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July 22, 2009
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Vocus, Inc. (VOCS) reported second-quarter revenue of $21.1 million on Jul 21, a 10.4% increase over the year-ago period. This was above the company's outlook of $20.6 million to $20.8 million, and also above our expectation of $20.8 million. Increased demand from small companies in the news distribution market was partially offset by a negative currency impact.
GAAP net loss was $0.3 million, or 2 cents per share, compared to net income of $5.7 million, or 30 cents, for the second quarter of 2008. Excluding amortization of intangibles and stock-based compensation expense, non-GAAP net income for the quarter was $3.5 million, or 18 cents per diluted share, versus $4.2 million, or 21 cents, in the year-ago quarter. Net income was negatively impacted by higher sales & marketing and general & administrative expenses. Non-GAAP EPS was slightly above the company's guidance of 15 cents to 16 cents, as well as our expectation of 15 cents.
GAAP gross margin for the quarter was 81.7%, versus 81% in the year-ago quarter. The company fell short of its long term gross margin target of 83% to 87%. GAAP operating margin for the quarter was a positive 1.1%, versus a negative 2.3% in the year-ago quarter. Non-GAAP operating margin was 19.2% versus 15.5% in the year-ago quarter.
Vocus added 203 net new subscription customers during 2Q09 and ended the quarter with 3,761 total active subscription customers, compared to 265 net new subscription customer added during 2Q08. The company signed subscription agreements with new and existing customers. In addition, during the quarter, Vocus launched inVocus, which is a new online publication that records major changes and trends in North American media.
For the third quarter of 2009, management expects revenue in the range of $20.8 million to $21 million. Non-GAAP EPS is expected to be in the range of 15 cents to 16 cents, while GAAP EPS is expected to be in the range of (4 cents) to (3 cents).
For the full-year 2009, Vocus expects revenue to be in the range of $84.2 million to $84.7 million. Non-GAAP EPS is expected to be in the range of 63 cents to 65 cents, while GAAP EPS is expected to be in the range of (12 cents) to (10 cents).
The company expects positive bookings in the second half of 2009, and will continue to invest in sales and marketing. We think Vocus' topline growth and customer wins are commendable considering the difficult environment.
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