K. Liu's Week in Review
Following months of speculation over Stamps.com’s (STMP) prospects for securing a new strategic partnership to mitigate the loss of incentive fees from the United States Postal Service (USPS), we were excited to see the company highlighted as a preferred partner under UPS’ Digital Access Program. We refer readers to our initial take on the news, “UPS Signs Agreement to Offer Discounted Shipping Rates to Stamps.com’s Customer Base,” for a more detailed discussion of the implications.
Moving on to M&A activity this week, ANSYS (ANSS) agreed to acquire Dynardo, an existing partner and provider of simulation process integration and design optimization (PIDO) tools to customers in the aerospace, automotive, energy, and consumer electronics industries. Terms of the transaction were not provided, and ANSYS does not anticipate any material impact from the deal on its 2019 or 2020 financial results. PTC, which also has a partnership with ANSYS, agreed to acquire Onshape for $470 million in cash. Onshape developed the first SaaS platform combining computer aided design (CAD) with data management and collaboration tools, and the acquisition ensures a clear migration path for PTC’s on-premise Creo and Windchill customers as CAD and product lifecycle management (PLM) workloads begin to move to the cloud. PTC also posted in line Q4 ’19 results and FY ’20 guidance, the latter of which incorporates roughly 100 basis points of growth in ARR from Onshape, implying approximately $11 million in ARR.
As the first wave of calendar Q3 ’19 earnings from software companies hit this week, we were mostly struck by the lack of any dramatic stock price reactions as well as fewer outright beat and raises than we have seen in recent quarters. SPS Commerce (SPSC) boasted the strongest stock price performance for the week, up nearly 11% as the company delivered a beat and raise driven by a 14% increase in recurring revenue customers amidst a stabilizing retail environment. Supply chain software vendor Manhattan Associates (MANH) also continues to benefit from similar market dynamics and posted a beat and raise of its own, although shares were marginally lower on the week. Citrix Systems (CTXS) reported strong results and guidance in conjunction with its Financial Analyst Day. The company’s results benefited from a rebound in bookings from its largest Strategic Service Provider customers and reflected an ongoing shift towards subscriptions. As Citrix progresses on its journey to a recurring revenue model, management anticipates an uptick in revenue growth from 3%-4% in FY ’20 to north of 10% post-transition beyond 2024, at which point the company should also generate a non-GAAP operating margin in the mid-30% range.
On the other end of the spectrum this week, video content management provider Brightcove (BCOV) posted a Q3 beat. However, higher churn in the quarter, commentary indicating pipeline development and sales capacity have been impacted by the pace of change and hiring in recent quarters, and disappointing Q4 guidance weighed on shares, and the stock was down about 10% on the week. Due to a change in our data provider, updated estimates for several companies reporting late in the week were unavailable at the time of publication. As such, our usual table depicting each reporting company’s stock price performance for the week, results versus expectations, and subsequent estimate revisions will be added to this post in the coming week.
In a notable development following SAP’s (SAP) earlier announcement that CEO Bill McDermott had declined to renew his contract, ServiceNow (NOW) has appointed Mr. McDermott as its next CEO, succeeding John Donahoe, who is leaving to join Nike as its next President and CEO. At PROS Holdings (PRO), John Allessio joins as Chief Customer Officer after previously serving as Red Hat’s Senior Vice President and General Manager, Global Services and Enablement. Secureworks (SCWX) named Steve Hardy, previously PerkinElmer’s Vice President, Head of Marketing, as Chief Marketing Officer. Finally, Absolute (ABT-CA) bolstered its engineering team, hiring William Morris and Ameer Karim as Executive Vice President, Engineering, and Executive Vice President, Product Management, respectively. Mr. Morris joins the company from BlackBerry, while Mr. Karim joins from Symantec.
Mergers and Acquisitions
ANSYS (ANSS) has agreed to acquire Dynardo, a leading provider of simulation process integration and design optimization technology that enables users to more quickly and economically identify optimal product designs.
Dynardo’s products have been adopted by customers across the automotive, aerospace, energy, and consumer electronics industries and will be integrated with ANSYS Minerva’s simulation data, process, and knowledge management solutions.
The transaction is expected to close in the current quarter and will not have a material impact on results in 2019 or 2020.
PTC to Acquire Leading SaaS Product Development Platform Provider Onshape
PTC (PTC) has agreed to acquire Onshape, which developed the first SaaS platform combining computer aided design (CAD) with data management and collaboration tools, for $470 million in cash.
The acquisition is expected to further PTC’s transition to a subscription model and capitalize on the migration of on-premise CAD and PLM workloads to the cloud.
Onshape is expected to contribute an incremental 100 basis points to PTC’s ARR growth in PTC’s FY ’20, implying approximately $11 million in anticipated ARR.
Earnings Releases
Agilysys Fiscal 2020 Second Quarter Revenue Rises 19.1% to Record $40.7 Million
Agilysys (AGYS) reported Q2 ’20 revenue above consensus and raised its top line growth expectations for the year.
Net revenue of $40.7 million (+19.1% Y/Y) exceeded consensus of $38.0 million. Adjusted EBITDA was $3.0 million (7.3% margin), slightly below consensus of $3.4 million. Non-GAAP EPS of $(0.04) were in line with consensus.
Recurring revenues of $20.3 million (+8% Y/Y) represented 55% of sales, while subscription revenues increased 16% Y/Y and comprised 36% of total recurring revenues.
The company currently services approximately 274,000 rooms (+2% Y/Y) and 57,000 terminals (+12% Y/Y).
Management noted that the company’s selling and revenue momentum remains at record levels and is arising from a broader base, providing more avenues for growth as well as more diverse revenue streams.
Point-of-sale solutions remain the primary driver of business momentum at present, but management anticipates product development initiatives to enhance its property management systems will ultimately provide another leg of growth.
In Q3, the company will launch the Agilysys Customer Engagement Suite, a platform for loyalty programs, stored value, gift card, and meal card-type applications.
Management raised its FY ’20 revenue growth expectations from 11% to 14% and reaffirmed its prior adjusted EBITDA guidance for 25% growth.
Brightcove Announces Financial Results for Third Quarter Fiscal Year 2019
Brightcove (BCOV) reported Q3 ’19 results above expectations, but guided Q4 below consensus.
Revenue of $47.4 million (+15.4% Y/Y) was near the high-end of management’s $47.0-$47.5 million guidance and in line with consensus of $47.3 million. Adjusted EBITDA of $4.1 million (8.7% margin) exceeded guidance of $2.6-$3.1 million and consensus of $3.0 million. Non-GAAP EPS of $0.06 also beat guidance and consensus of $0.04.
Key metrics: 3,720 (-3.8% Y/Y) customers at quarter-end, including 2,362 (+6.1% Y/Y) premium customers; average annual subscription per premium subscriber was $84,500 (+14% Y/Y); recurring dollar retention rate of 85%.
Per management, both sales capacity and pipeline development were impacted in Q3 by the amount of change and hiring in recent quarters and may remain pressured in Q4.
The introduction of Brightcove Beacon, a new SaaS OTT platform, marks the first purpose-built solution launched to target four key markets: OTT, regional broadcasters, corporate communications, and marketing and demand generation.
The company completed a small tuck-in acquisition during Q3 to help accelerate the launch of Brightcove Beacon.
Brightcove plans to make one-time investments of approximately $1.6 million in Q4 to explore new market opportunities.
Management’s Q4 guidance calls for revenue of $47.6-$48.1 million, adjusted EBITDA of $3.4-$3.9 million, and non-GAAP EPS of $0.05-$0.06, below consensus of $48.4 million, $5.6 million, and $0.09, respectively.
Citrix Reports Third Quarter 2019 Financial Results and Hosts Financial Analyst Meeting
Revenue of $732.9 million (+0.1% Y/Y) was above management’s $700.0-$720.0 million guidance and consensus of $715.3 million. Non-GAAP operating income was $214.4 million (29.2% margin), exceeding consensus of $201.4 million. Non-GAAP EPS were $1.52, beating guidance of $1.15-$1.30 and consensus of $1.25.
Key metrics: Subscription ARR was $672 million (+40% Y/Y); SaaS ARR was $463 million (+52% Y/Y); future committed revenue was $2.175 billion (+13% Y/Y) with an average contract duration of 1.6 years.
A rebound in demand from Strategic Service Providers contributed to the strong results and boosted the mix of subscriptions within total bookings and Networking bookings.
Subscriptions accounted for 59% of total product bookings; Workspace subscriptions comprised 75% of Workspace product bookings; Networking subscriptions were 29% of Networking product bookings.
Management raised its FY ’19 revenue and non-GAAP EPS guidance from $2.97-$3.01 billion and $5.35-$5.60, respectively, to $2.99-$3.01 billion and $5.60-$5.70.
Management’s initial FY ’20 outlook calls for 3%-4% revenue growth, implying revenue of $3.08-$3.13 billion, and non-GAAP EPS of $5.25-$5.45, which was mixed versus Street expectations for $3.12 billion in revenue and $6.07 in non-GAAP EPS.
Management expects subscription bookings to account for up to 80% of product bookings by the end of 2020, comprise 85%-90% of the mix in 2022, and reach 90%-95% in 2024.
Other long-term targets provided at the Financial Analyst Meeting include expectations for 7%-8% revenue growth with a non-GAAP operating margin of 31%-33% in 2022, an acceleration to 8%-10% revenue growth with a non-GAAP operating margin of 33%-35% by 2024, and at least 10% growth with a non-GAAP operating margin in excess of 34% post-transition.
F5 Networks (FFIV) reported Q4 ’19 results above expectations and provided mixed guidance for Q1 ’20.
Revenue of $590.4 million (+4.9% Y/Y) exceeded management’s $577.0-$587.0 million guidance and consensus of $582.4 million. Non-GAAP operating income was $192.4 million (32.6% margin), just shy of the Street’s $193.8 million. Non-GAAP EPS of $2.59 beat guidance of $2.53-$2.56 and consensus of $2.55.
Strong customer demand for security use cases like Web Application Firewall and continued ELA traction fueled a second consecutive quarter of 91% software revenue growth and helped to offset a 15% decline in the systems business.
Software was 31% of product revenue versus 17% last year; Americas grew 11%, EMEA was down 3%, and APAC was down 2%; Enterprise, Service Provider, and Government comprised 61%, 17%, and 22% of product bookings, respectively.
F5 has signed a strategic collaboration agreement with AWS, encompassing field sales, solution architecture and services.
Management’s Q1 guidance calls for revenue of $560.0-$570.0 million and non-GAAP EPS of $2.41-$2.44, which was mixed relative to consensus expectations for $567.0 million in revenue and $2.47 in non-GAAP EPS.
HealthStream Announces Third Quarter 2019 Results
HealthStream (HSTM) reported mixed Q3 ’19 results and raised its profitability expectations for the year.
Revenues of $62.5 million (+4.2% Y/Y) were just shy of the Street’s $63.1 million estimate. Adjusted EBITDA of $11.5 million (18.4% margin) was well above consensus of $9.5 million. EPS of $0.11 beat consensus of $0.06.
HealthStream is approximately 25% of the way through a 36-month journey to transition customers from its legacy resuscitation products, drive adoption of and migration to its new Verity platform for credential and privilege management, and upgrade customers to its hStream platform.
The transition from legacy resuscitation products to the new Red Cross offering continues with legacy revenues expected to decline by another $800,000 sequentially en route to zero in Q1 ’21.
Key metrics: added approximately 434,000 hStream subscribers to reach a total of 2.78 million; contracted 48 new accounts for the American Red Cross resuscitation suite, reaching a total of 69 accounts with over $22.3 million in contract value signed at quarter-end; increased new Verity subscriptions by 50% Q/Q to reach 155 contracted customers.
Management narrowed its prior FY ’19 revenue guidance from $251-$258 million in revenue to $252-$256 million and increased its non-GAAP operating income expectations from $13.2-$15.2 million to $14.7-$16.2 million.
As the company’s transition continues, gross margin should cross 60% by this time in 2020.
LogMeIn Announces Third Quarter 2019 Results
LogMeIn (LOGM) reported Q3 ’19 results above expectations and provided mixed guidance for Q4.
Non-GAAP revenue was $317.2 million (+2.5% Y/Y), above management’s $314.0-$316.0 million guidance and consensus of $315.5 million. Adjusted EBITDA was $109.3 million (34.5% margin), just above the high-end of guidance and ahead of the Street’s $108.4 million. Non-GAAP EPS of $1.39 also beat guidance and consensus of $1.36.
Strong performance from growth products offset weaker than anticipated results from the core meeting business.
Key metrics: gross renewal rate on an annualized dollar basis across all products was approximately 80%; free cash flow was $70 million (22% margin).
UCaaS products, primarily Jive and GoToConnect, posted strong growth of 37% with add-on sales up over 50% Y/Y; Management noted that Jive’s user base is now in excess of 500,000 with revenue set to exceed $140 million.
LastPass has nearly 20 million users, posted growth in excess of 60% during Q3, and is expected to generate close to $85 million in revenue during FY ’19.
In September, LogMeIn introduced its revamped GoToMeeting solution, which management remains optimistic will improve customer retention and position the company to win new business.
Chief Financial Officer, Ed Herdiech, plans to retire in 2020 at a date to be determined and has agreed to remain in his role to help transition his duties and assist in the hiring and on-boarding of his successor.
Guidance for Q4 calls for revenue of $319.0-$321.0 million, below consensus of $322.4 million, and adjusted EBITDA and non-GAAP EPS of $110.0-$111.0 million and $1.39-$1.41, respectively, in line with the Street’s $110.9 million and $1.39.
Manhattan Associates Reports Record Third Quarter 2019 Revenue
Manhattan Associates (MANH) reported Q3 ’19 results ahead of expectations and raised guidance for FY ’19.
Revenue of $162.3 million (+14.0% Y/Y) was above management’s guidance and topped consensus of $151.6 million. Non-GAAP operating income was $43.1 million (26.6% margin), exceeding guidance of $30.0-$31.5 million and consensus of $30.7 million. Non-GAAP EPS of $0.51 also beat guidance and consensus of $0.36.
Remaining performance obligations (RPO) totaled $152.0 million (+136.9% Y/Y) at quarter-end.
The upside in the quarter was attributed to stronger than anticipated license performance as several large deals in the pipeline closed earlier than expected.
The global pipeline remains solid with favorable trends in both cloud and license, demand appears to be building for WMS in the cloud, and over 50% of deal opportunities represent net new logos.
Competitive win rates remain strong at approximately 70% in head-to-head competition, new customers comprised approximately 30% of license and cloud sales, and the retail, consumer goods and food and beverage verticals drove over half of license and cloud revenue in Q3.
Manhattan continues to invest aggressively in R&D, has increased services capacity by 13% year-to-date, and continues to recruit consultants around the world.
Guidance for Q4 includes revenue growth of 1.0%-3.0% and non-GAAP EPS of $0.31, comparing favorably with consensus expectations for revenue growth of 1.5% and $0.29 in non-GAAP EPS.
Management raised its FY ’19 guidance from revenue, non-GAAP operating margin, and non-GAAP EPS of $598.0-$604.0 million, 21.0%-21.2%, and $1.46-$1.50, respectively, to $610.0-$614.0 million, 23.0-23.2%, and $1.63-$1.65, respectively.
For FY ’20, management’s initial outlook calls for $643.0-$658.0 million in revenue, above consensus of $630.7 million, and non-GAAP EPS of $1.50-$1.57, leaving consensus at the high-end.
Microsoft Cloud Strength Drives First Quarter Results
Microsoft (MSFT) reported Q1 ’20 results above expectations and guided Q2 profitability ahead of consensus.
Revenue was $33.1 billion (+13.7% Y/Y), exceeding management’s guidance of $31.7-$32.4 billion and consensus of $23.2 billion. Operating income of $12.7 billion (38.4% margin) also outpaced guidance of $11.05-$11.45 billion and consensus of $11.38 billion. Non-GAAP EPS were $1.38, beating consensus of $1.25.
By segment, Productivity and Business Processes revenue was $11.1 billion (+13.4% Y/Y), Intelligent Cloud revenue was $10.8 billion (+26.6% Y/Y), and More Personal Computing revenue was $11.1 billion (+3.6% Y/Y).
Strength was realized across all markets with commercial bookings growth ahead of expectations, resulting in commercial remaining performance obligation of $86 billion (+26% Y/Y).
Office 365 Consumer subscribers rose to 35.6 million and Office 365 Commercial monthly active users surpassed 200 million.
The company’s extensive go-to-market partnership with SAP announced earlier in the week makes Azure, which contributed revenue growth of 59% in Q1, the preferred destination for every SAP customer.
Power Platform, which brings together low code, no code app development; robotic process automation; and self-service analytics, now has over 2.5 million monthly active developers and 84% of the Fortune 500 have created Power Apps.
Management’s revenue guidance by segment implies Q2 revenue of $35.2-$36.0 billion, leaving consensus at the higher end, while expectations for total costs and expenses imply operating income and EPS of $11.9-$12.4 billion and $1.29-$1.34, respectively, ahead of the Street’s $11.7 billion and $1.27.
Proofpoint Announces Third Quarter 2019 Financial Results
Proofpoint (PFPT) reported Q3 ’19 results above expectations and guided Q4 in line with consensus.
Revenue of $227.4 million (+23.5% Y/Y) exceeded guidance of $223.0-$225.0 million and consensus of $224.3 million. Non-GAAP operating income was $33.9 million (14.9% margin), well above consensus of $27.3 million. Non-GAAP EPS of $0.49 beat guidance of $0.37-$0.40 and consensus of $0.39.
Momentum continues to be driven by demand for Proofpoint’s next-generation cloud security and compliance platform, migrations to the cloud, the company’s ability to identify and block complex threats, and its visibility into the threat landscape.
Key metrics: billings of $277.8 million (+25.5% Y/Y) beat management’s $274.0-$276.0 million guidance; renewal rate remains solidly above 90%; free cash flow was $58.6 million (25.8% margin).
Q4 guidance calls for revenue of $237.5-$239.5 million and non-GAAP EPS of $0.47-$0.50, both of which were in line with Street expectations for $238.5 million in revenue and $0.48 in non-GAAP EPS.
Management’s preliminary view for FY ’20 includes $1.05-$1.0625 billion in revenue (versus consensus of $1.062 billion), a non-GAAP operating margin at the lower end of the company’s targeted 13%-15% range, implying non-GAAP operating income of $136.5-$138.1 million (versus consensus of $153.7 million), and free cash flow of approximately $250 million.
PROS Holdings, Inc. Reports Third Quarter 2019 Financial Results
Revenue of $64.2 million (+30.7% Y/Y) was within management’s guidance of $63.0-$65.0 million and above consensus of $63.3 million. Adjusted EBITDA of $(2.2) million (-3.5% margin) was also within guidance but slightly below consensus of $(1.7) million. Non-GAAP EPS of $(0.06) beat guidance of $(0.09)-$(0.07) and consensus of $(0.08).
Key metrics: TTM calculated bookings increased 15% Y/Y and is expected to increase approximately 20% for the full year; free cash flow was $3.0 million (4.7% margin).
PROS’ real-time dynamic pricing solution helps customers power their digital selling efforts and has garnered the company more wins in its markets and robust growth.
The strong performance has been split relatively equally amongst new and existing customers, and PROS is also seeing momentum in customer migrations and existing cloud customer expansions.
Due to an increase in the number of active implementations, the company leveraged third-party system integrators to support its delivery organization in the quarter, which weighed on services margins and is expected to pressure margins again in Q4.
The acquisition of Travelaer, which comprised less than 1% of revenue and ARR as of the end of Q3, enabled the company to launch PROS Travel Retail, an end-to-end e-commerce solution for airlines differentiated by real-time personalized offers.
The company continues to recruit new sales hires to achieve its goal of 20% growth in quota-carrying personnel by year-end.
Management’s Q4 guidance calls for revenue of $63.9-$64.4 million, leaving consensus at the high-end, and adjusted EBITDA and non-GAAP EPS of $(3.0)-$(2.0) million and $(0.10)-$(0.08), respectively, both of which were shy of the Street’s $(1.2) million and $(0.07).
In FY ’20, management anticipates revenue in the upper $280 million to lower $290 million range, subscription revenue growth just under 40%, and a very modest improvement in free cash flow from the $(2)-$2 million anticipated in FY ’19.
PTC Announces Fiscal Fourth Quarter 2019 Results; Provides Fiscal 2020 Outlook
PTC (PTC) reported Q4 ’19 results consistent with expectations and guided FY ’20 in line with consensus.
On an ASC 605 basis, non-GAAP revenue was $335.0 million (+4.0% Y/Y), within guidance of $330.0-$338.0 million and slightly above consensus of $333.8 million. Non-GAAP operating income of $73.0 million (21.8% margin) was also slightly ahead of the Street’s $71.2 million. Non-GAAP EPS of $0.45 were in line with consensus.
Key metrics: ARR of $1.116 billion (+10% Y/Y); license and software bookings of $150 million, above guidance of $135-$145 million; subscription ACV of $70 million, above guidance of $62-$67 million; free cash flow of $50.4 million (15% margin).
Despite a challenging macro environment and a global PMI below 50, PTC delivered a strong bookings performance driven by better than anticipated bookings in PLM and a rebound in CAD bookings.
IoT had a very strong quarter due to a megadeal with Rockwell Automation, while the Augmented Reality division also performed well with acceleration in six-figure deals.
On the alliance front, Rockwell delivered a 75% sequential increase in new deals, ending the year with nearly 100 transactions; Microsoft closed 72 deals, doubling the number of deals sequentially; and ANSYS added 126 transactions, up 66% from Q3.
Guidance for FY ’20 includes revenue of $1.41-$1.51 billion and non-GAAP EPS of $1.95-$2.60, in line with consensus expectations for $1.45 billion in revenue and $2.33 in non-GAAP EPS; guidance also calls for ARR of $1.245-$1.280 billion (+12%-15% Y/Y) and free cash flow of $218-$238 million.
SAP SE: Double-Digit Growth Across Revenue, Profit and Cash Flow
SAP (SAP) reported Q3 ’19 results consistent with the company’s October 10, 2019 pre-announcement.
Non-IFRS revenue was €6.81 billion (+13% Y/Y), non-IFRS operating profit was €2.09 billion (31% margin), and non-IFRS EPS were €1.30, in line with the company’s pre-announcement.
New cloud bookings of €572 million (+39% Y/Y) benefited from a new partnership with Microsoft (MSFT) that added 18 percentage points of growth; non-IFRS cloud revenue of $1.81 billion (+37% Y/Y); free cash flow of €2.33 billion (34% margin).
Added over 500 SAP S/4HANA customers for a total of 12,000 (+25% Y/Y) at quarter-end; added over 150 customers to SAP SuccessFactors Employee Central, which now has over 3,500 customers; approximately 11,000 Qualtrics customers.
Management reiterated its prior FY ’19 guidance for €6.7-€7.0 billion in non-IFRS cloud revenue, €22.4-22.7 billion in non-IFRS cloud and software revenue, and €7.85-€8.05 billion in non-IFRS operating profit, all on a constant currency basis.
The company’s longer-term 2020 and 2023 ambitions also remain unchanged.
ServiceNow Reports Third Quarter 2019 Financial Results
ServiceNow (NOW) delivered a Q3 beat but lowered the midpoint of its FY ’19 subscription revenue and billings outlook.
Revenues of $885.8 million (+31.6% Y/Y) were in line with consensus of $885.0 million. Subscription billings of $864.0 million (+28.2% Y/Y) outpaced guidance for $848.0-$853.0 million. Non-GAAP operating income was $228.2 million (25.8% margin), exceeding guidance for a 23.0% margin and consensus of $205.2 million. Non-GAAP EPS of $0.99 beat consensus of $0.89.
Key metrics: closed 46 transactions with over $1 million in net new annual contract value (ACV) for a total of 809 customers with over $1 million in ACV; renewal rate of 99%; remaining performance obligations of $5.6 billion (+36% Y/Y).
The company has narrowed its search for a CFO to a small group of candidates, but the process was slowed to enable incoming CEO Bill McDermott to select his preferred candidate.
While FX fluctuations have affected the outlook, management indicated that the company has seen no impact from macro concerns thus far and continues to benefit from a tailwind driven by digital transformation in the enterprise.
Management’s Q4 guidance calls for $884.0-$889.0 million in subscription revenues, $1.249-$1.254 billion in subscription billings, and a 21% non-GAAP operating margin.
Subscription revenues guidance for FY ’19 was lowered from $3.245-$3.255 billion to $3.240-$3.245 billion, while the high-end of management’s prior subscription billings guidance decreased from $3.740-$3.750 billion to $3.740-$3.745 billion.
SPS Commerce Reports Third Quarter 2019 Financial Results
SPS Commerce (SPSC) reported Q3 ’19 results ahead of expectations and guided Q4 and FY ’20 above consensus.
Revenue was $70.9 million (+12.8% Y/Y), above management’s guidance of $69.7-$70.2 million and consensus of $70.0 million. Adjusted EBITDA was $18.1 million (25.5% margin), also exceeding guidance of $16.9-$17.4 million and consensus of $17.2 million. Non-GAAP EPS of $0.33 beat guidance of $0.27-$0.28 and consensus of $0.28.
Key metrics: 30,500 (+14% Y/Y) recurring revenue customers at quarter-end; wallet share was flat at approximately $8,800.
The retail environment has stabilized in management’s view and the company remains well positioned to address the needs of trading partners across the globe as retailers and suppliers embrace the evolution of e-commerce, omnichannel and retail.
Management’s Q4 guidance calls for revenue of $72.2 million-$72.8 million, adjusted EBITDA of $17.9-$18.4 million, and non-GAAP EPS of $0.29-$0.30, all of which were above consensus of $71.9 million, $17.8 million, and $0.29, respectively.
Preliminary guidance for FY ’20 includes revenue growth of at least 10% and an increase of 20% in adjusted EBITDA, implying $306.5-$307.1 million and $82.6-$83.2 million, respectively, versus consensus of $303.9 million and $78.7 million.
The Board of Directors has increased the company’s share repurchase authorization from $50 million to $100 million and has extended the expiration of the program from November 2, 2019 to November 2, 2021.
Notable News
Absolute (ABT-CA) has appointed William Morris as Executive Vice President, Engineering, and Ameer Karim as Executive Vice President, Product Management.
Mr. Morris joins the company from BlackBerry, where he led the global engineering team, and will lead all aspects of engineering and product development at Absolute.
Mr. Karim will be responsible for product strategy and joins the company from Symantec, where he created a new business group focused on delivering products and services around network security and IoT devices.
John Allessio Joins PROS as Chief Customer Officer
PROS Holdings (PRO) announced the hiring of John Allessio as Chief Customer Officer, a role in which he will be responsible for professional services, customer success, and customer and partner enablement.
Mr. Allessio joins the company from Red Hat where he most recently served as Senior Vice President and General Manager, Global Services and Enablement.
Secureworks Welcomes Steve Hardy as Chief Marketing Officer
Secureworks (SCWX) named Steve Hardy as its new Chief Marketing Officer.
Mr. Hardy joins the company from PerkinElmer where he served as Vice President, Head of Marketing, and now has responsibility for Secureworks’ global marketing strategy, including product marketing, demand generation, corporate communications and field marketing.
ServiceNow Announces Bill McDermott to Become CEO
ServiceNow (NOW) announced that Bill McDermott will join the company by the end of 2019 as President and Chief Executive Officer and a member of the Board of Directors, succeeding John Donahoe, who is leaving to become President and Chief Executive Officer of Nike in January 2020.
Mr. McDermott most recently served as Chief Executive Officer at SAP and is currently transitioning from that role as he recently announced his decision to not renew his contract.
UPS Announces Multiple Tech-Enabled Services, New Customers And Partners
Amongst other partnerships and tech-enabled solutions highlighting its expansion in areas like drone delivery and healthcare, UPS also unveiled its Digital Access Program, the company’s strategy to expand its e-commerce services with small and medium-sized e-commerce businesses.
Under the Digital Access Program, Stamps.com (STMP) was named a preferred partner, and UPS has made discounted rates available to the 740,000 customers subscribing to its portfolio of solutions, including ShipStation, ShippingEasy, ShipWorks, Stamps.com, and Endicia.
Disclosure(s):
The analyst, a member of the analyst’s household, and/or an account in which the analyst exercises discretion hold(s) a long position in the common stock of Brightcove (BCOV).
The analyst, a member of the analyst’s household, and/or an account in which the analyst exercises discretion hold(s) a long position in the common stock of Stamps.com (STMP).