Piper Jaffray Comments On RightNow Technologies Following Solid Earnings

RightNow Technologies RNOW Q1 results were highlighted by >30% software backlog growth despite a tough comparison, marking an acceleration versus 28% in Q4, and surprisingly strong customer additions of 71, the most in 2.5 years. RNOW increased 2011 EPS guidance by $0.03 and slightly raised its recurring-revenue growth target from 23% to 24%, whereas in recent years RNOW had maintained or slightly reduced guidance exiting Q1. Total revenue of $52.3M was slightly ahead of consensus of $52.1M, while PF EPS of $0.10 beat consensus by $0.02. RightNow expects Q2 2011 total revenue of $54.0M which is in line with consensus and PF EPS of $0.12, which is $0.01 ahead of consensus. RightNow Technologies current software backlog grew a record 38% y/y despite tough comps, representing one of the highest bookings growth rates in the SaaS segment, RNOW also raised recurring revenue growth guidance for the full year by 100 bps to 24%, which is among the highest recurring revenue growth rates in the industry. Negatives include: OCF per share missed consensus by $0.10/sh and OCF was flat y/y; despite very strong backlog growth in Q1, 2011 guidance was only increased modestly as the company acknowledged some conservatism in the forecast. Piper Jaffray has a $40 PT and Overweight rating on RNOW RNOW closed Wednesday at $32.95