Responsys (NASDAQ:MKTG)

SAN BRUNO, CA--(Marketwired - Jun 3, 2013) - Responsys, Inc. (NASDAQ: MKTG), a marketing cloud software and services leader, has been recognized as a "Visionary" in Gartner, Inc.'s May 2013 "Magic Quadrant for CRM Multichannel Campaign Management" (MCCM) report. We believe being named a Visionary validates Responsys' proven track record in the market, and that the Responsys Interact Marketing Cloud has become one of the leading solutions for companies looking to more effectively manage their digital relationships and interactions across email, mobile, social, display and the web. This is the sixth consecutive time Responsys has been included in this prestigious evaluation of the leading multichannel campaign management providers.

"There's no question marketers are realizing that traditional campaign management solutions are no longer going to cut it when it comes to delivering highly personalized interactions at scale, and are therefore moving towards strategies and solutions that are more customer and digitally led," said Scott Olrich, President, Marketing and Platform at Responsys. "We consider being recognized as a 'Visionary' in the Gartner Magic Quadrant a testament to our consistent track record of re-thinking what a multichannel campaign management solution needs to be in the digital age."

Published by Adam Sarner, et.al. Research Director at Gartner, the Magic Quadrant evaluates vendors in the multichannel campaign management market based on their ability to execute and completeness of vision. Responsys was placed in the "Visionaries" quadrant of the Magic Quadrant, which Gartner describes as companies that "provide a strong vision for the campaign management market, or excel in advanced or emerging areas such as digital marketing."

According to Gartner, "Budgets for digital marketing are growing about twice as fast as the overall marketing budget and now represent about a quarter of total marketing spending. Gartner expects spending on CRM software to exceed $14 billion in 2013, with a growth rate of 7.5% -- marketing automation will achieve 11% annual growth. Digital marketing has sparked this growth because it enables new techniques that can grow revenue faster -- for example, inbound marketing, real-time marketing and data-driven marketing. In addition, new technologies, such as social and mobile, open not just new channels, but also new ways of engaging customers. Thus, marketers have to coordinate more channels and more kinds of campaigns."

Responsys' inclusion in Gartner's 2013 "Magic Quadrant for CRM Multichannel Campaign Management" (MCCM) report builds on the company's impressive standings in other recent market research evaluations, including being named a "Strong Performer" in "The Forrester Wave™: Cross-Channel Campaign Management (CCCM), 2012" report, and a "Leader" in "The Forrester Wave™: Email Marketing Service Providers, 2012" report.

First Quarter 2013 Results

• For the first quarter of 2013, total revenue increased 27% to $48.5 million, up from $38.1 million in the first quarter of 2012.
• Non-GAAP net income for the first quarter of 2013 was $3.7 million, or $0.07 per diluted share as compared with $3.5 million, or $0.07 per diluted share, for the first quarter of 2012.

"Our outperformance in the first quarter demonstrates the value that customers place on our differentiated solutions, and we are confident that our growth will continue to be driven by the success of our customers," said Dan Springer, Chairman and CEO. "The strong volumes of digital messages sent by our customers and the higher than anticipated demand for our professional services from new and existing clients were the key revenue drivers this quarter. We believe our ongoing investment in innovation has allowed us to pioneer market-leading products that provide our customers with competitive advantages.

"During the first quarter, we introduced enhancements to the Responsys Interact Suite, including Responsys Interact Preference, a new offering that provides marketers with a unified, cross-channel view of customer preferences and permissions," continued Mr. Springer. "Our new product introductions and investments in our premium platform are focused on enabling our customers to generate the highest return for their customized digital marketing programs. We have a track record of anticipating emerging trends, and we intimately understand the needs of marketers. We believe we are well-positioned to deliver strong financial results throughout the rest of 2013 and beyond."

Business Outlook

Based on information available as of May 6, 2013, Responsys is issuing guidance for the second quarter of 2013 and revising fiscal 2013 guidance as follows:

For the second quarter of 2013, the Company expects revenue to be in the range of $45.5-$46.5 million. Non-GAAP net income is expected to be approximately $0.02 per diluted share. Expected non-GAAP net income for the quarter excludes an estimated $0.7 million in amortization of acquired intangibles and an estimated $2.9 million in stock-based compensation expense. Non-GAAP net income per diluted share is based on estimated weighted average diluted shares outstanding of 53.6 million.

Responsys is increasing its outlook for fiscal 2013 revenue from a range of $188-$192 million to a range of $190-193 million. The Company is revising its expectation for fiscal 2013 non-GAAP net income from approximately $0.16 to $0.18 per diluted share to approximately $0.18 per diluted share. Non-GAAP net income for the full year excludes an estimated $1.8 million in amortization of acquired intangibles and an estimated $12.2 million in stock-based compensation expense. Non-GAAP net income per diluted share is based on weighted average diluted shares outstanding of 54 million.

Non-GAAP net income outlook for the fiscal year 2013 assumes an effective non-GAAP tax rate of 35%.

On February 22, 2013, we made our research report, "Responsys Inc (MKTG): Filling the Valuation Gap", available to our Premium members.  An excerpt states:

In light of our ongoing coverage of SaaS companies, we have now widened our focus to include Responsys Inc. (NASDAQ: MKTG). A clue which leads us to believe that MKTG may be telegraphing itself as an acquisition target exists in information disclosed in a January, 11 2013 8K (a related press release has not been issued).  We mentioned this fact in our January 16, 2013 Seeking Alpha article and disclosed that we went long MKTG shares to our premium members in a January 14, 2013 (see January 22, 2013 research note on GeoInvesting for more details).

Please see our entire report here.

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Fourth Quarter 2012 Results

• For the fourth quarter of 2012, total revenue increased 19.9% to $44.7 million, up from $37.2 million in the fourth quarter of 2011.
• Non-GAAP net income for the fourth quarter of 2012 was $3.7 million, or $0.07 per diluted share as compared to $3.3 million, or $0.06 per share on a non-GAAP diluted basis¹, for the fourth quarter of 2011.

"Our strong fourth quarter financial results reflect our success in helping brands transform the way they interact and build relationships with their customers across the digital channels," said Dan Springer, Chairman and Chief Executive Officer of Responsys. "As digital marketers shift away from mass marketing to creating individualized experiences for each customer, we're poised to lead the market with the industry's only interaction management platform that puts the customer first, not the campaign."