Intralinks Holdings, Inc. (NYSE:IL), a leading, global SaaS
provider of secure content collaboration solutions, today announced
its results for the second quarter ended June 30, 2016.
"Our second quarter results demonstrate the successful execution
of our strategy across the company," said Ron Hovsepian,
Intralinks’ president and chief executive officer. "In our M&A
use case, deal count and new business reached all-time highs and we
continued to gain market share. In our Enterprise business, we
continued to gain traction with our largest clients, retention
rates remained high and we meaningfully expanded existing
relationships as our clients increased their number of users and
use cases. Also, our ongoing investment in sales capacity delivered
important new customer wins during the quarter. We are well
positioned to grow our business while continuing our actions to
increase profit margins and free cash flow in the second half of
this year and beyond."
Second Quarter 2016 Financial Highlights
- Revenue was $73.0 million, compared to
$69.0 million in the second quarter of 2015, an increase of 6%, or
7% in constant currency.
- Enterprise revenue was $29.0 million,
compared to $26.6 million in the second quarter of 2015, an
increase of 9%, or 10% in constant currency.
- M&A revenue was $36.8 million,
compared to $34.7 million in the second quarter of 2015, an
increase of 6%, or 7% in constant currency.
- DCM revenue was $7.1 million, compared
to $7.7 million in the second quarter of 2015, a decrease of 8% in
both actual and constant currency.
- GAAP operating loss was $4.4 million,
compared to $7.4 million in the second quarter of 2015. Non-GAAP
adjusted operating income was $4.5 million, compared to $1.6
million in the second quarter of 2015.
- GAAP operating margin was (6.0)%
compared to (10.7)% in the second quarter of 2015, an improvement
of 470 basis points. Non-GAAP adjusted operating margin was 6.1%
compared to 2.3% in the second quarter of 2015, an increase of 380
basis points.
- General and administrative expense in
the second quarter of 2016 declined both as a percentage of revenue
and in absolute dollars as cost reduction initiatives produced
results. This was the lowest level of G&A expense as a
percentage of revenue in nearly three years.
- Net cash from operations in the first
half of 2016 was $12.7 million, compared to $8.0 million in the
first half of 2015, an increase of nearly 60%.
- During the quarter, Intralinks
repurchased approximately 1.1 million shares of its common stock at
a total cost of $8.8 million.
Business Highlights
- Grew quota-bearing sales capacity by
approximately 22% since December 31, 2015.
- Continued to expand relationships with
our existing Intralinks VIA customers with nearly half of our top
25 customers spending more with us this quarter than they were a
year ago.
- Signed important deals during the
quarter with several customers from our four target industries:
financial services, life sciences, energy and IP-intensive
manufacturing including agreements with one of the world's largest
wealth management firms, a large biotech firm and a large
government contractor.
- Grew the number of active Intralinks
Dealspace customers by 10% and number of new projects by 11%
year-over-year.
Business Outlook
Commenting on the company's outlook, Chris Lafond, Intralinks'
chief financial officer said, "Our efforts to expand profit margins
and increase free cash flow are progressing faster than we
originally planned for this year and we are accelerating our
efforts to rationalize our cost structure. As a result, we have
increased our non-GAAP adjusted operating margin guidance for the
year to 8%. In addition, we see further near-term margin expansion
that would drive non-GAAP adjusted operating margin to the 12% to
14% range in 2017, which puts us on track to deliver our 20%
target. We expect to accomplish this while still driving
double-digit revenue growth."
Based on information available as of August 3, 2016, Intralinks
is providing guidance for 2016 as follows:
Third Quarter 2016
Revenue: $75.0 million to $76.0 million
GAAP operating loss: $(3.1) million to $(2.6) million
Non-GAAP adjusted operating income: $6.0 million to $6.5
million
GAAP net loss per share: $(0.10) to $(0.08)
Non-GAAP adjusted net income per share: $0.05 to $0.06
Full Year 2016
Revenue: $300.0 million to $306.0 million
GAAP operating loss: $(12.1) million to $(10.6) million
Non-GAAP adjusted operating income: $23.5 million to $25.0
million
GAAP net loss per share: $(0.36) to $(0.33)
Non-GAAP adjusted net income per share: $0.20 to $0.21
Our full-year guidance above is based on foreign currency
exchange rates as of January 2016. Excluding the impact of
fluctuations in foreign currency exchange rates, our full-year
guidance reflects 10% to 12% revenue growth.
Quarterly Conference Call
Intralinks will host a conference call today at 4:30 p.m.
Eastern Time (ET) to discuss the company's second quarter 2016
financial results and 2016 business outlook. To access this call,
dial 888-348-8637 (domestic) or 412-902-4244 (international). A
passcode is not required. This presentation will also be webcast
live on the investor relations section on the Intralinks website at
www.Intralinks.com/ir.
Following the conference call, a replay will be available until
August 10, 2016 at 877-870-5176 (domestic) or 858-384-5517
(international). The passcode for the replay is 10090130. An
archived webcast of this conference call will also be available on
the investor relations section on the Intralinks website at
www.Intralinks.com/ir.
About Intralinks
Intralinks Holdings, Inc. (NYSE: IL) is a global content
collaboration company that provides cloud-based solutions to
control the sharing, distribution and management of high value
content within and across organizations according to the
highest-level of security and the most stringent compliance
regulations. Over 90,000 clients, 99% of the Fortune 1000
companies, have depended on Intralinks to digitally transform and
simplify critical business processes, and secure high-value
information. With a 20-year track record of enabling high-stakes
transactions and business collaborations valued at more than $31.3
trillion, Intralinks is a trusted provider of easy-to-use,
enterprise strength, cloud-based collaboration technology. For more
information, visit www.intralinks.com.
Non-GAAP Financial Measures
This press release includes certain financial measures that are
not prepared in accordance with generally accepted accounting
principles in the United States (“GAAP” or “U.S. GAAP”). Our
definitions of these non-GAAP financial measures may differ from
the definitions used by other companies, including peer companies,
and therefore comparability may be limited. These non-GAAP measures
should be considered in addition to the company's results prepared
in accordance with U.S. GAAP and should not be considered
substitutes for or superior to the company's U.S. GAAP results. We
endeavor to compensate for the limitations of the non-GAAP measures
presented in this release by providing the comparable GAAP measures
with equal or greater prominence. We encourage investors to examine
the reconciling adjustments between the GAAP and non-GAAP measures,
which are included in this release.
Management defines its non-GAAP financial measures as
follows:
- Non-GAAP adjusted operating income
represents the corresponding GAAP measure adjusted to exclude, if
applicable: (1) amortization of intangible assets, (2) stock-based
compensation expense and (3) impairment charges or asset
write-offs.
- Non-GAAP adjusted net income represents
the corresponding GAAP measure adjusted to exclude, if applicable:
(1) amortization of intangible assets, (2) stock-based compensation
expense and (3) impairment charges or asset write-offs. The income
tax expense included in non-GAAP adjusted net income is calculated
using an estimated long-term effective tax rate.
- Non-GAAP adjusted net income per share
represents non-GAAP adjusted net income (which is defined above)
divided by fully diluted weighted average shares outstanding.
- Free cash flow represents net cash
provided by operating activities less capitalized software
development costs and capital expenditures.
- The Company refers to growth rates at
constant currency so that the results can be viewed without the
impact of fluctuations in foreign currency exchange rates to
facilitate comparisons of the Company's performance from one period
to another. Constant currency for revenue is calculated by
retranslating current and prior period revenue at a consistent
rate.
Management believes that these non-GAAP financial measures, when
viewed with our results under U.S. GAAP and the accompanying
reconciliations, provide useful information about our
period-over-period growth and provide additional information that
is useful for evaluating our operating performance. In addition,
free cash flow provides management with useful information for
managing the cash needs of our business. Management also believes
that these non-GAAP financial measures provide a more meaningful
comparison of our operating results against those of other
companies in our industry, as well as on a period-over-period
basis, because these measures exclude items that are not
representative of our operating performance, such as amortization
of intangible assets and stock-based compensation expense.
Reconciliations of GAAP to Non-GAAP financial measures are
included in this press release.
Forward Looking Statements
This press release contains forward-looking statements that are
made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. This press release
contains expressed or implied forward-looking statements that are
not based on historical information relating to, among other
things, expectations and assumptions concerning management's
forecast of financial performance, future business growth, and
management's plans, objectives, opportunities and strategies. These
statements are neither promises nor guarantees, but are subject to
a variety of risks and uncertainties, many of which are beyond our
control, which could cause actual results to differ materially from
those contemplated in these forward-looking statements. In
particular, the risks and uncertainties include, among other
things: the uncertainty of our future profitability; our ability to
sustain positive cash flow or to attain our business objectives;
periodic fluctuations in our operating results; when and on what
terms we enter into contracts with customers subscribing to the
Intralinks service and the impact thereof on the amount of our
annualized recurring revenue at any point in time; fluctuations in
currency exchange rates; our ability to manage our expected growth;
risks related to our substantial debt balances and our ability to
generate or obtain sufficient capital to service our debt and fund
our business; our ability to maintain the security and integrity of
our systems; risks associated with the privacy and protection of
information in our possession; our ability to increase our
penetration in our principal existing markets and expand into
additional markets; our ability to expand into new geographic
markets; delays in market adoption and penetration of our products
and services; difficulties developing, integrating and introducing
new products and services; our dependence on the volume of
financial and strategic business transactions; our dependence on
customer referrals and relationships; our ability to maintain and
expand our direct sales capabilities; our ability to develop and
maintain strategic relationships to sell and deliver our solutions;
customer renewal rates and attrition; our ability to maintain the
compatibility of our services with third-party applications;
competition and our ability to maintain our average sales prices;
our ability to adapt to changing technologies; interruptions or
delays in our service; international risks; uncertainties
surrounding domestic and global economic conditions; our ability to
protect our intellectual property; costs of being a public company;
and risks related to changes in laws, regulations or governmental
policy, including data privacy and tax regulations. Further
information on these and other factors that could affect our
financial and other results is contained in our public filings with
the Securities and Exchange Commission from time to time, including
our Annual Report on Form 10-K for the year ended December 31, 2015
and subsequent quarterly reports. Existing and prospective
investors are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date
hereof.
Intralinks undertakes no obligation to update or revise the
information contained in this press release, whether as a result of
new information, future events or circumstances or otherwise.
“Intralinks,” “Intralinks VIA” and the Intralinks stylized logo
are registered trademarks of Intralinks, Inc. © 2016 Intralinks,
Inc.
Intralinks Holdings, Inc.
Consolidated Balance Sheets
(In Thousands, Except Share
Data)
(unaudited)
June 30, 2016 December 31, 2015
ASSETS Current assets: Cash and cash equivalents $ 38,367 $ 47,875
Investments 1,100 12,425 Accounts receivable, net of allowances of
$5,269 and $4,265, respectively 53,654 50,360 Prepaid expenses
7,444 8,595 Other current assets 2,733 3,399 Total
current assets 103,298 122,654 Fixed assets, net 17,519 20,789
Capitalized software, net 50,510 46,636 Goodwill 229,848 224,383
Other intangibles, net 27,629 38,106 Other non-current assets 5,819
7,619 Total assets $ 434,623 $ 460,187
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts
payable $ 6,398 $ 10,094 Current portion of long-term debt, net of
debt issuance costs 1,869 1,829 Deferred revenue 56,041 52,005
Accrued expenses and other current liabilities 23,824 29,856
Total current liabilities 88,132 93,784 Long-term debt, net
of debt issuance costs 78,590 79,457 Other long-term liabilities
4,681 4,795 Commitments and contingencies Stockholders' equity:
Undesignated preferred stock, $0.001 par
value; 10,000,000 shares authorized; 0 sharesissued and
outstanding, respectively
— —
Common stock, $0.001 par value; authorized
300,000,000 shares; issued 58,723,802and 58,434,464 shares;
outstanding 57,314,168 and 58,434,464 shares, respectively
59 58 Additional paid-in capital 461,390 456,141 Accumulated
deficit (182,438 ) (169,594 ) Accumulated other comprehensive loss
(4,302 ) (4,454 ) Treasury stock, 1,409,634 and 0 shares of common
stock at cost, respectively (11,489 ) — Total stockholders'
equity 263,220 282,151 Total liabilities and
stockholders' equity $ 434,623 $ 460,187
Intralinks Holdings, Inc.
Consolidated Statements of
Operations
(In Thousands, Except Share and Per
Share Data)
(unaudited)
Three months ended June 30, Six months ended June
30, 2016 2015 2016
2015 Revenue $ 72,951 $ 68,975 $ 143,674 $ 135,281 Cost of
revenue 19,733 19,332 39,606 37,885
Gross profit 53,218 49,643 104,068 97,396 Operating expenses: Sales
and marketing 32,986 32,198 63,339 62,170 General and
administrative 17,253 18,605 35,181 36,754 Product development
7,380 6,215 13,970 12,248 Total
operating expenses 57,619 57,018 112,490
111,172 Loss from operations (4,401 ) (7,375 ) (8,422 )
(13,776 ) Interest expense 1,133 1,069 2,250 2,199 Amortization of
debt issuance costs 143 143 286 286 Other expense (income), net
1,655 (658 ) 1,112 838 Net loss before income
tax (7,332 ) (7,929 ) (12,070 ) (17,099 ) Income tax expense 639
562 774 744 Net loss $ (7,971 ) $
(8,491 ) $ (12,844 ) $ (17,843 ) Net loss per common share: Basic $
(0.14 ) $ (0.15 ) $ (0.22 ) $ (0.31 ) Diluted $ (0.14 ) $ (0.15 ) $
(0.22 ) $ (0.31 ) Weighted average number of shares: Basic
57,141,105 56,862,896 57,499,081 56,728,439
Diluted 57,141,105 56,862,896 57,499,081
56,728,439
Intralinks Holdings, Inc.
Consolidated Statements of Cash
Flows
(In Thousands)
(unaudited)
Six months ended June 30, 2016
2015 Cash flows from operating activities: Net loss $
(12,844 ) $ (17,843 ) Adjustments to reconcile net loss to net cash
provided by operating activities: Depreciation and amortization
13,163 13,561 Amortization of intangible assets 12,077 11,975
Stock-based compensation expense 5,404 5,864 Other, net 3,199 1,664
Changes in operating assets and liabilities: Accounts receivable
(5,024 ) (7,630 ) Prepaid expenses and other assets 2,107 1,168
Accounts payable (2,703 ) 502 Accrued expenses and other
liabilities (6,164 ) (3,495 ) Deferred revenue 3,453 2,184
Net cash provided by operating activities 12,668
7,950
Cash flows from investing activities:
Capitalized software development costs (13,429 ) (11,212 ) Capital
expenditures (1,164 ) (2,780 ) Maturities of investments 11,284
5,550 Acquisition, net of cash acquired (6,334 ) — Purchase of a
cost method investment — (1,000 ) Net cash used in investing
activities (9,643 ) (9,442 )
Cash flows from financing
activities: Purchases of treasury stock (11,489 ) — Payments on
long-term debt (1,148 ) (400 ) Other (154 ) (271 ) Net cash used in
financing activities (12,791 ) (671 ) Effect of foreign exchange
rate changes on cash and cash equivalents 258 (475 ) Net
decrease in cash and cash equivalents (9,508 ) (2,638 ) Cash and
cash equivalents at beginning of period 47,875 40,682
Cash and cash equivalents at end of period $ 38,367 $ 38,044
Intralinks Holdings, Inc.
Reconciliation of GAAP to Non-GAAP
Financial Measures
(In Thousands)
(unaudited)
Three Months Ended June 30, Six Months Ended June
30, 2016 2015 2016
2015 Loss from operations $ (4,401 ) $ (7,375 ) $ (8,422 ) $
(13,776 ) Amortization of intangible assets 6,095 5,988 12,077
11,975 Stock-based compensation expense 2,789 2,980
5,404 5,864 Non-GAAP adjusted operating income $
4,483 $ 1,593 $ 9,059 $ 4,063
Net loss $ (7,971 ) $ (8,491 ) $ (12,844 ) $ (17,843 ) Amortization
of intangible assets 6,095 5,988 12,077 11,975 Stock-based
compensation expense 2,789 2,980 5,404 5,864 Impairment of cost
method investment 1,500 — 1,500 — Income tax expense 639 562
774 744 Non-GAAP adjusted net income before
tax 3,052 1,039 6,911 740 Non-GAAP income tax expense 1,160
395 2,627 281 Non-GAAP adjusted net income $
1,892 $ 644 $ 4,284 $ 459 Net
cash provided by operating activities $ 18,005 $ 16,122 $ 12,668 $
7,950 Capitalized software development costs (6,771 ) (6,109 )
(13,429 ) (11,212 ) Capital expenditures (8 ) (2,347 ) (1,164 )
(2,780 ) Free cash flow $ 11,226 $ 7,666 $ (1,925 ) $
(6,042 )
Intralinks Holdings, Inc.
Reconciliation of GAAP to Non-GAAP
Financial Measures - Guidance
(In Thousands)
(unaudited)
Three Months Ending
September 30, 2016
Year Ending
December 31, 2016
Loss from operations $ (2,869 ) $ (11,332 ) Amortization of
intangible assets 6,068 24,214 Stock-based compensation expense
3,051 11,368 Non-GAAP adjusted operating income $
6,250 $ 24,250 Net loss $ (5,057 ) $ (19,519 )
Amortization of intangible assets 6,068 24,214 Stock-based
compensation expense 3,051 11,368 Impairment of cost method
investment — 1,500 Income tax expense 912 1,977
Non-GAAP adjusted net income before tax 4,974 19,540 Non-GAAP
income tax expense 1,890 7,425 Non-GAAP adjusted net
income $ 3,084 $ 12,115
Note: All forward-looking figures presented in
these tables are stated at the mid-point of the estimated
range.
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version on businesswire.com: http://www.businesswire.com/news/home/20160803006088/en/
Investors:Intralinks Holdings, Inc.Dean Ridlon,
617-607-3957dridlon@intralinks.comorMedia:Intralinks
Holdings, Inc.Ian Bruce, (Cell) 508-574-2016ibruce@intralinks.com
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