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Boingo Wireless Reports Strong First Quarter 2016 Financial Results
[May 05, 2016]

Boingo Wireless Reports Strong First Quarter 2016 Financial Results


Boingo (News - Alert) Wireless (NASDAQ: WIFI), the leading distributed antenna system (DAS) and Wi-Fi provider that serves consumers, carriers and advertisers worldwide, today announced the Company's financial results for the first quarter ended March 31, 2016.

First Quarter 2016 Financial Highlights

  • Revenue of $34.5 million increased 17.4% compared to $29.4 million in the first quarter of 2015. Growth was led by strength in DAS, military and wholesale Wi-Fi, including carrier offload.
    • DAS revenue of $11.1 million increased 15.7% compared to $9.6 million in the first quarter of 2015. DAS revenue for the quarter was comprised of $7.0 million of build-out project revenue and $4.1 million of access fee revenue.
    • Military revenue of $9.1 million increased 158.9% compared to $3.5 million in the first quarter of 2015.
    • Wholesale Wi-Fi revenue of $4.9 million increased 18.4% compared to $4.2 million in the first quarter of 2015.
  • Net loss attributable to common stockholders was $10.0 million, or $0.27 per diluted share, compared to a net loss of $7.9 million, or $0.22 per diluted share, in the first quarter of 2015.
  • Adjusted EBITDA of $5.1 million increased 60.8% compared to $3.2 million in the first quarter of 2015. Adjusted EBITDA, which is a non-GAAP financial measure, is defined below and is reconciled to net loss attributable to common stockholders, the most comparable measure under GAAP, in the schedule entitled "Reconciliation of Net Loss Attributable to Common Stockholders to Adjusted EBITDA."
  • Free cash flow was a negative $4.5 million compared to a negative $4.1 million in the first quarter of 2015. Free cash flow, which is a non-GAAP financial measure, is defined below and is reconciled to net cash provided by operating activities, the most comparable measure under GAAP, in the schedule entitled "Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flows."

Business Highlights

  • The Company signed 12 DAS carrier contracts during the quarter and had 30 DAS venues deployed as of March 31, 2016.
  • Boingo Broadband high-speed Wi-Fi and IPTV (News - Alert) covered 250,000 beds on 51 U.S. military bases as of March 31, 2016 compared to 244,000 beds on 49 U.S. military bases as of December 31, 2015. Subscriber penetration grew to 27.6% from 23.4% in the fourth quarter of 2015.
  • The Company has begun small cell market trials with two Tier 1 carriers to serve as an extension of the macro cellular network in providing coverage and capacity to smaller venues.

Management Commentary

"I am pleased to report our momentum continues and once again, we delivered very strong quarterly performance," said David Hagan, Chief Executive Officer of Boingo Wireless (News - Alert). "The first quarter of 2016 represents our sixth consecutive quarter of double-digit, year-over-year revenue growth, as well as our third consecutive quarter of EBITDA margin expansion. The results of Boingo's long-term strategy are coming to fruition following several years of significant investment in building out the Company's high-density wireless networks. Continuing this positive trend, we believe we will be in a position to generate positive free cash flow in the second half of 2016. Our strong performance reflects the focused implementation of our long-term strategy and precise execution by the team. Given these positive factors, I truly believe that Boingo is poised to realize the benefits of its strategic plan and leverage its market leading position for years to come."

Mr. Hagan continued, "Strength in DAS continued, and we signed 12 DAS carrier contracts during the first quarter. The next natural extension of DAS is small cell and we are very pleased to announce we have begun small cell in market trials with two Tier 1 carriers. These market trials are enabling us to test different solutions and understand the implications for how small cells will become a part of our product portfolio going forward. In regards to carrier offload, we have seen significant growth in data consumed by Sprint (News - Alert) customers and we are very pleased with how well the product has been performing. Lastly, our military build-out remains on schedule to complete all 300,000 beds by year-end and we are very pleased with current penetration rates which have surpassed our expectations."

Business Outlook

Boingo Wireless is initiating guidance for the second quarter ending June 30, 2016 and reiterating guidance for the full year ending December 31, 2016 as follows:

Second Quarter 2016

  • Revenue is expected to be in the range of $37.5 million to $40.5 million.
  • Adjusted EBITDA is expected to be in the range of $7.5 million to $9.5 million.
  • Net loss attributable to common stockholders is expected to be in the range of $9.0 million to $7.0 million, or a net loss of $0.24 to $0.19 per diluted share.

Full Year 2016

  • Revenue is expected to be in the range of $158.0 million to $164.0 million.
  • Adjusted EBITDA is expected to be in the range of $38.5 million to $42.5 million.
  • Net loss attributable to common stockholders is expected to be in the range of $30.0 million to $26.0 million, or a net loss of $0.79 to $0.68 per diluted share.

Conference Call Information

Members of Boingo Wireless' management will host a conference call to discuss its first quarter 2016 financial results beginning at 4:30 p.m. ET (1:30 p.m. PT), today, May 5, 2016. To participate in the conference call, investors from the U.S. and Canada should dial (877) 407-0789 and enter the passcode: 13635177 ten minutes prior to the scheduled start time. International callers should dial +1 (201) 689-8562 and enter the same passcode. The conference call will be broadcast live over the Internet in the Investor Relations section of the company's website at http://investors.boingo.com. In addition, a supplement reflecting the company's key business metrics will be made available in the Investor Relations section of the company's website. The supplement and webcast will be archived online upon completion of the conference call.

Use of Non-GAAP Financial Measures

To supplement Boingo Wireless' financial statements presented on a GAAP basis, Boingo Wireless provides Adjusted EBITDA and free cash flows as supplemental measures of its performance.

The company defines Adjusted EBITDA as net loss attributable to common stockholders plus depreciation and amortization of property and equipment, income tax expense, amortization of intangible assets, stock-based compensation expense, non-controlling interests and interest and other expense, net. Boingo Wireless believes Adjusted EBITDA is useful to investors in evaluating its operating performance. Boingo's management uses Adjusted EBITDA in conjunction with accounting principles generally accepted in the United States, or GAAP, and operating performance measures as part of its overall assessment of the company's performance for planning purposes, including the preparation of its annual operating budget, to evaluate the effectiveness of its business strategies and to communicate with its board of directors concerning its financial performance. Adjusted EBITDA should not be considered as an alternative financial measure to net loss attributable to common stockholders, which is the most directly comparable financial measure calculated in accordance with GAAP, or any other measure of financial performance calculated in accordance with GAAP.

The company defines free cash flows as cash flows provided by operating activities, less purchases of property and equipment, net. Boingo Wireless believes that free cash flows provides investors with additional useful information to measure operating liquidity because it reflects the amount of cash generated by the company's operations after the purchases of property and equipment, that can be used for strategic opportunities. Free cash flows should not be considered as an alternative financial measure to net cash provided by operating activities, which is the most directly comparable financial measure calculated in accordance with GAAP, or any other measure of financial performance calculated in accordance with GAAP.

About Boingo Wireless

Boingo Wireless, Inc. (NASDAQ: WIFI) helps the world stay connected. Boingo's vast footprint of small cell networks covers more than a million and a half DAS and Wi-Fi locations and reaches more than 1 billion consumers annually - in places as varied as airports, stadiums, arenas, universities, and military bases. For more information about the Boingo story, visit www.boingo.com.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains "forward-looking statements" that involves risks, uncertainties and assumptions. Forward-looking statements can be identified by words such as "anticipates," "intends," "plans," "seeks," "believes," "estimates," "expects" and similar references to future periods. These forward-looking statements include the quotations from management in this press release, as well as any statements regarding Boingo's strategic plans and future guidance. Forward-looking statements are based on the Company's current expectations and assumptions regarding its business, the economy and other future conditions. Since forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. The Company's actual results may differ materially from those contemplated by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include our ability to maintain our existing and establish new relationships with venue partners, particularly key airport venue partners and military bases, our ability to maintain revenue growth and achieve profitability, our ability to execute on our strategic and business plans, our ability to successfully compete with new technologies and adapt to changes in the wireless industry, as well as other risks and uncertainties described more fully in documents filed with or furnished to the Securities and Exchange Commission (SEC (News - Alert)), including Boingo's Form 10-K for the year ended December 31, 2015 filed with the SEC on March 11, 2016, which the Company incorporates by reference into this press release. Any forward-looking statement made by Boingo in this press release speaks only as of the date on which it is made. Factors or events that could cause the Company's actual results to differ may emerge from time to time, and it is not possible for Boingo to predict all of them. Boingo undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

Boingo, Boingo Wireless, the Boingo Wireless Logo and Don't Just Go. Boingo. are registered trademarks of Boingo Wireless, Inc. All other trademarks are the properties of their respective owners.





 
Boingo Wireless, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
 
Three Months Ended
March 31,
2016   2015
 
Revenue $ 34,499 $ 29,392
Costs and operating expenses:
Network access 14,678 13,623
Network operations 10,450 8,039
Development and technology 5,353 4,191
Selling and marketing 4,668 4,416
General and administrative 8,152 5,833
Amortization of intangible assets 865 893
Total costs and operating expenses 44,166 36,995
Loss from operations (9,667 ) (7,603 )
Interest and other expense, net (30 ) (20 )
Loss before income taxes (9,697 ) (7,623 )
Income tax expense 238 204
Net loss (9,935 ) (7,827 )
Net income attributable to non-controlling interests 49 55
Net loss attributable to common stockholders $ (9,984 ) $ (7,882 )
 
Net loss per share attributable to common stockholders:
Basic $ (0.27 ) $ (0.22 )
Diluted $ (0.27 ) $ (0.22 )
 
Weighted average shares used in computing net loss per share attributable to common stockholders:
Basic 37,554 36,390
Diluted 37,554 36,390
 
 

Boingo Wireless, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands, except per share amounts)
   
March 31,
2016 		December 31,
2015
Assets
Current assets:
Cash and cash equivalents $ 14,651 $ 14,718
Accounts receivable, net 42,736 43,552
Prepaid expenses and other current assets 4,053 3,876
Total current assets 61,440 62,146
Property and equipment, net 224,962 214,500
Goodwill 42,403 42,403
Intangible assets, net 15,173 16,055
Other assets 6,616 5,908
Total assets $ 350,594 $ 341,012
 
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 19,923 $ 29,376
Accrued expenses and other liabilities 24,151 36,328
Deferred revenue 35,379 25,759
Current portion of long-term debt 875 875
Current portion of capital leases 1,596 1,610
Total current liabilities 81,924 93,948
Deferred revenue, net of current portion 127,159 106,825
Long-term debt 21,531 16,750
Long-term portion of capital leases 2,320 2,217
Deferred tax liabilities 3,105 2,965
Other liabilities 8,105 6,272
Total liabilities 244,144 228,977
 
Commitments and contingencies
 
Stockholders' equity:
Preferred stock, $0.0001 par value; 5,000 shares authorized; no shares issued and outstanding - -
Common stock, $0.0001 par value; 100,000 shares authorized; 37,829 and 37,325 shares issued and outstanding at March 31, 2016 and December 31, 2015, respectively 4 4
Additional paid-in capital 201,963 197,612
Accumulated deficit (95,254 ) (85,176 )
Accumulated other comprehensive loss (1,032 ) (1,160 )
Total common stockholders' equity 105,681 111,280
Non-controlling interests 769 755
Total stockholders' equity 106,450 112,035
Total liabilities and stockholders' equity $ 350,594 $ 341,012
 
 
Boingo Wireless, Inc.
Reconciliation of Net Loss Attributable to Common Stockholders to Adjusted EBITDA
(Unaudited)
(In thousands)
 
Three Months Ended
March 31,
2016   2015
 
Net loss attributable to common stockholders $ (9,984 ) $ (7,882 )
Depreciation and amortization of property and equipment 10,308 8,054
Income tax expense 238 204
Amortization of intangible assets 865 893
Stock-based compensation expense 3,605 1,835
Non-controlling interests 49 55
Interest and other expense, net 30 20
Adjusted EBITDA $ 5,111 $ 3,179
 
 
Boingo Wireless, Inc.
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flows
(Unaudited)
(In thousands)
 
Three Months Ended
March 31,
2016   2015
 
Net cash provided by operating activities $ 41,037 $ 12,475
Purchases of property and equipment, net (45,522 ) (16,600 )
Free cash flows $ (4,485 ) $ (4,125 )
 
 
Boingo Wireless, Inc.
Revenue Summary
(Unaudited)
(In thousands)
 
Three Months Ended
March 31,
2016     2015
Revenue:
DAS $ 11,106 $ 9,596
Military 9,098 3,514
Retail 6,914 8,709
Wholesale-Wi-Fi 4,937 4,170
Advertising and other 2,444 3,403
Total revenue $ 34,499 $ 29,392
 
 
Boingo Wireless, Inc.
Key Business Metrics
(In thousands)
 
Three Months Ended March 31,
2016     2015
Key business metrics:    
DAS nodes(1) 12.5 8.9
DAS nodes in backlog(2) 5.2 4.6
Subscribers-military(3) 69 32
Subscribers-retail(3) 187 235
Connects(4) 30,353 22,819

________________________

(1)   This metric represents the number of active DAS nodes as of the end of the period. A DAS node is a single communications endpoint, typically an antenna, which transmits or receives radio frequency signals wirelessly. This measure is an indicator of the reach of our DAS network.
(2) This metric represents the number of DAS nodes under contract but not yet active as of the end of the period.
(3) This metric represents the number of paying customers who are on a month-to-month subscription plan at a given period end.
(4) This metric shows how often individuals connect to our global Wi-Fi network in a given period. The connects include retail and wholesale customers in both customer pay locations and customer free locations where we are a paid service provider or receive revenue sponsorship or promotion fees. We count each connect as a single connect regardless of how many times that individual accesses the network at a given venue during their 24 hour period. This measure is an indicator of paid activity throughout our network.


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