Eloqua Announces Fourth Quarter and Full Year 2012 Financial Results

Eloqua Announces Fourth Quarter and Full Year 2012 Financial Results

VIENNA, Va.--(BUSINESS WIRE)-- Eloqua, the marketing system of record for modern marketers, today announced financial results for the three and twelve month period ended December 31, 2012.

Financial Highlights for the Full Year Ended December 31, 2012


Total revenue for the full year was $95.8 million, an increase of 34% from $71.3 million in 2011. Subscription and Support revenue was $83.9 million, an increase of 33% from $63.2 million in 2011. Professional Services revenue was $11.9 million, an increase of 46% from $8.1 million in 2011.

GAAP operating loss for the full year of 2012 was $(10.8) million, compared to GAAP operating loss of $(5.1) million in 2011. GAAP net loss attributable to common stockholders was $(78.2) million or $(5.40) per basic and diluted share, based on 14.5 million weighted average shares outstanding. GAAP net loss attributable to common stockholders for 2012 includes $66.9 million of accretion of redeemable preferred stock expense. This compares to a GAAP net loss attributable to common stockholders of $(95.8) million or $(116.74) per basic and diluted share, based on 0.8 million weighted average shares outstanding for 2011. GAAP net loss attributable to common stockholders for 2011 includes $89.7 million of accretion of redeemable preferred stock expense.

Non-GAAP operating loss for the full year 2012 was $(7.3) million, compared to a non-GAAP operating loss of $(3.3) million for the full year 2011. Non-GAAP net loss for the full year 2012 was $(7.4) million or $(0.22) per basic and diluted share, based on 33.5 million pro forma weighted average shares outstanding, compared to a non-GAAP net loss of $(3.7) million for the full year 2011, or $(0.11), per basic and diluted share, based on 32.4 million pro forma weighted average shares outstanding.

A reconciliation of GAAP operating and net income to Non-GAAP operating and net income has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading "Non-GAAP Financial Measures."

Cash and cash equivalents were $92.9 million as of December 31, 2012, compared to $85.5 million as of September 30, 2012. For the full year 2012, net cash used in operating activities was ($6.4) million, compared to net cash provided by operating activities of $2.7 million for the full year 2011. Free cash flow was $(11.1) million for the full year 2012, compared to free cash flow of $(0.2) million for the full year 2011.

Financial Highlights for the Fourth Quarter Ended December 31, 2012

Total revenue for the fourth quarter of 2012 was $27.0 million, an increase of 27% from $21.3 million in the fourth quarter of 2011. Subscription and Support revenue was $22.9 million, an increase of 28% from $17.9 million in the fourth quarter of 2011. Professional Services revenue was $4.1 million, an increase of 21% from $3.4 million in the fourth quarter of 2011.

GAAP operating loss for the fourth quarter of 2012 was $(3.8) million, compared to GAAP operating loss of $(1.1) million for the fourth quarter of 2011. GAAP net loss attributable to common stockholders was $(3.7) million or $(0.11) per basic and diluted share, based on 34.4 million weighted average shares outstanding. This compares to a GAAP net loss attributable to common stockholders of $(18.8) million or $(19.09) per basic and diluted share, based on 1.0 million weighted average shares outstanding, for the fourth quarter of 2011. GAAP net loss attributable to common stockholders for the fourth quarter of 2011 includes $17.4 million of accretion of redeemable preferred stock expense.

Non-GAAP operating loss for the fourth quarter of 2012 was $(2.6) million, compared to a non-GAAP operating loss of $(0.4) million for the fourth quarter of 2011. Non-GAAP net loss was $(2.6) million or $(0.07) per basic share and diluted, based on 34.4 million pro forma weighted average shares outstanding compared to non-GAAP net loss of $(0.6) million for the fourth quarter of 2011, or $(0.02) per basic and diluted share, based on 32.6 million pro forma weighted average shares outstanding.

Net cash used in operating activities was ($2.7) million for the fourth quarter of 2012, compared to net cash used in operating activities of ($1.0) million for the fourth quarter of 2011. Free cash flow was ($4.5) million for the fourth quarter of 2012, compared to free cash flow of ($1.6) million for the fourth quarter of 2011.

On December 20, 2012, Eloqua announced an agreement to be acquired by Oracle for $23.50 per share. A special meeting of the shareholders of Eloqua will be held on Friday, February 8, 2013, at 10:00 a.m., local time, at the offices of Goodwin Procter LLP, 901 New York Avenue, NW, Washington, DC 20001 to consider and vote on the proposed transaction.

Non-GAAP Financial Measures

Eloqua has provided in this release financial information that has not been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP. This information includes non-GAAP operating loss, non-GAAP net loss, non-GAAP net loss per share, pro forma weighted average shares outstanding and free cash flow. Non-GAAP operating loss is based on GAAP operating loss and excludes stock-based compensation expense; non-GAAP net loss is based on GAAP net loss and excludes accretion of dividends on redeemable preferred stock, stock-based compensation expense, change in fair value of warrants and income tax (benefit) expense; free cash flow is based on net cash (used in) provided by operating activities less purchases of property and equipment. Eloqua uses these non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, as a supplement to GAAP measures in evaluating Eloqua's ongoing operational performance.

Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measure. A reconciliation of GAAP to the non-GAAP financial measures has been provided in the tables included as part of this press release.

About Eloqua

Eloqua (NAS: ELOQ) is the marketing system of record for modern marketers. The company's cloud software, professional services and education programs provide marketers with the technology and expertise needed to help marketing drive revenue. More than 100,000 global users from companies both large and small, rely on the marketing automation power of Eloqua to improve demand generation and lead management while driving more qualified leads. Eloqua's customers include AON, Dow Jones, ADP, Fidelity, Polycom, and National Instruments. The company is headquartered in Vienna, Virginia. For more information, visit www.eloqua.com, subscribe to the It's All About Revenue blog, call 866-327-8764, or email demand@eloqua.com.

ELOQUA, INC.

UNAUDITED CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT SHARE DATA)

December 31, 2012

December 31, 2011

ASSETS

Current assets:

Cash and cash equivalents

$

92,914

$

7,240

Accounts receivable, net of reserve of $615 and $725, respectively

30,802

18,228

Deferred commissions and other deferred costs

1,846

2,680

Deferred tax asset

572

781

Prepaid expense and other assets

3,100

4,153

Total current assets

129,234

33,082

Property and equipment, net of accumulated depreciation and amortization of $9,505 and 7,242, respectively

6,193

3,721

Deferred commissions and other deferred costs

526

902

Deferred tax asset

3,965

3,800

Total assets

$

139,918

$

41,505

LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities:

Accounts payable

$

3,846

$

3,263

Accrued employee compensation and related costs

13,356

3,479

Accrued and other current liabilities

7,531

7,858

Deferred revenue, current portion

38,148

28,863

Current portion of long-term debt

-

834

Total current liabilities

62,881

44,297

Long-term debt, net of current portion

-

1,458

Non current deferred revenue and other liabilities

2,545

1,943

Total liabilities

65,426

47,698

Redeemable convertible preferred stock:

Series A preferred stock, $0.0001 par value, 12,124,650 shares authorized,

-

39,406

issued and outstanding at December 31, 2011 and no shares outstanding at December 31, 2012;

liquidation preference of $39,406 at December 31, 2011

Series B preferred stock, $0.0001 par value, 17,678,926 shares authorized,

-

57,456

issued and outstanding at December 31, 2011 and no shares outstanding at December 31, 2012;

liquidation preference of $57,456 at December 31, 2011

Series C preferred stock, $0.0001 par value, 21,483,563 shares authorized,

-

64,242

and 19,766,821 shares issued and outstanding at December 31, 2011 and no shares outstanding at December 31, 2012;

liquidation preference of $64,242 at December 31, 2011

Total redeemable convertible preferred stock

-

161,104

Stockholders' equity (deficit)

Eloqua, Inc. stockholders' equity (deficit):

Common stock, $0.0001 par value; 100,000,000 and 90,000,000 shares authorized, 35,525,498 and 1,063,368

shares issued and outstanding at December 31, 2012 and December 31, 2011

3

-

Additional paid-in capital

319,070

-

Accumulated deficit

(244,581

)

(169,259

)

Total Eloqua, Inc. stockholders' equity (deficit)

74,492

(169,259

)

Noncontrolling interest

-

1,962

Total stockholders' equity (deficit)

74,492

(167,297

)

Total liabilities, redeemable preferred stock and stockholders' equity

$

139,918

$

41,505

ELOQUA, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

Three months ended December 31,

Twelve months ended December 31,

2012

2011

2012

2011

Revenue:

Subscription and support

$

22,879

$

17,925

$

83,906

$

63,222

Professional services

4,084

3,382

11,856

8,126

Total revenue

26,963

21,307

95,762

71,348

Cost of revenue:

Subscription and support

4,806

3,191

15,758

12,330

Professional services

3,714

3,415

11,537

10,718

Total cost of revenue

8,520

6,606

27,295

23,048

Gross profit

18,443

14,701

68,467

48,300

Operating expenses:

Research and development

3,821

3,207

13,664

11,679

Marketing and sales

11,288

8,071

40,708

29,481

General and administrative

7,109

4,485

21,419

12,208

Litigation settlement

-

-

3,500

-

Total operating expenses

22,218

15,763

79,291

53,368

Loss from operations

(3,775

)

(1,062

)

(10,824

)

(5,068

)

Other income (expense), net

34

(237

)

(288

)

(707

)

Loss before benefit (provision) for income taxes

(3,741

)

(1,299

)

(11,112

)

(5,775

)

Benefit (provision) for income taxes

46

(102

)

(152

)

(378

)

Net loss

(3,695

)

(1,401

)

(11,264

)

(6,153

)

Accretion of dividends on redeemable preferred stock

-

(17,351

)

(66,920

)

(89,659

)

Net loss attributable to common stockholders

$

(3,695

)

$

(18,752

)

$

(78,184

)

$

(95,812

)

Net loss per share attributable to common stockholders, basic and diluted

$

(0.11

)

$

(19.09

)

$

(5.40

)

$

(116.74

)

Weighted average common shares outstanding, basic and diluted

34,375,057

982,471

14,490,578

820,734

ELOQUA, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)

Three months ended December 31,

Twelve months ended December 31,

2012

2011

2012

2011

Cash flows from operating activities:

Net loss

$

(3,695

)

$

(1,401

)

$

(11,264

)

$

(6,153

)

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

Depreciation and amortization

739

506

2,263

1,872

Stock-based compensation expense

1,196

682

3,547

1,812

Foreign currency transaction gain (loss)

3

44

(41

)

65

Deferred income taxes

(87

)

52

40

264

Loss on disposal of fixed assets

-

173

-

173

Change in fair value of Series C warrants

-

51

189

264

Change in operating assets and liabilities:

Accounts receivable, net

(10,876

)

(6,997

)

(12,574

)

(2,362

)

Prepaid expenses and other assets

494

(1,185

)

(464

)

(2,102

)

Deferred commissions and other deferred costs

176

1,005

1,210