TMCnet News
iPass Reports First Quarter 2017 Financial Results
REDWOOD SHORES, Calif., May 03, 2017 (GLOBE NEWSWIRE) -- iPass Inc. (NASDAQ:IPAS), a leading provider of global mobile connectivity, reported total revenue of $14.3 million, GAAP net loss of $4.3 million, and Adjusted EBITDA loss of $3.4 million for the quarter ended March 31, 2017. "Revenue in the first quarter was a disappointment, and evidence that business turnarounds do not progress on a straightline,” said Gary Griffiths, president and CEO. “That said, while not evident in the numbers, there were several extremely positive developments in this quarter, especially as related to our product and technology. iPass SmartConnect™ continues lead the pack in intelligent connection management, which increases employee productivity, reducing mobility costs, and improving mobile data security for businesses. For mobile operators and other strategic partners, iPass SmartConnect offers better quality-of-service for consumers, while increasing margins for the operators. Today, we have more than dozen iPass SmartConnect partners actively deploying or testing iPass SmartConnect in multiple countries across six continents. These operators are seeing the margin advantages of using Wi-Fi to supplement cellular data, especially critical as consumers increasingly demand unlimited data plans. While revenue from these and related partnerships is being recognized more slowly than we’d hoped, the demand is there and is growing. We remain undeterred on the path we started down two years ago, as the world of global connectivity is a much different place in 2017 than it was in 2015. I remain confident in our approach and glad that we took bold actions when we did.” Quarterly Metrics
Financial Outlook "While 2017 started slow, not unlike 2016, we maintain a clear path to recognizing revenue from our backlog of deals signed last year. And although first quarter ACV was lower than expected, our pipeline is filling rapidly with strategic partner opportunities to use our iPass SmartConnect technology as the backbone of their consumer data offerings. We remain confident in meeting the annual guidance for 2017." Financial Guidance For the year ending December 31, 2017, iPass confirms the prior annual guidance provided:
Key Operating Metrics iPass tracks key metrics to evaluate operating performance. Wi-Fi Network Users (Enterprise and Strategic Partnerships) is the number of iPass platform users each month in a given quarter that used Wi-Fi network services from iPass. Active Platform Users is the number of users who were billed platform fees and who have used or deployed the platform during the period. This metric excludes UNLIMITED subscribers unless they have actively accessed network during the period. ACV represents the annualized sales value committed under contract for newly acquired customers or significant upsell, in total across Enterprise and Strategic Partnerships.
Conference Call The telephone replay dial-in numbers are 1-866-375-1919 and 1-719-457-0820 and will be available until May 12, 2017, 5:00 p.m. Pacific time. The confirmation code for the replay is 5892734. Forward-Looking Statements The statements in this press release: that iPass SmartConnect™ continues lead the pack in intelligent connection management, increasing employee productivity, reducing mobility costs, and improving mobile data security for businesses, that the demand is there and is growing, that the company continues to optimize its algorithms to improve connection success without adversely impacting usage revenue, that the company maintains a clear path to recognizing revenue from the backlog of deals signed last year, that the company remains confident in meeting the annual guidance, and statements relating to iPass’ projections of the year ending December 31, 2017, under the caption “Financial Guidance for the year ending December 31, 2017,” are forward-looking statements. Actual results may differ materially from the expectations contained in these statements due to a number of risks and uncertainties, including the following: the risk that consumers and customers will not perceive the benefits of the iPass UNLIMITED, iPass EVERYWHERE and iPass INVISIBLE initiatives to be as iPass expects; the risk that iPass will not be able to achieve the cost savings that iPass currently expects; the risk that the “End of Life” of iPass’ legacy Mobile Office product may negatively impact customer retention and mobility revenues more than iPass expects; the risk that the iPass solution will not continue to achieve the market acceptance iPass expects; the risk of material reductions in iPass customers’ existing minimum commitments more than iPass currently expects; the risk that iPass does not accurately predict usage for its Enterprise flat rate price plans which could result in iPass expenses exceeding revenues for these plans; the risk that iPass customers do not widely deploy iPass Open Mobile on smartphones, tablets and other mobile handheld devices at the rate iPass expects; the risk that demand for Mobility Services does not grow as iPass expects; the risk that strong competition in the market for Mobility Services could reduce demand for iPass’ services; and the risk that a meaningful portion of iPass business is international, which subjects iPass to additional risks such as currency fluctuations. Detailed information about these and other risk factors that could potentially affect iPass’ business, financial condition and results of operations are included in iPass’ Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 14, 2017, and available at its Web site at www.sec.gov and the company’s website at http://investor.ipass.com. iPass undertakes no responsibility to update the information in this press release if any forward-looking statement later turns out to be an inaccurate prediction of the actual results. In addition, investors and others should note that iPass announces material financial information to its investors using its investor relations website, SEC filings, press releases, public conference calls and webcasts. iPass also uses social media to communicate with its customers and the public about iPass, its products and services and other matters relating to its business and market. It is possible that the information iPass posts on social media could be deemed to be material information. Therefore, iPass encourages investors, the media, and others interested in iPass to review the information it posts on U.S. social media channels including the iPass Twitter Feed, the iPass LinkedIn Feed, the iPass Google+ Feed, the iPass Facebook Page, the iPass Blog, and the iPass Instagram account. These social media channels may be updated from time to time. Information Regarding Non-GAAP Financial and Operational Measures This press release also contains financial measures that are not calculated in accordance with U.S. generally accepted accounting principles (GAAP). iPass considers Adjusted EBITDA as a supplemental measure of the company’s performance that is not required by, nor presented in accordance with GAAP. The company defines Adjusted EBITDA as net income (loss) before interest, income taxes, depreciation and amortization, stock-based compensation and restructuring charges. The company believes Adjusted EBITDA provides a meaningful comparison between its core operating results, on a consistent basis, over different periods of time. Accordingly, management uses this financial measure for evaluating and making operating decisions and for purposes of comparison with its strategic plan, operating budgets and allocation of resources. Furthermore, iPass believes the use of Adjusted EBITDA is useful to investors:
Adjusted EBITDA should not be considered in isolation, or construed as an alternative to net income, or any other performance measure derived in accordance with GAAP, or as an alternative to cash flow from operating activities or as a measure of the company's liquidity. In addition, other companies may calculate Adjusted EBITDA differently than iPass does, which would limit its usefulness in comparing iPass’ financial results with those of such other companies. The company defines a key operating metric, ACV, as the annualized sales value committed under contract for newly acquired customers or significant upsell, in total across the Enterprise and Strategic Partnership go-to-market strategies, in the period. Because ACV is not an alternative measure for GAAP revenue, but only an operational metric to provide insight on the health and progress of the sales pipeline and revised go-to-market strategy, the signing of committed contract value should not be assumed to have met the entire revenue recognition criteria. For example, while persuasive evidence of an arrangement always exist before reporting ACV, service may not yet have been provided to the customer or collections may not yet be determined to be reasonably assured. The company makes reasonable efforts to substantiate the viability of all reported ACV, but future events could change that conclusion. As an example, when a previously reported ACV customer fails to perform under the committed contract, such remaining calculated ACV will be reversed in the current period reported ACV. About iPass Inc. iPass (NASDAQ:IPAS) is a leading provider of global mobile connectivity, offering simple, secure, always-on Wi-Fi access on any mobile device. Built on a software-as-a-service (SaaS) platform, the iPass cloud-based service keeps its customers connected by providing unlimited Wi-Fi connectivity on unlimited devices. iPass is the world’s largest Wi-Fi network, with more than 60 million hotspots in more than 120 countries, at airports, hotels, train stations, convention centers, outdoor venues, inflight, and more. Using patented technology, the iPass SmartConnectTM platform takes the guesswork out of Wi-Fi, automatically connecting customers to the best hotspot for their needs. Customers simply download the iPass app to experience unlimited, everywhere, and invisible Wi-Fi. iPass® is a registered trademark of iPass Inc. Wi-Fi® is a registered trademark of the Wi-Fi Alliance. All other trademarks are owned by their respective owners.
IR Contact: Kirsten Chapman / Becky Herrick, LHA Investor Relations, 415-433-3777, [email protected] |