Interactive Intelligence takes quarterly loss

Interactive Intelligence Group Inc. exceeded analyst expectations in the second quarter despite a money-losing period.

The Indianapolis-based software firm on Monday reported a loss of $3.7 million, or 18 cents per share, compared with a loss of $3.4 million, or 16 cents per share, in the same quarter a year ago.

Analysts expected a loss of 21 cents per share in the quarter.

Revenue rose to $79.8 million, compared with $72.2 percent a year ago. The revenue figure slightly topped the consensus analyst prediction of $79.4 million.

The company reported an operating loss of $11.5 million in the quarter, far exceeding last year's gain of $849,000.

Interactive was right on target with the preliminary earnings announcement it made July 16, when it predicted revenue between $86 million and $88 million and an operating loss between $11 million and $12 million.

Profit at Interactive, which develops software for corporate contact centers, has suffered the past few years as the company moved its business model to subscription-based cloud services from on-site installations and services. The shift meant collecting revenue more gradually over longer times versus receiving upfront fees.

Cloud-based revenue during the quarter increased 77 percent from the same quarter of 2013, and cloud-based orders represented 52 percent of total orders.

“Our second-quarter revenues show the ongoing shift of our business to the cloud and were primarily impacted by lower than expected on-premises orders as well as the deferral of revenues from two sizable contracts we expected to recognize,” Interactive CEO Donald Brown said in a prepared statement. “The shift to the cloud market is accelerating and will continue to result in more revenues being deferred to future quarters leading to greater overall growth of recurring revenue."

Interactive shares rose 2.4 percent Monday, to $45.99 each, prior to the earnings announcement. The stock has fallen 31 percent this year.