CyberSource Announces Second Quarter 2009 Financial Results

Reports record revenue of $62.9 million and record transaction volume of 579 million;
Signs a record 38,000 new customers in quarter;
Raises guidance for Net Income and EPS.

CyberSource Corporation (NASDAQ: CYBS), a leading provider of electronic payment and risk management solutions, today announced financial results for its second quarter ended June 30, 2009.

Second quarter revenue was $62.9 million, a 13% increase compared to $55.7 million in the same period the previous year.
On a GAAP basis, net income for the second quarter of 2009 was $2.2 million and earnings per share was $0.03, compared to net loss of ($45,000) and breakeven earnings per share in the second quarter of 2008.
Non-GAAP net income for the second quarter was $13.8 million, a 22% increase compared to $11.3 million for the second quarter of 2008. Non-GAAP earnings per share for the second quarter was $0.19, a 19% increase compared to $0.16 earnings per share for the second quarter of 2008. Non-GAAP net income excludes stock-based compensation expense, the non-cash portion of the tax provision, depreciation and amortization expense, and certain non-recurring items. A reconciliation of certain historical GAAP to non-GAAP measures is attached.
During the second quarter, CyberSource processed a record 579 million billable transactions, a 29% increase over the same period the previous year. The value of transactions processed was $28.6 billion, a 4% increase over Q2 2008.
CyberSource signed a record 38,000 new customers in the quarter, increasing the installed base to approximately 273,000 active customers.

"Our very strong results this quarter reflect our continued market share gains, our successful expansion internationally, and the resilience of the eCommerce market in a difficult economy. Despite economic headwinds, we processed record transaction volumes of 579 million, a 29% increase over the prior year, and increased customer signups by 47% over the prior year. I am very pleased with how both our small business and enterprise businesses are performing. Our significant growth in transaction volumes and new customer signups clearly demonstrates that our value proposition is resonating with customers," said Bill McKiernan, Chairman and Chief Executive Officer of CyberSource. "The strong growth in transaction volumes helped increase our GAAP gross margin by 300 basis points to 54% in the second quarter of 2009, compared to the second quarter of 2008, and we ended the quarter with $80.7 million in net cash."

Customers: CyberSource added approximately 38,000 new customers in the quarter, bringing its installed base of customers to approximately 273,000. New enterprise customer wins this quarter include: Air Jamaica, Charming Shoppes, LexisNexis, PayDay Advance Loans, and Tata Communications. Existing customers that added new services or renewed agreements during the quarter include: AF Services, Columbia Sportswear USA Corporation, PC Connection, RSA Security, and Thompson and Company.
International: CyberSource continues to drive strong growth outside the U.S. CyberSource's European operations processed a record 146.3 million transactions in the second quarter, an increase of 67% over the same period last year. The Company's European business is comprised of revenue generated by customers domiciled outside the US, and represented about 7% of revenue in the second quarter.
Global acquiring: CyberSource generated $19.3 million of global acquiring revenue during the second quarter, up 2% over the immediately preceding quarter. CyberSource added approximately 850 new acquiring customers during the quarter, and now has approximately 5,900 global acquiring customers.
Channel Partners: CyberSource's partner program of over 4,300 resellers and affiliate partners continues to be a major driver for small business leads, and provides a broad base of partners selling CyberSource services every day. In the second quarter, CyberSource signed over 400 new ISO and affiliate resellers.

During the second quarter, we did not repurchase any shares of our common stock.

CyberSource is providing guidance for the third quarter of 2009 and full year 2009 based on information available as of July 23, 2009. We assume no duty to update these numbers at any time.

For the third quarter ending September 30, 2009:

Total revenue is expected to be between $63.5 and $64.0 million.
The company expects to process between 580 and 585 million billable transactions.
GAAP gross profit is expected to be approximately $33.4 million, while GAAP operating expenses are expected to be approximately $31.8 million. The company expects to record GAAP net income in the third quarter of approximately $1.0 million and $0.01 earnings per share based on a weighted average share count of 73 million shares.
Non-GAAP net income for the third quarter is expected to be approximately $12.8 million and non-GAAP earnings per share to be $0.18 based on a weighted average share count of 73 million shares.

For the full year 2009:

Total revenue for 2009 is expected to be between $260.0 and $263.0 million, compared to prior guidance of between $258.0 and $263.0 million.
GAAP net income for 2009 is expected to be between $6.5 and $7.0 million, compared to prior guidance of between $5.3 and $5.8 million.
GAAP earnings per share is expected to be between $0.09 and $0.10 per share, based on a weighted average share count of 73 million shares, compared to prior guidance of between $0.07 and $0.08 per share.
Non-GAAP net income for the full year 2009 is expected to be between $54.0 and $55.0 million, compared to prior guidance of $52.5 and $54.0 million. Non-GAAP earnings per share is expected to be between $0.74 and $0.75, based on a weighted average share count of 73 million shares, compared to prior guidance of between $0.72 and $0.74.

CyberSource will host a public conference call today, July 23, 2009 at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss the second quarter results. The call can be accessed in either of the following ways:

Live conference call
888-585-4496 (U.S. and Canada), 706-634-9580 (local and international). The call's conference ID number is: 19225636. A taped replay of this call will be available through October 31, 2009. The dial-in numbers for the taped replay are: 800-642-1687 (U.S.) 706-645-9291 (local and international). Conference ID is as above.

Live web cast
http://ir.cybersource.com/events.cfm
A replay of this web cast will remain available at this location through October 31, 2009.

CyberSource Corporation is a leading provider of electronic payment and risk management solutions. CyberSource solutions enable electronic payment processing for Web, call center, and POS environments. CyberSource also offers industry leading risk management solutions for merchants accepting card-not-present transactions. CyberSource Professional Services designs, integrates, and optimizes commerce transaction processing systems. Approximately 273,000 businesses use CyberSource solutions, including half the companies comprising the Dow Jones Industrial Average. The company is headquartered in Mountain View, California, and has sales and service offices in Japan, the United Kingdom, and other locations in the United States including Bellevue, Washington and American Fork, Utah. For more information on CyberSource please visit www.cybersource.com or email info@cybersource.com. For more information on Authorize.Net small business solutions, please visit www.authorize.net or email sales@authorize.net.

In addition to financial results presented on a GAAP basis, the company has provided non-GAAP measures of gross profit, operating expenses, net income and earnings per share, which are adjusted to exclude certain non-cash items. For purposes of this release, non-GAAP gross profit, operating expenses, net income and earnings per share exclude stock based compensation expense under SFAS 123R, the non-cash portion of the income tax provision, depreciation and amortization expense, and certain non-recurring items. A reconciliation of these historical GAAP to non-GAAP measures is attached with the financial statements. The company believes that presentation of non-GAAP financial measures may provide investors with additional meaningful and relevant financial information. Management believes the non-GAAP measures help indicate trends in the company's business, and management uses the non-GAAP measures to plan and forecast future periods. Non-GAAP information is not determined using GAAP and should not be considered superior to or as a substitute for GAAP measures or data prepared in accordance with GAAP. Furthermore, non-GAAP information may not be comparable across companies, as other companies may use different non-GAAP measures. The company does not provide guidance for certain financial measures such as depreciation and stock-based compensation expense, and, as a result, is not able to provide a reconciliation of GAAP and non-GAAP financial measures for forward-looking data. The company intends to calculate the various non-GAAP financial measures in future periods consistent with the methodology used in the three months ended June 30, 2009, as presented in this release.

Statements in this release that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, without limitation, statements regarding expectations, objectives, anticipations, plans, hopes, beliefs, intentions or strategies regarding the future. Forward-looking statements in this release include, without limitation, statements regarding: (1) strength of the second quarter results reflecting continued market share gains; (2) performance of the small and enterprise businesses; (3) significant growth in transaction volumes and new customer signups demonstrating that the Company's value proposition is resonating with customers; (4) continuing to drive strong growth outside the U.S.; (5) the partner program continuing to be a major driver for small business leads; (6) financial guidance including, without limitation, those regarding revenue, transaction volume, gross profit, operating expenses, net income, and earnings per share. There is no assurance that any forward-looking statement will be realized. Achievement of future results is subject to risks, uncertainties, and potentially inaccurate assumptions. These risks and uncertainties include, among others, those discussed under "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in CyberSource's most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q as well as the consolidated financial statements, related Notes, and the other financial information appearing elsewhere in those reports and other CyberSource filings with the Securities and Exchange Commission. The factors that could cause actual results to differ materially from the forward-looking statements include risks and uncertainties such as: changes in Generally Accepted Accounting Principles and the application thereof; changes in customer needs; the risks of failures, disruptions or illiquidity in the national and global banking, credit and financial systems and the impact of those risks on CyberSource's business; the risk of the economy, in general, and online economy, in particular, slowing down; security breaches; new products and services offerings by CyberSource and its competitors; and any unforeseen system failures. Should known or unknown risks or uncertainties materialize, or should underlying assumptions prove inaccurate, actual results could differ materially from past results and those anticipated, estimated or projected. Readers should bear this in mind when considering forward-looking statements. CyberSource undertakes no obligation to publicly update forward-looking statements, whether as a result of new information, future events, or otherwise.

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Editorial Contact:
Bruce Frymire
CyberSource Corporation
650.965.6042
bfrymire@cybersource.com

© 2009 CyberSource Corporation. All rights reserved. CyberSource is a registered trademark in the U.S. and other countries. Authorize.Net is a registered trademark in the U.S. All other brands and product names are trademarks or registered trademarks of their respective companies.