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Jive Software Announces Second Quarter 2014 Financial Results(GlobeNewswire Via Acquire Media NewsEdge) 2Q total revenue of $43.4 million, up 23% year-over-year 2Q non-GAAP earnings of $(0.07), up 50% year-over-year PALO ALTO, Calif., July 31, 2014 (GLOBE NEWSWIRE) -- Jive Software, Inc. (Nasdaq:JIVE), the world's leading provider of modern communication and collaboration solutions for business, today announced financial results for its second quarter ended June 30, 2014. "Jive delivered second quarter results that exceeded our guidance from both a revenue and profitability perspective. However, we also experienced a more challenging sales environment that resulted in elongated sales cycles, including several larger opportunities that did not close by the end of the quarter," said Tony Zingale, Chairman & CEO of Jive Software. Zingale added, "We are continuing to execute against our go-to-market strategy and although it has been well received by customers we believe it will take additional time to fully recognize the benefits in our results. We remain enthusiastic about the long-term prospects associated with the global enterprise communication and collaboration market. We believe we are well positioned to capitalize on this opportunity with our unmatched platform, functionality and track record of delivering customer success." Second Quarter 2014 Financial Highlights Revenue: Total revenue for the second quarter was $43.4 million, an increase of 23% on a year-over-year basis. Within total revenue, product revenue was $39.0 million for the second quarter, an increase of 24% on a year-over-year basis. Professional Services revenue for the second quarter was $4.3 million, an increase of 18% on a year-over-year basis. Non-GAAP Billings: Short-term billings, which Jive defines as revenue plus the change in short-term deferred revenue, were $46.1 million for the second quarter, an increase of 10% on a year-over-year basis. Total billings, which Jive defines as revenue plus the change in short and long-term deferred revenue, was $40.8 million compared to $42.0 in the year-ago period. Gross Profit: GAAP gross profit for the second quarter was $26.7 million, compared to $21.5 million for the second quarter of 2013. Non-GAAP gross profit was $28.6 million for the second quarter, representing a year-over-year increase of 22% and a non-GAAP gross margin of 66%. Loss from Operations: GAAP loss from operations for the second quarter was $14.4 million, compared to a loss of $18.8 million for the second quarter of 2013. Non-GAAP loss from operations was $4.4 million for the second quarter, compared to a loss of $9.2 million for the second quarter of 2013. Net Loss: GAAP net loss for the second quarter was $14.6 million, compared to a net loss of $17.8 million for the same period last year. GAAP net loss per share for the second quarter was $0.21 based on 70.2 million weighted-average shares outstanding, compared to a net loss per share of $0.27 based on 66.8 million weighted-average shares outstanding for the same period last year. Non-GAAP net loss for the second quarter was $4.6 million, compared to a net loss of $9.5 million for the same period last year. Non-GAAP net loss per share for the second quarter was $0.07 based on 70.2 million weighted-average shares outstanding, compared to net a loss per share of $0.14 based on 66.8 million weighted-average shares outstanding for the same period last year. Balance Sheet and Cash Flow: As of June 30, 2014, Jive had cash and cash equivalents and marketable securities of $139.2 million, a decrease of $100 thousand from $139.3 million at the end of the first quarter. The company generated $4.2 million in cash from operations and invested $3.0 million in capital expenditures, leading to free cash flow of $1.2 million for the second quarter. Negative free cash flow was $1.7 million for the second quarter of 2013. Free cash flow is defined as cash flows provided by operating activities minus cash flows used to purchase capital expenditures. A reconciliation of GAAP to non-GAAP financial measures has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading "Non-GAAP Financial Measures." Second Quarter 2014 Business Highlights Signed new customers and expanded existing relationships, including: Akamai Technologies, Artelia, Eli Lilly, Euroclear Bank, Gentex, GNS3 Inc., Humana, Huntsman International LLC, Intercontinental Exchange, Modern Times Group, Persistent Systems Inc., PricewaterhouseCoopers, ServiceMax, Sodexo Group, TI Automotive Systems, TVO and Univision, among others. Named one of the world's foremost vendors in enterprise collaboration and social networking by two independent research firms. Forrester Research named Jive a leader in The Forrester Wave™: Enterprise Social Platforms, Q2 2014 and Aragon Research ranked Jive as the top vendor in the leader category amongst all other global vendors in The Aragon Research Globe™ for Social Software, 2014. Strengthened reputation as one of the best places to work. Recent distinctions included Bay Area News Group's "Top Workplaces in the Bay Area," Oregon Business Magazine's "Best Companies to Work for in Oregon," and Portland Business Journal's "Oregon's Most Admired Companies." Jive also achieved a 4.3 out of 5 overall rating from both current and past employees on Glassdoor, the global standard for transparent employee workplace assessments.Financial Outlook As of July 31, 2014, Jive is initiating guidance for its third quarter 2014 and updating guidance for the full year 2014, as follows: Third Quarter 2014 Guidance: Total revenue is expected to be in the range of $44.0 million to $45.0 million. Non-GAAP loss from operations is expected to be in the range of $4.5 million to $6.5 million. Non-GAAP net loss per share is expected to be in the range of $0.08 to $0.10 based on approximately 71.1 million weighted-average diluted shares outstanding. Full Year 2014 Guidance: Total revenue is expected to be in the range of $172.0 million to $176.0 million. Non-GAAP loss from operations is expected to be in the range of $24.0 million to $28.0 million. Non-GAAP net loss per share is expected to be in the range of $0.35 to $0.43 based on approximately 70.7 million weighted-average diluted shares outstanding. Free cash flow is expected to be in the range of negative $15.0 million to negative $ 20.0 million. With respect to the Company's expectations under "Financial Outlook" above, the Company has not reconciled non-GAAP loss from operations or non-GAAP net loss per share to GAAP loss from operations and GAAP net loss per share because the Company does not provide guidance for stock-based compensation, income taxes or amortization of intangible assets, which are reconciling items between those Non-GAAP and GAAP measures. As items that impact loss from operations and loss per share are out of the Company's control and/or cannot be reasonably predicted, the Company is unable to provide such guidance. Accordingly, a reconciliation to loss from operations and net loss per share is not available without unreasonable effort. Quarterly Conference Call Jive will host a conference call today at 2:00 p.m. PT (5:00 p.m. ET) to review the company's financial results for the second quarter 2014, in addition to discussing the company's outlook for the third quarter and full year 2014. To access this call, dial (888) 204-4610 (domestic) or (913) 312-1449 (international) with conference ID 6600060. A live webcast of the conference call will be accessible from the investor relations section of Jive's website at http://investors.jivesoftware.com/ and a replay will be archived and accessible at: http://investors.jivesoftware.com/events.cfm. A replay of this conference call can also be accessed through August 14, 2014, by dialing (877) 870-5176 (domestic) or (858) 384-5517 (international). The replay pass code is 6600060. About Jive Software Jive (Nasdaq:JIVE) is the leading provider of modern communication and collaboration solutions for business. Recognized as a leader by the industry's top analyst firms in multiple categories, Jive enables employees, partners and customers to work better together. More information can be found at www.jivesoftware.com or the Jive News Blog. Non-GAAP Financial Measures The Company uses certain non-GAAP financial measures in this release. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles. Non-GAAP gross profit, loss from operations, net loss and net loss per share exclude stock-based compensation expenses and amortization of acquisition related intangible assets. Total billings is defined by the Company as revenue plus the change in total deferred revenue. Short-term billings is defined as revenue plus the change in short-term deferred revenue. Management presents these non-GAAP financial measures because it considers them to be important supplemental measures of performance. Management uses the non-GAAP financial measures for planning purposes, including analysis of the Company's performance against prior periods, the preparation of operating budgets and to determine appropriate levels of operating and capital investments. Management also believes that the non-GAAP financial measures provide additional insight for analysts and investors in evaluating the Company's financial and operational performance. However, these non-GAAP financial measures have limitations as an analytical tool and are not intended to be an alternative to financial measures prepared in accordance with GAAP. We intend to provide these non-GAAP financial measures as part of our future earnings discussions and, therefore, the inclusion of these non-GAAP financial measures will provide consistency in our financial reporting. A reconciliation of these non-GAAP measures to GAAP is provided in the accompanying tables. Safe Harbor Statement "Safe Harbor" statement under Private Securities Litigation Reform Act of 1995: This press release contains forward-looking statements, including statements concerning our financial guidance for the third fiscal quarter of 2014 and the full year of 2014, the future growth of the social business market, and our belief that we are well positioned to build upon our momentum in 2014. The achievement of success in the matters covered by such forward-looking statements involves substantial risks, uncertainties and assumptions. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, our results or events could differ materially from the results expressed or implied by the forward-looking statements we make. The risk and uncertainties referred to above include, but are not limited to, risks associated with our limited operating history; expectations regarding the benefits of our relationship with Cisco; expectations regarding the widespread adoption of social business platforms by enterprises; uncertainty regarding the market for social business platforms; changes in the competitive dynamics of our market; our ability to increase and predict new subscription; subscription renewal or upsell rates and the impact these rates may have on our future revenues; our reliance on our own controls and third-party service providers to host some of our products; the risk that our security measures could be breached and unauthorized access to customer data could be obtained; potential third party intellectual property infringement claims; and the price volatility of our common stock. More information about potential factors that could affect our business and financial results is contained in our prospectus as filed with the Securities and Exchange Commission. Additional information will also be set forth in our quarterly reports on Form 10-Q, annual reports on Form 10-K and other filings that we make with the Securities and Exchange Commission. We do not intend and undertake no duty to release publicly any updates or revisions to any forward-looking statements contained herein. JIVE SOFTWARE, INC.Consolidated Statements of Operations(In thousands, except per share amounts)(Unaudited) For the Three Months Ended For the Six Months Ended June 30, June 30, 2014201320142013 Revenues: Product $ 39,037 $ 31,559 $ 76,414 $ 62,222 Professional services 4,338 3,683 7,990 6,872 Total revenues 43,375 35,242 84,404 69,094 Cost of revenues: Product 10,835 9,540 20,756 18,752 Professional services 5,805 4,215 11,339 8,063 Total cost of revenues 16,640 13,755 32,095 26,815 Gross profit 26,735 21,487 52,309 42,279 Operating expenses: Research and development 12,991 13,749 25,888 26,426 Sales and marketing 21,658 20,480 45,159 39,344 General and administrative 6,514 6,081 12,833 11,947 Total operating expenses 41,163 40,310 83,880 77,717 Loss from operations (14,428) (18,823) (31,571) (35,438) Other income (expense), net: Interest income 60 62 101 131 Interest expense (64) (105) (147) (180) Other, net (141) (105) (151) (109) Total other income (expense), net (145) (148) (197) (158) Loss before provision for (benefit from) income taxes (14,573) (18,971) (31,768) (35,596) Provision for (benefit from) income taxes 57 (1,191) 186 (1,215) Net loss $ (14,630) $ (17,780) $ (31,954) $ (34,381) Basic and diluted net loss per share $ (0.21) $ (0.27) $ (0.46) $ (0.52) Shares used in basic and diluted per share calculations 70,233 66,816 69,785 66,285 JIVE SOFTWARE, INC.Consolidated Balance Sheets(In thousands, except share and per share data)(Unaudited) June 30, December 31, 20142013 Assets Current Assets: Cash and cash equivalents $ 30,499 $ 38,415 Short-term marketable securities 69,521 69,809 Accounts receivable, net of allowances 38,935 58,829 Prepaid expenses and other current assets 12,426 9,425 Total current assets 151,381 176,478 Marketable securities, noncurrent 39,175 33,443 Property and equipment, net of accumulated depreciation 23,694 21,379 Goodwill 29,753 29,753 Intangible assets, net of accumulated amortization 11,870 14,310 Other assets 555 572 Total assets $ 256,428 $ 275,935 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 5,228 $ 6,412 Accrued payroll and related liabilities 7,440 7,469 Other accrued liabilities 7,514 8,478 Deferred revenue, current 116,134 112,432 Term debt, current 2,400 2,400 Total current liabilities 138,716 137,191 Deferred revenue, less current portion 27,444 34,905 Term debt, less current portion 4,800 6,000 Other long-term liabilities 1,176 1,605 Total liabilities 172,136 179,701 Commitments and contingencies Stockholders' Equity: Common stock 7 7 Less treasury stock at cost (3,352) (3,352) Additional paid-in capital 346,758 326,834 Accumulated deficit (259,485) (227,531) Accumulated other comprehensive income 364 276 Total stockholders' equity 84,292 96,234 Total liabilities and stockholders' equity $ 256,428 $ 275,935 JIVE SOFTWARE, INC.Consolidated Statements of Cash Flows(In thousands)(Unaudited) Three Months Ended Six Months Ended June 30, June 30, 2014201320142013 Cash flows from operating activities: Net loss $ (14,630) $ (17,780) $ (31,954) $ (34,381) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 3,903 4,530 7,885 7,787 Stock-based compensation 8,808 8,250 18,625 14,389 Change in deferred taxes -- (1,351) 32 (1,351) (Increase) decrease, net of acquisitions, in: Accounts receivable, net 9,212 135 19,894 11,712 Prepaid expenses and other assets (1,840) (605) (2,931) (1,009) Increase (decrease), net of acquisitions, in: -- Accounts payable 1,571 565 (890) (355) Accrued payroll and related liabilities (564) 295 (311) (1,963) Other accrued liabilities 133 (587) (628) 100 Deferred revenue (2,572) 6,710 (3,759) 11,068 Other long-term liabilities 168 52 115 40Net cash provided by operating activities 4,189 214 6,078 6,037 Cash flows from investing activities: Payments for purchase of property and equipment (2,956) (1,926) (6,588) (4,789) Purchases of marketable securities (43,560) (31,288) (62,194) (58,780) Sales of marketable securities 7,601 14,068 11,101 23,721 Maturities of marketable securities 24,507 20,900 45,074 42,330 Acquisitions, net of cash acquired -- (11,047) -- (11,047)Net cash used in investing activities (14,408) (9,293) (12,607) (8,565) Cash flows from financing activities: Proceeds from exercise of stock options 480 1,708 1,528 5,341 Taxes paid related to net share settlement of equity awards (861) (392) (1,115) (392) Repayments of term loans (600) (600) (1,200) (1,200) Earnout payment for prior acquisition -- -- (576) -- Net cash provided by (used in) financing activities (981) 716 (1,363) 3,749 Net increase (decrease) in cash and cash equivalents (11,200) (8,363) (7,892) 1,221Effect of exchange rate changes (26) 7 (24) 12Cash and cash equivalents, beginning of period 41,725 58,544 38,415 48,955Cash and cash equivalents, end of period $ 30,499 $ 50,188 $ 30,499 $ 50,188 JIVE SOFTWARE, INC.Reconciliation of Non-GAAP Information(In thousands, except per share data)(Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2014201320142013 Gross profit, as reported $ 26,735 $ 21,487 $ 52,309 $ 42,279 Add back: Stock-based compensation 941 777 2,111 1,298 Amortization related to acquisitions 954 926 1,926 1,682 Non-recurring acquisition expense -- 250 -- 250 Gross profit, non-GAAP $ 28,630 $ 23,440 $ 56,346 $ 45,509 Gross margin, non-GAAP 66% 67% 67% 66% Three Months Ended June 30, Six Months Ended June 30, 2014201320142013 Research and development, as reported $ 12,991 $ 13,749 $ 25,888 $ 26,426 less: Stock-based compensation 2,992 3,395 5,972 5,627 Amortization related to acquisitions 127 110 254 176 Non-recurring acquisition expense -- 19 -- 19 Research and development, non-GAAP $ 9,872 $ 10,225 $ 19,662 $ 20,604 As percentage of total revenues, non-GAAP 23% 29% 23% 30% Three Months Ended June 30, Six Months Ended June 30, 2014201320142013 Sales and marketing, as reported $ 21,658 $ 20,480 $ 45,159 $ 39,344 less: Stock-based compensation 2,885 2,405 6,627 4,629 Amortization related to acquisitions 129 115 258 175 Sales and marketing, non-GAAP $ 18,644 $ 17,960 $ 38,274 $ 34,540 As percentage of total revenues, non-GAAP 43% 51% 45% 50% Three Months Ended June 30, Six Months Ended June 30, 2014201320142013 General and administrative, as reported $ 6,514 $ 6,081 $ 12,833 $ 11,947 less: Stock-based compensation 1,990 1,673 3,915 2,835 General and administrative, non-GAAP $ 4,524 $ 4,408 $ 8,918 $ 9,112 As percentage of total revenues, non-GAAP 10% 13% 11% 13% Three Months Ended June 30, Six Months Ended June 30, 2014201320142013 Loss from operations, as reported $ (14,428) $ (18,823) $ (31,571) $ (35,438) Add back: Stock-based compensation 8,808 8,250 18,625 14,389 Amortization related to acquisitions 1,210 1,151 2,438 2,033 Non-recurring acquisition expense -- 269 -- 269 Loss from operations, non-GAAP $ (4,410) $ (9,153) $ (10,508) $ (18,747) Three Months Ended June 30, Six Months Ended June 30, 2014201320142013 Loss before provision for (benefit from) income taxes, as reported $ (14,573) $ (18,971) $ (31,768) $ (35,596) Add back: Stock-based compensation 8,808 8,250 18,625 14,389 Amortization related to acquisitions 1,210 1,151 2,438 2,033 Non-recurring acquisition expense -- 269 -- 269 Loss before provision for (benefit from) income taxes, non-GAAP $ (4,555) $ (9,301) $ (10,705) $ (18,905) Three Months Ended June 30, Six Months Ended June 30, 2014201320142013 Net loss, as reported $ (14,630) $ (17,780) $ (31,954) $ (34,381) Add back: Stock-based compensation 8,808 8,250 18,625 14,389 Amortization related to acquisitions 1,210 1,151 2,438 2,033 Non-recurring acquisition expense -- 269 -- 269 Tax benefit related to acquisitions -- (1,351) -- (1,351) Net loss, non-GAAP $ (4,612) $ (9,461) $ (10,891) $ (19,041) Three Months Ended June 30, Six Months Ended June 30, 2014201320142013 Basic and diluted net loss per share, as reported $ (0.21) $ (0.27) $ (0.46) $ (0.52) Add back: Stock-based compensation 0.12 0.13 0.27 0.22 Amortization related to acquisitions 0.02 0.02 0.03 0.03 Non-recurring acquisition expense -- -- -- -- Tax benefit related to acquisitions -- (0.02) -- (0.02) Basic and diluted net loss per share, non-GAAP $ (0.07) $ (0.14) $ (0.16) $ (0.29) Three Months Ended June 30, Six Months Ended June 30, 2014201320142013 Total revenues $ 43,375 $ 35,242 $ 84,404 $ 69,094 Deferred revenue, current, end of period 116,134 96,794 116,134 96,794 Less: Deferred revenue, current, beginning of period (113,454) (90,186) (112,432) (87,698) Short-term billings $ 46,055 $ 41,850 $ 88,106 $ 78,190 Three Months Ended June 30, Six Months Ended June 30, 2014201320142013 Total revenues $ 43,375 $ 35,242 $ 84,404 $ 69,094 Deferred revenue, end of period 143,578 128,115 143,578 128,115 Less: Deferred revenue, beginning of period (146,150) (121,405) (147,337) (117,047) Billings $ 40,803 $ 41,952 $ 80,645 $ 80,162 CONTACT: Investor Contact: Brian Denyeau ICR (646) 277-1251 [email protected] Media Contact: Jason Khoury Jive Software (650) 847-8308 [email protected] Source: Jive Software 2014 GlobeNewswire, Inc. |