- Record Total Revenue of $103.1 Million, Up 27%
Year-over-Year
- Record Subscription Revenue of $79.7 Million, Up 26%
Year-over-Year
Medallia Inc. (NYSE: MDLA), the global leader in experience
management, today announced financial results for the quarter ended
October 31, 2019.
“I am very pleased with the momentum in our business that has
carried into the fourth quarter. During the third quarter, we
crossed the $100 million quarterly revenue milestone, added many
more marquee customers and grew our year-over-year subscription and
total revenue,” commented Leslie Stretch, president and CEO,
Medallia. “New signings included Amadeus, American Axle &
Manufacturing, Inc., Amtrak, Hard Rock Cafe, Pizza Hut and
Softbank.”
Stretch continued, “We also expanded our ability to transform
customer experience in real-time with the acquisition of
Crowdicity, a crowdsourcing innovation and idea solution, and
Zingle, a multi-channel mobile messaging technology, already in use
in many of our hospitality customers. Our platform and signal story
is resonating with customers and prospects alike, our scale and
ability to out-innovate the market is being clearly recognized and
this positions us well for the future.”
Financial Highlights for the Third Quarter of Fiscal
2020
- Total revenue for the quarter was $103.1 million, an increase
of 27% from the same period last year. Subscription revenue was
$79.7 million, an increase of 26% from the same period last
year.
- Loss from operations for the quarter was $41.7 million,
compared to loss from operations of $16.5 million in the same
period last year. Non-GAAP loss from operations for the third
quarter was $2.0 million, compared to a non-GAAP loss from
operations of $8.8 million in the same period last year.
- Net loss for the quarter was $39.6 million, or ($0.31) per
share, basic and diluted, compared to net loss of $16.6 million, or
($0.60) per share, basic and diluted, in the same period last year.
Non-GAAP net loss was $932,000, or ($0.01) per share, basic and
diluted, compared to non-GAAP net loss of $9.0 million, or ($0.33)
per share, basic and diluted, in the same period last year.
- Cash, cash equivalents and marketable securities were $319.3
million as of October 31, 2019.
For information regarding the non-GAAP financial measures
discussed in this press release, please see the section titled
“Non-GAAP Financial Measures.” Reconciliations between GAAP and
non-GAAP financial measures are provided in the tables of this
press release.
Recent Highlights
- Launched the Medallia City Tours, bringing the company’s annual
Experience Conference to eleven cities around the globe.
- At Dreamforce, Medallia was the official feedback partner at
Salesforce’s Dreamfest, the main evening event, and an innovator
sponsor for the conference.
- Expanded our ServiceNow partnership providing certified
integrations with ServiceNow’s Customer Service and IT Service
Management on the ServiceNow store.
- In conjunction with Workday, we showcased our Employee
Experience product at Workday Rising, including our forthcoming
integration with Workday’s Prism Analytics Suite.
Conference Call
Medallia will host a conference call at 1:30 p.m. PT (4:30 p.m.
ET) today to discuss the third quarter of fiscal 2020, our outlook
for the fourth quarter and the full fiscal year 2020, as well as a
preliminary outlook for the full fiscal year 2021. The conference
call will be available via live webcast and replay at the Investor
Relations section of Medallia’s website:
https://investor.medallia.com/events-and-presentations/default.aspx.
About Medallia
Medallia (NYSE: MDLA) is the pioneer and market leader in
Experience Management. Medallia leads the market in the
understanding and management of experience for customers, employees
and citizens. Medallia captures experience signals created on daily
journeys in person, digital and IoT interactions and applies
proprietary AI technology to reveal personalized and predictive
insights that can drive action with tremendous business results.
Using the suite of experience management and innovation solutions
offered by Medallia, customers can engage employees, reduce churn,
turn detractors into promoters and buyers and create in-the-moment
cross-sell and up-sell opportunities providing clear and potent
returns on investment.
For more information, please visit www.medallia.com.
Non-GAAP Financial Measures
In addition to financial measures prepared in accordance with
U.S. generally accepted accounting principles (“GAAP”), this press
release and the accompanying tables contain, and the conference
call will contain, non- GAAP financial measures, including non-GAAP
gross profit, non-GAAP subscription revenue gross profit, non- GAAP
operating expenses, non-GAAP loss from operations, non-GAAP net
loss and non-GAAP net loss per share, basic and diluted. Our
management uses these non-GAAP financial measures internally in
analyzing our financial results and believes they are useful to
investors, as a supplement to the corresponding GAAP financial
measures, in evaluating our ongoing operational performance and
trends and in comparing our financial measures with other companies
in the same industry, many of which present similar non-GAAP
financial measures to help investors understand the operational
performance of their businesses. However, it is important to note
that the particular items we exclude from, or include in, our
non-GAAP financial measures may differ from the items excluded
from, or included in, similar non-GAAP financial measures used by
other companies in the same industry. In addition, other companies
may utilize metrics that are not similar to ours.
The non-GAAP financial information is presented for supplemental
informational purposes only and is not intended to be considered in
isolation or as a substitute for, or superior to, financial
information prepared and presented in accordance with GAAP. There
are material limitations associated with the use of non-GAAP
financial measures since they exclude significant expenses and
income that are required by GAAP to be recorded in our financial
statements. Please see the reconciliation tables at the end of this
release for the reconciliation of GAAP and non-GAAP results.
Management encourages investors and others to review Medallia’s
financial information in its entirety and not rely on a single
financial measure.
We adjust the following items from one or more of our non-GAAP
financial measures:
Stock-based compensation expense. We exclude stock-based
compensation expense, which is a non-cash expense, from certain of
our non-GAAP financial measures because we believe that excluding
this item provides meaningful supplemental information regarding
operational performance. In particular, companies calculate
stock-based compensation expense using a variety of valuation
methodologies and subjective assumptions. We also exclude cash
expenses for employer payroll taxes related to employee stock
plans, from certain of our non-GAAP financial measures because we
believe that excluding this item provides meaningful supplemental
information regarding operational performance. In particular, this
expense is tied to the exercise or vesting of underlying equity
awards and the price of our common stock at the time of exercise or
vesting, which may vary from period to period independent of the
operating performance of our business.
Amortization of acquired intangible assets. We exclude
amortization of acquired intangible assets, which is a non-cash
expense, from certain of our non-GAAP financial measures. Our
expenses for amortization of intangible assets are inconsistent in
amount and frequency because they are significantly affected by the
timing, size of acquisitions and the inherent subjective nature of
purchase price allocations. We exclude these amortization expenses
because we do not believe these expenses have a direct correlation
to the operation of our business.
Acquisition-related costs. We exclude costs related to
acquisitions from our non-GAAP financial measures. These costs
include legal and transactional costs associated with acquisition
activities.
Restructuring and other. We exclude restructuring and other from
certain of our non-GAAP financial measures. Restructuring and other
consists of exit costs related to our former headquarters in San
Mateo.
Tax benefit related to acquisitions. We exclude tax benefits
related to acquisitions from our non-GAAP financial measures. These
tax benefits realized consist of the change in the valuation
allowance resulting from acquisitions.
Note on Forward-Looking Statements
The forward-looking statements included in this press release
and in the accompanying conference call, including for example,
discussion of our commercial prospects, partnerships, estimates of
future revenues, operating income/loss and expenses, stock-based
compensation expense and related employer payroll tax expense,
amortization of acquired intangible assets, acquisition-related
costs, restructuring and other expenses, and acquisitions, reflect
management’s best judgment based on factors currently known and
involve risks and uncertainties. These risks and uncertainties
include, but are not limited to, potential disruption of customer
purchase decisions resulting from global economic conditions,
timing and size of orders, relative growth of our recurring
revenue, potential decreases in customer spending, uncertainty
regarding purchasing trends in the cloud software market, customer
cancellations or non-renewal of maintenance contracts or on-demand
services, our potential inability to manage effectively any growth
we experience, our ability to develop new products and services,
increased competition or new entrants in the marketplace, potential
impact of acquisitions and investments, changes in staffing levels,
and other risks detailed in registration statements and periodic
reports we file with the Securities and Exchange Commission,
including our prospectus filed with the SEC pursuant to Rule
424(b)(4) dated July 18, 2019 and in our quarterly report on Form
10-Q dated September 12, 2019, both of which may be obtained on the
Investor Relations section of Medallia’s website
(https://investor.medallia.com/financials/sec-filings/default.aspx).
Actual results may differ materially from those presently reported.
All forward-looking statements in this press release are based on
information available to us as of the date hereof. We assume no
obligation to update the information contained in this press
release or the accompanying conference call, except as required by
law.
© 2019 Medallia, Inc. All rights reserved. Medallia®, the
Medallia logo, and the names and marks associated with Medallia’s
products are trademarks of Medallia. All other trademarks are the
property of their respective owners.
Medallia, Inc. Condensed Consolidated Balance Sheets (in thousands)
(unaudited)
October 31, January 31,
2019
2019
Assets Current assets: Cash and cash equivalents
$
296,651
$
44,876
Marketable securities
22,646
— Trade and other receivables, net of allowance for doubtful
accounts of $609and $253 as of October 31, 2019 and January 31,
2019, respectively
71,036
106,120
Deferred commissions, current
19,303
15,874
Prepaid expenses and other current assets
21,659
15,595
Total current assets
431,295
182,465
Property and equipment, net
31,363
42,989
Deferred commissions, noncurrent
42,710
35,727
Goodwill and intangible assets, net
101,139
17,050
Other noncurrent assets
4,602
1,953
Total assets
$
611,109
$
280,184
Liabilities, and stockholders’ equity (deficit) Current
liabilities: Accounts payable
$
4,220
$
1,007
Accrued expenses and other current liabilities
21,569
12,840
Accrued compensation
27,741
19,708
Deferred revenue, current
163,554
210,666
Total current liabilities
217,084
244,221
Deferred revenue, noncurrent
1,194
1,151
Deferred rent, noncurrent
2,633
37,182
Other liabilities
5,854
4,188
Total liabilities
226,765
286,742
Stockholders’ equity (deficit): Convertible preferred stock —
72
Common stock, Class A —
30
Common stock
127
— Additional paid-in capital
834,079
363,076
Accumulated other comprehensive loss
(759
)
(1,096
)
Accumulated deficit
(449,103
)
(368,640
)
Total stockholders’ equity (deficit)
384,344
(6,558
)
Total liabilities and stockholders’ equity (deficit)
$
611,109
$
280,184
Medallia, Inc. Condensed Consolidated Statements of Operations (in
thousands except per share data) (unaudited)
Three
Months EndedOctober 31, Nine Months EndedOctober
31,
2019
2018
2019
2018
Revenue: Subscription
$
79,749
$
63,241
$
226,008
$
178,923
Professional services
23,325
17,925
66,355
48,335
Total revenue
103,074
81,166
292,363
227,258
Cost of revenue: Subscription
16,296
11,942
44,456
35,345
Professional services
22,299
17,459
61,617
51,235
Total cost of revenue
38,595
29,401
106,073
86,580
Gross profit
64,479
51,765
186,290
140,678
Operating expenses: Research and development
26,321
20,995
68,630
66,580
Sales and marketing
47,067
34,243
127,152
108,296
General and administrative
32,758
13,020
72,672
36,940
Total operating expenses
106,146
68,258
268,454
211,816
Loss from operations
(41,667
)
(16,493
)
(82,164
)
(71,138
)
Interest income and other income (expense), net
2,001
205
2,574
223
Loss before provision for (benefits from) income taxes
(39,666
)
(16,288
)
(79,590
)
(70,915
)
Provision for (benefits from) income taxes
(46
)
323
873
1,371
Net loss
$
(39,620
)
$
(16,611
)
$
(80,463
)
$
(72,286
)
Net loss per share attributable to common stockholders, basic
anddiluted
$
(0.31
)
$
(0.60
)
$
(1.19
)
$
(2.77
)
Weighted-average shares used in computing net loss per
shareattributable to common stockholders, basic and diluted
127,715
27,482
67,735
26,065
Medallia, Inc. GAAP to Non-GAAP Adjustment Summary
(in thousands) (unaudited) GAAP to Non-GAAP adjustments
include stock-based compensation expense, amortization of acquired
intangible assets, acquisition-related costs, restructuring and
other and tax benefit related to acquisitions as follows:
Three
Months Ended Nine Months Ended October 31,
October 31,
2019
2018
2019
2018
Cost of revenue: Subscription
$
1,578
$
363
$
3,099
$
1,240
Professional services
2,820
580
6,067
1,822
Operating expenses: Research and development
6,292
1,665
11,533
5,845
Sales and marketing
9,099
1,593
19,076
5,033
General and administrative
19,858
3,457
40,003
7,116
Tax benefit related to acquisitions
(959)
—
(1,375)
— Total
$
38,688
$
7,658
$
78,403
$
21,056
Medallia, Inc. Condensed Consolidated Statements of Cash Flows (in
thousands) (unaudited)
Nine Months Ended October 31,
2019
2018
Operating activities Net loss
$
(80,463
)
$
(72,286
)
Adjustments to reconcile net loss to net cash used in operating
activities: Depreciation and amortization
10,812
10,440
Amortization of deferred commissions
13,616
9,481
Stock-based compensation expense
80,296
19,653
Impairment (gain) on property and equipment and lease termination
(13,783
)
— Other
(1,463
)
(430
)
Changes in assets and liabilities: Accounts receivable
36,627
40,255
Deferred commissions
(24,108
)
(14,105
)
Prepaid expenses and other current assets
(5,849
)
4,452
Other noncurrent assets
92
(709
)
Accounts payable
2,655
1,835
Deferred revenue
(49,921
)
(37,130
)
Accrued expenses and other current liabilities
10,410
3,084
Other noncurrent liabilities
17
723
Net cash used in operating activities
(21,062
)
(34,737
)
Investing activities Purchases of property, equipment and
other
(14,250
)
(5,637
)
Purchase of marketable securities
(76,122
)
(18,684
)
Maturities of marketable securities
53,604
33,340
Proceeds from sale of marketable securities
511
1,296
Acquisitions, net of cash acquired
(75,238
)
— Other
(1,500
)
— Net cash (used in) provided by investing activities
(112,995
)
10,315
Financing activities Proceeds from initial public offering,
net of issuance costs, underwriters discounts and commissions, and
concurrent private placement
319,972
— Proceeds from Series F convertible preferred stock, net of
issuance costs
69,848
— Proceeds from exercise of stock options
16,451
7,831
Payments for employee taxes withheld upon vesting of restricted
stock units
(15,592
)
— Payment of capital leases
(2,505
)
(224
)
Repayment of debt assumed in acquisition
(2,297
)
— Net cash provided by financing activities
385,877
7,607
Effect of exchange rate changes on cash and cash equivalents
(45
)
(222
)
Net increase (decrease) in cash and cash equivalents
251,775
(17,037
)
Cash and cash equivalents at beginning of period
44,876
42,699
Cash and cash equivalents at end of period
$
296,651
$
25,662
Medallia, Inc. GAAP to Non-GAAP Reconciliations (in
thousands, except percentages) (unaudited)
Three Months
Ended Nine Months Ended October 31, October
31,
2019
2018
2019
2018
Non-GAAP gross profit reconciliation: GAAP gross
profit
$
64,479
$
51,765
$
186,290
$
140,678
GAAP gross margin
63%
64%
64%
62%
Add (subtract): Stock-based compensation
3,768
901
8,171
2,743
Amortization of acquired intangible assets
630
42
995
319
Non-GAAP gross profit
$
68,877
$
52,708
$
195,456
$
143,740
Non- GAAP gross margin
67%
65%
67%
63%
Three Months Ended Nine Months Ended
October 31, October 31,
2019
2018
2019
2018
Non-GAAP subscription revenue gross profit reconciliation:
GAAP subscription revenue gross profit
$
63,453
$
51,299
$
181,552
$
143,578
GAAP subscription revenue gross margin
80%
81%
80%
80%
Add (subtract): Stock-based compensation
948
321
2,104
921
Amortization of acquired intangible assets
630
42
995
319
Non-GAAP subscription revenue gross profit
$
65,031
$
51,662
$
184,651
$
144,818
Non-GAAP subscription revenue gross margin
82%
82%
82%
81%
Three Months Ended Nine Months Ended
October 31, October 31,
2019
2018
2019
2018
Non-GAAP operating expense reconciliation: GAAP
operating expenses
$
106,146
$
68,258
$
268,454
$
211,816
GAAP operating expenses, as a % of total revenue
103%
84%
92%
93%
Add (subtract): Stock-based compensation
(34,046)
(5,631)
(72,784)
(16,910)
Amortization of acquired intangible assets
(113)
—
(115)
— Acquisition-related costs
(1,090)
—
(1,766)
— Restructuring and other
-
(1,084)
4,053
(1,084)
Non-GAAP operating expenses
$
70,897
$
61,543
$
197,842
$
193,822
Non-GAAP operating expenses, as a % of total revenue
69%
76%
68%
85%
Medallia, Inc. GAAP to Non-GAAP Reconciliations (in
thousands, except percentages) (unaudited)
Three
Months Ended Nine Months Ended October 31,
October 31,
2019
2018
2019
2018
Non-GAAP loss from operations reconciliation:
GAAP loss from operations
$
(41,667)
$
(16,493)
$
(82,164)
$
(71,138)
GAAP loss from operations, as a % of total revenue
(40)%
(20)%
(28)%
(31)%
Add (subtract): Stock-based compensation
37,814
6,532
80,955
19,653
Amortization of acquired intangible assets
743
42
1,110
319
Acquisition-related costs
1,090
—
1,766
— Restructuring and other —
1,084
(4,053)
1,084
Non-GAAP loss from operations
$
(2,020)
$
(8,835)
$
(2,386)
$
(50,082)
Non-GAAP loss from operations, as a % of total revenue
(2)%
(11)%
(1)%
(22)%
Three Months Ended Nine Months
Ended October 31, October 31,
2019
2018
2019
2018
Non-GAAP net loss reconciliation: GAAP
net loss
$
(39,620)
$
(16,611)
$
(80,463)
$
(72,286)
GAAP net loss as a % of total revenue
(38)%
(20)%
(28)%
(32)%
Add (subtract): Stock-based compensation
37,814
6,532
80,955
19,653
Amortization of acquired intangible assets
743
42
1,110
319
Acquisition-related costs
1,090
—
1,766
— Restructuring and other —
1,084
(4,053)
1,084
Tax benefit related to acquisitions
(959)
—
(1,375)
— Non-GAAP net loss
$
(932)
$
(8,953)
$
(2,060)
$
(51,230)
Non-GAAP net loss as a % of total revenue
(1)%
(11)%
(1)%
(23)%
Weighted average shares - basic and
diluted
127,715
27,482
67,735
26,065
Medallia, Inc. Non-GAAP Supplemental Financial
Information (In thousands, except for percentages) (unaudited)
Trailing Twelve Months Ended October 31,
Subscription Billings
2019
2018
Subscription revenue
$
293,882
$
232,931
Change in subscription deferred revenue and contract assets
(unbilled receivables)
36,818
34,640
Subscription billings
$
330,700
$
267,571
Subscription billings growth rate
24%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191205005850/en/
Investor Relations Contact Carolyn Bass ir@medallia.com Source:
Medallia Inc.
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