UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 001-34803

Qlik Technologies Inc.

(Exact name of registrant as specified in its charter)

Delaware		20-1643718
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
150 N. Radnor Chester Road, Suite E220
Radnor, Pennsylvania		19087
(Address of principal executive offices)		(Zip Code)

(888) 828-9768
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Date File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filed, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer.” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o		Accelerated filer o		Non-accelerated filer þ		Smaller reporting company o
				(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

As of August 1, 2011, there were 83,010,500 shares of the registrant’s common stock issued and outstanding.

 

 

TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of June 30, 2011 (unaudited) and December 31, 2010			1
Unaudited Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2011 and 2010			2
Unaudited Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2011 and 2010			3
Notes to Unaudited Consolidated Financial Statements			4
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			11
Item 3. Quantitative and Qualitative Disclosures About Market Risk			24
Item 4. Controls and Procedures			24
PART II — OTHER INFORMATION
Item 1. Legal Proceedings			25
Item 1A. Risk Factors			25
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			25
Item 3. Defaults Upon Senior Securities			26
Item 4. Removed and Reserved			26
Item 5. Other Information			26
Item 6. Exhibits			27
SIGNATURES			28
Exhibit 10.21.D
Exhibit 10.21.E
Exhibit 10.43
Exhibit 10.44
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

QLIK TECHNOLOGIES INC.

CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)

		June 30,				December 31,
		2011				2010
		(unaudited)
Assets
Current assets:
Cash and cash equivalents		$	174,503			$	158,712
Accounts receivable, net of allowance for doubtful accounts of $810 and $807, respectively			70,946				85,364
Prepaid expenses and other current assets			14,180				7,107
Deferred income taxes			527				527
Total current assets			260,156				251,710
Property and equipment, net			10,131				4,399
Intangible assets, net			306				388
Goodwill			2,861				2,746
Deferred income taxes			4,248				4,248
Deposits and other noncurrent assets			1,679				1,573
Total assets		$	279,381			$	265,064
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable		$	7,469			$	5,627
Deferred revenue			54,941				50,024
Accrued payroll and other related costs			27,976				25,262
Accrued expenses			16,921				21,391
Deferred income taxes			337				337
Total current liabilities			107,644				102,641
Long-term liabilities:
Deferred income taxes			48				48
Other long-term liabilities			7,605				3,185
Total liabilities			115,297				105,874
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.0001 par value, 10,000,000 authorized, none issued and outstanding at June 30, 2011 and December 31, 2010			—				—
Common stock, $0.0001 par value, 300,000,000 shares authorized; 82,847,266 shares issued and outstanding at June 30, 2011 and 78,752,390 shares issued and outstanding at December 31, 2010			8				8
Additional paid-in-capital			167,557				157,928
(Accumulated deficit) retained earnings			(6,610	)			133
Accumulated other comprehensive income			3,129				1,121
Total stockholders’ equity			164,084				159,190
Total liabilities and stockholders’ equity		$	279,381			$	265,064

The accompanying notes are an integral part of these unaudited consolidated financial statements.

QLIK TECHNOLOGIES INC.

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)

		Three Months Ended June 30,								Six Months Ended June 30,
		2011				2010				2011				2010
Revenue:
License revenue		$	45,329			$	32,544			$	83,214			$	58,766
Maintenance revenue			21,780				13,519				41,157				26,588
Professional services revenue			6,933				5,067				12,690				9,541
Total revenue			74,042				51,130				137,061				94,895
Cost of revenue:
License revenue			777				1,178				1,692				1,857
Maintenance revenue			1,697				1,013				3,238				1,708
Professional services revenue			6,126				3,554				11,325				6,466
Total cost of revenue			8,600				5,745				16,255				10,031
Gross profit			65,442				45,385				120,806				84,864
Operating expenses:
Sales and marketing			45,393				27,751				83,065				53,164
Research and development			6,531				2,980				11,843				5,644
General and administrative			17,119				8,813				34,508				18,206
Total operating expenses			69,043				39,544				129,416				77,014
Income (loss) from operations			(3,601	)			5,841				(8,610	)			7,850
Other income (expense), net:
Interest income (expense), net			27				(185	)			60				(443	)
Change in fair value of warrants			—				(1,408	)			—				(1,962	)
Foreign exchange gain (loss) and other income (expense), net			361				664				(1,113	)			(698	)
Total other income (expense), net			388				(929	)			(1,053	)			(3,103	)
Income (loss) before (provision) benefit for income taxes			(3,213	)			4,912				(9,663	)			4,747
(Provision) benefit for income taxes			1,043				(1,374	)			2,920				(1,328	)
Net income (loss)		$	(2,170	)		$	3,538			$	(6,743	)		$	3,419
Net income (loss) per common share:
Basic		$	(0.03	)		$	0.02			$	(0.08	)		$	0.02
Diluted		$	(0.03	)		$	0.02			$	(0.08	)		$	0.02
Weighted average number of common shares:
Basic			81,724,971				17,222,001				80,486,401				17,035,083
Diluted			81,724,971				24,711,969				80,486,401				24,150,670

The accompanying notes are an integral part of these unaudited consolidated financial statements.

QLIK TECHNOLOGIES INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

		Six Months Ended June 30,
		2011				2010
Cash flows from operating activities
Net income (loss)		$	(6,743	)		$	3,419
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization			1,196				739
Stock-based compensation expense			3,500				1,049
Excess tax benefit from stock-based compensation			—				(656	)
Other non-cash items			448				300
Change in fair value of warrants			—				1,962
Unrealized foreign currency (gain) loss, net			(946	)			1,169
Changes in assets and liabilities:
Accounts receivable			18,515				10,148
Prepaid expenses and other assets			(6,263	)			(1,345	)
Deferred revenue			2,284				2,932
Accounts payable and other liabilities			166				(2,330	)
Net cash provided by operating activities			12,157				17,387
Cash flows from investing activities
Purchase of property and equipment			(5,139	)			(1,074	)
Acquisition, net of cash acquired			(179	)			193
Net cash used in investing activities			(5,318	)			(881	)
Cash flows from financing activities
Proceeds from exercise and issuance of common stock options			6,127				951
Payments on line of credit and long-term debt, net			—				(2,310	)
Excess tax benefit on stock-based compensation			—				656
Payments of offering costs			—				(1,769	)
Net cash provided by (used in) financing activities			6,127				(2,472	)
Effect of exchange rates on cash			2,825				(3,046	)
Net increase in cash and cash equivalents			15,791				10,988
Cash and cash equivalents, beginning of period			158,712				24,852
Cash and cash equivalents, end of period		$	174,503			$	35,840
Supplemental cash flow information:
Cash paid during the period for interest		$	58			$	329
Cash paid during the period for income taxes		$	11,865			$	786
Non-cash investing activities:
Leasehold improvement allowance received under operating lease		$	1,764			$	—
Common stock issued for acquisition of business		$	—			$	622

The accompanying notes are an integral part of these unaudited consolidated financial statements.

QLIK TECHNOLOGIES INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data)

(1) Description of Business

Qlik Technologies Inc. (“We, QlikTech or the Company”) has pioneered a powerful, user-driven business intelligence solution that enables our customers to make better and faster business decisions. Our Business Discovery platform, QlikView, combines enterprise-class analytics and search functionality with the simplicity and ease-of-use found in office productivity software tools for a broad set of business users. Through its wholly owned subsidiaries, the Company sells software solutions that are powered by our in-memory associative search technology, which has utilized rapid advances in computing power to yield significant improvement in flexibility and performance at a lower cost than traditional business intelligence solutions.

(2) Significant Accounting Policies

Significant Accounting Policies

The Company’s significant accounting policies are disclosed in the audited consolidated financial statements for the year ended December 31, 2010 included in the Company’s Annual Report on Form 10-K (file number 001-34803), filed with the SEC on March 16, 2011. Since the date of those financial statements, there have been no material changes to the Company’s significant accounting policies.

Basis of Presentation and Consolidation

The accompanying unaudited consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All material intercompany balances and transactions have been eliminated. Prior year amounts have been reclassified where appropriate to conform to the current year classification for comparative purposes.

Interim Financial Statements

The accompanying interim unaudited consolidated financial statements and related disclosures are unaudited and have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) on the same basis as the audited consolidated financial statements for the year ended December 31, 2010 included in the Company’s Annual Report on Form 10-K, filed with the SEC on March 16, 2011 and, in the opinion of management, include all adjustments of a normal recurring nature considered necessary to present fairly the Company’s financial position, results of operations, and cash flows for the six months ended June 30, 2011 and 2010. The results of operations for the three and six months ended June 30, 2011 and 2010 are not necessarily indicative of the results that may be expected for the year ending December 31, 2011 or any other future periods. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted under the Securities and Exchange Commission’s (“SEC”) rules and regulations. These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes for the year ended December 31, 2010. The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to the Quarterly Report on Form 10-Q and, therefore, do not include all information and footnotes required by U.S. GAAP for complete financial statements.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

On an ongoing basis, the Company evaluates its estimates, including those related to the accounts receivable allowance, useful lives of long-lived assets, the recoverability of goodwill and other intangible assets, assumptions used for the purpose of determining stock-based compensation expense and income taxes, among others. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying value of assets and liabilities as well as reported revenue and expenses during the periods presented.

Foreign Currency Translation

The financial statements of the Company’s foreign operations are measured using the local currency as the functional currency. The local currency assets and liabilities are translated at the rate of exchange to the U.S. dollar on the balance sheet date and the local currency revenues and expenses are translated at average rates of exchange to the U.S. dollar during the reporting periods. Foreign currency transaction gains (losses) have been reflected as a component of the Company’s statements of operations and foreign currency translation gains (losses) have been included as a component of accumulated other comprehensive income (loss). Gains and losses from foreign currency transactions are included as a component of other income (expense), net.

Business Combinations

The Company recognizes all of the assets acquired, liabilities assumed and contingent consideration at their fair value on the acquisition date. The purchase price allocation process requires management to make significant estimates and assumptions, especially at the acquisition date, with respect to intangible assets acquired, estimated contingent consideration payments and pre-acquisition contingencies assumed. Unanticipated events and circumstances may occur which may affect the accuracy or validity of such assumptions, estimates or actual results. Additionally, any change in the fair value of the acquisition-related contingent consideration subsequent to the acquisition date, including changes from events after the acquisition date, will be recognized in earnings in the period of the estimated fair value change. All other changes in a valuation allowance or uncertain tax positions are recognized as a reduction of or an increase to income tax expense.

Acquisition-related transaction costs, including legal and accounting fees and other external costs directly related to the acquisition, are recognized separately from the acquisition and expensed as incurred in general and administrative expenses in the unaudited consolidated statements of operations.

Accumulated Comprehensive Income (Loss)

The Company classifies items of accumulated other comprehensive income (loss) separately within stockholders’ equity. For the three and six months ended June 30, 2011 and 2010, accumulated comprehensive income (loss) was:

		Three Months Ended June 30,								Six Months Ended June 30,
		2011				2010				2011				2010
Net income (loss)		$	(2,170	)		$	3,538			$	(6,743	)		$	3,419
Foreign currency translation gain (loss)			203				(1,054	)			2,008				(640	)
Accumulated comprehensive income (loss)		$	(1,967	)		$	2,484			$	(4,735	)		$	2,779

Fair Value of Financial Instruments

The carrying amount of cash and cash equivalents, accounts receivable, other current assets, and accounts payable approximate fair value, due to their short-term nature.

Stock-Based Compensation

The Company recognizes the cost of stock-based compensation based on the fair value of those awards at the date of grant over the requisite service period. The Company uses the Black-Scholes-Merton (“Black-Scholes”) option pricing model to determine the fair value of common stock option awards. The fair value of a restricted stock unit is determined by using the fair value of the Company’s common stock on the date of grant. Stock-based compensation plans, related expenses and assumptions used in the Black-Scholes option pricing model are more fully described in Note 8 to these unaudited consolidated financial statements. The estimated fair value of stock-based compensation awards on the date of grant is amortized on a straight-line basis over the requisite service period. Stock-based compensation expense is recorded within cost of revenue, sales and marketing, research and development, and general and administrative expenses.

The following table sets forth the total stock-based compensation expense included in the unaudited consolidated statements of operations for the three and six months ended June 30, 2011 and 2010:

		Three Months Ended June 30,								Six Months Ended June 30,
		2011				2010				2011				2010
Cost of revenue		$	156			$	26			$	252			$	52
Sales and marketing			1,079				308				1,928				568
Research and development			91				21				133				42
General and administrative			674				194				1,187				387
		$	2,000			$	549			$	3,500			$	1,049

Net Income (Loss) Attributable to Common Share

The following table sets forth the computation of basic and diluted net income (loss) per common share for the periods indicated:

		Three Months Ended June 30,								Six Months Ended June 30,
		2011				2010				2011				2010
Basic net income (loss) per common share calculation:
Net income (loss)		$	(2,170	)		$	3,538			$	(6,743	)		$	3,419
Less: Undistributed earnings allocated to participating securities			—				(3,129	)			—				(3,056	)
Net income (loss) attributable to common shares			(2,170	)			409				(6,743	)			363
Weighted average common shares outstanding			81,724,971				17,222,001				80,486,401				17,035,083
Net income (loss) per share — Basic		$	(0.03	)		$	0.02			$	(0.08	)		$	0.02
Diluted net (loss) income per common share calculation:
Net income (loss)		$	(2,170	)		$	3,538			$	(6,743	)		$	3,419
Less: Undistributed earnings allocated to participating securities			—				(3,129	)			—				(3,056	)
Net income (loss) attributable to common shares			(2,170	)			409				(6,743	)			363
Weighted average shares used to compute basic net income (loss) per share			81,724,971				17,222,001				80,486,401				17,035,083
Effect of potentially dilutive securities:
Employee stock options			—				7,489,968				—				7,115,587
Weighted average shares used to compute diluted net income (loss) per share			81,724,971				24,711,969				80,486,401				24,150,670
Diluted net income (loss) per share		$	(0.03	)		$	0.02			$	(0.08	)		$	0.02

Diluted net income (loss) per common share for the periods presented does not reflect the following potential common shares as the effect would be anti-dilutive:

		Three Months Ended June 30,								Six Months Ended June 30,
		2011				2010				2011				2010
Common stock options			9,269,794				725,000				9,269,794				725,000
Restricted stock units			57,312				—				57,312				—
Common stock warrants			—				474,282				—				474,282
			9,327,106				1,199,282				9,327,106				1,199,282

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption.

In January 2010, the FASB updated the accounting guidance related to fair value measurements disclosures. The updated guidance (i) requires separate disclosure of significant transfers in and out of Level 1 and Level 2 fair value measurements, (ii) requires disclosure of Level 3 fair value measurements activity on a gross basis, (iii) clarifies existing disaggregation requirements, and (iv) clarifies existing input and valuation technique disclosure requirements. The updated guidance was effective for the Company for interim or annual periods beginning after January 1, 2010, except for Level 3 fair value measurement disclosure requirements, which are effective for fiscal years beginning after January 1, 2011. The Company adopted the aspects of the guidance on January 1, 2010 and adopted the remaining guidance on January 1, 2011. The adoption of the guidance had no material impact on the consolidated financial statements.

In June 2010, the FASB issued an Accounting Standards Update to the Comprehensive Income Topic in the ASC aimed at increasing the prominence of items reported in other comprehensive income in the financial statements. This update requires companies to present comprehensive income in a single statement below net income or in a separate statement of comprehensive income immediately following the income statement. Companies will no longer be allowed to present comprehensive income on the statement of changes in shareholders’ equity. In both options, companies must present the components of net income, total net income, the components of other comprehensive income, total other comprehensive income and total comprehensive income. This update does not change which items are reported in other comprehensive income or the requirement to report reclassifications of items from other comprehensive income to net income. This requirement will become effective for the Company beginning with the Quarterly Report on Form 10-Q for the quarter ended March 31, 2012 and will require retrospective application for all periods presented.

(3) Acquisitions

On January 22, 2010, the Company completed its acquisition of Syllogic Corporation for total consideration of $1.1 million. The purchase price consisted of 120,000 shares of common stock valued at $0.6 million and contingent cash consideration of $0.5 million, which is estimated to be paid out over a four year period. The total maximum contingent cash consideration that could be paid pursuant to the agreement is $0.8 million. The Company paid $0.2 million through June 30, 2011, based on achievement of certain financial targets.

(4) Goodwill and Other Intangible Assets

The cost of finite-lived intangible assets is amortized on a straight-line basis over their estimated useful lives. The estimated useful lives of these assets range from one to five years. Amortization of intangible assets was de minimus for the three months ended June 30, 2011 and 2010, respectively. Amortization of intangible assets was $0.1 million and $0.1 million for the six months ended June 30, 2011 and 2010, respectively. The estimated aggregate amortization expense for each of the succeeding years is as follows: $0.1 million for the remainder of 2011 and $0.2 million in 2012. The Company evaluates the useful lives of these assets on a periodic basis and tests for impairments whenever events or changes in circumstances occur that could impact the recoverability of these assets.

The change in goodwill in the unaudited consolidated balance sheet during the six months ended June 30, 2011 was due to foreign currency translation.

(5) Fair Value Measurements

The Company evaluates assets and liabilities subject to fair value measurements on a recurring and nonrecurring basis to determine the appropriate level to classify them for each reporting period. This determination requires significant judgments to be made by the Company. The Company estimated the fair value of the Syllogic Corporation contingency using a probability-weighted discount cash flow model. The contingency is more fully described in Note 3 to these unaudited consolidated financial statements. This fair value was classified as Level 3 because it was based on significant observable inputs that are supported by little or no market activity and reflect our own assumptions. There were no material changes in fair value from December 31, 2010 to June 30, 2011.

Assets and liabilities that are measured at fair value on a non-recurring basis include intangible assets and goodwill. These items are recognized at fair value when they are considered to be impaired. During the three and six months ended June 30, 2011 and the year ended December 31, 2010, there were no fair value adjustments for assets and liabilities measured on a non-recurring basis.

(6) (Provision) Benefit for Income Taxes

The effective tax rate for the three months ended June 30, 2011 was a benefit of 32.5% compared to a provision of 28.0% in the prior-year period. The effective tax rate for the six months ended June 30, 2011 was a benefit of 30.2% compared to a provision of 28.0% in the prior-year period. The Company’s (provision) benefit for income taxes was based on our estimated annual effective tax rate adjusted for the recognition of discrete items. The Company’s estimated annual effective tax rate principally includes the U.S. federal statutory rate, state income taxes and the impact of foreign income taxed at different rates. The Company operates in an international environment with significant operations in various locations outside the U.S. Accordingly, the consolidated income tax rate is a composite rate reflecting the Company’s income (loss) and the applicable tax rate in the various locations where the Company operates.

(7) Business and Geographic Segment Information

The Company currently operates in one operating business segment, namely, the development, commercialization and implementation of software products and related services. The Company is managed and operated as one business. A single management team that reports to the chief operating decision maker comprehensively manages the entire business. The Company does not operate any material separate lines of business or separate business entities with respect to its products or product development. Accordingly, the Company views its business and manages its operations as one reportable segment.

The following geographic data includes revenues generated by subsidiaries located within that geographic area. The Company’s revenues were generated in the following geographic regions for the periods indicated:

		Three Months Ended June 30,								Six Months Ended June 30,
		2011				2010				2011				2010
The Americas		$	22,736			$	15,771			$	43,372			$	28,522
Europe			44,738				31,898				82,005				59,161
Rest of world			6,568				3,461				11,684				7,212
		$	74,042			$	51,130			$	137,061			$	94,895

(8) Stock-Based Compensation

Common Stock Options

The following provides a summary of the common stock option activity for the Company for the six months ended June 30, 2011:

										Weighted-
										Average
						Weighted-				Remaining
		Number of				Average				Contractual				Aggregrate
		Shares				Exercise Price				Term (Years)				Intrinsic Value
Outstanding as of January 1, 2011			12,053,445			$	2.95				6.71
Granted			1,462,500			$	25.64
Exercised			(4,094,876	)		$	1.52
Forfeited			(151,275	)		$	9.19
Outstanding as of June 30, 2011			9,269,794			$	7.05				7.17			$	250,378
Exercisable at June 30, 2011			4,489,994			$	1.80				5.81			$	144,852
Vested and expected to vest at June 30, 2011			8,712,947			$	7.09				7.17			$	234,988

The Company’s 2010 Equity Incentive Plan (“2010 Plan”) took effect on the effective date of the registration statement, July 16, 2010, for the Company’s initial public offering (“IPO”). The Company initially reserved 3,300,000 shares of its common stock for issuance under the 2010 Plan. The number of shares reserved for issuance under the 2010 Plan will be increased automatically on January 1st of each year, starting with 2011, by a number equal to the smallest of (i) 3,300,000 shares; (ii) 3.75% of the shares of common stock outstanding at that time; or (iii) a number of shares determined by the Company’s board of directors. In February 2011, the Board of Directors of the Company authorized an automatic increase to the 2010 Plan equal to 2,952,968 shares. As of June 30, 2011, there were 4,175,256 shares available for issuance under the 2010 Plan.

For the six months ended June 30, 2011 and 2010, the Company issued common stock options exercisable for 1,462,500 and 1,250,500 shares, respectively, to employees and non-employee directors. The grant date weighted-average fair value per common stock option for the six months ended June 30, 2011 and 2010 was $12.34 and $6.18, respectively.

Proceeds from the exercise of common stock options were $6.1 million and $0.9 million for the six months ended June 30, 2011 and 2010, respectively. The total intrinsic value of common stock options exercised during the six months ended June 30, 2011 and 2010 was $106.7 million and $3.7 million, respectively. For the six months ended June 30, 2011, the Company has not recognized any excess tax benefits on stock options exercised. The excess tax benefit will be recorded to additional paid-in-capital when realized. The Company recognized an excess tax benefit on such exercises for the six months ended June 30, 2010 of $0.7 million.

The assumptions used in the Black-Scholes option pricing model are:

		Three Months Ended June 30,								Six Months Ended June 30,
		2011				2010				2011				2010
Expected dividend yield		0.0%				0.0%				0.0%				0.0%
Risk-free interest rate			1.9% - 2.2%			2.4%					1.9% - 2.7%				1.9% - 2.7%
Expected volatility		45.9% - 46.4%				49.2%				45.9% - 47.0%				48.7% - 50.2%
Expected life (Swedish grants, in years)		4				4				4				4
Expected life (all other grants, in years)		6.25				6.25				6.25				6.25

For the three months ended June 30, 2011 and 2010, the Company recorded stock-based compensation expenses of $1.8 million and $0.5 million, respectively, related to common stock option grants. For the six months ended June 30, 2011 and 2010, the Company recorded stock-based compensation expenses of $3.2 million and $1.0 million, respectively, related to common stock option grants.

As of June 30, 2011, there was $22.5 million of total unrecognized compensation cost, net of estimated forfeitures, related to non-vested employee and non-employee director common stock options.

Restricted Stock Units

The following provides a summary of the restricted stock unit activity for the Company as of the six months ended June 30, 2011:

						Weighted-
						Average
		Number of				Grant Date				Aggregrate
		Shares				Fair Value				Intrinsic Value
Outstanding as of January 1, 2011			40,820			$	11.02
Granted			16,492				31.83
Vested			—				—
Forfeited			—				—
Unvested as of June 30, 2011			57,312			$	17.01			$	977
Vested and expected to vest at June 30, 2011			57,312			$	17.01			$	977

The Company grants restricted stock unit awards to its non-employee directors under the provisions of the 2010 Plan. The cost of a restricted stock unit is determined using the fair value of the Company’s common stock on the date of grant. A restricted stock unit award entitles the holder to receive shares of the Company’s common stock as the award vests. Vesting may be based on length of service, the attainment of performance-based milestones, or a combination of both. Stock-based compensation expense is amortized on a straight-line basis over the vesting period.

In May 2011, the Company granted restricted stock unit awards for an aggregate of 16,492 shares of common stock to its non-employee directors having an aggregate value of $0.5 million based on the closing price of the Company’s stock price of $31.83 at the date of grant.

For the three months ended June 30, 2011, the Company recorded stock-based compensation expenses of $0.2 million related to restricted stock unit awards. For the six months ended June 30, 2011, the Company recorded stock-based compensation expenses of $0.3 million related to restricted stock unit awards. For the three and six months ended June 30, 2010, there was no stock-based compensation expense related to restricted stock unit awards.

As of June 30, 2011, there was $0.5 million of total unrecognized compensation cost, net of estimated forfeitures, related to unvested restricted stock units. This amount will be amortized on a straight-line basis over the requisite service period related to the restricted unit grants.

(9) Commitments and Contingencies

In May 2011, the Company began to occupy a new leased facility in Lund, Sweden, and simultaneously ceased use of its previous leased facility in Lund. In July 2011, the Company reached an agreement with the landlord of the previous leased facility to allow the Company to terminate the lease agreement in exchange for a lease termination fee of 9.5 million Swedish kronor (approximately $1.5 million based on an assumed exchanged rate of 0.16 as of June 30, 2011). This lease termination fee is payable no later than September 30, 2011, and is included in accrued expenses on the Company’s unaudited consolidated balance sheet as of June 30, 2011. In addition to the lease termination fee, the Company incurred $0.4 million in rent charges following its abandonment of the previous leased facility as well as an impairment charge of $0.3 million related to the write-off of leasehold improvements from the previous leased facility. These items resulted in aggregate lease termination costs of $2.2 million and are recorded in general and administrative expenses in the accompanying unaudited consolidated statements of operations for the three and six months ended June 30, 2011.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto and management’s discussion and analysis of financial condition and results of operations for the year ended December 31, 2010 included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission, or SEC, on March 16, 2011. This Quarterly Report on Form 10-Q contains forward-looking statements, including, but not limited to, statements regarding the value and effectiveness of our products, the introduction of product enhancements or additional products and our growth, expansion and market leadership, that involve risks, uncertainties, assumptions, and other factors which, if they do not materialize or prove correct, could cause our results to differ materially from those expressed or implied by such forward-looking statements. All statements, other than statements of historical fact, are statements that could be deemed forward-looking statements, including statements containing the words “predicts,” “plan,” “expects,” “anticipates,” “believes,” “goal,” “target,” “estimate,” “potential,” “may,” “will,” “might,” “momentum,” “could,” and similar words. We intend all such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projected in such statements due to various factors, including but not limited to:

	•		risk and uncertainties inherent in our business;
	•		our ability to attract new customers and retain existing customers;
	•		our ability to effectively sell, service and support our products;
	•		our ability to manage our international operations;
	•		our ability to compete effectively;
	•		our ability to develop and introduce new products and add-ons or enhancements to existing products;
	•		our ability to continue to promote and maintain our brand in a cost-effective manner;
	•		our ability to manage growth;
	•		our ability to attract and retain key personnel;
	•		the scope and validity of intellectual property rights applicable to our products;
	•		adverse economic conditions in general and adverse economic conditions specifically affecting the markets in which we operate; and
	•		other risks discussed in the section titled “Risk Factors,” set forth in Part I, Item 1A of our Annual Report on Form 10-K, the section titled “Risk Factors, set forth in Part II, Item 1A of this Quarterly Report on Form 10-Q and elsewhere in this Report.

Past performance is not necessarily indicative of future results. There can be no assurance that the actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, us. Therefore, no assurance can be given that the outcomes stated in such forward-looking statements and estimates will be achieved.

The forward-looking statements in this Quarterly Report on Form 10-Q represent our views as of the date of this Quarterly Report on Form 10-Q. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we undertake no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Quarterly Report on Form 10-Q.

Introduction

Management’s Discussion and Analysis of Financial Condition and Results of Operations is provided to help provide an understanding of our financial condition and results of operations. This item of our Quarterly Report on Form 10-Q is organized as follows:

	•		Overview and Key Financial Metrics and Trends. This section provides a general description of our business, the key financial metrics that we use in assessing our performance, and anticipated trends that we expect to affect our financial condition and results of operations.
	•		Critical Accounting Policies and Estimates. This section discusses accounting policies that are considered important to our financial condition and results of operations. The accounting policies require significant judgment or require estimates on our part in applying them. Our significant accounting policies, including those considered to be critical accounting policies, are summarized in Note 2 to the unaudited consolidated financial statements.
	•		Consolidated Results of Operations. This section provides an analysis of our results of operations for the three and six months ended June 30, 2011 and 2010.
	•		Seasonality. This section discusses the seasonality in the sale of our products and services.

	•		Liquidity and Capital Resources. This section provides an analysis of our cash flows for the six months ended June 30, 2011 and 2010, a discussion of our capital requirements, and the resources available to us to meet those requirements.
	•		Contractual Obligations and Off-Balance Sheet Arrangements. This section discusses contractual obligations and commitments and off-balance sheet arrangements expected to have an impact on our liquidity and cash flow in future periods.
	•		Inflation. This section discusses inflation that could impact our financial condition and results of operations.
	•		Recent Accounting Pronouncements. This section provides for recent accounting pronouncements that could impact our financial condition and results of operations.

Overview

We have pioneered a powerful, user-driven business intelligence solution that enables our customers to make better and faster business decisions. Our Business Discovery platform, QlikView, combines enterprise-class analytics and search functionality with the simplicity and ease-of-use found in office productivity software tools for a broad set of business users. QlikView is powered by our in-memory associative search technology, which has utilized rapid advances in computing power to yield significant improvement in flexibility and performance at a lower cost than traditional business intelligence solutions. We have grown our customer base from over 4,000 active customers in 2006 to approximately 21,000 active customers as of June 30, 2011 and increased our revenue at a 50% compound annual growth rate during the same period. We added an average of approximately 400 new customers per month during fiscal year 2010. Our solution addresses the needs of a diverse range of customers from middle market customers to large enterprises such as Autodesk, Campbell Soup Company, Colonial Life, The Dannon Company, Inc., Heidelberger Druckmaschinen AG, ING, Kraft foods, Lifetime Brands, Nasdaq OMX, National Health Service (NHS), Qualcomm, Symantec and Volvo Car UK Limited. We currently have customers in over 100 countries, and approximately 74% and 73% of our revenue for the three and six months ended June 30, 2011, respectively and approximately 75% of our revenue for the three and six months ended June 30, 2010, were derived internationally.

We have a differentiated business model designed to accelerate the adoption of our product by reducing the time and cost to purchase and implement our software. Our low risk approach to product sales, which offers free product downloads to individuals and a 30-day money back guarantee upon purchase, provides a needed alternative to costly, all-or-nothing, traditional business intelligence models. We initially focus on specific business users or departments within a prospective customer’s organization and seek to solve a targeted business need. After demonstrating QlikView’s benefits to initial adopters within an organization, we work to expand sales of our product to other business units, geographies and use cases with the long-term goal of broad organizational deployment.

We license QlikView under perpetual licenses which include one year of maintenance as part of the initial purchase price of the product. Our customers can renew, and generally have renewed, their maintenance agreements for a fee that is based upon a percentage of the initial license fee paid. For the fiscal year ended December 31, 2010, our total revenue was comprised of 64% license revenue, 26% maintenance revenue, and 10% professional services revenue. For the six months ended June 30, 2011, our total revenue was comprised of 61% license revenue, 30% maintenance revenue and 9% professional services revenue. We have a diversified distribution model that consists of a direct sales force and a partner network of resellers, OEM relationships and systems integrators which accounted for more than 50% of our total product license and first years’ maintenance billings during the three and six months ended June 30, 2011 and 2010. Additionally, our online QlikCommunity provides us with a loyal and growing network of users who promote our software, provide support for other users and contribute valuable insights and feedback for our product development efforts.

To complement QlikView, we have developed a differentiated business model that has the following attributes:

	•		Broad User Focus — marketing and selling QlikView directly to the business user by providing an easy-to-use platform that can be used with minimal training.
	•		Low Risk Rapid Product Adoption — providing a low risk alternative to costly, all-or-nothing, enterprise-wide deployment requirements.
	•		“Land and Expand” Customer Penetration — initially targeting business users in an organization to create a loyal user base that promotes broad adoption of our software platform across an organization.
	•		Globally Diversified Distribution Model — employing a multi-pronged international sales approach that leverages a direct sales force and partner network.
	•		Community-Based Marketing and Support — augmenting our development, marketing and support efforts through our online QlikCommunity.

In evaluating our operating results we focus on the productivity of our sales force, the effectiveness of our local and corporate level marketing, our ability to close opportunities generated by our marketing leads and the competitiveness of our technology. In each of these areas, we have taken steps designed to improve our operating results, including undertaking additional sales training for our sales representatives, hiring more experienced regional sales management, investing further in our corporate website to improve its use as an effective lead generative tool, developing a partner enablement program to focus on the results of our sales partners around the world and expanding our research and development staff with a focus on testing and quality assurance.

From a risk perspective, we have had to deal with the impact of the recessionary global environment during the past several years, and the unsettled global economic environment could affect our operating results in future periods. We have faced pricing pressure from some of our larger competitors to which we have attempted to respond by focusing on the value delivered by QlikView in comparison to more traditional business intelligence products, and we believe that this has helped to minimize the loss of potential new business and existing customers from this pressure. Also, the rapid growth in our business has required the continued hiring of experienced staff across all of our geographic territories. To aid this effort we have focused on improving our local recruiting initiatives, as well as developing further internal training programs to prepare executives for greater responsibilities.

We were founded in Sweden in 1993. From 1993 until 1999, our activities were focused on software research and development that resulted in QlikView’s core technology, and from 1999 until 2004 we focused on the commercialization of our technology primarily in the Nordic market and limited regions of Europe. In late 2004, we reincorporated in Delaware and began to broaden our marketing and sales activities in the U.S. and continued our expansion globally.

Key Financial Metrics and Trends

Revenues

Our revenue is comprised of license, maintenance and professional services. We license our software under perpetual licenses which include one year of maintenance as part of the initial purchase price of the product. License revenue reflects the revenue recognized from sales of licenses to new customers and additional licenses to existing customers. Historically, the majority of our license revenues have come from new customers. However, going forward we seek to increase the contribution from existing customers based upon our “land and expand” sales strategy. Customers can renew, and generally have renewed, their maintenance agreements for a fee that is based upon a percentage of the initial license fee paid. Current customers with maintenance agreements are entitled to receive unspecified upgrades and enhancements when and if they become available. We have experienced growth in maintenance revenue primarily due to increased license sales and growth in our customer base and high retention of those customers. In 2010 and for the six months ended June 30, 2011, our maintenance renewal rates exceeded 85%. Professional services revenue is comprised of training, installation and other consulting revenues. Given the ease of implementation of our product and our relationship with our partners, professional services revenue for the six months ended June 30, 2011 and 2010 was approximately 9% and 10%, respectively, of total revenue. We do not expect that proportion to change significantly during the near term. Prior to 2009, we generated the majority of sales through our direct sales channel rather than through our partner network. However, the contribution from our partner network continues to grow, and we anticipate that revenues from partners will continue to be more than 50% of total revenues. Given the size of the U.S. market and our current limited penetration there, we expect that the U.S. will represent our largest growth opportunity during the near term and will likely be an important contributor to future revenue growth. Due to the global diversity of our customer base, our results are impacted by movements in the currencies of the major territories in which we operate. The primary currencies impacting results are the U.S. dollar (our functional currency), the Swedish kronor, the euro and the British pound. Inflation and changing prices had no material effect on our sales, revenue or operating income (loss) from continuing operations during the three and six months ended June 30, 2011 and 2010.

Cost of Revenue

Cost of revenue primarily consists of personnel costs, fees paid to subcontractors providing technical support services, referral fees paid to third parties in connection with software license sales and other discrete professional services. Personnel costs include salaries, employee benefit and social costs, bonuses, stock-based compensation and direct overhead.

Operating Expenses

We classify our operating expenses into three categories: sales and marketing, research and development and general and administrative. Our operating expenses primarily consist of personnel costs, travel costs, sales commissions, marketing program costs, facilities, legal, accounting, consulting and other professional services costs and depreciation and amortization. Personnel costs include salaries, employee benefit and social costs, bonuses, stock-based compensation and direct overhead. Historically, we have focused on the continued growth of our license revenues, and as a result, sales and marketing has represented the largest amount of total expenses both in absolute dollar terms and as a percentage of total revenues. Going forward, we expect to drive greater efficiencies from this cost base and consequently expect that sales and marketing as a percentage of revenues will decline in the long term. Conversely, we project that research and development expenses will remain constant or grow as a percentage of total revenues as we continue to invest in future product enhancements and new products.

Sales and Marketing. Sales and marketing expenses primarily consist of personnel costs for our sales, marketing and business development employees and executives; commissions earned by our sales personnel; travel costs; facilities costs attributable to our sales and marketing personnel; the cost of marketing programs; the cost of employee training programs; and the cost of business development programs. We expect to continue to hire additional sales personnel in the U.S. and in our international locations during the second half of 2011.

Research and Development. Research and development expenses primarily consist of personnel and facility costs for our research and development and product marketing employees. We have devoted our development efforts primarily to enhancing the functionality and expanding the capabilities of our software platform, including, for example, the development of our QlikView mobile client (released in 2009). We expect that our research and development expenses will continue to increase in absolute dollars and as a percentage of revenue in the long term as we increase our research and development and product marketing headcount to further strengthen and enhance our software platform. The vast majority of our research and development staff is based in Lund, Sweden.

General and Administrative. General and administrative expenses primarily consist of personnel costs for our executive, finance, legal, human resources and administrative personnel, as well as the cost of facilities attributable to general and administrative operations, the cost of our annual employee summit, the cost of employee training programs, depreciation and amortization, legal, accounting, and other professional services fees and other corporate expenses. We incurred additional costs during the three and six months ended June 30, 2011 and 2010 and expect to continue to incur higher costs associated with being a public company, including higher legal, directors’ and officers’ insurance and accounting expenses, as well as the additional costs of achieving and then maintaining compliance with Section 404 of the Sarbanes-Oxley Act and related regulations. We also expect that general and administrative expenses will continue to increase in absolute dollars because of our efforts to expand our international operations, but we believe over time general and administrative costs will decline as a percentage of revenues as we expect to derive greater efficiencies from our corporate infrastructure.

Stock-Based Compensation. Stock-based compensation expense is based on the fair value of those awards at the date of grant. We use the Black-Scholes-Merton (“Black-Scholes”) option pricing model to determine the fair value of common stock option awards. The fair value of a restricted stock unit is determined by using the fair value of the Company’s common stock on the date of grant. The estimated fair value of stock-based compensation awards on the date of grant is amortized on a straight-line basis over the requisite service period. Stock-based compensation expense is recorded within cost of revenue, sales and marketing, research and development, and general and administrative expenses.

Other Income (Expense), net

Other income (expense), net primarily consists of net interest, foreign exchange gains (losses) and other income or expense. Net interest represents interest income received on our cash and cash equivalents and interest expense associated with previously outstanding debt. Foreign exchange gains (losses) relate to the business activities in foreign countries and the re-measurement of intercompany transactions denominated in currencies other than our functional reporting currency, the U.S. dollar. As a result of our business activities in foreign countries, we expect that foreign exchange gains (losses) will continue to occur due to fluctuations in exchange rates in the countries where we do business.

Provision (Benefit) for Income Taxes

Provision (benefit) for income taxes primarily consists of corporate income taxes related to income (losses) at our U.S. and international subsidiaries. The provision (benefit) includes amounts for federal, state and foreign income taxes.

Impact of Foreign Currency Translation

Approximately 69% and 70% of our operating revenues for the six months ended June 30, 2011 and 2010 were earned in foreign denominated currencies, including the Swedish kronor, euro and British pound. We expect that our exposure to foreign currency exchange risk will increase to the extent we are able to continue to expand our business internationally. For purposes of our consolidated financial statements, local currency assets and liabilities are translated at the rate of exchange to the U.S. dollar on the balance sheet date and local currency revenues and expenses are translated at average rates of exchange to the U.S. dollar during the reporting period. Foreign currency transaction gains (losses) have been reflected as a component of our results from net income (loss) and foreign currency translation gains (losses) have been included as a component of accumulated other comprehensive income (loss).

Our operating results for the three and six months ended June 30, 2011 were negatively impacted by $0.3 million and $0.8 million, respectively, by the general weakening of the U.S. dollar relative to the euro, the British pound and the Swedish kronor.

Critical Accounting Policies and Estimates

We prepare our consolidated financial statements in accordance with U.S. GAAP. The preparation of consolidated financial statements also requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from the estimates made by our management. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations, and cash flows will be affected. We believe that these accounting policies are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates. Our significant accounting policies are disclosed in the audited consolidated financial statements for the year ended December 31, 2010 included in our Annual Report on Form 10-K (file number 001-34803), filed with the SEC on March 16, 2011. Since the date of those financial statements, there have been no material changes to our critical accounting policies and use of estimates.

Consolidated Results of Operations

Comparison of the Three Months Ended June 30, 2011 and 2010

Revenue

The following table sets forth revenue by source:

		Three Months Ended June 30,
		2011								2010
						Percentage of								Percentage of
		Amount				Revenue				Amount				Revenue				Period to Period Change
		(unaudited)
		(dollars in thousands)
Revenue:
License revenue		$	45,329				61.2	%		$	32,544				63.6	%		$	12,785				39.3	%
Maintenance revenue			21,780				29.4	%			13,519				26.4	%			8,261				61.1	%
Professional services revenue			6,933				9.4	%			5,067				9.9	%			1,866				36.8	%
Total revenue		$	74,042				100.0	%		$	51,130				100.0	%		$	22,912				44.8	%

Revenue was $74.0 million for the three months ended June 30, 2011 compared to $51.1 million for the three months ended June 30, 2010, an increase of $22.9 million, or 44.8%. All territories reported strong revenue growth, particularly the Americas (includes North America and South America), Nordic region (includes Sweden, Denmark, Finland and Norway), the German region (includes Germany, Austria and Switzerland), and the United Kingdom, which grew by 44%, 35%, 54% and 45% and contributed an incremental $15.8 million in total revenue. License revenue grew by approximately $12.8 million, or 39.3%. There was no material change in the pricing for our product during the three months ended June 30, 2011. Revenue growth was achieved primarily due to volume growth as more customers acquired our product for the first time, along with additional license purchases by our existing customers. In addition, during the three months ended June 30, 2011, we closed 104 contracts that had total license and first year’s maintenance exceeding $100,000, compared to 61 contracts for the same period last year. Amounts invoiced to existing customers during the three months ended June 30, 2011 as compared to the three months ended June 30, 2010 represented a larger share of total billings, approximately 64%, resulting from our “land and expand” sales strategy. Billings from our indirect partner channel for license and first year maintenance were 57% of total license and first year maintenance billings for the three months ended June 30, 2011. Maintenance revenues grew by approximately 61.1% in the three months ended June 30, 2011 as compared to the three months ended June 30, 2010 driven by annual maintenance renewal rates of greater than 85%. Professional services revenue grew by 36.8% in the three months ended June 30, 2011 compared to the three months ended June 30, 2010 due to growth in consulting and training revenue, resulting from an increase in our customer base. The revenue growth in the three months ended June 30, 2011 as compared to the three months ended June 30, 2010 may not be indicative of our future revenue growth, if any.

Cost of Revenue and Gross Profit

The following table sets forth cost of revenue and gross profit for each revenue source:

		Three Months Ended June 30,
		2011								2010
						Percentage of								Percentage of
		Amount				Related Revenue				Amount				Related Revenue				Period to Period Change
		(unaudited)
		(dollars in thousands)
Cost of Revenue:
Cost of license revenue		$	777				1.7	%		$	1,178				3.6	%		$	(401	)			-34.0	%
Cost of maintenance revenue			1,697				7.8	%			1,013				7.5	%			684				67.5	%
Cost of professional services revenue			6,126				88.4	%			3,554				70.1	%			2,572				72.4	%
Total cost of revenue		$	8,600				11.6	%		$	5,745				11.2	%		$	2,855				49.7	%
Gross Profit:
License revenue		$	44,552				98.3	%		$	31,366				96.4	%		$	13,186				42.0	%
Maintenance revenue			20,083				92.2	%			12,506				92.5	%			7,577				60.6	%
Professional services revenue			807				11.6	%			1,513				29.9	%			(706	)			-46.7	%
Total gross profit		$	65,442				88.4	%		$	45,385				88.8	%		$	20,057				44.2	%

Cost of revenue was $8.6 million for the three months ended June 30, 2011 compared to $5.7 million for the three months ended June 30, 2010, an increase of $2.9 million, or 49.7%. Cost of license revenue largely consists of referral fees paid to third parties in connection with software license sales. Referral fees decreased $0.4 million for the three months ended June 30, 2011 as compared to the three months ended June 30, 2010. Cost of maintenance revenue increased $0.7 million for the three months ended June 30, 2011 as compared to same period in 2010. In anticipation of continued growth in our current customer base, we increased headcount in our support organization which increased personnel costs by $0.7 million (including a $0.1 million increase in stock-based compensation) for the three months ended June 30, 2011 as compared to the same period in 2010. Cost of professional services revenue increased by $2.6 million in the three months ended June 30, 2011 as compared to the three months ended June 30, 2010 largely due to increased personnel costs of $0.3 million, increased consulting and other cost of professional services of $1.9 million, increased travel expenses of $0.2 million and increased facility and infrastructure costs of $0.2 million to support international expansion. The decrease in our gross margin during the three months ended June 30, 2011 as compared to the three months ended June 30, 2010 may not be indicative of our future gross margin.

Operating Expenses

The following table sets forth operating expenses as a percentage of revenue:

		Three Months Ended June 30,
		2011								2010
						Percentage of								Percentage of
		Amount				Revenue				Amount				Revenue				Period to Period Change
		(unaudited)
		(dollars in thousands)
Operating expenses:
Sales and marketing		$	45,393				61.3	%		$	27,751				54.3	%		$	17,642				63.6	%
Research and development			6,531				8.8	%			2,980				5.8	%			3,551				119.2	%
General and administrative			17,119				23.1	%			8,813				17.2	%			8,306				94.2	%
Total operating expenses		$	69,043				93.2	%		$	39,544				77.3	%		$	29,499				74.6	%

Sales and Marketing. Sales and marketing expenses increased $17.6 million, or 63.6% in the three months ended June 30, 2011 as compared to the three months ended June 30, 2010 reflecting increased personnel costs related to higher employee headcount and variable compensation resulting from increased license revenue. The increase in sales and marketing expenses was primarily attributable to an increase in personnel and commission costs of $11.3 million (including a $0.8 million increase in stock-based compensation) for the three months ended June 30, 2011 as compared to the three months ended June 30, 2010. We had an increase in marketing costs of $3.2 million during the three months ended June 30, 2011 as compared to the three months ended June 30, 2010. This increase in marketing costs included $1.0 million for our annual partner event, Qonnections. In addition, we had an increase in travel expenses of $1.3 million, an increase in facility and infrastructure costs of $0.4 million to support international expansion and an increase in consulting and other sales and marketing costs of $1.4 million. The total increase in sales and marketing expense includes $1.7 million from two newly formed inside sales teams. During the second half of 2010, we formed our North American inside sales team, which represented incremental costs of $1.0 million during the three months ended June 30, 2011 as compared to the three months ended June 30, 2010. During the first half of 2011, we formed our European inside sales team, which represented incremental costs of $0.7 million during the three months ended June 30, 2011 as compared to the three months ended June 30, 2010.

Research and Development. Research and development expenses grew by approximately $3.6 million or 119.2% during the three months ended June 30, 2011 as compared to the three months ended June 30, 2010. The increase was attributable to higher personnel costs of $2.2 million (including a $0.1 million increase in stock-based compensation) as a result of the increase in our headcount in research and development, including $0.5 million due to changes in the value of the Swedish kronor as the vast majority of our research and development staff is based in Lund, Sweden, and an increase in other expenses such as facilities and travel related to a larger research and development function of $1.4 million.

General and Administrative. General and administrative expenses were $17.1 million for the three months ended June 30, 2011 compared to $8.8 million for the three months ended June 30, 2010, an increase of $8.3 million, or 94.2%. This increase was due to other general and administrative costs of $2.6 million, primarily professional fees, such as legal and information technology consulting, as we expand our infrastructure to support anticipated global growth. We incurred $2.2 million in lease termination costs relating to our previous facility in Lund, Sweden during the three months ended June 30, 2011. We had an increase in personnel costs of $1.8 million (including a $0.5 million increase in stock-based compensation) to build out our corporate level functions to support anticipated global growth and meet the demands and compliance responsibilities of a U.S. public company. This increase was also due to a $0.9 million increase in public company costs, such as accounting and legal fees and directors and officers insurance and an increase in facility and infrastructure costs of $0.6 million to support international expansion in the three months ended June 30, 2011 as compared to the three months ended June 30, 2010. In addition, we had an increase of $0.2 million in travel expenses primarily related to an increase in headcount.

Other Income (Expense), net. Other income was $0.4 million for the three months ended June 30, 2011 compared to expense of $0.9 million for the three months ended June 30, 2010. During the three months ended June 30, 2011, we had foreign exchange gains of $0.4 million. During the three months ended June 30, 2010, we had expense due to the change in the fair value of stock warrants of $1.4 million and net interest expense of $0.2 million. These expenses were offset by foreign exchange gains and other income of $0.7 million. The change in the fair value of stock warrants decreased due to the reclassification of the warrant liability to additional paid-in-capital upon the effectiveness of our IPO in July 2010. Net interest expense decreased primarily due to the repayment in full of the principal, accrued interest and prepayment penalty of our previously outstanding note payable balance in July 2010.

(Provision) Benefit for Income Taxes. The effective tax rate for the three months ended June 30, 2011 was a benefit of 32.5% compared to a provision of 28.0% in the prior-year period. Our (provision) benefit for income taxes was based on our estimated annual effective tax rate adjusted for the recognition of discrete items. Our estimated annual effective tax rate principally includes the U.S. federal statutory rate, state income taxes and the impact of foreign income taxed at different rates. We operate in an international environment with significant operations in various locations outside the U.S. Accordingly, the consolidated income tax rate is a composite rate reflecting our income (loss) and the applicable tax rate in the various locations where we operate.

Comparison of the Six Months Ended June 30, 2011 and 2010

Revenue

The following table sets forth revenue by source:

		Six Months Ended June 30,
		2011								2010
						Percentage of								Percentage of
		Amount				Revenue				Amount				Revenue				Period to Period Change
		(unaudited)
		(dollars in thousands)
Revenue:
License revenue		$	83,214				60.7	%		$	58,766				61.9	%		$	24,448				41.6	%
Maintenance revenue			41,157				30.0	%			26,588				28.0	%			14,569				54.8	%
Professional services revenue			12,690				9.3	%			9,541				10.1	%			3,149				33.0	%
Total revenue		$	137,061				100.0	%		$	94,895				100.0	%		$	42,166				44.4	%

Revenue was $137.1 million for the six months ended June 30, 2011 compared to $94.9 million for the six months ended June 30, 2010, an increase of $42.2 million, or 44.4%. All territories reported strong revenue growth, particularly the Americas (includes North America and South America), Nordic region (includes Sweden, Denmark, Finland and Norway), the German region (includes Germany, Austria and Switzerland) and the United Kingdom, which grew by 52%, 33%, 35% and 44% and contributed an incremental $29.3 million in total revenue. License revenue grew by approximately $24.5 million, or 41.6%. There was no material change in the pricing for our product during the six months ended June 30, 2011. Revenue growth was achieved primarily due to volume growth as more customers acquired our product for the first time, along with additional license purchases by our existing customers. In addition, we closed 186 contracts that had total license and first year’s maintenance exceeding $100,000, compared to 129 contracts for the same period last year. Amounts invoiced to existing customers during the six months ended June 30, 2011 as compared to the six months ended June 30, 2010 represented a larger share of total billings, approximately 66%, resulting from our “land and expand” sales strategy. Billings from our indirect partner channel for license and first year maintenance were 54% of total license and first year maintenance billings for the six months ended June 30, 2011. Maintenance revenues grew by approximately 54.8% in the six months ended June 30, 2011 as compared to the six months ended June 30, 2010 driven by annual maintenance renewal rates of greater than 85%. Professional services revenue grew by 33.0% in the six months ended June 30, 2011 compared to the six months ended June 30, 2010 due to growth in consulting and training revenue, resulting from an increase in our customer base. The revenue growth in the six months ended June 30, 2011 as compared to the six months ended June 30, 2010 may not be indicative of our future revenue growth, if any.

Cost of Revenue and Gross Profit

The following table sets forth cost of revenue and gross profit for each revenue source:

		Six Months Ended June 30,
		2011								2010
						Percentage of								Percentage of
		Amount				Related Revenue				Amount				Related Revenue				Period to Period Change
		(unaudited)
		(dollars in thousands)
Cost of Revenue:
Cost of license revenue		$	1,692				2.0	%		$	1,857				3.2	%		$	(165	)			-8.9	%
Cost of maintenance revenue			3,238				7.9	%			1,708				6.4	%			1,530				89.6	%
Cost of professional services revenue			11,325				89.2	%			6,466				67.8	%			4,859				75.1	%
Total cost of revenue		$	16,255				11.9	%		$	10,031				10.6	%		$	6,224				62.0	%
Gross Profit:
License revenue		$	81,522				98.0	%		$	56,909				96.8	%		$	24,613				43.2	%
Maintenance revenue			37,919				92.1	%			24,880				93.6	%			13,039				52.4	%
Professional services revenue			1,365				10.8	%			3,075				32.2	%			(1,710	)			-55.6	%
Total gross profit		$	120,806				88.1	%		$	84,864				89.4	%		$	35,942				42.4	%

Cost of revenue was $16.3 million for the six months ended June 30, 2011 compared to $10.0 million for the six months ended June 30, 2010, an increase of $6.3 million, or 62.0%. Cost of license revenue largely consists of referral fees paid to third parties in connection with software license sales. Referral fees decreased $0.2 million for the six months ended June 30, 2011 as compared to the six months ended June 30, 2010. Cost of maintenance revenue increased $1.5 million for the six months ended June 30, 2011 as compared to same period in 2010. In anticipation of continued growth in our current customer base, we increased headcount in our support organization which increased personnel costs by $1.3 million (including a $0.2 million increase in stock-based compensation) for the six months ended June 30, 2011 as compared to the same period in 2010. In addition, other cost of maintenance revenue increased $0.2 million for the six months ended June 30, 2011 as compared to the same period in 2010. Cost of professional services revenue increased by $4.9 million in the six months ended June 30, 2011 as compared to the six months ended June 30, 2010 largely due to increased personnel costs of $1.9 million, increased consulting and other cost of professional services of $2.4 million, increased travel expenses of $0.3 million and increased facility and infrastructure costs of $0.3 million to support international expansion. The decrease in our gross margin during the six months ended June 30, 2011 as compared to the six months ended June 30, 2010 may not be indicative of our future gross margin.

Operating Expenses

The following table sets forth operating expenses as a percentage of revenue:

		Six Months Ended June 30,
		2011								2010
						Percentage of								Percentage of
		Amount				Revenue				Amount				Revenue				Period to Period Change
		(unaudited)
		(dollars in thousands)
Operating expenses:
Sales and marketing		$	83,065				60.6	%		$	53,164				56.0	%		$	29,901				56.2	%
Research and development			11,843				8.6	%			5,644				5.9	%			6,199				109.8	%
General and administrative			34,508				25.2	%			18,206				19.2	%			16,302				89.5	%
Total operating expenses		$	129,416				94.4	%		$	77,014				81.2	%		$	52,402				68.0	%

Sales and Marketing. Sales and marketing expenses increased $29.9 million, or 56.2% in the six months ended June 30, 2011 as compared to the six months ended June 30, 2010 reflecting increased personnel costs related to higher employee headcount and variable compensation resulting from increased license revenue. The increase in sales and marketing expenses was primarily attributable to an increase in personnel and commission costs of $19.9 million (including a $1.4 million increase in stock-based compensation) for the six months ended June 30, 2011 as compared to the six months ended June 30, 2010. We had an increase in marketing costs of $4.2 million during the three months ended June 30, 2011 as compared to the three months ended June 30, 2010. This increase in marketing costs included $1.0 million for our annual partner event, Qonnections. In addition, we had an increase in travel expenses of $2.4 million, an increase in consulting and other sales and marketing costs of $2.4 million and an increase in facility and infrastructure costs of $1.0 million to support international expansion. The total increase in sales and marketing expense includes $2.3 million from two newly formed inside sales teams. During the second half of 2010, we formed our North American inside sales team, which represented incremental costs of $1.6 million during the six months ended June 30, 2011 as compared to the six months ended June 30, 2010. During the first half of 2011, we formed our European inside sales team, which represented incremental costs of $0.7 million during the six months ended June 30, 2011 as compared to the six months ended June 30, 2010.

Research and Development. Research and development expenses grew by approximately $6.2 million or 109.8% during the six months ended June 30, 2011 as compared to the six months ended June 30, 2010. The increase was attributable to higher personnel costs of $4.0 million (including a $0.1 million increase in stock-based compensation) as a result of the increase in our headcount in research and development, including 0.7 million due to changes in the value of the Swedish kronor as the vast majority of our research and development staff is based in Lund, Sweden, and an increase in other expenses such as facilities and travel related to a larger research and development function of $2.2 million.

General and Administrative. General and administrative expenses were $34.5 million for the six months ended June 30, 2011 compared to $18.2 million for the six months ended June 30, 2010, an increase of $16.3 million, or 89.5%. This increase was due to other general and administrative costs of $5.6 million, primarily professional fees, such as legal and information technology consulting, as we expand our infrastructure to support anticipated global growth. We had an increase in personnel costs of $4.2 million (including a $0.8 million increase in stock-based compensation) to build out our corporate level functions to support anticipated global growth and meet the demands and compliance responsibilities of a U.S. public company. This increase was also due to $2.2 million in lease termination costs relating to our previous facility in Lund, Sweden. In addition, we had an increase in public company costs, such as accounting and legal fees and directors and officers insurance, of $1.8 million, an increase in travel expenses of $1.7 million primarily related to our annual employee summit and an increase in other facility and infrastructure costs of $0.8 million to support international expansion.

Other Expense, net. Other expense was $1.0 million for the six months ended June 30, 2011 compared to expense of $3.1 million for the six months ended June 30, 2010. During the six months ended June 30, 2011, we had foreign exchange losses and other expenses of $1.1 million offset by net interest income of $0.1 million. During the six months ended June 30, 2010, we had expense due to the change in the fair value of stock warrants of $2.0 million, foreign exchange losses and other expenses of $0.7 million, and net interest expense of $0.4 million. The change in the fair value of stock warrants decreased due to the reclassification of the warrant liability to additional paid-in-capital upon the effectiveness of our IPO in July 2010. Net interest expense decreased primarily due to the repayment in full of the principal, accrued interest and prepayment penalty of our previously outstanding note payable balance in July 2010.

(Provision) Benefit for Income Taxes. The effective tax rate for the six months ended June 30, 2011 was a benefit of 30.2% compared to a provision of 28.0% in the prior-year period. Our (provision) benefit for income taxes was based on our estimated annual effective tax rate adjusted for the recognition of discrete items. Our estimated annual effective tax rate principally includes the U.S. federal statutory rate, state income taxes and the impact of foreign income taxed at different rates. We operate in an international environment with significant operations in various locations outside the U.S. Accordingly, the consolidated income tax rate is a composite rate reflecting our income (loss) and the applicable tax rate in the various locations where we operate.

Seasonality

Our quarterly results reflect seasonality in the sale of our products and services. Historically, a pattern of increased license sales in the fourth quarter has positively impacted sales activity in that period which can make it difficult to achieve sequential revenue growth in the first quarter. In addition, our European operations occasionally provide lower revenues in the summer months because of the generally reduced level of economic activity in Europe during those months. Similarly, our gross margins and operating income have been affected by these historical trends because the majority of our expenses are relatively fixed in the near-term. The timing of revenues in relation to our expenses, much of which does not vary directly with revenue, has an impact on the cost of revenue, sales and marketing expense, research and development expense, and general and administrative expense as a percentage of revenue in each calendar quarter during the year. The majority of our expenses are personnel-related and include salaries, stock-based compensation, benefits, and incentive-based compensation plan expenses. As a result, we have not experienced significant seasonal fluctuations in the timing of expenses from period to period, other than an increase in general and administrative expenses during the first quarter of each year as a result of our annual employee summit and an increase in sales and marketing expenses in the second quarter of each year due to our annual partner event. On a quarterly basis, we have usually generated the majority of our revenues in the final month of each quarter and a significant amount in the last two weeks of a quarter. We believe this is due to customer buying patterns typical in this industry. Although these seasonal factors are common in the technology sector, historical patterns should not be considered a reliable indicator of our future sales activity or performance.

Liquidity and Capital Resources

Since our inception, we have financed our operations through the sale of preferred stock and common stock, cash flows generated by operations and borrowings under debt instruments. As of June 30, 2011, we had cash and cash equivalents totaling $174.5 million, net accounts receivable of $70.9 million and $152.5 million of working capital. As of June 30, 2011, we had $52.8 million of our total cash and cash equivalents in banking institutions outside of the U.S.

We believe that our existing cash and cash equivalents and our cash flow from operations will be sufficient to fund our operations and our capital expenditures for at least the next 12 months. Our future capital requirements will depend on many factors, including our rate of revenue growth, the expansion of our sales and marketing activities, the timing and extent of spending to support product development efforts and expansion into new territories, the timing of introductions of new software products and enhancements to existing software products and the continuing market acceptance of our software offerings. We may from time to time enter into agreements, arrangements or letters of intent regarding potential investments in, or acquisitions of, complementary businesses, applications or technologies. If we enter into these types of arrangements, it could require us to seek additional equity or debt financing. Additional funds may not be available on terms favorable to us or at all.

Since July 2010, we have been incurring costs as a public company that we had not previously incurred, including, but not limited to, costs and expenses for directors’ fees, increased directors’ and officers’ insurance, investor relations fees, expenses for compliance with the Sarbanes-Oxley Act of 2002 and rules implemented by the SEC and Nasdaq, the exchange on which our common stock is listed, and various other costs. The Sarbanes-Oxley Act of 2002 requires annual management assessment of the effectiveness of our internal control over financial reporting.

The following table shows selected balance sheet data as well as our cash flows from operating activities, investing activities, and financing activities for the stated periods:

		June 30,				December 31,
		2011				2010
		(unaudited)
		(dollars in thousands)
Cash and cash equivalents		$	174,503			$	158,712
Accounts receivable, net			70,946				85,364
Deferred revenue			54,941				50,024
Working capital			152,512				149,069

		Six Months Ended June 30
		2011				2010
		(unaudited)
		(dollars in thousands)
Cash flow activities
Net cash provided by operating activities		$	12,157			$	17,387
Net cash used in investing activities			(5,318	)			(881	)
Net cash provided by (used in) financing activities			6,127				(2,472	)

Cash and Cash Equivalents

Our cash and cash equivalents at June 30, 2011 were held for working capital purposes and were invested primarily in bank deposits and money market accounts having less than 90 day maturities. We do not enter into investments for trading or speculative purposes. These balances could be impacted if the underlying depository institutions or the guarantors fail or could be subject to adverse conditions in the financial markets. We can provide no assurances that access to our funds will not be impacted by adverse conditions in the financial markets.

Accounts Receivable, net

Our accounts receivable balance fluctuates from period to period which affects our cash flow from operating activities. The fluctuations vary depending on the timing of our service delivery and billing activity, cash collections and changes to our allowance for doubtful accounts. Our allowance for doubtful accounts represents our best estimate of the amount of probable credit losses. To date, we have not incurred any significant write-offs of accounts receivable.

Cash Flows

Operating Activities

Net cash provided by operating activities was $12.2 million for the six months ended June 30, 2011. We incurred non-cash expenses totaling $4.2 million for the six months ended June 30, 2011. Non-cash expenses primarily consisted of stock-based compensation expense, provisions for bad debt, unrealized foreign currency gains and losses, and depreciation and amortization expense.

The change in certain assets and liabilities resulted in a net source of cash of $14.7 million for the six months ended June 30, 2011. Net cash provided by operating activities is driven by sales of our products. Collection of accounts receivable from the product sales is a significant component of our cash flows from operating activities, as is the change in deferred revenue related to these sales. In addition, net cash provided by operating activities reflects income tax payments made of $11.9 million.

Net cash provided by operating activities was $17.4 million for the six months ended June 30, 2010. We incurred non-cash expenses totaling $4.6 million for the six months ended June 30, 2010. Non-cash expenses primarily consisted of stock-based compensation expense, provisions for bad debt, change in the fair value of warrants, unrealized foreign currency gains and losses, and depreciation and amortization expense.

The change in certain assets and liabilities resulted in a net source of cash of $9.4 million for the six months ended June 30, 2010. Net cash provided by operating activities is driven by sales of our software offerings. Collection of accounts receivable from the sales of our software offerings is a significant component of our cash flows from operating activities, as is the change in deferred revenue related to these sales. In addition, net cash provided by operating activities includes income tax payments made of $0.8 million.

Investing Activities

Net cash used in investing activities was $5.3 million for the six months ended June 30, 2011. Cash used in investing activities for the six months ended June 30, 2011 was primarily for capital expenditures of $5.1 million related to leasehold improvements and computer equipment as we continued to expand our infrastructure and workforce. In addition, we paid out $0.2 million for the achievement of certain financial targets related to the acquisition of Syllogic Corporation in January 2010.

Net cash used in investing activities was $0.9 million for the six months ended June 30, 2010. Cash used in investing activities for the six months ended June 30, 2010 was primarily for capital expenditures of $1.1 million related to property and equipment as we expanded our infrastructure and workforce. These capital expenditures were offset by the acquisition of Syllogic Corporation in January 2010, which resulted in a source of cash of approximately $0.2 million.

Financing Activities

Net cash provided by financing activities was $6.1 million for the six months ended June 30, 2011. Net cash provided by financing activities resulted from the proceeds from the exercise of common stock options during such period.

Net cash used in financing activities was $2.5 million for the six months ended June 30, 2010. Net cash used in financing activities for the six months ended June 30, 2010 was due to payments under our then outstanding long-term note payable arrangement of $2.1 million, payment of deferred offering costs of $1.8 million and payments under our then outstanding line of credit of $0.2 million. These were offset by proceeds from the exercise of common stock option of $0.9 million, an excess tax benefit from stock-based compensation of $0.6 million and proceeds from the issuance of options to purchase common stock of $0.1 million.

Non-GAAP Financial Measures

We use measures of non-generally accepted accounting principles (“Non-GAAP”) income (loss) from operations, Non-GAAP net income (loss) and Non-GAAP income (loss) per share. We believe that the Non-GAAP financial information provided can assist investors in understanding and assessing our on-going core operations and prospects for the future. This Non-GAAP financial information provides an additional tool for investors to use in comparing our financial results with other companies in our industry, many of which present similar Non-GAAP financial measures to investors.

For the three and six months ended June 30, 2011 and 2010, Non-GAAP operating income (loss) is determined by taking income or loss from operations and adding back non-cash stock-based compensation expense, employer payroll taxes related to stock transactions and lease termination costs. Non-GAAP net income (loss) is determined by taking pre-tax income or loss and adding back non-cash stock-based compensation expense and employer payroll taxes on stock transactions, and the result is tax affected at an estimated 32% tax rate.

The following is a reconciliation of Non-GAAP income (loss) from operations, Non-GAAP net income (loss) and Non-GAAP income (loss) per share to the most comparable U.S. GAAP measure for the periods indicated:

		Three Months Ended June 30,								Six Months Ended June 30,
		2011				2010				2011				2010
		(unaudited)								(unaudited)
		(dollars in thousands)								(dollars in thousands)
Reconciliation of Non-GAAP income (loss) from operations:
GAAP income (loss) from operations		$	(3,601	)		$	5,841			$	(8,610	)		$	7,850
Stock-based compensation expense			2,000				549				3,500				1,049
Employer payroll taxes on stock transactions			810				—				1,800				—
Lease termination costs			2,236				—				2,236				—
Non-GAAP income (loss) from operations		$	1,445			$	6,390			$	(1,074	)		$	8,899
Reconciliation of Non-GAAP net income (loss):
GAAP net income (loss)		$	(2,170	)		$	3,538			$	(6,743	)		$	3,419
Stock-based compensation expense			2,000				549				3,500				1,049
Employer payroll taxes on stock transactions			810				—				1,800				—
Lease termination costs			2,236				—				2,236				—
Income tax adjustment (1)			(1,630	)			(374	)			(2,239	)			(527	)
Non-GAAP net income (loss)		$	1,246			$	3,713			$	(1,446	)		$	3,941
Reconciliation of Non-GAAP income (loss) per share:
Non-GAAP net income (loss) per common share — basic		$	0.02			$	0.05			$	(0.02	)		$	0.05
Non-GAAP net income (loss) per common share — diluted		$	0.01			$	0.04			$	(0.02	)		$	0.05
GAAP net income (loss) per common share — basic		$	(0.03	)		$	0.02			$	(0.08	)		$	0.02
GAAP net income (loss) per common share — diluted		$	(0.03	)		$	0.02			$	(0.08	)		$	0.02
Non-GAAP weighted average number of common shares outstanding — basic (2)			81,724,971				76,823,425				80,486,401				76,636,507
Non-GAAP weighted average number of common shares outstanding — diluted (2)			86,807,408				84,313,393				80,486,401				83,752,094
GAAP weighted average number of common shares outstanding — basic			81,724,971				17,222,001				80,486,401				17,035,083
GAAP weighted average number of common shares outstanding — diluted			81,724,971				24,711,969				80,486,401				24,150,670