Keynote (NASDAQ: KEYN), the
global leader in mobile and web cloud testing & monitoring,
reported financial results for its first fiscal quarter ended December
Umang Gupta, Chairman and CEO of Keynote, said: "Our first fiscal
quarter of 2013 results were better than expected. Our Internet
subscriptions revenue continued on its upward trajectory and our mobile
telecom business delivered record revenue. Additionally, we continued to
make progress with our mobile enterprise business. Today, we have the
strongest product offering in our growing market segments and solid
go-to-market strategies. We are optimistic about our future prospects."
Quarter Ended December 31, 2012 Compared to Quarter Ended December
Revenue was $33.9 million for the first fiscal quarter of 2013, compared
to $33.1 million in the first fiscal quarter of 2012. Total Internet
revenue was $16.4 million, up from $15.5 million a year ago. Total
mobile revenue was $17.5 million, compared to $17.6 million a year ago.
The revenue accounting headwind in the quarter was $1.2 million, which
equals the decrease in mobile ratable licenses revenue from $1.6 million
a year ago to $397,000 in the first fiscal quarter of 2013.
Total costs and expenses for the quarter were $29.7 million, compared to
$27.6 million in the same quarter a year ago. Net income for the first
fiscal quarter of 2013 was $1.9 million, or $0.11 per diluted share,
compared to net income of $4.1 million, or $0.22 per diluted share, for
the same period last fiscal year. Non-GAAP net income for the first
fiscal quarter of 2013 was $6.0 million, or $0.33 per diluted share,
compared to $6.0 million, or $0.32 per diluted share, for the same
period last fiscal year. The company defines non-GAAP net income as GAAP
net income adjusted for the provision for income taxes, cash taxes from
on-going operations, stock-based compensation expense, amortization of
purchased intangibles, and any unusual items. Non-GAAP net income per
diluted share equals non-GAAP net income divided by the diluted weighted
average shares outstanding for the period.
Adjusted EBITDA was $7.9 million for the first fiscal quarter of 2013,
or 23% of revenue, compared to $7.4 million, or 22% of revenue, for the
same period last fiscal year. The company defines Adjusted EBITDA as
earnings before interest income, taxes, depreciation, amortization of
purchased intangibles, stock-based compensation, other income (expense),
net, and any unusual items.
Cash provided by operating activities was $3.8 million for the first
fiscal quarter of 2013, compared to $1.5 million for the same period
last fiscal year. Keynote defines free cash flow as cash flow from
operations less cash used to purchase property, equipment and software.
The company generated free cash flow of $2.4 million for the first
fiscal quarter of 2013, compared to using $98,000 in the first fiscal
quarter of 2012.
At December 31, 2012, Keynote had $51.2 million in cash, cash
equivalents, and short-term investments, compared to $49.9 million at
September 30, 2012. Net deferred revenue was $15.6 million at December
31, 2012, compared to $16.7 million at September 30, 2012. The total
shares outstanding at December 31, 2012 were 18.2 million, compared to
17.9 million at September 30, 2012.
Quarterly Cash Dividend
On December 11, 2012, the board of directors announced a cash dividend
of $0.06 per common share to common stockholders of record as of the
close of business on December 21, 2012, which was paid on or about
December 31, 2012. This accelerated dividend was in lieu of any
quarterly dividend to be declared in January 2013.
In addition to the accelerated cash dividend paid last quarter, the
board of directors approved an increase in the quarterly cash dividend
to $0.07 per common share, to be paid next quarter on June 15, 2013 to
common stockholders of record at the close of business on June 1, 2013.
Expectations for the Second Fiscal Quarter of 2013
The statements in this section of this press release are forward-looking
statements within the meaning of Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934.
Keynote currently expects the following for the second fiscal quarter of
The above guidance is based on the following assumptions:
Keynote will host a conference call and simultaneous Webcast at 2:00 pm
(PDT) today, January 29, 2013. To access the call in the U.S., please
dial (800) 588-4973, and for international callers dial (847) 230-5643.
Callers may provide the following confirmation number 34004609 to access
the call more quickly, and are encouraged to dial into the call 10 to 15
minutes prior to the start to prevent any delay in joining. The webcast
can be accessed at www.keynote.com
and is available for replay for 90 days. In addition, a replay of the
call will be available via telephone for two business days, beginning
two hours after the call. To listen to the telephone replay in the U.S.,
please dial (888) 843-7419, and for international callers dial (630)
652-3042 and enter access code 34004609#.
This press release contains forward-looking statements that are not
purely historical regarding the company or management's intentions,
hopes, beliefs, expectations and strategies for the future. Because such
statements deal with future events, they are subject to various risks
and uncertainties, and actual results could differ materially from the
company's current expectations.
Forward-looking statements in this release include, but are not limited
to, future prospects, forecasts concerning Keynote's expected revenue,
GAAP and Non-GAAP earnings per share and other results, and the related
underlying assumptions in calculating those amounts including foreign
exchange rates, the seasonal nature of revenues, and other future
financial results. It is important to note that actual outcomes and
Keynote's actual results could differ materially from those in such
forward-looking statements. Factors that could cause actual results to
differ materially include risks and uncertainties such as risks related
to Keynote's ability to successfully market and sell its services to new
or existing customers, especially mobile enterprise customers, the
uncertain impact global economic conditions, particularly in Europe,
will have on Keynote's business or the businesses of current or
potential customers, Keynote's ability to develop and introduce new
services in a timely manner and customer acceptance of new services, the
extent to which demand for Keynote's various services fluctuates, the
extent to which existing customers renew their subscriptions and
purchase additional services, particularly enterprise customers,
Keynote's ability to attract and retain new customers, Keynote's ability
to operate its international operations and manage related costs
successfully, Keynote's ability to retain key employees, pricing
pressure with respect to Keynote's services, unforeseen expenses,
competition in Keynote's markets, costs associated with any future
acquisitions, the effect of acquisitions by competitors in Keynote's
target markets, Keynote's ability to keep pace with changes in the
mobile and Internet infrastructure as well as other technological
changes, the impact of changes in foreign exchange rates, which can be
significant, and the success of Keynote's international operations.
Readers should also refer to the risks outlined in Keynote's reports
filed with the Securities and Exchange Commission, including its Annual
Report on Form 10-K for its fiscal year ended September 30, 2012, and
its quarterly reports on Form 10-Q and any current reports on Form 8-K
filed during the fiscal year.
All forward-looking statements and reasons why results might differ
included in this release are made as of the date of this press release,
based on information available to Keynote as of the date of this press
release, and Keynote assumes no obligation to update any such
forward-looking statements or reasons why results might differ.
This press release includes information on Non-GAAP net income, Non-GAAP
net income per share, Adjusted EBITDA and free cash flow. These measures
are not based on any standardized methodology prescribed by United
States generally accepted accounting principles ("GAAP") and are not
necessarily comparable to similar measures presented by other companies.
Non-GAAP net income is calculated by adjusting GAAP net income (loss)
for the provision (benefit) for income taxes, cash taxes from on-going
operations, stock-based compensation expense, amortization of purchased
intangibles, and any unusual items. In the first fiscal quarter of 2012,
the change in fair value of acquisition-related contingent consideration
was considered an unusual item. Non-GAAP net income per share is
calculated by dividing Non-GAAP net income by the weighted average
number of diluted shares outstanding for the period. Free cash flow is
defined as cash flow from operations less cash used to purchase
property, equipment and software. Adjusted EBITDA is defined as earnings
before interest income, taxes, depreciation, amortization of purchased
intangibles, stock-based compensation, other income (expense), net, and
any unusual items. In the first fiscal quarter of 2012, the change in
fair value of acquisition-related contingent consideration was
considered an unusual item. These measures should not be considered in
isolation or as a substitute for measures prepared in accordance with
GAAP, and because these amounts are not determined in accordance with
GAAP, they should not be used exclusively in evaluating the company's
business and operations. Accordingly, the company believes that this
non-GAAP information is useful as an additional means for investors to
evaluate the company's operating performance, when reviewed in
conjunction with the company's GAAP financial statements. Management
also uses this information as an additional means for measuring the
performance of the company. The company compensates for these
limitations by realizing that these amounts are not determined in
accordance with GAAP and, therefore, should not be used exclusively in
evaluating its business and operations.
(NASDAQ:KEYN) is the global leader in Internet
and mobile cloud testing & monitoring. Keynote maintains the
world's largest on-demand performance monitoring and testing
infrastructure for Web and mobile sites comprised of over 7,000
measurement computers and mobile devices in over 275 locations around
the world that enable companies to continuously improve the online and
mobile experience. Known as 'The Mobile and Internet Performance
Authority™,' Keynote offers three market-leading product platforms:
Perspective® provides on-demand performance monitoring
for enterprise Web and mobile sites including online portals, e-commerce
sites and B2B sites. Over 2,000 customers rely on Keynote Perspective
services to know precisely how their websites, content, and applications
perform on actual browsers, networks, and mobile devices.
DeviceAnywhere® is an enterprise-class, cloud-based,
mobile application lifecycle management (ALM) testing & quality
assurance platform. It is used by over 1,000 mobile developers and
enterprises to deliver mobile applications, content and services faster
while reducing downtime and testing costs.
SIGOS® offers active end-to-end Quality of Service (QoS)
testing and monitoring solutions for mobile, fixed and VoIP
communications. Its SITE and Global Roamer products are used by over 200
network operators, content providers, carriers and regulators in over
100 countries worldwide.
Keynote's 4,000 customers represent top Internet and mobile companies
and include American Express, AT&T, Disney, eBay, E*TRADE, Expedia,
Google, Microsoft, SonyEricsson, T-Mobile and Vodafone. Keynote Systems,
Inc. is headquartered in San Mateo, California and can be reached at http://www.keynote.com/
or by phone in the U.S. at 1-800-KEYNOTE.
The trademarks or registered trademarks of Keynote Systems, Inc. in the
United States and other countries include Keynote®, DataPulse®,
Keynote Customer Experience Rankings®, Perspective®,
Keynote Red Alert®, Keynote WebEffective®, The
Internet Performance Authority®, MyKeynote®, SIGOS®,
SITE®, keynote® The Mobile & Internet Performance
Authority™, Keynote FlexUse®, Keynote DeviceAnywhere®,
Keynote DeviceAnywhere Test Center®, Keynote DemoAnywhere®
and Keynote MonitorAnywhere® All related trademarks, trade
names, logos, characters, design and trade dress are trademarks or
registered trademarks of Keynote Systems, Inc. in the United States and
other countries and may not be used without written permission. All
other trademarks are the property of their respective owners.
(in thousands, except per share data)
Non-GAAP Net Income
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