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BroadSoft Reports Fourth Quarter and Full Year 2012 Financial Results

Companies mentioned in this article: BroadSoft, Inc.

GAITHERSBURG, MD -- (Marketwire) -- 02/27/13 -- BroadSoft, Inc. (NASDAQ: BSFT), the leading global provider of Internet protocol-based, or IP-based, communications services to the telecommunications industry, today announced financial results for the fourth quarter and twelve-month period ended December 31, 2012.

Financial Highlights for the Fourth Quarter of 2012

  • Total revenue increased 13% year-over-year to $45.8 million
  • GAAP gross profit equaled 82% of total revenue; non-GAAP gross profit equaled 85% of total revenue
  • GAAP income from operations totaled $8.4 million or 18% of revenue; non-GAAP income from operations totaled $14.0 million or 31% of revenue
  • GAAP diluted EPS equaled $0.17 per common share; non-GAAP diluted EPS equaled $0.47 per common share

Results for the three months ended December 31, 2012

Total revenue rose to $45.8 million in the fourth quarter of 2012, an increase of 13% compared to $40.6 million in the fourth quarter of 2011.

Net income for the fourth quarter of 2012 was $4.9 million, or $0.17 per diluted common share, compared to net income of $5.5 million, or $0.19 per diluted common share in the fourth quarter of 2011.

On a non-GAAP basis, net income in the fourth quarter of 2012 was $13.4 million, or $0.47 per diluted common share, compared to non-GAAP net income of $10.8 million, or $0.38 per diluted common share, in the fourth quarter of 2011. A reconciliation of non-GAAP and GAAP results is included in the financial tables below.

Results for the twelve months ended December 31, 2012

For the full year, total revenue was $164.8 million, an increase of 19% compared to $138.1 million in 2011.

Net income for the full year of 2012 was $12.1 million, or $0.43 per diluted common share, compared to net income of $32.3 million, or $1.15 per diluted common share, in 2011. GAAP results for 2011 included an income tax benefit of $8.9 million, or $0.32 per diluted common share, resulting from the release of a tax valuation allowance relating to net deferred tax assets.

On a non-GAAP basis, net income for the full year of 2012 was $40.9 million or $1.44 per diluted common share, compared to non-GAAP net income of $34.5 million, or $1.23 per diluted common share, in 2011.

Management Commentary

"We executed well against our 2012 strategic plan, including our introduction of UC-One, the only Unified Communications platform designed for telecommunications service providers," said Michael Tessler, president and chief executive officer, BroadSoft. "In 2013, we will continue to focus on developing innovative mobile services to address the growing multi-device communication trend and provide users the freedom to communicate from anywhere. We will also closely collaborate with our customers to design successful go-to-market strategies to drive the rapid adoption of their hosted Unified Communications solutions beyond voice services."

"For 2012, we grew revenues by 19% and billings by an even stronger 24%," said Jim Tholen, chief financial officer, BroadSoft. "We were pleased that we delivered non-GAAP operating margins of 26% for the year and cash flow from operations of over $30 million. As we head into 2013, we remain excited by the opportunities to further drive adoption of BroadSoft-enabled solutions."

Guidance

For the first quarter of 2013, BroadSoft anticipates revenue of $37 to $40 million. The Company also expects to achieve earnings on a non-GAAP basis of $0.02 to $0.12 per diluted common share.

For the full year 2013, BroadSoft expects revenue of $181 to $189 million. This range assumes that we do not recognize any material contribution from amounts currently held in our long-term deferred revenue balance. The Company anticipates full year 2013 earnings on a non-GAAP basis of $1.10 to $1.35 per diluted common share.

"Regarding our revenue guidance for 2013, we expect to see continued strong growth in our enterprise Unified Communications software and cloud offerings. We anticipate that this strong growth will be partially offset by lower consumer applications revenue prior to service providers ramping up their voice over LTE investment as well as a decline in our professional services revenue given timing issues related to professional services revenue recognized in 2011 and 2012 from prior periods," commented Tholen.

Conference Call

BroadSoft will discuss its fourth quarter and full year 2012 results and its business outlook today via teleconference at 5:00 p.m. Eastern Time. To participate in the teleconference, callers can dial the toll free number 1-877-312-5517 (U.S. callers only) or 1-760-666-3772 (from outside the U.S.). The conference call can also be heard live via audio webcast at http://investors.broadsoft.com/events.cfm. To help ensure the conference begins on time, please dial in or connect via the web five minutes prior to the scheduled start time.

For those unable to participate in the live call, a recording will be available shortly after the conclusion of the call at http://investors.broadsoft.com/events.cfm and will remain available until immediately prior to our next earnings call.

BroadSoft has provided in this release, and will provide on this afternoon's teleconference, financial information that has not been prepared in accordance with generally accepted accounting principles, or GAAP. BroadSoft 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 BroadSoft's ongoing operational performance. BroadSoft's management regularly uses these non-GAAP financial measures to understand and manage its business and believes these non-GAAP financial measures provide meaningful supplemental information regarding the Company's performance by excluding certain non-cash expenses, and may include additional adjustments for items that are infrequent in nature. BroadSoft believes the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing its financial results with other companies in BroadSoft's industry, many of which present similar non-GAAP financial measures to investors. A reconciliation of the non-GAAP financial measures included in this release and to be discussed on this afternoon's teleconference to the most directly comparable GAAP financial measures is set forth below.

Non-GAAP financial measures:

Non-GAAP net income and net income per share. BroadSoft defines non-GAAP net income as net income plus stock-based compensation expense, amortization expense for acquired intangible assets, non-cash interest expense on the Company's convertible notes, and non-cash tax expense included in the GAAP tax provision. BroadSoft defines non-GAAP income per share as non-GAAP net income divided by the weighted average shares outstanding. BroadSoft considers these non-GAAP financial measures to be useful metrics for management and investors because they exclude the effect of certain non-cash expenses so management and investors can compare BroadSoft's core business operating results over multiple periods.

Non-GAAP gross profit, license gross profit, subscription and maintenance support gross profit, and professional services and other gross profit. BroadSoft defines non-GAAP gross profit as gross profit plus stock-based compensation expense and amortization expense for acquired intangible assets. BroadSoft considers non-GAAP gross profit to be a useful metric for management and our investors because it excludes the effect of certain non-cash expenses so management and its investors can compare BroadSoft's sales margins over multiple periods. Where BroadSoft provides further breakdown of non-GAAP gross profit between license, subscription and maintenance support and professional services and other, the Company adds back the stock-based compensation expense and amortization expense, as applicable, to the related gross profit.

Non-GAAP license cost of revenue, subscription and maintenance support cost of revenue, and professional services and other cost of revenue. BroadSoft defines non-GAAP cost of revenue less stock-based compensation expense and amortization expense for acquired intangible assets. BroadSoft considers non-GAAP cost of revenue to be a useful metric for management and our investors because it excludes the effect of certain non-cash expenses so management and its investors can compare BroadSoft's cost of revenue over multiple periods. Where BroadSoft provides further breakdown of non-GAAP cost of revenue between license, subscription and maintenance support and professional services and other, the Company subtracts the stock-based compensation expense and amortization expense, as applicable, to the related cost of revenue.

Non-GAAP income from operations. BroadSoft defines non-GAAP income from operations as income from operations plus stock-based compensation expense and amortization expense for acquired intangible assets. BroadSoft considers non-GAAP income from operations to be a useful metric for management and investors because it excludes the effect of certain non-cash expenses so management and investors can compare BroadSoft's core business operating results over multiple periods. Where BroadSoft provides further breakdown of non-GAAP operating expenses for sales and marketing, research and development and general and administrative, the Company deducts stock-based compensation expense included in the applicable expense item.

Billings. BroadSoft defines billings as revenue plus the net change in our deferred revenue balance for a particular period. BroadSoft believes that billings is a key measure of our business activity.

With respect to our expectations under "Guidance" above, reconciliation of non-GAAP earnings per share guidance to the closest corresponding GAAP measure is not available without unreasonable efforts on a forward-looking basis due to the high variability, complexity and low visibility with respect to the charges excluded from these non-GAAP measures, in particular, the measures and effects of non-cash income taxes, which are extremely difficult to project as a result of our tax status in a number of foreign jurisdictions, and stock-based compensation expense specific to equity compensation awards that are directly impacted by unpredictable fluctuations in our stock price. We expect the variability of the above charges to have a significant, and potentially unpredictable, impact on our future GAAP financial results.

The presentation of non-GAAP net income, non-GAAP net income per share, non-GAAP gross margin, non-GAAP income from operations, billings and other non-GAAP financial measures in this release and on this afternoon's teleconference is not meant to be a substitute for "net income," "net income per share," "gross margin," "income from operations" or other financial measures presented in accordance with GAAP, but rather should be evaluated in conjunction with such data. BroadSoft's definition of "non-GAAP net income," "non-GAAP net income per share," "non-GAAP gross margin," "non-GAAP income from operations," "billings" and other non-GAAP financial measures may differ from similarly titled non-GAAP measures used by other companies and may differ from period to period. In reporting non-GAAP measures in the future, management may make other adjustments for expenses and gains it does not consider reflective of core operating performance in a particular period and may modify "non-GAAP net income," "non-GAAP net income per share," "non-GAAP gross margin," "non-GAAP income from operations," "billings" and such other non-GAAP measures by excluding these expenses and gains.

Forward-Looking Statements

This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by their use of terms and phrases such as "anticipate," "enable," "expect," "will," "believe," "continue" and other similar terms and phrases, and such forward-looking statements include, but are not limited to, the statements regarding the Company's future financial performance set forth under the heading "Guidance." The outcome of the events described in these forward-looking statements is subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from the results anticipated by these forward-looking statements, including, but not limited to: the Company's dependence on the success of BroadWorks® and on its service provider customers to sell services using its applications; the Company's dependence in large part on service providers' continued deployment of, and investment in, their IP-based networks; claims that the Company infringes the intellectual property rights of others; the Company's ability to integrate and achieve the expected benefits from its recent acquisitions, including Adaption Technologies; and the Company's ability to expand its product offerings, as well as those factors contained in the "Risk Factors" sections of the Company's Form 10-K for the year ended December 31, 2012 filed with the SEC on February 27, 2013, and in the Company's other filings with the SEC. All information in this release is as of February 27, 2013. Except as required by law, the Company undertakes no obligation to update publicly any forward-looking statement made herein for any reason to conform the statement to actual results or changes in the Company's expectations.

About BroadSoft

BroadSoft is the leading provider of software and services that enable mobile, fixed-line and cable service providers to offer Unified Communications over their Internet Protocol networks. The Company's core communications platform enables the delivery of a range of enterprise and consumer calling, messaging and collaboration communication services, including private branch exchanges, video calling, text messaging and converged mobile and fixed-line services.

Financial Statements

The financial statements set forth below are not the complete set of the Company's financial statements for the quarter and the year and are presented below without footnotes. Readers are encouraged to obtain and carefully review BroadSoft's Annual Report on Form 10-K for the year ended December 31, 2012, including all financial statements contained therein and the footnotes thereto, as filed with the SEC on February 27, 2013. Once filed with the SEC, the Form 10-K may be retrieved from the SEC's website at www.sec.gov or from BroadSoft's website at www.broadsoft.com.

BSFT-F


                               BroadSoft, Inc.

                    Condensed Consolidated Balance Sheets
                                 (unaudited)


                                                December 31,   December 31,
                                                    2012           2011
                                               -------------  -------------
                                                (In thousands, except share
                                                    and per share data)
Assets:
Current assets:
  Cash and cash equivalents                    $      90,545  $      94,072
  Short-term investments                              73,075         92,749
  Accounts receivable, net of allowance for
   doubtful accounts of $139 and $54 at
   December 31, 2012 and December 31, 2011,
   respectively                                       48,980         47,048
  Deferred tax assets                                  3,732         12,968
  Other current assets                                10,796          4,435
                                               -------------  -------------
    Total current assets                             227,128        251,272
                                               -------------  -------------
Long-term assets:
  Property and equipment, net                          7,361          4,221
  Long-term investments                               30,102          5,000
  Restricted cash                                        584            959
  Intangible assets, net                              11,247          8,842
  Goodwill                                            37,529         17,276
  Other long-term assets                              12,955          3,386
                                               -------------  -------------
    Total long-term assets                            99,778         39,684
                                               -------------  -------------
      Total assets                             $     326,906  $     290,956
                                               =============  =============
Liabilities and stockholders' equity:
Current liabilities:
  Accounts payable and accrued expenses        $      15,686  $      14,999
  Notes payable and bank loans, current
   portion                                               555            891
  Deferred revenue, current portion                   49,368         55,372
                                               -------------  -------------
      Total current liabilities                       65,609         71,262

Convertible senior notes                              86,451         81,737
Notes payable and bank loans                             414            461
Deferred revenue                                      11,781          1,764
Deferred tax liabilities                                   -          1,433
Other long-term liabilities                            1,416          1,056
                                               -------------  -------------
      Total liabilities                              165,671        157,713
                                               -------------  -------------

Stockholders' equity:

Common stock, par value $0.01 per share;
 100,000,000 shares authorized at December 31,
 2012 and December 31, 2011; 27,913,471 and
 27,106,393 shares issued and outstanding at
 December 31, 2012 and December 31, 2011,
 respectively                                            279            271
  Additional paid-in capital                         208,073        191,714
  Accumulated other comprehensive loss                (3,008)        (2,557)
  Accumulated deficit                                (44,109)       (56,185)
                                               -------------  -------------
Total stockholders' equity                           161,235        133,243
                                               -------------  -------------
Total liabilities and stockholders' equity     $     326,906  $     290,956
                                               =============  =============



                              BroadSoft, Inc.

              Condensed Consolidated Statements of Operations
                                (Unaudited)


                                     Three Months Ended     Year Ended
                                        December 31,        December 31,
                                    ------------------- -------------------
                                       2012      2011      2012      2011
                                    --------- --------- --------- ---------
                                     (In thousands, except per share data)
Revenue:
  License software                  $  24,430 $  25,482 $  89,750 $  77,289
  Subscription and maintenance
   support                             16,707    12,517    58,249    42,462
  Professional services and other       4,672     2,552    16,843    18,313
                                    --------- --------- --------- ---------
    Total revenue                      45,809    40,551   164,842   138,064

Cost of revenue:
  License software                      1,739     1,800     8,643     6,077
  Subscription and maintenance
   support                              4,319     2,829    14,831    10,419
  Professional services and other       2,310     2,205     9,012     8,478
                                    --------- --------- --------- ---------
    Total cost of revenue               8,368     6,834    32,486    24,974
                                    --------- --------- --------- ---------

Gross profit                           37,441    33,717   132,356   113,090

Operating expenses:
  Sales and marketing                  13,835    12,234    47,911    38,376
  Research and development              9,695     7,611    36,178    27,744
  General and administrative            5,468     5,383    22,863    19,534
                                    --------- --------- --------- ---------
    Total operating expenses           28,998    25,228   106,952    85,654
                                    ========= ========= ========= =========

Income from operations                  8,443     8,489    25,404    27,436

Other expense, net:                     1,661     1,600     6,470     3,314
                                    --------- --------- --------- ---------
Income before income taxes              6,782     6,889    18,934    24,122
  Provision for (benefit from)
   income taxes                         1,903     1,422     6,858    (8,175)
                                    --------- --------- --------- ---------
Net income                          $   4,879 $   5,467 $  12,076 $  32,297
                                    ========= ========= ========= =========


Net income per common share
 available to BroadSoft, Inc.
 common stockholders:
  Basic                             $    0.18 $    0.20 $    0.44 $    1.21
  Diluted                           $    0.17 $    0.19 $    0.43 $    1.15

Weighted average common shares
 outstanding:
  Basic                                27,861    27,065    27,581    26,603
  Diluted                              28,515    28,142    28,353    27,987

Stock-based compensation expense
 included above:
  Cost of revenue                   $     555 $     352 $   1,831 $     916
  Sales and marketing                   1,764       769     5,609     1,984
  Research and development              1,558       638     4,498     1,901
  General and administrative              847       549     3,084     2,400



                              BroadSoft, Inc.

                 Summary of Consolidated Cash Flow Activity
                                (Unaudited)


                                                  Year ended December 31,
                                               ----------------------------
                                                 2012      2011      2010
                                               --------  --------  --------
                                                      (in thousands)
Net cash provided by operating activities        30,598    28,575    19,386
Net cash used in investing activities           (34,153)  (99,136)  (24,274)
Net cash (used in) provided by financing
 activities                                        (121)  117,431    29,203



                                  Billings
                                 (Unaudited)


                                                  Year ended December 31,
                                                 2012      2011       2010
                                              --------- ---------  ---------

Beginning of period deferred revenue balance  $  57,136 $  59,264  $  40,047
End of period deferred revenue balance           61,149    57,136     59,264
                                              --------- ---------  ---------
Increase (decrease) in deferred revenue           4,013    (2,128)    19,217

Revenue                                         164,842   138,064     95,623
                                              --------- ---------  ---------
Revenue plus net change in deferred revenue     168,855   135,936    114,840



                              BroadSoft, Inc.

               Reconciliation of Non-GAAP Financial Measures
                                (Unaudited)

                                              Three
                       Three Months Ended     Months       Years Ended
                          December 31,        Ended        December 31,
                                            September
                         2012       2011     30, 2012     2012       2011
                      ---------  ---------  ---------  ---------  ---------
                                          (In thousands)

Non-GAAP cost of
 revenue:
GAAP license cost of
 revenue              $   1,739  $   1,800  $   2,030  $   8,643  $   6,077

Less:
Stock-based
 compensation expense       124        128        113        553        331
Amortization of
 acquired intangibles       244        233        214        938        704
                      ---------  ---------  ---------  ---------  ---------

Non-GAAP license cost
 of revenue           $   1,371  $   1,439  $   1,703  $   7,152  $   5,042
                      =========  =========  =========  =========  =========

GAAP subscription and
 maintenance support
 cost of revenue      $   4,319  $   2,829  $   3,667  $  14,831  $  10,419

Less:
Stock-based
 compensation expense       316        133        170        839        334
Amortization of
 acquired intangibles       570        336        516      1,722        591
                      ---------  ---------  ---------  ---------  ---------

Non-GAAP subscription
 and maintenance
 support cost of
 revenue              $   3,433  $   2,360  $   2,981  $  12,270  $   9,494
                      =========  =========  =========  =========  =========

GAAP professional
 services and other
 cost of revenue      $   2,310  $   2,205  $   2,028  $   9,012  $   8,478

Less:
Stock-based
 compensation expense       115         91        102        439        251
                      ---------  ---------  ---------  ---------  ---------

Non-GAAP professional
 services and other
 cost of revenue      $   2,195  $   2,114  $   1,926  $   8,573  $   8,227
                      =========  =========  =========  =========  =========

Non-GAAP gross
 profit:
GAAP gross profit     $  37,441  $  33,717  $  32,449  $ 132,356  $ 113,090
  (percent of total
   revenue)                  82%        83%        81%        80%        82%
Plus:
  Stock-based
   compensation
   expense                  555        352        385      1,831        916
  Amortization of
   acquired
   intangible assets        814        569        730      2,660      1,295
                      ---------  ---------  ---------  ---------  ---------

Non-GAAP gross profit $  38,810  $  34,638  $  33,564  $ 136,847  $ 115,301
                      =========  =========  =========  =========  =========
  (percent of total
   revenue)                  85%        85%        84%        83%        84%

GAAP license gross
 profit               $  22,691  $  23,682  $  19,524  $  81,107  $  71,212
  (percent of related
   revenue)                  93%        93%        91%        90%        92%
Plus:
  Stock-based
   compensation
   expense                  124        128        113        553        331
  Amortization of
   acquired
   intangible assets        244        233        214        938        704
                      ---------  ---------  ---------  ---------  ---------

Non-GAAP license
 gross profit         $  23,059  $  24,043  $  19,851  $  82,598  $  72,247
                      =========  =========  =========  =========  =========
  (percent of related
   revenue)                  94%        94%        92%        92%        93%

GAAP subscription and
 maintenance support
 gross profit         $  12,388  $   9,688  $  11,708  $  43,418  $  32,043
  (percent of related
   revenue)                  74%        77%        76%        75%        75%
Plus:
  Stock-based
   compensation
   expense                  316        133        170        839        334
  Amortization of
   acquired
   intangible assets        570        336        516      1,722        591
                      ---------  ---------  ---------  ---------  ---------

Non-GAAP subscription
 and maintenance
 support gross profit $  13,274  $  10,157  $  12,394  $  45,979  $  32,968
                      =========  =========  =========  =========  =========
  (percent of related
   revenue)                  79%        81%        81%        79%        78%

GAAP professional
 services and other
 gross profit         $   2,362  $     347  $   1,217  $   7,831  $   9,835
  (percent of related
   revenue)                  51%        14%        38%        46%        54%
Plus:
  Stock-based
   compensation
   expense                  115         91        102        439        251
                      ---------  ---------  ---------  ---------  ---------

Non-GAAP professional
 services and other
 gross profit         $   2,477  $     438  $   1,319  $   8,270  $  10,086
                      =========  =========  =========  =========  =========
  (percent of related
   revenue)                  53%        17%        41%        49%        55%



                              BroadSoft, Inc.

         Reconciliation of Non-GAAP Financial Measures (continued)
                                (Unaudited)

                                              Three
                       Three Months Ended     Months       Years Ended
                          December 31,        Ended        December 31,
                                            September
                         2012       2011     30, 2012     2012       2011
                      ---------  ---------  ---------  ---------  ---------
                                          (In thousands)
Non-GAAP income from
 operations:
GAAP income from
 operations           $   8,443  $   8,489  $   6,476  $  25,404  $  27,436
  (percent of total
   revenue)                  18%        21%        16%        15%        20%
Plus:
  Stock-based
   compensation
   expense                4,724      2,308      3,326     15,022      7,201
  Amortization of
   acquired
   intangible assets        814        569        730      2,660      1,295
                      ---------  ---------  ---------  ---------  ---------

Non-GAAP income from
 operations           $  13,981  $  11,366  $  10,532  $  43,086  $  35,932
                      =========  =========  =========  =========  =========
  (percent of total
   revenue)                  31%        28%        26%        26%        26%

GAAP operating
 expense              $  28,998  $  25,228  $  25,973  $ 106,952  $  85,654

Less:
  Stock-based
   compensation
   expense                4,169      1,956      2,941     13,191      6,285
                      ---------  ---------  ---------  ---------  ---------

Non-GAAP operating
 expense              $  24,829  $  23,272  $  23,032  $  93,761  $  79,369
                      =========  =========  =========  =========  =========
  (as percent of
   total revenue)            54%        57%        57%        57%        57%

GAAP sales and
 marketing expense    $  13,835  $  12,234  $  11,396  $  47,911  $  38,376

Less:
  Stock-based
   compensation
   expense                1,764        769      1,317      5,609      1,984
                      ---------  ---------  ---------  ---------  ---------

Non-GAAP sales and
 marketing expense    $  12,071  $  11,465  $  10,079  $  42,302  $  36,392
                      =========  =========  =========  =========  =========
  (as percent of
   total revenue)            26%        28%        25%        26%        26%

GAAP research and
 development expense  $   9,695  $   7,611  $   8,876  $  36,178  $  27,744

Less:
  Stock-based
   compensation
   expense                1,558        638      1,040      4,498      1,901
                      ---------  ---------  ---------  ---------  ---------

Non-GAAP research and
 development expense  $   8,137  $   6,973  $   7,836  $  31,680  $  25,843
                      =========  =========  =========  =========  =========
  (as percent of
   total revenue)            18%        17%        20%        19%        19%

GAAP general and
 administrative
 expense              $   5,468  $   5,383  $   5,701  $  22,863  $  19,534

Less:
  Stock-based
   compensation
   expense                  847        549        584      3,084      2,400
                      ---------  ---------  ---------  ---------  ---------

Non-GAAP general and
 administrative
 expense              $   4,621  $   4,834  $   5,117  $  19,779  $  17,134
                      =========  =========  =========  =========  =========
  (as percent of
   total revenue)            10%        12%        13%        12%        12%



                              BroadSoft, Inc.

         Reconciliation of Non-GAAP Financial Measures (continued)
                                (Unaudited)

                                                Three
                           Three Months Ended   Months      Years Ended
                              December 31,      Ended       December 31,
                                              September
                             2012      2011    30, 2012    2012      2011
                          --------- --------- --------- --------- ---------
                                (In thousands, except per share data)
Non-GAAP net income and
 income per share:
GAAP net income           $   4,879 $   5,467 $   3,140 $  12,076 $  32,297

Adjusted for:
  Stock-based
   compensation expense       4,724     2,308     3,326    15,022     7,201
  Amortization of
   acquired intangible
   assets                       814       569       730     2,660     1,295
  Non-cash interest
   expense on our
   convertible notes          1,319     1,230     1,286     5,120     2,561
  Non-cash tax provision
   (benefit)                  1,630     1,202     1,505     6,023    (8,879)
                          --------- --------- --------- --------- ---------

Non-GAAP net income       $  13,366 $  10,776 $   9,987 $  40,901 $  34,475
                          ========= ========= ========= ========= =========


GAAP net income per basic
 common share             $    0.18 $    0.20 $    0.11 $    0.44 $    1.21

Adjusted for:
  Stock-based
   compensation expense        0.17      0.09      0.12      0.54      0.27
  Amortization of
   acquired intangible
   assets                      0.03      0.02      0.03      0.10      0.05
  Non-cash interest
   expense on our
   convertible notes           0.04      0.05      0.05      0.18      0.10
  Non-cash tax provision
   (benefit)                   0.06      0.04      0.05      0.22     (0.33)
                          --------- --------- --------- --------- ---------

Non-GAAP net income per
 basic common share       $    0.48 $    0.40 $    0.36 $    1.48 $    1.30
                          ========= ========= ========= ========= =========


GAAP net income per
 diluted common share     $    0.17 $    0.19 $    0.11 $    0.43 $    1.15

Adjusted for:
  Stock-based
   compensation expense        0.16      0.08      0.12      0.53      0.26
  Amortization of
   acquired intangible
   assets                      0.03      0.02      0.03      0.09      0.05
  Non-cash interest
   expense on our
   convertible notes           0.05      0.05      0.04      0.18      0.09
  Non-cash tax provision
   (benefit)                   0.06      0.04      0.05      0.21     (0.32)
                          --------- --------- --------- --------- ---------

Non-GAAP net income per
 diluted common share     $    0.47 $    0.38 $    0.35 $    1.44 $    1.23
                          ========= ========= ========= ========= =========


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