Total Revenue of $69.2 Million, Up 57%
Year-over-Year
Subscription and Support Revenue of $55.1
Million, Up 54% Year-over-Year
MuleSoft, Inc. (NYSE: MULE), provider of the leading platform
for building application networks, today announced financial
results for its second quarter of fiscal 2017 ended June 30,
2017.
“We delivered strong growth performance in the second quarter
and continue to be excited about our market opportunity,” said Greg
Schott, chairman and CEO of MuleSoft. “The convergence of major
technology forces, such as mobile, cloud, big data, and the
Internet of Things, is driving the shift to composability and
creating disruption across almost every industry. By making it easy
to connect nearly every technology in a standardized way, our
customers can speed innovation to deliver differentiated customer
experiences, new revenue channels, and entirely new business
models.”
Second Quarter 2017 Financial Highlights:
- Revenue: Total revenue was $69.2
million, an increase of 57% year-over-year. Subscription and
support revenue was $55.1 million, an increase of 54%
year-over-year. Professional services and other revenue was $14.2
million, an increase of 70% year-over-year.
- Gross margin: GAAP gross margin
was 73.5%, an increase of 40 basis points compared to 73.1% in Q2
2016. Non-GAAP gross margin was 75.1% for Q2 2017, an increase of
160 basis points compared to 73.5% in the year-ago period.
- Operating loss: GAAP operating
loss was $19.0 million, compared to a GAAP operating loss of $11.8
million for Q2 2016. Non-GAAP operating loss for Q2 2017 was $12.1
million, compared to a non-GAAP operating loss of $10.4 million in
the year-ago period.
- Net loss per share: GAAP net
loss per share was $0.15 based on 128.8 million weighted average
shares outstanding in Q2 2017, compared to GAAP net loss per share
of $0.60 based on 20.0 million weighted average shares outstanding
in Q2 2016.Non-GAAP net loss per share was $0.10 based on 128.8
million non-GAAP weighted average shares outstanding in Q2 2017,
compared to non-GAAP net loss per share of $0.10 based on 110.3
million non-GAAP weighted average shares outstanding in Q2
2016.
- Deferred revenue: Total deferred
revenue was $144.4 million at the end of Q2 2017, an increase of
50% year-over-year. Short-term deferred revenue was $138.9 million
at the end of Q2 2017, an increase of 49% year-over-year.
- Cash: Cash from operating
activities was ($2.0) million, compared to ($6.0) million for Q2
2016. Free cash flow, which is a non-GAAP measure that reflects
cash from operating activities less cash used for capital
expenditures, was ($3.0) million for Q2 2017, compared to ($6.8)
million in the year-ago period.Cash, cash equivalents, and
investments totaled $337.1 million at the end of Q2 2017.
Other Recent Highlights:
- Launching Crowd - Next Major Release
of Anypoint Platform™: General availability of the
newest major release of Anypoint Platform is scheduled for July 29.
The Crowd release introduces a set of powerful collaboration
capabilities to make creating, discovering, and reusing composable
IT assets, such as APIs and best practice templates, both easy and
natural for platform users. With the Crowd release, MuleSoft is
making its Anypoint Platform more accessible to a broader set of
users.
- Availability of Anypoint Platform on
G-Cloud 9: MuleSoft announced that Anypoint Platform is
available on the UK government’s latest G-Cloud framework, G-Cloud
9. The framework provides UK public sector organizations with a way
to buy cloud-based services as commodities to accelerate cloud
adoption in a timely and cost-effective manner. The availability of
Anypoint Platform on G-Cloud 9 enables all UK government agencies
to easily purchase the product and is a sign of MuleSoft's
commitment to enabling digital transformation in the public
sector.
- #1 Top Place to Work in Bay
Area: MuleSoft was ranked the #1 Top Workplace for mid-sized
companies by the Bay Area News Group, owner of the San Jose Mercury
News. It is the fifth consecutive year that MuleSoft has been named
a top employer on the list. In addition, MuleSoft was named one of
the Best Places to Work for a third time by the San Francisco
Business Times and Silicon Valley Business Journal. For both
awards, companies were evaluated solely on employee satisfaction
surveys, with prestigious honors given to the most outstanding
companies.
Financial Outlook:
MuleSoft is providing guidance for its third quarter ending
September 30, 2017 as follows:
- Total revenue between $71 million and
$72 million
- Non-GAAP operating loss between $14
million and $15 million
- Non-GAAP net loss per share of
approximately $0.12
- Weighted average shares outstanding of
approximately 129 million
The company is also updating guidance for the fiscal year 2017
ending December 31, 2017 as follows:
- Total revenue between $279 million and
$281 million
- Non-GAAP operating loss between $47
million and $49 million
- Non-GAAP net loss per share between
$0.38 and $0.40
- Non-GAAP weighted average shares
outstanding of approximately 126 million
All forward-looking non-GAAP measures exclude estimates for
stock-based compensation (“SBC”) expenses. We do not provide
reconciliations of our forward-looking non-GAAP financial measures
to the corresponding GAAP measures due to the high variability and
difficulty in making accurate forecasts and projections with
respect to SBC expenses, which is excluded from these non-GAAP
measures. SBC expenses are impacted by future hiring and retention
needs, as well as the future fair market value of our common stock,
all of which are difficult to predict and subject to change. The
actual amounts of the excluded SBC expenses will have a significant
impact on our GAAP operating loss and GAAP net income (loss) per
share. Accordingly, reconciliations of our forward-looking non-GAAP
financial measures to the corresponding GAAP measures are not
available.
Conference Call Information:
MuleSoft will host a conference call at 2 p.m. Pacific Time (or
5 p.m. Eastern Time) today, July 27, 2017, to discuss its financial
results. A live webcast of the call will be available on the
MuleSoft website at investors.mulesoft.com. A live dial-in will be
available at (866) 807-9684 for domestic participants and at (412)
317-5415 for international participants.
About MuleSoft
MuleSoft’s mission is to help organizations change and innovate
faster by making it easy to connect the world’s applications, data
and devices. With its API-led approach to connectivity, MuleSoft’s
market-leading Anypoint Platform™ is enabling over 1,000
organizations in approximately 60 countries to build application
networks. For more information, visit https://www.mulesoft.com.
Forward-Looking Statements
This press release and the accompanying conference call contain
forward-looking statements including, among others, statements
about demand for our products and being adopted as an enterprise
standard; our expectations regarding benefits we expect our
customers to receive from our platform and recently announced
enhancements; our current estimates of third quarter and full year
2017 revenue, non-GAAP operating loss, non-GAAP net loss per share,
and GAAP and non-GAAP weighted average shares outstanding;
statements regarding our business and growth strategy; our
expectations relating to our continued investment in our business,
and the continued strength of the market we serve.
These forward-looking statements involve risks and
uncertainties. If any of these risks or uncertainties materialize,
or if any of our assumptions prove incorrect, our actual results
could differ materially from the results expressed or implied by
these forward-looking statements. These risks and uncertainties
include risks associated with: our limited operating history in a
new and unproven market; engagement of our customers, including
through renewals of subscriptions and expanded use of our platform,
and our ability to attract new customers; our ability to continue
to successfully enhance our platform and develop new services to
meet the needs of our customers and address future advances in
technology; risks associated with managing our rapid growth,
including our ability to maintain our rate of revenue growth and
manage our expenses and investment plans; execution of our plans
and strategies, including our strategy to target larger
organizations for sales of our platform; our ability to maintain
and continually develop our technology and network infrastructure
to ensure that customers can access our platform at any time and
within an acceptable amount of time; increasing competition; our
ability to recruit and retain our employees; general economic,
market and business conditions; and the risks described in the
other filings we make with the Securities and Exchange Commission
from time to time, including the risks described under the heading
“Risk Factors” in our Quarterly Report on Form 10-Q for the quarter
ended March 31, 2017, which was filed with the Securities and
Exchange Commission on May 10, 2017, should be read in conjunction
with our financial results and forward-looking statements, and is
available on the SEC filings section of the Investor Relations page
of our website at https://investors.mulesoft.com/.
All forward-looking statements in this press release are based
on information available to us as of the date hereof, and we do not
assume any obligation to update the forward-looking statements
provided to reflect events that occur or circumstances that exist
after the date on which they were made.
Non-GAAP Financial Measures
To supplement its consolidated financial statements, which are
prepared and presented in accordance with GAAP, MuleSoft provides
investors with certain non-GAAP financial measures, including
non-GAAP gross margin, non-GAAP operating loss, non-GAAP net loss,
non-GAAP net loss per share, non-GAAP share count, and non-GAAP
free cash flow. The presentation of these non-GAAP financial
measures is not intended to be considered in isolation or as a
substitute for, or superior to, the financial information prepared
and presented in accordance with GAAP. For more information on
these non-GAAP financial measures, please see the reconciliation of
these non-GAAP financial measures to their nearest comparable GAAP
measures at the end of this press release.
We use these non-GAAP financial measures for financial and
operational decision-making and as a means to evaluate
period-to-period comparisons. Our management believes that these
non-GAAP financial measures provide meaningful supplemental
information regarding MuleSoft’s performance by excluding certain
expenses that may not be indicative of our recurring core business
operating results. We believe that both management and investors
benefit from referring to these non-GAAP financial measures in
assessing MuleSoft’s performance and when planning, forecasting,
and analyzing future periods. These non-GAAP financial measures
also facilitate management’s internal comparisons to our historical
performance as well as comparisons to our competitors’ operating
results. We believe these non-GAAP financial measures are useful to
investors both because (1) they allow for greater transparency
with respect to measures used by management in its financial and
operational decision-making and (2) they are used by our
institutional investors and the analyst community to help them
analyze the health of our business.
A limitation of non-GAAP financial measures is that they do not
have uniform definitions. Further, our definitions will likely
differ from the definitions used by other companies, including peer
companies, and therefore comparability may be limited. Thus, our
non-GAAP financial measures should be considered in addition to,
and not as a substitute for, or in isolation from, measures
prepared in accordance with GAAP. Additionally, in the case of SBC
expense, if we did not pay a portion of compensation in the form of
SBC expense, the cash salary expense included in cost of revenue
and operating expenses would be higher, which would affect our cash
position.
Non-GAAP gross margin and non-GAAP operating loss. We
define non-GAAP gross margin and non-GAAP operating loss as gross
margin and operating loss, respectively, excluding expenses related
to SBC. Although SBC is an important aspect of the compensation of
our employees and executives, determining the fair value of certain
of the stock-based instruments we utilize involves a high degree of
judgment and estimation and the expense recorded may bear little
resemblance to the actual value realized upon the vesting or future
exercise of the related stock-based awards. Furthermore, unlike
cash compensation, the value of stock options, which is an element
of our ongoing SBC expense, is determined using a complex formula
that incorporates factors, such as market volatility, that are
beyond our control. For restricted stock unit awards, the amount of
SBC expenses may not reflect the value ultimately received by the
grant recipients. Management believes it is useful to exclude SBC
in order to better understand the long-term performance of our core
business and to facilitate comparison of our results to those of
peer companies.
Non-GAAP net loss and non-GAAP net loss per share. We
define non-GAAP net loss as net loss excluding expenses related to
SBC. We define non-GAAP net loss per share as non-GAAP net loss
divided by the non-GAAP weighted average outstanding shares. The
accompanying tables have more details on the reconciliations of
non-GAAP financial measures to their nearest comparable GAAP
measures.
MuleSoft is a registered trademark of MuleSoft, Inc. All other
marks are those of respective owners.
MULESOFT, INC. Consolidated Balance Sheets (in
thousands) (unaudited)
June
30,
December 31, Assets 2017 2016 Current
assets: Cash and cash equivalents $ 203,989 $ 35,101 Investments
51,959 63,361 Trade receivables, net of allowance for doubtful
accounts of $654 and $446 as of June 30, 2017 and December 31, 2016
66,966 72,324 Prepaid expenses and other current assets 11,665
18,854 Total current assets 334,579 189,640
Investments, noncurrent 81,108 4,151 Property and equipment, net
6,339 5,231 Restricted cash 709 671 Goodwill 772 787 Intangible
assets, net 1,164 1,797 Other assets 2,348 661 Total
assets $ 427,019 $ 202,938
Liabilities and
Stockholders’ Equity Current liabilities: Accounts payable $
2,368 $ 1,879 Accrued expenses 10,085 7,797 Accrued compensation
and related expenses 12,854 16,369 Deferred revenue 138,912
130,045 Total current liabilities 164,219 156,090 Deferred
revenue, noncurrent 5,532 5,569 Other liabilities 1,571
1,176 Total liabilities 171,322 162,835
Stockholders’ equity: Convertible preferred stock - 255,946 Class A
and class B common stock 3 1 Additional paid-in capital 523,551
22,241 Accumulated deficit (266,013 ) (236,230 ) Accumulated other
comprehensive loss (1,844 ) (1,855 ) Total stockholders’ equity
255,697 40,103 Total liabilities and stockholders’
equity $ 427,019 $ 202,938
MULESOFT,
INC. Condensed Consolidated Statements of Operations
(in thousands, except share and per share
amounts)
(unaudited)
Three Months Ended,
Six Months Ended, June 30, June 30,
2017 2016 2017 2016 Revenue:
Subscription and support $ 55,077 $ 35,649 $ 105,671 $ 66,900
Professional services and other 14,156 8,345 24,467
16,125 Total revenue 69,233 43,994 130,138 83,025
Cost of revenue:(1) Subscription and support 4,649 3,371 8,697
5,951 Professional services and other 13,699 8,461
24,890 15,633 Total cost of revenue 18,348
11,832 33,587 21,584 Gross profit 50,885
32,162 96,551 61,441 Operating expenses:(1) Research and
development 15,140 7,332 27,929 14,192 Sales and marketing 43,817
29,815 76,943 53,520 General and administrative 10,950 6,843
20,611 14,126 Total operating expenses 69,907
43,990 125,483 81,838 Loss from
operations (19,022 ) (11,828 ) (28,932 ) (20,397 ) Interest income
357 107 515 204 Other income (expense), net (191 ) (107 ) (267 )
(106 ) Net loss before provision for income taxes (18,856 ) (11,828
) (28,684 ) (20,299 ) Provision for income taxes 779 268
1,092 548
Net loss attributable to common
stockholders
$ (19,635 ) $ (12,096 ) $ (29,776 ) $ (20,847 ) Net loss per share
attributable to common stockholders, basic and diluted $ (0.15 ) $
(0.60 ) $ (0.36 ) $ (1.06 ) Weighted-average shares used in
computing net loss per share, basic and diluted 128,825,841
19,995,314 83,370,758 19,678,429
(1) Includes stock-based compensation as
follows (in thousands):
Cost of subscription and support revenue $ 236 $ 55 $ 337 $ 88 Cost
of professional services and other revenue 847 119 1,160 211
Research and development 1,529 329 2,445 538 Sales and marketing
3,229 586 4,653 1,094 General and administrative 1,039 327
1,568 527 Total stock-based compensation
expenses $ 6,880 $ 1,416 $ 10,163 $ 2,458
MULESOFT, INC. Consolidated Statements of Cash
Flows (in thousands) (unaudited)
Three Months Ended,
Six Months Ended, June 30, June 30,
2017 2016 2017 2016
Cash flows from operating activities: Net loss $ (19,635 ) $
(12,096 ) $ (29,776 ) $ (20,847 ) Adjustments to reconcile net loss
to net cash provided by (used in) operating activities: Stock-based
compensation 6,880 1,416 10,163 2,458 Depreciation and amortization
987 397 1,829 756 Amortization of investment premiums 110 118 222
307 Provision for doubtful accounts 72 374 208 312 Loss on disposal
of property and equipment 4 3 36 3 Other - - - 13 Changes in assets
and liabilities: Trade receivables (4,761 ) (14,380 ) 5,112 (6,252
) Prepaid expenses and other current assets 5,322 2,316 5,211 1,792
Other assets (1,224 ) 133 (1,687 ) 67 Accounts payable (714 ) 382
395 1,044 Accrued expenses 708 1,752 2,480 3,152 Accrued
compensation and related expenses 1,850 1,680 (5,824 ) (2,925 )
Other liabilities 672 121 394 141 Deferred revenue 7,731
11,757 9,024 13,982 Net cash used in operating
activities (1,998 ) (6,027 ) (2,213 ) (5,997 )
Cash flows from
investing activities: Purchases of investments (101,355 )
(6,450 ) (101,355 ) (8,405 ) Sales of investments 2,425 - 2,425
20,786 Maturities of investments 16,776 2,345 32,856 7,095
Purchases of property and equipment (973 ) (727 ) (2,334 ) (980 )
Business combinations, net of cash acquired (600 ) - (106 )
- Net cash provided by (used in) investing activities
(83,727 ) (4,832 ) (68,514 ) 18,496
Cash flows from
financing activities: Net proceeds from issuance of common
stock in initial public offering - - 236,360 - Proceeds from
employee stock purchase plan 2,309 - 2,309 - Note receivable - - -
(250 ) Repurchase of common shares - (259 ) - (351 ) Proceeds from
issuance of common stock upon exercise of options and warrants 386
367 2,464 941 Payments of costs related to initial public offering
(1,031 ) - (1,823 ) - Net cash provided by financing
activities 1,664 108 239,310 340 Impact
of foreign exchange on cash and cash equivalents 97 (331 )
343 (461 ) Net increase (decrease) in cash (83,964 ) (11,082
) 168,926 12,378 Cash, cash equivalents and restricted cash,
Beginning of period 288,662 45,843 35,772
22,383 Cash, cash equivalents and restricted cash, End of
period $ 204,698 $ 34,761 $ 204,698 $ 34,761
Supplemental disclosures of cash flow information:
Cash paid for income taxes $ 474 $ 120 $ 617 $
270
Supplemental disclosures of non-cash investing and
financing information: Costs related to the initial public
offering, accrued but unpaid $ 89 $ - $ 89 $ -
Liability for purchase of property and equipment $ 171
$ 334 $ 171 $ 334
MULESOFT, INC.
Reconciliation of GAAP to Non-GAAP Financial Measures (in
thousands, except share and per share amounts) (unaudited)
Three Months Ended, Six Months
Ended, June 30, June 30, 2017 2016
2017 2016 Cost of subscription and support
revenue on a GAAP basis $ 4,649 $ 3,371 $ 8,697 $ 5,951 Stock-based
compensation expenses (236 ) (55 ) (337 ) (88 ) Cost of
subscription services revenue on a non-GAAP basis $ 4,413 $
3,316 $ 8,360 $ 5,863 Gross margin on
subscription and support revenue on a GAAP basis 91.6 % 90.5 % 91.8
% 91.1 % Stock-based compensation expenses 0.4 % 0.2 % 0.3 % 0.1 %
Gross margin on subscription services revenue on a non-GAAP basis
92.0 % 90.7 % 92.1 % 91.2 % Cost of professional services
and other revenue on a GAAP basis $ 13,699 $ 8,461 $ 24,890 $
15,633 Stock-based compensation expenses (847 ) (119 ) (1,160 )
(211 ) Cost of professional services and other revenue on a
non-GAAP basis $ 12,852 $ 8,342 $ 23,730 $
15,422 Gross margin on professional services and
other revenue on a GAAP basis 3.2 % (1.4 )% (1.7 )% 3.1 %
Stock-based compensation expenses 6.0 % 1.4 % 4.7 % 1.3 % Gross
margin on professional services and other revenue on a non-GAAP
basis 9.2 % 0.0 % 3.0 % 4.4 % Gross profit on a GAAP basis $
50,885 $ 32,162 $ 96,551 $ 61,441 Stock-based compensation expenses
1,083 174 1,497 299 Gross profit on a
non-GAAP basis $ 51,968 $ 32,336 $ 98,048 $
61,740 Gross margin on total revenue on a GAAP basis
73.5 % 73.1 % 74.2 % 74.0 % Stock-based compensation expenses 1.6 %
0.4 % 1.1 % 0.4 % Gross margin on total revenue on a non-GAAP basis
75.1 % 73.5 % 75.3 % 74.4 % Research and development
expenses on a GAAP basis $ 15,140 $ 7,332 $ 27,929 $ 14,192
Stock-based compensation expenses (1,529 ) (329 ) (2,445 ) (538 )
Research and development expenses on a non-GAAP basis $ 13,611
$ 7,003 $ 25,484 $ 13,654 Sales
and marketing expenses on a GAAP basis $ 43,817 $ 29,815 $ 76,943 $
53,520 Stock-based compensation expenses (3,229 ) (586 ) (4,653 )
(1,094 ) Sales and marking expenses on a non-GAAP basis $ 40,588
$ 29,229 $ 72,290 $ 52,426
General and administrative expenses on a GAAP basis $ 10,950 $
6,843 $ 20,611 $ 14,126 Stock-based compensation expenses (1,039 )
(327 ) (1,568 ) (527 ) General and administrative expenses on a
non-GAAP basis $ 9,911 $ 6,516 $ 19,043 $
13,599 Total operating expenses on a GAAP basis $
69,907 $ 43,990 $ 125,483 $ 81,838 Stock-based compensation
expenses (5,797 ) (1,242 ) (8,666 ) (2,159 ) Total operating
expenses on a non-GAAP basis $ 64,110 $ 42,748 $
116,817 $ 79,679 Operating loss on a GAAP
basis $ (19,022 ) $ (11,828 ) $ (28,932 ) $ (20,397 ) Stock-based
compensation expenses 6,880 1,416 10,163 2,458
Operating loss on a non-GAAP basis $ (12,142 ) $ (10,412 ) $
(18,769 ) $ (17,939 ) Net loss attributable to common
stockholders on a GAAP basis $ (19,635 ) $ (12,096 ) $ (29,776 ) $
(20,847 ) Stock-based compensation expenses 6,880 1,416
10,163 2,458 Net loss attributable to common
stockholders on a non-GAAP basis $ (12,755 ) $ (10,680 ) $ (19,613
) $ (18,389 ) Net loss per share attributable to common
stockholders, basic and diluted: $ (0.15 ) $ (0.60 ) $ (0.36 ) $
(1.06 ) Stock-based compensation expenses 0.05 0.07 0.12 0.12
Convertible preferred stock - 0.43 0.08 0.77
Net loss per share attributable to common stockholders,
basic and diluted, on a non-GAAP basis $ (0.10 ) $ (0.10 ) $ (0.16
) $ (0.17 ) GAAP weighted-average shares used to compute net
loss per share attributable to common stockholders, basic and
diluted 128,825,841 19,995,314 83,370,758
19,678,429 Convertible preferred shares issued and
outstanding at beginning of the period - 90,262,270
38,500,043 90,262,270
Non-GAAP weighted-average shares used to
compute non-GAAP net loss per share attributable to common
stockholders, basic and diluted
128,825,841 110,257,584 121,870,801
109,940,699
MULESOFT, INC. Reconciliation of
GAAP to Non-GAAP Financial Measures (in thousands) (unaudited)
The following table presents a
reconciliation of free cash flow to net cash used in operating
activities, the most directly comparable financial measure
calculated in accordance with generally accepted accounting
principles, or GAAP:
Three Months Ended, Six Months Ended, June
30, June 30,
2017
2016 2017 2016 Net cash used in
operating activities $ (1,998 ) $ (6,027 ) $ (2,213 ) $ (5,997 )
Less: Purchases of property and equipment (973 ) (727 ) (2,334 )
(980 ) Free cash flow $ (2,971 ) $ (6,754 ) $ (4,547 ) $ (6,977 )
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170727006298/en/
MuleSoftMedia ContactMelissa Czapiga,
415-294-0161press@mulesoft.comorInvestor ContactCarla
Cooper, 415-656-8831investorrelations@mulesoft.com
Mulesoft Class A (NYSE:MULE)
Historical Stock Chart
From Aug 2024 to Sep 2024
Mulesoft Class A (NYSE:MULE)
Historical Stock Chart
From Sep 2023 to Sep 2024