MobileIron Announces Fiscal Fourth Quarter and Full Year 2015 Financial Results

MOUNTAIN VIEW, Calif., Feb. 4, 2016 /PRNewswire/ -- MobileIron (NASDAQ: MOBL), the leader in mobile enterprise security, today announced results for its fourth fiscal quarter ended December 31, 2015.

Fourth Quarter 2015 Financial Highlights

• Gross billings were $48.6 million, up 15% year-over-year
• Recurring billings, which represented 65% of gross billings, were $31.5 million, up 30% year-over-year
• GAAP revenue was $43.0 million, up 14% year-over-year
• Non-GAAP revenue was $42.9 million, up 17% year-over-year
• Recurring revenue was $26.0 million, up 45% year-over-year
• GAAP net loss per share was $0.18; non-GAAP net loss per share was $0.07
• Cash and equivalents, plus short and long term investments stood at $98.9 million
• Surpassed 10,500 cumulative customers who have purchased our platform since 2009 and over 500 of the 2015 Forbes Global 2000

Full Year 2015 Financial Highlights

• Gross billings were $165.0 million, up 13% year-over-year
• Recurring billings, which represented 65% of gross billings, were $107.5 million, up 37% year-over-year
• GAAP revenue was $149.3 million, up 13% year-over-year
• Non-GAAP revenue was $147.5 million, up 16% year-over-year
• Recurring revenue was $90.6 million, up 49% year-over-year
• GAAP net loss per share was $1.07; non-GAAP net loss per share was $0.71

"We have a great opportunity in front of us. I joined MobileIron for two reasons: there's a huge market and, having been a MobileIron customer, I believe we have the best product," said Barry Mainz, CEO, MobileIron. "It was a strong end to the year with record billings and revenues. We achieved our financial targets while reducing expenses and demonstrated improved operating leverage. I am committed to the goal of exiting 2016 cash flow positive."

Fourth Quarter 2015 Business Highlights

Platform

• Released software enhancements to MobileIron Core, Cloud, Sentry, Docs@Work, Email+, including increased iOS 9 features, enhancements to Android for Work, and general release of Windows 10.   
• As of end of 2015, MobileIron ecosystem boasted 470 active technology partners, which have already released over 180 technology integrations.

Channels

• Added Dimension Data as a global channel partner.
• Our largest reseller, AT&T, represented approximately 16% of GAAP revenue for the quarter.

Milestones and Recognition

• Granted four additional US patents bringing the total to 26 issued.  
• Recognized as a leader by Forrester Research, Inc. in its report The Forrester Wave(tm): Enterprise Mobile Management, Q4 2015.
• Reported new data on the State of App Security and showed that one in 10 enterprises has at least one compromised mobile device.
• Settled outstanding lawsuits with Good Technology.

Financial Outlook

The company is providing the following outlook for its fiscal first quarter 2016 (ending March 31, 2016):

• Gross billings are expected to be between $40 million and $43 million, growth of 10% to 18% year-over-year.
• Revenue is expected to be between $38 million and $40 million, growth between 16% and 22% year-over-year.
• Non-GAAP gross margin is expected to be between 82 and 83%, and non-GAAP operating expenses are expected to be between $42 million and $44 million.

The company is providing the following outlook for its fiscal 2016 (ending December 31, 2016):

• Gross billings are expected to be between $180 million and $200 million.
• Revenue is expected to be between $160 million and $180 million.
• Non-GAAP operating margin is expected to be between -8% and -12% for the fourth quarter 2016.
• Cash from operations is expected to be positive for the fiscal fourth quarter 2016.

All forward-looking non-GAAP financial measures contained in this section "Financial Outlook" exclude estimates for stock-based compensation expenses and amortization of intangible assets. Beginning the first quarter of 2016, we will stop reporting non-GAAP revenue on either an actual or forward-looking basis as reconciling items for GAAP to non-GAAP revenue become immaterial. While a reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis, the company has provided a reconciliation of GAAP to non-GAAP financial measures in the financial statement tables included in this press release for its fiscal fourth quarter of 2014 and 2015 and for fiscal year 2014 and 2015.

Conference Call and Webcast

MobileIron will host a conference call and live webcast at 1:30 p.m. Pacific Daylight Time (4:30 p.m. EDT) to discuss the company's financial results and business highlights. Interested parties may access the call by dialing 1-855-327-6837 in the U.S. or 1-631-891-4304 from international locations. The live webcast will be available on the MobileIron Investor Relations website at http://investors.mobileiron.com/. A replay will be available through the same link or by dialing (877) 870-5176 and referencing conference ID#117239 through March 4, 2016.

Safe Harbor Statement

This press release contains forward-looking statements that involve risks and uncertainties, including, but not limited to, statements regarding MobileIron's revenue,  operating expenses, cost structure, GAAP and non-GAAP financial metrics, projected financial results and trends in MobileIron's business. There are a significant number of factors that could cause actual results to differ materially from statements made in this press release, including, but not limited to, our limited operating history, quarterly fluctuations in our operating results, our need to develop new solutions and enhancements to compete in rapidly evolving markets, product defects, customer adoption, competitive pressures, billings type mix shift, our ability to scale, our ability to recruit and retain key personnel, and the quality of our support services.   

Additional information on potential factors that could affect MobileIron's financial results is included in our SEC filings, including our reports on Forms 10-K, 10-Q and 8-K and other filings that we make with the SEC from time to time. MobileIron does not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.    

*  The Forrester Wave™: Enterprise Mobile Management, Q4 2015

About MobileIron

MobileIron provides the secure foundation for companies around the world to transform into Mobile First organizations. For more information, please visit www.mobileiron.com.

"MobileIron" and the MobileIron Planet M logo are registered trademarks of MobileIron, Inc. in the United States and other countries. Trade names, trademarks, and service marks of other companies that are used in this press release belong to their respective owners.

Financial Results

Non-GAAP financial measures and reconciliations

To supplement our financial results presented on a GAAP basis, we provide investors with certain non-GAAP financial measures, including gross billings, recurring billings, non-GAAP revenue, recurring revenue, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating loss, non-GAAP operating margin, non-GAAP net loss, and non-GAAP net loss per share. These non-GAAP financial measures exclude stock-based compensation, restructuring charges, amortization of intangible assets, and perpetual license revenue recognized from licenses delivered prior to 2013:

Perpetual license revenue recognized from licenses delivered prior to 2013:  We have excluded the effect of perpetual license revenue recognized from licenses delivered prior to 2013 from revenue, gross profit, gross margin, operating loss, operating margin, net loss, and net loss per share. Because we had not established vendor specific objective evidence, or VSOE, of fair value of software support and services prior to January 1, 2013, we recognized perpetual license revenue ratably over the term of the related software support agreement. Upon establishing VSOE on January 1, 2013, we began to recognize perpetual license revenue upon delivery assuming all other revenue recognition criteria are met. As a result, our perpetual license revenue includes amounts related to licenses delivered prior to 2013. Revenue from these perpetual licenses delivered prior to 2013 has declined over each quarter since the quarter ended March 31, 2013 and will continue to decline sequentially until it is fully amortized.

Stock-based compensation expenses: We have excluded the effect of stock-based compensation expenses from our gross profit, gross margin, operating loss, operating margin, net loss, and net loss per share. Stock-based compensation expenses will recur in future periods.

Restructuring charges:  In our non-GAAP financial measures, we have excluded the effect of the severance and other expenses related to our reduction in workforce. Restructuring charges may recur in the future; however, the timing and amounts are difficult to predict.

Amortization of intangible assets: We have excluded the effect of amortization of intangible assets from our gross profit, gross margin, operating loss, operating margin, net loss, and net loss per share. Amortization of intangible assets is significantly affected by the timing and size of our acquisitions. Amortization of intangible assets will recur in future periods.

Non-GAAP revenue, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating loss, non-GAAP operating margin, non-GAAP net loss, and non-GAAP net loss per share:  We believe that the exclusion of perpetual license revenue recognized from licenses delivered prior to 2013, stock-based compensation expense, restructuring charges and amortization of intangible assets, from revenue, gross profit, gross margin, operating loss, operating margin, net loss, and net loss per share provides useful measures for management and investors because revenue recognized from licenses delivered prior to 2013 has and will continue to significantly decline over time until it is fully amortized. Stock-based compensation, amortization of intangible assets and restructuring charges have been and can continue to be inconsistent in amount from period to period. We believe the inclusion of these items makes it difficult to compare periods and understand the growth and performance of our business. In addition, we evaluate our business performance and compensate management based in part on these non-GAAP measures. There are limitations in using non-GAAP financial measures because the non-GAAP financial measures are not prepared in accordance with GAAP, may be different from non-GAAP financial measures used by our competitors and exclude expenses that may have a material impact on our reported financial results. Further, stock-based compensation expense has been and will continue to be for the foreseeable future a significant recurring expense in our business and an important part of the compensation provided to our employees. Similarly, amortization of intangible assets has been and will continue to be a recurring expense.

Gross and recurring billings, recurring revenue and free cash flow:  Our non-GAAP financial measures also include: gross billings, which we define as total revenue plus the change in deferred revenue in a period; recurring billings, which we define as total revenue less perpetual license, hardware, and professional services revenue plus the change in deferred revenue for subscription and software support arrangements in a period, adjusted for nonrecurring perpetual license billings; recurring revenue, which we define as total revenue less perpetual license, hardware, professional services and perpetual amounts recorded as subscription or software support revenue in multiple elements arrangements and free cash flow, which we define as cash used in operating activities less the amount of property and equipment purchased. We consider gross billings to be a useful metric for management and investors because subscription billings, excluding MRC, and software support and services billings drive deferred revenue, which is an important indicator of future revenue. Similarly, we consider recurring billings and recurring revenue to be useful metrics because they are important indicators of the portion of our business that we would expect to recur each year. There are a number of limitations related to the use of gross, recurring billings and recurring revenue. First, gross and recurring billings include amounts that have not yet been recognized as revenue. Second, our calculation of gross and recurring billings may be different from other companies that report similar financial measures. Third, recurring revenue excludes perpetual license amounts recognized from multiple elements arrangements that we record as subscription or software support revenue in our GAAP statements of operations and that perpetual license amount is based on invoice value, not fair value, although, we believe invoice value approximates the fair value of the element. Fourth, in the MRC model, revenue and billings are based on active devices or users of the service provider's customer and are billed to us by the service provider on a monthly basis over time and one month in arrears. Thus, under the MRC model, we receive no billings or revenue for MRC at the time the deal is booked, but instead the MRC is billed and revenue is recognized each month based on active usage. Unlike term subscriptions, MRC is not reflected in deferred revenue. This important difference between MRC billings and perpetual and term subscription billings can lead to significant variability of billings in a given quarter depending on the type of billing model that the customer chooses and the overall mix of billing types for all customers within a quarter. We compensate for these limitations by providing specific information regarding GAAP revenue and evaluating gross and recurring billings and recurring revenue together with revenue calculated in accordance with GAAP. Management believes that information regarding free cash flow provides investors with an important perspective on the cash available to invest in our business and fund ongoing operations. However, our calculation of free cash flow may not be comparable to similar measures used by other companies.

We believe these non-GAAP financial measures are helpful in understanding our past financial performance and our future results. Our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. Our management regularly uses our supplemental non-GAAP financial measures internally to understand, manage and evaluate our business, and make operating decisions. These non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. Compensation of our executives is based in part on the performance of our business based on certain of these non-GAAP measures.

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