8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) April 28, 2010

RIGHTNOW TECHNOLOGIES, INC.

(Exact Name of Registrant as Specified in Charter)

DELAWARE	000-31321	81-0503640
(State or Other Jurisdiction	(Commission	(IRS Employer
of Incorporation)	File Number)	Identification No.)

136 ENTERPRISE BOULEVARD, BOZEMAN, MT	59718
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code (406) 522-4200

N/A
(Former Name or Former Address, if Changed Since Last Report)

     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

     o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

     o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

     o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

     o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

     On April 28, 2010, RightNow Technologies, Inc. (the “Company”) issued a press release announcing its financial results for the first quarter ended March 31, 2010. A copy of the press release is furnished herewith as Exhibit 99.1. The Company also has posted on its website supplemental financial data, as of April 28, 2010, which is furnished herewith as Exhibit 99.2.

     The information contained under Item 2.02 in this report and in Exhibits 99.1 and 99.2 attached to this report is being furnished to the Securities and Exchange Commission and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that Section, or incorporated by reference in any filing under the Exchange Act or the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01. Financial Statements and Exhibits.

(a)	Financial statements of business acquired.
	Not Applicable
(b)	Pro forma financial information.
	Not applicable
(c)	Shell company transactions.
	Not applicable
(d)	Exhibits.

Exhibit No.	Description of Exhibit
99.1	Press Release dated April 28, 2010 announcing RightNow Technologies, Inc.’s financial results for the first quarter ended March 31, 2010 (furnished herewith but not filed pursuant to Item 2.02).
99.2	Supplemental financial data of RightNow Technologies, Inc. as of April 28, 2010 (furnished herewith but not filed pursuant to Item 2.02).

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	RIGHTNOW TECHNOLOGIES, INC. (Registrant)
Dated: April 28, 2010	/s/ Jeffrey C. Davison
	Jeffrey C. Davison
	Chief Financial Officer, Vice President and Treasurer

EXHIBIT INDEX

Exhibit No.	Description of Exhibit
99.1	Press Release dated April 28, 2010 announcing RightNow Technologies, Inc.’s financial results for the first quarter ended March 31, 2010 (furnished herewith but not filed pursuant to Item 2.02).
99.2	Supplemental financial data of RightNow Technologies, Inc. as of April 28, 2010 (furnished herewith but not filed pursuant to Item 2.02).

EX-99.1

Exhibit 99.1

For Further Information, Contact:

Investor Relations:	Corporate Communications:
Todd Friedman or Stacie Bosinoff	Chaundera Wolfe
The Blueshirt Group	RightNow Technologies
415.217.7722	406-556-3323 Office
todd@blueshirtgroup.com	406-548-4892 Cell
stacie@blueshirtgroup.com	cwolfe@rightnow.com

RightNow Technologies Announces
First Quarter 2010 Financial Results

Company reports recurring revenue growth of 27% year over year.

BOZEMAN, Mont. (April 28, 2010) — RightNow (NASDAQ: RNOW) today announced results for the first quarter ended March 31, 2010. Revenue was $42.1 million in the first quarter of 2010, compared to $36.0 million in the first quarter of 2009, reflecting 17% growth in total revenue. Recurring revenue in the first quarter of 2010 increased 27% to $33.0 million from $26.0 million in the first quarter of 2009.

Net income in the first quarter of 2010 was $585,000 or $0.02 per share, compared to net income of $1.3 million, or $0.04 per share, in the first quarter of 2009. Non-GAAP net income in the first quarter of 2010, which excludes stock-based compensation charges of $1.8 million, was $2.3 million, or $0.07 per share, compared to non-GAAP net income of $2.8 million or $0.09 per share, in the first quarter of 2009.

New, renewed and expanded customer relationships during the first quarter of 2010 included Beretta, Cabela’s, CBS Interactive, Epson, Investor’s Business Daily, Monster.com, Navy Federal Credit Union, RealNetworks, Thule, United States General Services Administration (GSA), and Zynga.

“Our CX vision for customer experience continues to resonate with customers and prospects around the world, driving continued momentum throughout our business,” stated Greg Gianforte, CEO and founder. “The Cloud Services Agreement (CSA) we announced in March is changing the way customers do business with software vendors. We believe we are the best choice for consumer facing organizations choosing to deliver an integrated customer experience across the web, social and contact center channels.”

“We are pleased to report 27% growth in recurring revenue over Q1 last year, and revenue and earnings for the first quarter in-line with our guidance,” said Jeff Davison, CFO. “We maintain our outlook for the year despite the recent decline in foreign currency exchange rates.”

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Guidance

• For the full year 2010, revenue is expected to be in the range of approximately $175 to $180 million, with recurring revenue growth of approximately 20%. Net income per share for the full year 2010 is expected to be in the range of approximately $0.15 to $0.20. Non-GAAP net income per share, which excludes stock-based compensation, is expected to be in the range of approximately $0.40 to $0.45.

• For the second quarter of 2010, revenue is expected to be in the range of approximately $42.5 to $43.5 million. Second quarter net income per share is expected to be in the range of $0.02 to $0.04. Second quarter non-GAAP net income per share, which excludes stock-based compensation, is expected to be in the range of approximately $0.07 to $0.09.

Quarterly Conference Call

RightNow Technologies will discuss its quarterly results today via teleconference at 2:30 p.m. Mountain Time (4:30 p.m. Eastern Time) today. To access the call, please dial (877) 638-9569, or outside the U.S. (914) 495-8536, at least five minutes prior to the 2:30 p.m. MT start time. A live webcast of the call will also be available at http://investor.rightnow.com/index.cfm under the Events & Presentations menu. An audio replay will be available between 5:30 p.m. MT April 28, 2010 and 9:59 p.m. MT May 12, 2010 by calling (800) 642-1687 or (706) 645-9291, with Conference ID 65657423. The replay will also be available on the Company’s website at http://investor.rightnow.com.

About RightNow Technologies

RightNow is helping rid the world of bad experiences one consumer interaction at a time, seven million times a day. RightNow CX, the customer experience suite, helps organizations deliver exceptional customer experiences across the web, social networks and contact centers, all delivered via the cloud. With more than eight billion customer interactions delivered, RightNow is the customer experience fabric for nearly 2,000 organizations around the globe. To learn more about RightNow, go to www.rightnow.com.

RightNow is a registered trademark of RightNow Technologies, Inc. NASDAQ is a registered trademark of The NASDAQ Stock Market LLC.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:

All statements included in this press release, other than statements or characterizations of historical fact, are forward-looking statements. These forward-looking statements are based on our current expectations, estimates and projections about our industry, management’s beliefs, and certain assumptions made by us, all of which are subject to change. Forward-looking statements can often be identified by words such as “anticipates,” “expects,” “intends,” “plans,” “predicts,” “believes,” “seeks,” “estimates,” “may,” “will,” “should,” “would,” “could,” “potential,” “continue,” “ongoing,” similar expressions, and variations or negatives of these words and include, but are not limited to, statements regarding projected results of operations and management’s future strategic plans. These forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause our actual results to differ materially and adversely from those expressed in any forward-looking statement.

The risks and uncertainties referred to above include, but are not limited to, general economic conditions; fluctuations in foreign currency exchange; our business model; our ability to develop or acquire and gain market acceptance for new products and enhancements to existing products in a cost-effective and timely manner; fluctuations in our earnings as a result of potential changes to our valuation allowance(s) on our deferred tax assets; the success of our efforts to integrate HiveLive’s personnel and processes, following

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our acquisition of that entity; the risk of asset impairment associated with the acquisition of HiveLive; the gain or loss of key customers; competitive pressures and other similar factors such as the availability and pricing of competing products and technologies and the resulting effects on sales and pricing of our products; our ability to expand or contract operations, manage expenses and grow profitability; the rate at which our present and future customers adopt our existing and future products and services; fluctuations in our operating results including our revenue mix and our rate of growth; fluctuations in backlog; the risk that our investments in partner relationships and additional employees will not achieve expected results; interruptions or delays in our hosting operations; breaches of our security measures; our ability to protect our intellectual property from infringement, and to avoid infringing on the intellectual property rights of third parties; the credit markets and potential impact on the recoverability of our portfolio of auction rate securities; our ability to sell auction rate securities under a put option with our broker; any unanticipated ambiguities in fair value accounting standards; fluctuations in our operating results from the impact of stock-based compensation expense; our ability to manage and expand our partner relationships; our ability to hire, retain and motivate our employees and manage our growth; the impact of potential future acquisitions, if any; and various other factors. Further information on potential factors that could affect our financial results is included in our Annual Report on Form 10-K, quarterly reports of Form 10-Q, and in other filings with the Securities and Exchange Commission. The forward-looking statements in this release speak only as of the date they are made. We undertake no obligation to revise or update publicly any forward-looking statement for any reason.

FRNOW

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RightNow Technologies, Inc.
Consolidated Balance Sheets
(In thousands) (Unaudited)

	March 31,			Dec 31,
	2010			2009
Assets
Cash and cash equivalents	$	43,114		$	41,546
Short-term investments		55,293			54,977
Accounts receivable		29,723			31,850
Term receivables, current		1,762			2,417
Allowance for doubtful accounts		(1,794	)		(1,914	)
Net receivables		29,691			32,353
Deferred commissions		5,828			6,394
Prepaid and other current assets		3,792			2,434
Total current assets		137,718			137,704
Property and equipment, net		10,154			10,122
Term receivables, non-current		810			1,105
Intangible assets, net		11,669			11,141
Deferred commissions, non-current		3,457			3,461
Other		1,055			902
Total Assets	$	164,863		$	164,435
Liabilities and Stockholders’ Equity
Accounts payable	$	7,442		$	5,427
Commissions and bonuses payable		4,964			6,271
Other accrued liabilities		12,525			11,146
Current debt		10			22
Current portion of deferred revenue		68,103			74,446
Total current liabilities		93,044			97,312
Deferred revenue, net of current portion		27,592			26,881
Stockholders’ equity:
Common stock		34			34
Additional paid-in capital		115,680			112,439
Treasury stock, at cost		(15,007	)		(15,007	)
Accumulated other comprehensive income		1,284			1,125
Accumulated deficit		(57,764	)		(58,349	)
Total stockholders’ equity		44,227			40,242
Total Liabilities and Stockholders’ Equity	$	164,863		$	164,435

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RightNow Technologies, Inc.
Consolidated Operating Statements
(In thousands, except per share amounts) (Unaudited)

	Three Months Ended
	March 31,
	2010			2009
Revenue:
Recurring revenue	$	33,025		$	26,045
Professional services		9,077			9,992
Total revenue		42,102			36,037
Cost of revenue:
Recurring revenue		5,879			4,949
Professional services		7,332			7,008
Total cost of revenue		13,211			11,957
Gross profit		28,891			24,080
Operating expenses:
Sales and marketing		18,724			14,863
Research and development		5,132			4,756
General and administrative		4,299			3,446
Total operating expenses		28,155			23,065
Income from operations		736			1,015
Interest and other income, net		183			401
Income before income taxes		919			1,416
Provision for income taxes		(334	)		(153	)
Net income	$	585		$	1,263
Net income per share:
Basic	$	0.02		$	0.04
Diluted	$	0.02		$	0.04
Shares used in the computation:
Basic		31,929			31,784
Diluted		33,431			32,249
Supplemental information of stock-based compensation expense included in:
Cost of software, hosting and support	$	113		$	96
Cost of professional services		114			133
Sales and marketing		751			622
Research and development		257			262
General and administrative		520			403
Total stock-based compensation	$	1,755		$	1,516

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RightNow Technologies, Inc.
Consolidated Statements of Cash Flow
(In thousands) (Unaudited)

	Three Months Ended
	March 31,
	2010			2009
Operating activities:
Net income	$	585		$	1,263
Non-cash adjustments:
Depreciation and amortization		2,065			1,887
Stock-based compensation		1,755			1,516
Provision for losses on accounts receivable		50			57
Changes in operating accounts:
Receivables		2,449			13,569
Prepaid and other current assets		(1,499	)		(126	)
Deferred commissions		445			525
Accounts payable		2,045			(1,107	)
Commissions and bonuses payable		(1,243	)		(2,553	)
Other accrued liabilities		1,511			(716	)
Deferred revenue		(4,614	)		(9,429	)
Other		(39	)		—
Cash provided by operating activities		3,510			4,886
Investing activities:
Net change in investments		(342	)		(2,251	)
Acquisition of property and equipment		(1,640	)		(684	)
Intangible asset additions		(1,034	)		—
Cash used in investing activities		(3,016	)		(2,935	)
Financing activities:
Proceeds from issuance of common stock		1,159			78
Common stock repurchase		—			(1,798	)
Excess tax benefit of stock options exercised		327			89
Payments on current and long-term debt, respectively		(12	)		(12	)
Cash provided (used) by financing activities		1,474			(1,643	)
Effect of foreign exchange rates on cash and cash equivalents		(400	)		(251	)
Increase in cash and cash equivalents		1,568			57
Cash and cash equivalents at beginning of period		41,546			51,405
Cash and cash equivalents at end of period	$	43,114		$	51,462

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RightNow Technologies, Inc.
Reconciliation of Non-GAAP Measurements
(Amounts in thousands, except per share amounts) (Unaudited)

Earnings Per Share Reconciliation

	Three Months Ended
	March 31,
	2010		2009
Net income as reported	$	585	$	1,263
Add stock-based compensation (“SBC”)		1,755		1,516
Net income before SBC	$	2,340	$	2,779
Net income per share, as reported (basic and diluted)	$	0.02	$	0.04
Net income per share, before SBC (basic and diluted)	$	0.07	$	0.09
Shares outstanding (basic), as reported		31,929		31,784
Shares outstanding (diluted), as reported		33,431		32,249

Forward-Looking Guidance Reconciliation

	GAAP Guidance						Non-GAAP Guidance
	From		To		Adjustment		From		To
Second quarter ending June 30, 2010
Net income	$	525	$	1,200	$	2,000 [a]	$	2,525	$	3,200
Net income per share	$	0.02	$	0.04			$	0.07	$	0.09
Shares (diluted)		34,000		34,000				34,000		34,000
Year ending December 31, 2010
Net income	$	5,050	$	6,800	$	8,400 [a]	$	13,450	$	15,200
Net income per share	$	0.15	$	0.20			$	0.40	$	0.45
Shares (diluted)		34,000		34,000				34,000		34,000

[a] Estimated stock-based compensation expense to be recorded for the periods indicated in accordance with FASB Accounting Standards Codification, Topic 718, Compensation-Stock Compensation, which is effective for periods beginning January 1, 2006.

About Non-GAAP Financial Measures

Non-GAAP net income and diluted net income per share are supplemental measures of our performance that are not required by, or presented in accordance with GAAP. These non-GAAP financial measures are not intended to be used in isolation and should not be considered a substitute for net income and net income per share or any other performance measure determined in accordance with GAAP. We present non-GAAP net income and net income per share because we consider each to be an important supplemental measure of our performance.

Management uses these non-GAAP financial measures to make operational decisions, evaluate the Company’s performance, prepare forecasts and determine compensation. Further, management believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing the Company’s performance when planning, forecasting and analyzing future periods. Our stock-based compensation expenses are expected to vary depending on the number of new grants issued, changes in our stock price, stock market volatility, expected option lives and risk-free rates of return, all of which are difficult to estimate. In calculating non-GAAP net income and net income per share, management excludes stock-based compensation expenses to facilitate its review of the comparability of the Company’s operating performance on a period-to-period basis because such expenses are not, in management’s view,

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related to the Company’s ongoing operating performance. Management uses this view of its operating performance for purposes of comparison with its business plan and individual operating budgets and resource allocation.

Management further believes that these non-GAAP financial measures are useful to investors in providing greater transparency to the information used by management in its operational decision making. We believe that the use of non-GAAP net income and net income per share also facilitate a comparison of RightNow’s underlying operating performance with that of other companies in our industry, which use similar non-GAAP financial measures to supplement their GAAP results.

Calculating non-GAAP net income and net income per share have limitations as an analytical tool, and readers should not consider these measures in isolation or as substitutes for GAAP net income and GAAP net income per share. In the future, we expect to incur additional stock-based compensation expenses and the exclusion of these expenses in the presentation of our non-GAAP financial measures should not be construed as an inference that these costs are unusual, infrequent or non-recurring. Investors and potential investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool, which include:

• Other companies inside and outside of our industry may calculate non-GAAP net income and net income per share differently than we do, limiting their usefulness as a comparative tool; and

• The Company’s income tax expense or benefit will be ultimately based on its GAAP taxable income and actual tax rates in effect, which may differ significantly from the effective tax rate used in our non-GAAP financial measures.

In addition, the adjustments to our GAAP financial measures reflect the exclusion of stock-based compensation expenses that are recurring and will be reflected in the Company’s financial results for the foreseeable future. The Company compensates for these limitations by providing specific information regarding the GAAP amount excluded from the non-GAAP financial measures. The Company further compensates for the limitations of our use of non-GAAP financial measures by presenting comparable GAAP measures more prominently. The Company evaluates the non-GAAP financial measures together with the most directly comparable GAAP financial measures.

Investors and potential investors are encouraged to review the reconciliation of non-GAAP financial measures contained within this press release with our GAAP net income and net income per share. For more information, see the consolidated operating statements and reconciliation of non-GAAP measurements contained in this press release.

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EX-99.2

Exhibit 99.2

Consolidated Balance Sheets           Amounts in thousands

  Unaudited
  Last updated April 28, 2010

	Mar 31,			Jun 30,			Sep 30,			Dec 31,			Mar 31,			Jun 30,			Sep 30,			Dec 31,			Mar 31,			Jun 30,			Sep 30,			Dec 31,			Mar 31,
	2007			2007			2007			2007			2008			2008			2008			2008			2009			2009			2009			2009			2010
Assets
Current assets:
Cash and cash equivalents		44,899			33,842			33,109			43,681			44,591			52,781			51,145			51,405			51,462			46,987			32,388			41,546			43,114
Short-term investments		37,578			52,911			56,823			52,644			36,585			41,540			46,444			34,412			36,517			42,808			60,634			54,977			55,293
Accounts receivable		25,050			27,797			24,690			29,480			27,503			26,722			27,820			36,770			24,220			31,670			31,034			31,850			29,723
Term receivables		20,555			15,756			13,773			13,069			9,616			8,814			6,875			5,752			4,810			4,107			3,011			2,417			1,762
Less allowance for doubtful accounts		(2,273	)		(2,046	)		(2,009	)		(1,918	)		(2,056	)		(2,177	)		(2,148	)		(2,277	)		(1,901	)		(1,910	)		(1,701	)		(1,914	)		(1,794	)
Prepaid & other current assets		3,676			4,980			5,786			5,979			6,773			7,082			7,497			7,531			7,593			7,815			8,689			8,828			9,620
Total current assets		129,485			133,240			132,172			142,935			123,012			134,762			137,633			133,593			122,701			131,477			134,055			137,704			137,718
Long-term investments		—			—			—			—			17,810			11,925			4,612			4,963			4,980			4,792			—			—			—
Property and equipment, net		10,715			10,494			10,451			10,856			10,807			10,798			10,377			10,141			9,187			9,775			9,781			10,122			10,154
Term receivables, noncurrent		19,349			13,239			11,170			9,859			8,059			5,728			4,420			3,547			2,804			2,159			1,447			1,105			810
Intangible and other assets, net		9,380			9,352			9,221			10,136			10,016			10,025			10,268			10,093			9,274			9,379			14,991			15,504			16,181
Total assets		168,929			166,325			163,014			173,786			169,704			173,238			167,310			162,337			148,946			157,582			160,274			164,435			164,863
Liabilities, Preferred Stock and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities		13,818			14,688			14,855			15,790			18,146			17,919			17,405			16,223			14,309			17,847			16,601			16,573			19,967
Commissions and bonuses payable		2,902			2,918			2,889			5,044			3,531			4,279			4,351			5,665			3,084			4,958			4,838			6,271			4,964
Current portion of long-term debt		32			32			42			43			44			44			45			46			46			45			34			22			10
Deferred revenue		67,444			66,660			69,665			76,995			73,575			76,693			72,008			77,584			72,885			75,972			75,643			74,446			68,103
Total current liabilities		84,196			84,298			87,451			97,872			95,296			98,935			93,809			99,518			90,324			98,822			97,116			97,312			93,044
Deferred revenue, noncurrent		41,241			41,718			37,139			37,665			38,079			39,289			37,201			35,614			30,322			28,112			28,298			26,881			27,592
Long-term debt		77			69			79			68			57			45			34			22			10			—			—			—			—
Stockholders’ equity (deficit):
Common stock		33			33			33			33			34			34			34			34			34			34			34			34			34
Additional paid-in capital		88,064			90,750			92,486			95,377			97,107			99,187			101,337			102,662			104,345			107,281			109,394			112,439			115,680
Treasury stock, at cost		—			—			—			—			—			—			—			(13,209	)		(15,007	)		(15,007	)		(15,007	)		(15,007	)		(15,007	)
Other comprehensive income (loss)		(384	)		(504	)		(551	)		(292	)		(536	)		(787	)		(193	)		1,916			1,875			1,260			1,394			1,125			1,284
Accumulated deficit		(44,298	)		(50,039	)		(53,623	)		(56,937	)		(60,333	)		(63,465	)		(64,912	)		(64,220	)		(62,957	)		(62,920	)		(60,955	)		(58,349	)		(57,764	)
Total stockholders’ equity		43,415			40,240			38,345			38,181			36,272			34,969			36,266			27,183			28,290			30,648			34,860			40,242			44,227
Total liabilities, preferred stock and stockholders’ equity		168,929			166,325			163,014			173,786			169,704			173,238			167,310			162,337			148,946			157,582			160,274			164,435			164,863

Consolidated Statements of Operations           Amounts in thousands (except per share amounts)

Unaudited

Last updated April 28, 2010

	2007															2008															2009															2010
	Q1			Q2			Q3			Q4			FY			Q1			Q2			Q3			Q4			YTD			Q1			Q2			Q3			Q4			YTD			Q1
Revenue:
Software, hosting and support		19,819			20,693			22,366			24,105			86,983			24,556			25,573			25,956			26,491			102,576			26,045			27,424			29,754			32,172			115,395			33,025
Professional services		5,883			5,772			6,880			6,559			25,094			8,342			9,648			10,281			9,588			37,859			9,992			8,916			8,977			9,407			37,292			9,077
Total revenue		25,702			26,465			29,246			30,664			112,077			32,898			35,221			36,237			36,079			140,435			36,037			36,340			38,731			41,579			152,687			42,102
Cost of revenue:
Software, hosting and support		4,394			4,565			4,604			4,848			18,411			5,035			5,043			5,305			5,014			20,397			4,949			4,954			5,232			5,813			20,948			5,879
Professional services		5,171			5,036			5,667			6,138			22,012			7,285			7,810			8,133			7,212			30,440			7,008			6,346			6,365			6,891			26,610			7,332
Total cost of revenue		9,565			9,601			10,271			10,986			40,423			12,320			12,853			13,438			12,226			50,837			11,957			11,300			11,597			12,704			47,558			13,211
Gross profit		16,137			16,864			18,975			19,678			71,654			20,578			22,368			22,799			23,853			89,598			24,080			25,040			27,134			28,875			105,129			28,891
Operating expenses:
Sales and marketing		15,727			15,788			16,516			17,087			65,118			16,818			17,627			16,889			16,294			67,628			14,863			16,008			16,175			17,705			64,751			18,724
Research and development		4,296			4,343			4,308			4,137			17,084			4,486			4,507			4,671			4,628			18,292			4,756			5,051			5,100			5,314			20,221			5,132
General and administrative		2,860			3,178			2,680			2,782			11,500			3,516			3,890			3,215			2,994			13,615			3,446			4,207			4,018			4,130			15,801			4,299
Total operating expenses		22,883			23,309			23,504			24,006			93,702			24,820			26,024			24,775			23,916			99,535			23,065			25,266			25,293			27,149			100,773			28,155
Operating income (loss)		(6,746	)		(6,445	)		(4,529	)		(4,328	)		(22,048	)		(4,242	)		(3,656	)		(1,976	)		(63	)		(9,937	)		1,015			(226	)		1,841			1,726			4,356			736
Interest and other income, net		828			885			1,004			966			3,683			938			519			552			687			2,696			401			351			342			1,000			2,094			183
Income (loss) before income taxes		(5,918	)		(5,560	)		(3,525	)		(3,362	)		(18,365	)		(3,304	)		(3,137	)		(1,424	)		624			(7,241	)		1,416			125			2,183			2,726			6,450			919
(Provision) benefit for income taxes		(84	)		(181	)		(59	)		48			(276	)		(92	)		5			(23	)		68			(42	)		(153	)		(89	)		(218	)		(119	)		(579	)		(334	)
Net income (loss)		(6,002	)		(5,741	)		(3,584	)		(3,314	)		(18,641	)		(3,396	)		(3,132	)		(1,447	)		692			(7,283	)		1,263			36			1,965			2,607			5,871			585
Net income (loss) per share:
Basic	$	(0.18	)	$	(0.17	)	$	(0.11	)	$	(0.10	)	$	(0.56	)	$	(0.10	)	$	(0.09	)	$	(0.04	)	$	0.02		$	(0.22	)	$	0.04		$	0.00		$	0.06		$	0.08		$	0.18		$	0.02
Diluted	$	(0.18	)	$	(0.17	)	$	(0.11	)	$	(0.10	)	$	(0.56	)	$	(0.10	)	$	(0.09	)	$	(0.04	)	$	0.02		$	(0.22	)	$	0.04		$	0.00		$	0.06		$	0.08		$	0.18		$	0.02
Shares used in the computation:
Basic		32,858			32,983			33,094			33,371			33,078			33,532			33,582			33,640			32,692			33,362			31,784			31,677			31,733			31,815			31,752			31,929
Diluted		32,858			32,983			33,094			33,371			33,078			33,532			33,582			33,640			33,204			33,362			32,249			32,160			32,424			33,047			32,336			33,431
Supplemental information of stock-based
compensation expense included in:
Cost of software, hosting and support		58			79			84			67			288			77			79			87			80			323			96			142			120			102			460			113
Cost of professional services		125			149			217			156			647			153			165			158			162			638			133			209			138			132			612			114
Sales and marketing		658			731			542			333			2,264			538			595			738			583			2,454			622			952			761			694			3,029			751
Research and development		226			289			166			206			887			235			242			252			240			969			262			377			285			254			1,178			257
General and administrative		235			743			199			208			1,385			263			816			297			265			1,641			403			1,056			548			500			2,507			520
Total stock-based compensation		1,302			1,991			1,208			970			5,471			1,266			1,897			1,532			1,330			6,025			1,516			2,736			1,852			1,682			7,786			1,755

Consolidated Statements of Cash Flow            Amounts in thousands

Unaudited

Last updated April 28, 2010

	2007															2008															2009															2010
	Q1			Q2			Q3			Q4			FY			Q1			Q2			Q3			Q4			YTD			Q1			Q2			Q3			Q4			YTD			Q1
Operating activities
Net income (loss)		(6,002	)		(5,741	)		(3,584	)		(3,314	)		(18,641	)		(3,396	)		(3,132	)		(1,447	)		692			(7,283	)		1,263			36			1,965			2,607			5,871			585
Noncash adjustments:
Depreciation and amortization		1,675			1,880			1,869			1,842			7,266			1,954			1,956			1,956			1,905			7,771			1,887			1,726			1,797			2,059			7,469			2,065
Provision for losses on accounts receivable		(69	)		13			401			39			384			89			26			64			33			212			57			30			30			40			157			50
Stock-based compensation expense		1,302			1,991			1,208			970			5,471			1,266			1,897			1,532			1,330			6,025			1,516			2,736			1,852			1,682			7,786			1,755
Changes in operating accounts:
Receivables		15,427			8,224			6,933			(3,032	)		27,552			7,447			4,062			1,143			(7,878	)		4,774			13,569			(5,171	)		2,333			524			11,255			2,449
Prepaid and other current assets		(1,471	)		(1,612	)		(803	)		(1,143	)		(5,029	)		(852	)		(804	)		(1,168	)		(900	)		(3,724	)		399			(583	)		(693	)		(614	)		(1,491	)		(1,054	)
Accounts payable and accrued liabilities		1,748			810			89			1,041			3,688			2,292			(257	)		42			(720	)		1,357			(1,823	)		3,099			(1,427	)		(35	)		(186	)		3,556
Commissions and bonuses payable		(1,171	)		(1	)		(47	)		2,176			957			(1,523	)		742			166			1,545			930			(2,553	)		1,743			(132	)		1,393			451			(1,243	)
Deferred revenue		(6,056	)		(814	)		(2,143	)		8,407			(606	)		(3,434	)		4,001			(3,566	)		7,168			4,169			(9,429	)		(2,038	)		(569	)		(2,880	)		(14,916	)		(4,614	)
Other		(23	)		13			(130	)		132			(8	)		(173	)		83			(52	)		635			493			—			503			(247	)		(555	)		(299	)		(39	)
Cash provided (used) by operating activities		5,360			4,763			3,793			7,118			21,034			3,670			8,574			(1,330	)		3,810			14,724			4,886			2,081			4,909			4,221			16,097			3,510
Investing activities
Acquistion of property and equipment		(1,987	)		(1,351	)		(1,426	)		(2,436	)		(7,200	)		(1,522	)		(1,536	)		(1,309	)		(1,425	)		(5,792	)		(584	)		(1,841	)		(1,240	)		(1,910	)		(5,575	)		(1,640	)
Business acquisitions		—			—			—			—			—			—			—			—			—			—			—			—			(5,906	)		—			(5,906	)		—
Intangible asset additions																																(100	)					(144	)		(410	)		(654	)		(1,034	)
Change in investments, net		1,549			(15,333	)		(3,912	)		4,179			(13,517	)		(1,970	)		748			2,218			12,435			13,431			(2,251	)		(6,059	)		(13,081	)		5,558			(15,833	)		(342	)
Other		(29	)		(32	)		1			17			(42	)		—			—			—			—			—			—			—			—			—			—			—
Cash provided (used) for investing activities		(467	)		(16,716	)		(5,337	)		1,760			(20,759	)		(3,492	)		(788	)		909			11,010			7,639			(2,935	)		(7,900	)		(20,371	)		3,238			(27,968	)		(3,016	)
Financing activities
Net proceeds from (payments on) long-term debt		(7	)		(8	)		(10	)		(10	)		(35	)		(11	)		(11	)		(11	)		(10	)		(43	)		(12	)		(11	)		(12	)		(11	)		(46	)		(12	)
Proceeds from issuance of stock:
Common stock issued under employee benefit plans		643			536			509			1,966			3,653			414			234			618			130			1,396			78			151			167			1,352			1,748			1,159
Common stock repurchase (Treasury)		—			—			—			—			—			—			—			—			(13,209	)		(13,209	)		(1,798	)		—			—			—			(1,798	)		—
Other		49			160			19			(45	)		183			51			(53	)		—			(133	)		(135	)		89			48			95			9			241			327
Cash provided (used) by financing activities		685			688			518			1,911			3,801			454			170			607			(13,222	)		(11,991	)		(1,643	)		188			250			1,350			145			1,474
Effect of foreign exchange rates		113			208			293			(217	)		397			278			234			(1,822	)		(1,338	)		(2,648	)		(251	)		1,156			613			349			1,867			(400	)
Net change in cash and cash equivalents		5,691			(11,057	)		(733	)		10,572			4,473			910			8,190			(1,636	)		260			7,724			57			(4,475	)		(14,599	)		9,158			(9,859	)		1,568
Cash and cash equivalents at beginning of period		39,208			44,899			33,842			33,109			39,208			43,681			44,591			52,781			51,145			43,681			51,405			51,462			46,987			32,388			51,405			41,546
Cash and cash equivalents at end of period		44,899			33,842			33,109			43,681			43,681			44,591			52,781			51,145			51,405			51,405			51,462			46,987			32,388			41,546			41,546			43,114

Supplemental Data Sheet          Amounts in thousands (except customers, interactions and employees)
Unaudited
Last updated April 28, 2010

		2007															2008															2009															2010
		Q1			Q2			Q3			Q4			YTD			Q1			Q2			Q3			Q4			YTD			Q1			Q2			Q3			Q4			YTD			Q1
Revenue	Recurring		19,225			20,341			21,813			23,541			84,920			24,412			25,459			25,917			26,476			102,264			25,955			27,393			29,741			32,161			115,250			32,995
Mix	Perpetual		594			352			553			564			2,063			144			114			39			15			312			90			31			13			11			145			30
(in thousands)	Professional services		5,883			5,772			6,880			6,559			25,094			8,342			9,648			10,281			9,588			37,859			9,992			8,916			8,977			9,407			37,292			9,077
	Total		25,702			26,465			29,246			30,664			112,077			32,898			35,221			36,237			36,079			140,435			36,037			36,340			38,731			41,579			152,687			42,102
Revenue	Recurring		75	%		77	%		74	%		77	%		76	%		75	%		73	%		72	%		73	%		73	%		72	%		75	%		77	%		77	%		75	%		78	%
Mix	Perpetual		2	%		1	%		2	%		2	%		2	%		0	%		0	%		0	%		0	%		0	%		0	%		0	%		0	%		0	%		0	%		0	%
(% of total)	Professional services		23	%		22	%		24	%		21	%		22	%		25	%		27	%		28	%		27	%		27	%		28	%		25	%		23	%		23	%		24	%		22	%
Revenue by	North America		18,472			18,908			20,687			21,473			79,540			22,357			23,384			25,187			26,712			97,640			26,997			26,386			27,737			29,694			110,814			29,941
Geography	Europe		5,359			5,321			5,958			6,923			23,561			8,066			8,876			8,082			6,922			31,946			6,440			6,832			7,441			7,831			28,544			8,143
(in thousands)	Asia Pacific		1,871			2,236			2,601			2,268			8,976			2,475			2,961			2,968			2,445			10,849			2,600			3,122			3,553			4,054			13,329			4,019
Revenue by	North America		72	%		72	%		71	%		70	%		71	%		67	%		67	%		70	%		74	%		69	%		75	%		72	%		72	%		71	%		72	%		71	%
Geography	Europe		21	%		20	%		20	%		23	%		21	%		25	%		25	%		22	%		19	%		23	%		18	%		19	%		19	%		19	%		19	%		19	%
(% of total)	Asia Pacific		7	%		8	%		9	%		7	%		8	%		8	%		8	%		8	%		7	%		8	%		7	%		9	%		9	%		10	%		9	%		10	%
Gross Deferred
Revenue*
(in thousands)	Total		113,668			122,793			123,998			134,933						138,629			147,052			145,088			150,872						138,000			152,424			166,305			179,892						196,225
Deferred	Current		67,444			66,660			69,665			76,995						73,575			76,693			72,008			77,584						72,885			75,972			75,643			74,446						68,103
Revenue	Non-current		41,241			41,718			37,139			37,665						38,079			39,289			37,201			35,614						30,322			28,112			28,298			26,881						27,592
(in thousands)	Total		108,685			108,378			106,804			114,660						111,654			115,982			109,209			113,198						103,207			104,084			103,941			101,327						95,695
Term Receivables	Current		20,555			15,756			13,773			13,069						9,616			8,814			6,875			5,752						4,810			4,107			3,011			2,418						1,762
(in thousands)	Non-current		19,349			13,239			11,170			9,859						8,059			5,728			4,420			3,547						2,804			2,159			1,447			1,105						810
	Total		39,904			28,995			24,943			22,928						17,675			14,542			11,295			9,299						7,614			6,266			4,458			3,523						2,572
Net Deferred	Current		46,889			50,904			55,892			63,926						63,959			67,879			65,133			71,832						68,075			71,865			72,632			72,028						66,341
Revenue	Non-current		21,892			28,479			25,969			27,806						30,020			33,561			32,781			32,067						27,518			25,953			26,851			25,776						26,782
(in thousands)	Total		68,781			79,383			81,861			91,732						93,979			101,440			97,914			103,899						95,593			97,818			99,483			97,804						93,123
Customers	New		62			74			60			60			256			64			73			68			59			264			26			53			82	*		51			212			46
	Total (~)		1,800			1,800			1,800			1,800						1,800			1,900			1,900			1,900						1,900			1,900			1,900			1,900			1,900			1,900
	Interactions (in millions)		352			332			347			436			1,467			463			477			576			583			2,099			584			586			620			704			2,494			765
Employees	Worldwide		679			698			691			686						718			765			777			737						742			756			792			797						836

*	Includes invoiced and uninvoiced deferred revenue.
**	Q3’09 customer count includes acquired customers from HiveLive acquisition.