RightNow Beats Zacks Consensus - Analyst Blog

RightNow Technologies Inc (RNOW) reported earnings from continuing operations of 9 cents per share for the third quarter of 2010, exceeding the Zacks Consensus Estimate of 7 cents. Total revenues for the quarter were $48.6 million, up 25% year over year.

Recurring revenue, a key measure of growth, increased 30% over the year-ago quarter, and this growth rate is amongst the highest among the software-as-a-service (SaaS) vendors. Professional service revenue was approximately $10 million for the quarter.

RightNow added 66 new customers in the most recent quarter. Current backlog at the end of the quarter was $134 million. The software portion of the current backlog at the end of the quarter was $118 million, which is 22% greater than in the third quarter of 2009.

New expansion and renewal business came from customers including Audiovox, Barclaycard U.S., CyberDefender, DeVry, HSN, Meijer, Nikon, Sony Online Entertainment, United States Air Force and the USDA. The mix of revenue across geographies for the quarter was 69% Americas, 19% EMEA and 12% Asia-Pacific.

Total gross margin was 71%. The margin on recurring revenue was 85% in the quarter and professional services gross margin was 17%. Total operating expenses were $28.2 million in the quarter. The company reported an operating profit of $6.3 million or 13% of revenue.

Cash generated from operations this quarter was $6 million. Capital expenditures for the quarter were $2.8 million. The company ended the quarter with total cash and investments of $109 million.

The company has raised its guidance for total revenue and earnings for 2010. Total revenues are expected to be approximately $183.5 million. It has also raised guidance for annual recurring revenue growth and expects it to be approximately 26%, which is above its previous guidance of 22%. For the full year 2010, the company expects its earnings per share to be 24 cents.

RightNow Technologies, Inc. provides customer relationship management software and services in the United States, Europe, and the Asia-Pacific. Its CRM software suite includes RightNow Service, RightNow Marketing, RightNow Sales, RightNow Feedback, RightNow Voice and RightNow Analytics.

The company has a Zacks #2 Rank (short-term Buy recommendation) on RightNow.