Top Image Systems Reports First Quarter 2014 Results
Q1 2014 Revenue Increases 19% to $8.1 Million, Subscription Revenue Increases 36% to $2.6 Million, Gross Margin Reaches 64%
Top Image Systems Ltd. today announced financial results for the first quarter ended March 31, 2014
- Total revenues increased 19% year over year to $8.1 million;
- Non-GAAP operating profit was $385 thousand for Q1, compared to a loss of $203 thousand for same quarter last year;
- Total recurring revenues were $2.6 million, including SaaS (Software as a Service) revenue of $0.44 million, compared to $1.9 million recurring revenues in the same quarter last year, an increase of 36%;
- Deferred revenues increased to $3.4 million as of March 31, 2014, compared to $2.3 million as of December 31, 2013, an increase of 50%;
- The quarter-end cash balance was $15.7 million, compared to $3.2 million as of December 31, 2013; on February 6, 2014 the Company closed a public offering of ordinary shares, resulting in net proceeds to the Company of $13.7 million, including exercise in full of the underwriters’ overallotment option;
- Growth solutions now represent 70% of revenues compared to 65% for the full year 2013, an increase of 8%;
- After going live this quarter, eFLOW® CrowdBridge on Amazon Mechanical Turk has already carried out 30,000 transactions;
- Through joint efforts with new partners, the US pipeline for our growth solutions has grown by 20%;
- Avi Mileguir was appointed Executive Vice President and General Manager for the newly consolidated branches of TIS Latin America and TIS America, forming TIS Americas;
- Our U.S.-based partner Fiserv went to market with the Snap-to-PayTM capability for select Fiserv mobile banking and payments solutions;
- Following the successful mobile enrollment deployment in Q4 2013, in Q1 2014, our project with Xerox in Brazil expanded, adding eFLOW® DMR to optimize back office processing and bringing more mobile business;
- We signed a partnership with US-based Open Scan to drive mobile payment capture solutions in the field, which we expect to drive mobile business in new verticals;
- The Company’s focus on enhanced cloud capabilities, transition to SaaS and growing our mobile business is driving product, sales, market and executive recruitment strategies to ensure maximum revenue growth, especially in the United States, which is our primary target growth market.
Michael Schrader, COO, Top Image Systems, commented, “We delivered strong top line and bottom line performance this quarter, increasing revenue by 19% year over year to $8.1 million. We expect this double-digit revenue growth and continued margin improvement to be sustainable moving forward. The ability to generally fund operations from our cash flow has enabled us to earmark the money from our recent capital raise to pursue strategic inorganic opportunities and we are actively pursuing subscription-based, growing and accretive assets. During this process, we will make every effort to maximize shareholder value on any investment we make.”
Mr. Schrader continued, “The organic growth that resulted in increased revenues derived from increased sales of our growth engine solutions: Mobile Imaging, ERP (INVOICE) and DMR (Digital Mailroom). Our business is highly defensible as our customers are large, blue chip companies with strong balance sheets that consider our solutions critical to their business success. Both our sales pipeline and our win rates have increased. In addition, our new SaaS business model is helping us win additional business and increase revenue predictability and visibility quarter to quarter. We continue to aggressively pursue sales and partnership opportunities in the U.S. For mobile imaging in particular, we are successfully engaging and landing industry-leading customers and partners thanks to our robust and flexible mobile imaging platform, which enables not only the mobile front end but also a complete back end platform, differentiating us from our competition. In fact, we find ourselves competing against first to market mobile providers in only a small percentage of our business, as we offer an open, extendible platform that they do not have. This important competitive advantage uniquely positions us to thrive in this space.”
First Quarter 2014 Results
Revenues: Total revenues for the first quarter were $8.1 million, compared to $6.8 million for the first quarter of 2013. License revenues for the first quarter were $3.4 million, compared to $2.4 million for the first quarter last year. Professional Services revenues for the first quarter were $2.0 million, compared to $2.4 million for first quarter last year. This decrease does not represent a negative trend, but is simply a consequence of typical fluctuation in project lifecycles. Recurring revenues for the first quarter were $2.6 million, an increase of 36% on a year-over-year basis.
Gross Profit: Gross profit for the first quarter was $5.2 million, compared to $3.8 million for the first quarter of 2013, an increase of 37%. Gross margin for the first quarter was 64%, compared to 56% in the first quarter last year.
Earnings: Non-GAAP operating income was $385 thousand compared to a loss of $203 thousand for the first quarter of 2013. Non-GAAP net income was $279 thousand compared to a loss of $259 thousand for the first quarter of 2013. Non-GAAP diluted earnings per share were $0.02 compared to a loss of $0.02 for the first quarter of 2013. GAAP operating income was $236 thousand compared to a loss of $246 thousand for the first quarter of 2013. GAAP net income was $130 thousand compared to a loss of $302 thousand for the first quarter of 2013. GAAP diluted earnings per share were $0.01 compared to a loss of $0.03 for the first quarter of 2013.
Mr. Schrader concluded, “In this quarter we continued to promote our mobile and cloud-directed strategies by pursuing powerful channel and technology partnerships, initiating product launches, and making key organizational enhancements to deliver global and US market growth. We are confident that our clear focus on cloud, SaaS and mobile imaging strategies in 2014 will drive us to maximum revenue growth throughout the balance of the year, and beyond.”