Mandiant, Inc. (NASDAQ: MNDT) today announced financial results
for the first quarter ended March 31, 2022. Unless otherwise noted,
all 2021 results in this release, including the financial tables
and reconciliations, reflect only continuing operations.
First Quarter 2022 Financial Highlights
- Revenue of $130 million, an increase of 13 percent from the
first quarter of 2021
- Annualized recurring revenue of $287 million, an increase of 22
percent from the end of the first quarter of 20211
- Deferred revenue of $400 million, an increase of 43 percent
from the end of the first quarter of 2021
- GAAP operating margin of negative 69 percent, compared to GAAP
operating margin of negative 64 percent in the first quarter of
2021
- Non-GAAP operating margin of negative 26 percent, compared to
non-GAAP operating margin of negative 24 percent in the first
quarter of 20212
- GAAP net loss per basic share attributable to common
stockholders of 42 cents, compared to GAAP net loss per basic share
attributable to common stockholders of 39 cents in the first
quarter of 2021
- Non-GAAP net loss per basic share attributable to common
stockholders of 15 cents, compared to non-GAAP net loss basic share
attributable to common stockholders of 13 cents in the first
quarter of 20212
1 Annualized recurring revenue is defined as the annualized
run-rate of active term licenses, subscriptions, and support
contracts at the end of a reporting period. 2 A reconciliation of
GAAP to non-GAAP financial measures is provided in the financial
statement tables included in this press release. An explanation of
these measures is also included under the heading “Non-GAAP
Financial Measures.”
Business Outlook and Conference Call
Given the announcement made on March 8, 2022, regarding the
company’s entry into a definitive agreement to be acquired by
Google LLC, Mandiant will not be providing financial guidance for
the second quarter of 2022 or updated financial guidance for the
full-year 2022. The company’s previously issued full-year 2022
financial guidance should no longer be relied upon.
Due to the pending transaction with Google LLC, Mandiant will
not host a conference call in conjunction with this release. For
further detail and discussion of the company’s financial
performance, please refer to the company’s upcoming quarterly
report on Form 10-Q for the first quarter ended March 31, 2022.
Non-GAAP Financial Measures
In this release Mandiant has provided financial information that
has not been prepared in accordance with generally accepted
accounting principles in the United States (GAAP). These non-GAAP
financial measures are not based on any standardized methodology
and are not necessarily comparable to similar measures used by
other companies. The company uses these non-GAAP financial measures
internally in analyzing its financial results and believes the use
of these non-GAAP financial measures is useful to investors as an
additional tool to evaluate ongoing operating results and trends,
and in comparing the company's financial results with other
companies in its industry, many of which present similar non-GAAP
financial measures.
Non-GAAP financial measures are not meant to be considered in
isolation or as a substitute for comparable financial information
prepared in accordance with GAAP and should be read only in
conjunction with the company's consolidated financial statements
prepared in accordance with GAAP. A reconciliation of the company's
non-GAAP financial measures to their most directly comparable GAAP
financial measures has been provided in the financial statement
tables included in this press release, and investors are encouraged
to review the reconciliation.
Non-GAAP gross margin. Mandiant defines non-GAAP gross margin as
total gross profit excluding stock-based compensation expense,
amortization of stock-based compensation expense capitalized in
software development costs, amortization of intangible assets, and,
as applicable, other special or non-recurring items, divided by
total revenue.
Non-GAAP operating income (loss) and non-GAAP operating margin.
Mandiant defines non-GAAP operating income (loss) as operating
income (loss) excluding stock-based compensation expense,
amortization of stock-based compensation expense capitalized in
software development costs, amortization of intangible assets,
acquisition-related expenses, transformation and transition
expense, restructuring charges, and other special or non-recurring
items. Mandiant defines non-GAAP operating margin as non-GAAP
operating income (loss) divided by total revenue.
Non-GAAP net loss attributable to common stockholders. Mandiant
defines non-GAAP net loss attributable to common stockholders as
net loss excluding stock-based compensation expense, amortization
of stock-based compensation expense capitalized in software
development costs, amortization of intangible assets,
acquisition-related expenses, transformation and transition
expense, restructuring charges, non-cash interest expense related
to the company’s convertible senior notes, discrete tax provision
(benefit), dividends on Series A convertible preferred stock,
accretion of Series A convertible preferred stock, and other
special or non-recurring items.
Non-GAAP net loss per basic share attributable to common
stockholders. Mandiant defines non-GAAP net loss per basic share
attributable to common stockholders as non-GAAP net loss
attributable to common stockholders divided by weighted average
basic shares outstanding, which excludes stock options, restricted
stock units, performance stock units, and shares issuable upon
conversion of the company's convertible senior notes and Series A
convertible preferred shares that are anti-dilutive.
Non-GAAP net loss attributable to common stockholders and
non-GAAP net loss per basic share attributable to common
stockholders in the first quarter 2022 excluded stock-based
compensation expense, amortization of stock-based compensation
expense capitalized in software development costs, amortization of
intangible assets, acquisition-related expenses, restructuring
charges, transformation and transition expense, non-cash interest
expense related to convertible senior notes issued in June 2015 and
the second quarter of 2018, and dividends on Series A convertible
preferred stock. Weighted average basic shares outstanding used to
calculate non-GAAP net loss per basic share attributable to common
stockholders excluded stock options, restricted stock units,
performance stock units, and shares issuable upon conversion of the
company's convertible senior notes and Series A convertible
preferred shares that were anti-dilutive.
Non-GAAP net loss attributable to common stockholders and
non-GAAP net loss per basic share attributable to common
stockholders in the first quarter 2021 excluded stock-based
compensation expense, amortization of stock-based compensation
expense capitalized in software development costs, amortization of
intangible assets, non-cash interest expense related to convertible
senior notes issued in June 2015 and the second quarter of 2018,
adjustment to provision from income taxes, dividends on Series A
convertible preferred stock, accretion of series A convertible
preferred stock and non-GAAP adjustments for discontinued
operations. Weighted average basic shares outstanding used to
calculate non-GAAP net loss per basic share attributable to common
stockholders excluded stock options, restricted stock units,
performance stock units, and shares issuable upon conversion of the
company's convertible senior notes that were anti-dilutive.
Mandiant considers these non-GAAP financial measures to be
useful metrics for management and investors because they exclude
the effect of stock-based compensation expense, amortization of
stock-based compensation expense capitalized in software
development costs, amortization of intangible assets, acquisition
related expenses, restructuring charges, transformation and
transition expense, non-cash interest expense related to
convertible senior notes issued in June 2015 and the second quarter
of 2018, dividends on Series A convertible preferred stock, and
other non-recurring and discrete items so that management and
investors can compare the company's core business operating results
over multiple periods.
There are a number of limitations related to the use of these
non-GAAP financial measures versus their nearest GAAP equivalents.
First, these non-GAAP financial measures exclude stock-based
compensation expense. Stock-based compensation is an important part
of Mandiant employees' overall compensation and has been, and will
continue to be for the foreseeable future, a significant recurring
expense in the company's business. Second, the components of the
costs that Mandiant excludes in its calculation of these non-GAAP
financial measures, including not only stock-based compensation,
but also amortization of stock-based compensation expense
capitalized in software development costs, non-recurring or
non-operating items such as amortization of intangible assets,
acquisition related expenses, restructuring charges, non-cash
interest expense related to the company’s convertible senior notes,
and dividends on Series A convertible preferred stock, may differ
from the components excluded by peer companies when they report
their non-GAAP results of operations. Mandiant compensates for
these limitations by providing specific information regarding the
GAAP amounts excluded from non-GAAP financial measures and
evaluating non-GAAP financial measures together with their nearest
GAAP equivalents.
About Mandiant, Inc.
Since 2004, Mandiant® has been a trusted partner to
security-conscious organizations. Effective security is based on
the right combination of expertise, intelligence, and adaptive
technology, and the Mandiant Advantage SaaS platform scales decades
of frontline experience and industry-leading threat intelligence to
deliver a range of dynamic cyber defense solutions. Mandiant’s
approach helps organizations develop more effective and efficient
cyber security programs and instills confidence in their readiness
to defend against and respond to cyber threats.
© 2022 Mandiant, Inc. All rights reserved. Mandiant is a
registered trademark of Mandiant, Inc. in the United States and
other countries. All other brands, products, or service names are
or may be trademarks or service marks of their respective
owners.
Mandiant, Inc.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited, in
thousands)
March 31, 2022
December 31, 2021
Assets
Current assets:
Cash and cash equivalents
$
771,967
$
1,154,458
Short-term investments
1,359,105
1,039,339
Accounts receivable, net
104,066
146,460
Prepaid expenses and other current
assets
76,145
73,079
Total current assets
2,311,283
2,413,336
Property and equipment, net
52,790
46,329
Operating lease right-of-use assets,
net
28,462
25,768
Goodwill
1,060,023
1,060,023
Intangible assets, net
70,818
79,511
Deposits and other long-term assets
25,021
26,220
Total Assets
$
3,548,397
$
3,651,187
Liabilities, Convertible preferred stock
and Stockholders' equity
Current Liabilities:
Accounts payable
$
25,779
$
32,585
Operating lease liabilities, current
14,928
13,306
Accrued and other current liabilities
102,555
105,886
Accrued compensation
52,743
71,660
Convertible senior notes, current, net
459,717
451,030
Deferred revenue, current
302,857
307,611
Total current liabilities
958,579
982,078
Convertible senior notes, non-current,
net
617,775
556,240
Deferred revenue, non-current
97,132
102,717
Operating lease liabilities,
non-current
53,993
52,132
Other long-term liabilities
7,366
7,376
Total liabilities
1,734,845
1,700,543
Commitments and contingencies:
Series A convertible preferred stock
424,122
419,404
Stockholders' equity:
Common stock
23
23
Additional paid-in capital
3,271,041
3,511,444
Treasury stock
(80,000
)
(80,000
)
Accumulated other comprehensive income
(13,873
)
(2,172
)
Accumulated deficit
(1,787,761
)
(1,898,055
)
Total stockholders’ equity
1,389,430
1,531,240
Total Liabilities, Convertible preferred
stock and Stockholders' equity
$
3,548,397
$
3,651,187
Mandiant, Inc.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited, in thousands,
except per share amounts)
Three Months Ended March
31,
2022
2021
Revenue:
Platform, cloud subscription and managed
services
$
57,629
$
55,999
Professional services
72,515
58,689
Total revenue
130,144
114,688
Cost of revenue: (1)(2)
Platform, cloud subscription and managed
services
30,121
26,613
Professional services
42,081
32,472
Total cost of revenue
72,202
59,085
Total gross profit
57,942
55,603
Operating expenses:
Research and development (1)(3)(10)
44,461
41,905
Sales and marketing (1)(2)
69,409
61,213
General and administrative (1)(4)(10)
32,413
25,351
Restructuring charges (5)
1,040
—
Total operating expenses
147,323
128,469
Operating loss
(89,381
)
(72,866
)
Other expense, net (6)
(1,844
)
(12,409
)
Loss before income taxes from continuing
operations before income taxes
(91,225
)
(85,275
)
Provision for income taxes (7)
789
1,180
Loss from continuing operations
(92,014
)
(86,455
)
Net income from discontinued operations,
net of income taxes (11)
—
35,809
Net loss
$
(92,014
)
$
(50,646
)
Dividend on series A convertible preferred
stock (8)
(4,718
)
(4,512
)
Accretion of series A convertible
preferred stock (9)
—
(82
)
Net income (loss) attributable to common
stockholders
$
(96,732
)
$
(55,240
)
Net income (loss) per share
attributable to common stockholders, basic and diluted:
Continuing operations
$
(0.42
)
$
(0.39
)
Discontinued operations
—
0.15
Net loss per share attributable to common
stockholders, basic and diluted
$
(0.42
)
$
(0.24
)
Weighted average shares used in computing
net income (loss) per share, basic and diluted
230,584
234,740
Mandiant, Inc.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited, in
thousands)
Three Months Ended March
31,
2022
2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss from continuing operations
$
(92,014
)
$
(86,455
)
Adjustments to reconcile net loss from
continuing operations to net cash used in continuing operating
activities:
Depreciation and amortization
17,505
23,770
Stock-based compensation
38,310
33,401
Non-cash interest expense related to
convertible senior notes
1,074
11,384
Deferred income taxes
62
(126
)
Loss (gain) on disposal of property and
equipment
21
(103
)
Other
354
37
Changes in operating assets and
liabilities, net of assets acquired and liabilities assumed in
business acquisitions:
Accounts receivable
42,104
13,409
Prepaid expenses and other assets
(1,375
)
4,528
Accounts payable
4,173
5,314
Accrued liabilities
(1,721
)
2,730
Accrued compensation
(18,918
)
(12,389
)
Deferred revenue
(10,339
)
(3,963
)
Other long-term liabilities
(2,571
)
(7,109
)
Net cash used in operating activities -
continuing operations
(23,335
)
(15,572
)
Net cash provided by operating activities
- discontinued operations
—
36,433
Net cash provided by (used in) operating
activities
(23,335
)
20,861
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment and
demonstration units
(9,002
)
(5,627
)
Purchases of short-term investments
(441,153
)
(339,801
)
Proceeds from maturities of short-term
investments
107,226
176,755
Business acquisitions, net of cash
acquired
—
49
FireEye Products business sale transaction
costs
(735
)
—
Lease deposits
307
457
Net cash used in investing activities -
continuing operations
(343,357
)
(168,167
)
Net cash used in investing activities -
discontinued operations
—
(4,392
)
Net cash used in investing activities
(343,357
)
(172,559
)
CASH FLOWS FROM FINANCING ACTIVITIES:
Settlement of share repurchases
(11,483
)
—
Series A convertible preferred stock
issuance costs
—
(82
)
Payment related to shares withheld for
taxes
(5,834
)
(8,798
)
Proceeds from exercise of equity
awards
1,518
1,097
Net cash used in financing activities
(15,799
)
(7,783
)
Net change in cash and cash
equivalents
(382,491
)
(159,481
)
Cash and cash equivalents, beginning of
period
1,154,458
673,234
Cash and cash equivalents held for sale,
beginning of period
—
3,220
Cash and cash equivalents held for sale,
end of period
—
(3,220
)
Cash and cash equivalents, end of
period
$
771,967
$
513,753
Mandiant, Inc.
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES
(Unaudited, in thousands,
except per share amounts)
Three Months Ended March
31,
2022
2021
GAAP operating loss
$
(89,381
)
$
(72,866
)
Stock-based compensation expense (1)
38,310
33,401
Amortization of stock-based compensation
capitalized in software development costs (3)
668
534
Amortization of intangible assets (2)
8,693
11,110
Transformation and transition expense
(10)
6,108
—
Acquisition related expenses (4)
500
—
Restructuring charges (5)
1,040
—
Non-GAAP operating income (loss)
$
(34,062
)
$
(27,821
)
GAAP gross margin
45
%
48
%
Stock-based compensation expense (1)
8
%
7
%
Amortization of stock-based compensation
capitalized in software development costs (3)
—
%
—
%
Amortization of intangible assets (2)
5
%
7
%
Non-GAAP gross margin
58
%
62
%
GAAP operating margin
(69
)%
(64
)%
Stock-based compensation expense (1)
29
%
29
%
Amortization of stock-based compensation
capitalized in software development costs (3)
1
%
1
%
Amortization of intangible assets (2)
7
%
10
%
Transformation and transition expense
(10)
5
%
—
%
Restructuring charges (5)
1
%
—
%
Non-GAAP operating margin
(26
)%
(24
)%
GAAP net loss attributable to common
stockholders
$
(96,732
)
$
(55,240
)
Continuing operations:
Stock-based compensation expense (1)
38,310
33,401
Amortization of stock-based compensation
capitalized in software development costs (3)
668
534
Amortization of intangible assets (2)
8,693
11,110
Acquisition related expenses (4)
500
—
Restructuring charges (5)
1,040
—
Non-cash interest expense related to
convertible senior notes (6)
1,074
11,384
Adjustment to provision (benefit) from
income taxes (7)
—
200
Dividend on series A convertible preferred
stock (8)
4,718
4,512
Accretion of series A convertible
preferred stock (9)
—
82
Transformation and transition expense
(10)
6,108
—
Discontinued operations:
Non-GAAP adjustments for discontinued
operations (11)
—
16,299
Non-GAAP net income (loss) attributable to
common stockholders
$
(35,621
)
$
22,282
GAAP net income (loss) per share
attributable to common stockholders, basic and diluted
$
(0.42
)
$
(0.24
)
Continuing operations:
Stock-based compensation expense (1)
0.17
0.14
Amortization of stock-based compensation
capitalized in software development costs (3)
—
—
Amortization of intangible assets (2)
0.05
0.05
Acquisition related expenses (4)
—
—
Restructuring charges (5)
—
—
Non-cash interest expense related to
convertible senior notes (6)
—
0.05
Adjustment to provision (benefit) from
income taxes (7)
—
—
Dividend on series A convertible preferred
stock (8)
0.02
0.02
Accretion of series A convertible
preferred stock (9)
—
—
Transformation and transition expense
(10)
0.03
—
Discontinued operations:
Non-GAAP adjustments for discontinued
operations (11)
—
0.07
Non-GAAP net income (loss) per share
attributable to common stockholders, basic and diluted
$
(0.15
)
$
0.09
Weighted average shares used in per share
calculation for GAAP, basic and diluted
230,584
234,740
(1) Includes stock-based compensation
expense as follows:
Cost of platform, cloud subscription and
managed services revenue
$
3,616
$
2,814
Cost of professional services revenue
7,339
5,186
Research and development expense
9,194
8,423
Sales and marketing expense
10,631
9,890
General and administrative expense
7,530
7,088
Total stock-based compensation expense
$
38,310
$
33,401
(2) Includes amortization of intangible
assets as follows:
Cost of platform, cloud subscription and
managed services revenue
$
6,764
$
7,112
Sales and marketing expense
1,929
3,998
Total amortization of intangible
assets
$
8,693
$
11,110
(3) Includes amortization of stock-based
compensation capitalized in software development costs as
follows:
Research and development expense
668
534
Total amortization of stock-based
compensation capitalized in software development costs
$
668
$
534
(4) Includes acquisition related expenses
as follows:
General and administrative expense
$
500
$
—
(5) Includes restructuring charges as
follows:
Restructuring charges
$
1,040
$
—
(6) Includes non-cash interest expense
related to convertible senior notes as follows:
Other income, net
$
1,074
$
11,384
(7) Includes income tax effect of non-GAAP
adjustments as follows:
Adjustment to provision (benefit) from
income taxes
$
—
$
200
(8) Dividend on series A convertible
preferred stock
$
4,718
$
4,512
(9) Accretion of series A convertible
preferred stock
$
—
$
82
(10) Includes transformation and
transition expense as follows:
Research and development expense
$
672
$
—
General and administrative expense
5,436
—
Total transformation and transition
expense
$
6,108
$
—
(11) Includes non-GAAP adjustments for
discontinued operations as follows:
Stock-based compensation expense
$
—
$
12,366
Amortization of intangibles
—
735
Amortization of stock-based compensation
capitalized in software development costs
—
538
Divestiture related costs
—
2,660
$
—
$
16,299
Mandiant, Inc.
SUMMARY OF CONTINUING
OPERATIONS, DISCONTINUED OPERATIONS, AND COMBINED
OPERATIONS
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES
(Unaudited, in thousands,
except per share amounts)
Three Months Ended March 31,
2021
Continuing
Discontinued
Combined
Revenue
$
114,688
$
131,659
$
246,347
Cost of revenue
59,085
27,801
86,886
Total gross profit
55,603
103,858
159,461
Research and development
41,905
27,420
69,325
Sales and marketing
61,213
37,644
98,857
General and administrative
25,351
2,660
28,011
GAAP operating income (loss)
(72,866
)
36,134
(36,732
)
Non-GAAP adjustments
45,045
16,298
61,343
Non-GAAP operating income (loss)
$
(27,821
)
$
52,432
$
24,611
Other income and expense, provision for
income tax & dividends on series A convertible preferred
stock
$
(18,183
)
$
(325
)
$
(18,508
)
Net loss attributable to common
stockholders
$
(91,049
)
$
35,809
$
(55,240
)
GAAP operating margin
(64
)%
28
%
(15
)%
Non-GAAP adjustments related to operating
income (loss)
40
%
12
%
25
%
Non-GAAP operating margin
(24
)%
40
%
10
%
Non-GAAP Adjustments:
Stock-based compensation expense
$
33,401
$
12,366
$
45,767
Amortization of intangible assets
11,110
735
11,845
Amortization of stock-based compensation
capitalized in software development costs
534
538
1,072
Divestiture related costs
—
2,660
2,660
Non-GAAP adjustments related to operating
income (loss)
$
45,045
$
16,299
$
61,344
Non-cash interest expense related to
convertible senior notes
$
11,384
$
—
$
11,384
Dividend on series A convertible preferred
stock
4,512
—
4,512
Accretion of series A convertible
preferred stock
82
—
82
Adjustment to provision (benefit) from
income taxes
200
—
200
Non-GAAP adjustments below operating
income (loss)
$
16,178
$
—
$
16,178
Total non-GAAP adjustments
$
61,223
$
16,299
$
77,522
GAAP net income (loss) per share
attributable to common stockholders, basic
$
(0.39
)
$
0.15
$
(0.24
)
Non-GAAP net income (loss) per share
attributable to common stockholders, basic
$
(0.13
)
$
0.22
$
0.09
Weighted average shares used in per share
calculation for non-GAAP, basic
234,740
234,740
234,740
Three Months Ended March
31,
2022
2021
Loss from continuing operations
$
(92,014
)
$
(86,455
)
Dividend on series A convertible preferred
stock
(4,718
)
(4,512
)
Accretion of series A convertible
preferred stock
—
(82
)
Net loss attributable to common
stockholders
(96,732
)
(91,049
)
Total Non-GAAP Adjustments
61,111
61,223
Non-GAAP net loss attributable to common
stockholders,
(35,621
)
(29,826
)
Net loss per share attributable to common
stockholders, basic and diluted
$
(0.42
)
$
(0.39
)
Non-GAAP net loss per share attributable
to common stockholders, basic and diluted
$
(0.15
)
$
(0.13
)
Weighted average shares used in per share
calculation for GAAP, basic and diluted
230,584
234,740
Weighted average shares used in per share
calculation for Non-GAAP, basic and diluted
230,584
234,740
Mandiant, Inc.
RECONCILIATION OF NON-GAAP
BILLINGS TO REVENUE
(Unaudited, in
thousands)
Three Months Ended March
31,
2022
2021
Revenue
$
130,144
$
114,688
Add: deferred revenue, end of period
399,989
280,291
Less: deferred revenue, beginning of
period
(410,328
)
(284,253
)
Billings (non-GAAP)
$
119,805
$
110,726
Mandiant, Inc.
BILLINGS BREAKOUT
(Unaudited, in
thousands)
Three Months Ended March
31,
2022
2021
Platform, cloud subscription and managed
services billings
$
50,213
$
52,335
Professional services billings
69,592
58,391
Billings (non-GAAP)
$
119,805
$
110,726
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220503006228/en/
Media Inquiries: Media.Relations@mandiant.com
Investor Inquiries: Investor.Relations@mandiant.com
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