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Contact Center Solutions Featured Article

January 29, 2009

Interactive Intelligence Reports 10.5 Percent Increase Despite Unstable Economy

By Michelle Robart

TMCnet Editor

Providing unified IP communications solutions worldwide, Interactive Intelligence today announced its fourth quarter and year-end operating results for the period ended December 31, 2008.

Based in Indianapolis, Interactive Intelligence (News - Alert) delivers unified business communications solutions specially created for the contact center. The company’s solutions provide effective automation, enterprise IP telephony, and enterprise messaging.

Over a decade ago, it became the first vendor to offer pre-integrated contact center functionality on a single Windows server. Since then, Interactive Intelligence (News - Alert) has continued to provide the contact center industry with insightful research and solutions.

Today’s financial results announcement is further evidence of the company’s success. Interactive Intelligence reportedly experienced a 10.5 percent year-over-year increase in revenues, jumping from $109.9 million in 2007 to $121.4 million for 2008. For the fourth quarter of 2008, the company increased revenues to $31.3 million, compared to $29.3 million for the same period last year.

“We are pleased to report double-digit annual revenue growth,” said Interactive Intelligence founder and CEO, Dr. Donald E. Brown. “Our product revenue growth rate was reduced from the prior year by the economic down-turn which slowed end-user spending. Despite this tougher economic environment, during 2008 we licensed our solutions to 366 new customers, a record number for a single year, and we managed a notable increase in services revenues with our growing customer base.”

Interactive Intelligence fourth quarter 2008 results include:

-- Product revenues of $15.4 million, compared to $15.2 million in the fourth quarter of 2007;

-- Services revenues of $15.9 million, compared to $14.1 million in the fourth quarter of 2007;

-- Gross margins of 67 percent, the same as in the fourth quarter of 2007;

-- Net income on a generally accepted accounting principles (GAAP) basis of $1.5 million, with diluted earnings per share (EPS) of $0.08; and

-- Net income on a non-GAAP basis of $3.2 million, with EPS of $0.18, compared to non-GAAP net income of $3.1 million and EPS of $0.16 in the fourth quarter

Non-GAAP net income and EPS exclude charges for stock-based compensation of $651,000, or EPS of $0.04, and non-cash income tax expense of approximately $1.1 million, or EPS of $0.06, for the fourth quarter of 2008, and charges for stock-based compensation of $840,000, or EPS of $0.04, and non-cash income tax benefit of $8.1 million, or EPS of $0.41, for the fourth quarter of 2007.

Operating expenses for the fourth quarter of 2008 include a reduction of $577,000 resulting from the resolution of certain tax disputes in France.

The financial results for the full year of 2008 include:

-- Product revenues of $60.3 million, compared to $57.7 million in 2007;

-- Services revenues of $61.2 million, compared to $52.2 million in 2007;

-- Gross margins of 68 percent, the same as 2007;

-- Net income on a GAAP basis of $4.3 million, with EPS of $0.23; and

-- Net income on a non-GAAP basis of $10.5 million, with EPS of $0.56, in 2008, compared to non-GAAP net income of $12.5 million and EPS of $0.65 in 2007.

Dr. Brown explained that even though the future of the economy remains unclear, he believes the company will continue its success, and plans to release a host of innovative new products this year. He adds that Interactive Intelligence holds a strategic advantage over its competitors with its SIP-based, all-in-one software architecture.

Other 2008 financial highlights for the company include:

-- Purchases of 1.2 million shares of outstanding common stock totaling $10.0 million for the year, including 851,000 shares for $6.6 million in the fourth quarter;

-- Deferred revenues totaling $43.1 million as of December 31, 2008, up from $40.8 million as of December 31, 2007;

-- Cash flows from operations of $14.6 million, compared to $20.2 million in 2007; and

-- Cash and investment balances as of December 31, 2008 totaling $45.5 million with no debt.

In December, Interactive Intelligence completed the Cisco (News - Alert) interoperability verification testing using the session initiation protocol (SIP) standard. The company also announced it had certified the IP5280 Communications SIP5280 service portfolio for integration with its contact center automation and enterprise IP telephony software.

The SIP5280 service portfolio provides a SIP trunking solution for enterprises, connecting legacy phone systems to a broadband connection through standard integrated access devices or gateway routers. Users benefit from reduced local, long distance and international call charges, and increased operational efficiencies through streamlined network management.

Technology Marketing Corporation had a chance to interview Interactive Intelligence this week, after it appointed a 10-year industry veteran to help oversee its marketing team in Australia and New Zealand.

Constantine Nicholas, who holds a Bachelor of Arts degree from the Australian National University in Canberra and a Certificate in Business and Marketing degree from WeDo College in Perth, will serve as the company’s field marketing coordinator in the region.

Interactive Intelligence has received numerous awards and recognition for its products and services. It was named one of Software Magazine’s top 500 global software and services suppliers, and ranked among NetworkWorld’s top 200 North American networking vendors. Interactive Intelligence is also a BusinessWeek “hot growth 50” company, and is among FORTUNE Small Business magazine’s top 100 fastest growing companies. Research firm Gartner (News - Alert) recently placed the company in the leaders quadrant of the 2008 Contact Center Infrastructure, Worldwide Magic Quadrant report.

Founded in 1994, Interactive Intelligence currently has more than 3,000 customers located all across the globe. It currently employs approximately 600 people, and maintains six global corporate offices with additional sales offices throughout North America, Europe, Middle East, Africa and Asia Pacific.

Michelle Robart is a contributing editor for TMCnet. To read more of Michelle's articles, please visit her columnist page.

Edited by Michelle Robart

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