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)     October 25, 2006

RIGHTNOW TECHNOLOGIES, INC.

(Exact Name of Registrant as Specified in Charter)

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

40 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 October 25, 2006, RightNow Technologies, Inc. (“RightNow” or the “Company”) issued a press release announcing its financial results for the third quarter ended September 30, 2006.  A copy of the press release is furnished herewith as Exhibit No. 99.1.  The Company also has posted on its website supplemental financial data, as of October 25, 2006, a copy of which is furnished herewith as Exhibit No. 99.2.

The information contained in this report and in the exhibits 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 liabilities of that Section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”).  The information contained in this report and in the exhibits attached to this report shall not be incorporated by reference into any registration statement or other document filed with the Securities and Exchange Commission by the Company under the Exchange Act or the Securities Act, whether made before or after the date hereof, regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01.Financial Statements and Exhibits.

(a)Not Applicable.

(b)Not Applicable.

(c)Not Applicable.

(d)Exhibits.

Exhibit No.	Description of Exhibit
99.1	Press Release, dated October 25, 2006, announcing RightNow Technologies, Inc.’s financial results for the third quarter ended September 30, 2006 (furnished herewith but not filed pursuant to Item 2.02).
99.2	Supplemental financial data of RightNow Technologies, Inc., as of October 25, 2006 (furnished herewith but not filed pursuant to Item 2.02).

2

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: October 25, 2006	/s/ SUSAN J. CARSTENSEN
	Susan J. Carstensen Chief Financial Officer, Vice President, Treasurer and Assistant Secretary

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EXHIBIT INDEX

Exhibit No.	Description of Exhibit
99.1	Press Release, dated October 25, 2006, announcing RightNow Technologies, Inc.’s financial results for the third quarter ended September 30, 2006 (furnished herewith but not filed pursuant to Item 2.02).
99.2	Supplemental financial data of RightNow Technologies, Inc. as of October 25, 2006 (furnished herewith but not filed pursuant to Item 2.02).

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EX-99.1

Exhibit 99.1

	40 Enterprise Boulevard
	PO Box 9300
	Bozeman, MT 59718-9300
	406.522.4200 P
	406.522.4227 F
FOR IMMEDIATE RELEASE

For Further Information, Contact:
Investor Relations:	Corporate Communications:
Todd Friedman or Stacie Bosinoff	Katie O’Connell
The Blueshirt Group	RightNow Technologies
415.217.7722	925.674.1487 Desk
todd@blueshirtgroup.com	510.304.3707 Cell
stacie@blueshirtgroup.com	koconnell@rightnow.com

RIGHTNOW TECHNOLOGIES REPORTS

THIRD QUARTER 2006 FINANCIAL RESULTS

BOZEMAN, MONT. (October 25, 2006)¾RightNow® Technologies, Inc. (NASDAQ: RNOW), today announced results for the third quarter ended September 30, 2006.  RightNow reported its 35th consecutive quarter of revenue growth, with third quarter consolidated revenue of $30.1 million, an increase of 30 percent from the third quarter of 2005.

The net loss in the third quarter of 2006 was $(0.5) million or $(0.02) per diluted share, compared to net income of $2.3 million, or $0.07 per diluted share, in the third quarter of 2005.   Third quarter 2006 non-GAAP net income per diluted share was $0.02, which excludes stock-based compensation charges of $1.1 million.

1

Revenue for the nine month period ended September 30, 2006 was $81.6 million, or 30 percent more than the comparable 2005 period.  The net loss for the nine months ended September 30, 2006 was $(2.7) million, or $(0.08) per diluted share, as compared to net income of $4.7 million, or $0.14 per diluted share, for the nine months ended September 30, 2005.  Results for the nine months ended September 30, 2006 include $(0.11) per diluted share of stock-based compensation charges.

RightNow added more than 80 new customers and handled more than 260 million customer interactions during the third quarter.  New, renewed and expanded customer relationships during the third quarter of 2006 included the Assessments and Qualifications Alliance, eHarmony, EPA Office of Environmental Education, Group Health Cooperative, Minnesota State Colleges and Universities, MTD Products, Northrup Grumman, T-Mobile Austria, and YP.com.

“The third quarter was an outstanding quarter for RightNow across many accounts,” stated Greg Gianforte, founder and CEO.  “Solid execution in our public sector business and with large enterprises drove record bookings and our 35th consecutive quarter of revenue growth.  During the quarter, we held our largest ever users’ conference where we launched RightNow 8 and received overwhelmingly positive customer reviews.  Our track record of success and high customer satisfaction demonstrates that we continue to set the standard for mission critical On Demand CRM.”

Susan Carstensen, CFO, added, “Record bookings of $45.5 million in the third quarter bring our year-to-date bookings to $116 million, or 51% more than the similar period last year.  Our deferred revenue balance topped $100 million for the first time, and our 2006 year-to-date cash from operations of $22.7 million is more than double that of the comparable 2005 period.”

2

Guidance

·For the fourth quarter of 2006, revenue is anticipated to be in the range of $31 to $31.5 million.  The fourth quarter net income (loss) per diluted share is expected to be in the range of $(0.02) to $0.00 cents.  Excluding the effect of stock-based compensation, fourth quarter non-GAAP net income per diluted share is expected to be in the range of $0.02 to $0.04 cents.  These forecasts result in full year 2006 revenue guidance in the range of approximately $113 million, net (loss) per share in the range of $(0.10) to $(0.08) and non-GAAP net income per diluted share in the range of $0.05 to $0.07.

·For the full year 2007, the Company expects revenue in the range of $143 to $148 million.  The Company expects recurring revenue to grow approximately 40 percent.  Perpetual license revenue in absolute dollars is expected to decrease and is expected to make up approximately 14 to 17 percent of total revenue.  Net income per share is expected to be in the range of $0.11 to $0.16 cents.  Excluding the effect of stock-based compensation, non-GAAP net income per diluted share for the year is expected to be in the range of $0.30 to $0.35 cents. The Company intends to further discuss its guidance and anticipated business model and related changes in today’s conference call.

Quarterly Conference Call

RightNow Technologies will discuss its quarterly results via teleconference at 4:30 p.m. (ET)/2:30 p.m. (MT) today, October 25, 2006. To access the call, please dial (800) 289-0572, at least five minutes prior to the start time.  An audio webcast of the call will also be available at www.shareholder.com/rnow/medialist.cfm.  A replay of today’s conference call will be available on the company Web site at www.shareholder.com/rnow/, under the Investor Webcasts menu, from 5:30 p.m. (MT) on October 25, 2006 until 10:00 p.m. (MT) November 8, 2006.   You may also access a replay of today’s call by dialing (719) 457-0820 or (888) 203-1112 with the replay passcode 7149272.

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About RightNow Technologies, Inc.

RightNow (NASDAQ: RNOW) is leading the industry beyond CRM to high-impact Customer Experience Management solutions.  More than 1,700 companies around the world turn to RightNow to drive a superior customer experience across the frontlines of their business.  As a win on service strategy becomes a business imperative, experience management solutions are increasingly recognized as a core driver of business success. Founded in 1997, RightNow is headquartered in Bozeman, Montana, with additional offices in North America, Europe and Asia.  For further information, please visit www.rightnow.com.

RightNow is a registered trademark of RightNow Technologies, Inc. NASDAQ is a registered trademark of the NASDAQ Global Market.

-30-

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 wordsand 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, risks associated with our business model; our ability to develop or acquire, and gain market acceptance for new products in a cost-effective and timely manner; the timing and success of our RightNow 8 product release; the gain or loss of key customers; our ability to successfully retain customers of Salesnet, Inc. and to integrate Salesnet’s products and processes following our recent acquisition of that company; competitive pressures; our ability to expand operations; fluctuations in our earnings as a result of the impact of stock-based compensation expense; 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; and our ability to expand, retain and motivate our employees and manage our growth.  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

4

RightNow Technologies, Inc.

Consolidated Balance Sheets

(In thousands) (Unaudited)

	Sep 30,			Dec 31,
	2006			2005
Assets
Cash and cash equivalents	$	38,114		$	40,874
Short-term investments	36,906			23,314
Accounts receivable	25,347			25,462
Term receivables, current	22,587			15,376
Allowance for doubtful accounts	(3,225		)	(2,209		)
Net receivables	44,709			38,629
Prepaid & other current assets	2,874			1,993
Total current assets	122,603			104,810
Property and equipment, net	8,470			6,451
Term receivables, non-current	22,193			10,697
Intangible assets, net	9,187			1,487
Other	115			231
Total Assets	$	162,568		$	123,676
Liabilities and Stockholders’ Equity
Accounts payable	$	2,420		$	2,308
Commissions and bonuses payable	4,001			2,910
Other accrued liabilities	6,171			5,733
Current portion of long-term debt	35			30
Current portion of deferred revenue	59,218			48,673
Total current liabilities	71,845			59,654
Long-term debt, less current portion	113			117
Deferred revenue, net of current portion	43,402			19,250
Stockholders’ equity:
Common stock	32			32
Additional paid-in capital	83,428			78,312
Accumulated other comprehensive loss	(250		)	(401		)
Accumulated deficit	(36,002		)	(33,288		)
Total stockholders’ equity	47,208			44,655
Total Liabilities Stockholders’ Equity	$	162,568		$	123,676

5

RightNow Technologies, Inc.

Consolidated Operating Statements

(In thousands, except per share amounts) (Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2006			2005			2006			2005
Revenue:
Software, hosting and support	$	23,754		$	18,005		$	63,700		$	48,743
Professional services	6,334			5,149			17,927			13,831
Total revenue	30,088			23,154			81,627			62,574
Cost of revenue:
Software, hosting and support	3,667			2,253			9,597			6,593
Professional services	4,969			3,026			14,014			8,601
Total cost of revenue	8,636			5,279			23,611			15,194
Gross profit	21,452			17,875			58,016			47,380
Operating expenses:
Sales and marketing	16,535			11,248			45,113			31,262
Research and development	3,740			2,937			10,346			7,524
General and administrative	2,333			1,627			7,098			4,623
Total operating expenses	22,608			15,812			62,557			43,409
Income (loss) from operations	(1,156		)	2,063			(4,541		)	3,971
Interest and other income, net	740			440			2,180			1,063
Income (loss) before income taxes	(416		)	2,503			(2,361		)	5,034
Provision for income taxes	(103		)	(160		)	(353		)	(331		)
Net income (loss)	$	(519	)	$	2,343		$	(2,714	)	$	4,703
Net income (loss) per share:
Basic	$	(0.02	)	$	0.08		$	(0.08	)	$	0.16
Diluted	$	(0.02	)	$	0.07		$	(0.08	)	$	0.14
Shares used in the computation:
Basic	32,316			30,802			32,144			30,287
Diluted	32,316			33,667			32,144			33,541
Supplemental information of stock-based compensation expense included in:
Cost of software, hosting and support	$	52		$	—		$	145		$	—
Cost of professional services	124			—			358			—
Sales and marketing	529			—			1,430			—
Product development	230			—			622			—
General and administrative	179			—			1,020			—
Total stock-based compensation	$	1,114		$	—		$	3,575		$	—

6

RightNow Technologies, Inc.

Consolidated Statements of Cash Flow

(In thousands, except per share amounts) (Unaudited)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2006			2005			2006			2005
Operating activities:
Net income (loss)	$	(519	)	$	2,343		$	(2,714	)	$	4,703
Non-cash adjustments:
Depreciation and amortization	1,556			892			3,998			2,462
Stock-based compensation	1,114			—			3,575			—
Provision for losses on accounts receivable	292			216			51			260
Changes in operating accounts:
Receivables	(8,117		)	(6,072		)	(16,529		)	(14,340		)
Prepaid expenses	(225		)	(609		)	(384		)	(586		)
Accounts payable	(808		)	(373		)	(64		)	405
Commissions and bonuses payable	932			807			967			732
Other accrued liabilities	392			1,444			201			2,023
Deferred revenue	15,184			6,523			33,509			15,283
Other	(8		)	77			99			109
Cash provided by operating activities	9,793			5,248			22,709			11,051
Investing activities:
Net change in short-term investments	(1,638		)	3,300			(13,527		)	10,305
Acquisition of property and equipment	(1,020		)	(1,124		)	(4,930		)	(3,272		)
Business acquisitions	43			(11		)	(8,688		)	(1,023		)
Other	—			(6		)	(10		)	(6		)
Cash provided (used) by investing activities	(2,615		)	2,159			(27,155		)	6,004
Financing activities:
Proceeds from long-term debt	—			162			—			162
Proceeds from issuance of common stock	363			1,767			1,362			3,572
Payments on long-term debt	(9		)	(8		)	(23		)	(8		)
Cash provided by financing activities	354			1,921			1,339			3,726
Effect of foreign exchange rates on cash and cash equivalents	36			(26		)	347			(131		)
Increase (decrease) in cash and cash equivalents	7,568			9,302			(2,760		)	20,650
Cash and cash equivalents at beginning of period	30,546			30,292			40,874			18,944
Cash and cash equivalents at end of period	$	38,114		$	39,594		$	38,114		$	39,594

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RightNow Technologies, Inc.

Reconciliation of Non-GAAP Measurements

 (Amounts in thousands, except per share amounts) (Unaudited)

Diluted Earnings Per Share Reconciliation

	Three Months Ended Sep 30, 2006			Nine Months Ended Sep 30, 2006
Net (loss) as reported	$	(519	)	$	(2,714	)
Add stock-based compensation (“SBC”)	1,114			3,575
Net income (loss) before SBC	$	595		$	861
Diluted net (loss) per share, as reported	$	(0.02	)	$	(0.08	)
Diluted net income (loss) per share, before SBC	0.02			0.03
Diluted shares outstanding, as reported	32,316			32,144
Diluted shares outstanding, excluding the effect of SBC	33,926			33,953

Forward-Looking Guidance Reconciliation

	GAAP Guidance									Non-GAAP Guidance
	From			To			Adjustment			From		To
Fourth quarter ending December 31, 2006
Net income (loss)	$	(600	)	$	100		$	1,300	(a)	$	700	$	1,400
Diluted EPS	$	(0.02	)	$	0.00					$	0.02	$	0.04
Diluted shares	32,500			34,300			1,800		(b)	34,300		34,300
Year ending December 31, 2006
Net income (loss)	$	(3,300	)	$	(2,600	)	$	4,900	(a)	$	1,600	$	2,300
Diluted EPS	$	(0.10	)	$	(0.08	)				$	0.05	$	0.07
Diluted shares	32,300			32,300			1,800		(b)	34,100		34,100
Year ending December 31, 2007
Net income (loss)	$	3,800		$	5,800		$	6,800	(a)	$	10,600	$	12,600
Diluted EPS	$	0.11		$	0.16					$	0.30	$	0.35
Diluted shares	35,500			35,500			—			35,500		35,500

(a) Estimated stock-based compensation expense to be recorded for the periods indicated in accordance with Statement of Financial Accounting Standards No. 123R, Share-Based Payments, (“SFAS 123R”) which is effective for periods beginning January 1, 2006.  Periods prior to 2006 do not include stock-based compensation expense.

(b) Estimated adjustment for the dilutive effect of outstanding common stock equivalents.

About Non-GAAP Financial Measures

Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.  These non-GAAP financial measures do not reflect a comprehensive system of accounting, differ from GAAP measures with the same captions and may differ from non-GAAP financial measures with the same or similar captions that are used by other companies.

RightNow’s management believes that these non-GAAP financial measures provide meaningful supplemental information regarding RightNow’s operating results because they facilitate the comparison of results for future periods with results from past periods.  RightNow adopted SFAS 123R on January 1, 2006 using the modified prospective method.  Results of prior periods have not been restated to conform with the 2006 presentation.  We believe the calculation of diluted net income per share, calculated without stock-based compensation expense, provides a meaningful comparison to our diluted net income per share figures reported for 2005 and prior years.

EX-99.2

Exhibit 99.2

Consolidated Balance Sheets

Unaudited

Last updated October 25, 2006

	Amounts in thousands
	At December 31,						Mar 31,		Jun 30,		Sep 30,		Dec 31,		Mar 31,		Jun 30,		Sep 30,		Dec 31,
	2000		2001		2002		2003		2003		2003		2003		2004		2004		2004		2004
Assets
Current assets:
Cash and cash equivalents	17,128		6,258		8,038		8,216		8,116		8,294		8,360		8,352		8,912		21,806		18,944
Short-term investments	—		—		—		—		—		—		—		—		—		25,943		31,188
Accounts receivable	5,649		3,711		6,637		7,084		7,652		6,342		10,415		12,003		14,034		17,968		16,939
Term receivables	2,839		3,600		3,085		4,498		5,881		6,521		4,926		5,080		5,849		8,232		10,090
Less allowance for doubtful accounts	(941	)	(728	)	(519	)	(616	)	(521	)	(768	)	(902	)	(1,221	)	(1,274	)	(2,626	)	(1,581	)
Prepaid & other current assets	526		510		466		853		711		1,021		509		1,017		1,778		1,265		1,255
Total current assets	25,201		13,351		17,707		20,035		21,839		21,410		23,308		25,231		29,299		72,588		76,835
Property and equipment, net	3,044		3,931		3,319		3,031		2,877		2,880		2,942		3,234		3,553		4,001		4,393
Term receivables, noncurrent	—		—		924		1,197		1,704		1,919		2,278		2,415		3,673		3,777		5,756
Intangible and other assets, net	496		1,343		1,152		990		911		938		858		1,145		1,068		1,157		1,325
Total assets	28,741		18,625		23,102		25,253		27,331		27,147		29,386		32,025		37,593		81,523		88,309
Liabilities, Preferred Stock and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable and accrued liabilities	2,819		2,335		2,039		2,229		2,591		3,234		3,179		4,197		4,293		5,452		5,435
Commissions and bonuses payable	1,025		531		1,076		925		974		1,197		1,636		1,469		2,133		2,248		2,648
Current portion of long-term debt	7		2,042		3,282		3,374		3,078		1,488		1,390		1,324		1,349		15		—
Deferred revenue	12,317		14,843		17,392		19,428		21,510		23,349		26,127		25,368		30,780		32,796		36,020
Total current liabilities	16,168		19,751		23,789		25,956		28,153		29,268		32,332		32,358		38,555		40,511		44,103
Deferred revenue, noncurrent	4,843		4,031		7,291		8,375		9,061		8,811		9,426		11,361		9,997		11,695		13,105
Long-term debt	—		1,185		940		720		753		626		484		1,046		1,377		—		—
Preferred stock	31,075		32,340		32,373		32,388		32,391		32,394		32,398		32,442		32,446		—		—
Stockholders’ equity (deficit):
Common stock and warrants	21		21		14		14		14		14		15		15		15		320		320
Additional paid-in capital	(1,109	)	(1,051	)	(986	)	(984	)	(987	)	(922	)	(912	)	(807	)	(721	)	71,663		72,367
Other comprehensive income (loss)	(38	)	(91	)	(9	)	(25	)	1		21		73		(40	)	(360	)	(390	)	(605	)
Accumulated deficit	(22,219	)	(37,561	)	(40,310	)	(41,191	)	(42,055	)	(43,065	)	(44,430	)	(44,350	)	(43,716	)	(42,276	)	(40,981	)
Total stockholders’ equity (deficit)	(23,345	)	(38,682	)	(41,291	)	(42,186	)	(43,027	)	(43,952	)	(45,254	)	(45,182	)	(44,782	)	29,317		31,101
Total liabilities, preferred stock and stockholders’ equity (deficit)	28,741		18,625		23,102		25,253		27,331		27,147		29,386		32,025		37,593		81,523		88,309

	Amounts in thousands
	Mar 31,		Jun 30,		Sep 30,		Dec 31,		Mar 31,		Jun 30,		Sep 30,
	2005		2005		2005		2005		2006		2006		2006
Assets
Current assets:
Cash and cash equivalents	33,155		30,292		39,594		40,874		42,444		30,546		38,114
Short-term investments	19,698		24,181		20,883		23,314		27,063		35,203		36,906
Accounts receivable	13,552		15,799		21,968		25,462		31,615		26,250		25,347
Term receivables	13,275		14,733		14,105		15,376		17,268		19,255		22,587
Less allowance for doubtful accounts	(1,627	)	(1,608	)	(1,960	)	(2,209	)	(2,090	)	(2,331	)	(3,225	)
Prepaid & other current assets	1,272		1,196		1,771		1,993		2,439		2,514		2,874
Total current assets	79,325		84,593		96,361		104,810		118,739		111,437		122,603
Property and equipment, net	4,842		5,375		5,597		6,451		6,632		8,620		8,470
Term receivables, noncurrent	8,256		10,234		10,801		10,697		12,611		15,765		22,193
Intangible and other assets, net	1,232		2,028		1,892		1,718		1,447		9,699		9,302
Total assets	93,655		102,230		114,651		123,676		139,429		145,521		162,568
Current liabilities:
Accounts payable and accrued liabilities	6,397		6,600		7,635		8,041		9,231		8,970		8,591
Commissions and bonuses payable	1,971		2,550		3,344		2,910		3,706		3,066		4,001
Current portion of long-term debt	—		31		29		30		30		35		35
Deferred revenue	37,899		40,669		45,694		48,673		54,191		56,222		59,218
Total current liabilities	46,267		49,850		56,702		59,654		67,158		68,293		71,845
Deferred revenue, noncurrent	14,911		16,699		18,058		19,250		26,715		31,012		43,402
Long-term debt	—		131		125		117		109		123		113
Preferred stock	—		—		—		—		—		—		—
Stockholders’ equity (deficit):
Common stock and warrants	233		137		138		32		32		32		32
Additional paid-in capital	73,042		74,479		76,339		78,312		79,536		81,856		83,428
Other comprehensive income (loss)	(618	)	(445	)	(433	)	(401	)	(393	)	(312	)	(250	)
Accumulated deficit	(40,180	)	(38,621	)	(36,278	)	(33,288	)	(33,728	)	(35,483	)	(36,002	)
Total stockholders’ equity (deficit)	32,477		35,550		39,766		44,655		45,447		46,093		47,208
Total liabilities, preferred stock and stockholders’ equity (deficit)	93,655		102,230		114,651		123,676		139,429		145,521		162,568

RightNow provides this information as of the “last updated” date above and makes no commitment to subsequently update the information.

You are encouraged to read RightNow’s most recent reports on Form 10-K and Form 10-Q for a full explanation of our financial data and results.

Consolidated Statements of Operations

Unaudited

Last updated October 25, 2006

	Amounts in thousands, except per share data
	Fiscal Year						2003										2004
	2000		2001		2002		Q1		Q2		Q3		Q4		FY		Q1		Q2		Q3		Q4		FY
Revenue:
Software, hosting and support	10,549		18,998		23,338		6,276		6,940		7,457		8,627		29,300		10,720		11,709		12,976		14,359		49,764
Professional services	758		2,009		3,603		1,531		1,304		1,763		1,981		6,579		2,137		3,053		3,450		3,360		12,000
Total revenue	11,307		21,007		26,941		7,807		8,244		9,220		10,608		35,879		12,857		14,762		16,426		17,719		61,764
Cost of revenue:
Software, hosting and support	3,306		4,636		4,279		1,225		1,337		1,342		1,359		5,263		1,579		1,636		1,729		1,797		6,741
Professional services	485		1,335		2,156		736		765		967		1,272		3,740		1,310		1,573		1,979		2,344		7,206
Total cost of revenue	3,791		5,971		6,435		1,961		2,102		2,309		2,631		9,003		2,889		3,209		3,708		4,141		13,947
Gross profit	7,516		15,036		20,506		5,846		6,142		6,911		7,977		26,876		9,968		11,553		12,718		13,578		47,817
Operating expenses:
Sales and marketing	20,756		22,050		15,939		4,402		4,696		5,389		6,322		20,809		6,848		8,037		8,055		9,046		31,986
Research and development	3,639		4,584		4,117		1,439		1,480		1,489		1,507		5,915		1,805		1,807		2,028		2,167		7,807
General and administrative	3,375		3,973		2,842		766		795		978		979		3,518		1,153		1,016		1,164		1,288		4,621
Total operating expenses	27,770		30,607		22,898		6,607		6,971		7,856		8,808		30,242		9,806		10,860		11,247		12,501		44,414
Operating income (loss)	(20,254	)	(15,571	)	(2,392	)	(761	)	(829	)	(945	)	(831	)	(3,366	)	162		693		1,471		1,077		3,403
Interest and other income (expense), net	607		229		(357	)	(117	)	(35	)	(65	)	2		(215	)	(64	)	(46	)	30		226		146
Income (loss) before income taxes	(19,647	)	(15,342	)	(2,749	)	(878	)	(864	)	(1,010	)	(829	)	(3,581	)	98		647		1,501		1,303		3,549
(Provision) benefit for income taxes	—		—		—		(3	)	—		—		(536	)	(539	)	(18	)	(13	)	(61	)	(8	)	(100	)
Net income (loss)	(19,647	)	(15,342	)	(2,749	)	(881	)	(864	)	(1,010	)	(1,365	)	(4,120	)	80		634		1,440		1,295		3,449
Net income (loss) per share:

Basic	$	(1.42	)	$	(1.10	)	$	(0.19	)	$	(0.06	)	$	(0.06	)	$	(0.07	)	$	(0.09	)	$	(0.28	)	$	0.01	$	0.04	$	0.06	$	0.04	$	0.17
Diluted	$	(1.42	)	$	(1.10	)	$	(0.19	)	$	(0.06	)	$	(0.06	)	$	(0.07	)	$	(0.09	)	$	(0.28	)	$	0.00	$	0.02	$	0.05	$	0.04	$	0.12
Shares used in the computation:
Basic	13,810			14,006			14,284			14,394			14,399			14,448			14,704			14,560			14,792		15,185		23,734		29,005		20,738
Diluted	13,810			14,006			14,284			14,394			14,399			14,448			14,704			14,560			25,143		26,187		30,671		33,665		29,177
Supplemental information of stock-based compensation expense included in:
Cost of software, hosting and support	—			—			—			—			—			—			—			—			—		—		—		—		—
Cost of professional services	—			—			—			—			—			—			—			—			—		—		—		—		—
Sales and marketing	—			—			—			—			—			—			—			—			—		—		—		—		—
Research and development	—			—			—			—			—			—			—			—			—		—		—		—		—
General and administrative	—			—			—			—			—			—			—			—			—		—		—		—		—
Total stock-based compensation	—			—			—			—			—			—			—			—			—		—		—		—		—

	Amounts in thousands, except per share data
	2005															2006
	Q1			Q2			Q3			Q4			FY			Q1			Q2			Q3			YTD
Revenue:
Software, hosting and support	13,874			16,864			18,005			19,201			67,944			19,310			20,636			23,754			63,700
Professional services	4,468			4,214			5,149			5,373			19,204			5,321			6,272			6,334			17,927
Total revenue	18,342			21,078			23,154			24,574			87,148			24,631			26,908			30,088			81,627
Cost of revenue:
Software, hosting and support	2,064			2,276			2,253			2,518			9,111			2,771			3,159			3,667			9,597
Professional services	2,696			2,879			3,026			3,355			11,956			4,104			4,941			4,969			14,014
Total cost of revenue	4,760			5,155			5,279			5,873			21,067			6,875			8,100			8,636			23,611
Gross profit	13,582			15,923			17,875			18,701			66,081			17,756			18,808			21,452			58,016
Operating expenses:
Sales and marketing	9,457			10,557			11,248			11,421			42,683			13,726			14,852			16,535			45,113
Research and development	2,161			2,426			2,937			2,904			10,428			3,130			3,476			3,740			10,346
General and administrative	1,410			1,586			1,627			1,822			6,445			2,056			2,709			2,333			7,098
Total operating expenses	13,028			14,569			15,812			16,147			59,556			18,912			21,037			22,608			62,557
Operating income (loss)	554			1,354			2,063			2,554			6,525			(1,156		)	(2,229		)	(1,156		)	(4,541		)
Interest and other income (expense), net	292			331			440			583			1,646			672			768			740			2,180
Income (loss) before income taxes	846			1,685			2,503			3,137			8,171			(484		)	(1,461		)	(416		)	(2,361		)
(Provision) benefit for income taxes	(45		)	(126		)	(160		)	(147		)	(478		)	44			(294		)	(103		)	(353		)
Net income (loss)	801			1,559			2,343			2,990			7,693			(440		)	(1,755		)	(519		)	(2,714		)
Net income (loss) per share:
Basic	$	0.03		$	0.05		$	0.08		$	0.09		$	0.25		$	(0.01	)	$	(0.05	)	$	(0.02	)	$	(0.08	)
Diluted	$	0.02		$	0.05		$	0.07		$	0.09		$	0.23		$	(0.01	)	$	(0.05	)	$	(0.02	)	$	(0.08	)
Shares used in the computation:
Basic	29,816			30,232			30,802			31,652			30,631			31,943			32,172			32,316			32,144
Diluted	33,559			33,367			33,667			34,199			33,695			31,943			32,172			32,316			32,144
Supplemental information of stock-based compensation expense included in:
Cost of software, hosting and support	—			—			—			—			—			38			55			52			145
Cost of professional services	—			—			—			—			—			97			137			124			358
Sales and marketing	—			—			—			—			—			366			535			529			1,430
Research and development	—			—			—			—			—			159			233			230			622
General and administrative	—			—			—			—			—			123			718			179			1,020
Total stock-based compensation	—			—			—			—			—			783			1,678			1,114			3,575

RightNow provides this information as of the “last updated” date above and makes no commitment to subsequently update the information.

You are encouraged to read RightNow’s most recent reports on Form 10-K and Form 10-Q for a full explanation of our financial data and results.

Consolidated Statements of Cash Flow

Unaudited

Last updated October 25, 2006

	Amounts in thousands
	Fiscal Years						2003										2004
	2000		2001		2002		Q1		Q2		Q3		Q4		FY		Q1		Q2		Q3		Q4		FY
Operating activities
Net income (loss)	(19,647	)	(15,342	)	(2,749	)	(881	)	(864	)	(1,010	)	(1,365	)	(4,120	)	80		634		1,440		1,295		3,449
Noncash adjustments:
Depreciation and amortization	532		1,486		2,051		619		626		631		598		2,474		624		711		746		709		2,790
Provision for losses on accounts receivable	1,715		2,032		259		178		153		180		(34	)	477		85		117		349		(62	)	489
Stock-based compensation expense							—		—		—		—		—		—		—		—		—		—
Changes in operating accounts:	—
Receivables	(6,846	)	(1,295	)	(3,636	)	(2,216	)	(2,583	)	526		(2,405	)	(6,678	)	(1,550	)	(4,178	)	(5,366	)	(3,563	)	(14,657	)
Prepaid and other current assets	(459	)	(338	)	(95	)	(244	)	169		(105	)	24		(156	)	(261	)	(536	)	(344	)	(23	)	(1,164	)
Accounts payable and accrued liabilities	2,071		(435	)	(378	)	192		333		629		(114	)	1,040		580		438		532		425		1,975
Commissions and bonusses payable	789		(510	)	525		(152	)	34		224		414		520		(175	)	671		102		390		988
Deferred revenue	12,991		2,367		5,723		3,121		2,701		1,568		3,265		10,655		1,117		4,406		3,694		4,103		13,320
Other	114		(117	)	243		(39	)	(74	)	(205	)	425		107		(167	)	(241	)	(90	)	46		(452	)
Cash provided (used) by operating activities	(8,740	)	(12,152	)	1,943		578		495		2,438		808		4,319		333		2,022		1,063		3,320		6,738
Investing activities
Acquistion of property and equipment	(3,031	)	(2,265	)	(1,184	)	(277	)	(330	)	(486	)	(491	)	(1,584	)	(761	)	(858	)	(1,004	)	(957	)	(3,580	)
Business acquisitions/purchased technologies	(236	)	(739	)	—		—		—		(150	)	—		(150	)	—		(406	)	(95	)	(190	)	(691	)
Change in short-term investments, net	—		—		—		—		—		—		—		—		—		—		(25,943	)	(5,245	)	(31,188	)
Other	—		—		2		16		—		2		—		18		—		1		—		2		3
Cash used for investing activities	(3,267	)	(3,004	)	(1,182	)	(261	)	(330	)	(634	)	(491	)	(1,716	)	(761	)	(1,263	)	(27,042	)	(6,390	)	(35,456	)
Financing activities
Net proceeds from (payments on) long-term debt	(8	)	3,219		896		(150	)	(285	)	(1,739	)	(259	)	(2,433	)	474		341		(2,713	)	(15	)	(1,913	)
Proceeds from issuance of stock:
Preferred stock	14,955		1,026		—		—		—		—		—		—		—		—		—		—		—
Common stock issued under employee benefit plans	93		46		90		5		—		70		13		88		111		90		105		870		1,176
Initial public offering, net of offering costs	—		—		—		—		—		—		—		—		(172	)	(603	)	41,462		(715	)	39,972
Other	(94	)	—		—		—		—		—		—		—		(2	)	—		—		—		(2	)
Cash provided (used) by financing activities	14,946		4,291		986		(145	)	(285	)	(1,669	)	(246	)	(2,345	)	411		(172	)	38,854		140		39,233
Effect of foreign exchange rates	6		(5	)	33		5		20		44		(5	)	64		9		(27	)	19		68		69
Net change in cash and cash equivalents	2,945		(10,870	)	1,780		177		(100	)	179		66		322		(8	)	560		12,894		(2,862	)	10,584
Cash and cash equivalents at beginning of period	14,183		17,128		6,258		8,038		8,215		8,115		8,294		8,038		8,360		8,352		8,912		21,806		8,360
Cash and cash equivalents at end of period	17,128		6,258		8,038		8,215		8,115		8,294		8,360		8,360		8,352		8,912		21,806		18,944		18,944

	Amounts in thousands
	2005										2006
	Q1		Q2		Q3		Q4		FY		Q1		Q2		Q3		YTD
Operating activities
Net income (loss)	801		1,559		2,343		2,990		7,693		(440	)	(1,755	)	(519	)	(2,714	)
Noncash adjustments:
Depreciation and amortization	742		828		892		944		3,406		1,105		1,337		1,556		3,998
Provision for losses on accounts receivable	52		(8	)	216		161		421		(248	)	7		292		51
Stock-based compensation expense	—		—		783		1,678		1,114		3,575
Changes in operating accounts:
Receivables	(2,402	)	(5,866	)	(6,072	)	(4,796	)	(19,136	)	(9,798	)	1,386		(8,117	)	(16,529	)
Prepaid and other current assets	(44	)	67		(609	)	(208	)	(794	)	(167	)	8		(225	)	(384	)
Accounts payable and accrued liabilities	984		373		1,071		502		2,930		1,191		(638	)	(416	)	137
Commissions and bonusses payable	(663	)	588		807		(423	)	309		787		(752	)	932		967
Deferred revenue	3,819		4,941		6,523		4,484		19,767		12,976		5,349		15,184		33,509
Other	(50	)	82		77		190		299		(137	)	244		(8	)	99
Cash provided (used) by operating activities	3,239		2,564		5,248		3,844		14,895		6,052		6,864		9,793		22,709
Investing activities
Acquistion of property and equipment	(1,078	)	(1,070	)	(1,124	)	(1,697	)	(4,969	)	(1,140	)	(2,770	)	(1,020	)	(4,930	)
Business acquisitions/purchased technologies	—		(1,012	)	(23	)	(10	)	(1,045	)	(10	)	(8,731	)	43		(8,698	)
Change in short-term investments, net	11,488		(4,483	)	3,298		(2,431	)	7,872		(3,749	)	(8,140	)	(1,638	)	(13,527	)
Other	—		—		8		—		8		—		—		—
Cash used for investing activities	10,410		(6,565	)	2,159		(4,138	)	1,866		(4,899	)	(19,641	)	(2,615	)	(27,155	)
Financing activities
Net proceeds from (payments on) long-term debt	—		—		154		(7	)	147		(7	)	(7	)	(9	)	(23	)
Proceeds from issuance of stock:
Preferred stock	—		—		—		—		—		—		—		—		—
Common stock issued under employee benefit plans	588		1,217		1,767		1,706		5,278		432		567		363		1,362
Initial public offering, net of offering costs	—		—		—		—		—		—		—		—
Other	—		—		—		—		—		—		—		—
Cash provided (used) by financing activities	588		1,217		1,921		1,699		5,425		425		560		354		1,339
Effect of foreign exchange rates	(26	)	(79	)	(26	)	(125	)	(256	)	(8	)	319		36		347
Net change in cash and cash equivalents	14,211		(2,863	)	9,302		1,280		21,930		1,570		(11,898	)	7,568		(2,760	)
Cash and cash equivalents at beginning of period	18,944		33,155		30,292		39,594		18,944		40,874		42,444		30,546		40,874
Cash and cash equivalents at end of period	33,155		30,292		39,594		40,874		40,874		42,444		30,546		38,114		38,114

RightNow provides this information as of the “last updated” date above and makes no commitment to subsequently update the information.

You are encouraged to read RightNow’s most recent reports on Form 10-K and Form 10-Q for a full explanation of our financial data and results.

Supplemental Data Sheet

Unaudited

Last updated October 25, 2006

	Fiscal Year						2003										2004
	2000		2001		2002		Q1		Q2		Q3		Q4		FY		Q1		Q2		Q3		Q4		FY
Revenue  Mix (in thousands)
Term	6,504		15,757		19,810		5,336		5,730		6,192		6,730		23,988		8,491		8,384		9,553		9,793		36,221
Perpetual	4,045		3,241		3,528		940		1,210		1,265		1,897		5,312		2,229		3,325		3,423		4,566		13,543
Professional services	758		2,009		3,603		1,531		1,304		1,763		1,981		6,579		2,137		3,053		3,450		3,360		12,000
Total	11,307		21,007		26,941		7,807		8,244		9,220		10,608		35,879		12,857		14,762		16,426		17,719		61,764
Revenue Mix (% of total)
Term	57	%	75	%	74	%	68	%	69	%	67	%	63	%	67	%	66	%	56	%	58	%	55	%	59	%
Perpetual	36	%	15	%	13	%	12	%	15	%	14	%	18	%	15	%	17	%	23	%	21	%	26	%	22	%
Professional services	7	%	10	%	13	%	20	%	16	%	19	%	19	%	18	%	17	%	21	%	21	%	19	%	19	%
Revenue by Geography (in thousands)
Americas	11,026		16,522		21,940		6,421		6,376		6,148		8,216		27,161		9,188		10,955		12,421		12,635		45,199
Europe	281		2,311		4,041		1,249		1,237		2,305		1,667		6,458		2,443		3,553		3,188		3,608		12,792
Asia Pacific	—		2,174		960		137		631		767		725		2,260		1,226		254		817		1,476		3,773
Revenue by Geography (% of total)
Americas	98	%	79	%	81	%	82	%	77	%	67	%	77	%	76	%	71	%	74	%	76	%	72	%	73	%
Europe	2	%	11	%	15	%	16	%	15	%	25	%	16	%	18	%	19	%	24	%	19	%	20	%	21	%
Asia Pacific	0	%	10	%	4	%	2	%	8	%	8	%	7	%	6	%	10	%	2	%	5	%	8	%	6	%
Deferred Revenue (in thousands)
Current	12,317		14,843		17,392		19,428		21,510		23,349		26,127				25,368		30,780		32,796		36,020
Non-current	4,843		4,031		7,291		8,375		9,061		8,811		9,426				11,361		9,997		11,695		13,105
Total	17,160		18,874		24,683		27,803		30,571		32,160		35,553				36,729		40,777		44,491		49,125
Customers
New	593		361		227		38		56		57		60		211		69		74		88		80		311
Total (>)	1,000		1,100		900		900		900		900		1,000				1,000		1,100		1,100		1,200
Percent hosted	62	%	78	%	82	%	83	%	83	%	85	%	85	%			85	%	85	%	86	%	87	%		%
Interactions (in millions)	n/a		n/a		146		53		56		63		77		249		102		110		140		150		502
Employees
Worldwide	346		222		234		255		258		278		306				322		354		387		403

	2005										2006
	Q1		Q2		Q3		Q4		FY		Q1		Q2		Q3		YTD
Revenue  Mix (in thousands)
Term	10,624		10,791		11,695		12,946		46,056		13,977		15,083		16,710		45,770
Perpetual	3,250		6,073		6,310		6,255		21,888		5,333		5,553		7,044		17,930
Professional services	4,468		4,214		5,149		5,373		19,204		5,321		6,272		6,334		17,927
Total	18,342		21,078		23,154		24,574		87,148		24,631		26,908		30,088		81,627
Revenue Mix (% of total)
Term	58	%	51	%	51	%	53	%	53	%	56	%	56	%	56	%	56	%
Perpetual	18	%	29	%	27	%	25	%	25	%	22	%	21	%	23	%	22	%
Professional services	24	%	20	%	22	%	22	%	22	%	22	%	23	%	21	%	22	%
Revenue by Geography (in thousands)
Americas	13,757		16,652		17,291		16,710		64,410		17,368		20,072		23,847		61,287
Europe	2,751		3,372		3,752		5,652		15,527		5,014		5,335		4,732		15,081
Asia Pacific	1,834		1,054		2,111		2,212		7,211		2,249		1,501		1,509		5,259
Revenue by Geography (% of total)
Americas	75	%	79	%	75	%	68	%	74	%	71	%	74	%	79	%	76	%
Europe	15	%	16	%	16	%	23	%	18	%	20	%	20	%	16	%	18	%
Asia Pacific	10	%	5	%	9	%	9	%	8	%	9	%	6	%	5	%	6	%
Deferred Revenue (in thousands)
Current	37,899		40,669		45,694		48,673				54,191		56,222		59,218
Non-current	14,911		16,699		18,058		19,250				26,715		31,012		43,402
Total	52,810		57,368		63,752		67,923				80,906		87,234		102,620
Customers
New	60		80		92		80		312		97		70		83		250
Total (>)	1,200		1,300		1,400		1,400				1,500		1,700		1,700
Percent hosted	86	%	86	%	87		87	%			87	%	90	%	90	%
Interactions (in millions)	166		176		188		214		744		281		223		261		765
Employees
Worldwide	438		490		494		530				578		649		654

RightNow provides this information as of the “last updated” date above and makes no commitment to subsequently update the information.

You are encouraged to read RightNow’s most recent reports on Form 10-K and Form 10-Q for a full explanation of our financial data and results.