While Bozeman, Montana, may seem like a quaint place, it hosts a variety of high-tech upstarts. Its stars include RightNow (Nasdaq: RNOW ) , which recently reported its first-quarter results.
RightNow posted a net loss of $440,000, or $0.01 per share, down from a net profit of $801,000, or $0.02 per share, in the year-ago period. However, the company generated $6.1 million in operating cash flow, a strong improvement year over year.
RightNow provides customer relationship management software. Its customers access that software on demand, via the Internet, for which they pay RightNow a subscription fee. The model has been a boon for companies such as Salesforce.com (NYSE: CRM ) , and RightNow is also enjoying success.
RightNow's software captures customers' attempts to contact a company via phone calls, email, and websites. The software then routes those customers to the right people within the company, or to certain predefined FAQs.
Bookings are critical to RightNow, and they were particularly strong in the first quarter, climbing 71% to $37.6 million. RightNow expects the bookings to grow between 40% and 50% for the rest of 2006.
Since RightNow's revenue is based on monthly subscription fees, it can take a year or more to see a material impact on the bottom line. (Salesforce.com had similar struggles.) Fortunately, RightNow's ramped-up bookings should eventually lead to stronger revenue and profit growth. As seen with Salesforce.com, such improvements can also create a healthy valuation for shareholders.
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Fool contributor Tom Taulli does not own shares mentioned in this article.