Digital River, Inc. (NASDAQ: DRIV), a leading provider of global e-commerce solutions, reports its third quarter financial results.
Third Quarter Ended Sept. 30, 2009
GAAP Results
Third quarter revenue totaled $99.4 million, compared to $96.3 million during the same period in 2008. These results exceeded management’s third quarter revenue guidance of $96.5 – $98.5 million.
Third quarter GAAP net income was $11.0 million, or $0.29 per diluted share. This compared to GAAP net income of $15.6 million, or $0.39 per diluted share, in the third quarter of 2008. These results were consistent with management’s third quarter earnings guidance of $0.26 – $0.29 per diluted share.
Non-GAAP Results
Third quarter non-GAAP net income was $15.9 million, or $0.42 per diluted share. This compared to non-GAAP net income of $19.2 million, or $0.46 per diluted share, in the third quarter of 2008. These results exceeded management’s third quarter earnings guidance of $0.38 – $0.41 per diluted share.
Non-GAAP net income is computed by starting with GAAP pre-tax income as reported on the company’s statement of income, then adding back amortization of acquisition-related intangibles and stock-based compensation expense, to calculate non-GAAP pre-tax income. This amount is then taxed at 27 percent to arrive at non-GAAP net income. This amount is then divided by fully-diluted GAAP shares outstanding, which includes shares underlying the company’s convertible senior notes, to derive non-GAAP diluted net income per share. To provide further clarity, a detailed reconciliation on the comparability of the GAAP and non-GAAP data has been provided in table form following the financial statements accompanying this release.
2009 Guidance
Digital River continues to work on its business plans in response to Symantec’s decision to not renew its e-commerce contract, which expires on June 30, 2010. While Digital River does not have complete visibility into Symantec’s transition plans and is still assessing the impact to its business, Digital River’s expectation for forward-looking guidance for the quarter ending Dec. 31, 2009, is as follows:
Fourth Quarter
* Total revenue of $94 – $98 million;
o Revenue related to Symantec products is expected to be between $19 – $22 million;
o Revenue, excluding Symantec, is expected to be approximately $75 – $76 million, representing year-over-year growth rates of 16 – 18 percent;
* GAAP diluted net income per share of $0.18 – $0.22, assuming a 25 percent tax rate; and
* Non-GAAP diluted net income per share of $0.30 – $0.34, assuming a 27 percent tax rate.
Full Year
* Revenue of approximately $393 – $397 million.
* GAAP diluted net income per share of $1.23 – $1.27, assuming a 25.5 percent tax rate; and
* Non-GAAP diluted net income per share of $1.69 – $1.73, assuming a 27 percent tax rate.
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