Market Overview

Bazaarvoice, Inc. Announces its Financial Results for the Second Fiscal Quarter of 2013

Second fiscal quarter of 2013 and recent strategic highlights include:

  • Revenue for the second quarter increased by 54% year-over-year to $38.6 million
  • Number of active enterprise clients totaled 1,109 at the end of the period
  • Stephen Collins was appointed Chief Executive Officer and President
  • Bazaarvoice acquired Longboard Media, Inc.

AUSTIN, Texas, Nov. 26, 2012 (GLOBE NEWSWIRE) -- Bazaarvoice, Inc. (Nasdaq: BV), a leading social commerce solutions company, reported its financial results for the second fiscal quarter of 2013 ended October 31, 2012:

  • Revenue for the second quarter of 2013 was $38.6 million, an increase of 54%, compared to $25.0 million for the second quarter of 2012.
  • Adjusted EBITDA for the second quarter of 2013 was a loss of $4.0 million, compared to a loss of $3.1 million for the second quarter of 2012.
  • GAAP net loss for the second quarter of 2013 was $11.2 million, compared to a GAAP net loss of $5.9 million for the second quarter of 2012. Non-GAAP net loss for the second quarter of 2013 was $4.9 million, compared to a non-GAAP net loss of $4.2 million for the second quarter of 2012.
  • GAAP net loss per share for the second quarter of 2013 was $0.16, compared to a GAAP net loss per share for the second quarter of 2012 of $0.30. Non-GAAP net loss per share for the second quarter of 2013 was $0.07, compared to a non-GAAP net loss per share for the second quarter of 2012 of $0.09.

"We entered the year with a plan to position the business to take advantage of the enormous opportunities as a result of exciting trends in social, ecommerce and big data," said Stephen Collins, Chief Executive Officer. "Our plans centered on furthering our lead position in online retail globally, investing in R&D to enhance our platform to a true self-service model and expanding our capabilities into retail shopper media. We are extremely gratified that we have now achieved all of these critical strategic objectives with the expansion of our network through the acquisition of PowerReviews, the enhancement of our technology platform with the release of Conversations 2.0 and our entry into shopper media through our recent acquisition of Longboard Media. With these achievements, we are confident that Bazaarvoice is well positioned to build momentum going forward."

Second Fiscal Quarter of 2013 Financial Details

Revenue: Bazaarvoice reported revenue of $38.6 million for the second quarter of 2013, representing a year-over-year increase of 54% compared to revenue of $25.0 million for the second quarter of 2012.

Net loss: GAAP net loss for the second quarter of 2013 was $11.2 million, compared to a GAAP net loss of $5.9 million for the second quarter of 2012. Non-GAAP net loss for the second quarter of 2013 was $4.9 million, compared to a non-GAAP net loss of $4.2 million for the second quarter of 2012.

Net loss per share: GAAP net loss per share for the second quarter of 2013 was $0.16 based upon weighted average shares outstanding of 69.8 million, compared to a GAAP net loss per share of $0.30 for the second quarter of 2012 based upon weighted average shares outstanding of 19.4 million.

Non-GAAP net loss per share for the second quarter of 2013 was $0.07 based upon weighted average shares outstanding of 69.8 million, compared to a non-GAAP net loss per share of $0.09 for the second quarter of 2012 based upon weighted average shares outstanding of 47.3 million.

Adjusted EBITDA: Adjusted EBITDA for the second quarter of 2013 was a loss of $4.0 million, compared to a loss of $3.1 million for the second quarter of 2012.

Clients: The number of active enterprise clients at the end of the second quarter was 1,109, and the number of active network clients at the end of the second quarter was approximately 1,100. Annualized revenue per average active enterprise client for the second quarter was approximately $141,400. Active enterprise client retention rate for the second quarter was approximately 96%.

In connection with our acquisition of PowerReviews, which closed in June 2012, we expanded the types of clients that we serve. To reflect differences among our clients and the services that we offer, we now define our clients as "active enterprise clients" and "active network clients," the definitions of which are set forth herein. Historical references to active clients for periods prior to the closing of the acquisition include both active enterprise clients and active network clients on an aggregate basis. As a result of this prospective nomenclature change resulting from our acquisition of PowerReviews, active clients and active client retention rates for periods prior to June 2012 and after June 2012 may not be directly comparable as we have not made this distinction retrospectively. This change also has a corresponding impact on metrics that are driven by the number of clients, such as revenue per active client.

Quarterly Conference Call

Bazaarvoice will host a conference call today at 4:30 p.m. Eastern Time to review the company's financial results for the second fiscal quarter of 2013 ended October 31, 2012. To access this call, dial (877) 208-2391 from the United States or (913) 312-0652 internationally with conference ID 4260279. A live webcast of the conference call can be accessed from the investor relations page of Bazaarvoice's company website at investors.bazaarvoice.com.  Following the completion of the call, a recorded replay will be available on the company's website, and a telephone replay will be available through December 10, 2012 by dialing (877) 870-5176 from the United States or (858) 384-5517 internationally with recording access code 4260279.

About Bazaarvoice

Bazaarvoice, a leading social commerce solutions company, assists clients in bringing the voice of the customer to the center of business strategy. With over 2,000 clients globally, including over half of the Internet Retailer 500, over 20 percent of the Fortune 500 and over one-third of the Fortune 100, Bazaarvoice helps clients to leverage social data derived from online word of mouth content to increase sales, acquire new customers, improve marketing effectiveness, enhance consumer engagement across channels, increase success of new product launches, improve existing products and services, effectively scale customer support, decrease product returns and enable retailers to launch and manage on-site advertising solutions and site monetization strategies. This online word of mouth content can be syndicated across Bazaarvoice's global network of client websites, shopper media sites and mobile devices, making the user-generated content that digital consumers trust accessible at multiple points of purchase. Headquartered in Austin, Texas, Bazaarvoice has offices in Amsterdam, London, Munich, New York, Paris, San Francisco, Stockholm and Sydney. For more information, visit www.bazaarvoice.com, read the blog at www.bazaarvoice.com/blog, and follow on Twitter at www.twitter.com/bazaarvoice.

The Bazaarvoice logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=13784

Number of Active Enterprise Clients

We define an active enterprise client as an organization that has implemented either the Bazaarvoice Conversations platform or the PowerReviews Enterprise platform and from which we are currently recognizing revenue, and we count organizations that are closely related as one client, even if they have signed separate contractual agreements. We believe that our ability to increase our enterprise client base is a leading indicator of our ability to grow revenue.

Number of Active Network Clients

We define an active network client as an organization that has implemented one of more of solutions but has not implemented either the Conversations or PowerReviews Enterprise platforms. Such solutions may include our Connections solutions, Media solutions or Express platform. We count organizations that are closely related as one client, even if they have signed separate contractual agreements. We believe that our network client base in combination with our enterprise client base is an indicator of the reach of our network.

Non-GAAP Financial Measures

Adjusted EBITDA discussed in this press release is defined as net loss adjusted for stock-based expense, adjusted depreciation and amortization (which excludes amortization of capitalized internal-use software development costs), integration and other costs related to acquisitions, income tax expense and other (income) expense, net. Non-GAAP net loss, which is used to calculate non-GAAP net loss per share, is defined as our GAAP net loss adjusted to exclude stock-based expense, amortization of acquired intangible assets, integration and other costs related to acquisitions along with the associated income tax effect of these adjustments. Non-GAAP basic and diluted loss per share for the second fiscal quarter of 2012 ended October 31, 2011 has been calculated assuming the conversion of all outstanding shares of our preferred stock into 27,897,031 shares of our common stock as of the first day of the beginning of the period. Management presents these non-GAAP financial measures because it considers them to be important supplemental measures of core operating performance.  Management uses the non-GAAP financial measures for planning purposes, including analysis of the company's operating performance against prior periods and the effectiveness of our business strategies, the preparation of operating budgets and to determine appropriate levels of operating and capital investments, as well as and in communications with our board of directors concerning our financial performance. Management also believes that the non-GAAP financial measures provide additional insight for securities analysts and investors in evaluating the company's financial and operational performance without regard to items that can vary substantially from company to company depending upon their financing, capital structures and the method by which assets were acquired. However, these non-GAAP financial measures have limitations as an analytical tool, and you should not consider them in isolation or as a substitute for analysis of our results of operations as reported under GAAP. Furthermore, these non-GAAP financial measures may not be comparable to similarly titled measures of other organizations because other organizations may not calculate these non-GAAP financial measures in the same manner.  We intend to provide these non-GAAP financial measures as part of our future financial results discussions and, therefore, the inclusion of these non-GAAP financial measures will provide consistency in our financial reporting.  A reconciliation of these non-GAAP measures to GAAP is provided in the accompanying tables.

Forward-looking Statements

This press release contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, included in this press release regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans and objectives of management are forward-looking statements. The words "anticipate," "believe," "estimate," "expect," "intend," "may," "plan," "will," "would" and similar and "target" expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements include, among other things, statements about management's estimates regarding future revenue and financial performance, the ability to continue developing network solutions to leverage our consumer audience reach, content and data to create incremental value for clients, and other statements about management's beliefs, intentions or goals. We may not actually achieve the expectations disclosed in the forward-looking statements, and you should not place undue reliance on our forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results or events to differ materially from the expectations disclosed in the forward-looking statements, including, but not limited to, our expectations regarding our revenue, expenses, sales and operations; our limited operating history; our ability to integrate the operations of Longboard Media, Inc. as announced in our release on Form 8-K on November 5, 2012; our ability to operate in a new and unproven market; our ability to effectively manage growth, especially in light of our announced management changes; our ability to manage expansion into international markets and new vertical industries; our ability to successfully identify, manage and integrate potential acquisitions; and other risks and potential factors that could affect Bazaarvoice's business and financial results identified in our Form 10-K for the fiscal year ended April 30, 2012, our Form 10-Q for the fiscal quarter ended July 31, 2012 and Form S-1 as filed with the Securities and Exchange Commission on July 12, 2012. Additional information will also be set forth in our future quarterly reports on Form 10-Q, annual reports on Form 10-K and other filings that we make with the Securities and Exchange Commission. We do not intend and undertake no duty to release publicly any updates or revisions to any forward-looking statements contained herein.

Bazaarvoice, Inc.
Condensed Consolidated Balance Sheets
(unaudited)
(in thousands)
     
  October 31, April 30,
  2012 2012
ASSETS    
Current assets:    
Cash and cash equivalents  $ 45,116  $ 74,367
Restricted cash  604  500
Short-term investments  96,408  50,834
Accounts receivable, net  22,465  17,977
Prepaid expenses and other current assets  4,293  3,873
Total current assets  168,886  147,551
     
Property, equipment and capitalized internal-use software development costs, net  12,710  8,868
Goodwill  113,152  --
Acquired intangible assets, net  39,133  --
Other non-current assets  129  448
Total assets  $ 334,010  $ 156,867
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
Current liabilities:    
Accounts payable  $ 5,852  $ 2,523
Accrued expenses and other current liabilities  16,931  12,725
Deferred revenue  47,185  42,152
Total current liabilities  69,968  57,400
     
Deferred revenue less current portion  2,317  3,434
Deferred tax liability, long-term  1,465  31
Other liabilities, long-term  2,390  2,404
Total liabilities  76,140  63,269
     
Stockholders' equity:    
Common stock  7  6
Additional paid-in capital  352,807  158,769
Accumulated other comprehensive loss  (6)  (20)
Accumulated deficit  (94,938)  (65,157)
Total stockholders' equity  257,870  93,598
Total liabilities and stockholders' equity  $ 334,010  $ 156,867
 
 
Bazaarvoice, Inc.
Condensed Consolidated Statement of Operations
(unaudited)
(in thousands, except net loss per share data)
         
  Three Months Six Months
  Ended October 31, Ended October 31,
  2012 2011 2012 2011
         
Revenue  $ 38,626  $ 25,015  $ 74,288  $ 47,103
Cost of revenue  14,099  8,805  26,732  16,602
Gross profit  24,527  16,210  47,556  30,501
Operating expenses:        
Sales and marketing  17,850  12,125  33,172  23,317
Research and development  7,948  4,576  15,442  7,919
General and administrative  7,484  4,815  23,680  9,914
Acquisition-related and other  1,366  --  2,750  --
Amortization of acquired intangible assets  898  --  1,378  --
Total operating expenses  35,546  21,516  76,422  41,150
Operating loss  (11,019)  (5,306)  (28,866)  (10,649)
Other income (expense), net:        
Interest income  --  6  50  13
Other income (expense)  51  (373)  (403)  (464)
Total other income (expense), net  51  (367)  (353)  (451)
Net loss before income taxes  (10,968)  (5,673)  (29,219)  (11,100)
Income tax expense   274  178  562  287
Net loss  $ (11,242)  $ (5,851)  $ (29,781)  $ (11,387)
Accretion of redeemable convertible preferred stock  --  (12)  --  (25)
Net loss applicable to common stockholders  $ (11,242)  $ (5,863)  $ (29,781)  $ (11,412)
Net loss per share applicable to common stockholders:        
Basic and diluted  $ (0.16)  $ (0.30)  $ (0.45)  $ (0.60)
Basic and diluted weighted average number of shares outstanding  69,846  19,421  66,203  19,119
 
 
Bazaarvoice, Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited)
(in thousands)
         
  Three Months Six Months
  Ended October 31, Ended October 31,
  2012 2011 2012 2011
OPERATING ACTIVITIES        
Net loss  $ (11,242)  $ (5,851)  $ (29,781)  $ (11,387)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:        
Depreciation and amortization expense  2,622  745  4,335  1,410
Stock-based expense  3,595  1,697  15,933  3,255
Bad debt expense  630  655  783  847
Excess tax benefit related to stock-based compensation  (190)  --  (272)  --
Changes in operating assets and liabilities:        
Accounts receivable  (5,929)  (4,257)  (4,800)  (5,506)
Prepaid expenses and other current assets  (670)  (1,682)  (228)  (1,077)
Other non-current assets  (173)  (213)  (116)  (213)
Accounts payable  1,090  756  3,176  2,227
Accrued expenses and other current liabilities  3,578  2,854  2,534  4,188
Deferred revenue  1,610  5,732  1,334  7,207
Other liabilities, long-term  937  263  1,138  263
Net cash provided by (used in) operating activities  (4,142)  699  (5,964)  1,214
INVESTING ACTIVITIES        
Acquisitions, net of cash acquired  --  --  (30,313)  --
Purchases of property and equipment and capitalized internal-use software development costs  (2,635)  (2,133)  (5,831)  (2,820)
Purchases of short-term investments  (50,090)  --  (74,216)  --
Proceeds from the sale of short-term investments  28,387  --  28,664  --
Increase in restricted cash  --  --  --  (250)
Net cash used in investing activities  (24,338)  (2,133)  (81,696)  (3,070)
FINANCING ACTIVITIES        
Payments of initial stock offering costs  --  (937)  --  (937)
Proceeds from follow-on stock offering, net of costs  (241)  --  51,943  --
Proceeds from exercise of stock options  5,416  213  6,196  1,782
Excess tax benefit related to stock-based compensation  190  --  272  --
Net cash provided by (used in) financing activities  5,365  (724)  58,411  845
Effect of exchange rate fluctuations on cash and cash equivalents  86  (23)  (2)  (39)
Net change in cash and cash equivalents  (23,029)  (2,181)  (29,251)  (1,050)
Cash and cash equivalents at beginning of period  68,145  16,181  74,367  15,050
Cash and cash equivalents at end of period  $ 45,116  $ 14,000  $ 45,116  $ 14,000
         
Supplemental disclosure of other cash flow information:        
Cash paid for income taxes  $ --  $ 17  $ 236  $ 18
Supplemental disclosure of non-cash investing and financing activities:        
Accretion of redeemable convertible preferred stock  $ --  $ 12  $ --  $ 25
Accrued stock offering costs  --  264  --  934
Issuance of stock for acquisition  --  --  119,696  --
 
 
Bazaarvoice, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(unaudited)
(in thousands, except net loss per share data)
         
  Three Months Six Months
  Ended October 31, Ended October 31,
  2012 2011 2012 2011
         
Non-GAAP net loss and net loss per share:        
GAAP net loss  $ (11,242)  $ (5,851)  $ (29,781)  $ (11,387)
Stock-based expense (1)  3,595  1,697  15,933  3,255
Amortization of acquired intangible assets  1,349  --  2,068  --
Acquisition-related and other expense  1,366  --  2,750  --
Income tax adjustment for non-GAAP items  35  --  59  --
Non-GAAP net loss  $ (4,897)  $ (4,154)  $ (8,971)  $ (8,132)
         
GAAP basic and diluted shares  69,846  19,421  66,203  19,119
Assumed preferred stock conversion  --  27,897  --  27,897
Non-GAAP basic and diluted shares  69,846  47,318  66,203  47,016
Non-GAAP basic and diluted net loss per share  $ (0.07)  $ (0.09)  $ (0.14)  $ (0.17)
         
Adjusted EBITDA:        
GAAP net loss  $ (11,242)  $ (5,851)  $ (29,781)  $ (11,387)
Stock-based expense (1)  3,595  1,697  15,933  3,255
Adjusted depreciation and amortization (2)  2,099  512  3,437  983
Acquisition-related and other expense  1,366  --  2,750  --
Income tax expense  273  178  561  287
Total other (income) expense, net  (50)  367  354  451
Adjusted EBITDA  $ (3,959)  $ (3,097)  $ (6,746)  $ (6,411)
         
(1) Stock-based expense includes the following:        
Cost of revenue  $ 583  $ 344  $ 877  $ 667
Sales and marketing  870  412  2,695  814
Research and development  1,054  360  1,696  564
General and administrative  1,088  581  10,665  1,210
Stock-based expense  $ 3,595  $ 1,697  $ 15,933  $ 3,255
         
         
Cost of revenue  $ 681  $ 214  $ 1,118  $ 421
Sales and marketing  175  124  308  253
Research and development  161  93  305  161
General and administrative  183  81  327  148
Amortization of acquired intangible assets  899  --  1,379  --
Adjusted depreciation and amortization  $ 2,099  $ 512  $ 3,437  $ 983
 
 
Bazaarvoice, Inc.
Selected Quarterly Financial and Operational Metrics
(unaudited)
(in thousands, except active enterprise clients and full-time employees data)
                 
  Three Months Ended,
  Oct 31, Jul 31, Apr 30, Jan 31, Oct 31, Jul 31, Apr 30, Jan 31,
  2012 2012 2012 2012 2011 2011 2011 2011
Revenue  $ 38,626  $ 35,662  $ 31,431  $ 27,602  $ 25,015  $ 22,088  $ 19,281  $ 17,306
Cost of revenue  14,099  12,633  10,325  9,514  8,805  7,797  7,293  6,676
Gross profit  24,527  23,029  21,106  18,088  16,210  14,291  11,988  10,630
Operating expenses:                
Sales and marketing  17,850  15,322  14,257  12,152  12,125  11,192  10,116  8,592
Research and development  7,948  7,494  6,811  6,059  4,576  3,343  2,999  2,801
General and administrative  7,484  16,196  6,047  5,934  4,815  5,099  3,598  3,281
Acquisition-related and other  1,366  1,384  --  --  --  --  --  --
Amortization of acquired intangible assets  898  480  --  --  --  --  --  --
Total operating expenses  35,546  40,876  27,115  24,145  21,516  19,634  16,713  14,674
Operating loss  (11,019)  (17,847)  (6,009)  (6,057)  (5,306)  (5,343)  (4,725)  (4,044)
Total other income (expense), net  51  (404)  (15)  (337)  (367)  (84)  205  (50)
Net loss before income taxes  (10,968)  (18,251)  (6,024)  (6,394)  (5,673)  (5,427)  (4,520)  (4,094)
Income tax expense  274  288  343  181  178  109  139  149
Net loss  $ (11,242)  $ (18,539)  $ (6,367)  $ (6,575)  $ (5,851)  $ (5,536)  $ (4,659)  $ (4,243)
                 
Stock-based expense (1)  $ 3,595  $ 12,338  $ 1,952  $ 2,503  $ 1,697  $ 1,558  $ 1,279  $ 1,253
Adjusted depreciation and amortization (2)  2,099  1,338  552  569  512  471  449  446
Acquisition-related and other expense  1,366  1,384  --  --  --  --  --  --
Income tax expense  273  288  343  181  178  109  139  149
Total other (income) expense, net  (50)  404  15  337  367  84  (205)  50
Adjusted EBITDA  $ (3,959)  $ (2,787)  $ (3,505)  $ (2,985)  $ (3,097)  $ (3,314)  $ (2,997)  $ (2,345)
                 
Number of active enterprise clients (at period end) (3)  1,109  1,076  790  737  701  640  571  518
Full-time employees (at period end)  777  771  640  608  566  520  494  467
                 
(1) Stock-based expense includes the following:                
Cost of revenue  $ 583  $ 294  $ 234  $ 319  $ 344  $ 323  $ 235  $ 247
Sales and marketing  870  1,825  636  419  412  402  307  325
Research and development  1,054  642  406  356  360  204  176  188
General and administrative  1,088  9,577  676  1,409  581  629  561  493
Stock-based expense  $ 3,595  $ 12,338  $ 1,952  $ 2,503  $ 1,697  $ 1,558  $ 1,279  $ 1,253
                 
(2) Adjusted depreciation and amortization includes the following:                
Cost of revenue  $ 681  $ 437  $ 194  $ 210  $ 214  $ 207  $ 194  $ 176
Sales and marketing  175  133  117  120  124  129  113  110
Research and development  161  144  136  134  93  68  50  51
General and administrative  183  144  105  105  81  67  92  109
Amortization of acquired intangible assets  899  480  --  --  --  --  --  --
Adjusted depreciation and amortization  $ 2,099  $ 1,338  $ 552  $ 569  $ 512  $ 471  $ 449  $ 446
                 
(3) In connection with our acquisition of PowerReviews, which closed in June 2012, we expanded the types of clients that we serve. To reflect differences among our clients and the services that we offer, we now define our clients as "active enterprise clients" and "active network clients," the definitions of which are set forth herein and in our Form 10-Q for the fiscal quarter ended July 31, 2012. Historical references to active clients for periods prior to the closing of the acquisition include both active enterprise clients and active network clients on an aggregate basis. As a result of this prospective nomenclature change resulting from our acquisition of PowerReviews, active clients and active client retention rates for periods prior to June 2012 and after June 2012 may not be directly comparable as we have not made this distinction retrospectively. This change also has a corresponding impact on metrics that are driven by the number of clients, such as revenue per active client.
CONTACT: Bazaarvoice Investor Relations Contact: Bazaarvoice Investor Relations Seth Potter ICR, Inc. on behalf of Bazaarvoice, Inc. 646-277-1230 seth.potter@icrinc.com Media Contact: Emily Brady Brady PR on behalf of Bazaarvoice, Inc. 650-692-6107 emily@bradypr.com

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