BURLINGTON, Mass., Aug 01, 2007 (BUSINESS WIRE) -- Acme Packet, Inc. (APKT, Trade), the leader in session border control solutions, today announced results for its second quarter ended June 30, 2007 and reaffirmed its previously issued business outlook for 2007. Highlights from the second quarter included:
* Record quarterly revenues of $27.0 million - an increase of 8% sequentially and 41% year-over-year and the seventh consecutive quarter of both sequential and year-over-year revenue growth;
* Record quarterly pre-tax earnings of $7.2 million - an increase of 5% sequentially and 34% year-over-year;
* Acquired 34 new service provider customers to expand its customer base to over 420 service providers - including 76 of the 100 largest Tier-1s in the world;
* Announced publicly nine more customers around the world from Alabama to Australia;
* Expanded the Acme Packet Connected Universe(TM) with the addition of four new Constellation program members; and
* Delivered Net-Net OS Release 5.0 with over 50 new features and enhancements for controlling service provider, enterprise and contact center access and interconnect borders.
Results for Three Month Period Ended June 30, 2007
Total revenues for the three month period ended June 30, 2007 were $27.0 million, an increase of 41% compared to total revenues of $19.2 million for the same period last year. Net income for the three month period ended June 30, 2007 was $4.6 million, or $0.07 per share on a diluted basis. Net income on a non-GAAP basis(1) for the three month period ended June 30, 2007 was $5.7 million, or $0.09 per share on a diluted basis. Non-GAAP net income(1) for the three month period ended June 30, 2007 differs from GAAP net income as it excludes stock-based compensation expense, net of tax, of approximately $1.1 million, or $0.02 per share on a diluted basis. A reconciliation of GAAP to non-GAAP results is included at the end of this press release. Net income for the three month period ended June 30, 2006 was $5.2 million, or $0.09 per share on a diluted basis. The Company's results during the three month period ended June 30, 2007 reflect a fully effective GAAP tax rate of approximately 36%. In contrast, the Company recorded a fully effective GAAP tax rate of approximately 3% during the three month period ended June 30, 2006, which represented a provision for United States federal alternative minimum tax and certain foreign taxes as the Company utilized net operating loss carryforwards and tax credits to offset taxable income.
Results for Six Month Period Ended June 30, 2007
Total revenues for the six month period ended June 30, 2007 were $52.1 million, an increase of 37% compared to total revenues of $38.1 million for the same period last year. Net income for the six month period ended June 30, 2007 was $8.9 million, or $0.13 per share on a diluted basis. Net income on a non-GAAP basis(1) for the six month period ended June 30, 2007 was $10.7 million, or $0.16 per share on a diluted basis. Non-GAAP net income(1) for the six month period ended June 30, 2007 differs from GAAP net income as it excludes stock-based compensation expense, net of tax, of approximately $1.8 million, or $0.03 per share on a diluted basis. Net income for the six month period ended June 30, 2006 was $11.3 million, or $0.21 per share on a diluted basis. The Company's results during the six month period ended June 30, 2007 reflect a fully effective GAAP tax rate of approximately 37%. In contrast, the Company recorded a fully effective GAAP tax rate of approximately 3% during the six month period ended June 30, 2006, which represented a provision for United States federal alternative minimum tax and certain foreign taxes as the Company utilized net operating loss carryforwards and tax credits to offset taxable income.
"We are pleased to report strong second quarter results highlighted by record revenues, gross profit, and pre-tax earnings. In addition to the financial results, our strong execution during the second quarter was also reflected in our robust customer acquisition efforts, the deepening deployments within our existing customers, and the continuing progress of our new product innovation initiatives," said Andy Ory, President and Chief Executive Officer of Acme Packet, Inc. "We are looking forward to the second half of the fiscal year based on broad based adoption of our solutions and strong company-wide execution."
Company Comments on Business Outlook for 2007
The Company reaffirmed its previously issued business outlook for 2007. The Company expects revenues in 2007 to range between $108.0 million and $112.0 million with sequential growth in each quarter of the year. The Company expects GAAP net income in 2007 to range between $14.5 million and $15.5 million, or between $0.22 and $0.24 per share on a diluted basis. The Company expects non-GAAP(1) net income in 2007 to range between $18.5 million and $19.5 million, or between $0.28 and $0.30 per share on a diluted basis. The Company's outlook for non-GAAP(1) net income differs from GAAP net income in 2007 as it excludes estimated stock-based compensation expense, net of tax, of approximately $4.0 million, or $0.06 per share on a diluted basis. The Company's outlook for 2007 assumes a fully effective non-GAAP tax rate of 35%. In contrast, the Company recorded a fully effective non-GAAP tax rate of approximately 5% in 2006. The Company expects its full year weighted average diluted share count to be approximately 66.5 million in 2007 as compared to 57.4 million in 2006.
Operational Highlights
The following milestones were completed or announced since the Company's first quarter of fiscal year 2007 ended on March 31, 2007:
-- The Company extended its leadership position in the SBC market with the announcement of nine new customers including: AR Telecom, an independent telecommunications company in Portugal; Broadnet, a German competitive local exchange carrier and internet service provider; eircom, Ireland's incumbent local exchange carrier; Edutel, a competitive local exchange carrier and internet service provider in the Netherlands; Internode, an Australian broadband provider; IP Networked Services, a wholly-owned division of Automatic Data Processing, Inc; Lannet Communications, which serves its customers through a privately owned nationwide network in Greece; Momentum Telecom Wholesale, a residential and business digital phone service provider based in Birmingham, Alabama; and Netia, a competitive local exchange carrier based in Poland and the largest alternative fixed-line telecom operator in the country.
-- The Company announced the expansion of the Acme Packet Connected Universe(TM) program with the addition of four new Constellation members - Belgacom ICS, Momentum Telecom Wholesale, PAETEC and Telcordia Technologies, Inc. The Acme Packet Connected Universe, launched in November 2006, is a program designed to facilitate business relationships among Acme Packet-enabled service providers that extend service reach, drive down costs, improve service quality and ultimately leverage new IP interactive communication service opportunities beyond voice.
-- The Company announced over 40 new features and enhancements with the availability of Net-Net OS Release 5.0 which extends capabilities of the Company's Net-Net session border controllers for controlling access to service provider, enterprise and contact center VoIP networks. The added features and enhancements further extend the capabilities of the Company's Net-Net SBCs for controlling access to VoIP, video and multimedia networks. These features advance the control functions of the Company's Net-Net SBCs in the areas of security, service reach maximization, SLA assurance, revenue and profit protection and regulatory compliance.
-- The Company announced Net-ASSURE (Assist, Support, Scale, Upgrade, Recommend, Evaluate), a new portfolio of premium professional services designed to optimize the Net-Net SBC's delivery of trusted, first-class interactive IP communication services. These new services include an advanced set of planning, testing, implementation procedures and support coordination services. Net-ASSURE services are customized to complement the capabilities of the Company's customers, distribution partners and product partners.
-- The Company announced the launch of its new NextSBC Reassurance Program which is designed to ease both the technical and business obstacles to migrating users of other SBCs to Acme Packet's industry-leading solutions. The Company's NextSBC Reassurance Program includes a complimentary set of Net-ASSURE professional services to provide configuration migration and optimization services and additional discounts for the Company's products purchased either directly from Acme Packet or through one of the Company's distribution partners.
Company to Host Live Conference Call and Webcast
The Company's management team will host a live conference call and webcast at 5:00 p.m. eastern time today to discuss the financial results as well as management's outlook for the business. The conference call may be accessed in the United States by dialing (877) 777-1973 and using access code "APKT". The conference call may be accessed outside of the United States by dialing (612) 332-1025 and using access code "APKT". The conference call will be simultaneously webcast on the Company's investor relations website, which can be accessed at www.ir.acmepacket.com. A replay of the conference call will be available approximately two hours after the call by dialing (800) 475-6701 and using access code 879939 or by accessing the webcast replay on the Company's investor relations website. |
