Advent Software Reports Strong Third Quarter 2010 Results

Advent Software Reports Strong Third Quarter 2010 Results

Company Achieves Record Quarterly Revenues of $72 Million and a 12% Increase in Annual Contract Value over Prior Year 

SAN FRANCISCO – October 25, 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 third quarter ended September 30, 2010.

“I am extremely pleased with our third quarter financial results.  Once again, we performed well across all areas of our business,” said Stephanie DiMarco, Founder and Chief Executive Officer of Advent.  “There is a strong need for our products as firms increasingly look to more effectively manage risk and drive greater operational efficiency.  Our domestic competitive position remains very strong, and I am excited to report that we are seeing excellent international growth.”

THIRD QUARTER 2010 RESULTS

GAAP Results from Continuing Operations

The Company reported revenue from continuing operations of $72.0 million for the third quarter of 2010, compared to $63.8 million in the third quarter of 2009, a 13% increase. 
 
Operating income from continuing operations for the third quarter of 2010 was $9.7 million, or 14% of revenue, which represented an increase of 67% compared with $5.8 million, or 9% of revenue, in the third quarter of 2009.

Net income from continuing operations for the third quarter of 2010 was $6.0 million compared to net income of $3.9 million in the third quarter of 2009, a 53% increase.
 
On a fully diluted basis, earnings per share from continuing operations in the third quarter of 2010 were $0.22 and represent a 47% increase from diluted earnings per share of $0.15 in the third quarter of 2009.

Operating cash flow from continuing operations in the third quarter of 2010 was $21.6 million, compared to $19.8 million in the third quarter of 2009, a 9% increase.  Cash, cash equivalents and marketable securities of continuing operations totaled $122.0 million as of September 30, 2010.

The Company repurchased approximately 32,000 of its shares in the third quarter of 2010 at an average price of $45.89 per share.

Non-GAAP Results from Continuing Operations

Non-GAAP operating income from continuing operations for the third quarter of 2010 was $15.7 million, or 22% of revenue. This represents a 28% increase compared to $12.3 million from continuing operations, or 19% of revenue, in the third quarter of 2009. On a fully diluted basis, Non-GAAP earnings per share from continuing operations were $0.38 and represent a 27% increase from Non-GAAP diluted earnings per share of $0.30 in the third quarter of 2009.

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

THIRD QUARTER HIGHLIGHTS

  • Healthy Trends in Fundamental Business Metrics: New term license and Advent OnDemand contracts signed in the third quarter of 2010 are expected to contribute $7.6 million in annual revenue once they are fully implemented, a 12% increase over the third quarter of 2009.  The renewal rate improved to a 91% initial renewal rate for the second quarter of 2010, a 4 point improvement over the same period last year.
  • Continued International Growth: Signaling continued international momentum in Asia, Europe and the Middle East, Advent signed new customers in Singapore, Bahrain, Sweden, Switzerland and the U.K. in the third quarter.  New customers included one of the largest multi-strategy hedge funds in Asia and a major global bank with operations in both Europe and Asia.
  • Launch of Moxy 7.0: Advent released the latest version of Moxy®, its industry leading trade order management solution.  The new features and functionality included in Moxy® 7.0 help meet the demands of a more complex and faster-paced investment marketplace.  It is designed to support the growing trend towards model-driven portfolio construction and management, combined with increased concerns about compliance. 
  • Waters Magazine Award: For the second consecutive year, Advent was named ‘Best Portfolio Management System Provider’ by Waters Magazine in the publication’s annual readers’ choice rankings. 
  • Client Conference: With more than 1,100 attendees, Advent hosted a very successful client conference the week of September 21st in Las Vegas.

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

Guidance 

Q4 2010 Continuing Operations

FY 2010 Continuing Operations

Total Revenue ($M)

$72M - $74M 

 $280M - $282M

Year over Year Growth

9% - 12%

8% - 9%

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 - $20M


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 Q3 2010 quarterly earnings conference call at 5:00 p.m. Eastern time today.  The Q3 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 800-299-6183 and request conference ID #15451023.  A replay will be available through midnight, November 1, 2010, by calling 888-286-8010 and referencing conference ID #60812781.  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 50 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; 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, and Moxy 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:      
Jessica Miller
Advent Software, Inc.    
(415) 645-1668     
jmiller@advent.com