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OpenTable, Inc. Announces Second Quarter Financial Results
Aug 02, 2011 (04:08 PM EDT)


-- Increases Revenue by 53% over Q2 2010 to $34.3 Million --

-- Grows Installed Restaurants by 60% and Seated Diners by 53% over Q2 2010 --

-- Achieves EPS of $0.26 and Non-GAAP EPS of $0.33 --

SAN FRANCISCO, Aug. 2, 2011 /PRNewswire/ -- OpenTable, Inc. (NASDAQ: OPEN), a leading provider of free, real-time online restaurant reservations for diners and reservation and guest management solutions for restaurants, today reported its financial results for the second quarter ended June 30, 2011.

(Logo: http://photos.prnewswire.com/prnh/20110606/MM07085LOGO )

OpenTable reported consolidated net revenues for Q2 2011 of $34.3 million, a 53% increase over Q2 2010.  Consolidated net income for Q2 2011 was $6.3 million, or $0.26 per diluted share.  Non-GAAP consolidated net income for Q2 2011, which excludes tax-affected stock-based compensation expense and tax-affected amortization of acquired intangibles, was $8.1 million, or $0.33 per diluted share.  

OpenTable provides operating results by geography as the Company is at different stages of development in its North America and International operations.  International operations include the operating results of toptable.com, a recent acquisition which closed on October 1, 2010.

North America Results

  • Installed restaurant base as of June 30, 2011, totaled 15,560, a 27% increase over June 30, 2010.
  • Seated diners totaled 22.2 million, a 47% increase over Q2 2010.
  • Revenues totaled $29.2 million, a 38% increase over Q2 2010.  
  • Non-GAAP adjusted EBITDA (earnings before interest, taxes, depreciation, amortization and stock-based compensation) totaled $14.8 million, or 51% of North America revenues, a 68% increase over Q2 2010.

International Results

  • Installed restaurant base as of June 30, 2011, totaled 7,067, a 276% increase over June 30, 2010.
  • Seated diners totaled 1.6 million, a 249% increase over Q2 2010.  
  • Revenues totaled $5.0 million, a 289% increase over Q2 2010.  
  • Non-GAAP adjusted EBITDA totaled a loss of $0.5 million compared to a loss of $1.2 million in Q2 2010.  
  • In Q2 2011, toptable.com contributed approximately 668,000 seated diners, $2.9 million of revenue and $0.3 million of non-GAAP adjusted EBITDA to the Company's results.

"Our solid performance in the second quarter was driven by strong growth in the number of installed restaurants and seated diners globally," said Matt Roberts, President and CEO of OpenTable.  "We're pleased with the continued momentum in our business and with the progress we're making across a variety of initiatives that support future growth." 

Q2 2011 Consolidated Financial and Operating Summary

  • Installed restaurant base as of June 30, 2011, totaled 22,627, a 60% increase over June 30, 2010.
  • Seated diners totaled 23.8 million, a 53% increase over Q2 2010.
  • Total revenues were $34.3 million in Q2 2011, up 53% over Q2 2010 revenues of $22.5 million.  
    • Subscription revenues were $12.6 million in Q2 2011, up 20% over Q2 2010 revenues of $10.5 million.  Subscription revenues increased as a result of the increase in installed restaurants using our Electronic Reservation Book solution.  
    • Reservation revenues were $18.3 million in Q2 2011, up 70% over Q2 2010 revenues of $10.7 million.  Reservation revenues primarily increased as a result of the increase in seated diners.  In Q2 2011, toptable.com contributed $2.1 million to reservation revenues.
    • Installation and other revenues were $3.4 million in Q2 2011, up 172% over Q2 2010 revenues of $1.3 million.  Installation and other revenues increased primarily as a result of an increase in revenue from other product offerings, including advertising sales, web service licensing, featured private dining listings and third-party restaurant coupon sales.  In Q2 2011, toptable.com contributed $0.8 million to installation and other revenues.

  • Total operating expenses were $24.8 million in Q2 2011, up 36% over Q2 2010 operating expenses of $18.3 million.  The increase was primarily driven by a 48% increase in headcount including those from the acquisition of toptable.com, the addition of other toptable.com expenses, and an increase in amortization of acquired intangibles.

  • Total operating income was $9.5 million in Q2 2011 compared to $4.2 million in Q2 2010.  Non-GAAP consolidated operating income, excluding stock-based compensation expense and amortization of acquired intangibles, was $12.4 million in Q2 2011 compared to $6.1 million in Q2 2010.  

  • The Q2 2011 GAAP income tax expense was $3.2 million, or a 34% tax rate.  

  • Consolidated net income was $6.3 million, or $0.26 per diluted share, in Q2 2011 compared to $2.6 million, or $0.11 per diluted share, in Q2 2010.  Non-GAAP consolidated net income, which excludes tax-affected stock-based compensation expense and tax-affected amortization of acquired intangibles, was $8.1 million, or $0.33 per diluted share, in Q2 2011 compared to $3.6 million, or $0.15 per diluted share, in Q2 2010.  

  • As of June 30, 2011, OpenTable had cash and cash equivalents and short-term investments of $69.1 million.  

Quarterly Conference Call

A conference call will be webcast live today at 2 p.m. PT/5 p.m. ET and will be available through August 31, 2011, at http://investors.opentable.com/events.cfm.  This call may contain forward-looking statements and other material information regarding the Company's financial and operating results.

About Non-GAAP Financial Information

This press release contains certain non-GAAP financial measures.  Tables are provided in the press release that reconcile the non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with Generally Accepted Accounting Principles (GAAP).  These non-GAAP financial measures include non-GAAP consolidated net income and the related per diluted share amounts, non-GAAP consolidated operating income and non-GAAP adjusted EBITDA.  Non-GAAP financial measure adjusted EBITDA is defined as earnings before interest, taxes, depreciation, amortization, stock-based compensation and acquisition-related expenses.   Within the Company's reconciliation to non-GAAP diluted net income per share, the impact of undistributed earnings allocated to participating securities has been excluded.

To supplement the Company's consolidated financial statements presented on a GAAP basis, management believes that these non-GAAP measures provide useful information about the Company's core operating results and thus are appropriate to enhance the overall understanding of the Company's past financial performance and its prospects for the future. Management believes it is useful to exclude stock-based compensation, acquisition-related expenses and amortization of acquired intangibles because they do not reflect the underlying performance of the Company's business operations. These adjustments to the Company's GAAP results are made with the intent of providing both management and investors a more complete understanding of the Company's underlying operational results and trends and performance.  Management uses these non-GAAP measures to evaluate the Company's financial results.  The presentation of non-GAAP measures is not meant to be considered in isolation or as a substitute for or superior to financial results determined in accordance with GAAP.

Background Information

The Company reports consolidated operations in U.S. dollars and operates in two geographic segments: North America and International. The North America segment is comprised of all operations in the United States, Canada and Mexico, and the International segment is comprised of all non-North America operations, which includes operations in Europe and Asia. The Company generates substantially all of its revenues from its restaurant customers. The Company's revenues primarily include installation fees for the Electronic Reservation Book (including training), monthly subscription fees and a fee for each restaurant guest seated through online reservations.  The financial results and other information in this press release reflect the acquisition of toptable.com, as applicable.

Forward-Looking Statements

This press release and its attachments contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that involve risks and uncertainties.  These forward-looking statements include the quotations from management in this press release, as well as any statements regarding the Company's strategic and operational plans.  The Company's actual results may differ materially from those anticipated in these forward-looking statements.  Factors that may contribute to such differences include, among others, the impact of the current economic climate on the Company's business; the Company's ability to maintain an adequate rate of growth; the Company's ability to effectively manage its growth; the Company's ability to attract new restaurant customers; the Company's ability to increase the number of visitors to its website and convert those visitors into diners; the Company's ability to retain existing restaurant customers and diners or encourage repeat reservations; the Company's ability to successfully enter new markets and manage its international expansion; the Company's ability to successfully manage any acquisitions of businesses, solutions or technologies; interruptions in service and any related impact on the Company's reputation; and costs associated with defending intellectual property infringement and other claims.  More information about potential factors that could affect the Company's business and financial results is contained in the Company's annual report on Form 10-K for the year ended December 31, 2010 and the Company's other filings with the SEC.  The Company does not intend, and undertakes no duty, to update this information to reflect future events or circumstances.

About OpenTable, Inc.

OpenTable is a leading provider of free, real-time online restaurant reservations for diners and reservation and guest management solutions for restaurants.  The OpenTable network delivers the convenience of online restaurant reservations to diners and the operational benefits of a computerized reservation book to restaurants.  OpenTable has more than 20,000 restaurant customers, and, since its inception in 1998, has seated more than 200 million diners around the world.  The Company is headquartered in San Francisco, California, and the OpenTable service is available throughout the United States, as well as in Canada, Germany, Japan, Mexico and the United Kingdom.  OpenTable also owns and operates toptable.com, a leading restaurant reservation site in the United Kingdom.

OpenTable, OpenTable.com, OpenTable logos, toptable.com and other service names are the trademarks of OpenTable, Inc. and/or its affiliates.

OPENTABLE, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS










June 30,


December 31,


2011


2010

ASSETS








CURRENT ASSETS:




 Cash and cash equivalents

$       50,160,000


$       33,444,000

 Short-term investments

18,941,000


9,080,000

 Accounts receivable, net

15,485,000


13,292,000

 Prepaid expenses and other current assets

2,886,000


2,919,000

 Deferred tax asset

7,930,000


7,882,000

 Restricted cash

-


167,000





          Total current assets

95,402,000


66,784,000





Property, equipment and software, net

15,167,000


14,612,000

Goodwill

43,692,000


42,347,000

Intangibles, net

18,956,000


20,248,000

Deferred tax asset

5,541,000


5,539,000

Other assets

877,000


366,000





TOTAL ASSETS

$     179,635,000


$     149,896,000





LIABILITIES AND STOCKHOLDERS' EQUITY








CURRENT LIABILITIES:




 Accounts payable and accrued expenses

$         8,000,000


$         7,666,000

 Accrued compensation

4,436,000


4,189,000

 Deferred revenue

2,142,000


1,852,000

 Dining rewards payable

18,089,000


15,398,000

          Total current liabilities

32,667,000


29,105,000





 Deferred revenue — non-current

2,474,000


2,802,000

 Deferred tax liability

5,261,000


5,644,000

 Income tax liability

12,758,000


8,577,000

 Other long-term liabilities

474,000


1,623,000





          Total liabilities

53,634,000


47,751,000









STOCKHOLDERS' EQUITY:




 Common stock

2,000


2,000

 Additional paid-in capital

154,598,000


143,292,000

 Treasury stock

(647,000)


(647,000)

 Accumulated other comprehensive income (loss)

735,000


(1,305,000)

 Accumulated deficit

(28,687,000)


(39,197,000)





          Total stockholders' equity

126,001,000


102,145,000





TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$     179,635,000


$     149,896,000




OPENTABLE, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS












Three Months Ended


Six Months Ended



June 30,


June 30,



2011

2010


2011

2010



(In thousands, except per share amounts)








REVENUES


$ 34,290

$ 22,453


$ 67,997

$ 43,704








COSTS AND EXPENSES:







 Operations and support (1)


9,686

6,324


19,158

12,326

 Sales and marketing (1)


6,403

5,046


14,215

9,786

 Technology (1)


3,531

3,020


7,578

5,740

 General and administrative (1)


5,148

3,879


11,010

7,902








          Total costs and expenses


24,768

18,269


51,961

35,754








Income from operations


9,522

4,184


16,036

7,950

Other income, net


24

73


45

142








Income before taxes


9,546

4,257


16,081

8,092

Income tax expense


3,221

1,673


5,571

2,984








NET INCOME


$   6,325

$   2,584


$ 10,510

$   5,108








Net income per share:







 Basic


$   0.27

$   0.11


$   0.45

$   0.23

 Diluted


$   0.26

$   0.11


$   0.43

$   0.21








Weighted average shares outstanding:







 Basic


23,558

22,502


23,446

22,352

 Diluted


24,615

23,801


24,573

23,648















(1) Stock-based compensation included in above line items:






 Operations and support


$      446

$      232


$      858

$      419

 Sales and marketing


493

471


1,003

865

 Technology


437

360


888

643

 General and administrative


460

737


2,091

1,407



$   1,836

$   1,800


$   4,840

$   3,334








Other Operational Data:







 Installed restaurants (at period end):







   North America


15,560

12,250


15,560

12,250

   International


7,067

1,878


7,067

1,878

   Total


22,627

14,128


22,627

14,128








 Seated diners (in thousands):







   North America


22,196

15,130


43,066

29,223

   International


1,618

463


3,171

871

   Total


23,814

15,593


46,237

30,094








 Headcount (at period end):







   North America


378

293


378

293

   International


162

73


162

73

   Total


540

366


540

366








Additional Financial Data:







 Revenues:







   North America







Subscription


$ 11,090

$   9,450


$ 21,711

$ 18,541

Reservation


15,560

10,468


30,536

20,266

Installation and other


2,592

1,238


5,769

2,373

Total North America Revenues


$ 29,242

$ 21,156


$ 58,016

$ 41,180

   International







Subscription


$   1,472

$   1,012


$   2,869

$   1,972

Reservation


2,736

263


5,367

502

Installation and other


840

22


1,745

50

Total International Revenues


5,048

1,297


9,981

2,524

   Total Revenues


$ 34,290

$ 22,453


$ 67,997

$ 43,704








 Income (loss) from operations:







   North America


$ 12,240

$   5,653


$ 22,325

$ 10,946

   International


(2,718)

(1,469)


(6,289)

(2,996)

   Total


$   9,522

$   4,184


$ 16,036

$   7,950








 Depreciation and amortization:







   North America


$   1,741

$   1,495


$   3,436

$   2,898

   International


1,209

135


2,345

273

   Total


$   2,950

$   1,630


$   5,781

$   3,171








 Stock-based compensation:







   North America


$      862

$   1,689


$   2,881

$   3,168

   International


974

111


1,959

166

   Total


$   1,836

$   1,800


$   4,840

$   3,334




OPENTABLE, INC.

RECONCILIATION OF GAAP TO NON-GAAP OPERATING RESULTS














Three Months Ended


Six Months Ended


June 30,


June 30,


2011

2010


2011

2010


(In thousands, except per share amounts)







Non-GAAP consolidated net income per share:






GAAP net income "as reported"

$   6,325

$  2,584


$ 10,510

$   5,108

Add back: stock-based compensation expense

1,836

1,800


4,840

3,334

Income tax effect of stock-based compensation

(778)

(780)


(1,918)

(1,453)

Add back: amortization of acquired intangibles

1,005

74


1,993

148

Income tax effect of amortization of intangibles

(272)

(30)


(558)

(59)







NON-GAAP CONSOLIDATED NET INCOME

$   8,116

$  3,648


$ 14,867

$   7,078







Non-GAAP diluted net income per share

$     0.33

$    0.15


$     0.61

$     0.30







Weighted average diluted shares outstanding

24,615

23,801


24,573

23,648







Non-GAAP consolidated operating income:






GAAP income from operations "as reported"

$   9,522

$  4,184


$ 16,036

$   7,950

Add back: stock-based compensation expense

1,836

1,800


4,840

3,334

Add back: amortization of acquired intangibles

1,005

74


1,993

148







NON-GAAP OPERATING INCOME

$ 12,363

$  6,058


$ 22,869

$ 11,432







North America Adjusted EBITDA:






GAAP operating income "as reported"

$ 12,240

$  5,653


$ 22,325

$ 10,946







Adjustments:






 Stock-based compensation expense

862

1,689


2,881

3,168

 Amortization of acquired intangibles

88

74


176

148

 Depreciation and other amortization expense

1,653

1,421


3,260

2,750







          North America Adjusted EBITDA

$ 14,843

$  8,837


$ 28,642

$ 17,012







International Adjusted EBITDA:






GAAP operating loss "as reported"

$ (2,718)

$ (1,469)


$ (6,289)

$ (2,996)







Adjustments:






 Stock-based compensation expense

974

111


1,959

166

 Amortization of acquired intangibles

917

-


1,817

-

 Depreciation and other amortization expense

292

135


528

273







          International Adjusted EBITDA

$    (535)

$ (1,223)


$ (1,985)

$ (2,557)




SOURCE OpenTable, Inc.