Bazaarvoice, Inc. Announces its Financial Results for the Second Fiscal Quarter of 2013

GlobeNewswire

Second fiscal quarter of 2013 and recent strategic highlights include:

Revenue for the second quarter increased by 54% year-over-year to $38.6 million Number of active enterprise clients totaled 1,109 at the end of the period Stephen Collins was appointed Chief Executive Officer and President Bazaarvoice acquired Longboard Media, Inc.

AUSTIN, Texas, Nov. 26, 2012 (GLOBE NEWSWIRE) -- Bazaarvoice, Inc. (Nasdaq:BV), a leading social commerce solutions company, reported its financial results for the second fiscal quarter of 2013 ended October 31, 2012:

Revenue for the second quarter of 2013 was $38.6 million, an increase of 54%, compared to $25.0 million for the second quarter of 2012. Adjusted EBITDA for the second quarter of 2013 was a loss of $4.0 million, compared to a loss of $3.1 million for the second quarter of 2012. GAAP net loss for the second quarter of 2013 was $11.2 million, compared to a GAAP net loss of $5.9 million for the second quarter of 2012. Non-GAAP net loss for the second quarter of 2013 was $4.9 million, compared to a non-GAAP net loss of $4.2 million for the second quarter of 2012. GAAP net loss per share for the second quarter of 2013 was $0.16, compared to a GAAP net loss per share for the second quarter of 2012 of $0.30. Non-GAAP net loss per share for the second quarter of 2013 was $0.07, compared to a non-GAAP net loss per share for the second quarter of 2012 of $0.09.

"We entered the year with a plan to position the business to take advantage of the enormous opportunities as a result of exciting trends in social, ecommerce and big data," said Stephen Collins, Chief Executive Officer. "Our plans centered on furthering our lead position in online retail globally, investing in R&D to enhance our platform to a true self-service model and expanding our capabilities into retail shopper media. We are extremely gratified that we have now achieved all of these critical strategic objectives with the expansion of our network through the acquisition of PowerReviews, the enhancement of our technology platform with the release of Conversations 2.0 and our entry into shopper media through our recent acquisition of Longboard Media. With these achievements, we are confident that Bazaarvoice is well positioned to build momentum going forward."

Second Fiscal Quarter of 2013 Financial Details

Revenue: Bazaarvoice reported revenue of $38.6 million for the second quarter of 2013, representing a year-over-year increase of 54% compared to revenue of $25.0 million for the second quarter of 2012.

Net loss: GAAP net loss for the second quarter of 2013 was $11.2 million, compared to a GAAP net loss of $5.9 million for the second quarter of 2012. Non-GAAP net loss for the second quarter of 2013 was $4.9 million, compared to a non-GAAP net loss of $4.2 million for the second quarter of 2012.

Net loss per share: GAAP net loss per share for the second quarter of 2013 was $0.16 based upon weighted average shares outstanding of 69.8 million, compared to a GAAP net loss per share of $0.30 for the second quarter of 2012 based upon weighted average shares outstanding of 19.4 million.

Non-GAAP net loss per share for the second quarter of 2013 was $0.07 based upon weighted average shares outstanding of 69.8 million, compared to a non-GAAP net loss per share of $0.09 for the second quarter of 2012 based upon weighted average shares outstanding of 47.3 million.

Adjusted EBITDA: Adjusted EBITDA for the second quarter of 2013 was a loss of $4.0 million, compared to a loss of $3.1 million for the second quarter of 2012.

Clients: The number of active enterprise clients at the end of the second quarter was 1,109, and the number of active network clients at the end of the second quarter was approximately 1,100. Annualized revenue per average active enterprise client for the second quarter was approximately $141,400. Active enterprise client retention rate for the second quarter was approximately 96%.

In connection with our acquisition of PowerReviews, which closed in June 2012, we expanded the types of clients that we serve. To reflect differences among our clients and the services that we offer, we now define our clients as "active enterprise clients" and "active network clients," the definitions of which are set forth herein. Historical references to active clients for periods prior to the closing of the acquisition include both active enterprise clients and active network clients on an aggregate basis. As a result of this prospective nomenclature change resulting from our acquisition of PowerReviews, active clients and active client retention rates for periods prior to June 2012 and after June 2012 may not be directly comparable as we have not made this distinction retrospectively. This change also has a corresponding impact on metrics that are driven by the number of clients, such as revenue per active client.

Quarterly Conference Call

Bazaarvoice will host a conference call today at 4:30 p.m. Eastern Time to review the company's financial results for the second fiscal quarter of 2013 ended October 31, 2012. To access this call, dial (877) 208-2391 from the United States or (913) 312-0652 internationally with conference ID 4260279. A live webcast of the conference call can be accessed from the investor relations page of Bazaarvoice's company website at investors.bazaarvoice.com. Following the completion of the call, a recorded replay will be available on the company's website, and a telephone replay will be available through December 10, 2012 by dialing (877) 870-5176 from the United States or (858) 384-5517 internationally with recording access code 4260279.

About Bazaarvoice

Bazaarvoice, a leading social commerce solutions company, assists clients in bringing the voice of the customer to the center of business strategy.With over 2,000 clients globally, including over half of the Internet Retailer 500, over 20 percent of the Fortune 500 and over one-third of the Fortune 100, Bazaarvoice helps clients to leverage social data derived from online word of mouth content to increase sales, acquire new customers, improve marketing effectiveness, enhance consumer engagement across channels, increase success of new product launches, improve existing products and services, effectively scale customer support, decrease product returns and enable retailers to launch and manage on-site advertising solutions and site monetization strategies.This online word of mouth content can be syndicated across Bazaarvoice's global network of client websites, shopper media sites and mobile devices, making the user-generated content that digital consumers trust accessible at multiple points of purchase.Headquartered in Austin, Texas, Bazaarvoice has offices in Amsterdam, London, Munich, New York, Paris, San Francisco, Stockholm and Sydney.For more information, visit www.bazaarvoice.com, read the blog at www.bazaarvoice.com/blog, and follow on Twitter at www.twitter.com/bazaarvoice.

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Number of Active Enterprise Clients

We define an active enterprise client as an organization that has implemented either the Bazaarvoice Conversations platform or the PowerReviews Enterprise platform and from which we are currently recognizing revenue, and we count organizations that are closely related as one client, even if they have signed separate contractual agreements. We believe that our ability to increase our enterprise client base is a leading indicator of our ability to grow revenue.

Number of Active Network Clients

We define an active network client as an organization that has implemented one of more of solutions but has not implemented either the Conversations or PowerReviews Enterprise platforms.Such solutions may include our Connections solutions, Media solutions or Express platform.We count organizations that are closely related as one client, even if they have signed separate contractual agreements.We believe that our network client base in combination with our enterprise client base is an indicator of the reach of our network.

Non-GAAP Financial Measures

Adjusted EBITDA discussed in this press release is defined as net loss adjusted for stock-based expense, adjusted depreciation and amortization (which excludes amortization of capitalized internal-use software development costs), integration and other costs related to acquisitions, income tax expense and other (income) expense, net.Non-GAAP net loss, which is used to calculate non-GAAP net loss per share, is defined as our GAAP net loss adjusted to exclude stock-based expense, amortization of acquired intangible assets, integration and other costs related to acquisitions along with the associated income tax effect of these adjustments.Non-GAAP basic and diluted loss per share for the second fiscal quarter of 2012 ended October 31, 2011 has been calculated assuming the conversion of all outstanding shares of our preferred stock into 27,897,031 shares of our common stock as of the first day of the beginning of the period.Management presents these non-GAAP financial measures because it considers them to be important supplemental measures of core operating performance. Management uses the non-GAAP financial measures for planning purposes, including analysis of the company's operating performance against prior periods and the effectiveness of our business strategies, the preparation of operating budgets and to determine appropriate levels of operating and capital investments, as well as and in communications with our board of directors concerning our financial performance.Management also believes that the non-GAAP financial measures provide additional insight for securities analysts and investors in evaluating the company's financial and operational performance without regard to items that can vary substantially from company to company depending upon their financing, capital structures and the method by which assets were acquired.However, these non-GAAP financial measures have limitations as an analytical tool, and you should not consider them in isolation or as a substitute for analysis of our results of operations as reported under GAAP.Furthermore, these non-GAAP financial measures may not be comparable to similarly titled measures of other organizations because other organizations may not calculate these non-GAAP financial measures in the same manner. We intend to provide these non-GAAP financial measures as part of our future financial results discussions and, therefore, the inclusion of these non-GAAP financial measures will provide consistency in our financial reporting. A reconciliation of these non-GAAP measures to GAAP is provided in the accompanying tables.

Forward-looking Statements

This press release contains forward-looking statements that involve substantial risks and uncertainties.All statements, other than statements of historical facts, included in this press release regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans and objectives of management are forward-looking statements.The words "anticipate," "believe," "estimate," "expect," "intend," "may," "plan," "will," "would" and similar and "target" expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements include, among other things, statements about management's estimates regarding future revenue and financial performance, the ability to continue developing network solutions to leverage our consumer audience reach, content and data to create incremental value forclients, and other statements about management's beliefs, intentions or goals.We may not actually achieve the expectations disclosed in the forward-looking statements, and you should not place undue reliance on our forward-looking statements.These forward-looking statements involve risks and uncertainties that could cause actual results or events to differ materially from the expectations disclosed in the forward-looking statements, including, but not limited to, our expectations regarding our revenue, expenses, sales and operations; our limited operating history; our ability to integrate the operations of Longboard Media, Inc. as announced in our release on Form 8-K on November 5, 2012; our ability to operate in a new and unproven market; our ability to effectively manage growth, especially in light of our announced management changes; our ability to manage expansion into international markets and new vertical industries; our ability to successfully identify, manage and integrate potential acquisitions; and other risks and potential factors that could affect Bazaarvoice's business and financial results identified in our Form 10-K for the fiscal year ended April 30, 2012, our Form 10-Q for the fiscal quarter ended July 31, 2012 and Form S-1 as filed with the Securities and Exchange Commission on July 12, 2012.Additional information will also be set forth in our future quarterly reports on Form 10-Q, annual reports on Form 10-K and other filings that we make with the Securities and Exchange Commission.We do not intend and undertake no duty to release publicly any updates or revisions to any forward-looking statements contained herein.

Bazaarvoice, Inc. Condensed Consolidated Balance Sheets (unaudited) (in thousands) October 31, April 30, 2012 2012 ASSETS Current assets: Cash and cash equivalents $45,116 $74,367 Restricted cash 604 500 Short-term investments 96,408 50,834 Accounts receivable, net 22,465 17,977 Prepaid expenses and other current assets 4,293 3,873 Total current assets 168,886 147,551 Property, equipment and capitalized internal-use software development costs, net 12,710 8,868 Goodwill 113,152 -- Acquired intangible assets, net 39,133 -- Other non-current assets 129 448 Total assets $334,010 $156,867 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $5,852 $2,523 Accrued expenses and other current liabilities 16,931 12,725 Deferred revenue 47,185 42,152 Total current liabilities 69,968 57,400 Deferred revenue less current portion 2,317 3,434 Deferred tax liability, long-term 1,465 31 Other liabilities, long-term 2,390 2,404 Total liabilities 76,140 63,269 Stockholders' equity: Common stock 7 6 Additional paid-in capital 352,807 158,769 Accumulated other comprehensive loss (6) (20) Accumulated deficit (94,938) (65,157) Total stockholders' equity 257,870 93,598 Total liabilities and stockholders' equity $334,010 $156,867 Bazaarvoice, Inc. Condensed Consolidated Statement of Operations (unaudited) (in thousands, except net loss per share data) Three Months Six Months Ended October 31, Ended October 31, 2012 2011 2012 2011 Revenue $38,626 $25,015 $74,288 $47,103 Cost of revenue 14,099 8,805 26,732 16,602 Gross profit 24,527 16,210 47,556 30,501 Operating expenses: Sales and marketing 17,850 12,125 33,172 23,317 Research and development 7,948 4,576 15,442 7,919 General and administrative 7,484 4,815 23,680 9,914 Acquisition-related and other 1,366 -- 2,750 -- Amortization of acquired intangible assets 898 -- 1,378 -- Total operating expenses 35,546 21,516 76,422 41,150 Operating loss (11,019) (5,306) (28,866) (10,649) Other income (expense), net: Interest income -- 6 50 13 Other income (expense) 51 (373) (403) (464) Total other income (expense), net 51 (367) (353) (451) Net loss before income taxes (10,968) (5,673) (29,219) (11,100) Income tax expense 274 178 562 287 Net loss $(11,242) $(5,851) $(29,781) $(11,387) Accretion of redeemable convertible preferred stock -- (12) -- (25) Net loss applicable to common stockholders $(11,242) $(5,863) $(29,781) $(11,412) Net loss per share applicable to common stockholders: Basic and diluted $(0.16) $(0.30) $(0.45) $(0.60) Basic and diluted weighted average number of shares outstanding 69,846 19,421 66,203 19,119 Bazaarvoice, Inc. Condensed Consolidated Statements of Cash Flows (unaudited) (in thousands) Three Months Six Months Ended October 31, Ended October 31, 2012 2011 2012 2011 OPERATING ACTIVITIES Net loss $(11,242) $(5,851) $(29,781) $(11,387) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization expense 2,622 745 4,335 1,410 Stock-based expense 3,595 1,697 15,933 3,255 Bad debt expense 630 655 783 847 Excess tax benefit related to stock-based compensation (190) -- (272) -- Changes in operating assets and liabilities: Accounts receivable (5,929) (4,257) (4,800) (5,506) Prepaid expenses and other current assets (670) (1,682) (228) (1,077) Other non-current assets (173) (213) (116) (213) Accounts payable 1,090 756 3,176 2,227 Accrued expenses and other current liabilities 3,578 2,854 2,534 4,188 Deferred revenue 1,610 5,732 1,334 7,207 Other liabilities, long-term 937 263 1,138 263 Net cash provided by (used in) operating activities (4,142) 699 (5,964) 1,214 INVESTING ACTIVITIES Acquisitions, net of cash acquired -- -- (30,313) -- Purchases of property and equipment and capitalized internal-use software development costs (2,635) (2,133) (5,831) (2,820) Purchases of short-term investments (50,090) -- (74,216) -- Proceeds from the sale of short-term investments 28,387 -- 28,664 -- Increase in restricted cash -- -- -- (250) Net cash used in investing activities (24,338) (2,133) (81,696) (3,070) FINANCING ACTIVITIES Payments of initial stock offering costs -- (937) -- (937) Proceeds from follow-on stock offering, net of costs (241) -- 51,943 -- Proceeds from exercise of stock options 5,416 213 6,196 1,782 Excess tax benefit related to stock-based compensation 190 -- 272 -- Net cash provided by (used in) financing activities 5,365 (724) 58,411 845 Effect of exchange rate fluctuations on cash and cash equivalents 86 (23) (2) (39) Net change in cash and cash equivalents (23,029) (2,181) (29,251) (1,050) Cash and cash equivalents at beginning of period 68,145 16,181 74,367 15,050 Cash and cash equivalents at end of period $45,116 $14,000 $45,116 $14,000 Supplemental disclosure of other cash flow information: Cash paid for income taxes $-- $17 $236 $18 Supplemental disclosure of non-cash investing and financing activities: Accretion of redeemable convertible preferred stock $-- $12 $-- $25 Accrued stock offering costs -- 264 -- 934 Issuance of stock for acquisition -- -- 119,696 -- Bazaarvoice, Inc. Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited) (in thousands, except net loss per share data) Three Months Six Months Ended October 31, Ended October 31, 2012 2011 2012 2011 Non-GAAP net loss and net loss per share: GAAP net loss $(11,242) $(5,851) $(29,781) $(11,387) Stock-based expense (1) 3,595 1,697 15,933 3,255 Amortization of acquired intangible assets 1,349 -- 2,068 -- Acquisition-related and other expense 1,366 -- 2,750 -- Income tax adjustment for non-GAAP items 35 -- 59 -- Non-GAAP net loss $(4,897) $(4,154) $(8,971) $(8,132) GAAP basic and diluted shares 69,846 19,421 66,203 19,119 Assumed preferred stock conversion -- 27,897 -- 27,897 Non-GAAP basic and diluted shares 69,846 47,318 66,203 47,016 Non-GAAP basic and diluted net loss per share $(0.07) $(0.09) $(0.14) $(0.17) Adjusted EBITDA: GAAP net loss $(11,242) $(5,851) $(29,781) $(11,387) Stock-based expense (1) 3,595 1,697 15,933 3,255 Adjusted depreciation and amortization (2) 2,099 512 3,437 983 Acquisition-related and other expense 1,366 -- 2,750 -- Income tax expense 273 178 561 287 Total other (income) expense, net (50) 367 354 451 Adjusted EBITDA $(3,959) $(3,097) $(6,746) $(6,411) (1) Stock-based expense includes the following: Cost of revenue $583 $344 $877 $667 Sales and marketing 870 412 2,695 814 Research and development 1,054 360 1,696 564 General and administrative 1,088 581 10,665 1,210 Stock-based expense $3,595 $1,697 $15,933 $3,255 Cost of revenue $681 $214 $1,118 $421 Sales and marketing 175 124 308 253 Research and development 161 93 305 161 General and administrative 183 81 327 148 Amortization of acquired intangible assets 899 -- 1,379 -- Adjusted depreciation and amortization $2,099 $512 $3,437 $983 Bazaarvoice, Inc. Selected Quarterly Financial and Operational Metrics (unaudited) (in thousands, except active enterprise clients and full-time employees data) Three Months Ended, Oct 31, Jul 31, Apr 30, Jan 31, Oct 31, Jul 31, Apr 30, Jan 31, 2012 2012 2012 2012 2011 2011 2011 2011 Revenue $38,626 $35,662 $31,431 $27,602 $25,015 $22,088 $19,281 $17,306 Cost of revenue 14,099 12,633 10,325 9,514 8,805 7,797 7,293 6,676 Gross profit 24,527 23,029 21,106 18,088 16,210 14,291 11,988 10,630 Operating expenses: Sales and marketing 17,850 15,322 14,257 12,152 12,125 11,192 10,116 8,592 Research and development 7,948 7,494 6,811 6,059 4,576 3,343 2,999 2,801 General and administrative 7,484 16,196 6,047 5,934 4,815 5,099 3,598 3,281 Acquisition-related and other 1,366 1,384 -- -- -- -- -- -- Amortization of acquired intangible assets 898 480 -- -- -- -- -- -- Total operating expenses 35,546 40,876 27,115 24,145 21,516 19,634 16,713 14,674 Operating loss (11,019) (17,847) (6,009) (6,057) (5,306) (5,343) (4,725) (4,044) Total other income (expense), net 51 (404) (15) (337) (367) (84) 205 (50) Net loss before income taxes (10,968) (18,251) (6,024) (6,394) (5,673) (5,427) (4,520) (4,094) Income tax expense 274 288 343 181 178 109 139 149 Net loss $(11,242) $(18,539) $(6,367) $(6,575) $(5,851) $(5,536) $(4,659) $(4,243) Stock-based expense (1) $3,595 $12,338 $1,952 $2,503 $1,697 $1,558 $1,279 $1,253 Adjusted depreciation and amortization (2) 2,099 1,338 552 569 512 471 449 446 Acquisition-related and other expense 1,366 1,384 -- -- -- -- -- -- Income tax expense 273 288 343 181 178 109 139 149 Total other (income) expense, net (50) 404 15 337 367 84 (205) 50 Adjusted EBITDA $(3,959) $(2,787) $(3,505) $(2,985) $(3,097) $(3,314) $(2,997) $(2,345) Number of active enterprise clients (at period end) (3) 1,109 1,076 790 737 701 640 571 518 Full-time employees (at period end) 777 771 640 608 566 520 494 467 (1) Stock-based expense includes the following: Cost of revenue $583 $294 $234 $319 $344 $323 $235 $247 Sales and marketing 870 1,825 636 419 412 402 307 325 Research and development 1,054 642 406 356 360 204 176 188 General and administrative 1,088 9,577 676 1,409 581 629 561 493 Stock-based expense $3,595 $12,338 $1,952 $2,503 $1,697 $1,558 $1,279 $1,253 (2) Adjusted depreciation and amortization includes the following: Cost of revenue $681 $437 $194 $210 $214 $207 $194 $176 Sales and marketing 175 133 117 120 124 129 113 110 Research and development 161 144 136 134 93 68 50 51 General and administrative 183 144 105 105 81 67 92 109 Amortization of acquired intangible assets 899 480 -- -- -- -- -- -- Adjusted depreciation and amortization $2,099 $1,338 $552 $569 $512 $471 $449 $446 (3) In connection with our acquisition of PowerReviews, which closed in June 2012, we expanded the types of clients that we serve.To reflect differences among our clients and the services that we offer, we now define our clients as "active enterprise clients" and "active network clients," the definitions of which are set forth herein and in our Form 10-Q for the fiscal quarter ended July 31, 2012.Historical references to active clients for periods prior to the closing of the acquisition include both active enterprise clients and active network clients on an aggregate basis.As a result of this prospective nomenclature change resulting from our acquisition of PowerReviews, active clients and active client retention rates for periods prior to June 2012 and after June 2012 may not be directly comparable as we have not made this distinction retrospectively.This change also has a corresponding impact on metrics that are driven by the number of clients, such as revenue per active client. CONTACT: Bazaarvoice Investor Relations Contact: Bazaarvoice Investor Relations Seth Potter ICR, Inc. on behalf of Bazaarvoice, Inc. 646-277-1230 seth.potter@icrinc.com Media Contact: Emily Brady Brady PR on behalf of Bazaarvoice, Inc. 650-692-6107 emily@bradypr.com

Source: Bazaarvoice