roll out of our applications by existing customers and the addition of customers through our acquisition of WWC on January 1, 2010 and Learn.com on October 1, 2010. Subscription and support revenue from our products for medium and larger, more complex organizations increased by $21.0 million in 2010 as compared to 2009 and subscription and support revenue from our small business product lines increased by $4.8 million for 2010 as compared to 2009. Our list prices for subscription and support services have remained relatively consistent on a year-over-year basis, and renewals of subscription and support services for medium and larger more complex organization, on a dollar-for-dollar basis, remained strong at approximately 97%. The increase in subscription and support revenues was due primarily to new customers, upgrades and additional subscriptions from existing customers and improvement in renewal rates over the past twelve months, and incremental revenue resulting from the acquisition of Learn.com in October 2010.

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About the author:

10qk
Charlie Tian, Ph.D., is the founder of GuruFocus. You can now order his book Invest Like a Guru on Amazon.

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