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SEC Filings

10-Q
INCONTACT, INC. filed this Form 10-Q on 11/09/2016
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Net revenue

Net revenues increased $10.9 million or 20% to $67.0 million during the three months ended September 30, 2016 compared to net revenues of $56.1 million during the same period in 2015.  The increase in net revenues relates to an increase of $7.5 million in Software segment revenue due to continued focus and investment in selling and marketing efforts of our inContact cloud contact center solutions through our direct sales and referral and reseller partner arrangements.  Network connectivity segment revenue increased $3.4 million as the increase of Network connectivity revenue associated with our inContact cloud software solution customers exceeded the attrition of our Network connectivity-only customers.

Costs of revenue and gross margin

Costs of revenue increased $4.2 million or 16% to $31.3 million during the three months ended September 30, 2016 compared to $27.1 million for the same period in 2015.  Gross margin increased one percentage point to 53% for the three months ended September 30, 2016 from 52% for the same period in 2015. Gross margin primarily increased as a result of higher gross margin Software revenue growing more than Network connectivity revenue, which has a comparatively lower gross margin. The growth in Software revenue more than offset greater professional service and customer service personnel related costs from headcount additions to service larger mid-market and enterprise customers and to support resellers, increased software and depreciation expenses related to our additional investments in software, equipment and in the development of our cloud contact center solutions to support current and anticipated customer growth.

Selling and marketing

Selling and marketing expenses increased $1.2 million or 7% to $19.0 million during the three months ended September 30, 2016 from $17.8 million for the same period in 2015. This increase is primarily a result of increased personnel related costs from headcount additions for direct sales employees and channel sales employees focused on managing and enhancing our partner relationships to support our growth strategy, increased commissions as a result of increased revenue and to a lesser extent higher levels of investment in marketing efforts to create increased awareness of our inContact cloud contact center solutions.

Research and development

Research and development expense increased $1.9 million or 26% to $9.3 million during the three months ended September 30, 2016 from $7.3 million during the same period in 2015. The increase relates to our efforts to expand our content offerings, upgrade and extend our service offerings and develop new technologies primarily through headcount additions, including the addition of employees from the AC2 and Attensity acquisitions.

General and administrative

General and administrative expense increased $4.6 million or 60% to $12.4 million during the three months ended September 30, 2016 compared to $7.8 million during the same period in 2015. The increase is primarily due to $2.8 million of legal settlement costs. Additionally, we incurred $1.0 million of costs related to professional services, regulatory fees and employee-related expenses incurred in connection with the proposed merger with NICE-Systems Ltd during the three months ended September 30, 2016. The remaining increase is due to increased personnel and software costs incurred to support our domestic and international business expansion.

Other expense

Other expense increased $0.2 to $1.8 million during the three months ended September 30, 2016 from $1.6 million for the same period in 2015. The increase is primarily due to losses on disposal of fixed assets of $100,000.

Income taxes

Provision for income taxes, which consists of various state income taxes and foreign taxes, was $100,000 for the three months ended September 30, 2016 compared to $163,000 for the same period in 2015.  

 

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