Vocus, Inc. (NASDAQ: VOCS) is one of the top on-demand companies in the world -- and one of the most profitable. Its technology helps PR folks with media campaigns, targeting, press releases and the like.

With a tough economy, it would seem that Vocus would hit some headwinds. But so far, there are no signs of trouble.

Just look at the company's Q2 report. Revenues spiked 36% to $19.09 million (with a 7% sequential increase). It's the 36th consecutive quarter of revenue growth.

Net income was $5.66 million, or $0.30 per share. Moreover, cash flow from operations was $6.52 million.

Why the success? A key is that the company's products sell at competitive price points. In fact, in Q2 Vocus snagged 265 net new subscription customers (the total is 2,911).

It also helps that Vocus' product offering fits the needs of small business as well as large ones. For example, some of the Q2 customers included CITGO Petroleum, Deli Management, Easter Seals Chicago, OfficeMax (NYSE: OMX) and United States Olympic Committee;

Vocus has raised its guidance. The forecast for full-year revenues is $77.3 million to $77.8 million, with earnings of $0.73 to $0.75 per share.

All in all, it's good stuff. And, on news of the earnings report, shares of Vocus are up almost 4% to $33.84.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

Here are some highlights from this past week's earnings coverage from BloggingStocks:

• Amazon.com Inc. (NASDAQ: AMZN) profits rose 30%, easily beating analysts' expectations.
• AMETEK Inc. (NYSE: AME) beat Q1 estimates on global strength and recent acquisitions.
• Apple Inc. (NASDAQ: AAPL) easily beat Q2 expectations but offered a weak outlook.
• AT&T Inc. (NYSE: T) posted strong Q1 results thanks to the popularity of the iPhone.
• Baidu.com Inc. (NASDAQ: BIDU) beat earnings and saw an upgrade from Citigroup Inc. (NYSE: C).
• Broadcom Corp. (NASDAQ: BRCM) Q1 profit soared, and it raised its guidance.
• Cymer Inc. (NASDAQ: CYMI) beat Q1 estimates and announced a share million buyback program.
• Electronic Data Systems Inc. (NYSE: EDS) posted Q1 profits on cost cutting and new contracts.
• EMC Corp. (NYSE: EMC) Q1 earnings fell on on acquisition-related charges.
• Hexcel Corp. (NYSE: HXL) beat Q1 estimates on increased commercial aerospace sales.
• Huaneng Power ADS (NYSE: HNP) earnings plunged on coal prices, but the stock went higher.
• Level 3 Communications Inc. (NASDAQ: LVLT) narrowed its loss on higher sales of networking services.
• McAfee Inc. (NYSE: MFE) Q1 profit plunged on product development and marketing costs.
• MEMC Electronic Materials Inc. (NYSE: WFR) missed analysts' estimates for the first quarter.
• Microsoft Corp. (NASDAQ: MSFT) beat earnings expectations and raised its full-year guidance.
• Netflix Inc. (NASDAQ: NFLX) profit soared in the first quarter on increase in subscriptions.
• Nintendo Co. (OTC: NTDOY) posted record results due to the popularity of the Wii system.

For companies, PR is one of the best ways to get customers and build a brand. But, it can be expensive – as well as unpredictable.

Well, Vocus (NASDAQ: VOCS) has been making things easier. That is, the company has a suite of web-based products that help manage the PR process, such as with media relations, monitoring, and news distribution. What's more, the services are fairly affordable.

Investors are also getting interested in Vocus. On news of its Q1 results, the shares shot up 8% to $27. Then again, revenues spiked 42% to $17.87 million, which was the 35th consecutive quarter of revenue growth. Cash flow from operation came to $5.94 million, which was a 58% increase.

In the quarter, Vocus added 219 net new subscribers (the total is 2,646). Some of the customers include British Antarctic Survey, China Foreign Trade Centre, Clemson University, Department of Justice, Merck & Company (NYSE: MRK) and so on.

Going into Q2, Vocus sees revenues of $18.6 million to $18.8 million. Full-year guidance is for $75.9 million to $76.7 million.

All in all, Vocus is yet another company that is leveraging the on-demand model, which allows for a nice recurring revenue model. What's more, it helps that the company doesn't have major competitive forces – yet has a fairly large market opportunity.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

Corporate strategy expert Sramana Mitra had a nice post yesterday that looked at a broad spectrum of the burgeoning Software as a Service (SaaS) market. Companies like salesforce.com, Inc. (NYSE: CRM) are revolutionizing the software industry by providing hosted versions of traditional software packages and essentially renting them to customers. Customers benefit by paying less money upfront and don't assume the cost of ownership, opting instead to rent software from SaaS companies. Updating and maintenance of software is handled by SaaS firm.

I've been looking at Concur Technologies, Inc. (Nasdaq: CNQR). Concur's solutions address automate corporate travel and expense management. Larry Schutts had a good post on the firm saying:

Its flagship program provides the process and information for management to reduce manual processing, improve internal controls, increase business policy compliance, speed up reimbursement, and increase expense report accuracy. The software features Web-based modules for tracking, submitting, and processing reports.

Large corporations like The Chubb Corporation (NYSE: CB), J.C. Penney Company, Inc. (NYSE: JCP) and Texas Instruments Incorporated (NYSE: TXN) are all looking to 1) manage complicated expense processing 2) lower costs.

SaaS companies are just in their infancy as more business look to rent rather than buy. Check out Taleo Corporation (Nasdaq: TLEO), RightNow Technologies (Nasdaq: RNOW), and Vocus, Inc. (Nasdaq: VOCS).

Zack Miller is the managing editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund.

MOST NOTEWORTHY: PhotoChannel Networks, BioMarin Pharmaceutical, Double-Take and Leapfrog Enterprises were today's noteworthy initiations:

• Merriman believes PhotoChannel Networks (OTC: PNWIF) is positioned to become a leading provider to the digital photofinishing market through its offering of a fully-integrated solution to retailers. The firm started shares with a Buy rating.
  
• Jefferies resumed coverage of BioMarin Pharmaceutical (NASDAQ: BMRN) with a Buy rating and $33 target, as they expect strong long-term growth from Aldurazyme and Naglazyme and is optimistic for Kuvan approval and a strong market launch.
  
• ThinkEquity is positive on Double-Take's (NASDAQ: DBTK) impressive operating leverage and valuation and started shares off with a Buy rating and $28 target.
  
• Needham initiated Leapfrog Enterprises (NYSE: LF) with a Strong Buy rating and $11 target. The firm expects Leapfrog to benefit from its turnaround initiatives in 2008 and for shares to be driven by improving sales and profits.

OTHER INITIATIONS:

• UBS started J Crew (NYSE: JCG) and American Eagle (NYSE: AEO) with Neutral ratings and targets of $40 and $25, and Gap (NYSE: GPS) and Abercrombie & Fitch (NYSE: ANF) with Buy ratings and targets of $23 and $97.
  
• Goldman initiated The9 (NASDAQ: NCTY) with a Neutral rating. Broadpoint initiated Vocus Inc (NASDAQ: VOCS) with a Strong Buy rating.

MOST NOTEWORTHY: Cypress Bioscience, Banc of America, Insulet, Taleo and Vocus Inc were today's noteworthy initiations:

• Friedman Billings started shares of Cypress Biosciences Inc (NASDAQ: CYPB) with an Outperform rating and $22 target, and is positive on the company's lead product milnacipran, in Phase III studies for fibromyalgia. The firm expects a 1Q09 launch and believes the U.S. market could be as large as $7B.
  
• Goldman resumed coverage of Bank of America Corporation (NYSE: BAC) with a Buy rating and $63 target as they believe the company has around $22.5B of unrealized gains in its strategic investment portfolio. Goldman also added BAC to their Americas Buy List.
  
• Insulet Corporation (NASDAQ: PODD) was initiated at William Blair with an Outperform rating. The firm believes the unique features of the OmniPod will allow PODD to capture a meaningful portion of the 300,000 current insulin pumpers in the United States.
  
• Soleil started shares of Taleo Corporation (NASDAQ: TLEO) with a Buy rating and $35 target and believes the company's recent growth pace can continue.
  
• Shares of Vocus Inc (NASDAQ: VOCS) were also initiated at Soleil with a Buy rating and $39 target. The firm believes the company can gain share in the early stage market for public relations software given its on-demand model and low price entry point.

OTHER INITIATIONS:

• Cowen initiated shares of Lions Gate Entertainment Corp (NYSE: LGF) and Marvel Entertainment Inc (NYSE: MVL) with an Outperform rating and shares of Dreamworks Animation SKG Inc (NYSE: DWA) with a Neutral rating.
  
• Goldman resumed coverage of Nintendo Co Ltd (OTC: NTDOY) with a Buy rating.

As we pass through the twenty-first century, some of the traditional public relations methods are being put aside in favor of internet-enabled approaches. A pioneer in expanding the frontiers along that line is headquartered in Lanham, Maryland.

Vocus Inc. (NASDAQ: VOCS) provides on-demand software for public relations management. The company's programs address such functions as media relations, news distribution, news monitoring and analysis. Its government relations software offers state and federal legislative contact lists and lobbying analysis tools. The service is delivered as an annual subscription, with no need for internal hardware, software or IT support. Vocus is used by over 1,800 not-for-profit, corporate, government and public relations organizations worldwide and is available in five languages. Clients include Southwest Airlines (NYSE: LUV), Goodwill Industries and the Humane Society of the United States. The firm has established partnerships with Google (NASDAQ: GOOG) and Microsoft (NASDAQ: MSFT).

Vocus had good news for investors last week, when it reported Q2 EPS of $0.11 and revenues of $14.08 million. Analysts had been looking for $0.09 and $13.46 million. Management also guided Q3 EPS to $0.10-$0.11 ($0.10 consensus), Q3 revenues to $14.3-$14.5 million ($14.30M consensus), FY07 EPS to $0.44-$0.46 ($0.43 consensus) and FY07 revenues to $56.3-$56.7 million ($55.98M consensus). The stock popped into a bullish "flag" consolidation pattern on the news. Prices frequently exit flags moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.

Brokers recommend the shares with two "strong buys," three "buys" and one "hold." Analysts see a 28% growth rate, through the next year. The VOCS Sales Growth rate (53.0%) and EPS Growth rate (175.0%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 55% of the outstanding shares. Over the past 52 weeks, the stock has traded between $14.70 and $30.53. A stop-loss of $23.25 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.

In an age of real-time communications, some traditional public relations methods are being put aside in favor of internet-enabled approaches. A Lanham, Maryland outfit is among those expanding the frontiers along that line.

Vocus Inc. (NASDAQ: VOCS) provides on-demand software for public relations management. The company's programs address such functions as media relations, news distribution, news monitoring and analysis. Its government relations software offers state and federal legislative contact lists and lobbying analysis tools. The service is delivered as an annual subscription, with no need for internal hardware, software or IT support. Vocus is used by over 1,800 not-for-profit, corporate, government and public relations organizations worldwide and is available in five languages. Clients include Southwest Airlines (NYSE: LUV), Goodwill Industries and the Humane Society of the United States. The firm has established partnerships with Google (NASDAQ: GOOG) and Microsoft (NASDAQ: MSFT).

Vocus had good news for investors earlier in the month, when it reported EPS of 11 cents and revenues of $12.6 million. Analysts had been looking for 7 cents and $12.3 million. Management also guided Q2 EPS to 8-9 cents (8 cent consensus), Q2 revenues to $13.3-13.5 million ($13.24M consensus), FY07 EPS to 41-43 cents (39 cent consensus) and FY07 revenues to $55.3-55.9 million ($55.42M consensus).

MOST NOTEWORTHY: Nintendo Co, Ltd (NTDOY) and FuelCell Energy, Inc (FCEL) were the only noteworthy initiations in today's modest-sized list:

• JP Morgan started Nintendo Ltd (OTC: NTDOY) with an Overweight rating.
• Lazard initiated shares of FuelCell Energy (NASDAQ: FCEL) with a Buy rating and $11 target, as the firm believes the company has the best bookings prospects in its history.

OTHER INITIATIONS:

• Discovery Holding Co (NASDAQ: DISCA) was initiated at Pali Research with a Buy rating and $25.50 target. Pali said Discovery now appears committed to developing unique,"on-brand" proprietary content across all its cable networks that it can exploit through an increasing number of distribution platforms; Pali added that this is a company that no longer feels compelled to be in every country around the globe.
• Pacific Crest initiated shares of Vocus, Inc (NASDAQ: VOCS) with an Outperform rating and $28 target, as the firm believes the company has a strong competitive position.
• Cowen initiated Medivation, Inc (NASDAQ: MDVN) with a Neutral rating based on valuation.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).