[November 03, 2015] |
|
RealPage Reports Third Quarter 2015 Financial Results
RealPage,
Inc. (NASDAQ:RP),
a leading provider of on demand software and software-enabled solutions
for the multifamily, commercial, single-family and vacation rental
housing industries, today announced financial results for its third
quarter ended September 30, 2015.
"Financial performance for the third quarter was strong," said Steve
Winn, Chairman and CEO of RealPage. "Revenue, adjusted EBITDA, and
non-GAAP net income per diluted share performance all exceeded
expectations. Subscription revenue growth of 18% was driven primarily by
continued demand for our Property Management, Resident Services and
Asset Optimization solutions. I'm also quite pleased with the continued
traction of our new Business Intelligence solutions which fueled
sequential revenue growth for Asset Optimization, demonstrating that the
investments made in this area are delivering results."
"With adjusted EBITDA margin growing over 430 basis points compared to
the prior year period, our focused plan to expand profit margins is
achieving significant results," said Bryan Hill, CFO and Treasurer of
RealPage. "The third quarter marks the fifth consecutive quarter of
sequential margin improvement. We also continue to prioritize efficient
capital allocation strategies. During the quarter we repurchased
approximately 800 thousand shares of our common stock, resulting in 2.5
million shares repurchased program-to-date, which we view as an
appropriate use of capital with the potential for a significant return."
Third Quarter 2015 Financial Highlights
-
Total GAAP revenue of $121.6 million, an increase of 16 percent
year-over-year;
-
Adjusted EBITDA of $24.2 million, representing margin expansion of
over 430 basis points and an increase of 48 percent year-over-year;
-
Non-GAAP net income of $11.3 million, or $0.15 per diluted share, a
year-over-year increase of 73 percent and 88 percent, respectively; and
-
GAAP net loss of $8.2 million, or $0.11 per diluted share, compared to
a GAAP net loss of $3.3 million, or $0.04 per diluted share, in the
prior year quarter. In connection with the preparation of the third
quarter financial statements, the company identified certain
indicators of impairment for identified intangibles within its Leasing
and Marketing solutions. As a result, the company has taken a
non-cash, non-tax-deductible income statement charge during the third
quarter to impair certain trade name intangible assets primarily
related to its 2011 acquisition of Multifamily Technology Solutions,
Inc. The charge is not expected to have a material impact on the
company's cash flows or liquidity nor does the company anticipate the
charge to affect its ongoing business or financial performance.
Financial Outlook
RealPage management expects to achieve the following results during its
fourth quarter ended December 31, 2015:
-
Total revenue is expected to be in the range of $120.0 million to
$122.0 million;
-
Adjusted EBITDA is expected to be in the range of $24.0 million to
$25.0 million;
-
Non-GAAP net income per diluted share is expected to be in the range
of $0.14 to $0.15;
-
Non-GAAP tax rate is expected to be approximately 40 percent; and
-
Weighted average shares outstanding are expected to be approximately
78.0 million, exclusive of any stock repurchase activity.
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 $465.2 million to
$467.2 million;
-
Adjusted EBITDA is expected to be in the range of $89.7 million to
$90.7 million;
-
Non-GAAP net income per diluted share is expected to be approximately
$0.53;
-
Non-GAAP tax rate is expected to be approximately 40 percent; and
-
Weighted average shares outstanding are expected to be approximately
77.6 million, exclusive of any stock repurchase activity.
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 November 3, 2015 at 5:00 p.m.
EST to discuss its financial results. Participants are encouraged to
listen to the presentation via a live web broadcast on the Investor
Relations section of the RealPage website. 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 72154959, until November 7, 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 services solutions. Founded in 1998 and
headquartered in Carrollton, Texas, RealPage currently serves over
11,000 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; the
results of its investments in Asset Optimization; its focus on driving
margin expansion; and the results of its capital allocation strategies.
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 quarterly 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) the inability to achieve revenue
growth or to enable margin expansion; and (j) 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 previously filed with
the SEC on August 7, 2015 and its Annual Report on Form 10-K previously
filed with the SEC on March 2, 2015. 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 traditional GAAP financial measures in that they (1) include
acquisition-related and other deferred revenue adjustments; (2) exclude
depreciation, loss on impairment and disposal of assets; amortization of
intangible assets; stock-based compensation expenses; any impact related
to the Yardi litigation (including related insurance litigation and
settlement costs), collectively the "Yardi Litigation"; and acquisition
related expenses (including any purchase accounting adjustments); and
(3) include income taxes at a sustainable effective rate, which excludes
the reversal of valuation allowances due to expected realization of
deferred tax assets.
We define non-GAAP total revenue as total revenue plus
acquisition-related and other deferred revenue adjustments. We also
define non-GAAP on demand revenue as on demand revenue plus
acquisition-related and other deferred revenue adjustments. Non-GAAP net
income is defined as net (loss) income plus acquisition-related and
other deferred revenue adjustments; amortization of intangible assets;
stock-based compensation expense; acquisition-related expense; any
impact related to the Yardi Litigation; loss on disposal and impairment
of assets; and an adjustment to income tax expense (benefit) to reflect
our effective tax rate. Other non-GAAP measures such as non-GAAP product
development, non-GAAP sales and marketing, non-GAAP general and
administrative, and non-GAAP operating expense and income exclude
amortization of intangible assets; litigation-related expense; loss on
disposal and impairment of assets; and stock-based compensation when
calculating their composition. In addition to these adjustments,
non-GAAP operating income is adjusted for acquisition-related and other
deferred revenue.
Adjusted gross profit is defined as gross profit plus
acquisition-related and other deferred revenue adjustments, depreciation
and amortization of intangible assets, and stock-based compensation.
We define Adjusted EBITDA as net (loss) income plus acquisition-related
and other deferred revenue adjustments; depreciation, asset impairment
and loss on disposal of assets; amortization of intangible assets; net
interest expense; income tax expense (benefit); stock-based compensation
expense; any impact related to the Yardi Litigation; and
acquisition-related expenses.
Non-GAAP on demand revenue per average on demand unit represents
non-GAAP on demand revenue for the period presented divided by average
on demand units for the same period. For interim periods, the
calculation is performed on an annualized basis. We calculate average on
demand units as the average of the beginning and ending on demand units
for each quarter in the period presented. We monitor this metric to
measure our success in increasing the number of on demand software
solutions utilized by our customers to manage their rental housing
units, our overall revenue and profitability.
Non-GAAP on demand annual customer value, or "ACV", represents
management's estimate of the current annual run-rate value of on demand
customer relationships. ACV is calculated by multiplying ending on
demand units by annualized Non-GAAP on demand revenue per average on
demand unit.
We believe that the non-GAAP financial measures defined above are useful
to investors and other users of our financial statements in evaluating
our operating performance because they provide additional tools to
compare business performance across companies and across periods. We
believe that:
-
these non-GAAP financial measures provide investors and other users of
our financial information consistency and comparability with our past
financial performance, facilitate period-to-period comparisons of
operations and facilitate 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, from non-GAAP earnings measures, such as Adjusted EBITDA
and non-GAAP net income, 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 the non-GAAP financial measures defined above in conjunction with
traditional GAAP financial 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 non-GAAP financial measures as our
only measures of operating performance. Non-GAAP financial measures
should not be considered as a substitute for other measures of financial
performance or liquidity 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 changes in, or cash requirements for, our working
capital, and they do not reflect our capital expenditures or future
requirements. We compensate for the inherent limitations associated with
using non-GAAP financial measures through disclosure of these
limitations, presentation of our financial statements in accordance with
GAAP, and reconciliation of non-GAAP financial measures to the most
directly comparable GAAP measure.
|
|
|
|
|
|
|
|
|
Condensed Consolidated Balance Sheets
|
|
(In thousands, except share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
|
December 31,
|
|
|
|
|
|
2015
|
|
|
|
|
2014
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
18,566
|
|
|
|
$
|
26,936
|
|
|
Restricted cash
|
|
|
|
94,086
|
|
|
|
|
85,543
|
|
|
Accounts receivable, less allowance for doubtful accounts of
$1,926 and $2,363 at September 30, 2015 and December 31, 2014,
respectively
|
|
|
|
68,460
|
|
|
|
|
64,845
|
|
|
Prepaid expenses
|
|
|
|
9,610
|
|
|
|
|
7,647
|
|
|
Deferred tax asset, net
|
|
|
|
17,635
|
|
|
|
|
10,996
|
|
|
Other current assets
|
|
|
|
2,571
|
|
|
|
|
1,848
|
|
|
Total current assets
|
|
|
|
210,928
|
|
|
|
|
197,815
|
|
|
Property, equipment and software, net
|
|
|
|
71,944
|
|
|
|
|
72,616
|
|
|
Goodwill
|
|
|
|
220,104
|
|
|
|
|
193,378
|
|
|
Identified intangible assets, net
|
|
|
|
87,287
|
|
|
|
|
100,085
|
|
|
Deferred tax asset, net
|
|
|
|
-
|
|
|
|
|
2,537
|
|
|
Other assets
|
|
|
|
5,201
|
|
|
|
|
5,059
|
|
|
Total assets
|
|
|
$
|
595,464
|
|
|
|
$
|
571,490
|
|
|
|
|
|
|
|
|
|
|
Liabilities and stockholders' equity
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
$
|
15,670
|
|
|
|
$
|
14,830
|
|
|
Accrued expenses and other current liabilities
|
|
|
|
33,582
|
|
|
|
|
22,905
|
|
|
Current portion of deferred revenue
|
|
|
|
77,217
|
|
|
|
|
73,485
|
|
|
Customer deposits held in restricted accounts
|
|
|
|
93,956
|
|
|
|
|
85,489
|
|
|
Total current liabilities
|
|
|
|
220,425
|
|
|
|
|
196,709
|
|
|
Deferred revenue
|
|
|
|
7,107
|
|
|
|
|
6,903
|
|
|
Deferred tax liability, net
|
|
|
|
1,439
|
|
|
|
|
5,196
|
|
|
Revolving credit facility
|
|
|
|
44,000
|
|
|
|
|
20,000
|
|
|
Other long-term liabilities
|
|
|
|
10,574
|
|
|
|
|
13,902
|
|
|
Total liabilities
|
|
|
|
283,545
|
|
|
|
|
242,710
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
|
Preferred stock, $0.001 par value: 10,000,000 shares authorized
and zero shares issued and outstanding at September 30, 2015 and
December 31, 2014, respectively
|
|
|
|
-
|
|
|
|
|
-
|
|
|
Common stock, $0.001 par value: 125,000,000 shares authorized,
82,370,113 and 83,211,650 shares issued and 78,479,774 and
79,037,351 shares outstanding at September 30, 2015 and December
31, 2014, respectively
|
|
|
|
82
|
|
|
|
|
83
|
|
|
Additional paid-in capital
|
|
|
|
456,707
|
|
|
|
|
437,664
|
|
|
Treasury stock, at cost: 3,890,339 and 4,174,299 shares at
September 30, 2015 and December 31, 2014, respectively
|
|
|
|
(23,496
|
)
|
|
|
|
(33,398
|
)
|
|
Accumulated deficit
|
|
|
|
(120,898
|
)
|
|
|
|
(75,360
|
)
|
|
Accumulated other comprehensive loss
|
|
|
|
(476
|
)
|
|
|
|
(209
|
)
|
|
Total stockholders' equity
|
|
|
|
311,919
|
|
|
|
|
328,780
|
|
|
Total liabilities and stockholders' equity
|
|
|
$
|
595,464
|
|
|
|
$
|
571,490
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Operations
|
|
(In thousands, except per share amounts)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
|
|
|
2015
|
|
|
|
|
2014
|
|
|
|
|
2015
|
|
|
|
|
2014
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
On demand
|
|
|
$
|
116,772
|
|
|
|
$
|
100,747
|
|
|
|
$
|
333,872
|
|
|
|
$
|
289,361
|
|
|
On premise
|
|
|
|
834
|
|
|
|
|
755
|
|
|
|
|
2,301
|
|
|
|
|
2,446
|
|
|
Professional and other
|
|
|
|
3,982
|
|
|
|
|
3,034
|
|
|
|
|
10,647
|
|
|
|
|
8,280
|
|
|
Total revenue
|
|
|
|
121,588
|
|
|
|
|
104,536
|
|
|
|
|
346,820
|
|
|
|
|
300,087
|
|
|
Cost of revenue(1)
|
|
|
|
52,879
|
|
|
|
|
46,311
|
|
|
|
|
150,160
|
|
|
|
|
128,353
|
|
|
Gross profit
|
|
|
|
68,709
|
|
|
|
|
58,225
|
|
|
|
|
196,660
|
|
|
|
|
171,734
|
|
|
Operating expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product development(1)
|
|
|
|
16,858
|
|
|
|
|
17,528
|
|
|
|
|
52,919
|
|
|
|
|
48,310
|
|
|
Sales and marketing(1)
|
|
|
|
31,559
|
|
|
|
|
29,949
|
|
|
|
|
90,333
|
|
|
|
|
83,970
|
|
|
General and administrative(1)
|
|
|
|
13,424
|
|
|
|
|
15,443
|
|
|
|
|
51,797
|
|
|
|
|
53,191
|
|
|
Impairment of identified intangible assets
|
|
|
|
20,274
|
|
|
|
|
-
|
|
|
|
|
20,801
|
|
|
|
|
-
|
|
|
Total operating expense
|
|
|
|
82,115
|
|
|
|
|
62,920
|
|
|
|
|
215,850
|
|
|
|
|
185,471
|
|
|
Operating loss
|
|
|
|
(13,406
|
)
|
|
|
|
(4,695
|
)
|
|
|
|
(19,190
|
)
|
|
|
|
(13,737
|
)
|
|
Interest expense and other, net
|
|
|
|
(391
|
)
|
|
|
|
(345
|
)
|
|
|
|
(1,048
|
)
|
|
|
|
(771
|
)
|
|
Loss before income taxes
|
|
|
|
(13,797
|
)
|
|
|
|
(5,040
|
)
|
|
|
|
(20,238
|
)
|
|
|
|
(14,508
|
)
|
|
Income tax benefit
|
|
|
|
(5,605
|
)
|
|
|
|
(1,783
|
)
|
|
|
|
(7,120
|
)
|
|
|
|
(4,124
|
)
|
|
Net loss
|
|
|
$
|
(8,192
|
)
|
|
|
$
|
(3,257
|
)
|
|
|
$
|
(13,118
|
)
|
|
|
$
|
(10,384
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
(0.11
|
)
|
|
|
$
|
(0.04
|
)
|
|
|
$
|
(0.17
|
)
|
|
|
$
|
(0.13
|
)
|
|
Diluted
|
|
|
$
|
(0.11
|
)
|
|
|
$
|
(0.04
|
)
|
|
|
$
|
(0.17
|
)
|
|
|
$
|
(0.13
|
)
|
|
Weighted average shares used in computing net loss per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
76,564
|
|
|
|
|
77,280
|
|
|
|
|
76,772
|
|
|
|
|
77,075
|
|
|
Diluted
|
|
|
|
76,564
|
|
|
|
|
77,280
|
|
|
|
|
76,772
|
|
|
|
|
77,075
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes stock-based compensation expense as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
|
|
|
2015
|
|
|
|
|
2014
|
|
|
|
|
2015
|
|
|
|
|
2014
|
|
|
Cost of revenue
|
|
|
$
|
817
|
|
|
|
$
|
1,141
|
|
|
|
$
|
3,267
|
|
|
|
$
|
3,014
|
|
|
Product development
|
|
|
|
1,759
|
|
|
|
|
2,707
|
|
|
|
|
7,050
|
|
|
|
|
6,763
|
|
|
Sales and marketing
|
|
|
|
3,118
|
|
|
|
|
3,774
|
|
|
|
|
10,750
|
|
|
|
|
10,018
|
|
|
General and administrative
|
|
|
|
2,975
|
|
|
|
|
1,914
|
|
|
|
|
9,599
|
|
|
|
|
8,999
|
|
|
|
|
|
$
|
8,669
|
|
|
|
$
|
9,536
|
|
|
|
$
|
30,666
|
|
|
|
$
|
28,794
|
|
|
Condensed Consolidated Statements of Cash Flows
|
(In thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
2015
|
|
|
|
2014
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
$
|
(8,192
|
)
|
|
$
|
(3,257
|
)
|
|
$
|
(13,118
|
)
|
|
$
|
(10,384
|
)
|
Adjustments to reconcile net loss to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
11,913
|
|
|
|
10,962
|
|
|
|
33,787
|
|
|
|
30,533
|
|
Deferred tax benefit
|
|
|
|
(7,173
|
)
|
|
|
(2,161
|
)
|
|
|
(8,827
|
)
|
|
|
(6,011
|
)
|
Stock-based compensation
|
|
|
|
8,669
|
|
|
|
9,536
|
|
|
|
30,666
|
|
|
|
28,794
|
|
Excess tax benefit from stock options
|
|
|
|
331
|
|
|
|
-
|
|
|
|
968
|
|
|
|
-
|
|
Loss on disposal and impairment of assets
|
|
|
|
20,966
|
|
|
|
16
|
|
|
|
23,769
|
|
|
|
36
|
|
Acquisition-related contingent consideration
|
|
|
|
(3,511
|
)
|
|
|
630
|
|
|
|
(3,018
|
)
|
|
|
564
|
|
Changes in assets and liabilities, net of assets acquired and
liabilities assumed in business combinations
|
|
|
|
(3,283
|
)
|
|
|
(8,420
|
)
|
|
|
4,287
|
|
|
|
6,522
|
|
Net cash provided by operating activities
|
|
|
|
19,720
|
|
|
|
7,306
|
|
|
|
68,514
|
|
|
|
50,054
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
Purchases of property, equipment and software
|
|
|
|
(7,476
|
)
|
|
|
(9,990
|
)
|
|
|
(18,553
|
)
|
|
|
(29,125
|
)
|
Proceeds from disposal of assets
|
|
|
|
-
|
|
|
|
-
|
|
|
|
305
|
|
|
|
-
|
|
Acquisition of businesses, net of cash acquired
|
|
|
|
-
|
|
|
|
111
|
|
|
|
(45,450
|
)
|
|
|
(41,942
|
)
|
Intangible asset additions
|
|
|
|
(60
|
)
|
|
|
-
|
|
|
|
(231
|
)
|
|
|
-
|
|
Net cash used in investing activities
|
|
|
|
(7,536
|
)
|
|
|
(9,879
|
)
|
|
|
(63,929
|
)
|
|
|
(71,067
|
)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
Payments on and proceeds from debt, net
|
|
|
|
(6,143
|
)
|
|
|
12,440
|
|
|
|
23,563
|
|
|
|
37,160
|
|
Payments of deferred acquisition-related consideration
|
|
|
|
(875
|
)
|
|
|
(3,259
|
)
|
|
|
(2,109
|
)
|
|
|
(4,007
|
)
|
Issuance of common stock
|
|
|
|
1,431
|
|
|
|
152
|
|
|
|
2,900
|
|
|
|
5,168
|
|
Excess tax benefit from stock options
|
|
|
|
(331
|
)
|
|
|
-
|
|
|
|
(968
|
)
|
|
|
-
|
|
Purchase of treasury stock
|
|
|
|
(16,991
|
)
|
|
|
(15,298
|
)
|
|
|
(36,074
|
)
|
|
|
(21,122
|
)
|
Net cash (used in) provided by financing activities
|
|
|
|
(22,909
|
)
|
|
|
(5,965
|
)
|
|
|
(12,688
|
)
|
|
|
17,199
|
|
Net decrease in cash and cash equivalents
|
|
|
|
(10,725
|
)
|
|
|
(8,538
|
)
|
|
|
(8,103
|
)
|
|
|
(3,814
|
)
|
Effect of exchange rate on cash
|
|
|
|
(31
|
)
|
|
|
(9
|
)
|
|
|
(267
|
)
|
|
|
(18
|
)
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
|
Beginning of period
|
|
|
|
29,322
|
|
|
|
39,217
|
|
|
|
26,936
|
|
|
|
34,502
|
|
End of period
|
|
|
$
|
18,566
|
|
|
$
|
30,670
|
|
|
$
|
18,566
|
|
|
$
|
30,670
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP Financial Measures
|
(In thousands, except per share amounts)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
|
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP revenue:
|
|
|
|
|
|
|
|
|
|
|
Revenue (GAAP)
|
|
|
$
|
121,588
|
|
|
$
|
104,536
|
|
|
$
|
346,820
|
|
|
$
|
300,087
|
|
|
|
Acquisition-related and other deferred revenue
|
|
|
|
(614
|
)
|
|
|
(392
|
)
|
|
|
(1,612
|
)
|
|
|
725
|
|
Non-GAAP revenue
|
|
|
$
|
120,974
|
|
|
$
|
104,144
|
|
|
$
|
345,208
|
|
|
$
|
300,812
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
|
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
2015
|
|
|
|
2014
|
|
Adjusted gross profit:
|
|
|
|
|
|
|
|
|
|
|
Gross profit (GAAP)
|
|
|
$
|
68,709
|
|
|
$
|
58,225
|
|
|
$
|
196,660
|
|
|
$
|
171,734
|
|
|
|
Acquisition-related and other deferred revenue
|
|
|
|
(614
|
)
|
|
|
(392
|
)
|
|
|
(1,612
|
)
|
|
|
725
|
|
|
|
Depreciation
|
|
|
|
2,431
|
|
|
|
2,311
|
|
|
|
7,269
|
|
|
|
6,182
|
|
|
|
Amortization of intangible assets
|
|
|
|
4,052
|
|
|
|
2,982
|
|
|
|
10,142
|
|
|
|
7,852
|
|
|
|
Stock-based compensation expense
|
|
|
|
817
|
|
|
|
1,141
|
|
|
|
3,267
|
|
|
|
3,014
|
|
|
Adjusted gross profit
|
|
|
$
|
75,395
|
|
|
$
|
64,267
|
|
|
$
|
215,726
|
|
|
$
|
189,507
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted gross profit margin
|
|
|
|
62.3
|
%
|
|
|
61.7
|
%
|
|
|
62.5
|
%
|
|
|
63.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
|
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
2015
|
|
|
|
2014
|
|
Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|
Net loss (GAAP)
|
|
|
$
|
(8,192
|
)
|
|
$
|
(3,257
|
)
|
|
$
|
(13,118
|
)
|
|
$
|
(10,384
|
)
|
|
|
Acquisition-related and other deferred revenue
|
|
|
|
(614
|
)
|
|
|
(392
|
)
|
|
|
(1,612
|
)
|
|
|
725
|
|
|
|
Depreciation, asset impairment and loss on disposal of assets
|
|
|
|
25,952
|
|
|
|
5,121
|
|
|
|
38,970
|
|
|
|
13,911
|
|
|
|
Amortization of intangible assets
|
|
|
|
6,927
|
|
|
|
5,857
|
|
|
|
18,586
|
|
|
|
16,658
|
|
|
|
Acquisition-related expense
|
|
|
|
(3,310
|
)
|
|
|
860
|
|
|
|
(1,653
|
)
|
|
|
2,098
|
|
|
|
Interest expense, net
|
|
|
|
391
|
|
|
|
349
|
|
|
|
966
|
|
|
|
780
|
|
|
|
Income tax benefit
|
|
|
|
(5,605
|
)
|
|
|
(1,783
|
)
|
|
|
(7,120
|
)
|
|
|
(4,124
|
)
|
|
|
Litigation-related expense
|
|
|
|
-
|
|
|
|
39
|
|
|
|
2
|
|
|
|
4,884
|
|
|
|
Stock-based compensation expense
|
|
|
|
8,669
|
|
|
|
9,536
|
|
|
|
30,666
|
|
|
|
28,794
|
|
|
Adjusted EBITDA
|
|
|
$
|
24,218
|
|
|
$
|
16,330
|
|
|
$
|
65,687
|
|
|
$
|
53,342
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA margin
|
|
|
|
20.0
|
%
|
|
|
15.7
|
%
|
|
|
19.0
|
%
|
|
|
17.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
|
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
2015
|
|
|
|
2014
|
|
Non-GAAP total product development:
|
|
|
|
|
|
|
|
|
|
|
Product development (GAAP)
|
|
|
$
|
16,858
|
|
|
$
|
17,528
|
|
|
$
|
52,919
|
|
|
$
|
48,310
|
|
|
|
Less: Loss on disposal and impairment of assets
|
|
|
|
532
|
|
|
|
-
|
|
|
|
1,333
|
|
|
|
-
|
|
|
|
|
Stock-based compensation expense
|
|
|
|
1,759
|
|
|
|
2,707
|
|
|
|
7,050
|
|
|
|
6,763
|
|
|
Non-GAAP total product development
|
|
|
$
|
14,567
|
|
|
$
|
14,821
|
|
|
$
|
44,536
|
|
|
$
|
41,547
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP total product development as % of non-GAAP revenue:
|
|
|
|
12.0
|
%
|
|
|
14.2
|
%
|
|
|
12.9
|
%
|
|
|
13.8
|
%
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP Financial Measures
|
(In thousands, except per share amounts)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
|
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
2015
|
|
|
|
2014
|
|
Non-GAAP total sales and marketing:
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing (GAAP)
|
|
|
$
|
31,559
|
|
|
$
|
29,949
|
|
|
$
|
90,333
|
|
|
$
|
83,970
|
|
|
|
Less: Amortization of intangible assets
|
|
|
|
2,875
|
|
|
|
2,875
|
|
|
|
8,444
|
|
|
|
8,614
|
|
|
|
|
Stock-based compensation expense
|
|
|
|
3,118
|
|
|
|
3,774
|
|
|
|
10,750
|
|
|
|
10,018
|
|
|
Non-GAAP total sales and marketing
|
|
|
$
|
25,566
|
|
|
$
|
23,300
|
|
|
$
|
71,139
|
|
|
$
|
65,338
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP total sales and marketing as % of non-GAAP revenue:
|
|
|
|
21.1
|
%
|
|
|
22.4
|
%
|
|
|
20.6
|
%
|
|
|
21.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
|
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
2015
|
|
|
|
2014
|
|
Non-GAAP total general and administrative:
|
|
|
|
|
|
|
|
|
|
|
General and administrative (GAAP)
|
|
|
$
|
13,424
|
|
|
$
|
15,443
|
|
|
$
|
51,797
|
|
|
$
|
53,191
|
|
|
|
Less: Loss on disposal and impairment of assets
|
|
|
|
160
|
|
|
|
16
|
|
|
|
1,635
|
|
|
|
36
|
|
|
|
|
Amortization of intangible assets
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
192
|
|
|
|
|
Acquisition-related expense
|
|
|
|
(3,310
|
)
|
|
|
860
|
|
|
|
(1,653
|
)
|
|
|
2,098
|
|
|
|
|
Litigation-related expense
|
|
|
|
-
|
|
|
|
39
|
|
|
|
2
|
|
|
|
4,884
|
|
|
|
|
Stock-based compensation expense
|
|
|
|
2,975
|
|
|
|
1,914
|
|
|
|
9,599
|
|
|
|
8,999
|
|
|
Non-GAAP total general and administrative
|
|
|
$
|
13,599
|
|
|
$
|
12,614
|
|
|
$
|
42,214
|
|
|
$
|
36,982
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP total general and administrative as % of non-GAAP revenue:
|
|
|
|
11.2
|
%
|
|
|
12.1
|
%
|
|
|
12.2
|
%
|
|
|
12.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
|
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
2015
|
|
|
|
2014
|
|
Non-GAAP total operating expense:
|
|
|
|
|
|
|
|
|
|
|
Operating expense (GAAP)
|
|
|
$
|
82,115
|
|
|
$
|
62,920
|
|
|
$
|
215,850
|
|
|
$
|
185,471
|
|
|
|
Less: Loss on disposal and impairment of assets
|
|
|
|
20,966
|
|
|
|
16
|
|
|
|
23,769
|
|
|
|
36
|
|
|
|
|
Amortization of intangible assets
|
|
|
|
2,875
|
|
|
|
2,875
|
|
|
|
8,444
|
|
|
|
8,806
|
|
|
|
|
Acquisition-related expense
|
|
|
|
(3,310
|
)
|
|
|
860
|
|
|
|
(1,653
|
)
|
|
|
2,098
|
|
|
|
|
Litigation-related expense
|
|
|
|
-
|
|
|
|
39
|
|
|
|
2
|
|
|
|
4,884
|
|
|
|
|
Stock-based compensation expense
|
|
|
|
7,852
|
|
|
|
8,395
|
|
|
|
27,399
|
|
|
|
25,780
|
|
|
Non-GAAP total operating expense
|
|
|
$
|
53,732
|
|
|
$
|
50,735
|
|
|
$
|
157,889
|
|
|
$
|
143,867
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP total operating expense as % of non-GAAP revenue:
|
|
|
|
44.4
|
%
|
|
|
48.7
|
%
|
|
|
45.7
|
%
|
|
|
47.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
|
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
2015
|
|
|
|
2014
|
|
Non-GAAP operating income:
|
|
|
|
|
|
|
|
|
|
|
Operating loss (GAAP)
|
|
|
$
|
(13,406
|
)
|
|
$
|
(4,695
|
)
|
|
$
|
(19,190
|
)
|
|
$
|
(13,737
|
)
|
|
|
Acquisition-related and other deferred revenue
|
|
|
|
(614
|
)
|
|
|
(392
|
)
|
|
|
(1,612
|
)
|
|
|
725
|
|
|
|
Loss on disposal and impairment of assets
|
|
|
|
20,966
|
|
|
|
16
|
|
|
|
23,769
|
|
|
|
36
|
|
|
|
Amortization of intangible assets
|
|
|
|
6,927
|
|
|
|
5,857
|
|
|
|
18,586
|
|
|
|
16,658
|
|
|
|
Acquisition-related expense
|
|
|
|
(3,310
|
)
|
|
|
860
|
|
|
|
(1,653
|
)
|
|
|
2,098
|
|
|
|
Litigation-related expense
|
|
|
|
-
|
|
|
|
39
|
|
|
|
2
|
|
|
|
4,884
|
|
|
|
Stock-based compensation expense
|
|
|
|
8,669
|
|
|
|
9,536
|
|
|
|
30,666
|
|
|
|
28,794
|
|
|
Non-GAAP operating income
|
|
|
$
|
19,232
|
|
|
$
|
11,221
|
|
|
$
|
50,568
|
|
|
$
|
39,458
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating margin
|
|
|
|
15.9
|
%
|
|
|
10.8
|
%
|
|
|
14.6
|
%
|
|
|
13.1
|
%
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP Financial Measures
|
(In thousands, except per share amounts)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
|
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
2015
|
|
|
|
2014
|
|
Non-GAAP net income:
|
|
|
|
|
|
|
|
|
|
|
Net loss (GAAP)
|
|
|
$
|
(8,192
|
)
|
|
$
|
(3,257
|
)
|
|
$
|
(13,118
|
)
|
|
$
|
(10,384
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax deductible items:
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related and other deferred revenue
|
|
|
|
(614
|
)
|
|
|
(392
|
)
|
|
|
(1,612
|
)
|
|
|
725
|
|
|
|
Loss on disposal and impairment of assets
|
|
|
|
20,966
|
|
|
|
16
|
|
|
|
23,769
|
|
|
|
36
|
|
|
|
Amortization of intangible assets
|
|
|
|
6,927
|
|
|
|
5,857
|
|
|
|
18,586
|
|
|
|
16,658
|
|
|
|
Acquisition-related expense
|
|
|
|
(3,310
|
)
|
|
|
860
|
|
|
|
(1,653
|
)
|
|
|
2,098
|
|
|
|
Litigation-related expense
|
|
|
|
-
|
|
|
|
39
|
|
|
|
2
|
|
|
|
4,884
|
|
|
|
Stock-based compensation expense
|
|
|
|
8,669
|
|
|
|
9,536
|
|
|
|
30,666
|
|
|
|
28,794
|
|
|
|
|
Subtotal of tax deductible items
|
|
|
|
32,638
|
|
|
|
15,916
|
|
|
|
69,758
|
|
|
|
53,195
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax impact of tax deductible items(1)
|
|
|
|
(13,055
|
)
|
|
|
(6,366
|
)
|
|
|
(27,903
|
)
|
|
|
(21,278
|
)
|
|
|
Tax (expense) benefit resulting from applying effective tax rate(2)
|
|
|
|
(86
|
)
|
|
|
233
|
|
|
|
975
|
|
|
|
1,679
|
|
|
Non-GAAP net income
|
|
|
$
|
11,305
|
|
|
$
|
6,526
|
|
|
$
|
29,712
|
|
|
$
|
23,212
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income per share - diluted
|
|
|
$
|
0.15
|
|
|
$
|
0.08
|
|
|
$
|
0.38
|
|
|
$
|
0.30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares - basic
|
|
|
|
76,564
|
|
|
|
77,280
|
|
|
|
76,772
|
|
|
|
77,075
|
|
|
|
Weighted average effect of dilutive securities - non-GAAP
|
|
|
|
499
|
|
|
|
494
|
|
|
|
603
|
|
|
|
727
|
|
|
Non-GAAP weighted average shares - diluted
|
|
|
|
77,063
|
|
|
|
77,774
|
|
|
|
77,375
|
|
|
|
77,802
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Reflects the removal of the tax benefit associated with the
acquisition-related and other deferred revenue adjustment, loss on
disposal and impairment of assets, amortization of intangible
assets, acquisition-related expense, litigation-related expense, and
stock-based compensation expense.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
Represents adjusting to a normalized effective tax rate of 40%.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
|
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
2015
|
|
|
|
2014
|
|
Annualized non-GAAP on demand revenue per average on demand unit:
|
|
|
|
|
|
|
|
On demand revenue (GAAP)
|
|
|
$
|
116,772
|
|
|
$
|
100,747
|
|
|
$
|
333,872
|
|
|
$
|
289,361
|
|
|
|
Acquisition-related and other deferred revenue
|
|
|
|
(614
|
)
|
|
|
(392
|
)
|
|
|
(1,612
|
)
|
|
|
725
|
|
|
Non-GAAP on demand revenue
|
|
|
|
116,158
|
|
|
|
100,355
|
|
|
|
332,260
|
|
|
|
290,086
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending on demand units
|
|
|
|
10,406
|
|
|
|
9,496
|
|
|
|
10,406
|
|
|
|
9,496
|
|
|
Average on demand units
|
|
|
|
10,354
|
|
|
|
9,434
|
|
|
|
9,995
|
|
|
|
9,305
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized non-GAAP on demand revenue per average on demand unit
|
|
|
$
|
44.87
|
|
|
$
|
42.55
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP on demand annual customer value(1)
|
|
|
$
|
466,917
|
|
|
$
|
404,055
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
This metric represents management's estimate of the current annual
run-rate value of on demand customer relationships. This metric is
calculated by multiplying ending on demand units by annualized
non-GAAP on demand revenue per average on demand unit for the
periods presented.
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20151103006870/en/
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