Advent Software Reports Second Quarter 2010 Results

Advent Software Reports Second Quarter 2010 Results

Company Achieves Record Quarterly Revenues of $69 Million and a 51% Increase in Annual Contract Value over Prior Year


SAN FRANCISCO – July 26, 2010 – Advent Software, Inc. (NASDAQ: ADVS), a leading provider of software and services to the global investment management industry, announced today financial results for the second quarter ended June 30, 2010.

“I am very pleased to report our second quarter financial results.  We achieved record quarterly revenues from continuing operations, strong new bookings and 20% non-GAAP operating margins,” said Stephanie DiMarco, Founder and Chief Executive Officer of Advent.  “Our healthy performance results from demand for our market leading suite of software and services from customers around the world.” 

SECOND QUARTER 2010 RESULTS

GAAP Results for Continuing Operations

The Company reported revenue from continuing operations of $69.3 million for the second quarter of 2010, compared to $63.1 million in the second quarter of 2009, a 10% increase. 
 
Operating income from continuing operations for the second quarter of 2010 was $7.6 million, or 11% of revenue, which represented an increase of 5% compared with $7.2 million, or 11% of revenue, in the second quarter of 2009.

Net income from continuing operations for the second quarter of 2010 was $4.8 million compared to net income of $7.2 million in the second quarter of 2009, a 32% decrease.
 
On a fully diluted basis, earnings per share from continuing operations in the second quarter of 2010 were $0.18 and represent a 35% decrease from diluted earnings per share of $0.27 in the second quarter of 2009.  The second quarter of 2009 included a $0.08 per share gain resulting from the sale of Advent’s equity investment in Latent Zero Limited.

Operating cash flow from continuing operations in the second quarter of 2010 was $17.8 million, compared to $12.5 million in the first quarter of 2010, a 42% increase.  Cash, cash equivalents and marketable securities of continuing operations totaled $102.5 million as of June 30, 2010.

The Company repurchased approximately 555,000 shares in the second quarter of 2010 at an average price of $43.02 per share. 

Non-GAAP Results for Continuing Operations

Non-GAAP operating income from continuing operations for the second quarter of 2010 was $13.8 million, or 20% of revenue. This represents a 4% increase compared to $13.3 million from continuing operations, or 21% of revenue, in the second quarter of 2009. Non-GAAP earnings per share from continuing operations were $0.33 in the second quarter of 2010 unchanged from the second quarter of 2009.

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

SECOND QUARTER HIGHLIGHTS

  • Customer Momentum: Advent added several notable clients during the quarter including:
    • Emirates NBD
    • State of Wisconsin
    • Allen & Company
    • Diamondback Capital Management
  • Healthy Trends in Fundamental Business Metrics: New term license and Advent OnDemandSM contracts signed in the second quarter of 2010 will contribute $6.5 million in annual revenue once they are fully implemented, a 51% increase over the second quarter of 2009.  The renewal rate improved to a 90% initial renewal rate for the first quarter of 2010, a 5 point improvement over the same period last year.
  • International Growth: International contributed 15% of revenues in the second quarter of 2010. The company signed Emirates NBD, the biggest banking group in the Middle East in terms of assets.  Advent was selected by Emirates NBD from a field of over 14 competitors for its comprehensive suite of software and services.
  • Expanding International Presence and Visibility: Advent announced the opening of a new office in Singapore underscoring the company’s commitment to the Asia Pacific region.  In May 2010, Advent hosted its EMEA Conference in Vienna, Austria where customers representing 17 countries were in attendance. 
  • Launch of Geneva® 8.0:  Advent launched the newest version of Geneva®, which introduces middle office functionality, out-of-the-box integration to counterparties and data providers, and easy-to-use, customizable access to real-time data. The new features complement the existing world-class asset coverage, reporting, and accounting functionality of Geneva®.
  • Launch of Tamale RMS® 5.0:  Advent released Tamale RMS® 5.0, the next generation of Advent's leading research management solution. The latest release introduces new configurable templates, dynamic dashboards and views combined with a new framework for seamless data integration that help firms streamline and optimize their investment processes.

 FINANCIAL GUIDANCE    
Advent announces the following financial guidance for the second quarter and fiscal year 2010:

Guidance 

Q3 2010 Continuing Operations

FY 2010 Continuing Operations

Total Revenue ($M)

$70M - $72M 

 $277M - $281M

Year over Year Growth

10% - 13%

7% - 8%

GAAP Operating Margin 

n/a

 11% - 12%

Amortization of Intangibles (% of revenue)

n/a

 1% - 2%

Stock Compensation Expense (% of revenue)

n/a

 7% - 8%

Non-GAAP Operating Margin

n/a

 20% - 21%

Operating Cash Flow ($M)

n/a

 $77M - $82M

Capital Expenditures ($M)

n/a

 $18M - $22M


Please click here to view the tables for the reconciliation between GAAP and non-GAAP financial measures.

INVESTOR CALL
Advent Software, Inc. will host its Q2 2010 quarterly earnings conference call at 5:00 p.m. Eastern time today.  The Q2 2010 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 800-659-1966 and request conference ID #14046382.  A replay will be available through midnight, August 3, 2010, by calling 888-286-8010 and referencing conference ID #99486014.  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’s products and services.  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, our revenue growth, market acceptance and demand for our products and new product releases, our competitive position, market conditions and their impact on our business, international expansion, and the momentum of the business, 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®, Axys®, Geneva® and Moxy® products; the successful development, release and market acceptance of new products and product enhancements; continued uncertainties and fluctuations in the financial markets; the Company’s ability to satisfy contractual performance requirements; difficulties in integrating merged businesses 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 2009 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, Moxy, and Tamale RMS are registered marks of, and Advent OnDemand is a mark of Advent Software, Inc.  All other company names or marks mentioned herein are those of their respective owners.


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

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