Interactive Intelligence Ends 2012 with a Flourish - Year Ahead Looking Strong as Well

Hopefully you read my end of the year interview with Interactive Intelligence CMO Joe Staples (News - Alert). As a reminder if you did, or if you have not had a chance yet, Joe discussed how the company’s investment in the cloud was creating differentiated value in the market and generating the prospects for strong growth not just for the end of the year but going forward.

Well news from Interactive Intelligence (News - Alert) about their preliminary results confirms the bullishness of our discussion. The results demonstrate how the cloud is helping drive results.

Playing it forward is paying off

The preliminary results for the fourth quarter and full year ended Dec. 31, 2012 caused Intelligence founder and CEO, Dr. Donald Brown (News - Alert) to state:

"We had a remarkable end to a record year for orders and revenues in 2012…The business showed excellent growth across the board, with our fourth-quarter performance driven by sales momentum for both our cloud and premises-based offerings as we continue to gain share at the high end of the contact center market. We received an unprecedented 20 orders of over $1 million in the fourth quarter involving some of the largest companies in the world.”

"Given our strong and growing pipeline of opportunities worldwide, we are maintaining our 2013 total order growth forecast of 20 percent and currently estimate that approximately 50 percent of these orders will be cloud-based."

As the highlights show, order momentum has been growing despite the continuing economic challenges around the world. Important to note are that:

• Total orders received during the fourth quarter of 2012 grew 119 percent year-over-year, with a 312 percent increase in cloud-based orders and a 68 percent increase in on-premises orders.
• Cloud-based orders represented 39 percent of total orders received during the fourth quarter of 2012.
• Total orders for the full year of 2012 increased 48 percent from 2011, including an increase in cloud-based orders of 121 percent and growth of on-premises orders of 25 percent.
• For 2012, cloud-based orders represented 35 percent of the total order mix and on-premises orders represented 65 percent.

The company went on to state that it expects to report total revenue for the 2012 fourth quarter between $70 million and $72 million, up approximately 21 to 24 percent year-over-year. For the full year of 2012, the company expects to report total revenue in the range of $237 million to $239 million, up approximately 13 to 14 percent year-over-year.

While final results, to be issued when the markets close on February 4, are still subject to some possible alteration, it is not difficult to see why Brown is so enthusiastic. “We expect our non-GAAP operating margin to be in the low single digits in 2013 due to the rapid growth of our cloud-based orders and our further investments in cloud solutions and sales," Brown said. "Interactive Intelligence is solidifying its position as a leader in the cloud-based contact center market, and we plan to extend that position by continuing to accelerate our pace of innovation in the coming year."

It should also be noted that while the cloud gets all of the headlines the premises business remains strong. In fact, the ability to offer customers the option of a premises-based, cloud or hybrid solution—and the flexibility to switch back and forth as business imperatives and market conditions dictate—from a single software platform is part of the secret of success that is allowing Interactive Intelligence to capture share and increase its consideration and success with larger accounts. 

Allowing customers not just options, but no need for costly training and technology forklifts to meet current needs and plan for future requirements is a significant competitive advantage that is being pressed. Plus, with being able to augment the Interactive Intelligence’s foundational CIC capabilities with targeted applications from third-parties as well as those from Interactive Intelligence in the forthcoming Marketplace e-commerce website, along with the expected move of customers to CIC 4.0 (not to mention several other important enhancements on the horizon and continued channel growth), Brown’s optimism seems well founded. Indeed, it will be interesting to see what the company has to say in a few weeks when they formally present their results.  

For those interested in listening to Interactive Intelligence’s call on its results on February 4 at 4:30 EDT, the teleconference can be accessed five minutes prior to the start at 1.877.324.1969 and requesting the,  "Interactive Intelligence fourth-quarter earnings call." It will also be broadcast live on the company's investor relations' page at http://investors.inin.com.

Interactive Intelligence is a Platinum-level sponsor of ITEXPO Miami 2013. Taking place Jan. 29-Feb 1 in Miami, Florida, ITEXP is the world’s premier IP communications event. Visit Interactive Intelligence in booth #409. For more information on ITEXPO (News - Alert), click here.