Exhibit 99.1
RealPage Reports Second Quarter 2015 Financial Results
- Q2’15 total GAAP revenue of $114.8 million, representing 21 percent year-over-year growth
- Q2’15 Adjusted EBITDA of $21.4 million, margin expands over 550 basis points year-over-year
- Q2’15 Non-GAAP net income per diluted share of $0.12, representing 100 percent year-over-year growth
CARROLLTON, Texas--(BUSINESS WIRE)--August 5, 2015--RealPage, Inc. (NASDAQ:RP), a leading provider of on-demand software and software-enabled solutions for the multifamily, commercial, single-family and vacation rental housing industries, today announced financial results for its second quarter ended June 30, 2015.
“Our second quarter financial performance was strong across the board,” said Steve Winn, Chairman and CEO of RealPage. “We achieved total revenue growth of 21 percent driven by accelerated customer adoption across all of our product families. I am particularly pleased with the performance of our resident services product family, which grew 50 percent compared to last year and is now our largest product family. In addition, leasing and marketing solutions grew 6 percent—ending four consecutive quarters of negative revenue growth—and we achieved sequential revenue growth acceleration from our property management and asset optimization product families.”
Winn continued, “The total number of units using one or more RealPage solutions increased sequentially from 9.7 million to 10.3 million at the end of the second quarter, primarily due to the acquisition of Indatus, the largest smart answer automation platform in the multifamily industry. This is critical, as it provides a signficant number of new units to cross-sell our existing platform of solutions.”
“Our strong profit performance reflects the expense discipline we’ve maintained over the last year,” said Bryan Hill, CFO and Treasurer of RealPage. “With Adjusted EBITDA margins expanding over 550 basis points, compared to the second quarter of last year, we intend to stay focused on driving margin expansion over the long-term.”
Second Quarter 2015 Financial Highlights
- Total GAAP revenue of $114.8 million, an increase of 21 percent year-over-year;
- Adjusted EBITDA of $21.4 million, an increase of 71 percent year-over-year;
- Non-GAAP net income of $9.6 million, or $0.12 per diluted share, a year-over-year increase of 106 percent and 100 percent, respectively; and
- GAAP net loss of $3.3 million, or $0.04 per diluted share, compared to a GAAP net loss of $6.3 million, or $0.08 per diluted share, in the prior year quarter.
Financial Outlook
RealPage management expects to achieve the following results during its third quarter ended September 30, 2015:
- Total revenue is expected to be in the range of $118.0 million to $120.0 million;
- Adjusted EBITDA is expected to be in the range of $22.0 million to $23.0 million;
- Non-GAAP net income per diluted share is expected to be in the range of $0.12 to $0.13;
- Non-GAAP tax rate is expected to be approximately 40 percent; and
- Weighted average shares outstanding are expected to be approximately 78.4 million, exclusive of any stock repurchase activity.
RealPage management expects to achieve the following results during its calendar year ended December 31, 2015:
- Total revenue is expected to be in the range of $461.0 million to $466.0 million;
- Adjusted EBITDA is expected to be in the range of $86.0 million to $89.0 million;
- Non-GAAP net income per diluted share is expected to be in the range of $0.47 to $0.49;
- Non-GAAP tax rate is expected to be approximately 40 percent; and
- Weighted average shares outstanding are expected to be approximately 78.3 million, exclusive of any stock repurchase activity.
Please note that the above statements are forward looking and that total revenue may exclude certain adjustments and the impact of acquisitions. Actual results may differ materially. Please reference the information under the caption “Non-GAAP Financial Measures,” as well as reconciliation tables of GAAP financial measures to Non-GAAP financial measures, as set forth in this press release.
Conference Call and Webcast
The company will host a conference call on Wednesday, August 5, 2015 at 5 p.m. EDT to discuss its financial results. Participants are encouraged to listen to the presentation via a live web broadcast on the Investor Relations section of the RealPage website. In addition, a live dial-in is available domestically at 866-743-9666 and internationally at 760-298-5103. A replay will be available at 855-859-2056 or 404-537-3406, passcode 1153533, until August 9, 2015.
About RealPage
RealPage, Inc. is a leading provider of comprehensive property management software solutions for the multifamily, commercial, single-family and vacation rental housing industries. These solutions help property owners increase efficiency, decrease expenses, enhance the resident experience and generate more revenue. Using its innovative SaaS platform, RealPage's on demand software enables easy system integration and streamlines online property management. Its product line covers the full spectrum of property management, leasing and marketing, asset optimization, and resident services solutions. Founded in 1998 and headquartered in Carrollton, Texas, RealPage currently serves over 10,000 clients worldwide from offices in North America, Europe and Asia. For more information about the company, visit http://www.realpage.com.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains "forward-looking" statements relating to RealPage, Inc.'s expected, possible or assumed future results; the ability to cross-sell its existing platform of solutions to newly acquired units; and its focus on driving margin expansion. These forward-looking statements are based on management's beliefs and assumptions and on information currently available to management. Forward-looking statements include all statements that are not historical facts and may be identified by terms such as "expects," "believes," "plans," or similar expressions and the negatives of those terms. Those forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. The Company may be required to revise its results upon finalizing its review of first quarter results, which could cause or contribute to such differences. Additional factors that could cause or contribute to such differences include, but are not limited to, the following: (a) the possibility that general economic conditions, including leasing velocity or uncertainty cause information technology spending, particularly in the rental housing industry, to be reduced or purchasing decisions to be delayed; (b) an increase in insurance claims; (c) an increase in customer cancellations; (d) the inability to increase sales to existing customers and to attract new customers; (e) RealPage, Inc.'s failure to integrate acquired businesses and any future acquisitions successfully; (f) the timing and success of new product introductions by RealPage, Inc. or its competitors; (g) changes in RealPage, Inc.'s pricing policies or those of its competitors; (h) legal or regulatory proceedings; (i) the inability to complete the integration of our LeaseStar products and deliver enhanced functionality on a timely basis; (j) the inability to achieve revenue growth or to enable margin expansion; and (k) such other risks and uncertainties described more fully in documents filed with or furnished to the Securities and Exchange Commission ("SEC") by RealPage Inc., including its Quarterly Report on Form 10-Q previously filed with the SEC on May 8, 2015. All information provided in this release is as of the date hereof and RealPage Inc. undertakes no duty to update this information except as required by law.
Non-GAAP Financial Measures
This press release contains non-GAAP financial measures. These measures differ from traditional GAAP financial measures in that they (1) include acquisition-related and other deferred revenue adjustments; (2) exclude depreciation, loss on impairment and disposal of assets; amortization of intangible assets; stock-based compensation expenses; any impact related to the Yardi litigation (including related insurance litigation and settlement costs), collectively the “Yardi Litigation”; and acquisition related expenses (including any purchase accounting adjustments); and (3) include income taxes at a sustainable effective rate, which excludes the reversal of valuation allowances due to expected or realization of deferred tax assets.
We define non-GAAP total revenue as total revenue plus acquisition-related and other deferred revenue adjustments. We also define non-GAAP on demand revenue as on demand revenue plus acquisition-related and other deferred revenue adjustments. Non-GAAP net income is defined as net (loss) income plus acquisition-related and other deferred revenue adjustments; amortization of intangible assets; stock-based compensation expense; acquisition-related expense; any impact related to the Yardi Litigation; loss on disposal and impairment of assets; and an adjustment to income tax expense (benefit) to reflect our effective tax rate. Other non-GAAP measures such as non-GAAP product development, non-GAAP sales and marketing, non-GAAP general and administrative, and non-GAAP operating expense and income exclude amortization of intangible assets; litigation-related expense; loss on disposal and impairment of assets; and stock-based compensation when calculating their composition. In addition to these adjustments, non-GAAP operating income is adjusted for acquisition-related and other deferred revenue.
Adjusted gross profit is defined as gross profit plus acquisition-related and other deferred revenue adjustments, depreciation and amortization of intangible assets, and stock-based compensation.
We define Adjusted EBITDA as net (loss) income plus acquisition-related and other deferred revenue adjustments; depreciation, asset impairment and loss on disposal of assets; amortization of intangible assets; net interest expense; income tax expense (benefit); stock-based compensation expense; any impact related to the Yardi Litigation; and acquisition-related expenses.
Non-GAAP on demand revenue per average on demand unit represents non-GAAP on demand revenue for the period presented divided by average on demand units for the same period. For interim periods, the calculation is performed on an annualized basis. We calculate average on demand units as the average of the beginning and ending on demand units for each quarter in the period presented. We monitor this metric to measure our success in increasing the number of on demand software solutions utilized by our customers to manage their rental housing units, our overall revenue and profitability.
Non-GAAP on demand annual customer value, or “ACV”, represents management's estimate of the current annual run-rate value of on demand customer relationships. ACV is calculated by multiplying ending on demand units by annualized Non-GAAP on demand revenue per average on demand unit.
We believe that the non-GAAP financial measures defined above are useful to investors and other users of our financial statements in evaluating our operating performance because they provide additional tools to compare business performance across companies and across periods. We believe that:
- these non-GAAP financial measures provide investors and other users of our financial information consistency and comparability with our past financial performance, facilitates period-to-period comparisons of operations and facilitates comparisons with our peer companies, many of which use similar non-GAAP financial measures to supplement their GAAP results;
- it is useful to exclude certain non-cash charges, such as depreciation and asset impairment, amortization of intangible assets and stock-based compensation and non-core operational charges, such as acquisition-related expenses and any impact related to the Yardi Litigation, from non-GAAP earnings measures, such as Adjusted EBITDA and non-GAAP net income, because the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations and these expenses can vary significantly between periods as a result of new acquisitions, full amortization of previously acquired tangible and intangible assets or the timing of new stock-based awards, as the case may be; and
- it is useful to include deferred revenue written down for GAAP purposes under purchase accounting rules and revenue deferred due to a lack of historical experience determining the settlement of the contractual obligation in order to appropriately measure the underlying performance of our business operations in the period of activity and associated expense.
We use the non-GAAP financial measures defined above in conjunction with traditional GAAP financial measures as part of our overall assessment of our performance; for planning purposes, including the preparation of our annual operating budget; to evaluate the effectiveness of our business strategies; and to communicate with our board of directors concerning our financial performance.
We do not place undue reliance on non-GAAP financial measures as our only measures of operating performance. Non-GAAP financial measures should not be considered as a substitute for other measures of financial performance or liquidity reported in accordance with GAAP. There are limitations to using non-GAAP financial measures, including that other companies may calculate these measures differently than we do, that they do not reflect changes in, or cash requirements for, our working capital, and they do not reflect our capital expenditures or future requirements. We compensate for the inherent limitations associated with using non-GAAP financial measures through disclosure of these limitations, presentation of our financial statements in accordance with GAAP, and reconciliation of non-GAAP financial measures to the most directly comparable GAAP measure.
Condensed Consolidated Balance Sheets | |||||||||||
(In thousands, except share amounts) | |||||||||||
| |||||||||||
June 30, | December 31, | ||||||||||
2015 | 2014 | ||||||||||
(Unaudited) | |||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 29,322 | $ | 26,936 | |||||||
Restricted cash | 99,494 | 85,543 | |||||||||
Accounts receivable, less allowance for doubtful accounts of $2,147 and $2,363 at June 30, 2015 and December 31, 2014, respectively | 65,478 | 64,845 | |||||||||
Prepaid expenses | 8,524 | 7,647 | |||||||||
Deferred tax asset, net | 11,111 | 10,996 | |||||||||
Other current assets | 1,203 | 1,848 | |||||||||
Total current assets | 215,132 | 197,815 | |||||||||
Property, equipment and software, net | 70,831 | 72,616 | |||||||||
Goodwill | 220,555 | 193,378 | |||||||||
Identified intangible assets, net | 113,550 | 100,085 | |||||||||
Deferred tax asset, net | 1,445 | 2,537 | |||||||||
Other assets | 4,895 | 5,059 | |||||||||
Total assets | $ | 626,408 | $ | 571,490 | |||||||
Liabilities and stockholders’ equity | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 17,323 | $ | 14,830 | |||||||
Accrued expenses and other current liabilities | 33,929 | 22,905 | |||||||||
Current portion of deferred revenue | 74,650 | 73,485 | |||||||||
Customer deposits held in restricted accounts | 99,618 | 85,489 | |||||||||
Total current liabilities | 225,520 | 196,709 | |||||||||
Deferred revenue | 7,063 | 6,903 | |||||||||
Deferred tax liability, net | 3,202 | 5,196 | |||||||||
Revolving credit facility | 50,000 | 20,000 | |||||||||
Other long-term liabilities | 13,259 | 13,902 | |||||||||
Total liabilities | 299,044 | 242,710 | |||||||||
Stockholders’ equity: | |||||||||||
Preferred stock, $0.001 par value: 10,000,000 shares authorized and zero shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively | — | — | |||||||||
Common stock, $0.001 par value: 125,000,000 shares authorized, 82,990,920 and 83,211,650 shares issued and 79,266,900 and 79,037,351 shares outstanding at June 30, 2015 and December 31, 2014, respectively | 83 | 83 | |||||||||
Additional paid-in capital | 451,316 | 437,664 | |||||||||
Treasury stock, at cost: 3,724,020 and 4,174,299 shares at June 30, 2015 and December 31, 2014, respectively | (21,814 | ) | (33,398 | ) | |||||||
Accumulated deficit | (101,776 | ) | (75,360 | ) | |||||||
Accumulated other comprehensive loss | (445 | ) | (209 | ) | |||||||
Total stockholders’ equity | 327,364 | 328,780 | |||||||||
Total liabilities and stockholders’ equity | $ | 626,408 | $ | 571,490 | |||||||
Condensed Consolidated Statements of Operations | |||||||||||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||||||
Revenue: | |||||||||||||||||||||
On demand | $ | 110,640 | $ | 91,606 | $ | 217,100 | $ | 188,614 | |||||||||||||
On premise | 726 | 826 | 1,467 | 1,691 | |||||||||||||||||
Professional and other | 3,396 | 2,556 | 6,665 | 5,246 | |||||||||||||||||
Total revenue | 114,762 | 94,988 | 225,232 | 195,551 | |||||||||||||||||
Cost of revenue(1) | 49,557 | 42,115 | 97,281 | 82,042 | |||||||||||||||||
Gross profit | 65,205 | 52,873 | 127,951 | 113,509 | |||||||||||||||||
Operating expense: | |||||||||||||||||||||
Product development(1) | 18,084 | 15,941 | 36,061 | 30,782 | |||||||||||||||||
Sales and marketing(1) | 29,823 | 28,030 | 58,774 | 54,021 | |||||||||||||||||
General and administrative(1) | 20,037 | 16,819 | 38,900 | 37,748 | |||||||||||||||||
Total operating expense | 67,944 | 60,790 | 133,735 | 122,551 | |||||||||||||||||
Operating loss | (2,739 | ) | (7,917 | ) | (5,784 | ) | (9,042 | ) | |||||||||||||
Interest expense and other, net | (390 | ) | (204 | ) | (657 | ) | (426 | ) | |||||||||||||
Loss before income taxes | (3,129 | ) | (8,121 | ) | (6,441 | ) | (9,468 | ) | |||||||||||||
Income tax expense (benefit) | 189 | (1,830 | ) | (1,515 | ) | (2,341 | ) | ||||||||||||||
Net loss | $ | (3,318 | ) | $ | (6,291 | ) | $ | (4,926 | ) | $ | (7,127 | ) | |||||||||
Net loss per share | |||||||||||||||||||||
Basic | $ | (0.04 | ) | $ | (0.08 | ) | $ | (0.06 | ) | $ | (0.09 | ) | |||||||||
Diluted | $ | (0.04 | ) | $ | (0.08 | ) | $ | (0.06 | ) | $ | (0.09 | ) | |||||||||
Weighted average shares used in computing net loss per share | |||||||||||||||||||||
Basic | 76,799 | 77,283 | 76,877 | 77,004 | |||||||||||||||||
Diluted | 76,799 | 77,283 | 76,877 | 77,004 | |||||||||||||||||
(1) Includes stock-based compensation expense as follows: | |||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||||||
Cost of revenue | $ | 1,216 | $ | 866 | $ | 2,450 | $ | 1,873 | |||||||||||||
Product development | 2,572 | 2,144 | 5,291 | 4,056 | |||||||||||||||||
Sales and marketing | 3,843 | 3,101 | 7,632 | 6,244 | |||||||||||||||||
General and administrative | 3,619 | 3,922 | 6,624 | 7,085 | |||||||||||||||||
$ | 11,250 | $ | 10,033 | $ | 21,997 | $ | 19,258 | ||||||||||||||
Condensed Consolidated Statements of Cash Flows | |||||||||||||||||||||
(In thousands) | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||||||
Cash flows from operating activities: | |||||||||||||||||||||
Net loss | $ | (3,318 | ) | $ | (6,291 | ) | $ | (4,926 | ) | $ | (7,127 | ) | |||||||||
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||||||||||||||
Depreciation and amortization | 11,263 | 10,067 | 21,874 | 19,571 | |||||||||||||||||
Deferred tax expense (benefit) | 454 | (2,859 | ) | (1,654 | ) | (3,850 | ) | ||||||||||||||
Stock-based compensation | 11,250 | 10,033 | 21,997 | 19,258 | |||||||||||||||||
Excess tax benefit from stock options | 637 | — | 637 | — | |||||||||||||||||
Loss on disposal and impairment of assets | 1,684 | — | 2,803 | 20 | |||||||||||||||||
Acquisition-related contingent consideration | 116 | (233 | ) | 493 | (66 | ) | |||||||||||||||
Changes in assets and liabilities, net of assets acquired and liabilities assumed in business combinations | 4,210 | 8,405 | 7,570 | 14,942 | |||||||||||||||||
Net cash provided by operating activities | 26,296 | 19,122 | 48,794 | 42,748 | |||||||||||||||||
Cash flows from investing activities: | |||||||||||||||||||||
Purchases of property, equipment and software | (4,895 | ) | (11,873 | ) | (11,077 | ) | (19,135 | ) | |||||||||||||
Proceeds from disposal of assets | 305 | — | 305 | — | |||||||||||||||||
Acquisition of businesses, net of cash acquired | (45,450 | ) | (34,874 | ) | (45,450 | ) | (42,053 | ) | |||||||||||||
Intangible asset additions | (171 | ) | — | (171 | ) | — | |||||||||||||||
Net cash used in investing activities | (50,211 | ) | (46,747 | ) | (56,393 | ) | (61,188 | ) | |||||||||||||
Cash flows from financing activities: | |||||||||||||||||||||
Payments on and proceeds from debt, net | 34,857 | 24,859 | 29,706 | 24,720 | |||||||||||||||||
Payments of deferred acquisition-related consideration | (95 | ) | (28 | ) | (1,234 | ) | (748 | ) | |||||||||||||
Issuance of common stock | 714 | 3,741 | 1,469 | 5,016 | |||||||||||||||||
Excess tax benefit from stock options | (637 | ) | — | (637 | ) | — | |||||||||||||||
Purchase of treasury stock | (9,317 | ) | (3,831 | ) | (19,083 | ) | (5,824 | ) | |||||||||||||
Net cash provided by financing activities | 25,522 | 24,741 | 10,221 | 23,164 | |||||||||||||||||
Net increase (decrease) in cash and cash equivalents | 1,607 | (2,884 | ) | 2,622 | 4,724 | ||||||||||||||||
Effect of exchange rate on cash | (72 | ) | 5 | (236 | ) | (9 | ) | ||||||||||||||
Cash and cash equivalents: | |||||||||||||||||||||
Beginning of period | 27,787 | 42,096 | 26,936 | 34,502 | |||||||||||||||||
End of period | $ | 29,322 | $ | 39,217 | $ | 29,322 | $ | 39,217 | |||||||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures | |||||||||||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||||||
Non-GAAP revenue: | |||||||||||||||||||||
Revenue (GAAP) | $ | 114,762 | $ | 94,988 | $ | 225,232 | $ | 195,551 | |||||||||||||
Acquisition-related and other deferred revenue | (532 | ) | (207 | ) | (998 | ) | 1,117 | ||||||||||||||
Non-GAAP revenue | $ | 114,230 | $ | 94,781 | $ | 224,234 | $ | 196,668 | |||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||||||
Adjusted gross profit: | |||||||||||||||||||||
Gross profit (GAAP) | $ | 65,205 | $ | 52,873 | $ | 127,951 | $ | 113,509 | |||||||||||||
Acquisition-related and other deferred revenue | (532 | ) | (207 | ) | (998 | ) | 1,117 | ||||||||||||||
Depreciation | 2,433 | 2,013 | 4,838 | 3,871 | |||||||||||||||||
Amortization of intangible assets | 3,276 | 2,447 | 6,090 | 4,870 | |||||||||||||||||
Stock-based compensation expense | 1,216 | 866 | 2,450 | 1,873 | |||||||||||||||||
Adjusted gross profit | $ | 71,598 | $ | 57,992 | $ | 140,331 | $ | 125,240 | |||||||||||||
Adjusted gross profit margin | 62.7 | % | 61.2 | % | 62.6 | % | 63.7 | % | |||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||||||
Adjusted EBITDA: | |||||||||||||||||||||
Net loss (GAAP) | $ | (3,318 | ) | $ | (6,291 | ) | $ | (4,926 | ) | $ | (7,127 | ) | |||||||||
Acquisition-related and other deferred revenue | (532 | ) | (207 | ) | (998 | ) | 1,117 | ||||||||||||||
Depreciation, asset impairment and loss on disposal of assets | 6,868 | 4,581 | 13,018 | 8,790 | |||||||||||||||||
Amortization of intangible assets | 6,079 | 5,486 | 11,659 | 10,801 | |||||||||||||||||
Interest expense, net | 308 | 207 | 575 | 431 | |||||||||||||||||
Income tax expense (benefit) | 189 | (1,830 | ) | (1,515 | ) | (2,341 | ) | ||||||||||||||
Litigation-related expense | — | 168 | 2 | 4,845 | |||||||||||||||||
Stock-based compensation expense | 11,250 | 10,033 | 21,997 | 19,258 | |||||||||||||||||
Acquisition-related expense | 565 | 357 | 1,657 | 1,238 | |||||||||||||||||
Adjusted EBITDA | $ | 21,409 | $ | 12,504 | $ | 41,469 | $ | 37,012 | |||||||||||||
Adjusted EBITDA margin | 18.7 | % | 13.2 | % | 18.5 | % | 18.8 | % | |||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||||||
Non-GAAP total product development: | |||||||||||||||||||||
Product development (GAAP) | $ | 18,084 | $ | 15,941 | $ | 36,061 | $ | 30,782 | |||||||||||||
Less: Loss on disposal and impairment of assets | 202 | — | 801 | — | |||||||||||||||||
Stock-based compensation expense | 2,572 | 2,144 | 5,291 | 4,056 | |||||||||||||||||
Non-GAAP total product development | $ | 15,310 | $ | 13,797 | $ | 29,969 | $ | 26,726 | |||||||||||||
Non-GAAP total product development as % of non-GAAP revenue: | 13.4 | % | 14.6 | % | 13.4 | % | 13.6 | % | |||||||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures | |||||||||||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||||||
Non-GAAP total sales and marketing: | |||||||||||||||||||||
Sales and marketing (GAAP) | $ | 29,823 | $ | 28,030 | $ | 58,774 | $ | 54,021 | |||||||||||||
Less: Amortization of intangible assets | 2,803 | 2,847 | 5,569 | 5,739 | |||||||||||||||||
Stock-based compensation expense | 3,843 | 3,101 | 7,632 | 6,244 | |||||||||||||||||
Non-GAAP total sales and marketing | $ | 23,177 | $ | 22,082 | $ | 45,573 | $ | 42,038 | |||||||||||||
Non-GAAP total sales and marketing as % of non-GAAP revenue: | 20.3 | % | 23.3 | % | 20.3 | % | 21.4 | % | |||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||||||
Non-GAAP total general and administrative: | |||||||||||||||||||||
General and administrative (GAAP) | $ | 20,037 | $ | 16,819 | $ | 38,900 | $ | 37,748 | |||||||||||||
Less: Loss on disposal and impairment of assets | 1,482 | — | 2,002 | 20 | |||||||||||||||||
Amortization of intangible assets | — | 192 | — | 192 | |||||||||||||||||
Acquisition-related expense | 565 | 357 | 1,657 | 1,238 | |||||||||||||||||
Litigation-related expense | — | 168 | 2 | 4,845 | |||||||||||||||||
Stock-based compensation expense | 3,619 | 3,922 | 6,624 | 7,085 | |||||||||||||||||
Non-GAAP total general and administrative | $ | 14,371 | $ | 12,180 | $ | 28,615 | $ | 24,368 | |||||||||||||
Non-GAAP total general and administrative as % of non-GAAP revenue: | 12.6 | % | 12.9 | % | 12.8 | % | 12.4 | % | |||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||||||
Non-GAAP total operating expense: | |||||||||||||||||||||
Operating expense (GAAP) | $ | 67,944 | $ | 60,790 | $ | 133,735 | $ | 122,551 | |||||||||||||
Less: Loss on disposal and impairment of assets | 1,684 | — | 2,803 | 20 | |||||||||||||||||
Amortization of intangible assets | 2,803 | 3,039 | 5,569 | 5,931 | |||||||||||||||||
Acquisition-related expense | 565 | 357 | 1,657 | 1,238 | |||||||||||||||||
Litigation-related expense | — | 168 | 2 | 4,845 | |||||||||||||||||
Stock-based compensation expense | 10,034 | 9,167 | 19,547 | 17,385 | |||||||||||||||||
Non-GAAP total operating expense | $ | 52,858 | $ | 48,059 | $ | 104,157 | $ | 93,132 | |||||||||||||
Non-GAAP total operating expense as % of non-GAAP revenue: | 46.3 | % | 50.7 | % | 46.5 | % | 47.4 | % | |||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||||||
Non-GAAP operating income: | |||||||||||||||||||||
Operating loss | $ | (2,739 | ) | $ | (7,917 | ) | $ | (5,784 | ) | $ | (9,042 | ) | |||||||||
Acquisition-related and other deferred revenue | (532 | ) | (207 | ) | (998 | ) | 1,117 | ||||||||||||||
Loss on disposal and impairment of assets | 1,684 | — | 2,803 | 20 | |||||||||||||||||
Amortization of intangible assets | 6,079 | 5,486 | 11,659 | 10,801 | |||||||||||||||||
Litigation-related expense | — | 168 | 2 | 4,845 | |||||||||||||||||
Stock-based compensation expense | 11,250 | 10,033 | 21,997 | 19,258 | |||||||||||||||||
Acquisition-related expense | 565 | 357 | 1,657 | 1,238 | |||||||||||||||||
Non-GAAP operating income | $ | 16,307 | $ | 7,920 | $ | 31,336 | $ | 28,237 | |||||||||||||
Non-GAAP operating margin | 14.3 | % | 8.4 | % | 14.0 | % | 14.4 | % | |||||||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures | |||||||||||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||||||
Non-GAAP net income: | |||||||||||||||||||||
Net loss (GAAP) | $ | (3,318 | ) | $ | (6,291 | ) | $ | (4,926 | ) | $ | (7,127 | ) | |||||||||
Tax deductible items: | |||||||||||||||||||||
Acquisition-related and other deferred revenue | (532 | ) | (207 | ) | (998 | ) | 1,117 | ||||||||||||||
Amortization of intangible assets | 6,079 | 5,486 | 11,659 | 10,801 | |||||||||||||||||
Loss on disposal and impairment of assets | 1,684 | — | 2,803 | 20 | |||||||||||||||||
Stock-based compensation expense | 11,250 | 10,033 | 21,997 | 19,258 | |||||||||||||||||
Litigation-related expense | — | 168 | 2 | 4,845 | |||||||||||||||||
Acquisition-related expense | 565 | 357 | 1,657 | 1,238 | |||||||||||||||||
Subtotal of tax deductible items | 19,046 | 15,837 | 37,120 | 37,279 | |||||||||||||||||
Tax impact of tax deductible items(1) | (7,618 | ) | (6,335 | ) | (14,848 | ) | (14,912 | ) | |||||||||||||
Tax benefit resulting from applying effective tax rate(2) | 1,440 | 1,418 | 1,061 | 1,446 | |||||||||||||||||
Non-GAAP net income | $ | 9,550 | $ | 4,629 | $ | 18,407 | $ | 16,686 | |||||||||||||
Non-GAAP net income per share - diluted | $ | 0.12 | $ | 0.06 | $ | 0.24 | $ | 0.21 | |||||||||||||
Weighted average shares - basic | 76,799 | 77,283 | 76,877 | 77,004 | |||||||||||||||||
Weighted average effect of dilutive securities - non-GAAP | 607 | 912 | 850 | 1,016 | |||||||||||||||||
Non-GAAP weighted average shares - diluted | 77,406 | 78,195 | 77,727 | 78,020 | |||||||||||||||||
(1) Reflects the removal of the tax benefit associated with the acquisition-related and other deferred revenue adjustment, amortization of intangible assets, loss on disposal and impairment of assets, stock-based compensation expense, litigation expense, and acquisition-related expense. | |||||||||||||||||||||
(2) Represents adjusting to a normalized effective tax rate of 40%. | |||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||||||
Annualized non-GAAP on demand revenue per average on demand unit: | |||||||||||||||||||||
On demand revenue (GAAP) | $ | 110,640 | $ | 91,606 | $ | 217,100 | $ | 188,614 | |||||||||||||
Acquisition-related and other deferred revenue | (532 | ) | (207 | ) | (998 | ) | 1,117 | ||||||||||||||
Non-GAAP on demand revenue | 110,108 | 91,399 | 216,102 | 189,731 | |||||||||||||||||
Ending on demand units | 10,302 | 9,371 | 10,302 | 9,371 | |||||||||||||||||
Average on demand units | 10,001 | 9,328 | 9,816 | 9,241 | |||||||||||||||||
Annualized non-GAAP on demand revenue per average on demand unit | $ | 44.04 | $ | 39.19 | $ | 44.03 | $ | 41.06 | |||||||||||||
Non-GAAP on demand annual customer value(1) | $ | 453,700 | $ | 367,249 | |||||||||||||||||
(1) This metric represents management's estimate of the current annual run-rate value of on demand customer relationships. This metric is calculated by multiplying ending on demand units by annualized non-GAAP on demand revenue per average on demand unit for the periods presented. | |||||||||||||||||||||
CONTACT:
RealPage, Inc.
Investor Relations
Rhett Butler, 972-820-3773
rhett.butler@realpage.com