Delaware
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000-50463
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77-0438629
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(State or other jurisdiction
of incorporation)
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(Commission
file number)
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(I.R.S. Employer
Identification No.)
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☐
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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☐
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 2.02.
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Results of Operations and Financial Condition
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Item 9.01.
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Financial Statements and Exhibits
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(d)
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Exhibits
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Exhibit
Number |
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Description
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Press Release of Callidus Software Inc. dated February 9, 2016.
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CALLIDUS SOFTWARE INC.
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Date: February 9, 2016
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By:
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/s/ Bob L. Corey
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Bob L. Corey
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Executive Vice President, Chief Financial Officer
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Exhibit
Number |
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Description
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Press Release of Callidus Software Inc. dated February 9, 2016.
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- | Q4 SaaS Revenue Increases 34% to $32.6 Million |
- | Q4 Non-GAAP Earnings per Share Increases 59% to $0.08 |
- | Annual Operating Cash Flow Increases 189% to $26.5 Million |
· | Recurring revenue gross margin was 75%, compared to 73% for the same quarter in the prior year. |
· | Overall gross margin was 63%, compared to 61% for the same quarter in the prior year. |
· | Operating loss was $1.8 million compared to $3.5 million for the same quarter in the prior year. |
· | Net loss was $2.1 million, or ($0.04) on a per share basis, compared to net loss of $4.1 million, or ($0.08) on a per share basis for the same quarter in the prior year. |
· | Recurring revenue gross margin was 77%, compared to 76% for the same quarter in the prior year. |
· | Overall gross margin was 66%, compared to 64%, for the same quarter in the prior year. |
· | Operating income was $4.7 million, compared to $2.9 million for the same quarter in the prior year. |
· | Net income was $4.4 million, or $0.08 per fully diluted share, compared to $2.3 million, or $0.05 per fully diluted share, for the same quarter in the prior year. |
· | Recurring revenue gross margin was 74%, compared to 69% in the prior year. |
· | Operating loss was $11.7 million compared to $13.5 million in the prior year. |
· | Net loss was $13.1 million, or ($0.24) on a per share basis, compared to a net loss of $11.6 million, or ($0.24) per share in the prior year. |
· | Recurring revenue gross margin was 78% compared to 73% in the prior year. |
· | Operating income was $12.7 million compared to $8.7 million in the prior year. |
· | Net income was $11.2 million, or $0.20 per fully diluted share, compared to $7.1 million, or $0.14 per fully diluted share in the prior year. |
· | CallidusCloud unveiled its next-generation version of its multi-award-winning incentive and commissions platform at an exclusive summit for executives from High Tech companies. The packed house, full of top customers and prospects, was treated to a first look at the new innovations in the platform including the new guided UI that makes unlocking the power of incentives easier than ever. President and CEO Leslie Stretch was joined by leaders from the customer and partner community who shared their first hand experiences with the audience. |
· | In December, CallidusCloud hosted its first partner summit bringing together thought leaders and industry experts from its partner ecosystem. At the summit a program of incentives and enablement activities was announced to accelerate the adoption of Lead to Money amongst leading systems integrators, consulting partners and independent software vendors. |
· | CallidusCloud announced a unique new mobile Configure Price Quote application enabling remote users and field personnel to reduce the time it takes to generate quotes and proposals on the go. The new app provides salespeople the ability to configure value-rich quotes in the field and seamlessly sync them up for sending when back online. The mobile app provides access to critical product, pricing and configuration information in the field and eliminates the need for re-keying between systems, speeding up the sale. |
· | The Litmos mobile learning platform joined the ADP marketplace in October, making the award-winning platform available to the thousands of users of ADP's Human Capital Management technologies. Litmos users will now be able to access pre-integrated workforce data in real-time through one intuitive platform. |
CALLIDUS SOFTWARE INC. | ||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||
Three Months Ended December 31, |
Three Months Ended December 31, |
Twelve Months Ended December 31, |
Twelve Months Ended December 31, |
|||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Revenue: | ||||||||||||||||
Recurring | $ | 36,004 | $ | 28,326 | $ | 129,911 | $ | 99,807 | ||||||||
Services and license | 10,780 | 9,800 | 43,176 | 36,811 | ||||||||||||
Total revenue | 46,784 | 38,126 | 173,087 | 136,618 | ||||||||||||
Cost of revenue: | ||||||||||||||||
Recurring | 9,073 | 7,576 | 34,306 | 31,282 | ||||||||||||
Services and license | 8,104 | 7,288 | 32,145 | 24,756 | ||||||||||||
Total cost of revenue | 17,177 | 14,864 | 66,451 | 56,038 | ||||||||||||
Gross profit | 29,607 | 23,262 | 106,636 | 80,580 | ||||||||||||
Operating expenses: | ||||||||||||||||
Sales and marketing | 15,408 | 13,352 | 58,785 | 47,040 | ||||||||||||
Research and development | 7,202 | 5,469 | 26,088 | 20,307 | ||||||||||||
General and administrative | 8,877 | 8,142 | 33,290 | 26,255 | ||||||||||||
Income from settlement and patent licensing | (500 | ) | (500 | ) | (500 | ) | (500 | ) | ||||||||
Restructuring and other | 394 | 316 | 628 | 1,025 | ||||||||||||
Total operating expenses | 31,381 | 26,779 | 118,291 | 94,127 | ||||||||||||
Operating loss | (1,774 | ) | (3,517 | ) | (11,655 | ) | (13,547 | ) | ||||||||
Interest income and other income (expense), net | (108 | ) | (444 | ) | (522 | ) | 3,504 | |||||||||
Interest expense | (31 | ) | (77 | ) | (180 | ) | (506 | ) | ||||||||
Loss before provision for income taxes | (1,913 | ) | (4,038 | ) | (12,357 | ) | (10,549 | ) | ||||||||
Provision for income taxes | 225 | 71 | 791 | 1,012 | ||||||||||||
Net loss | $ | (2,138 | ) | $ | (4,109 | ) | $ | (13,148 | ) | $ | (11,561 | ) | ||||
Net loss per share | ||||||||||||||||
Basic and Diluted | $ | (0.04 | ) | $ | (0.08 | ) | $ | (0.24 | ) | $ | (0.24 | ) | ||||
Weighted average shares used in computing net loss per share: | ||||||||||||||||
Basic and Diluted | 56,390 | 48,987 | 54,719 | 47,457 |
CALLIDUS SOFTWARE INC. | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
(In thousands) | ||||||||
December 31, | December 31, | |||||||
2015 | 2014 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 77,232 | $ | 34,200 | ||||
Short-term investments | 19,977 | 2,766 | ||||||
Accounts receivable, net | 43,461 | 41,623 | ||||||
Prepaid and other current assets | 11,385 | 10,384 | ||||||
Total current assets | 152,055 | 88,973 | ||||||
Property and equipment, net | 20,540 | 18,755 | ||||||
Goodwill | 50,146 | 46,970 | ||||||
Intangible assets, net | 14,885 | 17,757 | ||||||
Deposits and other assets | 4,016 | 3,843 | ||||||
Total assets | $ | 241,642 | $ | 176,298 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 3,635 | $ | 2,056 | ||||
Accrued payroll and related expenses | 12,510 | 9,051 | ||||||
Accrued expenses | 11,018 | 18,343 | ||||||
Deferred revenue | 74,644 | 61,427 | ||||||
Capital lease obligations | - | 1,001 | ||||||
Total current liabilities | 101,807 | 91,878 | ||||||
Deferred revenue, noncurrent | 5,186 | 10,195 | ||||||
Deferred income taxes, noncurrent | 1,477 | 561 | ||||||
Revolving line of credit | - | 10,481 | ||||||
Other noncurrent liabilities | 4,371 | 4,709 | ||||||
Total liabilities | 112,841 | 117,824 | ||||||
Stockholders' equity: | ||||||||
Common stock | 56 | 49 | ||||||
Additional paid-in capital | 428,776 | 344,312 | ||||||
Treasury stock | (14,430 | ) | (14,430 | ) | ||||
Accumulated other comprehensive loss | (1,735 | ) | (739 | ) | ||||
Accumulated deficit | (283,866 | ) | (270,718 | ) | ||||
Total stockholders' equity | 128,801 | 58,474 | ||||||
Total liabilities and stockholders' equity | $ | 241,642 | $ | 176,298 | ||||
CALLIDUS SOFTWARE INC. | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(In thousands) | ||||||||
Twelve Months Ended December 31, | ||||||||
2015 | 2014 | |||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (13,148 | ) | $ | (11,561 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation expense | 6,011 | 5,503 | ||||||
Amortization of intangible assets | 5,687 | 4,971 | ||||||
Gain on sale of intangible assets | - | (3,862 | ) | |||||
Provision for doubtful accounts | 1,897 | 852 | ||||||
Stock-based compensation | 18,592 | 11,813 | ||||||
Deferred income taxes | 26 | (86 | ) | |||||
Release of valuation allowance | - | (265 | ) | |||||
Excess tax benefits from stock-based compensation | (91 | ) | - | |||||
Loss on disposal of property and equipment | 10 | 43 | ||||||
Amortization of convertible notes issuance cost | - | 58 | ||||||
Net amortization on investments | 133 | 27 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (2,944 | ) | (11,746 | ) | ||||
Prepaid and other current assets | (972 | ) | (3,749 | ) | ||||
Other noncurrent assets | (549 | ) | (1,088 | ) | ||||
Accounts payable | 1,413 | (794 | ) | |||||
Accrued expenses and other liabilities | 67 | 6,696 | ||||||
Accrued payroll and related expenses | 3,459 | 1,149 | ||||||
Accrued restructuring and other expenses | (131 | ) | (181 | ) | ||||
Deferred revenue | 7,009 | 11,371 | ||||||
Net cash provided by operating activities | 26,469 | 9,151 | ||||||
Cash flows from investing activities: | ||||||||
Purchases of investments | (24,479 | ) | (2,784 | ) | ||||
Proceeds from maturities and sale of investments | 7,119 | 7,850 | ||||||
Purchases of property and equipment (net) | (13,128 | ) | (7,121 | ) | ||||
Proceeds from sale of intangible assets, net of expense | - | 4,651 | ||||||
Purchases of intangible assets | (827 | ) | (1,112 | ) | ||||
Acquisitions, net of cash acquired | (4,365 | ) | (15,488 | ) | ||||
Net cash (used in) investing activities | (35,680 | ) | (14,004 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from follow-on offering, net of issuance costs | 64,372 | - | ||||||
Proceeds from issuance of common stock | 4,484 | 4,852 | ||||||
Restricted stock units acquired to settle employee withholding liability | (3,070 | ) | (1,723 | ) | ||||
Excess tax benefits from stock-based compensation | 91 | - | ||||||
Proceeds (repayment) from/to line of credit | (10,481 | ) | 10,481 | |||||
Payment of consideration related to acquisitions | (1,802 | ) | (630 | ) | ||||
Repayment of debt | - | (645 | ) | |||||
Payment of principal under capital leases | (1,001 | ) | (1,294 | ) | ||||
Net cash provided by financing activities | 52,593 | 11,041 | ||||||
Effect of exchange rates on cash and cash equivalents | (350 | ) | (283 | ) | ||||
Net increase in cash and cash equivalents | 43,032 | 5,905 | ||||||
Cash and cash equivalents at beginning of period | 34,200 | 28,295 | ||||||
Cash and cash equivalents at end of period | $ | 77,232 | $ | 34,200 | ||||
CALLIDUS SOFTWARE INC. | ||||||||||
GAAP TO NON-GAAP ADJUSTMENT SUMMARY | ||||||||||
(In thousands) | ||||||||||
(unaudited) |
GAAP to Non-GAAP adjustments include stock-based compensation, amortization of acquired intangible assets, patent litigation and settlement costs and estimates, interest expense on convertible notes, amortization of convertible note issuance costs, debt conversion expense, restructuring and other expenses, acquisition-related costs and gain on sale of domain names and trademarks as follows:
Three Months Ended
December 31,
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Twelve Months Ended
December 31,
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2015 | 2014 | 2015 | 2014 | |||||||||||||
Cost of revenues: | ||||||||||||||||
Recurring | $ | 1,165 | $ | 724 | $ | 3,956 | $ | 4,234 | ||||||||
Services and license | 304 | 302 | 1,191 | 1,073 | ||||||||||||
Operating expenses: | ||||||||||||||||
Sales and marketing | 1,892 | 1,526 | 6,818 | 4,594 | ||||||||||||
Research and development | 840 | 619 | 3,031 | 2,012 | ||||||||||||
General and administrative | 1,642 | 2,953 | 8,160 | 9,278 | ||||||||||||
Restructuring and other | 675 | 316 | 1,151 | 1,025 | ||||||||||||
Interest income and other income (expense) | (3,508 | ) | ||||||||||||||
Total | $ | 6,518 | $ | 6,440 | $ | 24,307 | $ | 18,708 | ||||||||
CALLIDUS SOFTWARE INC. | |
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES | |
(In thousands, except for percentages and per share data) | |
(unaudited) |
Three Months Ended
December 31,
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Twelve Months Ended
December 31,
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2015 | 2014 | 2015 | 2014 | |||||||||||||
Non-GAAP gross profit reconciliation: | ||||||||||||||||
Gross profit | $ | 29,607 | $ | 23,262 | $ | 106,636 | $ | 80,580 | ||||||||
Gross margin | 63 | % | 61 | % | 62 | % | 59 | % | ||||||||
Add back: | ||||||||||||||||
Non-cash stock-based compensation | 725 | 603 | 2,386 | 1,938 | ||||||||||||
Non-cash amortization of acquired intangible assets | 746 | 657 | 2,760 | 2,413 | ||||||||||||
Patent litigation estimate | - | (234 | ) | - | 956 | |||||||||||
Non-GAAP gross profit | $ | 31,078 | $ | 24,288 | $ | 111,782 | $ | 85,887 | ||||||||
Gross margin | 66 | % | 64 | % | 65 | % | 63 | % | ||||||||
Non-GAAP recurring revenue gross profit reconciliation: | ||||||||||||||||
Recurring revenue gross profit | $ | 26,931 | $ | 20,750 | $ | 95,605 | $ | 68,525 | ||||||||
Recurring revenue gross margin | 75 | % | 73 | % | 74 | % | 69 | % | ||||||||
Add back: | ||||||||||||||||
Non-cash stock-based compensation | 431 | 312 | 1,237 | 912 | ||||||||||||
Non-cash amortization of acquired intangible assets | 735 | 646 | 2,719 | 2,366 | ||||||||||||
Patent litigation estimate | - | (234 | ) | - | 956 | |||||||||||
Non-GAAP recurring revenue gross profit | $ | 28,097 | $ | 21,474 | $ | 99,561 | $ | 72,759 | ||||||||
Recurring revenue gross margin | 78 | % | 76 | % | 77 | % | 73 | % | ||||||||
Non-GAAP operating expense reconciliation: | ||||||||||||||||
Operating expenses | $ | 31,382 | $ | 26,779 | $ | 118,292 | $ | 94,127 | ||||||||
Operating expenses, as a % of total revenues | 67 | % | 70 | % | 68 | % | 69 | % | ||||||||
Subtract: | ||||||||||||||||
Non-cash stock-based compensation | (3,943 | ) | (3,294 | ) | (16,205 | ) | (9,875 | ) | ||||||||
Non-cash amortization of acquired intangible assets | (401 | ) | (434 | ) | (1,678 | ) | (1,387 | ) | ||||||||
Patent litigation and settlement costs | (29 | ) | (753 | ) | (123 | ) | (1,925 | ) | ||||||||
Acquisition-related costs | (279 | ) | (449 | ) | (523 | ) | (708 | ) | ||||||||
Restructuring and other | (394 | ) | (316 | ) | (628 | ) | (1,025 | ) | ||||||||
Patent litigation estimate | - | (168 | ) | (1,989 | ) | |||||||||||
Non-GAAP operating expenses | $ | 26,336 | $ | 21,365 | $ | 99,135 | $ | 77,218 | ||||||||
Non-GAAP operating expenses, as a % of total revenues | 56 | % | 56 | % | 57 | % | 57 | % |
CALLIDUS SOFTWARE INC. |
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES |
(In thousands, except for percentages and per share data) |
(unaudited) |
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Non-GAAP operating income (loss) reconciliation: | ||||||||||||||||
Operating loss | $ | (1,774 | ) | $ | (3,517 | ) | $ | (11,655 | ) | $ | (13,547 | ) | ||||
Operating loss, as a % of total revenues | (4 | )% | (9 | )% | (7 | )% | (10 | )% | ||||||||
Add back: | ||||||||||||||||
Non-cash stock-based compensation | 4,668 | 3,897 | 18,592 | 11,813 | ||||||||||||
Non-cash amortization of acquired intangible assets | 1,147 | 1,091 | 4,440 | 3,800 | ||||||||||||
Patent litigation and settlement costs | 29 | 753 | 123 | 1,925 | ||||||||||||
Acquisition-related costs | 279 | 449 | 523 | 708 | ||||||||||||
Restructuring and other | 394 | 316 | 628 | 1,025 | ||||||||||||
Patent litigation estimate | - | (66 | ) | - | 2,945 | |||||||||||
Non-GAAP operating income | $ | 4,743 | $ | 2,923 | $ | 12,651 | $ | 8,669 | ||||||||
Non-GAAP operating income (loss), as a % of total revenues | 10 | % | 8 | % | 7 | % | 6 | % | ||||||||
Non-GAAP net income (loss) reconciliation: | ||||||||||||||||
Net loss | $ | (2,138 | ) | $ | (4,109 | ) | $ | (13,148 | ) | $ | (11,561 | ) | ||||
Net loss, as a % of total revenues | (5 | )% | (11 | )% | (8 | )% | (8 | )% | ||||||||
Add back: | ||||||||||||||||
Non-cash stock-based compensation | 4,668 | 3,897 | 18,592 | 11,813 | ||||||||||||
Non-cash amortization of acquired intangible assets | 1,147 | 1,091 | 4,440 | 3,800 | ||||||||||||
Patent litigation and settlement costs | 29 | 753 | 123 | 1,925 | ||||||||||||
Acquisition-related costs | 279 | 449 | 523 | 727 | ||||||||||||
Restructuring and other | 394 | 316 | 628 | 1,025 | ||||||||||||
Patent litigation estimate | - | (66 | ) | - | 2,945 | |||||||||||
Interest expense on convertible notes | - | - | - | 277 | ||||||||||||
Amortization of convertible note issuance cost | - | - | - | 58 | ||||||||||||
Gain on sale of domain names and trademarks | - | - | - | (3,862 | ) | |||||||||||
Non-GAAP net income | $ | 4,379 | $ | 2,331 | $ | 11,158 | $ | 7,147 | ||||||||
Non-GAAP net income (loss), as a % of total revenues | 9 | % | 6 | % | 6 | % | 5 | % | ||||||||
Non-GAAP net income (loss) per share reconciliation: | ||||||||||||||||
Net loss per basic and diluted share | $ | (0.04 | ) | $ | (0.08 | ) | $ | (0.24 | ) | $ | (0.24 | ) | ||||
Add back: | ||||||||||||||||
Non-cash stock-based compensation | 0.08 | 0.08 | 0.34 | 0.25 | ||||||||||||
Non-cash amortization of acquired intangible assets | 0.02 | 0.02 | 0.08 | 0.08 | ||||||||||||
Patent litigation and settlement costs | - | 0.02 | - | 0.03 | ||||||||||||
Acquisition-related costs | 0.01 | 0.01 | 0.01 | 0.02 | ||||||||||||
Restructuring and other | 0.01 | - | 0.01 | 0.02 | ||||||||||||
Patent litigation estimate | - | - | - | 0.06 | ||||||||||||
Interest expense on convertible notes | - | - | - | 0.01 | ||||||||||||
Amortization of convertible note issuance cost | - | - | - | (0.01 | ) | |||||||||||
Gain on sale of domain names and trademarks | - | - | - | (0.08 | ) | |||||||||||
Non-GAAP net income per diluted share | $ | 0.08 | $ | 0.05 | $ | 0.20 | $ | 0.14 | ||||||||
Basic and fully diluted shares reconciliation: | ||||||||||||||||
GAAP Basic shares | 56,390 | 48,987 | 54,719 | 47,547 | ||||||||||||
Add back: | ||||||||||||||||
Weighted average effect of diluted securities | 1,740 | 1,909 | 1,650 | 2,575 | ||||||||||||
Diluted shares (a) | 58,130 | 50,896 | 56,369 | 50,122 |
(a)
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Shares used in the per share calculation for reconciling items GAAP and Non-GAAP financial measures
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Three Months Ended | ||||
March 31, 2016 | ||||
GAAP | Non-GAAP | |||
Total revenue | $47,800 - $48,800 | $47,800 - $48,800 | ||
Operating income (loss) (a) | ($4,500) - ($6,000) | $2,600 - $3,600 | ||
Net income (loss) per diluted share (c) | ($0.09) - ($0.11) | $0.04 - $0.06 | ||
Twelve Months Ended | ||||
December 31, 2016 | ||||
GAAP | Non-GAAP | |||
Total revenue | $210,000 - $215,000 | $210,000 - $215,000 | ||
Operating income (loss) (b) | ($15,000) - ($18,000) | $17,000 - $19,000 | ||
Net income (loss) per diluted share (c) | ($0.29) - ($0.33) | $0.25 - $0.29 |
(a)
|
Estimated non-GAAP amounts above for the three months ending March 31, 2016 reflect adjustments that exclude the estimated amortization of acquired intangible assets of approximately $1.1 - $1.3 million, estimated stock-based compensation expense of approximately $6.5 – $7.0 million, patent litigation costs and restructuring and other expenses of approximately $0.1 – $0.4 million, and approximately $0.1 million in expense related to BridgeFront acquisition earnout.
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(b)
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Estimated non-GAAP amounts above for the twelve months ending December 31, 2016 reflect adjustments that exclude the estimated amortization of acquired intangible assets of approximately $4.7 - $5.2 million, estimated stock-based compensation expense of approximately $27.0 - $28.5 million, patent litigation costs, restructuring and other expenses of approximately $0.7 - $1.5 million, and approximately $0.3 million in expense related to BridgeFront acquisition earnout.
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(c)
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Non-GAAP fully diluted share count is between 58.5 million and 61.0 million. GAAP share count is between 56.5 million and 59.0 million.
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