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SoundBite Communications Looks To Buck Trend Of Seasonality

|Includes: SoundBite Communications, Inc. (SDBT)

SoundBite Communications, Inc. (NASDAQ:SDBT) will report Q1 fiscal 2012 earnings on Wednesday May 2, 2012. Wall Street analysts are expecting $10.9 million in revenue. This is within the guidance range of $10.2 to $11.0 million given by management on the last earnings call, but still down from record revenue of $12 million achieved in Q4. Earnings guidance called for -0.05 to -0.09 versus current analyst estimates of -0.07.

CFO Robert Leahy pointed out that last quarter's positive upswing was due in part to seasonality, but also represents a growing client base and increased usage on their platforms. CEO James Milton expressed his excitement over the positioning of SDBT's cloud-based multi-channel and preference management platforms. He also expressed his commitment to continue seeking acquisition opportunities. Its SmartReply deal contributed substantially to revenue in Q3 and Q4.

SDBT has certainly been active in acquiring its way into the mobile marketing space. This has made the company more comparable with Augme Technologies (AUGT.OB) - especially via Augme's recent acquisition of HipCricket - along with Velti (VELT). The space is hot. Shares of both AUGT.OB and VELT are up approximately 100% year to date. SDBT's stock has also been on the move, but is still only up about 20%. Catching up to AUGT.OB and VELT would take shares of SDBT well over $4.00 per share.

The Bottom Line: Pipeline Data believes that SDBT has been more of victim of poor market conditions than poor management. At present though, SDBT's addressable market mix has become more favorable and face-to-face meetings with Mr. Milton reveal him to be a sharp and seasoned executive. We believe SDBT has a good shot to meet, if not to beat, analyst estimates on Wednesday evening.

Disclosure: I am long SDBT.