Convio Posts Record Quarterly Revenue, Continued Positive Cash Flow and Profitability

Austin, Texas (November 6, 2008) —

Convio, Inc. – the leading provider of on-demand constituent relationship management software and services to nonprofit organizations – today announced record revenues of $14.9 million for the third quarter of 2008, a 26 percent increase over the same period last year. Generating $1.1 million in operating cash flow, the company produced positive cash flow from operations for the fourth time in the last five quarters and again achieved profitability on a non-GAAP basis.

“Our continued growth, record revenues, cash flow and profitability during a challenging economic period shows that nonprofit organizations are assessing their IT and software budgets and adopting solutions that drive results and develop stronger relationships with constituents,” said Gene Austin, chief executive officer of Convio. “Nonprofits and their constituents appreciate the efficiency and effectiveness of the Internet for communication, fundraising and advocacy as well as being the preferred method to deploy and use software and services. Our focus and investment in client service, new products, open applications and innovation also ensures our clients have a platform that is optimized for multi-channel engagement as well as future technologies and applications.”

With the combination of new clients, addition of significant new events and organic growth in the existing client base Convio processed $565 million in online donations on behalf of clients during the first nine months of 2008 — a 91 percent increase over the same period a year ago. Convio clients sent more than 2.2 billion emails to constituents during that period with a deliverability rate in excess of 95 percent, above industry standards.

Convio’s non-GAAP income from operations for the quarter ended September 30, 2008, which excludes stock-based compensation expense and amortization of intangibles arising from the acquisition of GetActive Software, Inc., was $751,000. This compares with non-GAAP loss from operations of $722,000 in the same period last year.

A reconciliation of GAAP to non-GAAP results has been provided in the summary financial statement tables included in this press release.  An explanation of this measure is also included below under the heading “Non-GAAP Financial Measures.”

Convio Common Ground™ Generally Available, Leading Nonprofit Brands Switch to Convio

In Q3 2008, Convio announced general availability of Common Ground™, a new constituent management system for nonprofits, including a fully functional trial version available at Convio’s Web site. Common Ground is an open, Web-based constituent relationship management (CRM) system for tracking all constituent interactions across all channels, online and offline. Built on salesforce.com’s Force.com Platform, the product offers an on-demand solution that easily integrates with other open systems to provide powerful tools that help nonprofits focus on their mission, fundraising, advocacy and communications instead of managing and maintaining software and technology.

During the quarter Convio signed a variety of new clients of many sizes and across a diverse sector of the nonprofit community. Some of the most well known brands include the Crohns & Colitis Foundation of America, Habitat for Humanity, Disabled American Veterans and the St. Joseph’s Indian School.

“Our results show that nonprofits understand that they need to be agile, social and connected if they expect to mobilize and inspire people, and achieve their mission," said Austin. “The adoption of the SaaS model for online fundraising, advocacy and marketing continues to be the growth engine for many nonprofit organizations. We are also seeing that beyond a communications channel the Internet is the most cost-effective and flexible way for nonprofits to use technology to manage their organization and turn ideas into actions that support their mission."

About Convio

Convio is the leading provider of on-demand constituent relationship management (CRM) software and services that give nonprofit organizations a better way to inspire and mobilize people to support their organization. The company’s online marketing suite offers integrated software for fundraising, advocacy, events, email marketing and web content management, and its CRM system, Convio Common Ground™, helps organizations efficiently track and manage all interactions with supporters. All Convio products are delivered through the Software-as-a-Service (SaaS) model and are backed by a portfolio of best-in-class consulting and support services and a network of partners who provide value-added services and applications focused on the unique needs of nonprofit organizations.  

Convio clients include nonprofit organizations, Institutions of Higher Education, Associations and Faith-based organizations around the world such as American Red Cross, American Diabetes Association, American Society for the Prevention of Cruelty to Animals, Humane Society of the United States, Easter Seals, National Multiple Sclerosis Society, Susan G. Komen for the Cure®, Sierra Club, and National Public Radio. For more information, please visit www.convio.com.

Non-GAAP Financial Measures

Convio has provided in this release financial information that has not been prepared in accordance with generally accepted accounting principles (“GAAP”).  This information includes non-GAAP income from operations.  Convio uses this non-GAAP financial measure internally in analyzing its financial results and believes it is useful to readers of this release, as a supplement to GAAP measures, in evaluating Convio’s ongoing operational performance.  Convio believes that the use of this non-GAAP financial measure provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing its financial results with other companies in Convio’s industry, many of which present similar non-GAAP financial measures. As noted, the non-GAAP financial results discussed above exclude stock-based compensation expense, the write off of deferred stock offering costs and costs associated with amortization of intangibles arising from the acquisition of GetActive Software, Inc.

Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.  Readers of this release are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measure below. 

Convio, Inc.
Condensed Consolidated Selected Financial Data
(in thousands)
(unaudited) 

Convio, Inc.
Reconciliation of GAAP Operating Loss to Non-GAAP Operating Income(Loss)
(in thousands)
(unaudited)

Press Contact:
Karoline McLaughlin
Director, Corporate Communications
Convio, Inc.
kmclaughlin@convio.com
512-652-7865