RightNow comes home strong
While the focus in enterprise applications is on a landscape laden with doom, RightNow, an on-demand CRM vendor ended 2008 strongly, ahead of guidance. On the earnings call, CEO Greg Gianforte was understandably upbeat asserting that (via Seeking Alpha transcript):
First, our land and expand strategy has been allowing customers to experience the benefits of RightNow solutions in a low-risk/ high-reward approach before they spend millions of dollars from those. Second, while discretionary spending in IT department was very tight these days many of our clients view right now as essential not discretionary. Talk to any high level executive and they are all say in the same thing. Find a way to cut cost but be sure to keep our existing customers. New customers are hard to find, so if companies do not protect their existing customers they are in trouble. Looking forward executives realized that they have to focus on improving the customers’ experience even in tough times and this was reflected in our Q4 results. Thirdly, the fact that we are growing our product footprint by releasing meaningful quarterly updates across our entire product line.
The Irregulars often debate the relative merits of on-premise and on-demand as we have representatives from both sides of that particular fence in our group. One of the 'features' that we see driving customers into on-demand vendors' arms is the speed of deployment and innovation.
During the call, Gianforte provided examples where RightNow is able to demonstrate early success in short run pilots as the precursor to big wins. This contrasts with the on-premise vendors who typically roll out functionality on a semi- or annual basis.
You can always argue the 'completeness' of one product/service compared to another but the fact RightNow is growing its market ahead of its own expectations says something positive about that style of operation. Equally important, RightNow has positioned itself as a 'must have' provider, pushing the message that it can help companies concentrate on retaining customers at a time when finding new opportunities is tough.
Despite the performance, which included record bookings in the final quarter of $46 million, RightNow remains relatively cautious for 2009 with revenues in the range $150-155 million and recurring revenue growth in the 10-15% range.
Full year revenue: $140.4 mill ($112.1 mill, 2007)
Quarter revenue: $36.1 mill ($30.7 mill, 2007)
Full year net loss: $7.3 mill ($18.6 mill, 2007)
Quarter net income/(loss) $0.7 mill (Loss $3.3 mill, 2007)
Cash and cash equivalents: $51.4 mill ($43.7 mill, 2007)