IntraLinks Earnings: Margins Suffer for Five Quarters Straight

IntraLinks Holdings Inc. (NYSE:IL) dropped to a second quarter loss, but results topped expectations. IntraLinks Holdings is a global provider of Software-as-a-Service solutions for securely managing content, exchanging critical business information and collaborating within and among organizations.

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IntraLinks Holdings Inc. Earnings Cheat Sheet

Results: Reported a loss of $9 million (17 cents per diluted share) in the quarter. IntraLinks Holdings Inc. had a net income of $7,000 or 0 cents per share in the year-earlier quarter.

Revenue: Rose 0.8% to $53.8 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: IntraLinks Holdings Inc. reported adjusted net income of 2 cents per share. By that measure, the company beat the mean estimate of one cent per share. It beat the average revenue estimate of $47.7 million.

Quoting Management: “Despite weakness in Europe and a challenging global M&A environment, we delivered revenue and profitability above our guidance range, led by strength in our M&A business,” said Ron Hovsepian, IntraLinks’ president and CEO. “We are seeing increasing validation of the need for secure content sharing beyond the firewall, underscoring the opportunity we see in adjacent enterprise markets.

Key Stats:

Last quarter marked the fifth straight quarter that the company saw shrinking gross margins, as gross margin fell 3.7 percentage points to 69.8% from the year-earlier quarter. In that span, margins have contracted an average of 2.6 percentage points per quarter on a year-over-year basis.

The company topped expectations last quarter after falling short of forecasts in the first quarter with net income of 7 cents versus a mean estimate of net income of 9 cents per share.

Over the last five quarters, revenue has increased 6.8% on average year-over-year. The biggest increase came in the second quarter of the last fiscal year, when revenue rose 20.1% from the year-earlier quarter.

Looking Forward: Over the past ninety days, the average estimate for the third quarter has fallen from 8 cents per share to one cent, indicating that analysts are growing pessisimistic about the company’s performance next quarter. At 8 cents per share, the average estimate for the fiscal year has fallen from 35 cents ninety days ago.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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