Advent Software Achieves Record Quarterly Revenue of $86 Million and Record Annual Revenue of $326 Million for 2011

Advent Software Achieves Record Quarterly Revenue of $86 Million and Record Annual Revenue of $326 Million for 2011

Company Reports Record ACV of $34 Million for the Year

SAN FRANCISCO – February 6, 2012 - Advent Software, Inc. (NASDAQ: ADVS), a leading provider of software and services to the global investment management industry, announced today its financial results for the fourth quarter ended December 31, 2011.

“I am very proud of Advent’s 2011 performance and strong fourth quarter finish. We achieved record revenue and record annual contract value, while simultaneously expanding non-GAAP operating margin to 22 percent for the year,” said Stephanie DiMarco, Founder and Chief Executive Officer of Advent.  “In addition to the Company's strong financial performance, we successfully executed on our core strategies to strengthen our portfolio of products and services and expand our global footprint and addressable market.  As a result, we head into 2012 with great momentum for Advent’s next phase of growth.”

FOURTH QUARTER 2011 RESULTS

GAAP Results for Continuing Operations
The Company reported quarterly revenue from continuing operations of $86.3 million for the fourth quarter of 2011, up from $75.6 million in the fourth quarter of 2010, a 14% increase.  Total annual revenues from continuing operations for the year ended December 31, 2011 were $326.2 million, compared to $283.5 million recorded in 2010, a 15% increase. 

Operating income from continuing operations for the fourth quarter of 2011 was $10.1 million, or 12% of revenue, compared to $11.7 million or 16% of revenue for the fourth quarter of 2010.  Operating income from continuing operations for the year ended December 31, 2011 was $42.6 million, or 13% of revenue, compared to $36.3 million, or 13% of revenue, for 2010.

Net income from continuing operations for the fourth quarter of 2011 was $6.5 million compared to $9.2 million in the fourth quarter of 2010, a 29% decrease.   Net income from continuing operations for the year ended December 31, 2011 was $28.3 million compared to $24.3 million for 2010, a 16% increase.

On a fully diluted basis, earnings per share from continuing operations in the fourth quarter of 2011 were $0.12, compared to diluted earnings per share of $0.17 in the fourth quarter of 2010. On a fully diluted basis, earnings per share from continuing operations for the year ended December 31, 2011 were $0.52, compared to $0.45 per share for 2010.

Operating cash flow from continuing operations in the fourth quarter of 2011 was $27.6 million, compared with $24.4 million in the fourth quarter of 2010, a 13% increase. Operating cash flow from continuing operations for the year ended December 31, 2011 was $83.2 million, compared with $76.2 million for 2010, a 9% increase.  Cash, cash equivalents and short and long-term marketable securities totaled $136.3 million as of December 31, 2011, compared to $152.0 million as of December 31, 2010.

Total deferred revenues were $174.9 million as of December 31, 2011, compared to $154.2 million from continuing operations as of December 31, 2010, a 13% increase. 

Non-GAAP Results for Continuing Operations
Non-GAAP operating income from continuing operations for the fourth quarter of 2011 was $18.5 million, or 21% of revenue. This compares to $17.9 million from continuing operations, or 24% of revenue, in the fourth quarter of 2010.  Non-GAAP operating income from continuing operations for the year ended December 31, 2011 was $72.2 million, or 22% of revenue.  This represents a 20% increase compared to non-GAAP operating income of $60.2 million, or 21% of revenue for 2010.
 
On a fully diluted basis, non-GAAP earnings per share from continuing operations were $0.22 in the fourth quarter of 2011 and represent a 5% increase from non-GAAP diluted earnings per share of $0.21 in the fourth quarter of 2010.  On a fully diluted basis, non-GAAP earnings per share from continuing operations were $0.86 for the year ended December 31, 2011, a 21% increase compared to $0.71 per share for 2010.

The reconciliation between GAAP and non-GAAP financial measures is provided at the end of this press release.

FOURTH QUARTER HIGHLIGHTS

  • Strong Fundamental Business Metrics:  The Annual Contract Value (ACV) of our new contract bookings in the fourth quarter of 2011 will contribute $13.7 million in annual revenue once the contracts are fully implemented.  New clients represent a broad cross-section of the investment management industry, from hedge funds and asset managers to family offices, fund administrators and the growing advisory market. The renewal rate was 93% for the third quarter of 2011, a 2 point improvement over the same period last year.
  • Global Expansion and Execution:  The fourth quarter saw strong demand for Advent’s leading solutions outside of North America.  Advent signed new contracts with firms in Europe, the Middle East, Africa, and Asia.  Revenue from international operations accounted for 18% of total revenue in the fourth quarter and 18% for the full year 2011.
  • Launch of Advent Portfolio Exchange® (APX) 4.0 and Tradex® 4.0:  Advent launched its most extensive update of APX to date.  With this release, Advent introduced customizable dashboard capabilities to offer greater flexibility and control over report content and format – delivering instant access to more information and with greater clarity.  Tradex®, an easy to use web-based system, allows firms that distribute funds to replace labor-intensive manual procedures for fund share order processing with a highly automated work flow and can be tailored to a specific client and market needs. With these releases, Advent continues to set a new standard in comprehensive portfolio management for both asset managers and wealth managers around the globe.

Advent’s Board of Directors appointed Advent's President Peter Hess to the position of Chief Executive Officer (CEO) and President, effective June 30, 2012. Stephanie DiMarco, Advent's founder and CEO, will step down as CEO at the end of June 2012. Ms. DiMarco continues to serve as a Director on Advent's Board and will be transitioning to an advisory role for the company's senior management.


FINANCIAL GUIDANCE    

Advent provides the following financial guidance for the first quarter and fiscal year 2012:

 

Guidance

Q1 2012

FY 2012

Total Revenue ($M)   

$86-$88

$361-$368

YoY Revenue Growth

 14%-17%

 11%-13%

GAAP Operating Margin

n/a

14.0%-14.5%

Amortization of Intangibles

(% of revenue)       

n/a

3%

Stock Compensation Expense (% of revenue)

n/a

6%

Non-GAAP Operating Margin

n/a

23.0%-23.5%

Operating Cash Flow ($M)

n/a

$90-$96

Capital Expenditures ($M)

n/a

$13-$15

Growth of Weighted Average Shares Outstanding, excluding any share repurchases


n/a

 
0.25%-0.75% per quarter

Effective Tax Rate (GAAP)

n/a

 35%-40%

Effective Tax Rate (non-GAAP)

n/a

 35%

Click here to view the comprehensive Q4.11 financial statements.

INVESTOR CALL
Advent Software, Inc. will host its Q4 2011 quarterly earnings conference call at 5:00 p.m. Eastern time today.  The Q4 2011 earnings presentation and trended disclosures file, which include highlights and detailed financial information, are currently available at http://investor.advent.com.  To participate via phone, please dial (866) 356-3095 and request conference ID #51691155.  A replay will be available through midnight, February 13, 2012.  The replay number for domestic callers is (888) 286-8010, and for international callers is (617) 801-6888, with the conference ID of #68833003.  The conference call will also be webcast live and then archived on http://investor.advent.com.
 
ABOUT ADVENT 
Advent Software, Inc. (www.advent.com), a global firm, has provided trusted solutions to the world’s leading financial professionals since 1983.  Firms in more than 60 countries use Advent technology.  Advent’s quality software, data, services and tools enable financial professionals to improve service and communication to their clients, allowing them to grow their business while controlling costs.  Advent is the only financial services software company to be awarded the Service Capability and Performance certification for being a world-class support organization.  For more information on Advent products visit http://www.advent.com/about/resources/demos/pr.
 
ABOUT NON-GAAP FINANCIAL INFORMATION
This press release includes non-GAAP financial measures. For a description of these non-GAAP financial measures, including the reasons management uses each measure, and reconciliations of these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with Generally Accepted Accounting Principles (GAAP), please see the accompanying tables entitled “Reconciliation of Selected Continuing Operations’ GAAP Measures to Non-GAAP Measures.”

FORWARD-LOOKING STATEMENTS 
The financial projections under Financial Guidance, and statements regarding our momentum and other forward-looking statements included in this presentation reflect management's best judgment based on factors currently known and involve risks and uncertainties; our actual results may differ materially from those discussed here.  These risks and uncertainties include: potential fluctuations in new contract bookings, renewal rates, operating results and future growth rates; continued market acceptance of our Advent Portfolio Exchange®, Geneva®, Tradex®, and Moxy® products; the successful development, release and market acceptance of new products and product enhancements; uncertainties and fluctuations in the financial markets; the Company’s ability to satisfy contractual performance requirements; difficulties in integrating merged businesses, such as Syncova Solutions Limited and Black Diamond Performance Reporting LLC, and achieving expected synergies and results; and other risks detailed from time to time in our SEC reports including, but not limited to, our quarterly reports on Form 10-Q and our 2010 annual report on Form 10-K.  The Company disclaims any intention or obligation to publicly update or revise any forward-looking statements including any guidance, whether as a result of events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Advent, the Advent logo, Advent Software, Advent Portfolio Exchange, Geneva and Moxy are registered trademarks of Advent Software, Inc, and Tradex is a registered mark in Norway and the European Union of Advent Norway AS.  All other company names or marks mentioned herein are those of their respective owners.

CONTACT
Media Contact:
Smita Topolski
Advent Software, Inc.
(415) 645-1668
stopolsk@advent.com

Investor Relations Contact:
Heidi Flaherty
Advent Software, Inc.
(415) 645-1145
flaherty@advent.com