DMAN: Management Comments on Q2 Results and Raises Q3 Operating Income Guidance
Submitted By Knobias ClipReport
DMAN: Management Comments on Q2 Results and Raises Q3 Operating Income Guidance
By Fain Hughes, fhughes@knobias.com
Shares of DemandTec, Inc. (DMAN) were higher in Friday’s session after the Company reported its financial results for the second quarter of fiscal year 2009 ended August 31, 2008 and issued guidance during a conference call after the bell on Thursday.
Revenue was $18.6 million in the second quarter of fiscal 2009, a 27% increase from $14.7 million in the second quarter of fiscal 2008 and a 3% increase from $18.1 million in the first quarter of fiscal 2009. Non-GAAP net income was $1.2 million, or $0.04 per diluted share, in the second quarter of fiscal 2009, compared to a non-GAAP net loss of $262,000, or ($0.02) per diluted share, in the second quarter of fiscal 2008. This beat the estimate from analysts of $0.03 per share.
Mark Culhane, CFO of DemandTec, added guidance for Q3 and FY09 during the conference call. He said, “We expect Q3 revenue of $18.7-$18.8 million and non-GAAP operating income of $600K-$750K. We expect Q3 non-GAAP diluted EPS of $0.03 per share.”
“For FY09, we reaffirm our prior revenue guidance of $74.5-$75.5 million. We are raising our non-GAAP operating income range to $2.6-$2.9 million, which raises the mid-point of our range by $150K. We expects FY09 diluted EPS of $0.12-$0.13 per share.”
Mr. Culhane added, “We are also raising our annual free cash flow margin target to $10 million, or 13% of revenue, from $9 million, or 12% of revenue.”
Dan Fishback, President and CEO of DemandTec, commented, “Our Q2 results demomstrate our continued success in executing our three-point growth strategy, as both revenue and non-GAAP profitability came in above the targets that we shared with you last quarter. We also had another strong quarter of cash flow performance with $3.3 million of cash flow from operations.”
Mr. Fishback added, “The economic environment remains challenging, however, on the margin, we have not seen any noticeable change in sales cycles or the level of scrutiny in getting customer agreements signed and closed. Our competitive win rates, renewal rates and interest in our solutions from our customers and prospects remains high, so we remain cautiously optimistic about the reception to our marketing message.”
He concluded, “We are the clear leader in the Consumer Demand Management market. We are highly differentiated by our comprehensive suite of advanced analytics, talented employees that bring proven domain experience and optimization software services.”
Pacific Crest believes the comps could get tougher for DMAN but maintains their Outperform rating. However, they cut the target price to $14 from $18.
