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iPass Reports Fourth Quarter and Year End 2017 Financial ResultsREDWOOD SHORES, Calif., Feb. 21, 2018 (GLOBE NEWSWIRE) -- iPass Inc. (NASDAQ:IPAS), a leading provider of global mobile connectivity, reported total revenue of $13.2 million, GAAP net loss of $4.3 million, and Adjusted EBITDA loss of $3.8 million for the quarter ended December 31, 2017, and total revenue of $54.4 million, GAAP net loss of $20.6 million, and Adjusted EBITDA loss of $16.5 million for the year ended December 31, 2017.
“While 2017 was not a memorable year for us, we did accomplish much to set us up well for 2018," said Gary Griffiths, president and CEO. "We made great progress in Q4, for example, to restructure our agreements with our network supply partners, lowering our revenue break-even point. And while iPass SmartConnectTM experienced growing pains typical for new technology last year, it is now stable with several enhanced features. So, given that, we expect 2018 will be the year to prove that our iPass SmartConnect software and Veri-FiTM big data analytics products, under development over the last two years, can transform iPass from a Wi-Fi reseller to a true technology company. We expect revenues from Veri-Fi and technology licensing to represent more than 10% of total revenue, up from 2% in 2017, which will mark an inflection point for us. Several game changing trials or proof of concepts are in various stages, and, based on recent activity, we finally expect our partnership with HP to start regaining momentum. We have other new initiatives well underway such as continual improvement of our enterprise value proposition, adding high demand inflight footprint such as United Airlines, and integrating the data driven analytics that enterprises need to effectively manage their mobile connectivity digital agenda."
Financial Metrics
Financial Outlook
"We have two simple goals for 2018: returning to revenue growth and achieving positive quarterly cash flow," continued Griffiths. "We have successfully re-negotiated the majority of our 2018 NAC commitments to carve approximately $10.0 million out of the 2017 annual expense. We will manage operating expense to minimize our revenue break-even point and with modest quarterly revenue growth expect to be cash flow positive by the second half of 2018. Finally, we will be opportunistic as we look to strengthen our balance sheet and optimize shareholder value.”
Financial Guidance
For the year ending December 31, 2018:
Selected Financial Results
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. Hours Consumed represent the number of network hours consumed by our customers each month in a given quarter. 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 1-888-203-1112 and 719-457-0820 and will be available until March 2, 2018, 5:00 p.m. Pacific time. The confirmation code for the replay is 2908173.
Forward-Looking Statements
The statements in this press release: we did accomplish much to set us up well for 2018; bringing our break-even point much closer; we expect 2018 will be the year to prove that our iPass SmartConnectTM software and Veri-FiTM big data analytics products, under development over the last two years, can transform iPass from a Wi-Fi reseller to a true technology company; we expect revenues from Veri-Fi and technology licensing to represent more than 10% of total revenue; will mark an inflection point for us; several game changing trials or proof of concepts are in various stages; we finally expect our partnership with HP to start regaining momentum; all statements under "Financial Outlook" including iPass will return to revenue growth and achieving positive quarterly cash flow; and all statements relating to iPass’ projections for the year ending December 31, 2018, under the caption “Financial Guidance", 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 iPass’ performance that is not required by, nor presented in accordance with GAAP.
iPass defines Adjusted EBITDA as net income (loss) before interest, income taxes, depreciation, stock-based compensation, out of period adjustment, and nonrecurring legal costs. iPass 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. iPass 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 64 million hotspots globally, 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]
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