Q2 Revenue Growth of 24 Percent Year-over-Year to a Record $366 Million
PLEASANTON, Calif. - Jul 21, 2011 : Polycom, Inc. (Nasdaq: PLCM), a global leader in unified communications (UC), today reported its earnings for the second quarter ended June 30, 2011.
Second quarter 2011 consolidated net revenues were a record $366 million, compared to $295 million for the second quarter of 2010. GAAP net income for the second quarter of 2011 was $29 million, or 16 cents per diluted share, compared to $13 million, or 7 cents per diluted share, for the same period last year. Non-GAAP net income for the second quarter of 2011 was $48 million, or 26 cents per diluted share, compared to non-GAAP net income of $30 million, or 17 cents per diluted share, for the second quarter of 2010.
For the six months ended June 30, 2011, net revenues were $710 million, compared to $571 million for the first six months of 2010. GAAP net income for the six months ended June 30, 2011 was $63 million, or 34 cents per diluted share, compared to GAAP net income of $18 million, or 10 cents per diluted share, for the same period last year. Non-GAAP net income for the period was $91 million, or 50 cents per diluted share, compared to $55 million, or 32 cents per diluted share, for the first six months of 2010.
Note that the share and per share data for all periods presented in this release have been adjusted to reflect a two-for-one stock split that was effective July 1, 2011.
The reconciliation between GAAP net income and non-GAAP net income is provided in the tables at the end of this release.
On a geographic basis, consolidated net revenues for the second quarter of 2011 were comprised of:
- 52 percent Americas, or $189.2 million;
- 24 percent Europe, Middle East, and Africa, or $89.3 million; and
- 24 percent Asia Pacific, or $87.1 million.
On a geographic basis, consolidated net revenues for the second quarter of 2010 were comprised of:
- 53 percent Americas, or $155.8 million;
- 25 percent Europe, Middle East, and Africa, or $74.3 million; and
- 22 percent Asia Pacific, or $64.5 million.
"Q2 was a hallmark quarter for Polycom, both in terms of strategic achievement and financial accomplishments," said Andrew Miller, Polycom president and CEO. "We made significant progress with our key partners through the Polycom Open Collaboration Network™, experienced significant acceleration in the adoption of our UC Intelligent Core™ network infrastructure solutions, and again benefitted from broad-based demand for our suite of solutions across all major geographies."
"Specifically, during the second quarter, we announced the acquisition of HP's Visual Collaboration business which is expected to close later this month, and the execution of a strategic agreement that makes Polycom an exclusive partner to HP for our wide array of telepresence and video solutions. We also expanded our strategic partnership with Microsoft through our upcoming launch of the Polycom CX7000 unified collaboration system that natively integrates with Microsoft's leading Lync platform. Built on this and our numerous other strategic successes with Microsoft, we were thrilled to be named the 2011 Microsoft Unified Communications Innovation Partner of the Year. As a further testament to our role as UC ecosystem partner of choice, we also announced the launch of the industry's first open video exchange cloud with AT&T, BT Conferencing, Telefonica, Verizon, and other global leading service providers, enabling B2B and B2C video communications and the network effect of video adoption worldwide."
"In Q2, we continued to experience strong demand in emerging markets such as China, India, Russia, and Brazil and also began to see momentum in select verticals such as the US Federal market, yielding record revenues in each major geography and product category. In fact, in order to fully optimize our opportunity, I have added Tracey Newell to the executive team as Polycom's new executive vice president of Global Sales. Each of the theatre presidents and global sales operations will report to her in this newly created role. Tracey is the ideal fit for this position and an excellent addition to the team with her proven go-to-market track record in both Cloud and customer premise-based sales at Juniper Networks and Cisco Systems."
"In summary, we continue to leverage our unparalleled position in the UC industry as the only independent provider of scale. Through our Cloud, Mobility, and Ecosystem advances and market gains, we believe Polycom is poised to capture the momentum of the video communications market. With these exciting market dynamics and Polycom's industry-leading capabilities, we expect to continue to deliver strong revenue growth and continued operating margin expansion," concluded Miller.
"Polycom generated strong sequential and year-over-year growth in revenues, gross margins, and operating margins in the second quarter," said Michael Kourey, Polycom's executive vice president, finance and administration, and CFO. "Coupled with effective working capital management, we delivered a record quarterly operating cash flow of $85 million. As a result of these excellent operating results, Polycom exited Q2 with $609 million in cash and investments and no debt.".