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Interactive Intelligence Sees Strong Growth

January 20, 2010

If there’s light at the end of the economic downturn tunnel then Interactive Intelligence is already basking in the sunshine with even brighter and warmer days ahead, pushed forward by growing demand for its products and services.

 
The firm is expecting to report in its fourth quarter 2009 (4Q09) and fiscal year financial results ended Dec. 31, 2009, an approximately 8 percent annual revenue increase from 2008 to 2009, said founder and CEO Dr. Donald E. Brown. It is currently anticipating revenue growth in 2010 of about 10 percent, with improvements in earnings along with continued investment in research and development, as well as marketing.
 
Interactive Intelligence’s preliminary financial results indicate Q4-09 total revenues between $35 million and $36.5 million, with net income on a non-GAAP* basis between $4.6 million and $5.3 million and diluted earnings per share (EPS) on a non-GAAP basis between $0.24 and $0.28. GAAP net income for 4Q09 is expected to be between $2.3 million and $2.7 million, with EPS between $0.12 and $0.14.
 
In contrast the company reported Q4-08 total revenues of $31.3 million, with non-GAAP net income and EPS of $3.2 million and $0.18, respectively, and GAAP net income and EPS of $1.5 million and $0.08, respectively.
 
Revenues for the year ended Dec. 31, 2009, are expected to be between $130.5 million and $132.0 million, with net income on a non-GAAP* basis between $17.5 million and $18.2 million and EPS on a non-GAAP basis between $0.96 and $0.99. GAAP net income for 2009 is expected to be between $8.4 million and $8.8 million with EPS of between $0.46 and $0.48.
 
In contrast, 2008 annual revenues reached $121.4 million, with non-GAAP net income and EPS of $10.5 million and $0.56, respectively, and GAAP net income and EPS of $4.3 million and $0.23, respectively.
 
“Strong activity from around the world generated a record amount of product orders in the fourth quarter,” said Dr. Brown. “We closed 19 transactions over $250,000, including two over $1 million. Customers and prospects appear to have a more positive outlook toward their businesses, the competitive environment continues to be favorable for us, and we believe that our new process automation offering is becoming an important part of many customer buying decisions.”
 
In contrast Interactive Intelligence is still seeing competitors posting significant revenue decreases. Several have gone into a “very defensive mode” trying to wait out the economic woes, cutting expenses, and investing very little in their businesses.
 
“That creates opportunities for growth companies like ours and we’re working hard to take advantage of those opportunities,” said Joe Staples, chief marketing officer, Interactive Intelligence.

The firm is not worried about any negative impacts from Avaya’s successful acquisition of Nortel’s enterprise division that observers say will strengthen Avaya in the marketplace. Instead it believes it could gain some customers from the deal. Staples said that regardless of how well Avaya executes, working out all the details, integrating the product lines, worrying about personnel issues and restructuring all take energy and time. It will be a distraction, he believed, from their ability to concentrate on their base business.

“Earlier this week Avaya announced their product roadmap [but] what was inherent was that some products would go away,” observed Staples. “If you are a customer who owns one of those products, you now have some decisions to make. Opening up those decisions creates opportunities and you can bet that we’ll be aggressive in outlining for those customers the value of migrating to and Interactive Intelligence platform.”
 
Interactive Intelligence is focusing not so much on its competitors though as executing its product and service strategy. Staples reported that the company continues to successfully go up market. Its communications platform scales well, he said, and as a result the firm is seeing larger and larger wins. It is also doing well in some key verticals including insurance, collections, and banks and credit unions.
 
Additionally Interactive Intelligence had a good solid year with its communications-as-a-service, or CaaS, offering as companies look at alternatives to capex spending. Into 2010, the company expects much of the same with the key addition of Interaction Process Automation. Customers are showing huge interest in IPA and it is seeing some early success stories.

“I think our performance is a reflection of our execution,” said Staples. “We have great products. Our brand recognition is increasing. The consultant and analyst communities are very positive about our offerings and ability to execute. So we are bucking the trend of the typical results you see in a tough economy.”


Brendan B. Read is ContactCenterSolutions’s Senior Contributing Editor. To read more of Brendan’s articles, please visit his columnist page.

Edited by Marisa Torrieri

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