Hurray! reports in-line on adjusted basis; IVR shows strong sequential growth; SMS weak (HRAY 2Q05 earnings results)

Hurray! (ticker: HRAY) reported Q2 2005 earnings results that met diluted earnings per ADS estimates on an adjusted basis. Keys stats from the quarter:

Q2 Results:
(all percentage changes and comparisons are year on year, unless stated otherwise)

• Total revenue rose 25.1% to $15.0 million vs consensus estimate of $15.66 million.
• Total revenue rose 0.5% sequentially.
• 2G service revenue rose 28.7% to $4.6 million, and rose 29.9% sequentially.
• 2.5G service revenue rose 21.8% to $8.8 million, but fell 6.5% sequentially.
• SMS revenue fell 38.4% to $2.1 million, and fell 8.8% sequentially.
• IVR revenue rose 97.8% sequentially to $2.5 million.
• Software and systems integration services revenue rose 34.0% to $1.6 million, but fell 18.6% sequentially.
• Gross margin was 59.7% vs 60.0%.
• Operating expenses rose 58.2% to $4.4 million, and rose 45.0% sequentially.
• Product development expenses rose 4.2% to $638,000.
• Sales and marketing expenses 49.3% to $2.6 million.
• G&A expenses rose 160.5% to $1.2 million.
• Operating income rose 2.8% to $4.5 million.
• Operating margin was 30.1% vs 36.6%.
• Net income rose 16.0% to $5.0 million but fell 10.2% sequentially.
• Net margin was 33.4% vs 36.0%.
• Diluted earnings per ADS of $0.22 vs $0.26.
• Adjusted diluted earnings per ADS of $0.25 in-line with consensus.

Balance Sheet

• Cash and equivalents of $77.3 million as of June 30, 2005.

HRAY chart.

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