Interactive Intelligence Announces Q3 Results; Revenues Increase 26 Percent

INDIANAPOLIS — Interactive Intelligence, a global provider of unified IP business communications solutions, has announced results for the three and nine months ended Sept. 30, 2010.

The company reported the following for the third quarter of 2010:

Total revenues of $41.8 million, an increase of 26 percent over revenues of $33.2 million in the same quarter last year. Net income on a generally accepted accounting principles (GAAP) basis of $3.5 million, with diluted earnings per share (EPS) of $0.19, compared to net income of $2.8 million and EPS of $0.15 in the third quarter of 2009. Non-GAAP* net income of $6.9 million, with EPS of $0.37, up from non-GAAP net income of $5.7 million and EPS of $0.31, in the same quarter last year.

Non-GAAP net income and EPS for the third quarter of 2010 excluded stock-based compensation expense of approximately $1.0 million, or EPS of $0.06, and non-cash income tax expense of $2.4 million, or EPS of $0.12. The 2009 third-quarter non-GAAP net income and EPS excluded stock-based compensation expense of $975,000, or EPS of $0.05, and non-cash income tax expense of $1.9 million, or EPS of $0.11.

Cash and investment balances as of Sept. 30, 2010 were $85.5 million and the company has no debt.

“Our performance during the quarter was strong across North America, Europe, Middle East, Africa, and specific regions throughout Asia-Pacific,” said Interactive Intelligence founder and CEO, Dr. Donald E. Brown. “As we reported in our preliminary third-quarter announcement, we closed a number of large orders during the quarter, which was a main contributor to our increased revenues and earnings. We continue to execute on our strategy of moving up-market, with record average dollar amounts for new orders. We’re also seeing strong increases in new cloud-based communications orders, positively building our recurring revenue base.”

The following are results for the first nine months of 2010:

Total revenues of $115.7 million, a 21 percent increase over revenues of $95.5 million in the first nine months of 2009. Other expense, principally due to foreign exchange losses, of $801,000, compared to other income, principally due to foreign exchange gains, of $938,000 for the same period last year. GAAP net income of $7.8 million, or EPS of $0.42, compared to $6.1 million, or EPS of $0.34, for the first nine months of 2009. Non-GAAP net income of $16.0 million, or EPS of $0.86, compared to $12.9 million, or EPS of $0.71, for the same period last year.

Non-GAAP net income and EPS for the first nine months of 2010 exclude charges for stock-based compensation of $3.0 million, or EPS of $0.16, and non-cash income tax expense of $5.2 million, or EPS of $0.28. For the same period last year, non-GAAP net income and EPS exclude charges for stock-based compensation of $2.5 million, or EPS of $0.14, and non-cash income tax expense of $4.3 million, or EPS of $0.23.

Other recent company highlights included:

Acquisition of Latitude Software, an accounts receivable management software and services company, effective Oct. 1, 2010. Launch of “Ditch the Frustration” campaign designed to provide educational resources to assist consumers and businesses with customer service. Opening of on-site health care clinic to help improve employee wellness. TMC Labs Unified Communications Innovation award for communications-based process automation product, Interaction Process Automation(TM) (IPA). Network Products Guide’s Reader’s Trust award for Interaction SIP Station(TM). Frost & Sullivan’s Technology Company of the Year award. More than 400 people in attendance at the 12th annual Interactive Intelligence Partner Conference.

Interactive Intelligence will host a conference call Nov. 1 at 4:30 p.m. EDT, featuring Dr. Brown, and the company’s CFO, Stephen R. Head. A live Q&A session will follow opening remarks.

To access the teleconference, please dial 1.877.324.1969 at least five minutes prior to the start of the call. Ask for the teleconference by the following name: “Interactive Intelligence third-quarter earnings call.”

The teleconference will also be broadcast live on the company’s investor relations’ page at http://investors.inin.com. An archive of the teleconference will be posted following the call.

About Interactive Intelligence
Interactive Intelligence Inc. (Nasdaq: ININ) is a global provider of unified business communications solutions for contact center automation, enterprise IP telephony, and business process automation. The company was founded in 1994 and has more than 3,500 customers worldwide. Interactive Intelligence is among Software Magazine’s top 500 global software and services suppliers, is a BusinessWeek “hot growth 50″ company, and is among Fortune Small Business magazine’s top 100 fastest growing companies. The company is also positioned in the leaders’ quadrant of the Gartner Magic Quadrant for Contact Center Infrastructure, Worldwide report (Feb. 22, 2010). Interactive Intelligence employs approximately 800 people and is headquartered in Indianapolis, Indiana. It has 16 offices throughout North America, Latin America, Europe, Middle East, Africa and Asia Pacific. Interactive Intelligence can be reached at +1 317.872.3000 or info@inin.com; on the Net: www.inin.com.