Interactive Intelligence trumps expectations for Q3
Interactive Intelligence Inc. (Nasdaq: ININ), a provider of software applications for contact centers and VoIP applications to enterprises, reported robust third-quarter results above the Street’s expectations.
For the three-month period ended Sept. 30, the Indianapolis, Ind.-based small cap recorded net income of $3.3 million, or EPS of $0.17, above the mean estimate of $0.12 eight analysts polled by Thomson Financial were on average projecting. Interactive Intelligence posted net income of $2.2 million in 2006, or EPS of $0.12 for the third quarter last year.
The company booked revenues of $28.7 million, above the $26.9 million eight analysts polled by Thomson Financial were on average forecasting. The current quarter’s revenues represent a 29% increase over revenues of $22.2 million in the third quarter of 2006.
The company had 19 deals greater than $250,000, compared with 14 deals in the second quarter and six in the third quarter of 2006 greater than $250,000.
Product margins, however, were substantially lower for the quarter, due to an increase in hardware-related sales (media servers and interaction servers), while service margins became stable.
Despite lower product margins, Interactive Intelligence said it’s seeing growth in all major geographies. Specifically, the company said it experienced strength in large contact center sales, as well as an increase in the licensing of its VOIP products, such as its gateways and media servers. Interactive further said higher revenues from these areas are driving steady increases in profitability.
Susquehanna Financial analyst Irit Jakoby, who has a “positive” rating on the stock—an equivalent of a “buy” rating—said she believes that positive trends for Interactive are sustainable and that the company’s fundamentals are accelerating going into 2008. “Robust growth for IP contact center infrastructure, together with the company’s increased presence in the market, lead us to believe that the current growth profile for the company is sustainable and accelerating,” Jakoby wrote in a research note today.
On account of confirmed positive trends that are expected to persist, Jakoby is raising her top line estimates for the fourth quarter and 2008, as well as her earnings estimate for 2008. Jakoby raised her EPS estimate for 2008 to $0.95 from $0.89. Eight analysts surveyed by Thomson Financial are expecting earnings of $0.62 per share for 2008.
Shares of Interactive Intelligence (ININ) rose 11.05%, or $2.49, to $25.03 at 11 a.m. ET. Shares of Interactive Intelligence have been trading in the range of $ 13.50 to $23.85 for the past 52 weeks.
