News

AVG Reports Second Quarter 2012 Financial Results

Revenue Grows 25 Percent in Q2 Year Over Year; Reports Q2 GAAP EPS of $0.20 and Non-GAAP EPS of $0.32; Raises Fiscal Year 2012 Outlook

"We executed well across the business in the second quarter, driving higher financial metrics and exceeding our financial expectations," stated J.R. Smith, chief executive officer of AVG. "Our active user count totaled 128 million customers at June 30 2012, a 31 percent increase compared to this time last year, which continues to strengthen our position in the market. Given our performance in the first half of 2012 and growth in key areas of our customer base, we are again raising our annual outlook."

Revenue for the second quarter of 2012 was $82.5 million, compared with $66.1 million for the second quarter of 2011, an increase of 25 percent.

Net income for the second quarter of 2012 was $11.0 million, or $0.20 per diluted ordinary share, based on 54.8 million weighted-average diluted shares outstanding. Second quarter 2012 net income reflects increased share-based stock compensation expense as well as investments made in the business compared to the second quarter of 2011. Net income in the second quarter of 2011 included a tax credit of $56.3 million following an agreement with the Dutch fiscal authorities relating to our innovative development activities; resulting in net income for the second quarter of 2011 of $75.0 million.

Non-GAAP adjusted net income for the second quarter of 2012 was $17.3 million, or $0.32 per diluted share, based on 54.8 million weighted-average diluted shares outstanding. This compares to non-GAAP adjusted net income of $15.9 million, or $0.31 per diluted share, and 50.9 million weighted-average diluted shares outstanding for the same period of the prior year[1]. Non-GAAP results for the second quarter of 2012 exclude $3.7 million in share-based compensation expense and $2.0 million in acquisition amortization and reflect a $0.5 million adjustment to normalize to a tax rate of 14 percent.

Deferred revenue as of June 30, 2012 was $156.8 million. Cash and cash equivalents totaled $123.7 million and net debt[2] was $73.7 million as of June 30, 2012.

AVG generated $32.2 million in cash from operating activities in the second quarter of 2012, and $29.3 million in non-GAAP unlevered free cash flow. This represents a 36 percent revenue to non-GAAP unlevered free cash flow conversion rate.