CAMBRIDGE, Mass. — August 9, 2007 — Sapient (NASDAQ: SAPE) today announced its financial results for the second quarter ended June 30, 2007.
Second Quarter Financial Results
For the second quarter of 2007, Sapient reported service revenues of $128.6 million, an increase of 31% year over year.
On a non-GAAP basis (excluding stock-based compensation expense, restructuring and other related charges, amortization of purchased intangible assets and expense relating to the stock-based compensation review and restatement), Sapient reported second quarter income from operations of $9.9 million, or 8% of service revenues. This compares to non-GAAP income from operations of $5.6 million, or 6% of service revenues, for the second quarter of 2006. On a GAAP basis, Sapient reported second quarter income from operations of $1.4 million, compared to $1.8 million in the second quarter of 2006.
Non-GAAP diluted income per share from continuing operations for the second quarter was $0.07, compared to $0.03 for the second quarter of 2006. On a GAAP basis, diluted income per share from continuing operations for the second quarter was $0.01, compared to breakeven for the second quarter of 2006.
"Demand continues to be strong for Sapient's unique blend of interactive marketing capabilities and consulting services," said Alan J. Herrick, president and chief executive officer of Sapient. "Our strong performance indicates that we are fulfilling this growing demand with the right approach, deep industry expertise and experienced people to deliver outstanding results for our clients."
The Company generated cash of $5.8 million from operations in the second quarter of 2007, compared to the use of $1.6 million in cash for the second quarter of 2006. Cash, cash equivalents and marketable securities totaled $109.4 million at June 30, 2007. Days sales outstanding in accounts receivable and unbilled revenue, net of deferred revenue, was 80 days for the second quarter of 2007 compared to 93 days for the second quarter of 2006.
Financial Outlook
Sapient management provided the following financial guidance for the third quarter ending September 30, 2007:
1. Service revenues are expected to be in excess of $135 million.
2. Non-GAAP operating margins are expected to be 8% or better.
Sapient management provided the following financial guidance for the year ending December 31, 2007:
1. Service revenues are expected to be in excess of $525 million.
Webcast and Conference Call
Sapient will host a discussion of its second quarter results at 5:00 p.m. (ET) today, which will be broadcast live on the Internet. Please use the following link to pre-register and view important information about this conference call: http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=65979&eventID=1600683. Alternatively, to be placed into the call by an operator, please call the number below at least 15 minutes prior to the call start time. A re-broadcast of the call will be available from August 9 at 7:00 p.m. (ET) through August 16 at 11:59 p.m. (ET). Please refer to the replay information below.
Dial-in Information
Inside the U.S. 888.680.0865
Outside the U.S. 617.213.4853
Passcode 19408809
Replay Information
Inside the U.S. 888.286.8010
Outside the U.S. 617.801.6888
Passcode 77842761
Adjusted (Non-GAAP) Financial Measures
Sapient provides non-GAAP financial measures to complement reported GAAP results. Management believes the measures help illustrate underlying trends in the Company's business and uses the measures to establish budgets and operational goals, communicated internally and externally, in managing the Company’s business and evaluating its performance. The Company anticipates that it will continue reporting both GAAP and certain non-GAAP financial measures in its financial results, including non-GAAP results excluding stock-based compensation expense, restructuring and other related charges, amortization of purchased intangible assets and expense relating to the stock-based compensation review and restatement.
Forward-Looking Statements
This press release contains forward-looking statements that involve a number of risks and uncertainties, in particular the financial guidance for future periods. A number of factors that could cause actual events to differ materially from those indicated. Such factors include, without limitation, the continued acceptance of the Company’s services, its ability to accurately set fees for and timely complete its current and future client projects, successfully manage risks associated with its international operations, manage its growth and projects effectively, continue to attract and retain high quality employees, and other factors set forth in the Company’s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q, as filed with the SEC.
About Sapient
Sapient, a global services firm, helps clients compete, evolve and grow in an increasingly complex marketplace. We operate two groups -- Sapient Interactive and Sapient Consulting -- positioned at the intersection of marketing, business and technology. Sapient Interactive provides brand and marketing strategy, award-winning creative work, web design and development and emerging media expertise. Sapient Consulting provides business and IT strategy, process and systems design, package implementation and custom development, as well as outsourcing services such as testing, maintenance and support.
Our passion for client success -- evidenced by our ability to foster collaboration, drive innovation and solve challenging problems -- is the subject of case studies on leadership and organizational behavior used by MBA students at both Harvard and Yale. Leading clients, including BP, Essent Energie, Harrah's Entertainment, Hilton International, Janus, Sony Electronics and Verizon, rely on our unique approach to drive growth and market momentum. Headquartered in Cambridge, Massachusetts, Sapient operates across North America, Europe and India. For more information, please visit www.sapient.com.
Sapient is a registered service mark of Sapient Corporation.
To view the financial schedules that are part of this release, click here .