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Press release from PR Newswire

OpenTable, Inc. Announces Third Quarter Financial Results

Thursday, November 01, 2012

OpenTable, Inc. Announces Third Quarter Financial Results16:31 EDT Thursday, November 01, 2012-- Increases Revenue by 16% to $39.7 Million -- -- Grows Seated Diners by 26% over Q3 2011 -- -- Achieves EPS of $0.26 and Non-GAAP EPS of $0.42 --SAN FRANCISCO, Nov. 1, 2012 /PRNewswire/ -- OpenTable, Inc. (NASDAQ: OPEN), a leading provider of free, real-time online restaurant reservations for diners and reservation and guest management solutions for restaurants, today reported its financial results for the third quarter ended September 30, 2012.(Logo:  http://photos.prnewswire.com/prnh/20110606/MM07085LOGO )OpenTable reported consolidated net revenues for Q3 2012 of $39.7 million, a 16% increase over Q3 2011.  Consolidated net income for Q3 2012 was $5.9 million, or $0.26 per diluted share.  Non-GAAP consolidated net income for Q3 2012, which excludes tax-affected stock-based compensation expense, tax-affected acquisition-related expenses and tax-affected amortization of acquired intangibles, was $9.7 million, or $0.42 per diluted share.  OpenTable provides operating results by geography as the Company is at different stages of development in its North America and International operations.  North America ResultsInstalled restaurant base as of September 30, 2012, totaled 18,975, a 17% increase over September 30, 2011. Seated diners totaled 27.4 million, a 26% increase over Q3 2011. Revenues totaled $34.5 million, a 19% increase over Q3 2011.  Non-GAAP adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, stock-based compensation and acquisition-related expenses) totaled $17.8 million, or 52% of North America revenues, a 31% increase over Q3 2011. International ResultsInstalled restaurant base as of September 30, 2012, totaled 7,385.  As previously reported, with the relaunch of the toptable site in Q2 2012, in an anticipated one-time event, we removed restaurants that did not migrate to OpenTable technology from our installed restaurant base.  After adjusting for this one-time event, our installed restaurant base as of September 30, 2012, represented an 80% increase over our installed base of OpenTable technology-enabled restaurants as of September 30, 2011.    Seated diners totaled 2.3 million, a 30% increase over Q3 2011.  Revenues totaled $5.2 million, a 1% decrease over Q3 2011 primarily driven by changes in per seated diner fees made at toptable earlier in the year and lower other revenue. Non-GAAP adjusted EBITDA totaled a loss of $0.3 million compared to a loss of $0.7 million in Q3 2011.  "We continue to see a meaningful shift to mobile, which we view as a long-term positive for the business," said Matt Roberts, President and CEO of OpenTable.  "Approximately one third of the 27 million diners we seated in North America during the quarter were attributable to mobile, and we're strategically positioned to further capitalize on the opportunity."Q3 2012 Consolidated Financial and Operating SummaryInstalled restaurant base as of September 30, 2012, totaled 26,360. Seated diners totaled 29.7 million, a 26% increase over Q3 2011. Total revenues were $39.7 million in Q3 2012, up 16% over Q3 2011 revenues of $34.4 million.  Reservation revenues were $21.9 million in Q3 2012, up 22% over Q3 2011 revenues of $18.0 million.  Reservation revenues primarily increased as a result of the increase in seated diners.  Subscription revenues were $14.3 million in Q3 2012, up 10% over Q3 2011 revenues of $12.9 million.  Subscription revenues primarily increased as a result of the increase in installed restaurants using our Electronic Reservation Book solution.  Other revenues were $3.6 million in Q3 2012, up 5% over Q3 2011 revenues of $3.4 million.  The increase is primarily the result of an increase in revenue from advertising on the OpenTable network, partially offset by a decrease in revenue from third-party restaurant coupon sales.  Total operating expenses were $30.6 million in Q3 2012, up 7% over Q3 2011 operating expenses of $28.5 million.  The increase was primarily driven by an increase in stock-based compensation expense and a 3% increase in headcount. Total operating income was $9.2 million in Q3 2012 compared to $5.8 million in Q3 2011.  Non-GAAP consolidated operating income, excluding stock-based compensation expense, acquisition-related expenses and amortization of acquired intangibles was $15.2 million in Q3 2012 compared to $10.8 million in Q3 2011.  The Q3 2012 GAAP income tax expense was $3.3 million, or a 35% tax rate.  Consolidated net income was $5.9 million, or $0.26 per diluted share, in Q3 2012 compared to $4.1 million, or $0.17 per diluted share, in Q3 2011.  Non-GAAP consolidated net income, which excludes tax-affected stock-based compensation expense, tax-affected acquisition-related expenses, and tax-affected amortization of acquired intangibles was $9.7 million, or $0.42 per diluted share, in Q3 2012 compared to $7.4 million, or $0.30 per diluted share, in Q3 2011.   As of September 30, 2012, OpenTable had cash and cash equivalents and short-term investments of $86.1 million.  "During the third quarter the business continued to deliver solid operating metrics, adjusted EBITDA margins and cash flows even as we invest for the future," said Duncan Robertson, CFO of OpenTable. Business OutlookAs of today, OpenTable is providing guidance for Q4 2012 and the full year 2012 on revenue, non-GAAP adjusted EBITDA and other consolidated metrics.  Hurricane Sandy:Hurricane Sandy has interrupted operations at many of the Company's restaurant customers along the East Coast. The key determinants of the impact will be the magnitude and duration of the disruption, which are still largely unknown at this time. The Company estimates the negative impact of Hurricane Sandy on Q4 2012 North America reservation revenue will be approximately $0.5 million.Q4 2012 Guidance:In the North America segment the Company estimates revenue to be in the range of $35.9 million to $37.2 million and non-GAAP adjusted EBITDA to be in the range of $18.6 million to $19.9 million.    In the International segment the Company estimates revenue to be in the range of $5.6 million to $5.9 million and non-GAAP adjusted EBITDA loss to be in the range of $0.5 million to $0.9 million. On a consolidated basis the Company estimates revenue to be in the range of $41.5 million to $43.1 million, non-GAAP adjusted EBITDA to be in the range of $17.7 million to $19.4 million and non-GAAP EPS to be in the range of $0.41 to $0.45. Full Year 2012 Guidance:In the North America segment the Company estimates revenue to be in the range of $138.6 million to $139.9 million and non-GAAP adjusted EBITDA to be in the range of $71.5 million to $72.9 million.  In the International segment the Company estimates revenue to be in the range of $21.6 million to $21.9 million and non-GAAP adjusted EBITDA loss to be in the range of $2.1 million to $2.5 million. On a consolidated basis the Company estimates revenue to be in the range of $160.2 million to $161.8 million, non-GAAP adjusted EBITDA to be in the range of $69.0 million to $70.8 million and non-GAAP EPS to be in the range of $1.64 to $1.68. Quarterly Conference CallA conference call will be webcast live today at 2 p.m. PT/5 p.m. ET and will be available through November 30, 2012, at http://investors.opentable.com/events.cfm.  This call may contain forward-looking statements and other material information regarding the Company's financial and operating results. About Non-GAAP Financial Information This press release contains certain non-GAAP financial measures.  Tables are provided in the press release that reconcile the non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP).    The reconciliations of the forward-looking non-GAAP financial measures to the most directly comparable GAAP financial measures in the tables below include all information reasonably available to the Company at the date of this press release and adjustments that the Company can reasonably predict.  Events that could cause the reconciliation to change include, but are not limited to, acquisitions and divestitures of businesses, goodwill and other asset impairments, and sales of available-for-sale debt securities and other investments.  The non-GAAP financial measures in this press release include non-GAAP consolidated net income and the related per diluted share amounts, non-GAAP consolidated operating income and non-GAAP adjusted EBITDA.  Non-GAAP financial measure adjusted EBITDA is defined as earnings before interest, taxes, depreciation, amortization, stock-based compensation, and acquisition-related expenses.   Within the Company's reconciliation to non-GAAP diluted net income per share, the impact of undistributed earnings allocated to participating securities has been excluded. To supplement the Company's consolidated financial statements presented on a GAAP basis, management believes that these non-GAAP measures provide useful information about the Company's core operating results and thus are appropriate to enhance the overall understanding of the Company's past financial performance and its prospects for the future. Management believes it is useful to exclude stock-based compensation, acquisition-related expenses and amortization of acquired intangibles because they do not reflect the underlying performance of the Company's business operations. These adjustments to the Company's GAAP results are made with the intent of providing both management and investors a more complete understanding of the Company's underlying operational results and trends and performance.  Management uses these non-GAAP measures to evaluate the Company's financial results.  The presentation of non-GAAP measures is not meant to be considered in isolation or as a substitute for or superior to financial results determined in accordance with GAAP.Background Information The Company reports consolidated operations in U.S. dollars and operates in two geographic segments: North America and International. The North America segment is comprised of all operations in the United States, Canada and Mexico, and the International segment is comprised of all non-North America operations, which includes operations in Europe and Asia. The Company generates substantially all of its revenues from its restaurant customers. The Company's revenues primarily include monthly subscription fees, a fee for each restaurant guest seated through online reservations, and other revenue, including installation fees for the Electronic Reservation Book (including training).  Forward-Looking StatementsThis press release and its attachments contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that involve risks and uncertainties.  These forward-looking statements include guidance for Q4 2012 and the full year 2012 and the quotations from management in this press release, as well as any statements regarding the Company's strategic and operational plans.  The Company's actual results may differ materially from those anticipated in these forward-looking statements.  Factors that may contribute to such differences include, among others, the impact of the current economic climate on the Company's business; the Company's ability to maintain an adequate rate of growth; the Company's ability to effectively manage its growth; the Company's ability to attract new restaurant customers; the Company's ability to increase the number of visitors to its websites and mobile applications and convert those visitors into diners; the Company's ability to retain existing restaurant customers and diners or encourage repeat reservations; the Company's ability to successfully enter new markets and manage its international expansion; the Company's ability to successfully manage any acquisitions of businesses, solutions or technologies; interruptions in service and any related impact on the Company's reputation; costs associated with defending intellectual property infringement and other claims; and the impact of natural catastrophic events.  More information about potential factors that could affect the Company's business and financial results is contained in the Company's annual report on Form 10-K for the year ended December 31, 2011 and the Company's other filings with the SEC.  The Company does not intend, and undertakes no duty, to update this information to reflect future events or circumstances.About OpenTable, Inc.OpenTable is a leading provider of free, real-time online restaurant reservations for diners and reservation and guest management solutions for restaurants.  The OpenTable network delivers the convenience of online restaurant reservations to diners and the operational benefits of a computerized reservation book to restaurants.  OpenTable has more than 26,000 restaurant customers, and, since its inception in 1998, has seated over 385 million diners around the world.  The Company is headquartered in San Francisco, California, and the OpenTable service is available throughout the United States, as well as in Canada, Germany, Japan, Mexico and the UK.  OpenTable also owns and operates toptable, a leading restaurant reservation site in the UK.       OpenTable, OpenTable.com, OpenTable logos, toptable and other service names are the trademarks of OpenTable, Inc. and/or its affiliates. OPENTABLE, INC.UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETSSeptember 30,December 31,20122011(In thousands)ASSETSCURRENT ASSETS:  Cash and cash equivalents$              85,158$              36,519  Short-term investments97813,411  Accounts receivable, net 19,18618,795  Prepaid expenses and other current assets3,0832,708  Deferred tax asset10,96011,238           Total current assets119,36582,671Property, equipment and software, net19,20616,150Goodwill46,31842,312Intangibles, net15,82816,403Deferred tax asset11,9255,466Other assets1,088813TOTAL ASSETS$            213,730$            163,815LIABILITIES AND STOCKHOLDERS' EQUITYCURRENT LIABILITIES:  Accounts payable and accrued expenses$                9,435$                7,004  Accrued compensation4,9924,518  Deferred revenue1,5971,752  Deferred tax liability107-  Dining rewards payable25,89920,827           Total current liabilities42,03034,101  Deferred revenue ? non-current2,1412,249  Deferred tax liability3,9333,915  Income tax liability14,84913,215  Other long-term liabilities71108           Total liabilities63,02453,588STOCKHOLDERS' EQUITY:  Common stock22  Additional paid-in capital201,606171,465  Treasury stock(50,673)(41,963)  Accumulated other comprehensive income (loss)905(1,634)  Accumulated deficit(1,134)(17,643)           Total stockholders' equity150,706110,227TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$            213,730$            163,815  OPENTABLE, INC.UNAUDITED CONDENSED CONSOLIDATED INCOME STATEMENTSThree Months EndedNine Months EndedSeptember 30,September 30,2012201120122011(In thousands, except per share amounts)REVENUES$         39,738$         34,356$      118,665$     102,353COSTS AND EXPENSES:  Operations and support (1)10,5449,91631,40229,074  Sales and marketing (1)8,2167,47725,55921,692  Technology (1)3,7413,74810,59911,326  General and administrative (1)8,0727,40725,67318,417           Total costs and expenses30,57328,54893,23380,509Income from operations9,1655,80825,43221,844Other income, net36236668Income before taxes9,2015,83125,49821,912Income tax expense 3,2531,7758,9897,346NET INCOME$           5,948$           4,056$        16,509$       14,566Net income per share:  Basic$           0.26$           0.17$         0.73$        0.62  Diluted$           0.26$           0.17$         0.71$        0.59Weighted average shares outstanding:  Basic22,64123,69522,58523,530  Diluted23,26124,48823,18824,545(1) Stock-based compensation included in above line items:  Operations and support$                    332$                    431$                  966$              1,289  Sales and marketing1,2905714,0461,574  Technology1,0204312,1841,319  General and administrative2,2682,5368,8914,627$                 4,910$                 3,969$             16,087$              8,809Other Operational Data:  Installed restaurants (at period end):    North America18,97516,23718,97516,237    International7,3857,6297,3857,629    Total26,36023,86626,36023,866  Seated diners (in thousands):    North America27,43821,81883,19264,884    International2,3021,7686,8004,939    Total29,74023,58689,99269,823  Headcount (at period end):    North America425403425403    International162165162165    Total587568587568Additional Financial Data:  Revenues:    North AmericaReservation$         19,193$         15,154$        58,128$       45,690Subscription12,51011,40636,67533,117Other2,7892,5217,8848,290Total North America Revenues$         34,492$         29,081$      102,687$       87,097    InternationalReservation$           2,718$           2,861$         8,421$        8,228Subscription1,7541,5315,0564,400Other7748832,5012,628Total International Revenues5,2465,27515,97815,256    Total Revenues$         39,738$         34,356$      118,665$     102,353  Income (loss) from operations:    North America$         11,581$           8,532$        32,935$       30,857    International(2,416)(2,724)(7,503)(9,013)    Total$           9,165$           5,808$        25,432$       21,844  Depreciation and amortization:    North America$           1,912$           1,726$         5,460$        5,162    International1,4551,3214,2133,666    Total$           3,367$           3,047$         9,673$        8,828  Stock-based compensation:    North America$           4,221$           3,295$        14,447$        6,176    International6896741,6402,633    Total$           4,910$           3,969$        16,087$        8,809  OPENTABLE, INC.RECONCILIATION OF GAAP TO NON-GAAP OPERATING RESULTSThree Months EndedNine Months EndedSeptember 30,September 30,2012201120122011(In thousands, except per share amounts)Non-GAAP consolidated net income per share:GAAP net income "as reported"$         5,948$         4,056$        16,509$        14,566Add back: stock-based compensation expense4,9103,96916,0878,809Income tax effect of stock-based compensation(1,996)(1,403)(6,298)(3,321)Add back: acquisition-related expenses53-104-Income tax effect of acquisition-related expenses(21)-(40)-Add back: amortization of acquired intangibles1,0899933,0382,986Income tax effect of amortization of intangibles(311)(264)(826)(822)NON-GAAP CONSOLIDATED NET INCOME $         9,672$         7,351$        28,574$        22,218Non-GAAP diluted net income per share$           0.42$           0.30$           1.23$           0.91Weighted average diluted shares outstanding23,26124,48823,18824,545Non-GAAP consolidated operating income:GAAP income from operations "as reported"$         9,165$         5,808$        25,432$        21,844Add back: stock-based compensation expense4,9103,96916,0878,809Add back: acquisition-related expenses53-104-Add back: amortization of acquired intangibles1,0899933,0382,986NON-GAAP OPERATING INCOME$        15,217$        10,770$        44,661$        33,639North America Adjusted EBITDA:GAAP operating income "as reported"$        11,581$         8,532$        32,935$        30,857Adjustments:  Stock-based compensation expense4,2213,29514,4476,176  Acquisition-related expense53-104-  Amortization of acquired intangibles20187377263  Depreciation and other amortization expense1,7111,6395,0834,899           North America Adjusted EBITDA$        17,767$        13,553$        52,946$        42,195International Adjusted EBITDA:GAAP operating loss "as reported"$        (2,416)$        (2,724)$        (7,503)$        (9,013)Adjustments:  Stock-based compensation expense6896741,6402,633  Amortization of acquired intangibles8889062,6612,723  Depreciation and other amortization expense5674151,552943           International Adjusted EBITDA$          (272)$          (729)$        (1,650)$        (2,714)  OPENTABLE, INC.RECONCILIATION OF GAAP TO NON-GAAP FORWARD-LOOKING GUIDANCEForward-Looking GuidanceThree Months EndingTwelve Months EndingDecember 31, 2012December 31, 2012Range of EstimateRange of EstimateFromToFromTo(In thousands, except per share amounts)Non-GAAP consolidated net income per share:GAAP net income$         6,438$         7,509$        22,947$        24,018Add back: stock-based compensation expense4,4864,48620,57320,573Income tax effect of stock-based compensation(1,742)(1,742)(8,040)(8,040)Add back: acquisition-related expenses--104104Income tax effect of acquisition-related expenses--(40)(40)Add back: amortization of acquired intangibles5875873,6253,625Income tax effect of amortization of intangibles(216)(216)(1,042)(1,042)NON-GAAP CONSOLIDATED NET INCOME $         9,553$        10,624$        38,127$        39,198Non-GAAP diluted net income per share$           0.41$           0.45$           1.64$           1.68Weighted average diluted shares outstanding23,40023,40023,30023,300North America Adjusted EBITDA:GAAP operating income$        12,247$        13,547$        45,083$        46,483Adjustments:  Stock-based compensation expense4,0024,00218,44918,449  Acquisition-related expense--104104  Amortization of acquired intangibles227227604604  Depreciation and other amortization expense2,1242,1247,2607,260           North America Adjusted EBITDA$        18,600$        19,900$        71,500$        72,900International Adjusted EBITDA:GAAP operating loss$        (2,062)$        (1,662)$        (9,514)$        (9,114)Adjustments:  Stock-based compensation expense4844842,1242,124  Amortization of acquired intangibles3603603,0213,021  Depreciation and other amortization expense3183181,8691,869           International Adjusted EBITDA$          (900)$          (500)$        (2,500)$        (2,100)Consolidated Adjusted EBITDA:GAAP operating income $        10,185$        11,885$        35,569$        37,369Adjustments:  Stock-based compensation expense4,4864,48620,57320,573  Acquisition-related expense--104104  Amortization of acquired intangibles5875873,6253,625  Depreciation and other amortization expense2,4422,4429,1299,129           Consolidated Adjusted EBITDA$        17,700$        19,400$        69,000$        70,800SOURCE OpenTable, Inc.For further information: Investor Relations, +1-415-344-6520, investors@opentable.com, or Media Relations Contact, +1-415-344-4275, pr@opentable.com