0001157523-15-003656.txt : 20151103 0001157523-15-003656.hdr.sgml : 20151103 20151103160606 ACCESSION NUMBER: 0001157523-15-003656 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20151103 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20151103 DATE AS OF CHANGE: 20151103 FILER: COMPANY DATA: COMPANY CONFORMED NAME: REALPAGE INC CENTRAL INDEX KEY: 0001286225 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 752788861 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-34846 FILM NUMBER: 151193725 BUSINESS ADDRESS: STREET 1: 4000 INTERNATIONAL PARKWAY CITY: CARROLLTON STATE: TX ZIP: 75007-1913 BUSINESS PHONE: 972-820-4853 MAIL ADDRESS: STREET 1: 4000 INTERNATIONAL PARKWAY CITY: CARROLLTON STATE: TX ZIP: 75007-1913 8-K 1 a51215444.htm REALPAGE, INC. 8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
______________

FORM 8-K
______________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)
November 3, 2015

______________

REALPAGE, INC.
(Exact name of registrant as specified in its charter)
______________

Delaware

001-34846

75-2788861

(State or other jurisdiction
of incorporation)

(Commission
File Number)

(IRS Employer

Identification No.)

4000 International Parkway
Carrollton, Texas 75007
(Address of principal executive offices, including zip code)

(972) 820-3000
(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

⃞ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02

Results of Operations and Financial Condition.

On November 3, 2015, RealPage, Inc. (the “Company”) issued a press release reporting its financial results for its fiscal quarter ended September 30, 2015. A copy of the press release is furnished herewith as Exhibit 99.1.

Item 7.01

Regulation FD Disclosure.

IR Fact Sheet

On November 3, 2015, the Company published an updated IR Fact Sheet on the Investor Relations section of the Company’s website located at http://investor.realpage.com/. A copy of the IR Fact Sheet is furnished herewith as Exhibit 99.2 and is incorporated herein by reference.

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.		Description
99.1		RealPage, Inc. Press Release dated November 3, 2015 reporting financial results for its fiscal quarter ended September 30, 2015.

99.2		RealPage, Inc. IR Fact Sheet dated November 3, 2015.

The information furnished by this Current Report on Form 8-K under Items 2.02 and 7.01 and the Exhibits 99.1 and 99.2 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, and shall not be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		REALPAGE, INC.


	By:	/s/ Stephen T. Winn
		Stephen T. Winn
		Chief Executive Officer and President

Date: November 3, 2015

EXHIBIT INDEX

Exhibit Number	Description

99.1	RealPage, Inc. Press Release dated November 3, 2015 reporting financial results for its fiscal quarter ended September 30, 2015.

99.2	RealPage, Inc. IR Fact Sheet dated November 3, 2015.

EX-99.1 2 a51215444_ex991.htm EXHIBIT 99.1

Exhibit 99.1

RealPage Reports Third Quarter 2015 Financial Results

Q3’15 total GAAP revenue of $121.6 million, representing 16 percent year-over-year growth
Q3’15 Adjusted EBITDA of $24.2 million, margin expands over 430 basis points year-over-year
Q3’15 Non-GAAP net income per diluted share of $0.15, representing 88 percent year-over-year growth

CARROLLTON, Texas--(BUSINESS WIRE)--November 3, 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 third quarter ended September 30, 2015.

“Financial performance for the third quarter was strong,” said Steve Winn, Chairman and CEO of RealPage. “Revenue, adjusted EBITDA, and non-GAAP net income per diluted share performance all exceeded expectations. Subscription revenue growth of 18% was driven primarily by continued demand for our Property Management, Resident Services and Asset Optimization solutions. I’m also quite pleased with the continued traction of our new Business Intelligence solutions which fueled sequential revenue growth for Asset Optimization, demonstrating that the investments made in this area are delivering results.”

“With adjusted EBITDA margin growing over 430 basis points compared to the prior year period, our focused plan to expand profit margins is achieving significant results,” said Bryan Hill, CFO and Treasurer of RealPage. “The third quarter marks the fifth consecutive quarter of sequential margin improvement. We also continue to prioritize efficient capital allocation strategies. During the quarter we repurchased approximately 800 thousand shares of our common stock, resulting in 2.5 million shares repurchased program-to-date, which we view as an appropriate use of capital with the potential for a significant return.”

Third Quarter 2015 Financial Highlights

Total GAAP revenue of $121.6 million, an increase of 16 percent year-over-year;
Adjusted EBITDA of $24.2 million, representing margin expansion of over 430 basis points and an increase of 48 percent year-over-year;
Non-GAAP net income of $11.3 million, or $0.15 per diluted share, a year-over-year increase of 73 percent and 88 percent, respectively; and
GAAP net loss of $8.2 million, or $0.11 per diluted share, compared to a GAAP net loss of $3.3 million, or $0.04 per diluted share, in the prior year quarter. In connection with the preparation of the third quarter financial statements, the company identified certain indicators of impairment for identified intangibles within its Leasing and Marketing solutions. As a result, the company has taken a non-cash, non-tax-deductible income statement charge during the third quarter to impair certain trade name intangible assets primarily related to its 2011 acquisition of Multifamily Technology Solutions, Inc. The charge is not expected to have a material impact on the company’s cash flows or liquidity nor does the company anticipate the charge to affect its ongoing business or financial performance.

Financial Outlook

RealPage management expects to achieve the following results during its fourth quarter ended December 31, 2015:

Total revenue is expected to be in the range of $120.0 million to $122.0 million;
Adjusted EBITDA is expected to be in the range of $24.0 million to $25.0 million;
Non-GAAP net income per diluted share is expected to be in the range of $0.14 to $0.15;
Non-GAAP tax rate is expected to be approximately 40 percent; and
Weighted average shares outstanding are expected to be approximately 78.0 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 $465.2 million to $467.2 million;
Adjusted EBITDA is expected to be in the range of $89.7 million to $90.7 million;
Non-GAAP net income per diluted share is expected to be approximately $0.53;
Non-GAAP tax rate is expected to be approximately 40 percent; and
Weighted average shares outstanding are expected to be approximately 77.6 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 November 3, 2015 at 5:00 p.m. EST 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 72154959, until November 7, 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 11,000 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 results of its investments in Asset Optimization; its focus on driving margin expansion; and the results of its capital allocation strategies. 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 quarterly 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 achieve revenue growth or to enable margin expansion; and (j) 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 August 7, 2015 and its Annual Report on Form 10-K previously filed with the SEC on March 2, 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 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, facilitate period-to-period comparisons of operations and facilitate 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)


	September 30,			December 31,
		2015			2014
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	18,566		$	26,936
Restricted cash		94,086			85,543
Accounts receivable, less allowance for doubtful accounts of $1,926 and $2,363 at September 30, 2015 and December 31, 2014, respectively		68,460			64,845
Prepaid expenses		9,610			7,647
Deferred tax asset, net		17,635			10,996
Other current assets		2,571			1,848
Total current assets		210,928			197,815
Property, equipment and software, net		71,944			72,616
Goodwill		220,104			193,378
Identified intangible assets, net		87,287			100,085
Deferred tax asset, net		—			2,537
Other assets		5,201			5,059
Total assets	$	595,464		$	571,490

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	15,670		$	14,830
Accrued expenses and other current liabilities		33,582			22,905
Current portion of deferred revenue		77,217			73,485
Customer deposits held in restricted accounts		93,956			85,489
Total current liabilities		220,425			196,709
Deferred revenue		7,107			6,903
Deferred tax liability, net		1,439			5,196
Revolving credit facility		44,000			20,000
Other long-term liabilities		10,574			13,902
Total liabilities		283,545			242,710
Stockholders’ equity:
Preferred stock, $0.001 par value: 10,000,000 shares authorized and zero shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively		—			—
Common stock, $0.001 par value: 125,000,000 shares authorized, 82,370,113 and 83,211,650 shares issued and 78,479,774 and 79,037,351 shares outstanding at September 30, 2015 and December 31, 2014, respectively		82			83
Additional paid-in capital		456,707			437,664
Treasury stock, at cost: 3,890,339 and 4,174,299 shares at September 30, 2015 and December 31, 2014, respectively		(23,496	)		(33,398	)
Accumulated deficit		(120,898	)		(75,360	)
Accumulated other comprehensive loss		(476	)		(209	)
Total stockholders’ equity		311,919			328,780
Total liabilities and stockholders’ equity	$	595,464		$	571,490


Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
		2015			2014			2015			2014
Revenue:
On demand	$	116,772		$	100,747		$	333,872		$	289,361
On premise		834			755			2,301			2,446
Professional and other		3,982			3,034			10,647			8,280
Total revenue		121,588			104,536			346,820			300,087
Cost of revenue⁽¹⁾		52,879			46,311			150,160			128,353
Gross profit		68,709			58,225			196,660			171,734
Operating expense:
Product development⁽¹⁾		16,858			17,528			52,919			48,310
Sales and marketing⁽¹⁾		31,559			29,949			90,333			83,970
General and administrative⁽¹⁾		13,424			15,443			51,797			53,191
Impairment of identified intangible assets		20,274			—			20,801			—
Total operating expense		82,115			62,920			215,850			185,471
Operating loss		(13,406	)		(4,695	)		(19,190	)		(13,737	)
Interest expense and other, net		(391	)		(345	)		(1,048	)		(771	)
Loss before income taxes		(13,797	)		(5,040	)		(20,238	)		(14,508	)
Income tax benefit		(5,605	)		(1,783	)		(7,120	)		(4,124	)
Net loss	$	(8,192	)	$	(3,257	)	$	(13,118	)	$	(10,384	)

Net loss per share
Basic	$	(0.11	)	$	(0.04	)	$	(0.17	)	$	(0.13	)
Diluted	$	(0.11	)	$	(0.04	)	$	(0.17	)	$	(0.13	)
Weighted average shares used in computing net loss per share
Basic		76,564			77,280			76,772			77,075
Diluted		76,564			77,280			76,772			77,075


⁽¹⁾ Includes stock-based compensation expense as follows:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
		2015			2014			2015			2014
Cost of revenue	$	817		$	1,141		$	3,267		$	3,014
Product development		1,759			2,707			7,050			6,763
Sales and marketing		3,118			3,774			10,750			10,018
General and administrative		2,975			1,914			9,599			8,999
	$	8,669		$	9,536		$	30,666		$	28,794


Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
		2015			2014			2015			2014
Cash flows from operating activities:
Net loss	$	(8,192	)	$	(3,257	)	$	(13,118	)	$	(10,384	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		11,913			10,962			33,787			30,533
Deferred tax benefit		(7,173	)		(2,161	)		(8,827	)		(6,011	)
Stock-based compensation		8,669			9,536			30,666			28,794
Excess tax benefit from stock options		331			—			968			—
Loss on disposal and impairment of assets		20,966			16			23,769			36
Acquisition-related contingent consideration		(3,511	)		630			(3,018	)		564
Changes in assets and liabilities, net of assets acquired and liabilities assumed in business combinations		(3,283	)		(8,420	)		4,287			6,522
Net cash provided by operating activities		19,720			7,306			68,514			50,054

Cash flows from investing activities:
Purchases of property, equipment and software		(7,476	)		(9,990	)		(18,553	)		(29,125	)
Proceeds from disposal of assets		—			—			305			—
Acquisition of businesses, net of cash acquired		—			111			(45,450	)		(41,942	)
Intangible asset additions		(60	)		—			(231	)		—
Net cash used in investing activities		(7,536	)		(9,879	)		(63,929	)		(71,067	)

Cash flows from financing activities:
Payments on and proceeds from debt, net		(6,143	)		12,440			23,563			37,160
Payments of deferred acquisition-related consideration		(875	)		(3,259	)		(2,109	)		(4,007	)
Issuance of common stock		1,431			152			2,900			5,168
Excess tax benefit from stock options		(331	)		—			(968	)		—
Purchase of treasury stock		(16,991	)		(15,298	)		(36,074	)		(21,122	)
Net cash (used in) provided by financing activities		(22,909	)		(5,965	)		(12,688	)		17,199
Net decrease in cash and cash equivalents		(10,725	)		(8,538	)		(8,103	)		(3,814	)
Effect of exchange rate on cash		(31	)		(9	)		(267	)		(18	)

Cash and cash equivalents:
Beginning of period		29,322			39,217			26,936			34,502
End of period	$	18,566		$	30,670		$	18,566		$	30,670


Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share amounts)
(Unaudited)

				Three Months Ended						Nine Months Ended
				September 30,						September 30,
					2015			2014			2015			2014

Non-GAAP revenue:
	Revenue (GAAP)			$	121,588		$	104,536		$	346,820		$	300,087
		Acquisition-related and other deferred revenue			(614	)		(392	)		(1,612	)		725
Non-GAAP revenue				$	120,974		$	104,144		$	345,208		$	300,812

				Three Months Ended						Nine Months Ended
				September 30,						September 30,
					2015			2014			2015			2014
Adjusted gross profit:
	Gross profit (GAAP)			$	68,709		$	58,225		$	196,660		$	171,734
		Acquisition-related and other deferred revenue			(614	)		(392	)		(1,612	)		725
		Depreciation			2,431			2,311			7,269			6,182
		Amortization of intangible assets			4,052			2,982			10,142			7,852
		Stock-based compensation expense			817			1,141			3,267			3,014
	Adjusted gross profit			$	75,395		$	64,267		$	215,726		$	189,507

	Adjusted gross profit margin				62.3	%		61.7	%		62.5	%		63.0	%

				Three Months Ended						Nine Months Ended
				September 30,						September 30,
					2015			2014			2015			2014
Adjusted EBITDA:
	Net loss (GAAP)			$	(8,192	)	$	(3,257	)	$	(13,118	)	$	(10,384	)
		Acquisition-related and other deferred revenue			(614	)		(392	)		(1,612	)		725
		Depreciation, asset impairment and loss on disposal of assets			25,952			5,121			38,970			13,911
		Amortization of intangible assets			6,927			5,857			18,586			16,658
		Acquisition-related expense			(3,310	)		860			(1,653	)		2,098
		Interest expense, net			391			349			966			780
		Income tax benefit			(5,605	)		(1,783	)		(7,120	)		(4,124	)
		Litigation-related expense			—			39			2			4,884
		Stock-based compensation expense			8,669			9,536			30,666			28,794
	Adjusted EBITDA			$	24,218		$	16,330		$	65,687		$	53,342

	Adjusted EBITDA margin				20.0	%		15.7	%		19.0	%		17.7	%

				Three Months Ended						Nine Months Ended
				September 30,						September 30,
					2015			2014			2015			2014
Non-GAAP total product development:
	Product development (GAAP)			$	16,858		$	17,528		$	52,919		$	48,310
		Less: Loss on disposal and impairment of assets			532			—			1,333			—
			Stock-based compensation expense		1,759			2,707			7,050			6,763
	Non-GAAP total product development			$	14,567		$	14,821		$	44,536		$	41,547

	Non-GAAP total product development as % of non-GAAP revenue:				12.0	%		14.2	%		12.9	%		13.8	%


Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share amounts)
(Unaudited)

				Three Months Ended						Nine Months Ended
				September 30,						September 30,
					2015			2014			2015			2014
Non-GAAP total sales and marketing:
	Sales and marketing (GAAP)			$	31,559		$	29,949		$	90,333		$	83,970
		Less: Amortization of intangible assets			2,875			2,875			8,444			8,614
			Stock-based compensation expense		3,118			3,774			10,750			10,018
	Non-GAAP total sales and marketing			$	25,566		$	23,300		$	71,139		$	65,338

	Non-GAAP total sales and marketing as % of non-GAAP revenue:				21.1	%		22.4	%		20.6	%		21.7	%

				Three Months Ended						Nine Months Ended
				September 30,						September 30,
					2015			2014			2015			2014
Non-GAAP total general and administrative:
	General and administrative (GAAP)			$	13,424		$	15,443		$	51,797		$	53,191
		Less: Loss on disposal and impairment of assets			160			16			1,635			36
			Amortization of intangible assets		—			—			—			192
			Acquisition-related expense		(3,310	)		860			(1,653	)		2,098
			Litigation-related expense		—			39			2			4,884
			Stock-based compensation expense		2,975			1,914			9,599			8,999
	Non-GAAP total general and administrative			$	13,599		$	12,614		$	42,214		$	36,982

	Non-GAAP total general and administrative as % of non-GAAP revenue:				11.2	%		12.1	%		12.2	%		12.3	%

				Three Months Ended						Nine Months Ended
				September 30,						September 30,
					2015			2014			2015			2014
Non-GAAP total operating expense:
	Operating expense (GAAP)			$	82,115		$	62,920		$	215,850		$	185,471
		Less: Loss on disposal and impairment of assets			20,966			16			23,769			36
			Amortization of intangible assets		2,875			2,875			8,444			8,806
			Acquisition-related expense		(3,310	)		860			(1,653	)		2,098
			Litigation-related expense		—			39			2			4,884
			Stock-based compensation expense		7,852			8,395			27,399			25,780
	Non-GAAP total operating expense			$	53,732		$	50,735		$	157,889		$	143,867

	Non-GAAP total operating expense as % of non-GAAP revenue:				44.4	%		48.7	%		45.7	%		47.8	%

				Three Months Ended						Nine Months Ended
				September 30,						September 30,
					2015			2014			2015			2014
Non-GAAP operating income:
	Operating loss (GAAP)			$	(13,406	)	$	(4,695	)	$	(19,190	)	$	(13,737	)
		Acquisition-related and other deferred revenue			(614	)		(392	)		(1,612	)		725
		Loss on disposal and impairment of assets			20,966			16			23,769			36
		Amortization of intangible assets			6,927			5,857			18,586			16,658
		Acquisition-related expense			(3,310	)		860			(1,653	)		2,098
		Litigation-related expense			—			39			2			4,884
		Stock-based compensation expense			8,669			9,536			30,666			28,794
	Non-GAAP operating income			$	19,232		$	11,221		$	50,568		$	39,458

	Non-GAAP operating margin				15.9	%		10.8	%		14.6	%		13.1	%


Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share amounts)
(Unaudited)

				Three Months Ended						Nine Months Ended
				September 30,						September 30,
					2015			2014			2015			2014
Non-GAAP net income:
	Net loss (GAAP)			$	(8,192	)	$	(3,257	)	$	(13,118	)	$	(10,384	)

	Tax deductible items:
		Acquisition-related and other deferred revenue			(614	)		(392	)		(1,612	)		725
		Loss on disposal and impairment of assets			20,966			16			23,769			36
		Amortization of intangible assets			6,927			5,857			18,586			16,658
		Acquisition-related expense			(3,310	)		860			(1,653	)		2,098
		Litigation-related expense			—			39			2			4,884
		Stock-based compensation expense			8,669			9,536			30,666			28,794
			Subtotal of tax deductible items		32,638			15,916			69,758			53,195

		Tax impact of tax deductible items⁽¹⁾			(13,055	)		(6,366	)		(27,903	)		(21,278	)
		Tax (expense) benefit resulting from applying effective tax rate⁽²⁾			(86	)		233			975			1,679
	Non-GAAP net income			$	11,305		$	6,526		$	29,712		$	23,212

	Non-GAAP net income per share - diluted			$	0.15		$	0.08		$	0.38		$	0.30

	Weighted average shares - basic				76,564			77,280			76,772			77,075
		Weighted average effect of dilutive securities - non-GAAP			499			494			603			727
	Non-GAAP weighted average shares - diluted				77,063			77,774			77,375			77,802

⁽¹⁾	Reflects the removal of the tax benefit associated with the acquisition-related and other deferred revenue adjustment, loss on disposal and impairment of assets, amortization of intangible assets, acquisition-related expense, litigation-related expense, and stock-based compensation expense.


⁽²⁾	Represents adjusting to a normalized effective tax rate of 40%.

				Three Months Ended						Nine Months Ended
				September 30,						September 30,
					2015			2014			2015			2014
Annualized non-GAAP on demand revenue per average on demand unit:
	On demand revenue (GAAP)			$	116,772		$	100,747		$	333,872		$	289,361
		Acquisition-related and other deferred revenue			(614	)		(392	)		(1,612	)		725
	Non-GAAP on demand revenue				116,158			100,355			332,260			290,086

	Ending on demand units				10,406			9,496			10,406			9,496
	Average on demand units				10,354			9,434			9,995			9,305

	Annualized non-GAAP on demand revenue per average on demand unit			$	44.87		$	42.55

	Non-GAAP on demand annual customer value⁽¹⁾			$	466,917		$	404,055

⁽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

EX-99.2 3 a51215444_ex992.htm EXHIBIT 99.2

Exhibit 99.2

RealPage, Inc.
Fact Sheet November 3, 2015
			Q1 2013			Q2 2013			Q3 2013			Q4 2013			FY 2013			Q1 2014			Q2 2014			Q3 2014			Q4 2014			FY 2014			Q1 2015			Q2 2015			Q3 2015
Revenue ($000's)
	Total GAAP Revenue		$	88,981		$	94,451		$	98,071		$	95,519		$	377,022		$	100,563		$	94,988		$	104,536		$	104,464		$	404,551		$	110,470		$	114,762		$	121,588
	Growth %			20	%		20	%		18	%		11	%		17	%		13	%		1	%		7	%		9	%		7	%		10	%		21	%		16	%

	Total Non-GAAP Revenue		$	88,983		$	94,451		$	99,864		$	96,441		$	379,739		$	101,887		$	94,781		$	104,144		$	104,174		$	404,986		$	110,004		$	114,230		$	120,974
	Growth %			19	%		20	%		20	%		12	%		18	%		15	%		0	%		4	%		8	%		7	%		8	%		21	%		16	%

	GAAP On Demand Revenue		$	85,322		$	90,825		$	94,084		$	92,081		$	362,312		$	97,008		$	91,606		$	100,747		$	101,261		$	390,622		$	106,460		$	110,640		$	116,772
	Growth %			21	%		21	%		19	%		13	%		18	%		14	%		1	%		7	%		10	%		8	%		10	%		21	%		16	%

	Non-GAAP On Demand Revenue		$	85,324		$	90,825		$	95,877		$	93,003		$	365,029		$	98,332		$	91,399		$	100,355		$	100,971		$	391,057		$	105,994		$	110,108		$	116,158
	Growth %			21	%		21	%		21	%		14	%		19	%		15	%		1	%		5	%		9	%		7	%		8	%		20	%		16	%

	On Premise Revenue		$	950		$	1,011		$	838		$	892		$	3,691		$	865		$	826		$	755		$	648		$	3,094		$	741		$	726		$	834
	Professional & Other Revenue		$	2,709		$	2,615		$	3,149		$	2,546		$	11,019		$	2,690		$	2,556		$	3,034		$	2,555		$	10,835		$	3,269		$	3,396		$	3,982
Expenses ($000's)
Cost of Revenue
	GAAP View		$	35,364		$	37,340		$	38,111		$	37,506		$	148,321		$	39,927		$	42,115		$	46,311		$	46,518		$	174,871		$	47,724		$	49,557		$	52,879
		Stock-based compensation		(750	)		(676	)		(785	)		(900	)		(3,111	)		(1,007	)		(866	)		(1,141	)		(812	)		(3,826	)		(1,234	)		(1,216	)		(817	)
		Amortization		(1,967	)		(2,028	)		(1,656	)		(2,062	)		(7,713	)		(2,423	)		(2,447	)		(2,982	)		(2,860	)		(10,712	)		(2,814	)		(3,276	)		(4,052	)
	Non-GAAP		$	32,647		$	34,636		$	35,670		$	34,544		$	137,497		$	36,497		$	38,802		$	42,188		$	42,846		$	160,333		$	43,676		$	45,065		$	48,010
		Depreciation		(1,843	)		(1,444	)		(1,480	)		(1,800	)		(6,567	)		(1,858	)		(2,013	)		(2,311	)		(2,330	)		(8,512	)		(2,405	)		(2,433	)		(2,431	)
	Adjusted EBITDA View		$	30,804		$	33,192		$	34,190		$	32,744		$	130,930		$	34,639		$	36,789		$	39,877		$	40,516		$	151,821		$	41,271		$	42,632		$	45,579

Product Development
	GAAP View		$	12,038		$	11,727		$	13,232		$	13,641		$	50,638		$	14,841		$	15,941		$	17,528		$	16,108		$	64,418		$	17,977		$	18,084		$	16,858
		Stock-based compensation		(1,131	)		(721	)		(1,271	)		(1,665	)		(4,788	)		(1,912	)		(2,144	)		(2,707	)		(1,874	)		(8,637	)		(2,719	)		(2,572	)		(1,759	)
		Asset Impairment		-			-			-			-			-			-			-			-			-			-			(599	)		(202	)		(532	)
	Non-GAAP View		$	10,907		$	11,006		$	11,961		$	11,976		$	45,850		$	12,929		$	13,797		$	14,821		$	14,234		$	55,781		$	14,659		$	15,310		$	14,567
		Depreciation		(754	)		(632	)		(749	)		(909	)		(3,044	)		(1,043	)		(1,171	)		(1,319	)		(1,375	)		(4,908	)		(1,256	)		(1,415	)		(1,201	)
	Adjusted EBITDA View		$	10,153		$	10,374		$	11,212		$	11,067		$	42,806		$	11,886		$	12,626		$	13,502		$	12,859		$	50,873		$	13,403		$	13,895		$	13,366

Sales & Marketing
	GAAP View		$	22,902		$	23,924		$	25,166		$	23,902		$	95,894		$	25,991		$	28,030		$	29,949		$	27,593		$	111,563		$	28,951		$	29,823		$	31,559
		Stock-based compensation		(3,201	)		(2,004	)		(2,686	)		(3,102	)		(10,993	)		(3,143	)		(3,101	)		(3,774	)		(2,948	)		(12,966	)		(3,789	)		(3,843	)		(3,118	)
		Amortization		(2,146	)		(2,264	)		(2,586	)		(2,939	)		(9,935	)		(2,892	)		(2,847	)		(2,875	)		(2,886	)		(11,500	)		(2,766	)		(2,803	)		(2,875	)
	Non-GAAP View		$	17,555		$	19,656		$	19,894		$	17,861		$	74,966		$	19,956		$	22,082		$	23,300		$	21,759		$	87,097		$	22,396		$	23,177		$	25,566
		Depreciation		(319	)		(244	)		(263	)		(323	)		(1,149	)		(407	)		(479	)		(555	)		(478	)		(1,919	)		(499	)		(556	)		(538	)
	Adjusted EBITDA View		$	17,236		$	19,412		$	19,631		$	17,538		$	73,817		$	19,549		$	21,603		$	22,745		$	21,281		$	85,178		$	21,897		$	22,621		$	25,028

General & Administrative
	GAAP View		$	16,507		$	12,819		$	15,554		$	15,730		$	60,610		$	20,929		$	16,819		$	15,443		$	16,011		$	69,202		$	18,863		$	20,037		$	13,424
		Stock-based compensation		(2,163	)		(2,660	)		(2,994	)		(2,988	)		(10,805	)		(3,163	)		(3,922	)		(1,914	)		(2,622	)		(11,621	)		(3,005	)		(3,619	)		(2,975	)
		Amortization		-			-			-			-			-			-			(192	)		-			-			(192	)		-			-			-
		Asset Disposal/Impairment		(3	)		(271	)		(36	)		(4	)		(314	)		(20	)		-			(16	)		(350	)		(386	)		(520	)		(1,482	)		(160	)
		Acquisition-related Expense		(2,774	)		949			(288	)		(1,156	)		(3,269	)		(881	)		(357	)		(860	)		111			(1,987	)		(1,092	)		(565	)		3,310
		Litigation-related expense		(406	)		353			(278	)		(330	)		(661	)		(4,677	)		(168	)		(39	)		(31	)		(4,915	)		(2	)		-			-
	Non-GAAP View		$	11,161		$	11,190		$	11,958		$	11,252		$	45,561		$	12,188		$	12,180		$	12,614		$	13,119		$	50,101		$	14,244		$	14,371		$	13,599
		Depreciation		(769	)		(808	)		(871	)		(889	)		(3,337	)		(880	)		(917	)		(920	)		(844	)		(3,561	)		(871	)		(780	)		(816	)
		Other (Income)/Expense		(268	)		(9	)		(1	)		(72	)		(350	)		(3	)		(4	)		(4	)		(4	)		(15	)		-			82			-
	Adjusted EBITDA View		$	10,124		$	10,373		$	11,086		$	10,291		$	41,874		$	11,305		$	11,259		$	11,690		$	12,271		$	46,525		$	13,373		$	13,673		$	12,783
Earnings
	Adjusted EBITDA ($000's)		$	20,666		$	21,100		$	23,745		$	24,801		$	90,312		$	24,508		$	12,504		$	16,330		$	17,247		$	70,589		$	20,060		$	21,409		$	24,218
	Margin			23	%		22	%		24	%		26	%		24	%		24	%		13	%		16	%		17	%		17	%		18	%		19	%		20	%

	Non-GAAP Net Income ($000's)		$	9,975		$	10,420		$	12,087		$	12,391		$	44,873		$	12,057		$	4,629		$	6,526		$	7,130		$	30,342		$	8,857		$	9,550		$	11,305
	Margin			11	%		11	%		12	%		13	%		12	%		12	%		5	%		6	%		7	%		7	%		8	%		8	%		9	%

	Non-GAAP Diluted EPS		$	0.13		$	0.14		$	0.16		$	0.16		$	0.59		$	0.16		$	0.06		$	0.08		$	0.09		$	0.39		$	0.11		$	0.12		$	0.15
	Growth			30	%		27	%		33	%		14	%		26	%		23	%		-57	%		-50	%		-44	%		-34	%		-31	%		100	%		88	%

RealPage, Inc.

Fact Sheet

November 3, 2015

Q1 2013

Q2 2013

Q3 2013

Q4 2013

FY 2013

Q1 2014

Q2 2014

Q3 2014

Q4 2014

FY 2014

Q1 2015

Q2 2015

Q3 2015

Non-GAAP On Demand Revenue Detail ($000's)
	Property Management		$	25,189		$	26,626		$	28,379		$	28,336		$	108,530		$	28,868		$	29,622		$	31,260		$	31,683		$	121,433		$	32,731		$	33,736		$	35,224
		% of Total		30	%		29	%		30	%		30	%		30	%		29	%		32	%		31	%		31	%		31	%		31	%		31	%		30	%
		Y-O-Y growth		13	%		15	%		20	%		13	%		15	%		15	%		11	%		10	%		12	%		12	%		13	%		14	%		13	%

	Resident Services		$	22,155		$	24,451		$	24,476		$	24,513		$	95,595		$	26,910		$	22,626		$	28,898		$	31,672		$	110,106		$	33,064		$	34,037		$	38,775
		% of Total		26	%		27	%		26	%		26	%		26	%		27	%		25	%		29	%		31	%		28	%		31	%		31	%		33	%
		Y-O-Y growth		31	%		34	%		25	%		17	%		26	%		21	%		-7	%		18	%		29	%		15	%		23	%		50	%		34	%

	Leasing and Marketing		$	29,499		$	30,858		$	33,599		$	30,484		$	124,440		$	32,427		$	28,945		$	29,805		$	27,006		$	118,183		$	29,369		$	30,690		$	30,115
		% of Total		35	%		34	%		35	%		33	%		34	%		33	%		32	%		30	%		27	%		30	%		28	%		28	%		26	%
		Y-O-Y growth		16	%		15	%		18	%		9	%		14	%		10	%		-6	%		-11	%		-11	%		-5	%		-9	%		6	%		1	%

	Asset Optimization		$	8,481		$	8,890		$	9,423		$	9,670		$	36,464		$	10,127		$	10,206		$	10,392		$	10,610		$	41,335		$	10,830		$	11,645		$	12,044
		% of Total		10	%		10	%		10	%		10	%		10	%		10	%		11	%		10	%		11	%		11	%		10	%		11	%		10	%
		Y-O-Y growth		39	%		33	%		31	%		22	%		31	%		19	%		15	%		10	%		10	%		13	%		7	%		14	%		16	%
Non-GAAP On Demand Revenue Detail ($000's)
	Subscription		$	69,361		$	73,440		$	76,435		$	79,082		$	298,318		$	82,126		$	82,420		$	87,012		$	92,326		$	343,884		$	93,984		$	97,256		$	102,946
		% of Total		81	%		81	%		80	%		85	%		82	%		84	%		90	%		87	%		91	%		88	%		89	%		88	%		89	%
		Y-O-Y growth		20	%		22	%		21	%		17	%		20	%		18	%		12	%		14	%		17	%		15	%		14	%		18	%		18	%

	Transactional		$	15,963		$	17,385		$	19,442		$	13,921		$	66,711		$	16,206		$	8,979		$	13,343		$	8,645		$	47,173		$	12,010		$	12,852		$	13,212
		% of Total		19	%		19	%		20	%		15	%		18	%		16	%		10	%		13	%		9	%		12	%		11	%		12	%		11	%
		Y-O-Y growth		22	%		20	%		23	%		-4	%		15	%		2	%		-48	%		-31	%		-38	%		-29	%		-26	%		43	%		-1	%

ACV
	Non-GAAP On Demand Annual Customer Value ($000's)		$	350,174		$	364,801		$	386,039		$	378,131					$	398,976		$	367,249		$	404,055		$	405,248					$	427,091		$	453,700		$	466,917
	Total ACV Growth (QTD)			23	%		21	%		20	%		14	%					14	%		1	%		5	%		7	%					7	%		24	%		16	%
	Organic ACV Growth (QTD)			20	%		20	%		19	%		11	%					13	%		-1	%		3	%		6	%					6	%		19	%		13	%
Unit Trend
	On Demand Units - Ending (000's)			8,545			8,616			8,730			9,022						9,285			9,371			9,496			9,560						9,700			10,302			10,406
Average Unit Renewal Rate
	Average Renewal Rate (8 quarters)			95.3	%		95.5	%		95.4	%		95.3	%					95.2	%		95.1	%		95.3	%		95.3	%					95.6	%		95.8	%		96.3	%
RPU
	Non-GAAP On Demand RPU (QTD) (whole $)		$	40.98		$	42.34		$	44.22		$	41.91					$	42.97		$	39.19		$	42.55		$	42.39					$	44.03		$	44.04		$	44.87
Top ACV / RPU
	Top 100 ACV ($000's)		$	163,454		$	164,474		$	172,727		$	177,723					$	184,204		$	184,181		$	187,588		$	183,478					$	187,650		$	197,036		$	202,882

	Top 100 ACV RPU		$	54.88		$	55.85		$	57.85		$	58.71					$	57.48		$	59.12		$	60.68		$	59.30					$	59.99		$	60.07		$	62.17

	Top 50 RPU Clients ACV ($000's)		$	48,478		$	43,784		$	44,352		$	46,896					$	45,375		$	44,641		$	46,876		$	45,984					$	50,167		$	53,132		$	55,378

	Top 50 RPU Clients RPU		$	126.50		$	132.80		$	133.70		$	135.60					$	136.60		$	141.90		$	142.10		$	146.71					$	150.03		$	157.46		$	161.12

Industry Data ⁽¹⁾
	Occupancy			94.9	%		95.3	%		95.4	%		95.0	%					95.1	%		95.6	%		95.8	%		95.5	%					95.5	%		96.0	%		96.2	%

	Annual Change in effective rents			2.5	%		3.0	%		3.2	%		2.8	%					3.2	%		3.4	%		3.7	%		4.6	%					4.5	%		4.9	%		5.6	%

	Ongoing construction (thousands of units)			365.5			391.2			409.3			416.5						435.2			447.6			449.6			446.8						460.8			481.7			450.4

	Supply			125.2			139.3			154.3			177.5						195.3			222.2			243.9			251.4						260.9			236.5			229.3

Headcount
Total Ending RP Headcount				3,217			3,396			3,320			3,337						3,506			3,758			3,757			3,875						3,898			3,936			4,051

Total International Headcount (included above)				682			799			858			900						977			1,153			1,216			1,363						1,393			1,425			1,585
% International Headcount				21	%		24	%		26	%		27	%					28	%		31	%		32	%		35	%					36	%		36	%		39	%

⁽¹⁾ Based on information from MPF Research. Numbers can fluctuate based on data revisions/reclassifications as well as shifts in construction start or finish dates.

RealPage, Inc.

Fact Sheet

November 3, 2015

Definitions

*Please read in conjunction with the Company's Quarterly Report on Form 10-Q previously filed with the Securities and Exchange Commission ("SEC") on August 7, 2015 and its Annual Report on Form 10-K previously filed with the SEC March 2, 2015 as well as the explanation of Non-GAAP financial measures attached hereto or posted to the Investor Relations section of the Company's website.

**Please note that amounts in prior periods are reclassified whenever necessary to conform to the current period presentation.

Subscription on demand revenue: Represents revenue from products related to license and subscription fees comprised of a charge billed at the initial order date and monthly or annual subscription fees for accessing our on demand software solutions. The license fee billed at the initial order date is recognized as revenue on a straight-line basis over the longer of the contractual term or the period in which the customer is expected to benefit, which we consider to be three years. Recognition starts once the product has been activated. Revenue from monthly and annual subscription fees is recognized on a straight-line basis over the access period.

Transactional on demand revenue: Represents revenue related to services performed influenced by leasing velocity (resident renewal/churn rate). This revenue stream is primarily related to our Leasing and Marketing solutions consisting of transactional elements of our Screening, Websites, Lead Generation, and Contact Center solutions. It also includes transactional elements of our Renter’s Insurance (contingent commission) and Spend Management solutions.

Leasing and Marketing on demand revenue: Consists of our Screening, Websites, Lead Management, Lead Generation, and Contact Center solutions. On demand annual revenue from this product family is approximately 70% subscription.

Property Management on demand revenue: Consists of our Facilities, Accounting, Property Management, and Spend Management solutions. On demand annual revenue from this product family is approximately 95% subscription.

Resident Services on demand revenue: Consists of our Renter’s Insurance, Resident Billing, Payments, Online Living and Contact Center Maintenance solutions. On demand annual revenue from this product family is approximately 95% subscription.

Asset Optimization on demand revenue: Consists of our YieldStar, Business Intelligence and MPF Research solutions. On demand annual revenue from this product family is 100% subscription.

Non-GAAP Financial Measures

This IR Fact Sheet, dated as of November 3, 2015, contains non-GAAP financial measures and should be read in concert with our Quarterly Report on Form 10-Q previously filed with the Securities and Exchange Commission (“SEC”) on August 7, 2015 and our Annual Report on Form 10-K previously filed with the SEC on March 2, 2015. These non-GAAP financial 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.

Specifically, we define the measures as follows:

Non-GAAP total revenue is total revenue plus acquisition-related and other deferred revenue.
Non-GAAP on demand revenue represents on demand revenue plus acquisition-related and other deferred revenue adjustments. We use this metric to evaluate our on demand revenue as we believe its inclusion provides a more accurate depiction of on demand revenue arising from our strategic acquisitions.
Ending on demand units represents the number of rental housing units managed by our customers with one or more of our on demand software solutions at the end of the period. We use ending on demand units to measure the success of our strategy of increasing the number of rental housing units managed with our on demand software solutions. Property unit counts are provided to us by our customers as new sales orders are processed. Property unit counts may be adjusted periodically as information related to our customers’ properties is updated or supplemented, which could result in adjustments to the number of units previously reported.
Non-GAAP net income is 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 stock registration costs, and an adjustment to income tax expense (benefit) to reflect our effective tax rate.
Adjusted EBITDA is 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, stock registration costs, and acquisition-related expenses.
RPU, or 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.
ACV, or annualized Non-GAAP on demand revenue per average on demand unit, is calculated by multiplying ending on demand units by annualized Non-GAAP on demand revenue per average on demand unit.
On Demand Revenue Detail uses Non-GAAP on demand revenue (defined above) for each product family and for subscription and transactional components.
Top 100 ACV is ACV (defined above) and RPU (defined above) for our largest ACV customers.
Top 50 RPU is ACV (defined above) and RPU (defined above) for our largest RPU customers.

these non-GAAP measures provide investors and other users of our financial information consistency and comparability with our past financial performance, facilitate period-to-period comparisons of operations and facilitate 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.