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ExactTarget’s Growth Continues

Posted on Wednesday, Mar 6th 2013

According to a recent report, the marketing automation industry is the fastest growing segment within the $4 billion CRM market. Researcher SiriusDecisions believes that adoption of marketing automation will grow 50% by the year 2015. Another report by TechNavio pegs the growth of the worldwide marketing automation market at 8.2% annually from 2011 through 2015. Growth within online marketing is projected to be driven by the increasing availability and adoption of SaaS-based marketing tools and the increased adoption of these tools by small and medium businesses. ExactTarget’s Financials
SaaS-based marketing solutions provider ExactTarget’s (NYSE:ET) Q4 revenues grew 42% over the year to $84.2 million. Revenue growth was driven by a 46% increase in recurring subscription revenues to $66.7 million in the quarter. They reported a loss of $0.10 per share compared with a loss of $0.42 per share reported a year ago for the quarter.

They ended the year with revenues rising 41% over the year to $292.3 million. Losses for the year shrank from $3.12 per share a year ago to $0.11 per share for the year.

For the current quarter, ExactTarget projects revenues of $87 million-$88 million, with a net loss of $0.09-$0.10 per share. They expect to end the year with revenues of $370 million-$374 million, with a net loss of $0.29-$0.31 per share.

ExactTarget’s International Expansion
ExactTarget has trying to expand their global footprint. During the last quarter, international revenues grew 47% to bring in $15.6 million. As part of their international growth, they expanded their global multilingual enterprise digital marking platform by adding a French Canadian user interface. ExactTarget’s tools, including email, mobile, social media, and data management applications, are now also available in English, Brazilian Portuguese, German, French, and French Canadian. They strengthened their global presence by opening new offices in Paris and Stockholm. At the end of the year, ExactTarget was present in seven countries outside the U.S., including Australia, Brazil, Canada, France, Germany, the United Kingdom, and Sweden.

ExactTarget’s Acquisition Spree
During the last quarter, ExactTarget has also been acquiring businesses. Last quarter, they announced the acquisition of analytics company iGoDigital for an estimated $21 million. Indianapolis-based iGoDigital offered tools that helped organizations improve their e-commerce offerings. Their solutions help track recommendations and the number of site visitors to improve the buying experience for end customers. Through their tools, organizations are also able to benefit from a predictive analytics services to improve a site’s design and content. Through the acquisition, ExactTarget will be able to expand their product recommendations solutions and predictive analytics offerings.

In October 2012, they also announced the acquisition of privately held business-to-business marketing automation startup Pardot for $95.5 million. Pardot’s software offerings help convert sales leads into customers and develop and analyze the cost effectiveness of marketing campaigns. They are focused on the SMB segment by helping these businesses generate and track sales leads. Pardot is believed to have recorded revenues of more than $7 million last year. ExactTarget plans to leverage the acquisition to create, deploy, and manage online lead-nurturing campaigns through integrations with salesforce.com, Microsoft Dynamics CRM, NetSuite, and SugarCRM.

Analysts are positive about seeing strong growth in digital marketing solutions. Spurred by the growth of the market, last December, Oracle also announced the $871 million acquisition of ExactTarget’s competitor, Eloqua. With revenues of nearly $24 million a quarter, Eloqua was a comparatively smaller player than ExactTarget, and ExactTarget will surely be pleased with Eloqua’s acquisition price. ExactTarget’s stock is trading at $22.72, with a market capitalization of $1.56 billion. The stock was priced at $19 for their IPO held in March 2012. Soon after listing, it touched 52-week highs of $29.88.

 

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