LogMeIn, Inc. (NASDAQ: LOGM), a leading provider of cloud-based
connectivity, today announced its results for the third quarter
ended September 30, 2019.
Third quarter financial highlights include:
- GAAP revenue was $316.9 million
- Non-GAAP revenue was $317.2 million, up 2.5% year over year, a
60-basis point improvement from Q2’19
- GAAP net income was $5.1 million or $0.10 per share and
non-GAAP net income was $68.7 million or $1.39 per share
- EBITDA was $82.2 million or 25.9% of GAAP revenue and Adjusted
EBITDA was $109.3 million or 34.5% of non-GAAP revenue
- Cash flow from operations was $83.0 million or 26.2% of
non-GAAP revenue, and adjusted free cash flow was $69.6 million or
22.0% of non-GAAP revenue
- Total GAAP deferred revenue was $392.8 million
- The Company closed the quarter with cash and cash equivalents
of $119.2 million and $200.0 million of borrowings under its
existing credit agreement
- The Company’s fastest growing products continued to gain market
share with Jive increasing 37% year over year to $37 million and
LastPass gaining 64% year over year to $22 million
Third quarter operational highlights include:
- Launched the new, video first experience for GoToMeeting, which
focuses on delivering a simple, intuitive end-user experience,
while giving IT even more control over deployment, management, and
security. The product includes industry-leading audio quality, a
new meeting hub, powerful meeting diagnostics, and additional
AI-powered transcription capabilities
- Announced the general availability of GoToConnect and GoToRoom
in the UK, Germany and Ireland, making the full GoTo Suite
available in those markets
- Named to the Gartner 2019 Magic Quadrant for both Unified
Communications as a Service and Meeting Solutions
- LastPass Identity named the winner of the “Overall ID
Management Solution of the Year” award in the 2019 CyberSecurity
Breakthrough Awards
“Our investments in our growth products continued to pay off in
the quarter and enabled us to exceed our guidance. Led by
Jive and LastPass, our growth products grew 34% in Q3 and now
account for more than a quarter of our revenue,” said Bill Wagner,
President and CEO.
“Additionally, we made significant progress strengthening our
collaboration products, with the introduction of the next
generation of our flagship GoToMeeting product and the launch of
GoToConnect into key European markets. We believe both of
these milestones are foundational to continue to drive overall
growth.”
CFO Retirement in 2020The Company is also
announcing that LogMeIn’s Chief Financial Officer, Ed Herdiech, has
informed the Company of his decision to retire in 2020, at a date
to be determined. In the interim, Ed has agreed to continue
in his role in a full-time capacity in order to help transition his
duties and to assist in the hiring and on-boarding of his
successor.
“I want to thank Ed for his distinguished service to LogMeIn
over the past 13 years, during which time he has helped scale the
Company from a small SaaS disruptor to a billion dollar market
leader. His leadership and execution have been critical
throughout our history, including during our 2009 IPO and our
transformational merger with the GoTo business. He has also built a
strong team that is the operational backbone of the company.
I look forward to working with Ed through his transition in 2020
and we all wish him well as he looks forward to his retirement,”
said Bill Wagner.
“I’ve had a great experience at LogMeIn. I’ve enjoyed
working with extremely smart people and developing a talented and
dedicated team that has supported the business on its path from a
start up to a billion-dollar SaaS company,” said Ed Herdiech.
“I believe the Company is well-positioned to be a leader in large,
forward-leaning markets and I look forward to helping ensure a
smooth transition.”
Business OutlookBased on information available
as of October 24, 2019, the Company is issuing guidance for the
fourth quarter 2019 and fiscal year 2019.
Fourth Quarter 2019: The Company expects fourth quarter
GAAP and non-GAAP revenue to be in the range of $319 million to
$321 million.
EBITDA is expected to be in the range of $89 million to $90
million, or approximately 28% of GAAP revenue. Adjusted
EBITDA is expected to be in the range of $110 million to $111
million, or approximately 34.5% of non-GAAP revenue.
Non-GAAP net income is expected to be in the range of $68
million to $69 million, or $1.39 to $1.41 per diluted share.
Non-GAAP net income excludes an estimated $18 million in
stock-based compensation expense, $3 million in acquisition and
litigation-related costs, and $60 million of amortization expense
of acquired intangible assets, as well as the income tax effect of
the above items.
Non-GAAP net income for the fourth quarter assumes an effective
tax rate of approximately 25% and GAAP net income assumes a tax
provision of approximately $3 million for the fourth quarter.
Non-GAAP and GAAP net income per diluted share is based on an
estimated 49 million fully-diluted weighted average shares
outstanding.
Including stock-based compensation expense, acquisition-related
costs and amortization, and litigation-related expense the Company
expects to report GAAP net income in the range of $8 million to $9
million, or $0.15 to $0.17 per diluted
share.
Fiscal year 2019: The Company expects full year 2019
non-GAAP revenue to be in the range of $1.258 billion to $1.260
billion. The Company expects full year 2019 GAAP revenue to
be in the range of $1.257 billion to $1.259 billion. Non-GAAP
revenue adds back $1 million for the impact of an acquisition
accounting adjustment recorded to reduce acquired deferred revenue
to the fair value of the remaining obligation.
EBITDA is expected to be in the range of $312 million to $313
million, or approximately 25% of GAAP revenue. Adjusted
EBITDA is expected to be in the range of $412 million to $413
million, or approximately 33% of non-GAAP revenue.
Non-GAAP net income is expected to be in the range of $256
million to $257 million, or $5.12 to $5.14 per diluted share.
Non-GAAP net income adds back the non-GAAP revenue adjustment
described above and excludes an estimated $69 million in
stock-based compensation expense, $15 million in acquisition and
litigation-related costs, $241 million of amortization expense of
acquired intangible assets, and $15 million of restructuring
charges, as well as the income tax effect of the above items.
Non-GAAP net income for the fiscal year assumes an effective tax
rate of approximately 25% and GAAP net loss for the fiscal year
assumes a tax provision of approximately $4 million. Non-GAAP
net income per diluted share is based on an estimated 50 million
fully-diluted weighted average shares outstanding. GAAP net
loss per share is based on an estimated 49.6 million weighted
average shares outstanding.
Including stock-based compensation expense, acquisition-related
costs and amortization, litigation-related expense, and
restructuring charges, the Company expects to report GAAP net loss
in the range of $3 million to $2 million, or $0.06 to $0.04 net
loss per share.
DividendIn accordance with its previously
announced capital return plan, the Company will pay a $0.325 per
share dividend on November 29, 2019 to stockholders of record as of
November 13, 2019. The Company currently has approximately 49
million shares of common stock outstanding.
Conference Call Information for Today, Thursday, October
24, 2019 The Company will host a corresponding conference
call and live webcast at 5:00 p.m. Eastern Time today. To
access the conference call, dial (800) 309-1256 and enter passcode
689811. A live webcast will be available on the Investor
Relations section of the Company’s corporate website at
https://www.logmeininc.com and via replay beginning approximately
two hours after the completion of the call until the Company’s
announcement of its financial results for the next quarter.
An audio replay of the call will also be available to investors
beginning at approximately 8:00 p.m. Eastern Time on October 24,
2019 until 8:00 p.m. Eastern Time on October 31, 2019, by dialing
888-203-1112 and entering passcode 2282202.
Non-GAAP Financial Measures
This press release contains non-GAAP financial measures
including non-GAAP revenue, EBITDA, EBITDA margin, adjusted EBITDA,
adjusted EBITDA margin, non-GAAP operating income, non-GAAP income
before provision for income taxes, non-GAAP provision for income
taxes, non-GAAP net income, non-GAAP net income per diluted share,
adjusted cash flow from operations, and adjusted free cash
flow.
- Non-GAAP revenue excludes the impact of the fair value
acquisition accounting adjustment on acquired deferred
revenue.
- EBITDA is GAAP net income (loss) excluding interest, income
taxes, other (expense) income, net, and depreciation and
amortization expense.
- EBITDA margin is calculated by dividing EBITDA by
revenue.
- Adjusted EBITDA is EBITDA excluding the impact of the fair
value acquisition accounting adjustment on acquired deferred
revenue, acquisition-related costs, gain on disposition of non-core
assets, stock-based compensation expense, restructuring charges,
and litigation-related expense.
- Adjusted EBITDA margin is calculated by dividing adjusted
EBITDA by non-GAAP revenue, or GAAP revenue if not different.
- Non-GAAP operating income excludes the impact of the fair value
acquisition accounting adjustment on acquired deferred revenue,
acquisition related costs and amortization, gain on disposition of
non-core assets, stock-based compensation expense, restructuring
charges, and litigation-related expense and includes amortization
expense for acquired company internally capitalized software
development costs that were adjusted in acquisition
accounting.
- Non-GAAP provision for income taxes excludes the tax impact of
the fair value acquisition accounting adjustment on acquired
deferred revenue, acquisition-related costs and amortization, gain
on disposition of non-core assets, stock-based compensation
expense, restructuring charges, litigation-related expense,
discrete integration related tax impacts, and the tax impact
related to the enactment of the U.S. Tax Cuts and Jobs Act of 2017,
and includes the tax impact of amortization expense for acquired
company internally capitalized software development costs that were
adjusted in acquisition accounting.
- Non-GAAP net income and non-GAAP net income per diluted share
reflects the adjustments noted in non-GAAP operating income and
non-GAAP provision for income taxes above.
- Adjusted cash flow from operations excludes acquisition
retention-based bonus, litigation, restructuring, and
acquisition-related payments and transaction and transition-related
tax payments.
- Adjusted free cash flow is adjusted cash flow from operations
excluding purchases of property and equipment and intangible asset
additions.
The exclusion of certain expenses in the calculation of non-GAAP
financial measures should not be construed as an inference that
these costs are unusual or infrequent. We anticipate excluding
these expenses in the future presentation of our non-GAAP financial
measures. The Company believes that these non-GAAP measures of
financial results provide useful information to management and
investors regarding certain financial and business trends relating
to the Company's financial condition and results of operations. The
Company's management uses these non-GAAP measures to compare the
Company's performance to that of prior periods and uses these
measures in financial reports prepared for management and the
Company's board of directors. The Company believes that the use of
these non-GAAP financial measures provides an additional tool for
investors to use in evaluating ongoing operating results and trends
and in comparing the Company's financial measures with other
software-as-a-service companies, many of which present similar
non-GAAP financial measures to investors. The Company does not
consider these non-GAAP measures in isolation or as an alternative
to financial measures determined in accordance with GAAP. The
principal limitation of these non-GAAP financial measures is that
they exclude significant elements that are required by GAAP to be
recorded in the Company's financial statements. In addition,
they are subject to inherent limitations as they reflect the
exercise of judgment by management in determining these non-GAAP
financial measures. In order to compensate for these
limitations, management of the Company presents its non-GAAP
financial measures in connection with its GAAP results. The
Company urges investors to review the reconciliation of its
non-GAAP financial measures to the comparable GAAP financial
measures, which it includes in press releases announcing quarterly
financial results, and not to rely on any single financial measure
to evaluate the Company's business. Reconciliation tables of the
most comparable GAAP financial measures to the non-GAAP measures
used in this press release are included in this release.
About LogMeIn, Inc.LogMeIn, Inc. (NASDAQ: LOGM)
simplifies how people connect with each other and the world around
them to drive meaningful interactions, deepen relationships, and
create better outcomes for individuals and businesses. One of the
world’s top 10 public SaaS companies, and a market leader in
unified communications and collaboration, identity and access
management, and customer engagement and support solutions, LogMeIn
has millions of customers spanning virtually every country across
the globe. LogMeIn is headquartered in Boston, Massachusetts with
additional locations in North America, South America, Europe, Asia
and Australia.
Cautionary Language Concerning Forward-Looking
Statements
This press release contains "forward-looking statements" within
the meaning of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995, including but not limited
to, statements regarding the progress made on the Company’s
strategic initiatives and revenue growth objectives, improvements
made to the Company’s competitive positioning, as well as the
Company's financial guidance for the fourth quarter of 2019 and
fiscal year 2019. These forward-looking statements are made as
of the date they were first issued and were based on current
expectations, estimates, forecasts and projections as well as the
beliefs and assumptions of management. Words such as "expect,"
"anticipate," "should," "believe," "hope," "target," "project,"
"goals," "estimate," "potential," "predict," "may," "will,"
"might," "could," "intend," variations of these terms or the
negative of these terms and similar expressions are intended to
identify these forward-looking statements. Forward-looking
statements are subject to a number of risks and uncertainties, many
of which involve factors or circumstances that are beyond the
Company's control. The Company's actual results could differ
materially from those stated or implied in forward-looking
statements due to a number of factors, including but not limited
to, customer adoption of the Company's solutions, the Company’s
ability to execute on its strategic initiatives, the Company’s
ability to integrate acquired products or companies, the Company's
ability to attract new customers and retain existing customers,
adverse economic conditions in general and adverse economic
conditions specifically affecting the markets in which the Company
operates, the effectiveness of the Company’s cybersecurity
measures, the Company's ability to continue to promote and maintain
its brand in a cost-effective manner, the Company's ability to
compete effectively, the Company's ability to develop and introduce
new products and add-ons or enhancements to existing products, the
Company's ability to manage growth, the Company's ability to
attract and retain key personnel, the Company's ability to protect
its intellectual property and other proprietary rights, the result
of any pending litigation including intellectual property
litigation, and other risks detailed in the Company's other
publicly available filings with the Securities and Exchange
Commission. Past performance is not necessarily indicative of
future results. The forward-looking statements included in
this press release represent the Company's views as of the date of
this press release. The Company anticipates that subsequent
events and developments will cause its views to change. The Company
undertakes no intention or obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise. These forward-looking statements
should not be relied upon as representing the Company's views as of
any date subsequent to the date of this press release.
LogMeIn is a registered trademark of LogMeIn,
Inc. in the US and other countries around the world.
Contact Information:Investors Rob
Bradley LogMeIn,
Inc.781-897-1301Rob.Bradley@LogMeIn.com
PressCraig VerColenLogMeIn,
Inc.781-897-0696Press@LogMeIn.com
LogMeIn,
Inc. |
|
Condensed
Consolidated Balance Sheets (unaudited) |
|
(In
thousands) |
|
|
|
|
|
|
|
|
|
December
31, |
|
September
30, |
|
|
|
|
2018 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
ASSETS |
|
Current
assets: |
|
|
|
|
|
Cash
and cash equivalents |
|
$ |
148,652 |
|
|
$ |
119,197 |
|
|
Accounts receivable, net |
|
|
95,354 |
|
|
|
80,876 |
|
|
Prepaid expenses and other current assets |
|
|
83,887 |
|
|
|
81,120 |
|
|
Total
current assets |
|
|
327,893 |
|
|
|
281,193 |
|
|
Property and
equipment, net |
|
|
98,238 |
|
|
|
97,005 |
|
|
Operating
lease assets |
|
|
- |
|
|
|
101,345 |
|
|
Restricted
cash, net of current portion |
|
|
1,840 |
|
|
|
1,834 |
|
|
Intangibles,
net |
|
|
1,059,988 |
|
|
|
895,800 |
|
|
Goodwill |
|
|
2,400,390 |
|
|
|
2,414,335 |
|
|
Other
assets |
|
|
41,545 |
|
|
|
61,261 |
|
|
Deferred tax
assets |
|
|
6,059 |
|
|
|
5,895 |
|
|
Total
assets |
|
$ |
3,935,953 |
|
|
$ |
3,858,668 |
|
|
|
|
|
|
|
|
LIABILITIES
AND EQUITY |
|
Current
liabilities: |
|
|
|
|
|
Accounts payable |
|
$ |
35,447 |
|
|
$ |
56,671 |
|
|
Current operating lease liabilities |
|
|
- |
|
|
|
17,900 |
|
|
Accrued liabilities |
|
|
119,379 |
|
|
|
144,285 |
|
|
Deferred revenue, current portion |
|
|
369,780 |
|
|
|
381,635 |
|
|
Total
current liabilities |
|
|
524,606 |
|
|
|
600,491 |
|
|
Long-term
debt |
|
|
200,000 |
|
|
|
200,000 |
|
|
Deferred
revenue, net of current portion |
|
|
9,518 |
|
|
|
11,189 |
|
|
Deferred tax
liabilities |
|
|
201,212 |
|
|
|
170,378 |
|
|
Non-current
operating lease liabilities |
|
|
- |
|
|
|
91,407 |
|
|
Other
long-term liabilities |
|
|
25,929 |
|
|
|
10,077 |
|
|
Total
liabilities |
|
|
961,265 |
|
|
|
1,083,542 |
|
|
Equity: |
|
|
|
|
|
Common stock |
|
|
567 |
|
|
|
572 |
|
|
Additional paid-in capital |
|
|
3,316,603 |
|
|
|
3,349,108 |
|
|
Retained earnings |
|
|
84,043 |
|
|
|
24,854 |
|
|
Accumulated other comprehensive income (loss) |
|
|
2,133 |
|
|
|
(1,946 |
) |
|
Treasury stock |
|
|
(428,658 |
) |
|
|
(597,462 |
) |
|
Total
equity |
|
|
2,974,688 |
|
|
|
2,775,126 |
|
|
Total
liabilities and equity |
|
$ |
3,935,953 |
|
|
$ |
3,858,668 |
|
|
|
|
|
|
|
|
LogMeIn,
Inc. |
|
Condensed
Consolidated Statements of Operations (unaudited) |
|
(In
thousands, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
308,927 |
|
|
$ |
316,941 |
|
|
$ |
893,794 |
|
|
$ |
937,705 |
|
|
Cost of
revenue |
|
|
72,853 |
|
|
|
81,230 |
|
|
|
208,628 |
|
|
|
239,685 |
|
|
Gross
profit |
|
|
236,074 |
|
|
|
235,711 |
|
|
|
685,166 |
|
|
|
698,020 |
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
Research and development |
|
|
42,220 |
|
|
|
39,452 |
|
|
|
129,256 |
|
|
|
120,548 |
|
|
Sales
and marketing |
|
|
95,041 |
|
|
|
110,604 |
|
|
|
282,599 |
|
|
|
346,063 |
|
|
General and administrative |
|
|
37,441 |
|
|
|
34,954 |
|
|
|
111,990 |
|
|
|
103,379 |
|
|
Restructuring charge |
|
|
- |
|
|
|
5,172 |
|
|
|
- |
|
|
|
14,602 |
|
|
Gain
on disposition of assets |
|
|
- |
|
|
|
- |
|
|
|
(33,910 |
) |
|
|
- |
|
|
Amortization of acquired intangibles |
|
|
44,268 |
|
|
|
39,368 |
|
|
|
128,698 |
|
|
|
118,257 |
|
|
Total
operating expenses |
|
|
218,970 |
|
|
|
229,550 |
|
|
|
618,633 |
|
|
|
702,849 |
|
|
Income
(loss) from operations |
|
|
17,104 |
|
|
|
6,161 |
|
|
|
66,533 |
|
|
|
(4,829 |
) |
|
Interest income |
|
|
293 |
|
|
|
299 |
|
|
|
1,335 |
|
|
|
1,375 |
|
|
Interest expense |
|
|
(2,033 |
) |
|
|
(2,048 |
) |
|
|
(4,213 |
) |
|
|
(6,317 |
) |
|
Other
income (expense), net |
|
|
(77 |
) |
|
|
180 |
|
|
|
(403 |
) |
|
|
(187 |
) |
|
Income
(loss) before income taxes |
|
|
15,287 |
|
|
|
4,592 |
|
|
|
63,252 |
|
|
|
(9,958 |
) |
|
(Provision
for) benefit from income taxes |
|
|
(2,570 |
) |
|
|
516 |
|
|
|
(14,269 |
) |
|
|
(495 |
) |
|
Net income
(loss) |
|
$ |
12,717 |
|
|
$ |
5,108 |
|
|
$ |
48,983 |
|
|
$ |
(10,453 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) per share: |
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.25 |
|
|
$ |
0.10 |
|
|
$ |
0.94 |
|
|
$ |
(0.21 |
) |
|
Diluted |
|
$ |
0.24 |
|
|
$ |
0.10 |
|
|
$ |
0.93 |
|
|
$ |
(0.21 |
) |
|
Weighted
average shares outstanding: |
|
|
|
|
|
|
|
|
|
Basic |
|
|
51,652 |
|
|
|
49,265 |
|
|
|
52,090 |
|
|
|
49,886 |
|
|
Diluted |
|
|
52,066 |
|
|
|
49,368 |
|
|
|
52,829 |
|
|
|
49,886 |
|
|
|
|
|
|
|
|
|
|
|
|
LogMeIn,
Inc. |
|
Calculation
of Non-GAAP Revenue (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
|
|
(in
thousands) |
|
(in
thousands) |
|
GAAP Revenue |
|
$ |
308,927 |
|
|
$ |
316,941 |
|
|
$ |
893,794 |
|
|
$ |
937,705 |
|
|
|
Add
Back: |
|
|
|
|
|
|
|
|
|
|
Effect of
acquisition accounting on fair value of acquired deferred
revenue |
|
|
654 |
|
|
|
230 |
|
|
|
3,186 |
|
|
|
978 |
|
|
Non-GAAP Revenue |
|
$ |
309,581 |
|
|
$ |
317,171 |
|
|
$ |
896,980 |
|
|
$ |
938,683 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation
of Non-GAAP Operating Income, Non-GAAP Net Income and Non-GAAP Net
Income per Diluted Share (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
|
|
(In thousands,
except per share data) |
|
(In thousands,
except per share data) |
|
GAAP Net income (loss) from operations |
|
$ |
17,104 |
|
|
$ |
6,161 |
|
|
$ |
66,533 |
|
|
$ |
(4,829 |
) |
|
|
Add
Back: |
|
|
|
|
|
|
|
|
|
|
Effect of
acquisition accounting on fair value of acquired deferred
revenue |
|
|
654 |
|
|
|
230 |
|
|
|
3,186 |
|
|
|
978 |
|
|
|
Stock-based
compensation expense |
|
|
15,688 |
|
|
|
17,611 |
|
|
|
48,820 |
|
|
|
50,845 |
|
|
|
Acquisition
related costs |
|
|
4,698 |
|
|
|
3,390 |
|
|
|
19,074 |
|
|
|
10,261 |
|
|
|
Restructuring charge |
|
|
- |
|
|
|
5,172 |
|
|
|
- |
|
|
|
14,602 |
|
|
|
Litigation
related expenses |
|
|
199 |
|
|
|
713 |
|
|
|
476 |
|
|
|
1,406 |
|
|
|
Amortization
of acquired intangibles |
|
|
62,484 |
|
|
|
60,227 |
|
|
|
183,086 |
|
|
|
181,124 |
|
|
|
Gain on
disposition of assets |
|
|
- |
|
|
|
- |
|
|
|
(33,910 |
) |
|
|
- |
|
|
|
Effect of
acquisition accounting on internally capitalized software
development costs |
|
|
(1,505 |
) |
|
|
- |
|
|
|
(7,636 |
) |
|
|
- |
|
|
Non-GAAP Operating income |
|
|
99,322 |
|
|
|
93,504 |
|
|
|
279,629 |
|
|
|
254,387 |
|
|
|
Interest and
other expense, net |
|
|
(1,817 |
) |
|
|
(1,569 |
) |
|
|
(3,281 |
) |
|
|
(5,129 |
) |
|
Non-GAAP Income before income taxes |
|
|
97,505 |
|
|
|
91,935 |
|
|
|
276,348 |
|
|
|
249,258 |
|
|
|
Non-GAAP
Provision for income taxes (1) |
|
|
(24,637 |
) |
|
|
(23,231 |
) |
|
|
(68,811 |
) |
|
|
(62,090 |
) |
|
Non-GAAP Net income |
|
$ |
72,868 |
|
|
$ |
68,704 |
|
|
$ |
207,537 |
|
|
$ |
187,168 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income per diluted share |
|
$ |
1.40 |
|
|
$ |
1.39 |
|
|
$ |
3.93 |
|
|
$ |
3.73 |
|
|
Diluted weighted average shares outstanding used in |
|
|
|
|
|
|
|
|
|
computing per share amounts |
|
|
52,066 |
|
|
|
49,368 |
|
|
|
52,829 |
|
|
|
50,198 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1 |
) |
The non-GAAP provision
for income taxes reported in the three and nine months ended
September 30, 2018 and 2019 excludes the tax impact of non-GAAP
items, and for the nine months ended September 30, 2018 excludes a
net discrete integration-related tax benefit of $2.0 million
as well as a net tax benefit of $2.9 million and $2.2 million in
the three and nine months ended September 30, 2018, respectively,
related to the enactment of the U.S. Tax Act. |
|
|
|
|
|
|
|
|
|
|
|
|
Calculation
of EBITDA and Adjusted EBITDA (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
|
|
(in
thousands) |
|
(in
thousands) |
|
GAAP Net income (loss) |
|
$ |
12,717 |
|
|
$ |
5,108 |
|
|
$ |
48,983 |
|
|
$ |
(10,453 |
) |
|
|
Add
Back: |
|
|
|
|
|
|
|
|
|
|
Interest and
other expense, net |
|
|
1,817 |
|
|
|
1,569 |
|
|
|
3,281 |
|
|
|
5,129 |
|
|
|
Income tax
provision (benefit) |
|
|
2,570 |
|
|
|
(516 |
) |
|
|
14,269 |
|
|
|
495 |
|
|
|
Amortization
of acquired intangibles |
|
|
62,484 |
|
|
|
60,227 |
|
|
|
183,086 |
|
|
|
181,124 |
|
|
|
Depreciation
and amortization expense |
|
|
14,337 |
|
|
|
15,795 |
|
|
|
40,096 |
|
|
|
47,231 |
|
|
EBITDA |
|
|
93,925 |
|
|
|
82,183 |
|
|
|
289,715 |
|
|
|
223,526 |
|
|
|
Add
Back: |
|
|
|
|
|
|
|
|
|
|
Effect of
acquisition accounting on fair value of acquired deferred
revenue |
|
|
654 |
|
|
|
230 |
|
|
|
3,186 |
|
|
|
978 |
|
|
|
Stock-based
compensation expense |
|
|
15,688 |
|
|
|
17,611 |
|
|
|
48,820 |
|
|
|
50,845 |
|
|
|
Gain on
disposition of assets |
|
|
- |
|
|
|
- |
|
|
|
(33,910 |
) |
|
|
- |
|
|
|
Acquisition
related costs |
|
|
4,698 |
|
|
|
3,390 |
|
|
|
19,074 |
|
|
|
10,261 |
|
|
|
Restructuring charge |
|
|
- |
|
|
|
5,172 |
|
|
|
- |
|
|
|
14,602 |
|
|
|
Litigation
related expenses |
|
|
199 |
|
|
|
713 |
|
|
|
476 |
|
|
|
1,406 |
|
|
Adjusted EBITDA |
|
$ |
115,164 |
|
|
$ |
109,299 |
|
|
$ |
327,361 |
|
|
$ |
301,618 |
|
|
|
EBITDA
Margin |
|
|
30.4 |
% |
|
|
25.9 |
% |
|
|
32.4 |
% |
|
|
23.8 |
% |
|
|
Adjusted
EBITDA Margin |
|
|
37.2 |
% |
|
|
34.5 |
% |
|
|
36.5 |
% |
|
|
32.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Calculation
of Adjusted Cash Flows from Operations and Adjusted Free Cash Flow
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
|
|
(in
thousands) |
|
(in
thousands) |
|
GAAP Cash flows from operations |
|
$ |
73,662 |
|
|
$ |
83,001 |
|
|
$ |
330,864 |
|
|
$ |
286,368 |
|
|
|
Add
Back: |
|
|
|
|
|
|
|
|
|
|
Litigation
related payments |
|
|
16 |
|
|
|
803 |
|
|
|
1,163 |
|
|
|
822 |
|
|
|
Acquisition
retention-based bonus |
|
|
2,486 |
|
|
|
1,355 |
|
|
|
3,143 |
|
|
|
6,581 |
|
|
|
Restructuring payments |
|
|
- |
|
|
|
2,449 |
|
|
|
- |
|
|
|
9,498 |
|
|
|
Partial tax
payment for gain on Xively disposition |
|
|
4,236 |
|
|
|
- |
|
|
|
4,236 |
|
|
|
- |
|
|
|
Transaction
related payments (acquisitions and dispositions) |
|
|
3,120 |
|
|
|
438 |
|
|
|
16,794 |
|
|
|
2,317 |
|
|
Adjusted cash flows from operations |
|
|
83,520 |
|
|
|
88,046 |
|
|
|
356,200 |
|
|
|
305,586 |
|
|
|
Purchases of
property and equipment |
|
|
(7,960 |
) |
|
|
(7,732 |
) |
|
|
(21,590 |
) |
|
|
(29,813 |
) |
|
|
Intangible
asset additions |
|
|
(8,276 |
) |
|
|
(10,676 |
) |
|
|
(26,138 |
) |
|
|
(29,421 |
) |
|
Adjusted Free Cash Flow |
|
$ |
67,284 |
|
|
$ |
69,638 |
|
|
$ |
308,472 |
|
|
$ |
246,352 |
|
|
|
GAAP Cash
flows from operations as a % of Non-GAAP Revenue |
|
|
23.8 |
% |
|
|
26.2 |
% |
|
|
36.9 |
% |
|
|
30.5 |
% |
|
|
Adjusted
Cash flows from operations as a % of Non-GAAP Revenue |
|
|
27.0 |
% |
|
|
27.8 |
% |
|
|
39.7 |
% |
|
|
32.6 |
% |
|
|
Adjusted
Free Cash Flow as a % of Non-GAAP Revenue |
|
|
21.7 |
% |
|
|
22.0 |
% |
|
|
34.4 |
% |
|
|
26.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Stock-Based
Compensation Expense (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
|
|
(in thousands) |
|
(in thousands) |
|
Cost of revenue |
|
$ |
1,278 |
|
|
$ |
1,309 |
|
|
$ |
3,755 |
|
|
$ |
3,590 |
|
|
Research and development (1) |
|
|
4,174 |
|
|
|
4,836 |
|
|
|
14,232 |
|
|
|
12,825 |
|
|
Sales and marketing (1) |
|
|
3,492 |
|
|
|
4,218 |
|
|
|
11,788 |
|
|
|
13,212 |
|
|
General and administrative |
|
|
6,744 |
|
|
|
7,248 |
|
|
|
19,045 |
|
|
|
21,218 |
|
|
Total stock based-compensation |
|
$ |
15,688 |
|
|
$ |
17,611 |
|
|
$ |
48,820 |
|
|
$ |
50,845 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1 |
) |
The stock-based compensation expense disclosure reported in the
table above for the nine months ended September 30, 2019 includes a
reclassification from research and development to sales and
marketing of $1.4 million ($0.630 million and $0.731 million for
the three months ended March 31, 2019 and June 30, 2019,
respectively). |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LogMeIn,
Inc. |
|
Calculation
of Projected 2019 Non-GAAP Revenue (unaudited) |
|
(In
millions) |
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Twelve
Months Ended |
|
|
|
|
December 31, 2019 |
|
December 31, 2019 |
|
|
|
|
|
|
|
|
GAAP Revenue |
|
$319 - $321 |
|
$1,257 - $1,259 |
|
Add Back: |
|
|
|
|
|
Effect of acquisition accounting on fair value of acquired
deferred revenue |
|
- |
|
1 |
|
Non-GAAP Revenue |
|
$319 - $321 |
|
$1,258 - $1,260 |
|
|
|
|
|
|
|
|
Calculation
of Projected 2019 Non-GAAP Net Income and Non-GAAP Net Income per
Diluted Share (unaudited) |
|
(In
millions, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Twelve
Months Ended |
|
|
|
|
December 31, 2019 |
|
December 31, 2019 |
|
|
|
|
|
|
|
|
GAAP Net income (loss) |
|
$8 - $9 |
|
$(3) - $(2) |
|
Add Back: |
|
|
|
|
|
Effect of acquisition accounting on fair value of acquired
deferred revenue |
|
- |
|
1 |
|
Stock-based compensation expense |
|
18 |
|
69 |
|
Acquisition and litigation related costs |
|
3 |
|
15 |
|
Restructuring charges |
|
- |
|
15 |
|
Amortization of acquired intangibles |
|
60 |
|
241 |
|
Income tax effect of non-GAAP items |
|
(21) |
|
(82) |
|
Non-GAAP Net income |
|
$68 - $69 |
|
$256 - $257 |
|
|
|
|
|
|
|
|
GAAP net income per diluted share, (loss) per share |
|
$0.15 - $0.17 |
|
$(0.06) -
$(0.04) |
|
Non-GAAP net income per diluted share |
|
$1.39 - $1.41 |
|
$5.12 - $5.14 |
|
Weighted average shares outstanding used in computing net loss per
share |
|
|
|
49.6 |
|
Diluted weighted average shares outstanding used in computing net
income per diluted share |
|
49.0 |
|
50.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation
of Projected 2019 EBITDA and Adjusted EBITDA
(unaudited) |
|
(In
millions) |
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Twelve
Months Ended |
|
|
|
|
December 31, 2019 |
|
December 31, 2019 |
|
|
|
|
|
|
|
|
GAAP Net
income (loss) |
|
|
$8 - $9 |
|
$(3) - $(2) |
|
Add Back: |
|
|
|
|
|
Interest and other (income) expense, net |
|
2 |
|
7 |
|
Income tax provision (benefit) |
|
3 |
|
4 |
|
Amortization of acquired intangibles |
|
60 |
|
241 |
|
Depreciation and amortization expense |
|
16 |
|
63 |
|
EBITDA |
|
$89 - $90 |
|
$312 - $313 |
|
Add Back: |
|
|
|
|
|
Effect of acquisition accounting on fair value of acquired
deferred revenue |
|
- |
|
1 |
|
Stock-based compensation expense |
|
18 |
|
69 |
|
Acquisition and litigation related costs |
|
3 |
|
15 |
|
Restructuring charges |
|
- |
|
15 |
|
Adjusted EBITDA |
|
$110 - $111 |
|
$412 -$413 |
|
EBITDA Margin |
|
28% |
|
25% |
|
Adjusted EBITDA Margin |
|
34.5% |
|
33% |
|
|
|
|
|
|
|
|
LogMeIn,
Inc. |
Condensed
Consolidated Statements of Cash Flows (unaudited |
(In
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
Cash flows from operating activities |
|
$ |
12,717 |
|
|
$ |
5,108 |
|
|
$ |
48,983 |
|
|
$ |
(10,453 |
) |
Net income (loss) |
|
|
|
|
|
|
|
|
Adjustments to reconcile net income (loss) to net cash |
|
|
|
|
|
|
|
|
provided by operating activities: |
|
|
|
|
|
|
|
|
Stock-based compensation |
|
|
15,688 |
|
|
|
17,611 |
|
|
|
48,820 |
|
|
|
50,845 |
|
Depreciation and amortization |
|
|
76,821 |
|
|
|
76,022 |
|
|
|
223,181 |
|
|
|
228,355 |
|
Gain on disposition of assets, excluding transaction
costs |
|
|
- |
|
|
|
- |
|
|
|
(36,281 |
) |
|
|
- |
|
Change in fair value of contingent consideration
liability |
|
|
- |
|
|
|
389 |
|
|
|
- |
|
|
|
581 |
|
Restructuring-related property and equipment charges |
|
|
- |
|
|
|
3,164 |
|
|
|
- |
|
|
|
3,164 |
|
Benefit from deferred income taxes |
|
|
(12,032 |
) |
|
|
(11,315 |
) |
|
|
(34,062 |
) |
|
|
(34,101 |
) |
Other, net |
|
|
489 |
|
|
|
335 |
|
|
|
1,282 |
|
|
|
1,274 |
|
Changes in assets and liabilities, excluding effect of
acquisitions and dispositions: |
|
|
|
|
|
|
Accounts receivable |
|
|
(6,429 |
) |
|
|
8,498 |
|
|
|
16,301 |
|
|
|
12,608 |
|
Prepaid expenses and other current assets |
|
|
518 |
|
|
|
(10,192 |
) |
|
|
8,474 |
|
|
|
(5,415 |
) |
Other assets |
|
|
(4,897 |
) |
|
|
(6,841 |
) |
|
|
(12,830 |
) |
|
|
(20,387 |
) |
Accounts payable |
|
|
2,072 |
|
|
|
5,944 |
|
|
|
13,575 |
|
|
|
21,451 |
|
Accrued liabilities |
|
|
(1,848 |
) |
|
|
7,920 |
|
|
|
21,113 |
|
|
|
24,146 |
|
Deferred revenue |
|
|
(7,752 |
) |
|
|
(12,586 |
) |
|
|
28,031 |
|
|
|
17,664 |
|
Other long-term liabilities |
|
|
(1,685 |
) |
|
|
(1,056 |
) |
|
|
4,277 |
|
|
|
(3,364 |
) |
Net cash provided by operating activities |
|
|
73,662 |
|
|
|
83,001 |
|
|
|
330,864 |
|
|
|
286,368 |
|
Cash flows from investing activities |
|
|
|
|
|
|
|
|
Purchases of property and equipment |
|
|
(7,960 |
) |
|
|
(7,732 |
) |
|
|
(21,590 |
) |
|
|
(29,813 |
) |
Intangible asset additions |
|
|
(8,276 |
) |
|
|
(10,676 |
) |
|
|
(26,138 |
) |
|
|
(29,421 |
) |
Acquisition of businesses, net of cash acquired |
|
|
1,279 |
|
|
|
- |
|
|
|
(342,072 |
) |
|
|
(22,463 |
) |
Proceeds from disposition of assets |
|
|
- |
|
|
|
7,500 |
|
|
|
42,394 |
|
|
|
7,500 |
|
Net cash provided by (used in) investing activities |
|
|
(14,957 |
) |
|
|
(10,908 |
) |
|
|
(347,406 |
) |
|
|
(74,197 |
) |
Cash flows from financing activities |
|
|
|
|
|
|
|
|
Borrowings (repayments) under credit facility |
|
|
- |
|
|
|
- |
|
|
|
200,000 |
|
|
|
- |
|
Proceeds from issuance of common stock upon option exercises |
|
|
2,809 |
|
|
|
51 |
|
|
|
3,831 |
|
|
|
133 |
|
Payments of withholding taxes in connection with restricted stock
unit vesting |
|
(1,536 |
) |
|
|
(792 |
) |
|
|
(29,490 |
) |
|
|
(18,468 |
) |
Payment of contingent consideration |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(1,857 |
) |
Dividends paid on common stock |
|
|
(15,523 |
) |
|
|
(16,037 |
) |
|
|
(46,900 |
) |
|
|
(48,736 |
) |
Purchase of treasury stock |
|
|
(75,127 |
) |
|
|
(44,956 |
) |
|
|
(190,230 |
) |
|
|
(169,188 |
) |
Net cash provided by (used in) financing activities |
|
|
(89,377 |
) |
|
|
(61,734 |
) |
|
|
(62,789 |
) |
|
|
(238,116 |
) |
Effect of exchange rate changes on cash, cash equivalents and
restricted cash |
|
|
(538 |
) |
|
|
(2,724 |
) |
|
|
(5,427 |
) |
|
|
(3,516 |
) |
Net increase (decrease) in cash, cash equivalents and restricted
cash |
|
|
(31,210 |
) |
|
|
7,635 |
|
|
|
(84,758 |
) |
|
|
(29,461 |
) |
Cash, cash equivalents and restricted cash, beginning of
period |
|
|
200,661 |
|
|
|
113,396 |
|
|
|
254,209 |
|
|
|
150,492 |
|
Cash, cash equivalents and restricted cash, end of period |
|
$ |
169,451 |
|
|
$ |
121,031 |
|
|
$ |
169,451 |
|
|
$ |
121,031 |
|
|
|
|
|
|
|
|
|
|
|
|
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