[February 26, 2015] |
|
RealPage Reports Fourth Quarter and Full Year 2014 Financial Results
RealPage, Inc. (NASDAQ:RP), a leading provider of on demand software and
software-enabled solutions to the rental housing industry, today
announced financial results for its fourth quarter and full year ended
December 31, 2014.
"Fourth quarter results were solid, reflecting initial returns on our
sales force and new product investments," said Steve Winn, Chairman and
CEO of RealPage. "New sales bookings strength during the back half of
2014 gives us confidence in our revenue outlook for 2015. However, we
are keenly aware of the consistent execution needed to accelerate
revenue growth while expanding margins, and we are focused on that
objective."
"Adjusted EBITDA exceeded the high-end of our guidance for the quarter,
underscoring our commitment to expanding margins over the long-term,"
said Bryan Hill, CFO of RealPage. "Specifically, our financial
objectives for 2015 are to accelerate revenue growth, continue to
leverage our expanded global workforce, streamline our real estate
footprint and optimize certain business processes."
Fourth Quarter 2014 Financial Highlights
-
Non-GAAP total revenue was $104.2 million, an increase of 8%
year-over-year, while GAAP total revenue was $104.5 million, an
increase of 9% year-over-year;
-
Non-GAAP on demand revenue was $101.0 million, an increase of 9%
year-over-year, while GAAP on demand revenue was $101.3 million, an
increase of 10% year-over-year;
-
Adjusted EBITDA was $17.2 million, a decrease of 30% year-over-year;
-
Non-GAAP net income was $7.1 million, or $0.09 per diluted share, a
year-over-year decrease of 42% and 44%, respectively; and
-
GAAP net income was $0.1 million, or $0.00 per diluted share, compared
to GAAP net income of $2.2 million, or $0.03 per diluted share, in the
prior year quarter.
Full Year 2014 Financial Highlights
-
Non-GAAP total revenue was $405.0 million, an increase of 7%
year-over-year, while GAAP total revenue was $404.6 million, an
increase of 7% year-over-year;
-
Non-GAAP on demand revenue was $391.1 million, an increase of 7%
year-over-year, while GAAP on demand revenue was $390.6 million, an
increase of 8% year-over-year;
-
Adjusted EBITDA was $70.6 million, a decrease of 22% year-over-year;
-
Non-GAAP net income was $30.3 million, or $0.39 per diluted share, a
year-over-year decrease of 32% and 34%, respectively; and
-
GAAP net loss was $10.3 million, or a loss of $0.13 per diluted share,
compared to GAAP net income of $20.7 million, or $0.27 per diluted
share, in the prior year.
Financial Outlook
RealPage management expects to achieve the following results during its
first quarter ended March 31, 2015:
-
Total revenue is expected to be in the range of $107.0 million to
$109.0 million;
-
Adjusted EBITDA is expected to be in the range of $18.0 million to
$19.0 million;
-
Non-GAAP net income per diluted share is expected to be in the range
of $0.09 to $0.10;
-
Non-GAAP tax rate of approximately 40%; and,
-
Weighted average shares outstanding of approximately 78.1 million.
RealPage management expects to achieve the following results during its
calendar year ended December 31, 2015:
-
Total revenue is expected to be in the range of $450.0 million to
$460.0 million;
-
Adjusted EBITDA is expected to be in the range of $80.0 million to
$85.0 million;
-
Non-GAAP net income per diluted share is expected to be in the range
of $0.41 to $0.45;
-
Non-GAAP tax rate of approximately 40%; and,
-
Weighted average shares outstanding of approximately 79.2 million.
Please note that the above statements are forward looking and that total
revenue may exclude certain adjustments and the impact of acquisitions.
Actual results may differ materially. Please reference the information
under the caption "Non-GAAP Financial Measures" as well as
reconciliation tables of GAAP financial measures to Non-GAAP financial
measures as set forth in this press release.
Conference Call and Webcast
The Company will host a conference call on February 26, 2015 at 5 p.m.
EST to discuss its financial results. Participants are encouraged to
listen to the presentation via a live Web broadcast at http://www.realpage.com on
the Investor Relations section. In addition, a live dial-in is available
domestically at 866-743-9666 and internationally at 760-298-5103. A
replay will be available at 855-859-2056 or 404-537-3406, passcode
88517033, until March 2, 2015.
About RealPage
RealPage, Inc. is a leading provider of comprehensive property
management software solutions for the multifamily, commercial,
single-family and vacation rental housing industries. These solutions
help property owners increase efficiency, decrease expenses, enhance the
resident experience and generate more revenue. Using its innovative SaaS
platform, RealPage's on demand software enables easy system integration
and streamlines online property management. Its product line covers the
full spectrum of property management, leasing and marketing, asset
optimization, and resident management solutions. Founded in 1998 and
headquartered in Carrollton, Texas, RealPage currently serves over
10,000 clients worldwide from offices in North America, Europe and Asia.
For more information about the company, visit http://www.realpage.com.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains "forward-looking" statements relating
to RealPage, Inc.'s expected, possible or assumed future results. These
forward-looking statements are based on management's beliefs and
assumptions and on information currently available to management.
Forward-looking statements include all statements that are not
historical facts and may be identified by terms such as "expects,"
"believes," "plans," or similar expressions and the negatives of those
terms. Those forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause actual results,
performance or achievements to be materially different from any future
results, performance or achievements expressed or implied by the
forward-looking statements. The Company may be required to revise its
results upon finalizing its review of fourth quarter results, which
could cause or contribute to such differences. Additional factors that
could cause or contribute to such differences include, but are not
limited to, the following: (a) the possibility that general economic
conditions, including leasing velocity or uncertainty cause information
technology spending, particularly in the rental housing industry, to be
reduced or purchasing decisions to be delayed; (b) an increase in
insurance claims; (c) an increase in customer cancellations; (d) the
inability to increase sales to existing customers and to attract new
customers; (e) RealPage, Inc.'s failure to integrate acquired businesses
and any future acquisitions successfully; (f) the timing and success of
new product introductions by RealPage, Inc. or its competitors; (g)
changes in RealPage, Inc.'s pricing policies or those of its
competitors; (h) legal or regulatory proceedings; (i) inability to
complete the integration of our LeaseStar products and deliver enhanced
functionality on a timely basis; (j) the ability to enable margin
expansion; and (k) such other risks and uncertainties described more
fully in documents filed with or furnished to the Securities and
Exchange Commission ("SEC") by RealPage Inc., including its Quarterly
Report on Form 10-Q/A previously filed with the SEC on November 12,
2014. All information provided in this release is as of the date hereof
and RealPage Inc. undertakes no duty to update this information except
as required by law.
Non-GAAP Financial Measures
This press release contains non-GAAP financial measures. These measures
differ from GAAP in that they include acquisition-related and other
deferred revenue and exclude amortization of intangible assets,
stock-based compensation expenses, any impact related to the Yardi
litigation (including related insurance litigation and settlement
costs), and acquisition related expenses (including any purchase
accounting adjustments) and include income taxes at a sustainable
effective rate, which excludes the reversal of valuation allowances due
to expected or realization of deferred tax assets.
We define non-GAAP total revenue as total revenue plus
acquisition-related and other deferred revenue adjustment. We also
define non-GAAP on demand revenue as on demand revenue plus
acquisition-related and other deferred revenue adjustment. Non-GAAP net
income is defined as net (loss) income plus acquisition-related and
other deferred revenue adjustment, amortization of intangible assets,
stock-based compensation expense, acquisition-related expense, any
impact related to Yardi litigation (including related insurance
litigation and settlement costs), loss on disposal of assets, and an
adjustment to income tax expense (benefit) to reflect our effective tax
rate.
We define Adjusted EBITDA as net (loss) income plus acquisition-related
and other deferred revenue adjustments, depreciation and asset
impairment, loss on sale of assets, amortization of intangible assets,
net interest expense, income tax expense (benefit), stock-based
compensation expense, any impact related to Yardi litigation (including
related insurance litigation and settlement costs), and
acquisition-related expenses.
We believe that the use of Adjusted EBITDA is useful to investors and
other users of our financial statements in evaluating our operating
performance because it provides them with an additional tool to compare
business performance across companies and across periods. We believe
that:
-
Adjusted EBITDA provides investors and other users of our financial
information consistency and comparability with our past financial
performance, facilitates period-to-period comparisons of operations
and facilitates comparisons with our peer companies, many of which use
similar non-GAAP financial measures to supplement their GAAP results;
-
it is useful to exclude certain non-cash charges, such as depreciation
and asset impairment, amortization of intangible assets and
stock-based compensation and non-core operational charges, such as
acquisition-related expenses and any impact related to the Yardi
litigation (including related insurance litigation and settlement
costs), from Adjusted EBITDA because the amount of such expenses in
any specific period may not directly correlate to the underlying
performance of our business operations and these expenses can vary
significantly between periods as a result of new acquisitions, full
amortization of previously acquired tangible and intangible assets or
the timing of new stock-based awards, as the case may be; and
-
it is useful to include deferred revenue written down for GAAP
purposes under purchase accounting rules and revenue deferred due to a
lack of historical experience determining the settlement of the
contractual obligation in order to appropriately measure the
underlying performance of our business operations in the period of
activity and associated expense.
We use Adjusted EBITDA in conjunction with traditional GAAP operating
performance measures as part of our overall assessment of our
performance, for planning purposes, including the preparation of our
annual operating budget, to evaluate the effectiveness of our business
strategies and to communicate with our board of directors concerning our
financial performance.
We do not place undue reliance on Adjusted EBITDA as our only measure of
operating performance. Adjusted EBITDA should not be considered as a
substitute for other measures of liquidity or financial performance
reported in accordance with GAAP. There are limitations to using
non-GAAP financial measures, including that other companies may
calculate these measures differently than we do, that they do not
reflect our capital expenditures or future requirements for capital
expenditures and that they do not reflect changes in, or cash
requirements for, our working capital. We compensate for the inherent
limitations associated with using Adjusted EBITDA measures through
disclosure of these limitations, presentation of our financial
statements in accordance with GAAP and reconciliation of Adjusted EBITDA
to the most directly comparable GAAP measure, net (loss) income.
|
|
|
|
|
|
|
Condensed Consolidated Balance Sheets
|
At December 31, 2014 and December 31, 2013
|
(unaudited, in thousands except share data)
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
|
|
2014
|
|
|
|
2013
|
|
Assets
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
26,936
|
|
|
$
|
34,502
|
|
|
Restricted cash
|
|
|
85,543
|
|
|
|
71,941
|
|
|
Accounts receivable, less allowance for doubtful accounts of $2,363
and $914 at
|
|
|
|
|
|
|
December 31, 2014 and December 31, 2013, respectively
|
|
|
64,845
|
|
|
|
66,635
|
|
|
Deferred tax asset, net
|
|
|
10,996
|
|
|
|
3,284
|
|
|
Other current assets
|
|
|
9,495
|
|
|
|
7,453
|
|
|
|
Total current assets
|
|
|
197,815
|
|
|
|
183,815
|
|
Property, equipment and software, net
|
|
|
72,616
|
|
|
|
54,775
|
|
Goodwill
|
|
|
193,378
|
|
|
|
152,422
|
|
Identified intangible assets, net
|
|
|
100,085
|
|
|
|
108,815
|
|
Deferred tax asset, net
|
|
|
2,537
|
|
|
|
-
|
|
Other assets
|
|
|
5,059
|
|
|
|
3,386
|
|
|
|
Total assets
|
|
$
|
571,490
|
|
|
$
|
503,213
|
|
Liabilities and stockholders' equity
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Accounts payable
|
|
$
|
14,830
|
|
|
$
|
11,978
|
|
|
Accrued expenses and other current liabilities
|
|
|
22,905
|
|
|
|
23,122
|
|
|
Current portion of deferred revenue
|
|
|
73,485
|
|
|
|
66,085
|
|
|
Customer deposits held in restricted accounts
|
|
|
85,489
|
|
|
|
71,910
|
|
|
|
Total current liabilities
|
|
|
196,709
|
|
|
|
173,095
|
|
Deferred revenue
|
|
|
6,903
|
|
|
|
5,671
|
|
Deferred tax liability, net
|
|
|
5,196
|
|
|
|
1,379
|
|
Revolving credit facility
|
|
|
20,000
|
|
|
|
-
|
|
Other long-term liabilities
|
|
|
13,902
|
|
|
|
8,564
|
|
|
|
Total liabilities
|
|
|
242,710
|
|
|
|
188,709
|
|
Stockholders' equity:
|
|
|
|
|
|
Preferred stock, $0.001 par value, 10,000,000 shares authorized and
zero shares
|
|
|
|
|
|
issued and outstanding at December 31, 2014 and December 31, 2013,
respectively
|
|
|
-
|
|
|
|
-
|
|
|
Common stock, $0.001 par value per share: 125,000,000 shares
authorized,
|
|
|
|
|
|
83,211,650 and 80,511,791 shares issued and 79,037,351 and
78,433,626 shares
|
|
|
|
|
|
outstanding at December 31, 2014 and December 31, 2013, respectively
|
|
|
83
|
|
|
|
81
|
|
|
Additional paid-in capital
|
|
|
437,664
|
|
|
|
390,854
|
|
|
Treasury stock, at cost: 4,174,299 and 2,078,165 shares at December
31, 2014 and
|
|
|
|
|
|
December 31,2013, respectively
|
|
|
(33,398
|
)
|
|
|
(11,183
|
)
|
|
Accumulated deficit
|
|
|
(75,360
|
)
|
|
|
(65,086
|
)
|
|
Accumulated other comprehensive loss
|
|
|
(209
|
)
|
|
|
(162
|
)
|
|
|
Total stockholders' equity
|
|
|
328,780
|
|
|
|
314,504
|
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
571,490
|
|
|
$
|
503,213
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Operations
|
For the Three and Twelve Months Ended December 31, 2014 and 2013
|
(unaudited, in thousands except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
2014
|
|
|
|
2013
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
On demand
|
|
$
|
101,261
|
|
|
$
|
92,081
|
|
|
$
|
390,622
|
|
|
$
|
362,312
|
|
|
|
On premise
|
|
|
648
|
|
|
|
892
|
|
|
|
3,094
|
|
|
|
3,691
|
|
|
|
Professional and other
|
|
|
2,555
|
|
|
|
2,546
|
|
|
|
10,835
|
|
|
|
11,019
|
|
|
|
|
Total revenue
|
|
|
104,464
|
|
|
|
95,519
|
|
|
|
404,551
|
|
|
|
377,022
|
|
|
Cost of revenue(1)
|
|
|
46,518
|
|
|
|
37,506
|
|
|
|
174,871
|
|
|
|
148,321
|
|
|
Gross profit
|
|
|
57,946
|
|
|
|
58,013
|
|
|
|
229,680
|
|
|
|
228,701
|
|
|
Operating expense:
|
|
|
|
|
|
|
|
|
|
|
Product development(1)
|
|
|
16,108
|
|
|
|
13,641
|
|
|
|
64,418
|
|
|
|
50,638
|
|
|
|
Sales and marketing(1)
|
|
|
27,593
|
|
|
|
23,902
|
|
|
|
111,563
|
|
|
|
95,894
|
|
|
|
General and administrative(1)
|
|
|
16,011
|
|
|
|
15,730
|
|
|
|
69,202
|
|
|
|
60,610
|
|
|
|
|
Total operating expense
|
|
|
59,712
|
|
|
|
53,273
|
|
|
|
245,183
|
|
|
|
207,142
|
|
|
Operating (loss) income
|
|
|
(1,766
|
)
|
|
|
4,740
|
|
|
|
(15,503
|
)
|
|
|
21,559
|
|
|
Interest expense and other, net
|
|
|
(333
|
)
|
|
|
(156
|
)
|
|
|
(1,104
|
)
|
|
|
(1,077
|
)
|
|
(Loss) income before income taxes
|
|
|
(2,099
|
)
|
|
|
4,584
|
|
|
|
(16,607
|
)
|
|
|
20,482
|
|
|
Income tax (benefit) expense
|
|
|
(2,209
|
)
|
|
|
2,406
|
|
|
|
(6,333
|
)
|
|
|
(210
|
)
|
|
Net (loss) income
|
|
$
|
110
|
|
|
$
|
2,178
|
|
|
$
|
(10,274
|
)
|
|
$
|
20,692
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income per share
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
-
|
|
|
$
|
0.03
|
|
|
$
|
(0.13
|
)
|
|
$
|
0.28
|
|
|
|
|
Diluted
|
|
$
|
-
|
|
|
$
|
0.03
|
|
|
$
|
(0.13
|
)
|
|
$
|
0.27
|
|
|
Weighted average shares used in
|
|
|
|
|
|
|
|
|
|
computing net (loss) income per share
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
76,742
|
|
|
|
76,035
|
|
|
|
76,991
|
|
|
|
74,962
|
|
|
|
|
Diluted
|
|
|
77,565
|
|
|
|
77,108
|
|
|
|
76,991
|
|
|
|
76,187
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Includes stock-based compensation
|
|
Three Months Ended
|
|
Twelve Months Ended
|
|
|
expense as follows:
|
|
December 31,
|
|
December 31,
|
|
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
|
Cost of revenue
|
|
$
|
812
|
|
|
$
|
900
|
|
|
$
|
3,826
|
|
|
$
|
3,111
|
|
|
|
|
Product development
|
|
|
1,874
|
|
|
|
1,665
|
|
|
|
8,637
|
|
|
|
4,788
|
|
|
|
|
Sales and marketing
|
|
|
2,948
|
|
|
|
3,102
|
|
|
|
12,966
|
|
|
|
10,993
|
|
|
|
|
General and administrative
|
|
|
2,622
|
|
|
|
2,988
|
|
|
|
11,621
|
|
|
|
10,805
|
|
|
|
|
|
|
$
|
8,256
|
|
|
$
|
8,655
|
|
|
$
|
37,050
|
|
|
$
|
29,697
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Cash Flows
|
For the Three and Twelve Months Ended December 31, 2014 and 2013
|
(unaudited, in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
2014
|
|
|
|
2013
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
|
|
$
|
110
|
|
|
$
|
2,178
|
|
|
$
|
(10,274
|
)
|
|
$
|
20,692
|
|
|
|
Adjustments to reconcile net (loss) income to net cash
|
|
|
|
|
|
|
|
|
|
|
provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
10,773
|
|
|
|
8,922
|
|
|
|
41,306
|
|
|
|
31,745
|
|
|
|
|
Deferred tax (benefit) expense
|
|
|
(1,880
|
)
|
|
|
2,370
|
|
|
|
(7,891
|
)
|
|
|
(2,503
|
)
|
|
|
|
Stock-based compensation
|
|
|
8,256
|
|
|
|
8,655
|
|
|
|
37,050
|
|
|
|
29,697
|
|
|
|
|
Excess tax benefit from stock options
|
|
|
(2,248
|
)
|
|
|
-
|
|
|
|
(2,248
|
)
|
|
|
-
|
|
|
|
|
Loss on disposal and impairment of assets
|
|
|
350
|
|
|
|
4
|
|
|
|
386
|
|
|
|
314
|
|
|
|
|
Acquisition-related contingent consideration
|
|
|
(391
|
)
|
|
|
(16
|
)
|
|
|
173
|
|
|
|
1,284
|
|
|
|
|
Changes in assets and liabilities, net of assets acquired
|
|
|
|
|
|
|
|
|
|
|
|
|
and liabilities assumed in business combinations:
|
|
|
4,948
|
|
|
|
(4,513
|
)
|
|
|
11,470
|
|
|
|
(12,020
|
)
|
|
|
|
|
Net cash provided by operating activities
|
|
|
19,918
|
|
|
|
17,600
|
|
|
|
69,972
|
|
|
|
69,209
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
Purchases of property, equipment and software
|
|
|
(7,937
|
)
|
|
|
(10,762
|
)
|
|
|
(37,062
|
)
|
|
|
(32,952
|
)
|
|
|
Acquisition of businesses, net of cash acquired
|
|
|
(5
|
)
|
|
|
(17,887
|
)
|
|
|
(41,947
|
)
|
|
|
(28,229
|
)
|
|
|
Intangible asset additions
|
|
|
(260
|
)
|
|
|
(327
|
)
|
|
|
(260
|
)
|
|
|
(927
|
)
|
|
|
|
|
Net cash used by investing activities
|
|
|
(8,202
|
)
|
|
|
(28,976
|
)
|
|
|
(79,269
|
)
|
|
|
(62,108
|
)
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
Payments on and proceeds from debt, net
|
|
|
(18,910
|
)
|
|
|
(137
|
)
|
|
|
18,250
|
|
|
|
(10,548
|
)
|
|
|
Payments of deferred acquisition-related consideration
|
|
|
(2,412
|
)
|
|
|
(4
|
)
|
|
|
(6,419
|
)
|
|
|
(1,549
|
)
|
|
|
Issuance of common stock
|
|
|
4,746
|
|
|
|
3,754
|
|
|
|
9,914
|
|
|
|
10,608
|
|
|
|
Excess tax benefit from stock options
|
|
|
2,248
|
|
|
|
-
|
|
|
|
2,248
|
|
|
|
-
|
|
|
|
Purchase of treasury stock
|
|
|
(1,093
|
)
|
|
|
(1,697
|
)
|
|
|
(22,215
|
)
|
|
|
(4,860
|
)
|
|
|
|
|
Net cash provided by (used in) financing activities
|
|
|
(15,421
|
)
|
|
|
1,916
|
|
|
|
1,778
|
|
|
|
(6,349
|
)
|
|
|
|
|
Net (decrease) increase in cash and cash equivalents
|
|
|
(3,705
|
)
|
|
|
(9,460
|
)
|
|
|
(7,519
|
)
|
|
|
752
|
|
|
|
|
|
Effect of exchange rate on cash
|
|
|
(29
|
)
|
|
|
(18
|
)
|
|
|
(47
|
)
|
|
|
(54
|
)
|
|
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
|
|
Beginning of period
|
|
|
30,670
|
|
|
|
43,980
|
|
|
|
34,502
|
|
|
|
33,804
|
|
|
|
End of period
|
|
$
|
26,936
|
|
|
$
|
34,502
|
|
|
$
|
26,936
|
|
|
$
|
34,502
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP Measures
|
For the Three and Twelve Months Ended December 31, 2014 and 2013
|
(unaudited, in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
2014
|
|
|
|
2013
|
|
Non-GAAP revenue:
|
|
|
|
|
|
|
|
|
|
Revenue (GAAP)
|
|
$
|
104,464
|
|
|
$
|
95,519
|
|
|
$
|
404,551
|
|
|
$
|
377,022
|
|
|
|
Acquisition-related and other deferred revenue
|
|
|
(290
|
)
|
|
|
922
|
|
|
|
435
|
|
|
|
2,717
|
|
|
Non-GAAP revenue
|
|
$
|
104,174
|
|
|
$
|
96,441
|
|
|
$
|
404,986
|
|
|
$
|
379,739
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
2014
|
|
|
|
2013
|
|
|
Adjusted gross profit:
|
|
|
|
|
|
|
|
|
|
|
Gross profit (GAAP)
|
|
$
|
57,946
|
|
|
$
|
58,013
|
|
|
$
|
229,680
|
|
|
$
|
228,701
|
|
|
|
|
Acquisition-related and other deferred revenue
|
|
|
(290
|
)
|
|
|
922
|
|
|
|
435
|
|
|
|
2,717
|
|
|
|
|
Depreciation
|
|
|
2,330
|
|
|
|
1,800
|
|
|
|
8,512
|
|
|
|
6,567
|
|
|
|
|
Amortization of intangible assets
|
|
|
2,860
|
|
|
|
2,062
|
|
|
|
10,712
|
|
|
|
7,713
|
|
|
|
|
Stock-based compensation expense
|
|
|
812
|
|
|
|
900
|
|
|
|
3,826
|
|
|
|
3,111
|
|
|
|
Adjusted gross profit
|
|
$
|
63,658
|
|
|
$
|
63,697
|
|
|
$
|
253,165
|
|
|
$
|
248,809
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted gross profit margin
|
|
|
61.1
|
%
|
|
|
66.0
|
%
|
|
|
62.5
|
%
|
|
|
65.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
2014
|
|
|
|
2013
|
|
|
Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income (GAAP)
|
|
$
|
110
|
|
|
$
|
2,178
|
|
|
$
|
(10,274
|
)
|
|
$
|
20,692
|
|
|
|
|
Acquisition-related and other deferred revenue
|
|
|
(290
|
)
|
|
|
922
|
|
|
|
435
|
|
|
|
2,717
|
|
|
|
|
Depreciation, loss on disposal and impairment of assets
|
|
|
5,377
|
|
|
|
3,925
|
|
|
|
19,288
|
|
|
|
14,411
|
|
|
|
|
Amortization of intangible assets
|
|
|
5,746
|
|
|
|
5,001
|
|
|
|
22,404
|
|
|
|
17,648
|
|
|
|
|
Interest expense, net
|
|
|
337
|
|
|
|
228
|
|
|
|
1,117
|
|
|
|
1,427
|
|
|
|
|
Income tax (benefit) expense
|
|
|
(2,209
|
)
|
|
|
2,406
|
|
|
|
(6,333
|
)
|
|
|
(210
|
)
|
|
|
|
Litigation-related expense
|
|
|
31
|
|
|
|
330
|
|
|
|
4,915
|
|
|
|
661
|
|
|
|
|
Stock-based compensation expense
|
|
|
8,256
|
|
|
|
8,655
|
|
|
|
37,050
|
|
|
|
29,697
|
|
|
|
|
Acquisition-related expense
|
|
|
(111
|
)
|
|
|
1,156
|
|
|
|
1,987
|
|
|
|
3,269
|
|
|
|
Adjusted EBITDA
|
|
$
|
17,247
|
|
|
$
|
24,801
|
|
|
$
|
70,589
|
|
|
$
|
90,312
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA margin
|
|
|
16.6
|
%
|
|
|
25.7
|
%
|
|
|
17.4
|
%
|
|
|
23.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
2014
|
|
|
|
2013
|
|
|
Non-GAAP total product development:
|
|
|
|
|
|
|
|
|
|
|
Product development (GAAP)
|
|
$
|
16,108
|
|
|
$
|
13,641
|
|
|
$
|
64,418
|
|
|
$
|
50,638
|
|
|
|
|
Less: Amortization of intangible assets
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
Stock-based compensation expense
|
|
|
1,874
|
|
|
|
1,665
|
|
|
|
8,637
|
|
|
|
4,788
|
|
|
|
Non-GAAP total product development:
|
|
$
|
14,234
|
|
|
$
|
11,976
|
|
|
$
|
55,781
|
|
|
$
|
45,850
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP total product development as % of non-GAAP revenue:
|
|
|
13.7
|
%
|
|
|
12.4
|
%
|
|
|
13.8
|
%
|
|
|
12.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP Measures
|
For the Three and Twelve Months Ended December 31, 2014 and 2013
|
(unaudited, in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
2014
|
|
|
|
2013
|
|
Non-GAAP total sales and marketing:
|
|
|
|
|
|
|
|
|
|
Sales and marketing (GAAP)
|
|
$
|
27,593
|
|
|
$
|
23,902
|
|
|
$
|
111,563
|
|
|
$
|
95,894
|
|
|
|
Less: Amortization of intangible assets
|
|
|
2,886
|
|
|
|
2,939
|
|
|
|
11,500
|
|
|
|
9,935
|
|
|
|
Stock-based compensation expense
|
|
|
2,948
|
|
|
|
3,102
|
|
|
|
12,966
|
|
|
|
10,993
|
|
|
Non-GAAP total sales and marketing:
|
|
$
|
21,759
|
|
|
$
|
17,861
|
|
|
$
|
87,097
|
|
|
$
|
74,966
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP total sales and marketing as % of non-GAAP revenue:
|
|
|
20.9
|
%
|
|
|
18.5
|
%
|
|
|
21.5
|
%
|
|
|
19.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
2014
|
|
|
|
2013
|
|
Non-GAAP total general and administrative:
|
|
|
|
|
|
|
|
|
|
General and administrative (GAAP)
|
|
$
|
16,011
|
|
|
$
|
15,730
|
|
|
$
|
69,202
|
|
|
$
|
60,610
|
|
|
|
Less: Amortization of intangible assets
|
|
|
-
|
|
|
|
-
|
|
|
|
192
|
|
|
|
-
|
|
|
|
Acquisition-related expense
|
|
|
(111
|
)
|
|
|
1,156
|
|
|
|
1,987
|
|
|
|
3,269
|
|
|
|
Stock-based compensation expense
|
|
|
2,622
|
|
|
|
2,988
|
|
|
|
11,621
|
|
|
|
10,805
|
|
|
|
Litigation-related expense
|
|
|
31
|
|
|
|
330
|
|
|
|
4,915
|
|
|
|
661
|
|
|
Non-GAAP total general and administrative:
|
|
$
|
13,469
|
|
|
$
|
11,256
|
|
|
$
|
50,487
|
|
|
$
|
45,875
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP total general and administrative as % of non-GAAP revenue:
|
|
|
12.9
|
%
|
|
|
11.7
|
%
|
|
|
12.5
|
%
|
|
|
12.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
2014
|
|
|
|
2013
|
|
Non-GAAP total operating expense:
|
|
|
|
|
|
|
|
|
|
Operating expense (GAAP)
|
|
$
|
59,712
|
|
|
$
|
53,273
|
|
|
$
|
245,183
|
|
|
$
|
207,142
|
|
|
|
Less: Amortization of intangible assets
|
|
|
2,886
|
|
|
|
2,939
|
|
|
|
11,692
|
|
|
|
9,935
|
|
|
|
Acquisition related expense
|
|
|
(111
|
)
|
|
|
1,156
|
|
|
|
1,987
|
|
|
|
3,269
|
|
|
|
Stock-based compensation expense
|
|
|
7,444
|
|
|
|
7,755
|
|
|
|
33,224
|
|
|
|
26,586
|
|
|
|
Litigation-related expense
|
|
|
31
|
|
|
|
330
|
|
|
|
4,915
|
|
|
|
661
|
|
|
Non-GAAP total operating expense:
|
|
$
|
49,462
|
|
|
$
|
41,093
|
|
|
$
|
193,365
|
|
|
$
|
166,691
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP total operating expense as % of non-GAAP revenue:
|
|
|
47.5
|
%
|
|
|
42.6
|
%
|
|
|
47.7
|
%
|
|
|
43.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
2014
|
|
|
|
2013
|
|
Non-GAAP operating income:
|
|
|
|
|
|
|
|
|
|
Operating (loss) income (GAAP)
|
|
$
|
(1,766
|
)
|
|
$
|
4,740
|
|
|
$
|
(15,503
|
)
|
|
$
|
21,559
|
|
|
|
Acquisition-related and other deferred revenue
|
|
|
(290
|
)
|
|
|
922
|
|
|
|
435
|
|
|
|
2,717
|
|
|
|
Amortization of intangible assets
|
|
|
5,746
|
|
|
|
5,001
|
|
|
|
22,404
|
|
|
|
17,648
|
|
|
|
Stock-based compensation expense
|
|
|
8,256
|
|
|
|
8,655
|
|
|
|
37,050
|
|
|
|
29,697
|
|
|
|
Acquisition-related expense
|
|
|
(111
|
)
|
|
|
1,156
|
|
|
|
1,987
|
|
|
|
3,269
|
|
|
|
Litigation-related expense
|
|
|
31
|
|
|
|
330
|
|
|
|
4,915
|
|
|
|
661
|
|
|
Non-GAAP operating income
|
|
$
|
11,866
|
|
|
$
|
20,804
|
|
|
$
|
51,288
|
|
|
$
|
75,551
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating margin
|
|
|
11.4
|
%
|
|
|
21.6
|
%
|
|
|
12.7
|
%
|
|
|
19.9
|
%
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP Measures
|
For the Three and Twelve Months Ended December 31, 2014 and 2013
|
(unaudited, in thousands except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
2014
|
|
|
|
2013
|
|
Non-GAAP net income:
|
|
|
|
|
|
|
|
|
|
Net (loss) income (GAAP)
|
|
$
|
110
|
|
|
$
|
2,178
|
|
|
$
|
(10,274
|
)
|
|
$
|
20,692
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax deductible items:
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related and other deferred revenue
|
|
|
(290
|
)
|
|
|
922
|
|
|
|
435
|
|
|
|
2,717
|
|
|
|
Amortization of intangible assets
|
|
|
5,746
|
|
|
|
5,001
|
|
|
|
22,404
|
|
|
|
17,648
|
|
|
|
Stock-based compensation expense
|
|
|
8,256
|
|
|
|
8,655
|
|
|
|
37,050
|
|
|
|
29,697
|
|
|
|
Acquisition-related expense
|
|
|
(111
|
)
|
|
|
1,156
|
|
|
|
1,987
|
|
|
|
3,269
|
|
|
|
Litigation-related expense
|
|
|
31
|
|
|
|
330
|
|
|
|
4,915
|
|
|
|
661
|
|
|
|
Loss on disposal and impairment of assets
|
|
|
350
|
|
|
|
4
|
|
|
|
386
|
|
|
|
314
|
|
|
|
|
Subtotal of tax deductible items
|
|
|
13,982
|
|
|
|
16,068
|
|
|
|
67,177
|
|
|
|
54,306
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax impact of tax deductible items(1)
|
|
|
(5,593
|
)
|
|
|
(6,427
|
)
|
|
|
(26,871
|
)
|
|
|
(21,722
|
)
|
|
|
Tax expense resulting from applying effective tax rate(2)
|
|
|
(1,369
|
)
|
|
|
572
|
|
|
|
310
|
|
|
|
(8,403
|
)
|
|
Non-GAAP net income
|
|
$
|
7,130
|
|
|
$
|
12,391
|
|
|
$
|
30,342
|
|
|
$
|
44,873
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income per share - diluted
|
|
$
|
0.09
|
|
|
$
|
0.16
|
|
|
$
|
0.39
|
|
|
$
|
0.59
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares - diluted
|
|
|
77,565
|
|
|
|
77,108
|
|
|
|
76,991
|
|
|
|
76,187
|
|
|
|
Weighted average effect of dilutive securities
|
|
|
-
|
|
|
|
-
|
|
|
|
725
|
|
|
|
-
|
|
|
Non-GAAP weighted average shares - diluted
|
|
|
77,565
|
|
|
|
77,108
|
|
|
|
77,716
|
|
|
|
76,187
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Reflects the removal of the tax benefit associated with the
amortization of intangible assets,
|
|
|
|
stock-based compensation expense, acquisition-related deferred
revenue adjustment and
|
|
|
|
acquisition-related expense.
|
|
(2)
|
|
Represents adjusting to a normalized effective tax rate of 40%.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
Annualized Non-GAAP on demand revenue per average on demand unit:
|
|
|
|
|
|
|
|
|
|
On demand revenue (GAAP)
|
|
$
|
101,261
|
|
|
$
|
92,081
|
|
$
|
390,622
|
|
$
|
362,312
|
|
|
Acquisition-related and other deferred revenue
|
|
|
(290
|
)
|
|
|
922
|
|
|
435
|
|
|
2,717
|
|
Non-GAAP on demand revenue
|
|
$
|
100,971
|
|
|
$
|
93,003
|
|
$
|
391,057
|
|
$
|
365,029
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending on demand units
|
|
|
9,560
|
|
|
|
9,022
|
|
|
9,560
|
|
|
9,022
|
|
Average on demand units
|
|
|
9,528
|
|
|
|
8,876
|
|
|
9,361
|
|
|
8,615
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized Non-GAAP on demand revenue per average on demand unit
|
|
$
|
42.39
|
|
|
$
|
41.91
|
|
$
|
41.78
|
|
$
|
42.37
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual customer value of on demand revenue(1)
|
|
$
|
405,248
|
|
|
$
|
378,131
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
This metric represents management's estimate for the current annual
run-rate value of on demand customer relationships. This metric is
calculated by multiplying ending on demand units times annualized
Non-GAAP on demand revenue per average on demand unit for the
periods presented.
|
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|