Bottomline Technologies (NASDAQ:EPAY), a leading provider of
financial technology which helps businesses pay and get paid, today
reported financial results for the first quarter ended September
30, 2017.
Subscription and transaction revenues, which are primarily
related to the company’s cloud platforms, were $60.7 million for
the first quarter, up 16% as compared to the first quarter of last
year. Revenues overall for the first quarter were $91.3
million, up 10% as compared to the first quarter of last
year.
GAAP net loss for the first quarter was $4.2 million compared to
$10.5 million for the first quarter of last year. GAAP net loss per
share was $0.11 in the first quarter compared to $0.28 in the first
quarter of last year.
Adjusted EBITDA for the first quarter was $22.1 million compared
to $16.7 million for the first quarter of last year. Adjusted
EBITDA for the first quarter was 24% of overall revenue compared to
20% of overall revenue for the first quarter of last year. Adjusted
EBITDA is calculated as discussed in the “Non-GAAP Financial
Measures” section that follows.
Core net income for the first quarter was $11.7 million compared
to $8.4 million for the first quarter of last year and core
earnings per share was $0.30 for the first quarter compared to
$0.22 for the first quarter of last year. Core net income and core
earnings per share exclude certain items as discussed in the
“Non-GAAP Financial Measures” section that follows.
"We are executing against our strategic plan and delivered
strong results,” said Rob Eberle, President and CEO of Bottomline
Technologies. “Growth and profitability were ahead of our
expectations. We are particularly pleased by the market
reception to our offerings and the new subscription bookings.
We enter the new fiscal year with a high degree of confidence in
our ability to execute against our strategic plan, achieve our
financial targets and drive shareholder value."
First Quarter Customer Highlights
- 29 institutions selected Paymode-X, Bottomline’s leading
payments platform to automate their payments processes, increase
productivity, reduce costs and earn cash rebates.
- 6 organizations, including Knight Insurance Group and AmWINS,
chose Bottomline's cloud-based legal spend management solutions to
automate, manage and control their legal spend.
- 4 banks selected Bottomline’s digital banking platforms to help
them compete and grow their corporate and business banking
franchises by deploying innovative digital capabilities.
- Companies such as Banco Santander and Shop & Finance
Limited selected Bottomline’s Financial Messaging solution to
improve operating efficiencies and optimize the effectiveness of
their financial transactions.
- Organizations such as The Main Street America Group and USI
Insurance Services chose Bottomline’s corporate payment automation
solutions to extend their payments capabilities and improve
efficiencies.
First Quarter Strategic Corporate Highlights
- Announced expansion of Bottomline’s global footprint with a new
financial messaging center in Singapore. With this new
center, Bottomline is well positioned to extend its secure set of
core financial messaging capabilities into the Asia-Pacific
region.
- Announced commitment to becoming a Third Party Provider (TPP)
under the Open Banking initiative, to allow customers to access
information and initiate payments directly with participating banks
through secure Application Programming Interfaces (APIs), via
cloud-based payment platforms.
- Bottomline’s PTX Cloud based payments platform was recognized
as an award winner by the Credit Control and Risk Association in
the new product category for payments and collections
Non-GAAP Financial Measures
We have presented supplemental non-GAAP financial measures as
part of this earnings release. The presentation of this non-GAAP
financial information should not be considered in isolation from,
or as a substitute for, our financial results presented in
accordance with GAAP. Core net income, core earnings per share,
constant currency information, adjusted EBITDA and adjusted EBITDA
as a percent of revenue are non-GAAP financial measures.
Core net income and core earnings per share exclude certain
items, specifically amortization of acquisition related intangible
assets, goodwill impairment charges, stock-based compensation,
acquisition and integration-related expenses, restructuring related
costs, minimum pension liability adjustments, non-core charges
associated with our convertible notes and revolving credit
facility, global enterprise resource planning (ERP) system
implementation costs, and other non-core or non-recurring gains or
losses that arise from time to time.
Non-core charges associated with our convertible notes and
revolving credit facility consist of the amortization of debt
issuance and debt discount costs. Acquisition and
integration-related expenses include legal and professional fees
and other direct transaction costs associated with business and
asset acquisitions, costs associated with integrating acquired
businesses, including costs for transitional employees or services,
integration related professional services costs and other
incremental charges we incur as a direct result of acquisition and
integration efforts. Global ERP system implementation costs relate
to direct and incremental costs incurred in connection with our
implementation of a new, global ERP solution and the related
technology infrastructure.
In computing diluted core earnings per share, we exclude the
effect of shares issuable under our convertible notes to the extent
that any such dilution would be offset by our note hedges; the note
hedges would be considered an anti-dilutive security under
GAAP.
Periodically, such as in periods that include significant
foreign currency volatility, we may present certain metrics on a
“constant currency” basis, to show the impact of period to period
results normalized for the impact of foreign currency rate changes.
We calculate constant currency information by translating prior
period financial results using current period foreign exchange
rates.
Adjusted EBITDA and adjusted EBITDA as a percent of revenue
represent our GAAP net income or loss, adjusted for charges related
to interest expense, income taxes, depreciation and amortization,
and other charges, as noted in the reconciliation that follows.
We believe that these supplemental non-GAAP financial measures
are useful to investors because they allow for an evaluation of the
company with a focus on the performance of its core operations,
including more meaningful comparisons of financial results to
historical periods and to the financial results of less acquisitive
peer and competitor companies. Our executive management team uses
these same non-GAAP financial measures internally to assess the
ongoing performance of the company. Additionally, the same non-GAAP
information is used for planning purposes, including the
preparation of operating budgets and in communications with our
board of directors with respect to our core financial performance.
Since this information is not a GAAP measurement of financial
performance, there are material limitations to its usefulness on a
stand-alone basis, including the lack of comparability of this
presentation to the GAAP financial results of other companies.
Reconciliation of Core Net IncomeA reconciliation of core net
income to GAAP net loss for the three months ended
September 30, 2017 and 2016 is as follows:
|
|
|
Three Months Ended
September 30, |
|
2017 |
|
2016 |
|
(in thousands) |
GAAP net loss |
$ |
(4,241 |
) |
|
$ |
(10,508 |
) |
Amortization of acquisition-related intangible assets |
5,188 |
|
|
6,285 |
|
Stock-based compensation expense |
8,460 |
|
|
8,199 |
|
Acquisition and integration-related expenses |
992 |
|
|
1,249 |
|
Restructuring benefit |
(9 |
) |
|
— |
|
Global
ERP system implementation costs |
2,076 |
|
|
2,491 |
|
Minimum
pension liability adjustments |
35 |
|
|
277 |
|
Amortization of debt issuance and debt discount costs |
3,709 |
|
|
3,372 |
|
Tax
effects on non-GAAP income |
(4,542 |
) |
|
(2,978 |
) |
Core net income |
$ |
11,668 |
|
|
$ |
8,387 |
|
|
|
|
|
|
|
|
|
Reconciliation of Diluted Core Earnings per ShareA
reconciliation of our diluted core earnings per share to our GAAP
basic and diluted net loss per share for the three months ended
September 30, 2017 and 2016 is as follows:
|
|
|
Three Months Ended
September 30, |
|
2017 |
|
2016 |
|
|
|
|
GAAP basic and diluted
net loss per share |
$ |
(0.11 |
) |
|
$ |
(0.28 |
) |
|
|
|
|
Plus: |
|
|
|
Amortization of acquisition-related intangible assets |
0.13 |
|
|
0.17 |
|
Stock-based compensation expense |
0.22 |
|
|
0.22 |
|
Acquisition and integration-related expenses |
0.03 |
|
|
0.03 |
|
Global
ERP system implementation costs |
0.05 |
|
|
0.06 |
|
Minimum
pension liability adjustments |
— |
|
|
0.01 |
|
Amortization of debt issuance and debt discount costs |
0.10 |
|
|
0.09 |
|
Tax
effects on non-GAAP income |
(0.12 |
) |
|
(0.08 |
) |
|
|
|
|
Diluted core earnings
per share |
$ |
0.30 |
|
|
$ |
0.22 |
|
|
|
|
|
|
|
|
|
A reconciliation of our non-GAAP weighted average shares used in
computing diluted core earnings per share to our GAAP weighted
average shares used in computing basic and diluted net loss per
share for the three months ended September 30, 2017 and 2016
is as follows:
|
|
|
Three Months Ended
September 30, |
|
2017 |
|
2016 |
Numerator: |
|
|
|
|
|
|
|
Core net income |
$ |
11,668 |
|
|
$ |
8,387 |
|
|
|
|
|
Denominator: |
|
|
|
|
|
|
|
Weighted average shares
used in computing basic and diluted net loss per share for
GAAP |
37,730 |
|
|
37,940 |
|
|
|
|
|
Impact of dilutive
securities (stock options, restricted stock awards and employee
stock purchase plan) (1) |
581 |
|
|
88 |
|
|
|
|
|
Weighted average shares
used in computing diluted core earnings per share |
38,311 |
|
|
38,028 |
|
|
(1)
These securities are anti-dilutive on a GAAP basis as a result of
our net loss, but are considered dilutive on a non-GAAP basis in
periods where we report non-GAAP net income. |
|
Reconciliation of Adjusted EBITDAA reconciliation of our
adjusted EBITDA to GAAP net loss for the three months ended
September 30, 2017 and 2016 is as follows:
|
|
|
Three Months Ended
September 30, |
|
2017 |
|
2016 |
|
|
|
|
GAAP net loss |
$ |
(4,241 |
) |
|
$ |
(10,508 |
) |
|
|
|
|
Adjustments: |
|
|
|
Other
expense, net |
4,463 |
|
|
3,935 |
|
Provision
for income taxes |
457 |
|
|
681 |
|
Depreciation and amortization |
4,668 |
|
|
4,087 |
|
Amortization of acquisition-related intangible assets |
5,188 |
|
|
6,285 |
|
Stock-based compensation expense |
8,460 |
|
|
8,199 |
|
Acquisition and integration-related expenses |
992 |
|
|
1,249 |
|
Restructuring benefit |
(9 |
) |
|
— |
|
Minimum
pension liability adjustments |
35 |
|
|
277 |
|
Global
ERP system implementation costs |
2,076 |
|
|
2,491 |
|
|
|
|
|
Adjusted EBITDA |
$ |
22,089 |
|
|
$ |
16,696 |
|
Reconciliation of Adjusted EBITDA as a percent of RevenueA
reconciliation of adjusted EBITDA as a percent of revenue to GAAP
net loss as a percent of revenue for the three months ended
September 30, 2017 and 2016 is as follows:
|
|
|
Three Months Ended
September 30, |
|
2017 |
|
2016 |
|
|
|
|
GAAP net loss as a
percent of revenue |
(5 |
%) |
|
(13 |
%) |
|
|
|
|
Adjustments: |
|
|
|
Other
expense, net |
5 |
% |
|
5 |
% |
Provision
for income taxes |
1 |
% |
|
1 |
% |
Depreciation and amortization |
5 |
% |
|
5 |
% |
Amortization of acquisition-related intangible assets |
6 |
% |
|
8 |
% |
Stock-based compensation expense |
9 |
% |
|
10 |
% |
Acquisition and integration-related expenses |
1 |
% |
|
1 |
% |
Global
ERP system implementation costs |
2 |
% |
|
3 |
% |
|
|
|
|
Adjusted EBITDA as a
percent of revenue |
24 |
% |
|
20 |
% |
|
|
|
|
|
|
About Bottomline TechnologiesBottomline
Technologies (NASDAQ:EPAY) helps businesses pay and get paid. We
make complex business payments simple, secure and seamless by
providing a trusted and easy-to-use set of cloud-based business
payment, digital banking, fraud prevention and financial document
solutions. Over 10,000 corporations, financial institutions, and
banks benefit from Bottomline solutions. Headquartered in the
United States, Bottomline also maintains offices in Europe and
Asia-Pacific. For more information, visit our website at
www.bottomline.com.
Bottomline Technologies, Paymode-X and the BT logo are
trademarks of Bottomline Technologies (de), Inc. which are
registered in certain jurisdictions. All other brand/product names
are trademarks of their respective holders.
In connection with this earnings release and our associated
conference call, we will be posting additional material financial
information (such as financial results, non-GAAP financial
projections and non-GAAP to GAAP reconciliations) within the
“Investors” section of our website at
www.bottomline.com/us/about/investors.
Cautionary LanguageThis press release contains "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995, including statements reflecting our
expectations about our ability to execute on our strategic plans,
achieve future growth and profitability, achieve financial targets
and increase shareholder value. Any statements that are not
statements of historical fact (including but not limited to
statements containing the words “believes,” “plans,” “anticipates,”
“expects,” “look forward”, “confident”, “estimates” and similar
expressions) should be considered to be forward-looking
statements. Actual results may differ materially from those
indicated by such forward-looking statements as a result of various
important factors including, among others, competition, market
demand, technological change, strategic relationships, recent
acquisitions, international operations and general economic
conditions. For additional discussion of factors that could impact
Bottomline Technologies' operational and financial results, refer
to our Form 10-K for the fiscal year ended June 30, 2017 and the
subsequently filed Form 10-Qs and Form 8-Ks or amendments thereto.
Any forward-looking statements represent our views only as of today
and should not be relied upon as representing our views as of any
subsequent date. We do not assume any obligation to update any
forward-looking statements.
Media Contact:Rick BoothBottomline
Technologies603-501-6270 rbooth@bottomline.com
|
Bottomline Technologies |
Unaudited Condensed Consolidated Statement of
Operations |
(in thousands, except per share
amounts) |
|
|
|
|
|
Three Months Ended
September 30, |
|
2017 |
|
2016 |
Revenues: |
|
|
|
Subscriptions and transactions |
$ |
60,714 |
|
|
$ |
52,132 |
|
Software
licenses |
2,365 |
|
|
2,121 |
|
Service
and maintenance |
27,342 |
|
|
27,673 |
|
Other |
875 |
|
|
1,158 |
|
|
|
|
|
Total revenues |
91,296 |
|
|
83,084 |
|
|
|
|
|
Cost of revenues: |
|
|
|
Subscriptions and transactions |
27,411 |
|
|
23,886 |
|
Software
licenses |
170 |
|
|
128 |
|
Service
and maintenance |
12,232 |
|
|
13,285 |
|
Other |
667 |
|
|
878 |
|
Total cost of
revenues |
40,480 |
|
|
38,177 |
|
|
|
|
|
Gross profit |
50,816 |
|
|
44,907 |
|
|
|
|
|
Operating
expenses: |
|
|
|
Sales and
marketing |
19,305 |
|
|
18,875 |
|
Product
development and engineering |
13,815 |
|
|
12,935 |
|
General
and administrative |
11,829 |
|
|
12,704 |
|
Amortization of acquisition-related intangible assets |
5,188 |
|
|
6,285 |
|
Total operating
expenses |
50,137 |
|
|
50,799 |
|
|
|
|
|
Income (loss) from
operations |
679 |
|
|
(5,892 |
) |
|
|
|
|
Other expense, net |
(4,463 |
) |
|
(3,935 |
) |
|
|
|
|
Loss before income
taxes |
(3,784 |
) |
|
(9,827 |
) |
Income tax
provision |
457 |
|
|
681 |
|
|
|
|
|
Net loss |
$ |
(4,241 |
) |
|
$ |
(10,508 |
) |
|
|
|
|
Basic and diluted net
loss per share: |
$ |
(0.11 |
) |
|
$ |
(0.28 |
) |
|
|
|
|
Shares used in
computing basic and diluted net loss per share: |
37,730 |
|
|
37,940 |
|
|
|
|
|
|
|
|
|
|
Bottomline Technologies |
Unaudited Condensed Consolidated Balance
Sheets |
(in thousands) |
|
September 30, |
|
June 30, |
|
2017 |
|
2017 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash,
cash equivalents and marketable securities |
$ |
128,331 |
|
|
$ |
126,542 |
|
Accounts
receivable |
61,505 |
|
|
64,244 |
|
Other
current assets |
19,362 |
|
|
16,807 |
|
|
|
|
|
Total
current assets |
209,198 |
|
|
207,593 |
|
|
|
|
|
Property and equipment,
net |
26,138 |
|
|
26,195 |
|
Goodwill and intangible
assets, net |
365,048 |
|
|
365,980 |
|
Other assets |
17,174 |
|
|
17,671 |
|
|
|
|
|
Total assets |
$ |
617,558 |
|
|
$ |
617,439 |
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
|
|
Current
liabilities: |
|
|
|
Accounts
payable |
$ |
11,235 |
|
|
$ |
9,013 |
|
Accrued
expenses and other current liabilities |
27,236 |
|
|
29,179 |
|
Deferred
revenue |
62,123 |
|
|
74,113 |
|
Convertible senior notes |
187,281 |
|
|
183,682 |
|
|
|
|
|
Total
current liabilities |
287,875 |
|
|
295,987 |
|
|
|
|
|
Deferred revenue, non
current |
22,122 |
|
|
22,047 |
|
Deferred income
taxes |
15,838 |
|
|
15,433 |
|
Other liabilities |
22,522 |
|
|
22,016 |
|
|
|
|
|
Total liabilities |
348,357 |
|
|
355,483 |
|
|
|
|
|
Stockholders'
equity |
|
|
|
Common
stock |
43 |
|
|
43 |
|
Additional paid-in-capital |
632,490 |
|
|
624,001 |
|
Accumulated other comprehensive loss |
(31,083 |
) |
|
(32,325 |
) |
Treasury
stock |
(111,565 |
) |
|
(113,071 |
) |
Accumulated deficit |
(220,684 |
) |
|
(216,692 |
) |
|
|
|
|
Total stockholders'
equity |
269,201 |
|
|
261,956 |
|
|
|
|
|
Total liabilities and
stockholders' equity |
$ |
617,558 |
|
|
$ |
617,439 |
|
|
|
|
|
|
|
|
|
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