RightNow Announces Second Quarter 2011 Financial Results

RightNow® (NASDAQ:RNOW) today announced results for the second quarter ended June 30, 2011.

Second quarter 2011 financial highlights included:

• Total revenue was $54.8 million, an increase of 26% over Q2 2010
• Recurring revenue was $45.4 million, an increase of 31% over Q2 2010
• GAAP diluted earnings per share was $0.01 and Non-GAAP diluted earnings per share was $0.15. A reconciliation of Non-GAAP measures can be found at the back of this release.
• Non-GAAP operating margin was 11%, an increase of 200 basis points over Q2 2010
• Current software backlog was $152 million, an increase of 43% over Q2 2010

Total revenue was $54.8 million in the second quarter of 2011, compared to $43.5 million in the second quarter of 2010, reflecting a 26% increase. Recurring revenue in the second quarter of 2011 increased 31% to $45.4 million from $34.7 million in the second quarter of 2010.

Net income in the second quarter of 2011 was $194,000 or $0.01 per diluted share, compared to net income of $1.4 million or $0.04 per diluted share in the second quarter of 2010. Non-GAAP net income in the second quarter of 2011 was $5.4 million, or $0.15 per diluted share, compared to non-GAAP net income of $3.2 million or $0.09 per diluted share in the second quarter of 2010.

"We executed well and delivered an outstanding second quarter with revenue and earnings ahead of guidance,” said Greg Gianforte, CEO and founder. ”Our accelerating growth rate is allowing us to further expand our sales capacity and raise our expectations for recurring revenue growth in 2011. We continue to provide robust customer experience solutions with fast return on investment and innovative products that are easy to use, enabling us to deliver high value for our customers around the world. Market trends are creating a demand for RightNow CX and we believe we are well positioned to continue our momentum.”

Total revenue was $107.1 million for the six months ended June 30, 2011, compared to $85.6 million for the six months ended June 30, 2010, reflecting a 25% increase. Recurring revenue in the six months ended June 30, 2011 increased 29% to $87.3 million from $67.8 million in the six months ended June 30, 2010.

Net income in the six months ended June 30, 2011 was $1.6 million or $0.04 per diluted share, compared to net income of $2.0 million, or $0.06 per diluted share in the six months ended June 30, 2010. Non-GAAP net income in the six months ended June 30, 2011 was $9.1 million, or $0.26 per diluted share, compared to non-GAAP net income of $5.5 million or $0.16 per diluted share in the six months ended June 30, 2010.

Guidance

• For the full year 2011, the Company is raising its recurring revenue growth expectation to 27% from 24%. Total revenue is expected to be approximately $226 million. Net income per diluted share for the full year 2011 is expected to be approximately $0.08. Non-GAAP net income per diluted share, which excludes stock-based compensation, acquisition costs and amortization of acquired intangible assets, amortization of debt issuance costs, and a foreign currency gain related to the Q-go acquisition, is expected to be approximately $0.58 for the full year 2011. The Company expects approximately 36 million diluted shares outstanding for the full year 2011.
• For the third quarter of 2011, total revenue is expected to be approximately $57 million. Third quarter net income per diluted share is expected to be approximately breakeven. Third quarter non-GAAP net income per diluted share, which excludes stock-based compensation, amortization of acquired intangible assets, and amortization of debt issuance costs, is expected to be approximately $0.15. The Company expects approximately 36.3 million diluted shares outstanding for the third quarter of 2011.

Please refer to our "Forward-Looking Guidance Reconciliation” table for complete details on adjustments between GAAP and non-GAAP guidance.

Quarterly Conference Call

RightNow Technologies will discuss its quarterly results today via teleconference at 2:30 p.m. Mountain Time (4:30 p.m. Eastern Time). To access the call, please dial (877) 638 - 9569, or outside the U.S. (914) 495-8536, at least five minutes prior to the 2:30 p.m. MT start time. A live webcast of the call will also be available at http://investor.rightnow.com/index.cfm under the Events & Presentations menu. An audio replay will be available between 5:30 p.m. MT July 27, 2011 and 9:59 p.m. MT August 10, 2011 by calling (800) 642-1687 or (706) 645-9291, with Conference ID 76695707. The replay will also be available during the same time period on the Company’s website at http://investor.rightnow.com.

About RightNow Technologies

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

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

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

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

The risks and uncertainties referred to above include, but are not limited to, our business model; our ability to develop or acquire and gain market acceptance for new products and enhancements to existing products in a cost-effective and timely manner; general economic conditions; fluctuations in foreign currency exchange; the gain or loss of key customers; competitive pressures and other similar factors such as the availability and pricing of competing products and technologies and the resulting effects on sales and pricing of our products; our ability to expand or contract operations, manage expenses and grow profitability; the rate at which our present and future customers adopt our existing and future products and services; fluctuations in our operating results including our revenue mix and our rate of growth; fluctuations in backlog; the risk that our investments in partner relationships and additional employees will not achieve expected results; interruptions or delays in our hosting operations; breaches of our security measures; our ability to protect our intellectual property from infringement, and to avoid infringing on the intellectual property rights of third parties; any unanticipated ambiguities in fair value accounting standards; the amount and timing of any stock repurchases under our stock repurchase program; fluctuations in our operating results from the impact of stock-based compensation expense; our ability to manage and expand our partner relationships; our ability to hire, retain and motivate our employees and manage our growth; the risks associated with prior and future acquisitions; and risks associated with our offering of convertible senior notes including the potential impact on earnings per share calculations; and various other factors. Further information on potential factors that could affect our financial results is included in our Annual Report on Form 10-K, quarterly reports on Form 10-Q, and in other filings with the Securities and Exchange Commission. The forward-looking statements in this release speak only as of the date they are made. We undertake no obligation to revise or update publicly any forward-looking statement for any reason.

FRNOW

RightNow Technologies, Inc.
Consolidated Balance Sheets
(In thousands) (Unaudited)
		June 30,				Dec. 31,
			2011				2010
Assets
Cash and cash equivalents		$	121,792			$	181,948
Short-term investments			134,133				94,759
Accounts receivable			45,703				39,338
Allowance for doubtful accounts			(1,774	)			(2,021	)
Net receivables			43,929				37,317
Deferred commissions			5,963				5,418
Prepaid and other current assets			5,488				4,662
Deferred tax assets			3,810				3,801
Total current assets			315,115				327,905
Property and equipment, net			13,003				10,702
Intangible assets, net			19,512				6,149
Goodwill			32,392				7,975
Deferred commissions, non-current			4,966				4,747
Other			4,365				4,921
Deferred tax assets, non-current			16,756				16,480
Total Assets		$	406,109			$	378,879
Liabilities and Stockholders’ Equity
Accounts payable		$	6,819			$	10,463
Commissions and bonuses payable			6,030				7,137
Other accrued liabilities			18,465				13,363
Current portion of deferred revenue			97,792				90,350
Total current liabilities			129,106				121,313
Deferred revenue, net of current portion			2,355				2,969
Other long-term liabilities			446				--
2.50% Convertible senior notes due 2030			175,000				175,000
Total liabilities			306,907				299,282
Stockholders’ equity:
Common stock			36				35
Additional paid-in capital			152,268				136,717
Treasury stock, at cost			(29,149	)			(29,149	)
Accumulated other comprehensive income			4,422				1,953
Accumulated deficit			(28,375	)			(29,959	)
Total stockholders’ equity			99,202				79,597
Total Liabilities and Stockholders’ Equity		$	406,109			$	378,879

RightNow Technologies, Inc.
Consolidated Operating Statements
(In thousands, except per share amounts) (Unaudited)
		Three Months Ended June 30,										Six Months Ended June 30,
		2011					2010					2011				2010
Revenue:
Recurring revenue		$		45,409			$		34,730			$	87,322			$		67,755
Professional services		9,407					8,724					19,823				17,801
Total revenue		54,816					43,454					107,145				85,556
Cost of revenue:
Recurring revenue		7,746					5,952					15,072				11,831
Professional services		9,411					7,378					18,821				14,710
Total cost of revenue		17,157					13,330					33,893				26,541
Gross profit		37,659					30,124					73,252				59,015
Operating expenses:
Sales and marketing		24,913					18,777					47,463				37,501
Research and development		5,581					4,797					11,177				9,929
General and administrative		6,377					4,324					12,548				8,623
Total operating expenses		36,871					27,898					71,188				56,053
Income from operations		788					2,226					2,064				2,962
Interest and other income (expense), net		(1,116			)		19					(348		)		202
Income (loss) before income taxes		(328			)		2,245					1,716				3,164
Benefit (provision) for income taxes		522					(841			)		(132		)		(1,175			)
Net income		$	194				$	1,404				$	1,584			$	1,989
Net income per share:
Basic		$	0.01				$	0.04				$	0.05			$	0.06
Diluted		$	0.01				$	0.04				$	0.04			$	0.06
Shares used in the computation:
Basic		33,171					32,000					32,880				31,965
Diluted		36,048					33,427					35,792				33,430
Supplemental information of Non-GAAP reconciling items included in:
Cost of recurring revenue		$	995				$	117				$	1,777			$	230
Cost of professional services		546					122					874				236
Sales and marketing		1,580					726					2,615				1,477
Research and development		443					240					792				497
General and administrative		1,408					556					2,799				1,076
Interest and other income (expense, net)		253					--					(1,312		)		--
Total Non-GAAP reconciling items (pre-tax)		$	5,225				$	1,761				$	7,545			$	3,516

RightNow Technologies, Inc.
Consolidated Statements of Cash Flow
(In thousands) (Unaudited)
		Three Months Ended June 30,								Six Months Ended June 30,
		2011				2010				2011				2010
Operating activities:
Net income		$	194			$	1,404			$	1,584			$	1,989
Non-cash adjustments:
Depreciation and amortization			3,318				1,872				6,120				3,937
Stock-based compensation			3,988				1,761				6,727				3,516
Provision for losses on accounts receivable			21				31				41				81
Foreign currency gain on acquisition			--				--				(1,819	)			--
Changes in operating accounts, net of business acquisitions:
Receivables			(11,010	)			(2,910	)			(2,981	)			(461	)
Prepaid and other current assets			785				(369	)			443				(1,868	)
Deferred commissions			(795	)			544				(655	)			989
Accounts payable			(5,298	)			1,099				(4,413	)			3,144
Commissions and bonuses payable			1,355				(329	)			(1,157	)			(1,573	)
Other accrued liabilities			3,181				1,053				3,790				2,564
Deferred revenue			11,535				(160	)			3,107				(4,774	)
Other			(852	)			18				(868	)			(19	)
Cash provided by operating activities			6,422				4,014				9,919				7,525
Investing activities:
Net change in investments			(16,411	)			17,107				(39,297	)			16,765
Acquisition of property and equipment			(2,031	)			(2,195	)			(5,148	)			(3,836	)
Intangible asset additions			(1,592	)			(1,305	)			(3,083	)			(2,339	)
Business acquisition, net of cash acquired			--				--				(33,837	)			--
Cash provided by (used in) investing activities			(20,034	)			13,607				(81,365	)			10,590
Financing activities:
Proceeds from issuance of common stock			3,065				409				8,376				1,568
Excess tax benefit of stock options exercised			(142	)			802				449				1,130
Payments on current and long-term debt			(20	)			(10	)			(260	)			(22	)
Cash provided by financing activities			2,903				1,201				8,565				2,676
Effect of foreign exchange rates on cash and cash equivalents			503				(724	)			2,725				(1,125	)
Increase (decrease) in cash and cash equivalents			(10,206	)			18,098				(60,156	)			19,666
Cash and cash equivalents at beginning of period			131,998				43,114				181,948				41,546
Cash and cash equivalents at end of period		$	121,792			$	61,212			$	121,792			$	61,212

RightNow Technologies, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measurements
(Amounts in thousands, except per share amounts) (Unaudited)
		Three Months Ended June 30,								Six Months Ended June 30,
		2011				2010				2011				2010
Income from operations as reported		$	788			$	2,226			$2,064				$	2,962
Income from operations as a % of total revenue (operating margin)			1	%			5	%		2		%			3	%
Non-GAAP reconciling items (pre-tax)
Add stock-based compensation ("SBC”)			3,988				1,761			6,727					3,516
Add Q-go acquisition costs			--				--			415					--
Add amortization expense of acquired intangible assets			984				--			1,715					--
Non-GAAP income from operations		$	5,760			$	3,987			$ 10,921				$	6,478
Non-GAAP income from operations as a % of total revenue (Non-GAAP operating margin)			11	%			9	%		10		%			8	%
Net income as reported		$	194			$	1,404			$1,584				$	1,989
Non-GAAP reconciling items (pre-tax)
Add stock-based compensation ("SBC”)			3,988				1,761			6,727					3,516
Add Q-go acquisition costs			--				--			415					--
Add amortization expense of acquired intangible assets			984				--			1,715					--
Add amortization of debt issuance expense			253				--			507					--
Less foreign currency gain			--				--			(1,819		)			--
Non-GAAP Net income		$	5,419			$	3,165			$ 9,129				$	5,505
Net income per share, as reported (basic)		$	0.01			$	0.04			$0.05				$	0.06
Net income per share, as reported (diluted)			0.01				0.04			0.04					0.06
Non-GAAP Net income per share (basic)			0.16				0.10			0.28					0.17
Non-GAAP Net income per share (diluted)			0.15				0.09			0.26					0.16
Shares outstanding (basic), as reported			33,171				32,000			32,880					31,965
Shares outstanding (diluted), as reported			36,048				33,427			35,792					33,430

Forward-Looking Guidance Reconciliation
			GAAP		Adjustment																	Non- GAAP
Third quarter ending September 30, 2011
Net income (approximately)		$	0		[a]	4,100		[b]	--		[c]	950		[d]	250						$	5,300
Net income per share (approximately)		$	0.00																		$	0.15
Shares (diluted)			36,250																			36,250
Year ending December 31, 2011
Net income (approximately)		$	2,800		[a]	15,000		[b]	400		[c]	3,600		[d]	1,000		[e]	(1,800	)		$	21,000
Net income per share (approximately)		$	0.08																		$	0.58
Shares (diluted)			36,000																			36,000
[a] Estimated stock-based compensation expense to be recorded for the periods indicated in accordance with FASB Accounting Standards Codification, Topic 718, Compensation-Stock Compensation, which is effective for periods beginning January 1, 2006.
[b] Estimated acquisition costs associated with Q-go.
[c] Estimated amortization expense of acquired intangible assets.
[d] Estimated debt issuance amortization expenses.
[e] Foreign currency gain associated with acquisition of Q-go.

About Non-GAAP Financial Measures

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

Management uses these non-GAAP financial measures to make operational decisions, evaluate the Company’s performance, prepare forecasts and determine compensation. Further, management believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing the Company’s performance when planning, forecasting and analyzing future periods.

Our stock-based compensation expenses are expected to vary depending on the number of new grants issued, changes in our stock price, stock market volatility, expected option lives and risk-free rates of return, all of which are difficult to estimate.

In calculating non-GAAP income from operations, operating margin, net income and net income per share, management excluded stock-based compensation expenses, acquisition costs and amortization associated with acquired intangible assets and debt amortization expenses (debt amortization expense was not included in non-GAAP income from operations because the amount was not recorded as operating income), to facilitate its review of the comparability of the Company’s operating performance on a period-to-period basis because such expenses and gain are not, in management’s view, related to the Company’s ongoing operating performance. Management uses this view of its operating performance for purposes of comparison with its business plan and individual operating budgets and resource allocation.

During the first quarter of 2011, we recorded a $1.8 million foreign currency gain related to our acquisition of Q go. This gain was excluded from our six months ended June 30, 2011 non-GAAP net income and net income per share calculations (the gain was not included in non-GAAP income from operations because the amount was not recorded to operating income).

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

Calculating non-GAAP financial measures have limitations as an analytical tool, and readers should not consider these measures in isolation or as substitutes for GAAP operating income, net income and net income per share. In the future, we expect to incur additional stock-based compensation expenses and the exclusion of these expenses in the presentation of our non-GAAP financial measures should not be construed as an inference that these costs are unusual, infrequent or non-recurring. In the future, we also expect to incur additional acquisition costs and amortization associated with acquired intangible assets and we anticipate excluding these expenses in the future presentation of our non-GAAP financial measures. These acquired intangible assets will be considered for impairment, but will be considered a static expense, one that is not typically affected by operations during any particular period. Lastly, we anticipate excluding amortization of debt issuance costs from our future presentation of our non-GAAP financial measures as these costs are non-cash expenses that are not considered part of ongoing operating results when assessing the performance of our business, and RightNow believes that doing so facilitates comparisons to its historical operating results and to the results of other companies in our industry.

Investors and potential investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool, which include:

• Other companies inside and outside of our industry may calculate non-GAAP net income and net income per share differently than we do, limiting their usefulness as a comparative tool; and
• The Company’s income tax expense or benefit will be ultimately based on its GAAP taxable income and actual tax rates in effect, which may differ significantly from the effective tax rate used in our non-GAAP financial measures.

In addition, the adjustments to our future GAAP financial measures reflecting the exclusion of stock-based compensation expenses, amortization of acquired intangible assets, and amortization of debt issuance costs are recurring and will be reflected in the Company’s financial results for the foreseeable future. The Company compensates for these limitations by providing specific information regarding the GAAP amount excluded from the non-GAAP financial measures. The Company further compensates for the limitations of its use of non-GAAP financial measures by presenting comparable GAAP with equal or greater prominence. The Company evaluates the non-GAAP financial measures together with the most directly comparable GAAP financial measures.

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

RightNow Technologies, Inc.
Supplemental Data Sheet		Amounts in thousands (except customers, interactions and employees)
Unaudited
Last updated July 27, 2011		Q1		Q2		Q3		Q4		FY		Q1		Q2		Q3		Q4		YTD		Q1		Q2		Q3		Q4		YTD		Q1		Q2		YTD
		2008		2008		2008		2008		2008		2009		2009		2009		2009		2009		2010		2010		2010		2010		2010		2011		2011		2011
Revenue
Revenue		32,898		35,221		36,237		36,079		140,435		36,037		36,340		38,731		41,579		152,687		42,102		43,454		48,593		51,373		185,522		52,329		54,816		107,145
YoY Growth		28%		33%		24%		18%		25%		10%		3%		7%		15%		9%		17%		20%		25%		24%		22%		24%		26%		25%
Recurring Revenue		24,412		25,459		25,917		26,476		102,264		25,955		27,393		29,741		32,161		115,250		33,025		34,730		38,613		40,977		147,345		41,913		45,409		87,322
YoY Growth		27%		25%		19%		12%		20%		6%		8%		15%		21%		13%		27%		27%		30%		27%		28%		27%		31%		29%
Pro Service Revenue		8,342		9,648		10,281		9,588		37,859		9,992		8,916		8,977		9,407		37,292		9,077		8,724		9,980		10,396		38,177		10,416		9,407		19,823
YoY Growth		42%		67%		49%		46%		51%		20%		-8%		-13%		-2%		-1%		-9%		-2%		11%		11%		2%		15%		8%		11%
North America Revenue %		67%		67%		70%		74%		69%		75%		72%		72%		71%		72%		71%		70%		69%		66%		69%		65%		63%
EMEA Revenue %		25%		25%		22%		19%		23%		18%		19%		19%		19%		19%		19%		19%		19%		20%		19%		20%		21%
APAC Revenue %		8%		8%		8%		7%		8%		7%		9%		9%		10%		9%		10%		11%		12%		14%		12%		15%		16%
Backlog and Backlog Related Metrics
Current Portion of Software Backlog		69,737		75,766		77,478		84,103				82,186		89,138		96,650		104,983				103,264		106,275		117,628		134,004				142,102		151,947
TTM Growth												20%		18%		20%		21%				23%		24%		23%		24%				27%		33%
YoY Growth		21%		26%		18%		20%				18%		18%		25%		25%				26%		19%		22%		28%				38%		43%
Total Backlog		138,629		147,052		145,088		150,872				138,000		152,424		166,305		179,892				196,225		211,911		252,338		295,830				316,124		333,861
Current Backlog		88,419		95,498		95,044		101,995				96,546		103,984		115,944		121,275				120,606		121,011		134,174		148,619				154,599		163,599
Non-Current Backlog		50,210		51,554		50,044		48,877				41,454		48,440		50,361		58,617				75,619		90,900		118,164		147,211				161,525		170,262
Deal Size Distribution
> $1M		4		6		4		7		21		1		10		7		8		26		14		11		17		18		60		9		12		21
$100K-$1M		73		86		76		91		326		59		60		83		90		292		91		106		112		129		438		96		120		216
<$100K		464		470		528		527		1,989		443		421		388		435		1,687		423		436		436		434		1,729		494		501		995
Top 5 industry sales-TTM
High-Tech		18%		21%		22%		23%				21%		21%		22%		20%				22%		22%		22%		21%				22%		21%
Public Sector		13%		12%		12%		14%				14%		15%		18%		16%				15%		17%		22%		20%				21%		18%
Entertainment/Media		4%		5%		6%		6%				6%		12%		10%		11%				10%		8%		13%		13%				14%		16%
Retail/CPG		14%		15%		15%		14%				15%		14%		13%		15%				15%		15%		13%		13%				11%		12%
Telecom		19%		15%		13%		13%				12%		10%		13%		16%				15%		15%		12%		10%				10%		10%
All other		32%		32%		32%		30%				32%		28%		24%		22%				23%		23%		18%		23%				22%		23%
Margin & Earnings Metrics (Non-GAAP)*
Gross Margin %		63%		64%		64%		67%		64%		67%		70%		71%		70%		70%		69%		70%		71%		73%		71%		70%		72%		71%
Software Margin %		80%		81%		80%		81%		80%		81%		82%		83%		82%		82%		83%		83%		85%		86%		84%		84%		85%		85%
Professional Services Margin %		15%		21%		22%		26%		21%		31%		31%		31%		28%		30%		20%		17%		17%		21%		19%		13%		6%		9%
Operating expense as % of Revenue		72%		69%		65%		63%		67%		60%		63%		61%		62%		62%		63%		61%		58%		59%		60%		60%		61%		61%
Operating Margin %		-9%		-5%		-1%		4%		-3%		7%		7%		10%		8%		8%		6%		9%		13%		14%		11%		10%		11%		10%
Operating Margin		(2,976)		(1,759)		(444)		1,267		(3,912)		2,531		2,510		3,693		3,408		12,142		2,490		3,987		6,336		7,245		20,058		5,161		5,760		10,921
Non-GAAP EPS (Diluted)		$ (0.06)		$ (0.04)		$ -		$ 0.06		$ (0.04)		$ 0.09		$ 0.09		$ 0.12		$ 0.10		$ 0.39		$ 0.07		$ 0.09		$ 0.15		$ 0.17		$ 0.49		$ 0.10		$ 0.15		$ 0.26
Other Metrics
Headcount		718		765		777		737		737		742		756		792		797		797		836		871		887		920		920		1,035		1,040		1,040
New Customer		64		73		68		59		264		26		53		56		51		212		46		38		66		53		203		71		76		147
Interactions (in millions)		463		477		576		583		2,099		584		586		620		704		2,494		765		801		786		811		3,163		870		873		1,743
*Note:  The supplemental data sheet refers to certain non-GAAP financial results.  Please refer to our reconciliations of GAAP, which can be found in our Company's earnings release(s), which is posted on the Investor Relations portion of our website.

RightNow Technologies, Inc.
Consolidated Balance Sheets		Amounts in thousands
Unaudited
Last updated July 27, 2011
		Mar 31,		Jun 30,		Sep 30,		Dec 31,		Mar 31,		Jun 30,		Sep 30,		Dec 31,		Mar 31,		Jun 30,
		2009		2009		2009		2009		2010		2010		2010		2010		2011		2011
Assets
Current assets:
Cash and cash equivalents		51,462		46,987		32,388		41,546		43,114		61,212		77,728		181,948		131,998		121,792
Short-term investments		36,517		42,808		60,634		54,977		55,293		38,228		31,287		94,759		117,659		134,133
Accounts receivable		24,220		31,670		31,034		31,850		29,723		33,020		36,367		39,037		34,349		45,563
Term receivables		4,810		4,107		3,011		2,417		1,762		1,271		371		301		209		140
Less allowance for doubtful accounts		(1,901)		(1,910)		(1,701)		(1,914)		(1,794)		(1,697)		(1,867)		(2,021)		(1,800)		(1,774)
Deferred tax asset		-		-		-		-		-		-		-		3,801		3,806		3,810
Prepaid & other current assets		7,593		7,815		8,689		8,828		9,620		9,178		8,816		10,080		10,867		11,451
Total current assets		122,701		131,477		134,055		137,704		137,718		141,212		152,702		327,905		297,088		315,115
Long-term investments		4,980		4,792		-		-		-		-		-		-		-		-
Property and equipment, net		9,187		9,775		9,781		10,122		10,154		10,850		11,063		10,702		12,644		13,003
Term receivables, noncurrent		2,804		2,159		1,447		1,105		810		537		82		14		5		6
Deferred tax asset, noncurrent		-		-		-		-		-		-		-		16,480		16,713		16,756
Long-term prepaid & other current assets		3,170		3,641		3,769		4,363		4,512		4,709		4,960		9,654		9,313		9,325
Goodwill		4,358		4,358		7,975		7,975		7,975		7,975		7,975		7,975		31,953		32,392
Intangible and other assets, net		1,746		1,380		3,247		3,166		3,694		4,586		5,407		6,149		19,115		19,512
Total assets		148,946		157,582		160,274		164,435		164,863		169,869		182,189		378,879		386,831		406,109
Liabilities, Preferred Stock and Stockholders' Equity
Current liabilities:
Accounts payable and accrued liabilities		14,309		17,847		16,601		16,573		19,967		22,013		23,425		23,826		27,307		25,284
Commissions and bonuses payable		3,084		4,958		4,838		6,271		4,964		4,597		6,142		7,137		4,678		6,030
Current portion of long-term debt		46		45		34		22		10		-		-		-		-		-
Deferred revenue		78,755		85,176		89,161		88,603		86,395		86,933		88,669		90,350		86,244		97,792
Total current liabilities		96,194		108,026		110,634		111,469		111,336		113,543		118,236		121,313		118,229		129,106
Deferred revenue, noncurrent		24,452		18,908		14,780		12,724		9,300		7,894		5,394		2,969		1,939		2,355
Long-term debt		10		-		-		-		-		-		-		175,000		175,000		175,000
Other long-term liabilities		-		-		-		-		-		-		-		-		453		446
Stockholders' equity (deficit):
Common stock		34		34		34		34		34		34		34		35		36		36
Additional paid-in capital		104,345		107,281		109,394		112,439		115,680		118,652		125,416		136,717		145,359		152,268
Treasury stock, at cost		(15,007)		(15,007)		(15,007)		(15,007)		(15,007)		(15,007)		(15,007)		(29,149)		(29,149)		(29,149)
Other comprehensive income (loss)		1,875		1,260		1,394		1,125		1,284		1,113		1,581		1,951		3,533		4,422
Accumulated deficit		(62,957)		(62,920)		(60,955)		(58,349)		(57,764)		(56,360)		(53,465)		(29,957)		(28,569)		(28,375)
Total stockholders' equity		28,290		30,648		34,860		40,242		44,227		48,432		58,559		79,597		91,210		99,202
Total liabilities, preferred stock and stockholders' equity		148,946		157,582		160,274		164,435		164,863		169,869		182,189		378,879		386,831		406,109

RightNow Technologies, Inc.
Consolidated Statements of Operations
Unaudited		Amounts in thousands (except net income (loss) per share)
Last updated July 27, 2011
		2008																				2009																				2010																				2011
		Q1				Q2				Q3				Q4				YTD				Q1				Q2				Q3				Q4				YTD				Q1				Q2				Q3				Q4				YTD				Q1				Q2				YTD
Revenue:
Software, hosting and support			24,556				25,573				25,956				26,491				102,576				26,045				27,424				29,754				32,172				115,395				33,025				34,730				38,613				40,977				147,345				41,913				45,409				87,322
Professional services			8,342				9,648				10,281				9,588				37,859				9,992				8,916				8,977				9,407				37,292				9,077				8,724				9,980				10,396				38,177				10,416				9,407				19,823
Total revenue			32,898				35,221				36,237				36,079				140,435				36,037				36,340				38,731				41,579				152,687				42,102				43,454				48,593				51,373				185,522				52,329				54,816				107,145
Cost of revenue:
Software, hosting and support			5,035				5,043				5,305				5,014				20,397				4,949				4,954				5,232				5,813				20,948				5,879				5,952				5,923				5,855				23,609				7,326				7,746				15,072
Professional services			7,285				7,810				8,133				7,212				30,440				7,008				6,346				6,365				6,891				26,610				7,332				7,378				8,395				8,348				31,453				9,410				9,411				18,821
Total cost of revenue			12,320				12,853				13,438				12,226				50,837				11,957				11,300				11,597				12,704				47,558				13,211				13,330				14,318				14,203				55,062				16,736				17,157				33,893
Gross profit			20,578				22,368				22,799				23,853				89,598				24,080				25,040				27,134				28,875				105,129				28,891				30,124				34,275				37,170				130,460				35,593				37,659				73,252
Operating expenses:
Sales and marketing			16,818				17,627				16,889				16,294				67,628				14,863				16,008				16,175				17,705				64,751				18,724				18,777				20,006				21,888				79,395				22,550				24,913				47,463
Research and development			4,486				4,507				4,671				4,628				18,292				4,756				5,051				5,100				5,314				20,221				5,132				4,797				5,160				5,065				20,154				5,596				5,581				11,177
General and administrative			3,516				3,890				3,215				2,994				13,615				3,446				4,207				4,018				4,130				15,801				4,299				4,324				4,975				5,108				18,706				6,171				6,377				12,548
Total operating expenses			24,820				26,024				24,775				23,916				99,535				23,065				25,266				25,293				27,149				100,773				28,155				27,898				30,141				32,061				118,255				34,317				36,871				71,188
Operating income (loss)			(4,242	)			(3,656	)			(1,976	)			(63	)			(9,937	)			1,015				(226	)			1,841				1,726				4,356				736				2,226				4,134				5,109				12,205				1,276				788				2,064
Interest and other income, net			938				519				552				687				2,696				401				351				342				1,000				2,094				183				19				454				(311	)			345				768				(1,116	)			(348	)
Income (loss) before income taxes			(3,304	)			(3,137	)			(1,424	)			624				(7,241	)			1,416				125				2,183				2,726				6,450				919				2,245				4,588				4,798				12,550				2,044				(328	)			1,716
(Provision) benefit for income taxes			(92	)			5				(23	)			68				(42	)			(153	)			(89	)			(218	)			(119	)			(579	)			(334	)			(841	)			(1,693	)			18,708				15,840				(654	)			522				(132	)
Net income (loss)			(3,396	)			(3,132	)			(1,447	)			692				(7,283	)			1,263				36				1,965				2,607				5,871				585				1,404				2,895				23,506				28,390				1,390				194				1,584
Net income (loss) per share:
Basic		$	(0.10	)		$	(0.09	)		$	(0.04	)		$	0.02			$	(0.22	)		$	0.04			$	0.00			$	0.06			$	0.08			$	0.18			$	0.02			$	0.04			$	0.09			$	0.72			$	0.88			$	0.04			$	0.01			$	0.05
Diluted		$	(0.10	)		$	(0.09	)		$	(0.04	)		$	0.02			$	(0.22	)		$	0.04			$	0.00			$	0.06			$	0.08			$	0.18			$	0.02			$	0.04			$	0.09			$	0.64			$	0.83			$	0.04			$	0.01			$	0.04
Shares used in the computation:
Basic			33,532				33,582				33,640				32,692				33,362				31,784				31,677				31,733				31,815				31,752				31,929				32,000				32,128				32,562				32,156				32,585				33,171				32,880
Diluted			33,532				33,582				33,640				33,204				33,362				32,249				32,160				32,424				33,047				32,336				33,431				33,427				33,659				37,574				34,568				35,482				36,048				35,792
Supplemental information of non-GAAP reconciling items included in:
Cost of recurring revenue			77				79				87				80				323				96				142				120				102				460				113				117				127				125				482				782				995				1,777
Cost of professional services			153				165				158				162				638				133				209				138				132				612				114				122				128				122				486				328				546				874
Sales and marketing			538				595				738				583				2,454				622				952				761				694				3,029				751				726				818				782				3,077				1,035				1,580				2,615
Research and development			235				242				252				240				969				262				377				285				254				1,178				257				240				254				237				988				349				443				792
General and administrative			263				816				297				265				1,641				403				1,056				548				500				2,507				520				556				875				870				2,821				1,391				1,408				2,799
Interest and other income, net			-				-				-				-				-				-				-				-				(1,000	)			(1,000	)			-				-				-				-				-				(1,565	)			253				(1,312	)
(Provision) benefit for income taxes			-				-				-				-				-				-				-				-				-				-				-				-				-				(19,732	)			(19,732	)			-				-				-
Total non-GAAP reconciling items (pre-tax)			1,266				1,897				1,532				1,330				6,025				1,516				2,736				1,852				682				6,786				1,755				1,761				2,202				(17,596	)			(11,878	)			2,320				5,225				7,545

RightNow Technologies, Inc.
Consolidated Statements of Cash Flow
Unaudited		Amounts in thousands
Last updated July 27, 2011
		2008															2009															2010															2011
		Q1			Q2			Q3			Q4			YTD			Q1			Q2			Q3			Q4			YTD			Q1			Q2			Q3			Q4			YTD			Q1			Q2			YTD
Operating activities
Net income (loss)		(3,396	)		(3,132	)		(1,447	)		692			(7,283	)		1,263			36			1,965			2,607			5,871			585			1,404			2,895			23,506			28,390			1,390			194			1,584
Noncash adjustments:
Depreciation and amortization		1,954			1,956			1,956			1,905			7,771			1,887			1,726			1,797			2,081			7,491			2,065			1,872			1,812			2,023			7,772			2,802			3,318			6,120
Provision for losses on accounts receivable		89			26			64			33			212			57			30			30			40			157			50			31			50			60			191			20			21			41
Stock-based compensation expense		1,266			1,897			1,532			1,330			6,025			1,516			2,736			1,852			1,682			7,786			1,755			1,761			2,202			2,136			7,854			2,739			3,988			6,727
Deferred tax asset valuation allowance reversal		-			-			-			-			-			-			-			-			-			-			-			-			-			(19,732	)		(19,732	)		-			-			-
Foreign currency exchange gain on acq.		-			-			-			-			-			-			-			-			-			-			-			-			-			-			-			(1,819	)		-			(1,819	)
Changes in operating accounts:
Receivables		7,447			4,062			1,143			(7,878	)		4,774			13,569			(5,171	)		2,333			524			11,255			2,449			(2,910	)		(963	)		(2,605	)		(4,029	)		8,029			(11,010	)		(2,981	)
Prepaid and other current assets		(852	)		(804	)		(1,168	)		(900	)		(3,724	)		399			(583	)		(693	)		(614	)		(1,491	)		(1,054	)		175			289			(672	)		(1,262	)		(202	)		(10	)		(212	)
Accounts payable and accrued liabilities		2,292			(257	)		42			(720	)		1,357			(1,823	)		3,099			(1,427	)		(35	)		(186	)		3,556			2,152			948			463			7,119			1,494			(2,117	)		(623	)
Commissions and bonuses payable		(1,523	)		742			166			1,545			930			(2,553	)		1,743			(132	)		1,393			451			(1,244	)		(329	)		1,451			999			877			(2,512	)		1,355			(1,157	)
Deferred revenue		(3,434	)		4,001			(3,566	)		7,168			4,169			(9,429	)		(2,038	)		(569	)		(2,880	)		(14,916	)		(4,614	)		(160	)		(2,887	)		(727	)		(8,388	)		(8,428	)		11,535			3,107
Other		(173	)		83			(52	)		635			493			-			503			(247	)		(577	)		(321	)		(38	)		19			176			(455	)		(298	)		(16	)		(852	)		(868	)
Cash provided (used) by operating activities		3,670			8,574			(1,330	)		3,810			14,724			4,886			2,081			4,909			4,221			16,097			3,510			4,015			5,973			4,996			18,494			3,497			6,422			9,919
Investing activities
Acquisition of property and equipment		(1,522	)		(1,536	)		(1,309	)		(1,425	)		(5,792	)		(584	)		(1,841	)		(1,240	)		(1,912	)		(5,577	)		(1,640	)		(2,196	)		(1,639	)		(1,233	)		(6,708	)		(3,117	)		(2,031	)		(5,148	)
Business acquisitions		-			-			-			-			-			-			-			(5,906	)		-			(5,906	)		-			-			-			-			-			(33,837	)		-			(33,837	)
Intangible asset additions																	(100	)					(144	)		(410	)		(654	)		(1,034	)		(1,305	)		(1,120	)		(1,101	)		(4,560	)		(1,491	)		(1,592	)		(3,083	)
Change in investments, net		(1,970	)		748			2,218			12,435			13,431			(2,251	)		(6,059	)		(13,081	)		5,558			(15,833	)		(342	)		17,107			6,935			(63,513	)		(39,813	)		(22,886	)		(16,411	)		(39,297	)
Other		-			-			-			-			-			-			-			-			-			-			-			-			-			-			-			-			-			-
Cash provided (used) for investing activities		(3,492	)		(788	)		909			11,010			7,639			(2,935	)		(7,900	)		(20,371	)		3,236			(27,970	)		(3,016	)		13,606			4,176			(65,847	)		(51,081	)		(61,331	)		(20,034	)		(81,365	)
Financing activities
Net proceeds from (payments on) long-term debt		(11	)		(11	)		(11	)		(10	)		(43	)		(12	)		(11	)		(12	)		(11	)		(46	)		(12	)		(10	)		-			175,000			174,978			(240	)		(20	)		(260	)
Debt issuance costs		-			-			-			-			-			-			-			-			-			-			-			-			-			(5,036	)		(5,036	)								-
Proceeds from issuance of stock:
Common stock issued under employee benefit plans		414			234			618			130			1,396			78			151			167			1,352			1,748			1,159			409			3,068			8,184			12,820			5,311			3,065			8,376
Common stock repurchase (Treasury)		-			-			-			(13,209	)		(13,209	)		(1,798	)		-			-			-			(1,798	)		-			-			-			(14,142	)		(14,142	)		-						-
Other		51			(53	)		-			(133	)		(135	)		89			48			95			11			243			328			802			1,491			982			3,603			591			(142	)		449
Cash provided (used) by financing activities		454			170			607			(13,222	)		(11,991	)		(1,643	)		188			250			1,352			147			1,475			1,201			4,559			164,988			172,223			5,662			2,903			8,565
Effect of foreign exchange rates		278			234			(1,822	)		(1,338	)		(2,648	)		(251	)		1,156			613			349			1,867			(401	)		(724	)		1,808			83			766			2,222			503			2,725
Net change in cash and cash equivalents		910			8,190			(1,636	)		260			7,724			57			(4,475	)		(14,599	)		9,158			(9,859	)		1,568			18,098			16,516			104,220			140,402			(49,950	)		(10,206	)		(60,156	)
Cash and cash equivalents at beginning of period		43,681			44,591			52,781			51,145			43,681			51,405			51,462			46,987			32,388			51,405			41,546			43,114			61,212			77,728			41,546			181,948			131,998			181,948
Cash and cash equivalents at end of period		44,591			52,781			51,145			51,405			51,405			51,462			46,987			32,388			41,546			41,546			43,114			61,212			77,728			181,948			181,948			131,998			121,792			121,792

RightNow Technologies, Inc.
Currency Component Data Sheet
Unaudited
As of July 27, 2011
		Currency Component of Total Revenue-TTM as of June 30, 2011		Currency exchange rate into USD as of July 26, 2011		Impact of 1 percent change in fx exchange rate per 100M in revenue
GBP		10%		1.6390		163,900
EUR		5%		1.4474		72,370
AUD		10%		1.0935		109,353
USD and other		75%		n/a
Total		100%				345,623
		Currency Component of Total Expense-TTM as of June 30, 2011		Currency exchange rate into USD as of July 26, 2011		Impact of 1 percent change in fx exchange rate per 100M in expense
GBP		10%		1.6390		163,900
EUR		6%		1.4474		86,843
AUD		3%		1.0935		32,806
USD and other		81%		n/a
Total		100%				283,549
TTM=Trailing Twelve Months