Exhibit 99.1
RealPage
Reports First Quarter 2016 Financial Results
-
Q1’16
total GAAP revenue of $128.4 million, representing 16 percent
year-over-year growth
-
Q1’16
adjusted EBITDA of $27.5 million, representing 37 percent
year-over-year growth
-
Q1’16
non-GAAP net income per diluted share of $0.17, representing 55
percent year-over-year growth
CARROLLTON, Texas--(BUSINESS WIRE)--May 4, 2016--RealPage, Inc.
(NASDAQ:RP), a leading provider of on demand software and
software-enabled services for the multifamily, commercial, single-family
and vacation rental housing industries, today announced financial
results for its first quarter ended March 31, 2016.
First Quarter 2016 Financial Highlights
-
Total GAAP revenue of $128.4 million, an increase of 16 percent
year-over-year;
-
GAAP net income of $3.0 million, or $0.04 per diluted share, compared
to a GAAP net loss of $1.6 million, or $0.02 per diluted share, in the
prior year quarter;
-
Total Non-GAAP revenue of $128.0 million, an increase of 16 percent
year-over-year;
-
Adjusted EBITDA of $27.5 million, an increase of 37 percent
year-over-year and 320 basis points of margin expansion; and
-
Non-GAAP net income of $12.7 million, or $0.17 per diluted share, a
year-over-year increase of 44 percent and 55 percent, respectively.
Comments on the News
“First quarter results represent a solid start to 2016,” said Steve
Winn, Chairman and CEO of RealPage. “Total non-GAAP revenue growth of
16% was driven by strong client adoption across our Property Management,
Resident Services and Asset Optimization product families. Our
acquisition of NWP Services Corporation, which was included in our
results for approximately one month during the first quarter,
contributed $4.7 million to total non-GAAP revenue. We are excited to
have NWP as a part of the RealPage family.”
“We increased our adjusted EBITDA margin by 320 basis points, which
contributed to another quarter of strong operating cash flow, up 29%
compared to the prior year period,” said Bryan Hill, CFO and Treasurer
of RealPage. “We expect to drive further operating leverage and strong
cash flow growth throughout 2016, and as a result we are raising our
full year adjusted EBITDA expectations.”
The company also announced that its board of directors has authorized
the company to purchase up to $50 million of its outstanding shares of
common stock over the next 12 months. “The Board's decision to continue
our stock repurchase program reflects continued support of our capital
allocation strategy which provides us a flexible framework to deploy
capital in opportunistic areas,” said Mr. Winn.
Financial Outlook
RealPage management expects to achieve the following results during its
second quarter ended June 30, 2016:
-
Total Non-GAAP revenue is expected to be in the range of $140.5
million to $142.5 million;
-
Adjusted EBITDA is expected to be in the range of $29.0 million to
$30.0 million;
-
Non-GAAP net income per diluted share is expected to be approximately
$0.17;
-
Non-GAAP tax rate is expected to be approximately 40 percent; and
-
Weighted average shares outstanding are expected to be approximately
77.9 million.
RealPage management expects to achieve the following results during its
calendar year ended December 31, 2016:
-
Total Non-GAAP revenue is expected to be in the range of $565.0
million to $575.0 million;
-
Adjusted EBITDA is expected to be in the range of $120.0 million to
$124.0 million;
-
Non-GAAP net income per diluted share is expected to be in the range
of $0.70 to $0.73;
-
Non-GAAP tax rate is expected to be approximately 40 percent; and
-
Weighted average shares outstanding are expected to be approximately
78.3 million.
Please note that the above statements are forward looking and that total
Non-GAAP revenue excludes certain adjustments and the impact of
acquisitions. The assumptions for weighted average shares outstanding
exclude any potential share repurchases by the Company. 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 May 4, 2016 at 5:00 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 866-807-9684 and internationally at
412-317-5415. A replay will be available at 877-344-7529 or
412-317-0088, passcode 10085276, until May 11, 2016.
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
12,000 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; its
expectations regarding operating leverage and cash flow growth.
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. 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 and full year 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, could 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 or to achieve
expected synergies; (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 Annual Report on Form 10-K previously filed with
the SEC on February 29, 2016. 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; non-recurring and
duplicative expenses related to the relocation of our headquarters; any
impact related to certain litigation such as our prior litigation with
Yardi Systems, Inc. (including related insurance litigation and
settlement costs); and acquisition related expenses (including any
purchase accounting adjustments); and (3) include income taxes at a
sustainable effective rate, which may differ from our current rate.
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 income (loss) plus acquisition-related and
other deferred revenue adjustments; amortization of intangible assets;
stock-based compensation expense; non-recurring and duplicative expenses
related to the relocation of our headquarters; acquisition-related
expenses (including any purchase accounting adjustments); any impact
related to certain litigation such as our prior litigation with Yardi
Systems, Inc. (including related insurance litigation and settlement
costs); and an adjustment to income tax expense (benefit) to reflect our
projected sustainable 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; non-recurring and duplicative
expenses related to the relocation of our headquarters; 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, non-recurring and duplicative
expenses related to the relocation of our headquarters, and stock-based
compensation.
We define Adjusted EBITDA as net income (loss) 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; non-recurring and duplicative expenses related to the
relocation of our headquarters; any impact related to certain litigation
such as our prior litigation with Yardi Systems, Inc. (including related
insurance litigation and settlement costs); and acquisition related
expenses (including any purchase accounting adjustments).
Non-GAAP on demand revenue per average on demand unit represents
non-GAAP on demand revenue for the period presented, including pro forma
on demand revenue for acquisitions acquired during the period, 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 rental housing units.
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 for the periods presented.
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, stock-based
compensation, non-recurring and duplicative expenses related to the
relocation of our headquarters, any impact related to certain
litigation such as our prior litigation with Yardi Systems, Inc.
(including related insurance litigation and settlement costs), and
acquisition related expenses (including any purchase accounting
adjustments), 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 substitutes 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 that they do not reflect our capital expenditures or future
requirements for capital expenditures. 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.
|
|
|
|
|
Consolidated Balance Sheets
|
|
(in thousands, except share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
|
December 31,
|
|
|
|
|
2016
|
|
|
2015
|
|
|
|
|
(unaudited)
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
57,499
|
|
|
|
$
|
30,911
|
|
|
Restricted cash
|
|
|
|
85,168
|
|
|
|
|
85,461
|
|
|
Accounts receivable, less allowance for doubtful accounts of
$2,612 and $2,318 at March 31, 2016 and December 31, 2015,
respectively
|
|
|
|
76,164
|
|
|
|
|
74,192
|
|
|
Prepaid expenses
|
|
|
|
10,362
|
|
|
|
|
8,294
|
|
|
Other current assets
|
|
|
|
25,828
|
|
|
|
|
23,085
|
|
|
Total current assets
|
|
|
|
255,021
|
|
|
|
|
221,943
|
|
|
Property, equipment and software, net
|
|
|
|
94,188
|
|
|
|
|
82,198
|
|
|
Goodwill
|
|
|
|
255,398
|
|
|
|
|
220,097
|
|
|
Identified intangible assets, net
|
|
|
|
91,723
|
|
|
|
|
81,280
|
|
|
Deferred tax assets, net
|
|
|
|
20,918
|
|
|
|
|
12,051
|
|
|
Other assets
|
|
|
|
5,571
|
|
|
|
|
5,632
|
|
|
Total assets
|
|
|
$
|
722,819
|
|
|
|
$
|
623,201
|
|
|
|
|
|
|
|
|
|
|
Liabilities and stockholders’ equity
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
$
|
27,499
|
|
|
|
$
|
17,448
|
|
|
Accrued expenses and other current liabilities
|
|
|
|
39,675
|
|
|
|
|
28,294
|
|
|
Current portion of deferred revenue
|
|
|
|
82,805
|
|
|
|
|
84,200
|
|
|
Current portion of term loan, net
|
|
|
|
3,125
|
|
|
|
|
—
|
|
|
Customer deposits held in restricted accounts
|
|
|
|
85,119
|
|
|
|
|
85,405
|
|
|
Total current liabilities
|
|
|
|
238,223
|
|
|
|
|
215,347
|
|
|
Deferred revenue
|
|
|
|
6,992
|
|
|
|
|
6,979
|
|
|
Revolving credit facility
|
|
|
|
—
|
|
|
|
|
40,000
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|
|
Term loan, net
|
|
|
|
121,188
|
|
|
|
|
—
|
|
|
Other long-term liabilities
|
|
|
|
33,451
|
|
|
|
|
34,423
|
|
|
Total liabilities
|
|
|
|
399,854
|
|
|
|
|
296,749
|
|
|
Stockholders’ equity:
|
|
|
|
|
|
|
|
Preferred stock, $0.001 par value: 10,000,000 shares authorized
and zero shares issued and outstanding at March 31, 2016 and
December 31, 2015, respectively
|
|
|
|
—
|
|
|
|
|
—
|
|
|
Common stock, $0.001 par value: 125,000,000 shares authorized,
84,307,678 and 82,919,033 shares issued and 80,021,740 and
78,793,670 shares outstanding at March 31, 2016 and December 31,
2015, respectively
|
|
|
|
84
|
|
|
|
|
83
|
|
|
Additional paid-in capital
|
|
|
|
478,150
|
|
|
|
|
471,668
|
|
|
Treasury stock, at cost: 4,285,938 and 4,125,363 shares at March
31,2016 and December 31, 2015, respectively
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|
|
|
(25,600
|
)
|
|
|
|
(24,338
|
)
|
|
Accumulated deficit
|
|
|
|
(129,140
|
)
|
|
|
|
(120,415
|
)
|
|
Accumulated other comprehensive loss
|
|
|
|
(529
|
)
|
|
|
|
(546
|
)
|
|
Total stockholders’ equity
|
|
|
|
322,965
|
|
|
|
|
326,452
|
|
|
Total liabilities and stockholders’ equity
|
|
|
$
|
722,819
|
|
|
|
$
|
623,201
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statements of Operations
|
|
(in thousands, except per share amounts)
|
|
(unaudited)
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|
|
|
|
|
|
|
|
|
|
|
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Three Months Ended
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|
|
March 31,
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2016
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|
|
2015
|
|
Revenue:
|
|
|
|
|
|
|
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On demand
|
|
|
$
|
123,411
|
|
|
|
$
|
106,460
|
|
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On premise
|
|
|
|
772
|
|
|
|
|
741
|
|
|
Professional and other
|
|
|
|
4,200
|
|
|
|
|
3,269
|
|
|
Total revenue
|
|
|
|
128,383
|
|
|
|
|
110,470
|
|
|
Cost of revenue(1) (2)
|
|
|
|
54,748
|
|
|
|
|
47,562
|
|
|
Gross profit
|
|
|
|
73,635
|
|
|
|
|
62,908
|
|
|
Operating expense:
|
|
|
|
|
|
|
|
Product development(1)
|
|
|
|
17,272
|
|
|
|
|
17,977
|
|
|
Sales and marketing(1) (2)
|
|
|
|
32,199
|
|
|
|
|
29,113
|
|
|
General and administrative(1) (2)
|
|
|
|
18,346
|
|
|
|
|
18,336
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|
|
Impairment of identified intangible assets(2)
|
|
|
|
—
|
|
|
|
|
527
|
|
|
Total operating expense
|
|
|
|
67,817
|
|
|
|
|
65,953
|
|
|
Operating income (loss)
|
|
|
|
5,818
|
|
|
|
|
(3,045
|
)
|
|
Interest expense and other, net
|
|
|
|
(708
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)
|
|
|
|
(267
|
)
|
|
Income (loss) before income taxes
|
|
|
|
5,110
|
|
|
|
|
(3,312
|
)
|
|
Income tax expense (benefit)
|
|
|
|
2,114
|
|
|
|
|
(1,704
|
)
|
|
Net income (loss)
|
|
|
$
|
2,996
|
|
|
|
$
|
(1,608
|
)
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share attributable to common shareholders
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
0.04
|
|
|
|
$
|
(0.02
|
)
|
|
Diluted
|
|
|
$
|
0.04
|
|
|
|
$
|
(0.02
|
)
|
|
Weighted average shares used in computing net income (loss) per
share attributable to common shareholders
|
|
|
|
|
|
|
|
Basic
|
|
|
|
76,656
|
|
|
|
|
76,956
|
|
|
Diluted
|
|
|
|
77,147
|
|
|
|
|
76,956
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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(1) Includes stock-based compensation expense as follows:
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|
|
|
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|
|
|
Three Months Ended
|
|
|
|
|
March 31,
|
|
|
|
|
2016
|
|
|
2015
|
|
Cost of revenue
|
|
|
$
|
751
|
|
|
|
$
|
1,234
|
|
|
Product development
|
|
|
|
1,449
|
|
|
|
|
2,719
|
|
|
Sales and marketing
|
|
|
|
2,974
|
|
|
|
|
3,789
|
|
|
General and administrative
|
|
|
|
3,217
|
|
|
|
|
3,005
|
|
|
|
|
|
$
|
8,391
|
|
|
|
$
|
10,747
|
|
|
|
|
|
|
|
|
|
|
(2) Certain amounts in the prior quarterly period of 2015
have been reclassified to conform with current period presentation.
|
|
|
|
|
|
Condensed Consolidated Statements of Cash Flows
|
|
(in thousands)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
March 31,
|
|
|
|
|
2016
|
|
|
2015
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
$
|
2,996
|
|
|
|
$
|
(1,608
|
)
|
|
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
12,607
|
|
|
|
|
10,611
|
|
|
Deferred tax expense (benefit)
|
|
|
|
1,539
|
|
|
|
|
(2,108
|
)
|
|
Stock-based compensation
|
|
|
|
8,391
|
|
|
|
|
10,747
|
|
|
Excess tax benefit from stock options
|
|
|
|
(27
|
)
|
|
|
|
—
|
|
|
Loss on disposal and impairment of assets
|
|
|
|
—
|
|
|
|
|
1,119
|
|
|
Acquisition-related consideration
|
|
|
|
(126
|
)
|
|
|
|
377
|
|
|
Changes in assets and liabilities, net of assets acquired
|
|
|
|
|
|
|
|
and liabilities assumed in business combinations
|
|
|
|
3,589
|
|
|
|
|
3,360
|
|
|
Net cash provided by operating activities
|
|
|
|
28,969
|
|
|
|
|
22,498
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
Purchases of property, equipment, and software
|
|
|
|
(10,217
|
)
|
|
|
|
(6,182
|
)
|
|
Acquisition of businesses, net of cash acquired
|
|
|
|
(59,152
|
)
|
|
|
|
—
|
|
|
Net cash used in investing activities
|
|
|
|
(69,369
|
)
|
|
|
|
(6,182
|
)
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
Payments on and proceeds from debt, net
|
|
|
|
84,144
|
|
|
|
|
(5,151
|
)
|
|
Payments of deferred acquisition-related consideration
|
|
|
|
(2,361
|
)
|
|
|
|
(1,139
|
)
|
|
Issuance of common stock
|
|
|
|
2,482
|
|
|
|
|
755
|
|
|
Excess tax benefit from stock options
|
|
|
|
27
|
|
|
|
|
—
|
|
|
Purchase of treasury stock
|
|
|
|
(17,400
|
)
|
|
|
|
(9,766
|
)
|
|
Net cash provided by (used in) financing activities
|
|
|
|
66,892
|
|
|
|
|
(15,301
|
)
|
|
Net increase in cash and cash equivalents
|
|
|
|
26,492
|
|
|
|
|
1,015
|
|
|
Effect of exchange rate on cash
|
|
|
|
96
|
|
|
|
|
(164
|
)
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents:
|
|
|
|
|
|
|
|
Beginning of period
|
|
|
|
30,911
|
|
|
|
|
26,936
|
|
|
End of period
|
|
|
$
|
57,499
|
|
|
|
$
|
27,787
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP Financial Measures
|
|
For the Three Months Ended March 31, 2016 and 2015
|
|
(in thousands, except per share amounts)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
March 31,
|
|
|
|
|
2016
|
|
|
2015
|
|
Non-GAAP revenue:
|
|
|
|
|
|
|
|
Revenue (GAAP)
|
|
|
$
|
128,383
|
|
|
|
$
|
110,470
|
|
|
Acquisition-related and other deferred revenue
|
|
|
|
(343
|
)
|
|
|
|
(466
|
)
|
|
Non-GAAP revenue
|
|
|
$
|
128,040
|
|
|
|
$
|
110,004
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
March 31,
|
|
|
|
|
2016
|
|
|
2015
|
|
Adjusted gross profit:
|
|
|
|
|
|
|
|
Gross profit (GAAP)(1)
|
|
|
$
|
73,635
|
|
|
|
$
|
62,908
|
|
|
Acquisition-related and other deferred revenue
|
|
|
|
(343
|
)
|
|
|
|
(466
|
)
|
|
Depreciation
|
|
|
|
2,692
|
|
|
|
|
2,405
|
|
|
Amortization of intangible assets
|
|
|
|
4,165
|
|
|
|
|
2,814
|
|
|
Headquarters relocation costs
|
|
|
|
584
|
|
|
|
|
—
|
|
|
Stock-based compensation expense
|
|
|
|
751
|
|
|
|
|
1,234
|
|
|
Adjusted gross profit
|
|
|
$
|
81,484
|
|
|
|
$
|
68,895
|
|
|
|
|
|
|
|
|
|
|
Adjusted gross profit margin
|
|
|
|
63.6
|
%
|
|
|
|
62.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
March 31,
|
|
|
|
|
2016
|
|
|
2015
|
|
Adjusted EBITDA:
|
|
|
|
|
|
|
|
Net income (loss) (GAAP)
|
|
|
$
|
2,996
|
|
|
|
$
|
(1,608
|
)
|
|
Acquisition-related and other deferred revenue
|
|
|
|
(343
|
)
|
|
|
|
(466
|
)
|
|
Depreciation, asset impairment, and loss on disposal of assets
|
|
|
|
5,496
|
|
|
|
|
6,150
|
|
|
Amortization of intangible assets
|
|
|
|
7,111
|
|
|
|
|
5,580
|
|
|
Acquisition-related (income) expense
|
|
|
|
(57
|
)
|
|
|
|
1,092
|
|
|
Interest expense, net
|
|
|
|
719
|
|
|
|
|
267
|
|
|
Income tax expense (benefit)
|
|
|
|
2,114
|
|
|
|
|
(1,704
|
)
|
|
Litigation-related expense
|
|
|
|
—
|
|
|
|
|
2
|
|
|
Headquarters relocation costs
|
|
|
|
1,025
|
|
|
|
|
—
|
|
|
Stock-based compensation expense
|
|
|
|
8,391
|
|
|
|
|
10,747
|
|
|
Adjusted EBITDA
|
|
|
$
|
27,452
|
|
|
|
$
|
20,060
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA margin
|
|
|
|
21.4
|
%
|
|
|
|
18.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
March 31,
|
|
|
|
|
2016
|
|
|
2015
|
|
Non-GAAP total product development:
|
|
|
|
|
|
|
|
Product development (GAAP)
|
|
|
$
|
17,272
|
|
|
|
$
|
17,977
|
|
|
Less: Asset impairment and loss on disposal of assets
|
|
|
|
—
|
|
|
|
|
599
|
|
|
Headquarters relocation costs
|
|
|
|
154
|
|
|
|
|
—
|
|
|
Stock-based compensation expense
|
|
|
|
1,449
|
|
|
|
|
2,719
|
|
|
Non-GAAP total product development
|
|
|
$
|
15,669
|
|
|
|
$
|
14,659
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP total product development as % of non-GAAP revenue:
|
|
|
|
12.2
|
%
|
|
|
|
13.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP Financial Measures
|
|
For the Three Months Ended March 31, 2016 and 2015
|
|
(in thousands, except per share amounts)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
March 31,
|
|
|
|
|
2016
|
|
|
2015
|
|
Non-GAAP total sales and marketing:
|
|
|
|
|
|
|
|
Sales and marketing (GAAP)(1)
|
|
|
$
|
32,199
|
|
|
|
$
|
29,113
|
|
|
Less: Amortization of intangible assets
|
|
|
|
2,946
|
|
|
|
|
2,766
|
|
|
Headquarters relocation costs
|
|
|
|
170
|
|
|
|
|
—
|
|
|
Stock-based compensation expense
|
|
|
|
2,974
|
|
|
|
|
3,789
|
|
|
Non-GAAP total sales and marketing
|
|
|
$
|
26,109
|
|
|
|
$
|
22,558
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP total sales and marketing as % of non-GAAP revenue:
|
|
|
|
20.4
|
%
|
|
|
|
20.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
March 31,
|
|
|
|
|
2016
|
|
|
2015
|
|
Non-GAAP total general and administrative:
|
|
|
|
|
|
|
|
General and administrative (GAAP)(1)
|
|
|
$
|
18,346
|
|
|
|
$
|
18,336
|
|
|
Less: Asset impairment and loss on disposal of assets
|
|
|
|
—
|
|
|
|
|
(7
|
)
|
|
Acquisition-related (income) expense
|
|
|
|
(57
|
)
|
|
|
|
1,092
|
|
|
Litigation-related expense
|
|
|
|
—
|
|
|
|
|
2
|
|
|
Headquarters relocation costs
|
|
|
|
117
|
|
|
|
|
—
|
|
|
Stock-based compensation expense
|
|
|
|
3,217
|
|
|
|
|
3,005
|
|
|
Non-GAAP total general and administrative
|
|
|
$
|
15,069
|
|
|
|
$
|
14,244
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP total general and administrative as % of non-GAAP revenue:
|
|
|
|
11.8
|
%
|
|
|
|
12.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
March 31,
|
|
|
|
|
2016
|
|
|
2015
|
|
Non-GAAP total operating expense:
|
|
|
|
|
|
|
|
Operating expense (GAAP)(1)
|
|
|
$
|
67,817
|
|
|
|
$
|
65,953
|
|
|
Less: Asset impairment and loss on disposal of assets
|
|
|
|
—
|
|
|
|
|
1,119
|
|
|
Amortization of intangible assets
|
|
|
|
2,946
|
|
|
|
|
2,766
|
|
|
Acquisition-related (income) expense
|
|
|
|
(57
|
)
|
|
|
|
1,092
|
|
|
Litigation-related expense
|
|
|
|
—
|
|
|
|
|
2
|
|
|
Headquarters relocation costs
|
|
|
|
441
|
|
|
|
|
—
|
|
|
Stock-based compensation expense
|
|
|
|
7,640
|
|
|
|
|
9,513
|
|
|
Non-GAAP total operating expense
|
|
|
$
|
56,847
|
|
|
|
$
|
51,461
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP total operating expense as % of non-GAAP revenue:
|
|
|
|
44.4
|
%
|
|
|
|
46.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
March 31,
|
|
|
|
|
2016
|
|
|
2015
|
|
Non-GAAP operating income:
|
|
|
|
|
|
|
|
Operating income (loss) (GAAP)
|
|
|
$
|
5,818
|
|
|
|
$
|
(3,045
|
)
|
|
Acquisition-related and other deferred revenue
|
|
|
|
(343
|
)
|
|
|
|
(466
|
)
|
|
Asset impairment and loss on disposal of assets
|
|
|
|
—
|
|
|
|
|
1,119
|
|
|
Amortization of intangible assets
|
|
|
|
7,111
|
|
|
|
|
5,580
|
|
|
Acquisition-related (income) expense
|
|
|
|
(57
|
)
|
|
|
|
1,092
|
|
|
Litigation-related expense
|
|
|
|
—
|
|
|
|
|
2
|
|
|
Headquarters relocation costs
|
|
|
|
1,025
|
|
|
|
|
—
|
|
|
Stock-based compensation expense
|
|
|
|
8,391
|
|
|
|
|
10,747
|
|
|
Non-GAAP operating income
|
|
|
$
|
21,945
|
|
|
|
$
|
15,029
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating margin
|
|
|
|
17.1
|
%
|
|
|
|
13.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP Financial Measures
|
|
For the Three Months Ended March 31, 2016 and 2015
|
|
(in thousands, except per share amounts)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
March 31,
|
|
|
|
|
2016
|
|
|
2015
|
|
Non-GAAP net income:
|
|
|
|
|
|
|
|
Net income (loss) (GAAP)
|
|
|
$
|
2,996
|
|
|
|
$
|
(1,608
|
)
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments:
|
|
|
|
|
|
|
|
Acquisition-related and other deferred revenue
|
|
|
|
(343
|
)
|
|
|
|
(466
|
)
|
|
Asset impairment and loss on disposal of assets
|
|
|
|
—
|
|
|
|
|
1,119
|
|
|
Amortization of intangible assets
|
|
|
|
7,111
|
|
|
|
|
5,580
|
|
|
Acquisition-related (income) expense
|
|
|
|
(57
|
)
|
|
|
|
1,092
|
|
|
Litigation-related expense
|
|
|
|
—
|
|
|
|
|
2
|
|
|
Headquarters relocation costs
|
|
|
|
1,025
|
|
|
|
|
—
|
|
|
Stock-based compensation expense
|
|
|
|
8,391
|
|
|
|
|
10,747
|
|
|
Subtotal of tax deductible items
|
|
|
|
16,127
|
|
|
|
|
18,074
|
|
|
|
|
|
|
|
|
|
|
Proforma tax impact of Non-GAAP adjustments(2)
|
|
|
|
(6,451
|
)
|
|
|
|
(7,230
|
)
|
|
Proforma tax benefit (expense) resulting from applying effective
tax rate(3)
|
|
|
|
70
|
|
|
|
|
(379
|
)
|
|
Non-GAAP net income
|
|
|
$
|
12,742
|
|
|
|
$
|
8,857
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income per share - diluted
|
|
|
$
|
0.17
|
|
|
|
$
|
0.11
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares - basic
|
|
|
|
76,656
|
|
|
|
|
76,956
|
|
|
Weighted average effect of dilutive securities - non-GAAP
|
|
|
|
491
|
|
|
|
|
831
|
|
|
Non-GAAP weighted average shares - diluted
|
|
|
|
77,147
|
|
|
|
|
77,787
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
March 31,
|
|
|
|
|
2016
|
|
|
2015
|
|
Annualized non-GAAP on demand revenue per average on demand unit:
|
|
|
|
|
|
|
|
On demand revenue (GAAP)
|
|
|
$
|
123,411
|
|
|
|
$
|
106,460
|
|
|
Acquisition-related and other deferred revenue
|
|
|
|
(343
|
)
|
|
|
|
(466
|
)
|
|
Non-GAAP on demand revenue
|
|
|
|
123,068
|
|
|
|
|
105,994
|
|
|
|
|
|
|
|
|
|
|
Ending on demand units
|
|
|
|
10,999
|
|
|
|
|
9,700
|
|
|
Average on demand units
|
|
|
|
10,783
|
|
|
|
|
9,630
|
|
|
|
|
|
|
|
|
|
|
Annualized non-GAAP on demand revenue per average on demand unit(4)
|
|
|
$
|
48.10
|
|
|
|
$
|
44.03
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP on demand annual customer value(5)
|
|
|
$
|
529,052
|
|
|
|
$
|
427,091
|
|
|
|
|
(1)
|
|
Certain amounts in prior quarterly periods of 2015 have been
reclassified to conform with current period presentation.
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(2)
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Reflects the removal of the tax benefit associated with the
acquisition-related and other deferred revenue adjustment, asset
impairment and loss on disposal of assets, amortization of
intangible assets, acquisition-related (income) expense,
litigation-related expense, headquarters relocation costs, and
stock-based compensation expense.
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(3)
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Represents adjusting to a normalized effective tax rate of 40%.
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(4)
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We define this metric as non-GAAP on demand revenue for the period
presented, including pro forma on demand revenue for acquisitions
acquired during the period, 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.
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(5)
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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.
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CONTACT:
RealPage
Investor Relations
Rhett Butler,
972-820-3773
rhett.butler@realpage.com
