EXHIBIT 99.1
Actua Announces Third Quarter 2015 Financial Results
Continued Revenue Growth and Operating Leverage Result in Improving Full-Year Earnings and Cash Flow Guidance
RADNOR, Pa., Nov. 5, 2015 (GLOBE NEWSWIRE) -- Actua Corporation (Nasdaq:ACTA) ("Actua") today reported its results for the third quarter ended September 30, 2015.
Revenue was $34.1 million for the third quarter of 2015, up from $20.8 million for the third quarter of 2014. Net loss attributable to Actua for the third quarter of 2015 was $(13.9) million, or $(0.37) per diluted share, compared to net loss attributable to Actua of $(10.7) million, or $(0.29) per diluted share, for the comparable prior year quarter. Non-GAAP net loss for the third quarter of 2015 was $(2.5) million, or $(0.07) per share, compared to a non-GAAP net loss of $(4.3) million, or $(0.12) per diluted share, for the comparable prior year quarter. Cash flow from operations was a use of $(1.7) million for the third quarter of 2015, compared to a use of $(8.5) million for the third quarter of 2014.
Revenue was $98.3 million for the nine months ended September 30, 2015, up from $58.2 million for the comparable period of 2014. Net loss attributable to Actua for the nine months ended September 30, 2015 was $(43.9) million, or $(1.19) per diluted share, compared to net loss attributable to Actua of $(33.7) million, or $(0.91) per diluted share, for the corresponding 2014 period. Non-GAAP net loss for the nine months ended September 30, 2015 was $(8.7) million, or $(0.24) per share, compared to a non-GAAP net loss of $(12.3) million, or $(0.33) per diluted share, for the corresponding 2014 period. Cash flow from operations was a use of $(5.1) million for the nine months ended September 30, 2015, compared to a use of $(18.8) million for the comparable 2014 period.
"We are excited about our improving operating cash flow as our platforms continue to scale," said Walter Buckley, CEO of Actua. "We believe we are well-positioned to accelerate revenue growth and improve earnings and cash flow as we execute against our long-term goals."
A reconciliation of the non-GAAP financial measures used above with the most comparable GAAP financial measures is included with the financial tables at the end of this release.
2015 Updated Guidance
Reflecting its year-to-date performance, Actua is tightening the range of its annual GAAP revenue, improving the range of its annual non-GAAP net income (loss) per share and improving the range of its annual cash flow from operations as reflected in the table below.
| | | Original | | November 5, 2015 |
| | | | | |
| Annual GAAP Revenue | $133 million to $138 million | Tightened to $133 million to $134 million |
| | | | | |
| Annual non-GAAP net income (loss) per share | $(0.36) to $(0.40) per diluted share | Improved to $(0.33) to $(0.36) per diluted share |
| | | | | |
| Annual cash flow from operations | $(5.0) million to $(9.0) million | Improved to $(3.0) million to $(5.0) million |
Please see Actua's website at www.actua.com for more information on Actua, its businesses and its third quarter 2015 results.
Actua will host a webcast at 10:00 a.m. ET today to discuss its financial results. As part of the live webcast for this call, Actua will post a slide presentation to accompany the prepared remarks. To access the webcast, go to www.actua.com/investors/events-presentations/ and click on the webcast link. Please log on to the website approximately ten minutes prior to the call to register and download and install any necessary audio software. The conference call is also accessible through listen-only mode by dialing 866.317.2576 or 678.509.7521. The Conference ID is 58814278.
For those unable to participate in the conference call, a replay will be available from November 5, 2015 at 2:00 p.m. ET until November 12, 2015 at 11:59 p.m. ET. To access the replay, dial 855.859.2056 or 404.537.3406. The Conference ID is 58814278. The replay and slide presentation also can be accessed in the investor relations section of the Actua website at www.actua.com/investors/events-presentations/.
About Actua
Actua Corporation (NASDAQ:ACTA), the multi-vertical cloud company, brings the power of the cloud to vertical markets and processes. Actua is pioneering the second wave of the SaaS revolution - the vertical wave - by growing cloud businesses that are transforming their markets. With approximately 800 employees delivering unrivaled domain knowledge, agility and responsiveness to our customers, Actua's rapidly growing vertical cloud businesses are positioned to lead this wave. For the latest information about Actua and its brands, please go to www.actua.com.
Safe Harbor Statement under Private Securities Litigation Reform Act of 1995
The statements contained in this press release that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve certain risks and uncertainties, including, but not limited to, risks associated with our ability to compete successfully in highly-competitive, rapidly-developing markets, the effect of economic conditions generally, capital spending by our customers, our ability to retain existing customer relationships and secure new ones, developments in the markets in which we operate and our ability to respond to those changes in a timely and effective manner, the availability, performance and security of our cloud-based technology, particularly in light of increased cybersecurity risks and concerns, our ability to retain key personnel, our ability to deploy capital effectively and on acceptable terms, our ability to successfully integrate any acquired business, the impact of any potential acquisitions, dispositions or other strategic transactions, our ability to have continued access to capital and to manage capital resources effectively, and other risks and uncertainties detailed in Actua's filings with the U.S. Securities and Exchange Commission. Those and other factors may cause actual results to differ materially from those projected.
| Actua Corporation |
| Consolidated Statements of Operations |
| (In thousands, except per share data) |
| (Unaudited) |
| | | | | |
| | Three Months Ended
September 30, | Nine Months Ended
September 30, |
| | 2015 | 2014 | 2015 | 2014 |
| | | | | |
| Revenue | $ 34,140 | $ 20,762 | $ 98,268 | $ 58,213 |
| | | | | |
| Operating Expenses | | | | |
| Cost of revenue (a) | 9,627 | 5,911 | 29,142 | 16,329 |
| Sales and marketing (a) | 12,945 | 10,718 | 36,344 | 28,834 |
| General and administrative (a) | 14,440 | 13,798 | 45,842 | 36,722 |
| Research and development (a) | 7,612 | 3,960 | 22,078 | 10,760 |
| Amortization of intangibles | 3,728 | 2,369 | 11,450 | 6,963 |
| Impairment related and other | 228 | 256 | 568 | 1,092 |
| Total operating expenses | 48,580 | 37,012 | 145,424 | 100,700 |
| Operating income (loss) | (14,440) | (16,250) | (47,156) | (42,487) |
| | | | | |
| Other income (expense): | | | | |
| Other income (loss), net | (144) | 83 | 796 | 1,020 |
| Interest income | 34 | 160 | 88 | 392 |
| Interest expense | (36) | (9) | (104) | (1,600) |
| | | | | |
| Income (loss) before income taxes, equity loss and discontinued operations | (14,586) | (16,016) | (46,376) | (42,675) |
| | | | | |
| Income tax benefit (expense) | (47) | 1,870 | (225) | 2,375 |
| Equity loss | — | (144) | — | (776) |
| | | | | |
| Income (loss) from continuing operations | (14,633) | (14,290) | (46,601) | (41,076) |
| Income (loss) from discontinued operations | — | 2,426 | — | 3,789 |
| Net income (loss) | (14,633) | (11,864) | (46,601) | (37,287) |
| Less: Net income (loss) attributable to the noncontrolling interest | (751) | (1,184) | (2,672) | (3,563) |
| Net income (loss) attributable to Actua | $ (13,882) | $ (10,680) | $ (43,929) | $ (33,724) |
| | | | | |
| Amounts attributable to Actua common shareholders: | | | | |
| Net income (loss) from continuing operations | $ (13,882) | $ (13,106) | $ (43,929) | $ (37,513) |
| Net income (loss) from discontinued operations | — | 2,426 | — | 3,789 |
| Net income (loss) attributable to Actua common shareholders | $ (13,882) | $ (10,680) | $ (43,929) | $ (33,724) |
| | | | | |
| Basic and diluted net income (loss) per share: | | | | |
| Income (loss) from continuing operations attributable to Actua common shareholders | $ (0.37) | $ (0.35) | $ (1.19) | $ (1.01) |
| Income (loss) from discontinued operations attributable to Actua common shareholders | — | 0.06 | — | 0.10 |
| Income (loss) attributable to Actua common shareholders | $ (0.37) | $ (0.29) | $ (1.19) | $ (0.91) |
| | | | | |
| Shares used in computation of basic and diluted net income (loss) per common share attributable to Actua common shareholders | 37,146 | 37,335 | 37,038 | 37,248 |
| | | | | |
| (a) Includes equity-based compensation of: | | | | |
| Cost of revenue | $ 48 | $ 16 | $ 103 | $ 55 |
| Sales and marketing | 173 | 35 | 310 | 118 |
| General and administrative | 6,270 | 6,270 | 20,250 | 16,706 |
| Research and development | 170 | 36 | 341 | 93 |
| | $ 6,661 | $ 6,357 | $ 21,004 | $ 16,972 |
| Actua Corporation |
| Condensed Consolidated Balance Sheets |
| (In thousands) |
| (Unaudited) |
| | | |
| | September 30,
2015 | December 31,
2014 |
| | | |
| ASSETS | | |
| Cash and cash equivalents | $ 80,588 | $ 103,134 |
| Restricted cash | 1,383 | 1,132 |
| Accounts receivable, net | 27,742 | 23,134 |
| Deferred tax asset | 182 | 182 |
| Prepaid expenses and other current assets | 6,569 | 3,979 |
| Total current assets | 116,464 | 131,561 |
| Fixed assets, net | 9,468 | 7,947 |
| Goodwill | 265,677 | 265,084 |
| Intangible assets, net | 91,820 | 101,998 |
| Cost and equity method investments | 18,146 | 17,672 |
| Deferred tax asset | 2,853 | 2,998 |
| Other assets, net | 1,762 | 1,652 |
| Total Assets | $ 506,190 | $ 528,912 |
| | | |
| LIABILITIES AND EQUITY | | |
| Current maturities of other long-term debt | $ 1,320 | $ 500 |
| Accounts payable | 13,780 | 12,595 |
| Accrued expenses | 6,264 | 8,306 |
| Accrued compensation and benefits | 10,680 | 9,241 |
| Deferred revenue | 43,166 | 33,238 |
| Total current liabilities | 75,210 | 63,880 |
| Long-term debt | — | — |
| Deferred tax liability | 266 | 266 |
| Deferred revenue | 561 | 1,256 |
| Other liabilities | 5,610 | 4,408 |
| Total Liabilities | 81,647 | 69,810 |
| Redeemable noncontrolling interest | 9,200 | 10,346 |
| Total Equity | 415,343 | 448,756 |
| Total Liabilities, Redeemable noncontrolling interest and Equity | $ 506,190 | $ 528,912 |
| |
| Actua Corporation |
| Consolidated Statements of Cash Flows |
| (In thousands) |
| (Unaudited) |
| | | | | |
| | Three Months Ended
September 30, | Nine Months Ended
September 30, |
| | 2015 | 2014 | 2015 | 2014 |
| | | | | |
| Operating Activities - continuing operations | | | | |
| Net income (loss) | $ (14,633) | $ (11,864) | $ (46,601) | $ (37,287) |
| (Income) loss from discontinued operations, including gain on sale, net of tax | — | (2,426) | — | (3,789) |
| | | | | |
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | | | | |
| Depreciation and amortization | 4,804 | 3,386 | 14,873 | 9,582 |
| Equity-based compensation | 6,661 | 6,357 | 21,004 | 16,972 |
| Impairment related and other | 89 | 256 | 429 | 1,092 |
| Other (income) loss | 144 | (83) | (796) | (1,020) |
| Equity loss | — | 144 | — | 776 |
| Deferred tax asset | 47 | (2,131) | 123 | (2,931) |
| Changes in assets and liabilities, net of effect of acquisitions: | | | | |
| Accounts receivable, net | (7,322) | (4,844) | (6,308) | (6,150) |
| Prepaid expenses and other assets | (243) | (276) | (1,000) | (34) |
| Accounts payable | 2,688 | (2,309) | 1,185 | (381) |
| Accrued expenses | (356) | 437 | 118 | (655) |
| Accrued compensation and benefits | 1,835 | 741 | 1,439 | (1,408) |
| Deferred revenue | 4,448 | 4,061 | 9,233 | 6,822 |
| Other liabilities | 151 | 42 | 1,202 | (356) |
| Cash flows provided by (used in) operating activities | (1,687) | (8,509) | (5,099) | (18,767) |
| | | | | |
| Investing Activities - continuing operations | | | | |
| Capital expenditures, net | (1,168) | (1,065) | (5,087) | (3,368) |
| Change in restricted cash | (319) | 93 | (251) | 43 |
| Proceeds from sales/distributions of ownership interests | — | 5,758 | 1,415 | 8,795 |
| Ownership acquisitions, net of cash acquired | (801) | (9,719) | (2,758) | (9,917) |
| Cash flows provided by (used in) investing activities | (2,288) | (4,933) | (6,681) | (4,447) |
| | | | | |
| Financing Activities - continuing operations | | | | |
| Acquisition of noncontrolling interest in subsidiary equity | — | (451) | (3,952) | (451) |
| Contingent consideration payments | — | — | (1,870) | — |
| Borrowings of long-term debt | — | — | 820 | — |
| Repayments of long-term debt and capital lease obligations | — | — | (24) | (12,641) |
| Purchase of treasury stock | — | (2,064) | (1,704) | (2,064) |
| Tax withholdings related to equity-based awards | (67) | (48) | (3,925) | (2,794) |
| Cash received for stock options exercised | 15 | 50 | 7 | 50 |
| Cash flows provided by (used in) financing activities | (52) | (2,513) | (10,648) | (17,900) |
| Effect of exchange rate on cash | (7) | — | (118) | — |
| Discontinued Operations: | | | | |
| Cash flows provided by (used in) operating activities | — | (1,201) | — | (1,152) |
| Cash flows provided by (used in) investing activities | — | — | — | — |
| Cash flows provided by (used in) financing activities | — | — | — | — |
| | | | | |
| Net increase(decrease) in cash and cash equivalents from discontinued operations | — | (1,201) | — | (1,152) |
| | | | | |
| Net increase (decrease) in cash and cash equivalents | (4,034) | (17,156) | (22,546) | (42,266) |
| Cash and cash equivalents at beginning of period | 84,622 | 309,546 | 103,134 | 334,656 |
| Cash and cash equivalents at end of period | $ 80,588 | $ 292,390 | $ 80,588 | $ 292,390 |
| |
| Actua Corporation |
| Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures |
| (In thousands, except per share data) |
| (Unaudited) |
| | | | | | | | |
| | 2014 | 2015 |
| | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 |
| GAAP Net income (loss) attributable to Actua: | $ (10,150) | $ (12,894) | $ (10,680) | $ 10,404 | $ (14,765) | $ (15,282) | $ (13,882) |
| Add back: | | | | | | | |
| Share-based compensation | 3,876 | 6,739 | 6,357 | 6,917 | 7,222 | 7,121 | 6,661 |
| Amortization of intangibles | 2,301 | 2,275 | 2,373 | 3,569 | 4,016 | 3,706 | 3,728 |
| Impairment related and other costs | 247 | 1,645 | 256 | 352 | 360 | 663 | 228 |
| Transaction expenses | 90 | 257 | 1,548 | 773 | 70 | 180 | 108 |
| Other (income) loss, net | (300) | (637) | (96) | (4,280) | (1,365) | 425 | 144 |
| Acquired businesses' deferred revenue | 76 | 76 | 336 | 1,991 | 677 | 678 | 557 |
| Equity loss | 312 | 320 | 144 | — | — | — | — |
| Impact on non-cash income tax benefit items | — | (800) | (2,131) | (10,749) | 34 | — | — |
| Loss (Income) from discontinued operations | (48) | (1,315) | (2,426) | (10,237) | — | — | — |
| Non-GAAP net income (loss) | $ (3,596) | $ (4,334) | $ (4,319) | $ (1,260) | $ (3,751) | $ (2,509) | $ (2,456) |
| | | | | | | | |
| | | | | | | | |
| GAAP Net income (loss) per diluted share: | $ (0.27) | $ (0.35) | $ (0.29) | $ 0.28 | $ (0.40) | $ (0.41) | $ (0.37) |
| Add back: | | | | | | | |
| Share-based compensation | 0.10 | 0.18 | 0.17 | 0.19 | 0.20 | 0.19 | 0.18 |
| Amortization of intangibles | 0.06 | 0.06 | 0.06 | 0.10 | 0.11 | 0.10 | 0.10 |
| Impairment related and other | 0.01 | 0.05 | 0.01 | 0.01 | 0.01 | 0.02 | 0.01 |
| Transaction expenses | — | 0.01 | 0.04 | 0.02 | — | — | — |
| Other (income) loss, net | (0.01) | (0.02) | — | (0.11) | (0.04) | 0.01 | — |
| Acquired businesses' deferred revenue | — | — | 0.01 | 0.05 | 0.02 | 0.02 | 0.01 |
| Equity loss | 0.01 | 0.01 | — | — | — | — | — |
| Impact on non-cash income tax benefit items | — | (0.02) | (0.06) | (0.29) | — | — | — |
| Income from discontinued operations | — | (0.03) | (0.06) | (0.28) | — | — | — |
| Non-GAAP net income (loss) per diluted share | $ (0.10) | $ (0.11) | $ (0.12) | $ (0.03) | $ (0.10) | $ (0.07) | $ (0.07) |
| | | | | | | | |
| Shares used in calculation of GAAP net income (loss) per share attributable to Actua: | | | | |
| Basic | 37,096 | 37,313 | 37,335 | 36,780 | 36,842 | 37,123 | 37,146 |
| Diluted | 37,096 | 37,313 | 37,335 | 36,780 | 36,842 | 37,123 | 37,146 |
| | | | | | | | |
| Shares used in calculation of non-GAAP net income (loss) per share attributable to Actua: | | | | |
| Basic | 37,096 | 37,313 | 37,335 | 36,780 | 36,842 | 37,123 | 37,146 |
| Diluted | 37,096 | 37,313 | 37,335 | 36,780 | 36,842 | 37,123 | 37,146 |
| |
| Actua Corporation |
| Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures (Continued) |
| (In thousands, except per share data) |
| (Unaudited) |
| | | | | | | | |
| | 2014 | 2015 |
| | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 |
| GAAP Net income (loss) attributable to Actua: | $ (10,150) | $ (12,894) | $ (10,680) | $ 10,404 | $ (14,765) | $ (15,282) | $ (13,882) |
| Add back: | | | | | | | |
| Share-based compensation | 3,876 | 6,739 | 6,357 | 6,917 | 7,222 | 7,121 | 6,661 |
| Amortization of intangibles | 2,301 | 2,275 | 2,373 | 3,569 | 4,016 | 3,706 | 3,728 |
| Impairment related and other costs | 247 | 1,645 | 256 | 352 | 360 | 663 | 228 |
| Transaction expenses | 90 | 257 | 1,548 | 773 | 70 | 180 | 108 |
| Other (income) loss, net | (300) | (637) | (96) | (4,280) | (1,365) | 425 | 144 |
| Acquired businesses' deferred revenue | 76 | 76 | 336 | 1,991 | 677 | 678 | 557 |
| Equity loss | 312 | 320 | 144 | — | — | — | — |
| Impact on non-cash income tax benefit items | — | (800) | (2,131) | (10,749) | 34 | — | — |
| Loss (Income) from discontinued operations | (48) | (1,315) | (2,426) | (10,237) | — | — | — |
| Interest expense (income), net | 425 | 934 | (151) | (58) | 18 | (4) | 2 |
| Income tax expense (current/cash only) | 94 | 201 | 261 | 193 | 143 | 1 | 41 |
| Depreciation | 822 | 798 | 1,013 | 918 | 1,224 | 1,123 | 1,076 |
| Adjusted EBITDA | $ (2,255) | $ (2,401) | $ (3,196) | $ (207) | $ (2,366) | $ (1,389) | $ (1,337) |
| | | | | | | | |
| GAAP Cost of Revenue | $ 4,899 | $ 5,519 | $ 5,911 | $ 8,091 | $ 9,732 | $ 9,783 | $ 9,627 |
| Share-based compensation | 19 | 20 | 16 | 21 | 26 | 29 | 48 |
| Adjusted Cost of revenue | $ 4,880 | $ 5,499 | $ 5,895 | $ 8,070 | $ 9,706 | $ 9,754 | $ 9,579 |
| | | | | | | | |
| GAAP Sales and marketing | $ 8,531 | $ 9,585 | $ 10,718 | $ 10,876 | $ 11,236 | $ 12,163 | $ 12,945 |
| Share-based compensation | 41 | 42 | 35 | 42 | 58 | 79 | 173 |
| Adjusted Sales and marketing | $ 8,490 | $ 9,543 | $ 10,683 | $ 10,834 | $ 11,178 | $ 12,084 | $ 12,772 |
| | | | | | | | |
| GAAP General and administrative | $ 10,009 | $ 12,915 | $ 13,798 | $ 15,062 | $ 15,936 | $ 15,966 | $ 14,440 |
| Share-based compensation | 3,788 | 6,648 | 6,270 | 6,803 | 7,093 | 6,887 | 6,270 |
| Adjusted General and administrative | $ 6,221 | $ 6,267 | $ 7,528 | $ 8,259 | $ 8,843 | $ 9,079 | $ 8,170 |
| | | | | | | | |
| GAAP Research and development | $ 3,253 | $ 3,547 | $ 3,960 | $ 4,648 | $ 7,093 | $ 7,373 | $ 7,612 |
| Share-based compensation | 28 | 29 | 36 | 51 | 45 | 52 | 170 |
| Adjusted Research and development | $ 3,225 | $ 3,518 | $ 3,924 | $ 4,597 | $ 7,048 | $ 7,321 | $ 7,442 |
About Actua's Non-GAAP Financial Measures
This release contains non-GAAP financial measures. The tables above reconcile these non-GAAP financial measures to the most directly comparable GAAP financial measures.
Non-GAAP financial measures should not be considered as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP. Actua strongly urges investors and potential investors in our securities to review the reconciliation of our non-GAAP financial measures to the comparable GAAP financial measures that are included in this release.
Actua's management believes that its non-GAAP financial measures provide useful information to investors because they allow investors to view the business through the eyes of management and provide meaningful supplemental information regarding Actua's operating results, as they exclude amounts that Actua excludes as part of its monitoring of operating results and assessment of the performance of the business.
Actua presents the following non-GAAP financial measures in this release: (1) non-GAAP net income (loss) (which term may be used interchangeably with adjusted net income (loss) by management during quarterly earnings presentations), (2) non-GAAP net income (loss) per diluted share (which term may be used interchangeably with adjusted net income (loss) per diluted share by management during quarterly earnings presentations), (3) Adjusted EBITDA, (4) Adjusted Cost of revenue, (5) Adjusted Sales and marketing, (6) Adjusted General and administrative and (7) Adjusted Research and development. Actua excludes items from these non-GAAP financial measures as described below.
Non-GAAP net income (loss) excludes from GAAP net income (loss) the following items:
- Share-based compensation. Actua excludes share-based compensation expenses and other expenses associated with equity granted to employees and non-employee directors primarily because they are non-cash expenses that Actua does not consider part of ongoing operating results when assessing the performance of its business, and the exclusion of these expenses facilitates the comparison of results over different time periods and the comparison of Actua's results with results of other companies.
- Amortization of intangibles. Actua excludes amortization of acquired intangibles, which consists primarily of customer relationships and technology, because they are expenses that Actua does not consider part of ongoing operating results when assessing the performance of its business, and Actua believes that doing so facilitates comparisons to its historical operating results and to the results of other companies.
- Impairment-related and other costs. Actua excludes the effect of impairment-related and other costs, which primarily include impairment charges, revaluation of contingent consideration, restructuring and severance fees, settlement costs and other one-time costs, because Actua does not consider them part of ongoing operating results when assessing the performance of its business and believes it is useful for investors to understand the effects of these items on Actua's operations.
- Transaction expenses. Actua excludes the effect of acquisition related expenses because Actua does not consider them part of ongoing operating results when assessing the performance of its business and believes it is useful for investors to understand the effects of these items on Actua's operations.
- Other income (loss), net. Actua excludes the effect of other income (loss), net, which primarily includes transaction-driven gains and losses, as well as certain foreign currency impacts, because Actua does not consider them part of ongoing operating results when assessing the performance of its business and believes it is useful for investors to understand the effects of these items on Actua's operations.
- Acquired businesses' deferred revenue. Actua includes acquired businesses' previously deferred revenues that are not recognized under GAAP because Actua considers them a part of ongoing operating results when assessing the performance of its business and believes it is useful for investors to understand the effects of these items on its operations.
- Equity loss. In accordance with GAAP, Actua recognizes its share of the earnings or losses of each company accounted for under the equity method and adjusts the carrying amount for each such company for its share of the earnings or losses of the company. Actua excludes GAAP equity income (loss) because it is significantly impacted by factors outside its direct control.
- Impact of non-cash income tax benefit items. Actua excludes the impact of any non-cash income tax benefit items as Actua believes it is useful for investors to understand the effect of this item and does not consider them a part of ongoing operating results when assessing the performance of its business.
- Income (loss) from discontinued operations. Actua excludes the income (loss) from discontinued operations as Actua believes it is useful for investors to understand the effect of these items for all periods presented and does not consider them a part of ongoing operating results when assessing the performance of its business.
Non-GAAP net income (loss) per diluted share is calculated as follows:
- Non-GAAP net income (loss) (as defined above) is the numerator.
- Shares used in calculation of non-GAAP net income (loss) per diluted share. For periods where GAAP and non-GAAP net income (loss) are both losses, Actua uses the same number of shares used to calculate GAAP and non-GAAP net loss per share. For periods where GAAP and non-GAAP net income (loss) are both income, Actua uses the same number of shares used to calculate GAAP and non-GAAP net income per diluted share. For periods where GAAP net income (loss) is a loss but non-GAAP net income (loss) is income, Actua includes the impact of incremental dilutive securities for the period to determine non-GAAP net income per diluted share. For periods where GAAP net income (loss) is income but non-GAAP net income (loss) is a loss, Actua excludes the impact of incremental dilutive securities for the period to determine non-GAAP net loss per diluted share.
Adjusted EBITDA excludes from GAAP net income (loss) the following items:
- Share-based compensation. Actua excludes share-based compensation expenses and other expenses associated with equity granted to employees and non-employee directors primarily because they are non-cash expenses that Actua does not consider part of ongoing operating results when assessing the performance of its business, and the exclusion of these expenses facilitates the comparison of results over different time periods and the comparison of Actua's results with results of other companies.
- Amortization of intangibles. Actua excludes amortization of acquired intangibles, which consists primarily of customer relationships and technology, because they are expenses that Actua does not consider part of ongoing operating results when assessing the performance of its business, and Actua believes that doing so facilitates comparisons to its historical operating results and to the results of other companies.
- Impairment-related and other costs. Actua excludes the effect of impairment-related and other costs, which primarily include impairment charges, restructuring and severance fees, settlement costs and other one-time costs, because Actua does not consider them part of ongoing operating results when assessing the performance of its business and believes it is useful for investors to understand the effects of these items on Actua's operations.
- Transaction expenses. Actua excludes the effect of acquisition related expenses because Actua does not consider them part of ongoing operating results when assessing the performance of its business and believes it is useful for investors to understand the effects of these items on Actua's operations.
- Other income (loss), net. Actua excludes the effect of other income (loss), net, which primarily includes transaction-driven gains and losses and revaluation of contingent consideration, as well as certain foreign currency impacts because Actua does not consider them part of ongoing operating results when assessing the performance of its business and believes it is useful for investors to understand the effects of these items on Actua's operations.
- Acquired businesses' deferred revenue. Actua includes acquired businesses' previously deferred revenues that are not recognized under GAAP because Actua considers them a part of ongoing operating results when assessing the performance of its business and believes it is useful for investors to understand the effects of these items on its operations.
- Equity loss. In accordance with GAAP, Actua recognizes its share of the earnings or losses of each company accounted for under the equity method and adjusts the carrying amount for each such company for its share of the earnings or losses of the company. Actua excludes GAAP equity income (loss) because it is significantly impacted by factors outside its direct control.
- Impact of non-cash income tax benefit items. Actua excludes the impact of any non-cash income tax benefit items as Actua believes it is useful for investors to understand the effect of this item and Actua does not consider them a part of ongoing operating results when assessing the performance of its business.
- Income (loss) from discontinued operations. Actua excludes the income (loss) from discontinued operations as Actua believes it is useful for investors to understand the effect of these items for all periods presented and does not consider them a part of ongoing operating results when assessing the performance of its business.
- Interest expense (income), net. Actua excludes income and expense from interest as Actua believes it is useful for investors to understand the effect of these items for all periods presented and does not consider them a part of ongoing operating results when assessing the performance of its business.
- Income tax expense (current/cash only). Actua excludes the impact of any current, cash income tax expense as Actua believes it is useful for investors to understand the effect of this item and does not consider them a part of ongoing operating results when assessing the performance of its business.
- Depreciation. Actua excludes depreciation expense as Actua believes it is useful for investors to understand the effect of these items for all periods presented and does not consider them a part of ongoing operating results when assessing the performance of its business.
Adjusted Cost of revenue excludes from GAAP Cost of revenue operating expenses the following item:
- Share-based compensation. Actua excludes share-based compensation expenses and other expenses associated with equity granted to employees and non-employee directors in the cost of revenue category on Actua's statements of operations primarily because they are non-cash expenses that Actua does not consider part of ongoing operating results when assessing the performance of its business, and the exclusion of these expenses facilitates the comparison of results over different time periods and the comparison of Actua's results with results of other companies.
Adjusted Sales and marketing excludes from GAAP Sales and marketing operating expenses the following item:
- Share-based compensation. Actua excludes share-based compensation expenses and other expenses associated with equity granted to employees and non-employee directors in the sales and marketing category on Actua's statements of operations primarily because they are non-cash expenses that Actua does not consider part of ongoing operating results when assessing the performance of its business, and the exclusion of these expenses facilitates the comparison of results over different time periods and the comparison of Actua's results with results of other companies.
Adjusted General and administrative excludes from GAAP General and administrative operating expenses the following item:
- Share-based compensation. Actua excludes share-based compensation expenses and other expenses associated with equity granted to employees and non-employee directors in the general and administrative category on Actua's statements of operations primarily because they are non-cash expenses that Actua does not consider part of ongoing operating results when assessing the performance of its business, and the exclusion of these expenses facilitates the comparison of results over different time periods and the comparison of Actua's results with results of other companies.
Adjusted Research and development excludes from GAAP Research and development operating expenses the following item:
- Share-based compensation. Actua excludes share-based compensation expenses and other expenses associated with equity granted to employees and non-employee directors in the research and development category on Actua's statements of operations primarily because they are non-cash expenses that Actua does not consider part of ongoing operating results when assessing the performance of its business, and the exclusion of these expenses facilitates the comparison of results over different time periods and the comparison of Actua's results with results of other companies.
Actua believes that the following considerations apply to the non-GAAP financial measures that it presents:
- Actua's management uses non-GAAP net income (loss), non-GAAP net income (loss) per diluted share, adjusted EBITDA, adjusted cost of revenue, adjusted sales and marketing, adjusted general and administrative and adjusted research and development in internal reports used by management in monitoring and making decisions regarding Actua's business, including in monthly financial reports prepared for management and in periodic reports to Actua's Board of Directors.
- An important limitation of Actua's non-GAAP financial measures is that they exclude expenses or cash flows, some of which may be significant, that are required by GAAP to be recorded. In addition, non-GAAP financial measures are subject to inherent limitations because they reflect the exercise of judgments by management about which charges to exclude from the non-GAAP financial measures.
To mitigate the limitations associated with non-GAAP financial measures, Actua reconciles its non-GAAP financial measures to the nearest comparable GAAP financial measures and recommends that investors and potential investors do not give undue weight to its non-GAAP financial measures.
CONTACT: Investor inquiries:
Karen Greene
Actua
Investor Relations
610.727.6900
IR@actua.com