Registered: Mar 2006
05-22-12 02:07 PM
Vocus is the leading On-Demand software vendor focused on the corporate communications segment. The company has found a market that is both large and has few competitors, and is leveraging the strengths of the On-Demand model. While PR and marketing budgets are under pressure due to the downturn, Vocus should see solid growth in its transaction-based PRWeb offering, core mid-market subscription business, and international segment.- Wells Fargo
• Q1 bookings were better than expected – at $38.9MM in Q1 (+47% yr/yr). New price increases of 20% for SMB customers along and new pricing for mid-market customers starting at $8K could provide possible upside to overall bookings expectations of 14% for FY2012.
• Marketing suite and social media contributing nicely. Sales of the marketing suite increased 18% sequentially and exceeded seasonally strong Q4 bookings. In addition, Social media bookings doubled year over year while contributing $12-15MM bookings on a standalone basis.
• The integration of iContact appears to be ahead of schedule with phase 1 completed in Q1. The addition of 71 quota carrying sales reps leaves only 79 sales hires remaining to meet their goal of 450. Current sales is already trained to sell the new bundled marketing suite and began to do so in Q2 setting up for a nice second half of FY2012.
• Guidance for Q2 above consensus with FY2012 increased. We believe Vocus is well positioned as a provider of social, search, email marketing and PR solution set for SMBs) addressing a larger market ($25B). We believe this sets the stage for a 20%+ bookings growth over the next 2-3 years.
I wanted to lead with Wells because they are perhaps the axe on the name having the lowest price target of $18-$20. The stk is $15 by the way!
Vocus helps generate awareness and increase influence through news monitoring, media relations, content distribution, and social networks. It has 13,103 annual subscription clients, more than 35,000 transaction customers, and relationships with another 300,000 businesses.
Vocus’ has a PR suite which serves as a mature cash cow
Vocus' has a SMB suite and other stand-alone products which are growth drivers.
Vocus' faces most likely slower growth in the core PR suite business balanced by rapid ramp in Social Media.
70%-75% of company’s annual revenues are derived from existing customers, customer retention rate is a key factor that drives revenue visibility and margin expansion. Vocus management does a good job here, customer retention is high- 80%-85%
Over 90% of company’s revenues from last year are derived from U.S.
This slow to expand to Europe model may pay off for management as we seem to be handling the world downturn better than most.
Vocus reported a strong quarter as revenue, bookings, deferred revenue, cash flow and EPS were all above estimates headlined by strong organic bookings growth of 20%+ and record new customers adds of 1,196 that was more than the company added in all of 2009.
Better-than-expected iContact integration efforts that produced $4.9M in revenue for 5 weeks vs expectations of $4.6M. Ths iContact is a new buy for the co!
Subscription Customers. Vocus added 1,196 new customers, versus 1,052 last period and 682 in the year-ago quarter. The total is now 13,103.
iContact. Acquired on February 24 for $167 million, this email-marketing provider contributed revenue of $4.9 million in just six weeks, above management’s expectations for $4.6 million.
Vocus began bundling iContact with its SMB suite in Q2/12. It is also targeting iContact’s 200,000 annual trial users for the SMB suite. Read Cross Sell!
Vocus offers two social products: Facebook campaigns (NorthSocial acquisition) and monitoring. YES THIS IS A BACK DOOR FACEBOOK PLAY NO ONE HAS TOLD YOU ABOUT!
The company expects billings of $12-15 million in 2012 for stand-alone (excluding those included in SMB suite deals) social.
Sales Expansion on Track. With 341 quota-carrying reps, the company added 71 new reps (including 20 from iContact) and plans to reach 450 by the end of the year.
Coming up with a target here is hard. $27 seems appropriate.
Well, enough Chit Chat. ~stoney