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Press release from PR Newswire

MicroStrategy Announces Fourth Quarter 2012 Financial Results

Monday, January 28, 2013

MicroStrategy Announces Fourth Quarter 2012 Financial Results20:05 EST Monday, January 28, 2013Record $164.5 Million in Total RevenuesTYSONS CORNER, Va., Jan. 28, 2013 /PRNewswire/ -- MicroStrategy® Incorporated (Nasdaq: MSTR), a leading worldwide provider of business intelligence (BI) and mobile software, today announced financial results for the three-month period ended December 31, 2012 (the fourth quarter of its 2012 fiscal year).Fourth quarter 2012 revenues were $164.5 million versus $160.3 million for the fourth quarter of 2011, a 3% increase.  Product licenses revenues for the fourth quarter of 2012 were $46.3 million versus $54.5 million for the fourth quarter of 2011, a 15% decrease.  Product support and other services revenues for MicroStrategy's core BI business for the fourth quarter of 2012 were $109.7 million versus $99.5 million for the fourth quarter of 2011, a 10% increase.  Operating expenses for the fourth quarter of 2012 were $111.3 million versus $113.7 million for the fourth quarter of 2011, a 2% decrease.  The decrease in operating expenses was due primarily to a reduction in sales and marketing expense.Net income for the fourth quarter of 2012 was $8.2 million, or $0.73 per share on a diluted basis, compared to $9.0 million, or $0.81 per share on a diluted basis, for the fourth quarter of 2011.As of December 31, 2012, MicroStrategy had cash and cash equivalents of $224.4 million versus $199.6 million as of December 31, 2011, an increase of $24.8 million.  As of December 31, 2012, MicroStrategy had 9,057,303 shares of class A common stock and 2,227,327 shares of class B common stock outstanding.Fourth Quarter Highlights in Big Data, Mobile Applications, and Cloud-based BIIn the fourth quarter of 2012, MicroStrategy continued to bolster its position as a leading worldwide provider of business intelligence and mobile software.  The company continued to offer visionary thought leadership, superior service to its customers, and disruptive new products.MicroStrategy Announces the General Availability of Express, an Innovative New Software-as-a-Service (SaaS) OfferingIn October 2012, MicroStrategy announced the general availability of Express, enabling any business person ? regardless of technical skill ? to access and analyze data on their own, and deploy powerful data-driven mobile apps to thousands of users within days.  Express combines the simplicity and flexibility of a cloud-based solution with the analytical depth, performance and scalability of world-class business intelligence.  Business people can access on-premises and cloud-based data rapidly and securely, and explore it using powerful and intuitive data visualizations.  They can design and share mobile apps without writing a line of code.  They can build boardroom-quality dashboards using pixel-perfect editing capabilities, and automatically publish personalized documents to any number of recipients.  To try the free service, visit http://www.microstrategy.com/cloud/express/.MicroStrategy Rated #1 by Dresner Advisory Study for Second Year in a Row for Mobile Business Intelligence OfferingIn November 2012, MicroStrategy announced that it has been rated the top Mobile Business Intelligence offering out of 25 product offerings in the widely followed 2012 Wisdom of Crowds® Mobile Business Intelligence Market Study® from Dresner Advisory Services.  This is the second year in a row MicroStrategy Mobile received this number one ranking.The MicroStrategy Mobile BI platform goes above and beyond standard business intelligence to become a full mobile app development platform.  The MicroStrategy Mobile App Platform enables organizations to build a wide variety of essential mobile apps that deliver workflows, transactions, mobile operations systems access, multimedia, and business intelligence in compelling custom native apps.  The Dresner study rated MicroStrategy the top Mobile BI offering, with the highest platform score and the highest customer user rating for Mobile BI among all 25 vendors rated.MicroStrategy Enhances Innovative Big Data Capabilities with Certified Integration to Amazon Redshift Analytical Data Warehouse ServiceIn November 2012, MicroStrategy announced that it certified its integration with the Amazon Redshift data warehouse service.  Launched by Amazon Web Services (AWS), Amazon Redshift is a cloud-based analytical data warehouse service designed to deliver high performance analytics for data warehouse and Big Data applications.MicroStrategy Releases Survey Results on the Use of Tablet Computers to Support Sales ActivitiesIn December 2012, MicroStrategy announced the results of a survey of over 500 U.S. organizations on the use of tablet computers to support sales activities across many industries.  Results of the online survey revealed that:Nearly one in two salespeople cite limited mobile access to key sales systems ? i.e. Customer Relationship Management (CRM), Content Management, Order Management ? as a challenge. C-level executives point to their respective salesforces' lack of understanding of customer needs as a major barrier to selling (75%), along with failure to keep product knowledge current (50%). The top five desired activities to perform on a mobile device include:  create or update opportunities, view sales collateral, view CRM records, view sales analytics, and collaborate and share ideas with other sales team members. Most sales organizations (72%) grade themselves at a B-level or below on sales meeting quality.  To see additional survey result detail, visit http://www.microstrategy.com/download/files/mobile/MSESurveyResults.pdf. Examples of Customer Deals from Q4 2012 Kinross Gold CorporationKinross Gold Corporation (NYSE: KGC) is a Canadian-based gold mining company with mines and projects in Brazil, Canada, Chile, Ecuador, Ghana, Mauritania, Russia and the United States, employing approximately 8,000 people worldwide.  Kinross is expanding its use of the MicroStrategy Business Intelligence, Mobile and Analytics platforms to support initiatives around continuous improvement, cost management and mining productivity.  Kinross selected MicroStrategy for its integrated architecture platform, ease-of-use, and visualization and reporting capabilities.Nielsen Holdings N.V.Nielsen Holdings N.V. (NYSE: NLSN) is a global information and measurement company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence, mobile measurement, trade shows and related properties.  Nielsen selected MicroStrategy as its enterprise BI and Mobile software solution to provide its manufacturing, retailer and media clients with the ability to report and analyze market information for their respective products and services.About MicroStrategy IncorporatedFounded in 1989, MicroStrategy (Nasdaq: MSTR) is a leading worldwide provider of enterprise software, including the MicroStrategy Business Intelligence (BI) Platform?, the MicroStrategy Mobile Platform?, and MicroStrategy Applications?.  The Company offers its technologies for deployment in customer data centers and as proprietary cloud services.  The MicroStrategy BI Platform enables leading organizations to analyze vast amounts of data and distribute business insight throughout the enterprise.  The MicroStrategy Mobile Platform lets organizations rapidly build enterprise-caliber mobile applications needed to mobilize business processes and information.  MicroStrategy Applications are a set of application services designed to help enterprises deploy mobile commerce and loyalty services, build mobile identity and cyber security services, as well as generate real-time insights into consumer preferences.  MicroStrategy Cloud? allows enterprises to deploy MicroStrategy BI apps and mobile apps more quickly and with lower financial risk than with traditional on-premises solutions.  To learn more about MicroStrategy, visit www.microstrategy.com and follow us on Facebook (http://www.facebook.com/microstrategy) and Twitter (http://www.twitter.com/microstrategy). MicroStrategy, MicroStrategy Business Intelligence Platform, MicroStrategy Mobile Platform, MicroStrategy Applications, MicroStrategy Express, and MicroStrategy Cloud are either trademarks or registered trademarks of MicroStrategy Incorporated in the United States and certain other countries.  Other product and company names mentioned herein may be the trademarks of their respective owners.This press release may include statements that may constitute "forward-looking statements," including estimates of future business prospects or financial results and statements containing the words "believe," "estimate," "project," "expect," or similar expressions.  Forward-looking statements inherently involve risks and uncertainties that could cause actual results of MicroStrategy Incorporated and its subsidiaries (collectively, the "Company") to differ materially from the forward-looking statements.  Factors that could contribute to such differences include: the extent and timing of market acceptance of MicroStrategy's new offerings, including MicroStrategy 9.3, MicroStrategy Express, MicroStrategy Wisdom, MicroStrategy Alert and MicroStrategy Usher; the Company's ability to recognize revenue or deferred revenue through delivery of products or satisfactory performance of services; continued acceptance of the Company's other products in the marketplace; the timing of significant orders; delays in the Company's ability to develop or ship new products; competitive factors; general economic conditions, including significant downturns in industries, including the financial services and retail industries, in which we have a significant number of customers; currency fluctuations; and other risks detailed in the Company's registration statements and periodic reports filed with the Securities and Exchange Commission.  By making these forward-looking statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this release. MICROSTRATEGY INCORPORATEDCONSOLIDATED STATEMENTS OF OPERATIONS(in thousands, except per share data)Three Months EndedTwelve Months EndedDecember 31,December 31,2012201120122011*(unaudited)(unaudited)(unaudited)RevenuesProduct licenses$          46,265$          54,502$        147,344$        154,574Product support and other services118,188105,764447,262407,576  Total revenues164,453160,266594,606562,150Cost of revenuesProduct licenses1,6322,2605,8198,774Product support and other services38,05035,392146,973133,246  Total cost of revenues39,68237,652152,792142,020Gross profit124,771122,614441,814420,130Operating expensesSales and marketing59,23069,125219,845243,029Research and development26,70822,31294,56572,618General and administrative25,34022,22397,25189,441  Total operating expenses111,278113,660411,661405,088Income from operations beforefinancing and other income and income taxes13,4938,95430,15315,042Financing and other (expense) income Interest income, net5060141199Gain on sale of investment---3,371Other (expense) income, net(1,801)666(1,063)688  Total financing and other (expense) income(1,751)726(922)4,258Income from operations before income taxes11,7429,68029,23119,300  Provision for income taxes3,5026808,6851,360Net income$           8,240$           9,000$        20,546$        17,940Basic earnings per share (1):$             0.73$             0.84$             1.87$             1.67Weighted average shares outstanding used in computing basic earnings per share11,24510,76710,99510,719Diluted earnings per share (1):$             0.73$             0.81$             1.84$             1.62Weighted average shares outstanding used in computing diluted earnings per share11,28111,07811,17411,066(1) Basic and fully diluted earnings per share for class A and class B common stock are the same.*Derived from audited financial statements. MICROSTRATEGY INCORPORATEDCONSOLIDATED STATEMENTS OF OPERATIONS(in thousands, except per share data)Core BI BusinessAngel.comConsolidatedThree Months EndedThree Months EndedThree Months EndedDecember 31,December 31,December 31,201220112012201120122011(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)RevenuesProduct licenses$             46,265$             54,502$                   -$                   -$             46,265$             54,502Product support and other services109,72199,467--109,72199,467Angel.com services--8,4676,2978,4676,297  Total revenues155,986153,9698,4676,297164,453160,266Cost of revenuesProduct licenses1,6322,260--1,6322,260Product support and other services34,80732,539--34,80732,539Angel.com services--3,2432,8533,2432,853  Total cost of revenues36,43934,7993,2432,85339,68237,652Gross profit119,547119,1705,2243,444124,771122,614Operating expensesSales and marketing56,59066,6282,6402,49759,23069,125Research and development25,07920,9461,6291,36626,70822,312General and administrative24,19221,2881,14893525,34022,223  Total operating expenses105,861108,8625,4174,798111,278113,660Income (loss) from operations beforefinancing and other income and income taxes13,68610,308(193)(1,354)13,4938,954Financing and other (expense) incomeInterest income, net5060--5060Gain on sale of investment------Other (expense) income, net(1,799)709(2)(43)(1,801)666  Total financing and other (expense) income(1,749)769(2)(43)(1,751)726Income (loss) from operations before income taxes$           11,937$           11,077$             (195)$          (1,397)$           11,742$              9,680  Provision for income taxes3,502680Net income$             8,240$              9,000Basic earnings per share$               0.73$                0.84Weighted average shares outstanding used in computing basic earnings per share11,24510,767Diluted earnings per share$               0.73$                0.81Weighted average shares outstanding used in computing diluted earnings per share11,28111,078 MICROSTRATEGY INCORPORATEDCONSOLIDATED STATEMENTS OF OPERATIONS(in thousands, except per share data)Core BI BusinessAngel.comConsolidatedTwelve Months EndedTwelve Months EndedTwelve Months EndedDecember 31,December 31,December 31,201220112012201120122011(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)RevenuesProduct licenses$           147,344$           154,574$                   -$                   -$           147,344$           154,574Product support and other services418,380382,594--418,380382,594Angel.com services--28,88224,98228,88224,982  Total revenues565,724537,16828,88224,982594,606562,150Cost of revenuesProduct licenses5,8198,774--5,8198,774Product support and other services135,257121,924--135,257121,924Angel.com services--11,71611,32211,71611,322  Total cost of revenues141,076130,69811,71611,322152,792142,020Gross profit424,648406,47017,16613,660441,814420,130Operating expensesSales and marketing209,975231,5049,87011,525219,845243,029Research and development88,19067,8636,3754,75594,56572,618General and administrative93,38486,2373,8673,20497,25189,441  Total operating expenses391,549385,60420,11219,484411,661405,088Income (loss) from operations beforefinancing and other income and income taxes33,09920,866(2,946)(5,824)30,15315,042Financing and other (expense) incomeInterest income (expense), net143199(2)-141199Gain on sale of investment-3,371---3,371Other (expense) income, net(1,035)764(28)(76)(1,063)688  Total financing and other (expense) income(892)4,334(30)(76)(922)4,258Income (loss) from operations before income taxes$           32,207$           25,200$          (2,976)$          (5,900)$           29,231$           19,300  Provision for income taxes8,6851,360Net income$           20,546$           17,940Basic earnings per share$               1.87$                1.67Weighted average shares outstanding used in computing basic earnings per share10,99510,719Diluted earnings per share$               1.84$                1.62Weighted average shares outstanding used in computing diluted earnings per share11,17411,066 MICROSTRATEGY INCORPORATEDCONSOLIDATED BALANCE SHEETS(in thousands, except per share data)December 31,December 31,20122011*Assets(unaudited)Current assets  Cash and cash equivalents$         224,393$         199,634  Restricted cash and short-term investments86289  Accounts receivable, net93,75894,723  Prepaid expenses and other current assets13,28817,043  Deferred tax assets, net26,61631,516Total current assets358,141343,205Property and equipment, net100,51495,311Capitalized software development costs, net10,3607,031Deposits and other assets5,2595,306Deferred tax assets, net3,6642,998Total Assets$       477,938$       453,851Liabilities and Stockholders' EquityCurrent liabilities  Accounts payable and accrued expenses$           42,492$           46,401  Accrued compensation and employee benefits74,15368,308  Deferred revenue and advance payments101,888103,199  Deferred tax liabilities523485Total current liabilities219,056218,393Deferred revenue and advance payments8,82310,841Other long-term liabilities43,51745,141Deferred tax liabilities6,23110,498Total Liabilities277,627284,873Stockholders' Equity  Preferred stock undesignated, $0.001 par value; 5,000 shares authorized;      no shares issued or outstanding--  Class A common stock, $0.001 par value; 330,000 shares authorized;    15,462 shares issued and 9,057 shares outstanding, and 14,810 shares     issued and 8,405 shares outstanding, respectively1515  Class B common stock, $0.001 par value; 165,000 shares authorized;     2,227 and 2,378 shares issued and outstanding, respectively22  Additional paid-in capital468,087457,837  Treasury stock, at cost; 6,405 shares(475,184)(475,184)  Accumulated other comprehensive loss(1,515)(2,052)  Retained earnings208,906188,360Total Stockholders' Equity200,311168,978Total Liabilities and Stockholders' Equity$       477,938$       453,851*Derived from audited financial statements. MICROSTRATEGY INCORPORATEDCONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands)Twelve Months EndedDecember 31,20122011*(unaudited)Operating activities:Net income$      20,546$      17,940Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization24,51918,526Bad debt expense4,9771,485Deferred taxes(79)(5,403)Gain on sale of investment-(3,371)Changes in operating assets and liabilities:Accounts receivable(3,438)(15,141)Prepaid expenses and other current assets1,0027,115Deposits and other assets9485Accounts payable and accrued expenses3,1544,775Accrued compensation and employee benefits5,4319,061Deferred revenue and advance payments(3,861)18,498Other long-term liabilities(2,461)7,244Net cash provided by operating activities49,88460,814Investing activities:Proceeds from sale of investment-3,371Purchases of property and equipment(31,116)(40,660)Capitalized software development costs(8,148)(5,907)Insurance proceeds3,2067,065Decrease (increase) in restricted cash and investments225(51)Net cash used in investing activities(35,833)(36,182)Financing activities:Proceeds from sale of class A common stock under exercise of employee stock options10,2502,463Payments on capital lease obligations(491)-Net cash provided by financing activities9,7592,463Effect of foreign exchange rate changes on cash and cash equivalents949(1,558)Net increase in cash and cash equivalents24,75925,537Cash and cash equivalents, beginning of period199,634174,097Cash and cash equivalents, end of period$    224,393$    199,634*Derived from audited financial statements. MSTR-FContact: MicroStrategy IncorporatedInvestor Relationsir@microstrategy.com(703) 848-8600SOURCE MicroStrategy Incorporated