Omniture Reports Third Quarter 2006 Financial Results

Posted Oct 26, 2006

Company Achieves Year-over-Year Revenue Growth of 83%; Raises FY 2006 Guidance

OREM, UT, October 26, 2006 – Omniture, Inc. (NASDAQ:OMTR), a leading provider of online business optimization software, today announced results for its third quarter ended September 30, 2006. Omniture reported another record revenue quarter, with third quarter revenue of $21 million, an increase of 83 percent over the third quarter of 2005 and 12 percent over the second quarter of 2006.

GAAP net loss in the third quarter of 2006 was $1.3 million or $0.03 per diluted share, compared to a net loss of $3.8 million, or $0.28 per diluted share, in the third quarter of 2005. Third quarter 2006 adjusted EBITDA was $2.7 million and non-GAAP net income was $0.2 million. Adjusted EBITDA is defined as earnings before interest, taxes, depreciation, amortization and stock compensation. Non-GAAP net income excludes the effect of expensing stock-based compensation under SFAS 123R beginning in 2006, amortization of deferred compensation related to stock options, amortization of intangible assets related to a warrant and a patent license agreement and imputed interest related to this patent license agreement.

Operating cash flow for the third quarter was $0.9 million and includes certain one-time payments totaling approximately $1.9 million related to the IPO and the Company’s NetRatings settlement. Excluding these one-time payments, adjusted operating cash flow was $2.8 million. Free cash flow, defined by the company as adjusted operating cash flow reduced by capital expenditures of $2.5 million, was $0.3 million for the quarter.

“The third quarter was one of significant milestones for Omniture. We generated positive free cash flow and returned to non-GAAP profitability," stated Josh James, CEO and co-founder of Omniture. "The demand for our products and services remains strong and we believe Omniture is uniquely positioned to capitalize on opportunities that exist in the market.”

Total cash and cash equivalents on September 30, 2006 were $67.8 million, which includes proceeds from the IPO completed in July 2006. Net proceeds from the IPO, including the full exercise by the underwriters of the over-allotment option, were approximately $62.3 million before offering costs and are reflected in the Q3 2006 financial results. Omniture used $4.0 million of the IPO proceeds to make a license payment due on the closing.

During the third quarter of 2006, Omniture added over 200 customers, bringing the total to over 1,500, and captured data from over 350 billion transactions. New customer relationships secured included Bertelsmann, Fannie Mae, Fox Broadcasting Co., Hawaiian Airlines, Intermountain Healthcare, KPN, MasterCraft, Mrs. Fields Gifts, Inc., Neiman Marcus Direct, Qantas Airways, Teletext, Waitrose and USA Today.

Click here for the Q3 2006 Financial Results

Guidance

    Q4 FY 2006: Revenue for the company's fourth quarter is expected to be in the range of $22.5 million to $23.5 million. GAAP net loss is expected to be in the range of $1.0 million to $0.6 million. Excluding the effect of stock-based compensation expense, the amortization of certain intangible assets and imputed interest expense, non-GAAP net income is expected to be in the range of $0.4 million to $0.8 million. Omniture expects to record positive adjusted EBITDA in the range of $2.9 million to $3.3 million.

      Full Year FY 2006: Based on third quarter results and the fourth quarter outlook, the company is raising its guidance for the year. Revenue for the company's full year 2006 is now expected to be in the range of $78.8 million to $79.8 million, and GAAP net loss is expected to be in the range of $7.9 million to $7.5 million. Excluding the effect of stock-based compensation expense, the amortization of certain intangible assets and imputed interest expense, non-GAAP net loss for the year is expected to be in the range of $2.8 million to $2.4 million. Omniture expects to record positive adjusted EBITDA in the range of $7.4 million to $7.8 million.

      Information for Conference Call to Discuss Q3 FY2006 Financial Results
      Omniture, Inc. will host a conference call and simultaneous audio-only webcast at 5:00 p.m. (Eastern Time). To access the conference call, dial 866-831-6267, or 617-213-8857 for international callers. The access code is 54501286. Please call 10 minutes prior to the scheduled conference call time. The webcast will be available on the "Investor Relations" section of the company's corporate Web site at www.omtr.com. A replay of the conference call will be accessible by telephone after 7:00 p.m. (Eastern Time) by dialing 888-286-8010 (or 617-801-6888), reservation number, 80293043. The conference call will also be archived on the company's corporate Web site. Both the replay and archived web cast will be available until November 9, 2006.

      About Non-GAAP Financial Measures
      In this release and during our conference call as described above we use or plan to discuss certain non-GAAP financial measures. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in the United States of America, or GAAP. A reconciliation between non-GAAP and GAAP measures can be found in the accompanying tables and on the Investor Relations section of our corporate Web site at www.omtr.com. Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. These non-GAAP financial measures do not reflect a comprehensive system of accounting, differ from GAAP measures with the same captions and may differ from non-GAAP financial measures with the same or similar captions that are used by other companies.

      We believe that, while these non-GAAP measures are not a substitute for GAAP results, they provide a basis for evaluating the Company's operating results because they facilitate the comparison of results for future periods with results from past periods. Omniture adopted SFAS 123R on January 1, 2006 using the prospective method. Results of prior periods have not been restated to conform with the 2006 presentation. Omniture also recorded deferred compensation in 2005 related to the granting of options which is being amortized in subsequent periods. We believe the calculation of net income and loss, calculated without stock-based compensation expense, the amortization of certain intangible assets and imputed interest expense, provides a meaningful comparison to our net loss figures reported for 2005 and prior years. We also believe that adjusted EBITDA, which we calculate as earnings before interest, taxes, depreciation, amortization and stock compensation, is an indicator of the Company’s financial results and is useful to investors in evaluating operating performance. These non-GAAP measures have been reconciled to the nearest GAAP measure as required under SEC rules.

      About Omniture
      Omniture, Inc., is a leading provider of online business optimization software, enabling customers to manage and enhance online, offline and multi-channel business initiatives. Omniture's software, which it hosts and delivers to its customers on-demand, enables customers to capture, store and analyze information generated by their websites and other sources and to gain critical business insights into the performance and efficiency of marketing and sales initiatives and other business processes. In addition, Omniture offers a range of professional services that complement its online services, including implementation services, best practices, consulting services, customer support and user training provided through Omniture University. Omniture's customers include eBay, AOL, Wal-Mart, Gannett, Microsoft, Oracle, General Motors and Hewlett-Packard. www.omniture.com

      Note on Forward-looking Statements
      Management believes that certain statements in this release may constitute "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933, including, but not limited to, statements regarding our business strategy, continuing customer demand for our services, our leadership in the market for on-demand, online business optimization services, the strength of our business in 2006, and expectations regarding revenue, GAAP and non-GAAP net income and loss, and adjusted EBITDA. These statements are based on current expectations and assumptions regarding future events and business performance and involve certain risks and uncertainties that could cause actual results to differ materially, including, but not limited to, risks associated with changes in the demand for our services, our ability to continue to attract new customers and sell additional services to our existing customers, the continued adoption by customers of our SiteCatalyst service and other product and service offerings, the significant capital requirements of our business model that make it more difficult to achieve positive cash flow and profitability if we continue to grow rapidly, our ability to develop or acquire new services, disruptions in our business and operations as a result of acquisitions, possible fluctuations in our operating results and rate of growth, the continued growth of the market for on-demand, online business optimization services, changes in the competitive dynamics of our markets, the inaccurate assessment of changes in our markets, errors, interruptions or delays in our services or other performance problems with our services, our ability to hire, retain and motivate our employees and manage our growth, our ability to effectively expand our sales and marketing capabilities, our ability to develop and maintain strategic relationships with third parties with respect to either technology integration or channel development, our ability to expand the sales of our services to customers located outside the United States, our ability to implement and maintain proper and effective internal controls, the adoption of laws or regulations, or interpretations of existing law, that could limit our ability to collect and use Internet user information, the blocking or erasing of "cookies," the unauthorized disclosure of personally identifiable information regarding Web site visitors, whether through breach of our secure network by an unauthorized party, employee theft or misuse, or otherwise, changes in relevant accounting standards and securities laws and regulations; and such other risks as identified in Omniture's quarterly report on Form 10-Q for the period ended June 30, 2006 and from time to time in other reports filed by Omniture with the U.S. Securities Exchange Commission. These reports are available on the Investor Relations page of our corporate Web site at www.omtr.com. Omniture undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the company's expectations.


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