Commtouch Reports Record Revenues in Q2 2000 971% Revenue Growth Over Comparable Period in Previous Fiscal Year
SANTA CLARA, Calif., Jul 20, 2000 /PRNewswire via COMTEX/ -- Commtouch (Nasdaq: CTCH chart, msgs), the worldwide leader in outsourced email and messaging solutions, today announced results for the second quarter 2000. Revenues for the second quarter of 2000 were a record $5.9 million, an increase of 971% over second quarter 1999 revenues of $553,000 and a 37% increase over first quarter 2000 revenues of $4.3 million. As of June 30, 2000, the Company had a backlog from contracts amounting to approximately $29 million that will be recognized as revenue over future quarters.
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"The stronger-than-ever demand for outsourced messaging services across all markets, coupled with our robust and reliable service, are the drivers behind our consistent growth," said Gideon Mantel, chairman and CEO of Commtouch. "Our gross profit margin of 53% is outstanding." Mantel added, "The release during Q2 2000 of our Service Provider Solution targeted at the enterprise market greatly enhances the reach of Commtouch services. In addition, we are equally as proud of our service uptime records that are setting the industry standard for reliability. Overall, Q2 2000 is the building block for the future of Commtouch outsourced services."
Commtouch announced deals with UrbanMedia, myCIO.com, a Network Associates, Inc. (Nasdaq: NETA chart, msgs) business, and Exodus Communications(TM), Inc. (Nasdaq: EXDS chart, msgs) to provide premier email and messaging solutions. In addition, Commtouch became the leading email provider in India through its agreements with the Times Group portal indiatimes.com; indya.com, Gnan.com and Indiaacross.com; brandquivier.com; GrabMail and Indian Doctors Network.
In addition, Commtouch announced its plans to develop an outsourced email solution built on the Microsoft Hosted Exchange 2000 platform. Through its Hosted Exchange platform, Commtouch will enable corporate customers worldwide to retain control while outsourcing their email operations, by providing the most scalable, reliable and secure, messaging systems available.
In Q2 2000, we opened Commtouch kk, based in Tokyo. We hired a Japanese CEO who is assembling a local team to expand the efforts that Commtouch has made in Japan during the last five years.
Gross profit for the first quarter of 2000 was $3.1 million representing an industry leading gross profit margin of 53% compared to a gross profit margin of 50% for the first quarter of 2000.
Net loss excluding amortization of the prepaid marketing asset resulting from warrants issued to Go2Net and Microsoft and stock-based employee deferred compensation for the quarter ended June 30, 2000, was $0.47 per share as compared to $0.38 share for the first quarter of 2000.
Net loss for the quarter ended June 30, 2000 was $9.9 million compared to $8.5 million for the quarter ended March 31, 2000. Net loss per share for the quarter ended June 30, 2000, was $0.65 per share compared to net loss per share of $0.56 for the first quarter, 2000.
About Commtouch
Commtouch is the leading global provider of outsourced integrated email and messaging solutions, currently serving 16 million email boxes worldwide. Commtouch customizes messaging solutions for more than 400 corporations, ASPs, ISPs, portals and online companies such as About.com, Asahi-Shimbun, Citibank, Ericsson, Exodus Communications, First USA, France Telecom, Go2Net, IFX, myCIO.com, Microsoft, Multimania.com, Scandinavia Online, Talk City, Toshiba, Tutopia and Yupi.
Commtouch offers the most integrated suite of online messaging applications in 25 languages that include features such as online calendaring, unified messaging, wireless integration and direct marketing applications. The Company, in addition to providing a destination site solution product, has a service provider solution (featuring primary email boxes) for ASPs, ISPs and small to medium enterprises. Founded in 1991, Commtouch has offices in Silicon Valley, Los Angeles, New York City, Miami, London and Tel Aviv.
Additional Company information may be obtained by visiting www.commtouch.com.
This press release contains forward-looking statements, including projections about our business, within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. For example, statements in the future tense, and statements including words such as "expect", "plan", "estimate", "anticipate", or "believe" are forward-looking statements. These statements are based on information available to us at the time of the release; we assume no obligation to update any of them. The statements in this release are not guarantees of future performance and actual results could differ materially from our current expectations as a result of numerous factors, including business conditions and growth in the Internet market; commerce and the general economy both domestic as well as international; fewer than expected new-partner relationships; competitive factors including pricing pressures; technological developments; and products offered by competitors; availability of qualified staff for expansion; and technological difficulties and resource constraints encountered in developing new products as well as those risks described in the Company's registration statement on Form 20-F filed with the SEC which is available through www.sec.gov.
NOTE: Commtouch is a registered trademark of Commtouch Software Ltd. Terms and product names in this document may be trademarks of others.
COMMTOUCH SOFTWARE LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
June 30, December 31,
2000 1999
ASSETS
Current Assets:
Cash and short term investments $56,883 $84,046
Trade receivables 7,402 2,378
Prepaid marketing expenses relating
to Go2Net and Microsoft warrants 624 4,508
Prepaid expenses and other accounts
receivable 3,400 1,648
Total current assets 68,309 92,580
Severance Pay Fund 546 354
Security Deposit 1,344 1,254
Investment at Equity 3,000 --
Property and Equipment, net 14,167 6,148
$87,366 $100,336
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $2,766 $1,510
Employees and payroll accruals 1,757 1,032
Deferred revenue 596 561
Other liabilities 2,051 1,424
Total current liabilities 7,170 4,527
Long-term Portion of Bank Loans
and Capital Leases 37 44
Accrued Severance Pay 704 453
741 497
Shareholders' Equity 79,455 95,312
$87,366 $100,336
COMMTOUCH SOFTWARE LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
2000 1999 2000 1999
Email Services -- revenue $5,911 $553 $10,183 $898
Cost of Email services -- revenue 2,784 606 4,905 1,040
Gross profit (loss) 3,127 (53) 5,278 (142)
Operating expenses:
Research and development, net 2,270 510 4,263 850
Sales and marketing 6,404 1,363 11,150 1,971
General and administrative 2,576 683 4,682 1,327
Amortization of the prepaid
marketing expenses relating to
Go2Net & Microsoft warrant
1,941 -- 3,882 --
Amortization of stock-based
employee deferred compensation 762 1,013 1,525 1,372
Total operating expenses 13,953 3,569 25,502 5,520
Operating loss (10,826) (3,622) (20,224) `(5,662)
Interest income (expense) and
other, net
931 6 1,869 (265)
Net loss $(9,895) $(3,616) $(18,355) $(5,927)
Basic and diluted net loss
per share $(0.65) $(1.66) $(1.21) $(3.17)
Weighted average number of
shares used in computing basic
and diluted net loss per share 15,261 2,178 15,205 1,869
Net Loss -- as adjusted (A) $(7,192) $(2,603) $(12,948) $(4,555)
Basic and diluted net loss
per share -- as adjusted (A) $(0.47) $(1.20) $(0.85) $(2.44)
(A) Excludes charges for amortization of stock-based employee compensation and Go2Net and Microsoft Warrants. Source: Commtouch, Inc.
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