Interactive Data Corporation reports financial results for the fourth quarter and full year ended 31 December 2008.
Interactive Datas fourth-quarter 2008 revenue increased 6.6% to $194.1 million from $182.1 million in the fourth quarter of 2007. Income from operations grew 27.0% to $57.1 million in the fourth quarter of 2008 from $45.0 million in the same period one year ago.
Net income for the fourth quarter of 2008 was $40.1 million, or $0.42 per diluted share, a 25.8% increase over net income of $31.9 million, or $0.33 per diluted share, in the fourth quarter of 2007.
Institutional Services Segment:
Interactive Data Pricing and Reference Data reported fourth-quarter 2008 revenue of $124.5 million, a 9.0% increase over the prior years fourth quarter (or an increase of 16.0% before the effects of foreign exchange).
Interactive Data Real-Time Services generated fourth-quarter 2008 revenue of $39.0 million, an increase of 3.7% over the same quarter last year (or an increase of 16.2% before the effects of foreign exchange). The revenue increase was driven by strong growth in the real-time datafeeds business and continued expansion of the Managed Solutions business in the United States.
Interactive Data Fixed Income Analytics reported revenue for the fourth quarter of 2008 of $8.5 million, a 4.0% increase from last years fourth quarter (or an increase of 4.3% before the effects of foreign exchange). New sales were partially offset by the impact of cancellations primarily caused by client consolidation activities.
Active Trader Services Segment:
eSignals fourth-quarter 2008 revenue of $22.2 million was essentially unchanged from the same quarter last year (or an increase of 3.0% before the effects of foreign exchange) as higher average net subscription fees were offset by a decline in the number of direct subscription terminals to under 55,000.
Full-Year 2008 Results
For the full year ended December 31, 2008, Interactive Data reported revenue of $750.5 million, an increase of $60.9 million, or 8.8%, from $689.6 million in 2007. Foreign exchange reduced full-year 2008 revenue by $9.3 million and acquisitions contributed a net of $6.6 million to full-year 2008 revenue.
The effective tax rate for 2008 was 34.3% compared with 31.8% in 2007. The increase of 2.5 percentage points from 2007 primarily reflects the impact of various discrete tax items during 2007 such as a favorable change in German tax rates and the impact of an R&D tax credit initiative from 2006 that was applied to the 2007 rate.
The fourth quarter of 2008 was an excellent finish to another year in which we posted record results, says Stuart Clark, president and chief executive officer. Our fourth-quarter 2008 revenue growth was primarily driven by strong new sales throughout the year, higher usage and the revenue contribution from acquired businesses, partially offset by the negative impact of foreign exchange.
Excluding the effects of foreign exchange and acquisitions, our organic revenue growth was 12.7% in the fourth quarter of 2008 as we saw sustained global demand for our evaluated pricing, reference data and real-time services. Our net income growth in the fourth quarter reflects higher income from operations and a fourth-quarter 2008 effective tax rate that was better than expected, partially offset by lower interest income.
We delivered notable growth in revenue, income from operations and net cash provided by operating activities during the fourth quarter of 2008, says Andrew Hajducky, executive vice president and chief financial officer, Interactive Data.
Our operating performance during the quarter and for the full year reflects continued positive operating leverage as our revenue growth continued to outpace operational spending. For the full year, we returned $156.1 million, or nearly 80% of the net cash provided by operating activities, to shareholders through our regular quarterly dividend, special dividend and stock repurchase activity.”
L.D.