EX-99.1 2 d764562dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

Jive Software Announces Second Quarter 2014 Financial Results

2Q total revenue of $43.4 million, up 23% year-over-year

2Q non-GAAP earnings of $(0.07), up 50% year-over-year

Palo Alto, Calif. – July 31, 2014 — Jive Software, Inc. (NASDAQ: JIVE), the world’s leading provider of modern communication and collaboration solutions for business, today announced financial results for its second quarter ended June 30, 2014.

“Jive delivered second quarter results that exceeded our guidance from both a revenue and profitability perspective. However, we also experienced a more challenging sales environment that resulted in elongated sales cycles, including several larger opportunities that did not close by the end of the quarter,” said Tony Zingale, Chairman & CEO of Jive Software.

Zingale added, “We are continuing to execute against our go-to-market strategy and although it has been well received by customers we believe it will take additional time to fully recognize the benefits in our results. We remain enthusiastic about the long-term prospects associated with the global enterprise communication and collaboration market. We believe we are well positioned to capitalize on this opportunity with our unmatched platform, functionality and track record of delivering customer success.”

Second Quarter 2014 Financial Highlights

 

    Revenue: Total revenue for the second quarter was $43.4 million, an increase of 23% on a year-over-year basis. Within total revenue, product revenue was $39.0 million for the second quarter, an increase of 24% on a year-over-year basis. Professional Services revenue for the second quarter was $4.3 million, an increase of 18% on a year-over-year basis.

 

    Non-GAAP Billings: Short-term billings, which Jive defines as revenue plus the change in short-term deferred revenue, were $46.1 million for the second quarter, an increase of 10% on a year-over-year basis. Total billings, which Jive defines as revenue plus the change in short and long-term deferred revenue, was $40.8 million compared to $42.0 in the year-ago period.

 

1


    Gross Profit: GAAP gross profit for the second quarter was $26.7 million, compared to $21.5 million for the second quarter of 2013. Non-GAAP gross profit was $28.6 million for the second quarter, representing a year-over-year increase of 22% and a non-GAAP gross margin of 66%.

 

    Loss from Operations: GAAP loss from operations for the second quarter was $14.4 million, compared to a loss of $18.8 million for the second quarter of 2013. Non-GAAP loss from operations was $4.4 million for the second quarter, compared to a loss of $9.2 million for the second quarter of 2013.

 

    Net Loss: GAAP net loss for the second quarter was $14.6 million, compared to a net loss of $17.8 million for the same period last year. GAAP net loss per share for the second quarter was $0.21 based on 70.2 million weighted-average shares outstanding, compared to a net loss per share of $0.27 based on 66.8 million weighted-average shares outstanding for the same period last year.

Non-GAAP net loss for the second quarter was $4.6 million, compared to a net loss of $9.5 million for the same period last year. Non-GAAP net loss per share for the second quarter was $0.07 based on 70.2 million weighted-average shares outstanding, compared to net a loss per share of $0.14 based on 66.8 million weighted-average shares outstanding for the same period last year.

 

    Balance Sheet and Cash Flow: As of June 30, 2014, Jive had cash and cash equivalents and marketable securities of $139.2 million, a decrease of $100 thousand from $139.3 million at the end of the first quarter.

The company generated $4.2 million in cash from operations and invested $3.0 million in capital expenditures, leading to free cash flow of $1.2 million for the second quarter. Negative free cash flow was $1.7 million for the second quarter of 2013. Free cash flow is defined as cash flows provided by operating activities minus cash flows used to purchase capital expenditures.

 

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A reconciliation of GAAP to non-GAAP financial measures has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”

Second Quarter 2014 Business Highlights

 

    Signed new customers and expanded existing relationships, including: Akamai Technologies, Artelia, Eli Lilly, Euroclear Bank, Gentex, GNS3 Inc., Humana, Huntsman International LLC, Intercontinental Exchange, Modern Times Group, Persistent Systems Inc., PricewaterhouseCoopers, ServiceMax, Sodexo Group, TI Automotive Systems, TVO and Univision, among others.

 

    Named one of the world’s foremost vendors in enterprise collaboration and social networking by two independent research firms. Forrester Research named Jive a leader in The Forrester Wave™: Enterprise Social Platforms, Q2 2014 and Aragon Research ranked Jive as the top vendor in the leader category amongst all other global vendors in The Aragon Research Globe™ for Social Software, 2014.

 

    Strengthened reputation as one of the best places to work. Recent distinctions included Bay Area News Group’s “Top Workplaces in the Bay Area,” Oregon Business Magazine’s “Best Companies to Work for in Oregon,” and Portland Business Journal’sOregon’s Most Admired Companies.” Jive also achieved a 4.3 out of 5 overall rating from both current and past employees on Glassdoor, the global standard for transparent employee workplace assessments.

Financial Outlook

As of July 31, 2014, Jive is initiating guidance for its third quarter 2014 and updating guidance for the full year 2014, as follows:

 

    Third Quarter 2014 Guidance: Total revenue is expected to be in the range of $44.0 million to $45.0 million. Non-GAAP loss from operations is expected to be in the range of $4.5 million to $6.5 million. Non-GAAP net loss per share is expected to be in the range of $0.08 to $0.10 based on approximately 71.1 million weighted-average diluted shares outstanding.

 

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    Full Year 2014 Guidance: Total revenue is expected to be in the range of $172.0 million to $176.0 million. Non-GAAP loss from operations is expected to be in the range of $24.0 million to $28.0 million. Non-GAAP net loss per share is expected to be in the range of $0.35 to $0.43 based on approximately 70.7 million weighted-average diluted shares outstanding. Free cash flow is expected to be in the range of negative $15.0 million to negative $ 20.0 million.

With respect to the Company’s expectations under “Financial Outlook” above, the Company has not reconciled non-GAAP loss from operations or non-GAAP net loss per share to GAAP loss from operations and GAAP net loss per share because the Company does not provide guidance for stock-based compensation, income taxes or amortization of intangible assets, which are reconciling items between those Non-GAAP and GAAP measures. As items that impact loss from operations and loss per share are out of the Company’s control and/or cannot be reasonably predicted, the Company is unable to provide such guidance. Accordingly, a reconciliation to loss from operations and net loss per share is not available without unreasonable effort.

Quarterly Conference Call

Jive will host a conference call today at 2:00 p.m. PT (5:00 p.m. ET) to review the company’s financial results for the second quarter 2014, in addition to discussing the company’s outlook for the third quarter and full year 2014. To access this call, dial (888) 204-4610 (domestic) or (913) 312-1449 (international) with conference ID 6600060. A live webcast of the conference call will be accessible from the investor relations section of Jive’s website at http://investors.jivesoftware.com/ and a replay will be archived and accessible at: http://investors.jivesoftware.com/events.cfm. A replay of this conference call can also be accessed through August 14, 2014, by dialing (877) 870-5176 (domestic) or (858) 384-5517 (international). The replay pass code is 6600060.

About Jive Software

Jive (NASDAQ: JIVE) is the leading provider of modern communication and collaboration solutions for business. Recognized as a leader by the industry’s top analyst firms in multiple categories, Jive enables employees, partners and customers to work better together. More information can be found at www.jivesoftware.com or the Jive News Blog.

 

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Non-GAAP Financial Measures

The Company uses certain non-GAAP financial measures in this release. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles.

Non-GAAP gross profit, loss from operations, net loss and net loss per share exclude stock-based compensation expenses and amortization of acquisition related intangible assets. Total billings is defined by the Company as revenue plus the change in total deferred revenue. Short-term billings is defined as revenue plus the change in short-term deferred revenue. Management presents these non-GAAP financial measures because it considers them to be important supplemental measures of performance. Management uses the non-GAAP financial measures for planning purposes, including analysis of the Company’s performance against prior periods, the preparation of operating budgets and to determine appropriate levels of operating and capital investments. Management also believes that the non-GAAP financial measures provide additional insight for analysts and investors in evaluating the Company’s financial and operational performance. However, these non-GAAP financial measures have limitations as an analytical tool and are not intended to be an alternative to financial measures prepared in accordance with GAAP. We intend to provide these non-GAAP financial measures as part of our future earnings discussions and, therefore, the inclusion of these non-GAAP financial measures will provide consistency in our financial reporting. A reconciliation of these non-GAAP measures to GAAP is provided in the accompanying tables.

Safe Harbor Statement

“Safe Harbor” statement under Private Securities Litigation Reform Act of 1995: This press release contains forward-looking statements, including statements concerning our financial guidance for the third fiscal quarter of 2014 and the full year of 2014, the future growth of the social business market, and our belief that we are well positioned to build upon our momentum in 2014. The achievement of success in the matters covered by such forward-looking statements involves substantial risks, uncertainties and assumptions. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, our results or events could differ materially from the results expressed or implied by the forward-looking statements we make.

 

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The risk and uncertainties referred to above include, but are not limited to, risks associated with our limited operating history; expectations regarding the benefits of our relationship with Cisco; expectations regarding the widespread adoption of social business platforms by enterprises; uncertainty regarding the market for social business platforms; changes in the competitive dynamics of our market; our ability to increase and predict new subscription; subscription renewal or upsell rates and the impact these rates may have on our future revenues; our reliance on our own controls and third-party service providers to host some of our products; the risk that our security measures could be breached and unauthorized access to customer data could be obtained; potential third party intellectual property infringement claims; and the price volatility of our common stock.

More information about potential factors that could affect our business and financial results is contained in our Form 10-K for the year ended December 31, 2013 as filed with the Securities and Exchange Commission. Additional information will also be set forth in our quarterly reports on Form 10-Q, future annual reports on Form 10-K and other filings that we make with the Securities and Exchange Commission. We do not intend and undertake no duty to release publicly any updates or revisions to any forward-looking statements contained herein.

Investor Contact:

Brian Denyeau

ICR

(646) 277-1251

brian.denyeau@icrinc.com

Media Contact:

Jason Khoury

Jive Software

(650) 847-8308

jason.khoury@jivesoftware.com

 

6


JIVE SOFTWARE, INC.

Consolidated Statements of Operations

(In thousands, except per share amounts)

(Unaudited)

 

     For the Three Months Ended
June 30,
    For the Six Months Ended
June 30,
 
     2014     2013     2014     2013  

Revenues:

        

Product

   $ 39,037      $ 31,559      $ 76,414      $ 62,222   

Professional services

     4,338        3,683        7,990        6,872   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     43,375        35,242        84,404        69,094   

Cost of revenues:

        

Product

     10,835        9,540        20,756        18,752   

Professional services

     5,805        4,215        11,339        8,063   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total cost of revenues

     16,640        13,755        32,095        26,815   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     26,735        21,487        52,309        42,279   

Operating expenses:

        

Research and development

     12,991        13,749        25,888        26,426   

Sales and marketing

     21,658        20,480        45,159        39,344   

General and administrative

     6,514        6,081        12,833        11,947   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     41,163        40,310        83,880        77,717   
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss from operations

     (14,428     (18,823     (31,571     (35,438

Other income (expense), net:

        

Interest income

     60        62        101        131   

Interest expense

     (64     (105     (147     (180

Other, net

     (141     (105     (151     (109
  

 

 

   

 

 

   

 

 

   

 

 

 

Total other income (expense), net

     (145     (148     (197     (158
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss before provision for (benefit from) income taxes

     (14,573     (18,971     (31,768     (35,596

Provision for (benefit from) income taxes

     57        (1,191     186        (1,215
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

   $ (14,630   $ (17,780   $ (31,954   $ (34,381
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic and diluted net loss per share

   $ (0.21   $ (0.27   $ (0.46   $ (0.52
  

 

 

   

 

 

   

 

 

   

 

 

 

Shares used in basic and diluted per share calculations

     70,233        66,816        69,785        66,285   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

7


JIVE SOFTWARE, INC.

Consolidated Balance Sheets

(In thousands, except share and per share data)

(Unaudited)

 

     June 30,
2014
    December 31,
2013
 

Assets

    

Current Assets:

    

Cash and cash equivalents

   $ 30,499      $ 38,415   

Short-term marketable securities

     69,521        69,809   

Accounts receivable, net of allowances

     38,935        58,829   

Prepaid expenses and other current assets

     12,426        9,425   
  

 

 

   

 

 

 

Total current assets

     151,381        176,478   

Marketable securities, noncurrent

     39,175        33,443   

Property and equipment, net of accumulated depreciation

     23,694        21,379   

Goodwill

     29,753        29,753   

Intangible assets, net of accumulated amortization

     11,870        14,310   

Other assets

     555        572   
  

 

 

   

 

 

 

Total assets

   $ 256,428      $ 275,935   
  

 

 

   

 

 

 

Liabilities and Stockholders’ Equity

    

Current liabilities:

    

Accounts payable

   $ 5,228      $ 6,412   

Accrued payroll and related liabilities

     7,440        7,469   

Other accrued liabilities

     7,514        8,478   

Deferred revenue, current

     116,134        112,432   

Term debt, current

     2,400        2,400   
  

 

 

   

 

 

 

Total current liabilities

     138,716        137,191   

Deferred revenue, less current portion

     27,444        34,905   

Term debt, less current portion

     4,800        6,000   

Other long-term liabilities

     1,176        1,605   
  

 

 

   

 

 

 

Total liabilities

     172,136        179,701   

Commitments and contingencies

    

Stockholders’ Equity:

    

Common stock

     7        7   

Less treasury stock at cost

     (3,352     (3,352

Additional paid-in capital

     346,758        326,834   

Accumulated deficit

     (259,485     (227,531

Accumulated other comprehensive income

     364        276   
  

 

 

   

 

 

 

Total stockholders’ equity

     84,292        96,234   
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 256,428      $ 275,935   
  

 

 

   

 

 

 

 

8


JIVE SOFTWARE, INC.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

     Three Months Ended
June 30,
    Six Months Ended
June 30,
 
     2014     2013     2014     2013  

Cash flows from operating activities:

        

Net loss

   $ (14,630   $ (17,780   $ (31,954   $ (34,381

Adjustments to reconcile net loss to net cash provided by operating activities:

        

Depreciation and amortization

     3,903        4,530        7,885        7,787   

Stock-based compensation

     8,808        8,250        18,625        14,389   

Change in deferred taxes

     —          (1,351     32        (1,351

(Increase) decrease, net of acquisitions, in:

        

Accounts receivable, net

     9,212        135        19,894        11,712   

Prepaid expenses and other assets

     (1,840     (605     (2,931     (1,009

Increase (decrease), net of acquisitions, in:

     —           

Accounts payable

     1,571        565        (890     (355

Accrued payroll and related liabilities

     (564     295        (311     (1,963

Other accrued liabilities

     133        (587     (628     100   

Deferred revenue

     (2,572     6,710        (3,759     11,068   

Other long-term liabilities

     168        52        115        40   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by operating activities

     4,189        214        6,078        6,037   

Cash flows from investing activities:

        

Payments for purchase of property and equipment

     (2,956     (1,926     (6,588     (4,789

Purchases of marketable securities

     (43,560     (31,288     (62,194     (58,780

Sales of marketable securities

     7,601        14,068        11,101        23,721   

Maturities of marketable securities

     24,507        20,900        45,074        42,330   

Acquisitions, net of cash acquired

     —          (11,047     —          (11,047
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash used in investing activities

     (14,408     (9,293     (12,607     (8,565

Cash flows from financing activities:

        

Proceeds from exercise of stock options

     480        1,708        1,528        5,341   

Taxes paid related to net share settlement of equity awards

     (861     (392     (1,115     (392

Repayments of term loans

     (600     (600     (1,200     (1,200

Earnout payment for prior acquisition

     —          —          (576     —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by (used in) financing activities

     (981     716        (1,363     3,749   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) in cash and cash equivalents

     (11,200     (8,363     (7,892     1,221   

Effect of exchange rate changes

     (26     7        (24     12   

Cash and cash equivalents, beginning of period

     41,725        58,544        38,415        48,955   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 30,499      $ 50,188      $ 30,499      $ 50,188   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

9


JIVE SOFTWARE, INC.

RECONCILIATION OF NON-GAAP INFORMATION

(In thousands, except per share data)

(Unaudited)

 

     Three Months Ended June 30,     Six Months Ended June 30,  
     2014     2013     2014     2013  

Gross profit, as reported

   $ 26,735      $ 21,487      $ 52,309      $ 42,279   

Add back:

        

Stock-based compensation

     941        777        2,111        1,298   

Amortization related to acquisitions

     954        926        1,926        1,682   

Non-recurring acquisition expense

     —          250        —          250   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit, non-GAAP

   $ 28,630      $ 23,440      $ 56,346      $ 45,509   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross margin, non-GAAP

     66     67     67     66
     Three Months Ended June 30,     Six Months Ended June 30,  
     2014     2013     2014     2013  

Research and development, as reported

   $ 12,991      $ 13,749      $ 25,888      $ 26,426   

less:

        

Stock-based compensation

     2,992        3,395        5,972        5,627   

Amortization related to acquisitions

     127        110        254        176   

Non-recurring acquisition expense

     —          19        —          19   
  

 

 

   

 

 

   

 

 

   

 

 

 

Research and development, non-GAAP

   $ 9,872      $ 10,225      $ 19,662      $ 20,604   
  

 

 

   

 

 

   

 

 

   

 

 

 

As percentage of total revenues, non-GAAP

     23     29     23     30
     Three Months Ended June 30,     Six Months Ended June 30,  
     2014     2013     2014     2013  

Sales and marketing, as reported

   $ 21,658      $ 20,480      $ 45,159      $ 39,344   

less:

        

Stock-based compensation

     2,885        2,405        6,627        4,629   

Amortization related to acquisitions

     129        115        258        175   
  

 

 

   

 

 

   

 

 

   

 

 

 

Sales and marketing, non-GAAP

   $ 18,644      $ 17,960      $ 38,274      $ 34,540   
  

 

 

   

 

 

   

 

 

   

 

 

 

As percentage of total revenues, non-GAAP

     43     51     45     50
     Three Months Ended June 30,     Six Months Ended June 30,  
     2014     2013     2014     2013  

General and administrative, as reported

   $ 6,514      $ 6,081      $ 12,833      $ 11,947   

less:

        

Stock-based compensation

     1,990        1,673        3,915        2,835   
  

 

 

   

 

 

   

 

 

   

 

 

 

General and administrative, non-GAAP

   $ 4,524      $ 4,408      $ 8,918      $ 9,112   
  

 

 

   

 

 

   

 

 

   

 

 

 

As percentage of total revenues, non-GAAP

     10     13     11     13
     Three Months Ended June 30,     Six Months Ended June 30,  
     2014     2013     2014     2013  

Loss from operations, as reported

   $ (14,428   $ (18,823   $ (31,571   $ (35,438

Add back:

        

Stock-based compensation

     8,808        8,250        18,625        14,389   

Amortization related to acquisitions

     1,210        1,151        2,438        2,033   

Non-recurring acquisition expense

     —          269        —          269   
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss from operations, non-GAAP

   $ (4,410   $ (9,153   $ (10,508   $ (18,747
  

 

 

   

 

 

   

 

 

   

 

 

 
     Three Months Ended June 30,     Six Months Ended June 30,  
     2014     2013     2014     2013  

Loss before provision for (benefit from) income taxes, as reported

   $ (14,573   $ (18,971   $ (31,768   $ (35,596

Add back:

        

Stock-based compensation

     8,808        8,250        18,625        14,389   

Amortization related to acquisitions

     1,210        1,151        2,438        2,033   

Non-recurring acquisition expense

     —          269        —          269   
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss before provision for (benefit from) income taxes, non-GAAP

   $ (4,555   $ (9,301   $ (10,705   $ (18,905
  

 

 

   

 

 

   

 

 

   

 

 

 
     Three Months Ended June 30,     Six Months Ended June 30,  
     2014     2013     2014     2013  

Net loss, as reported

   $ (14,630   $ (17,780   $ (31,954   $ (34,381

Add back:

        

Stock-based compensation

     8,808        8,250        18,625        14,389   

Amortization related to acquisitions

     1,210        1,151        2,438        2,033   

Non-recurring acquisition expense

     —          269        —          269   

Tax benefit related to acquisitions

     —          (1,351     —          (1,351
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss, non-GAAP

   $ (4,612   $ (9,461 )   $ (10,891   $ (19,041
  

 

 

   

 

 

   

 

 

   

 

 

 
     Three Months Ended June 30,     Six Months Ended June 30,  
     2014     2013     2014     2013  

Basic and diluted net loss per share, as reported

   $ (0.21   $ (0.27   $ (0.46   $ (0.52

Add back:

        

Stock-based compensation

     0.12        0.13        0.27        0.22   

Amortization related to acquisitions

     0.02        0.02        0.03        0.03   

Non-recurring acquisition expense

     —          —          —          —     

Tax benefit related to acquisitions

     —          (0.02     —          (0.02
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic and diluted net loss per share, non-GAAP

   $ (0.07   $ (0.14 )   $ (0.16   $ (0.29
  

 

 

   

 

 

   

 

 

   

 

 

 
     Three Months Ended June 30,     Six Months Ended June 30,  
     2014     2013     2014     2013  

Total revenues

   $ 43,375      $ 35,242      $ 84,404      $ 69,094   

Deferred revenue, current, end of period

     116,134        96,794        116,134        96,794   

Less: Deferred revenue, current, beginning of period

     (113,454     (90,186     (112,432     (87,698
  

 

 

   

 

 

   

 

 

   

 

 

 

Short-term billings

   $ 46,055      $ 41,850     $ 88,106      $ 78,190   
  

 

 

   

 

 

   

 

 

   

 

 

 
     Three Months Ended June 30,     Six Months Ended June 30,  
     2014     2013     2014     2013  

Total revenues

   $ 43,375      $ 35,242      $ 84,404      $ 69,094   

Deferred revenue, end of period

     143,578        128,115        143,578        128,115   

Less: Deferred revenue, beginning of period

     (146,150     (121,405     (147,337     (117,047
  

 

 

   

 

 

   

 

 

   

 

 

 

Billings

   $ 40,803      $ 41,952      $ 80,645      $ 80,162   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

10