K. Liu's Week in Review
Another week, another big acquisition. Following last week’s announced take-private of Ultimate Software (ULTI), this week saw the sale of Ellie Mae (ELLI) to Thoma Bravo for an equity value of $3.7B, representing TTM EV/Sales and EV/EBITDA multiples of 6.9x and 27.2x, respectively. Subsequent to the announcement, ELLI reported Q4 ’18 revenues ahead of expectations, but adjusted EBITDA and non-GAAP EPS below. For 2018, ELLI’s revenue growth was +14.7% Y/Y on a comparable ASC 605 basis, but had slowed to +2.0% in Q4. On the opposite end of the valuation spectrum, Determine (DTRM) entered into an agreement to sell substantially all of its assets to Corcentric, a provider of procurement and financial process automation solutions to over 6,000 mid-market customers. The $32MM asset purchase price represents TTM EV/Recurring Revenue and EV/Sales multiples of 1.5x and 1.2x, respectively. Considering DTRM’s declining revenues, ongoing operating losses and weak balance sheet, the depressed valuation was not particularly surprising. In a similar vein, Brightcove (BCOV) announced plans to acquire the online video platform business of competitor Ooyala in a cash and stock deal totaling $15MM. While BCOV has yet to disclose anticipated contribution from the acquisition in 2019, management indicated that the purchase price represents an EV/Sales multiple below 1.0x. Finally, both Dassault Systèmes (DSY-FR) and Qualys (QLYS) completed tuck-in acquisitions. The former acquired the elecworks electrical and automation design software product line from Trace Software International, while the latter acquired Adya’s SaaS compliance and audit software solutions.
The calendar Q4 earnings season also continued with reports from over twenty software companies. Much like the prior week, nearly every reporting company met or exceeded expectations for the quarter. However, guidance was more of a mixed bag this time around, as over half of the reporting companies we tracked set revenue expectations below consensus and nearly as many did so from a profitability standpoint. In fact, only four companies delivered results and guidance commensurate with the “beat and raise” optics typically sought by the Street. These companies were CyberArk (CYBR), HubSpot (HUBS), Pluralsight (PS) and SPS Commerce (SPSC). We note that HUBS gave back some of its post-earnings gains after raising approximately $300MM in a 1.8MM share secondary offering. The table below depicts the companies’ share price performance for the week, reported results versus consensus and subsequent adjustments to Street estimates for the current quarter and year.
As for other news that caught our eye this week, Akamai (AKAM) and Mitsubishi UFJ Financial Group formed a joint venture, GO-NET, with plans to launch a blockchain-based online payment network in Japan during 1H 2020. Separately, Oracle (ORCL) announced that SDK.financial is using Oracle Blockchain Platform to confirm transactions in lieu of relying on third party financial intermediaries for cross-border transactions. We also highlight the general availability of Ask Data in Tableau’s (DATA) latest platform update. Ask Data enables users of any skill level to type in a data question using natural language and immediately returns a visual response. We find this fascinating given the ancillary ties to artificial intelligence, bots, conversational commerce and customer self-service, all of which we hope to explore further in future research.
Finally, the week was a busy one for executives on the move. Cornerstone OnDemand (CSOD) announced the hiring of Trish Coughlin as its first Chief Accounting Officer. She joins from Workday (WDAY) and will also manage the company’s new office in Salt Lake City, or Silicon Slopes in tech industry parlance. CyberArk (CYBR) appointed Airbus veteran Francois Auque to its board, while Yext (YEXT) promoted current Chief Client Officer, Wendi Sturgis, to CEO of Yext Europe. Zendesk (ZEN) added three new executives: Elisabeth Zorne, who joins as Chief Customer Officer after previously serving as GM of Global Support for Microsoft Office; Colleen Berube, ZEN’s new Chief Information Officer who was previously Chief Technology Officer at Fisher Investments; and Shawna Wolverton, who joins as Senior Vice President, Product Management from Planet, where she was Chief Product Officer. GoDaddy (GDDY) named Fara Howard, who previously served as Chief Marketing Officer of Amazon Fashion, as its new Chief Marketing Officer, and also announced the promotion of Andrew Low Ah Kee to Chief Operating Officer. GDDY’s current Chief Technology Officer, Charles Beadnall, also assumes more responsibility with the retirement of Chief Information Officer, Arne Josefsberg, and a search is underway to replace Chief Product Officer, Steven Aldrich, who is leaving the company.
Mergers and Acquisitions
BCOV: Brightcove Signs Definitive Agreement to Acquire Ooyala’s Online Video Platform Business
BCOV announced that the company has entered into an agreement to acquire the online video platform business of Ooyala.
The purchase price of ~$15.0MM is comprised of $6.25MM in cash and ~1.06MM unregistered BCOV shares.
Ooyala’s financial profile has not been disclosed, but management stated that the purchase price represents an EV/Sales multiple below 1x, and the acquisition is expected to be accretive to adjusted EBITDA for FY ’19.
The transaction is expected to close in 1H 2019.
DSY-FR announced plans to acquire Trace Software International’s elecworks electrical and automation design software product line.
The deal adds 21 employees and is expected to close next month.
Per DSY-FR, the acquired products already sit at the core of its SOLIDWORKS Electrical applications and will enable the company to better address a $400MM market opportunity among small and midsized businesses.
DTRM: Corecentric, Inc. to Acquire Determine, Inc.
Corcentric entered into an agreement to acquire substantially all of the assets of DTRM for ~$32.0MM in cash, representing TTM EV/Recurring Revenue and EV/Sales multiples of 1.5x and 1.2x, respectively.
The acquisition brings together Corcentrics mid-market procurement and financial process automation solutions with DTRM’s source-to-pay and enterprise contract lifecycle management platform.
Given that Corcentric generated $103MM in revenues in 2018, annualized revenues for the combined company are ~$130MM.
The transaction is expected to close in Q2 ’19 upon receipt of shareholder and regulatory approvals.
ELLI: Ellie Mae Enters into Definitive Agreement to Be Acquired by Thoma Bravo
ELLI announced that the company would be taken private by Thoma Bravo for $99.00 per share in cash, or an equity value of approximately $3.7B.
The purchase price reflects a 47% premium to the 30-day average closing price and represents TTM EV/Sales and EV/EBITDA multiples of 6.9x and 27.2x, respectively.
The agreement includes a 35-day “go-shop” period and remains subject to shareholder and regulatory approvals. The company expects the sale to be consummated in Q2 or Q3 of 2019.
QLYS: Qualys Acquires Software Assets of Cloud Application Management Company Adya
QLYS announced the acquisition of Adya’s software assets.
Adya’s software enables customers to manage the administration of all of their SaaS applications in a single console, set and enforce security policies across these applications, and report and audit on activity.
QLYS anticipates Adya’s solutions will be fully integrated into the Qualys Cloud Platform and commercially available in Q3 ‘19.
Notable News
AKAM: Akamai and MUFG Announce Joint Venture for Blockchain-Based Online Payment Network
AKAM and Mitsubishi UFJ Financial Group (MUFG) announced the establishment of a joint venture, the Global Open Network (GO-NET), and plans to offer a new blockchain-based online payment network.
GO-NET is expected to be available in Japan during 1H 2020 and include support for existing payment processing functions, pay-per-use, micropayments and other developing IoT-enabled payment transactions.
AKAM’s Blockchain as a Service solution, which leverages its Intelligent Edge Platform, will power the online network.
“MUFG has high expectations for our joint venture with Akamai. Our goal is to enable rapid innovation in digital payment services, leveraging a transformative platform, with built-in security, hyper-scale and efficiencies. GO-NET aims to expand the payment network business to a global scale, and enhance the services to support diverse payment ideas in the upcoming IoT era.” – Hironori Kamezawa, Group CDTO of MUFG and CEO of GO-NET
CSOD: Cornerstone Hire Industry Veteran to Lead New Silicon Slopes Office
CSOD announced the hiring of Trish Coughlin as its first Chief Accounting Officer.
Ms. Coughlin will have responsibility for CSOD’s global accounting operations as well as managing the company’s new office in Salt Lake City, which is expected to be its second largest in North America.
Ms. Coughlin previously served as Corporate Controller for Workday (WDAY) and has also held finance positions at Goldman Sachs, Honeywell and Pricewaterhouse Coopers.
CYBR: CyberArk Appoints Francois Auque to Board of Directors
CYBR announced the appointment of Francois Auque to its Board of Directors.
Mr. Auque previously served as CEO of Airbus’ space division for 16 years and was Chairman of the Investment Committee for Airbus Ventures, leading investments in cyber security, artificial intelligence and digital transformation technologies.
DATA: Tableau Releases Ask Data, A New and Intuitive Way to Analyze Data with Natural Language
DATA announced the launch of its newest release, Tableau 2019.1, as well as the general availability of Ask Data, which is available at no extra charge as part of the new release.
Ask Data enables any user to type in a data question using natural language and instantly receive a visual response.
GDDY: GoDaddy Announces Changes to Executive Leadership Team; Fara Howard Joins as CMO
GDDY announced that Fara Howard has joined the company as Chief Marketing Officer. Additionally, the company announced the promotion of Andrew Low Ah Kee to Chief Operating Officer, the retirement of Chief Information Officer Arne Josefsberg and the departure of Chief Product Officer Steven Aldrich.
Ms. Howard will be responsible for the company’s marketing strategy and execution. She previously served as Chief Marketing Officer at Amazon Fashion.
Mr. Low Ah Kee will be responsible for worldwide commercial strategy and operations in addition to his current responsibilities for global revenue functions, including marketing, sales and international expansion.
A search for a new Chief Product Officer is underway, and GDDY plans to unify its technology and infrastructure organization under current Chief Technology Officer, Charles Beadnall.
HUBS: HubSpot Announces Pricing of Public Offering of Common Stock
HUBS priced its public offering of common stock commenced the day prior at $165.00 per share.
The underwritten public offering of 1.8MM shares generated net proceeds of approximately $300.0MM and the underwriters have been granted a 30-day option to purchase another 255k shares that would generate ~$45.0MM of gross proceeds.
ORCL: Oracle Blockchain Helps Czech Financial Firm, SDK.finance, Transform Payment Industry
ORCL announced that SDK.finance is using Oracle Blockchain Platform to remove intermediary financial institutions and confirm transactions through the blockchain, potentially reducing the time required for cross-border transactions from days to seconds.
“Despite the considerable disruption of the financial services industry, cross-border payments are still very slow, the associated fees are expensive, and there is an inherent lack of trust, especially around peer-to-peer payments. We are removing these pain points by providing a platform that drives highly secure, affordable and fast transactions. Oracle’s enterprise-grade blockchain cloud platform is critical to helping us achieve these goals.” – Pavlo Sidelov, Chief Technical Officer at SDK.finance
YEXT: Yext Names Wendi Sturgis CEO, Yext Europe
YEXT appointed Wendi Sturgis CEO of Yext Europe.
Ms. Sturgis previously served as YEXT’s Chief Client Officer and will still retain that role.
She has been with the company for nearly eight years and has previously held executive positions at Oracle, Gartner, Right Media and Yahoo!.
ZEN announced that Elisabeth Zornes, Colleen Berube and Shawna Wolverton have joined the company as chief customer officer, chief information officer, and senior vice president, product management, respectively.
Ms. Zornes was previously general manager of global support for Microsoft Office.
Ms. Berube was previously executive vice president and chief technology officer of Fisher Investments and executive in residence at PricewaterhouseCoopers.
Ms. Wolverton was most recently chief product officer at Planet and was previously senior vice president for product management at Salesforce.
Earnings Releases
AMBR: Amber Road Announces Fourth Quarter and Full Year 2018 Financial Results
AMBR reported Q4 results ahead of expectations and provided solid guidance for FY ’19.
Total revenue of $21.9MM (+6.1% Y/Y) exceeded management’s $21.1MM-$21.7MM guidance and consensus of $21.5MM. Non-GAAP operating income of $0.4MM (1.8% margin) was also ahead of guidance and consensus of $(0.8)MM. Non-GAAP EPS of $0.00 beat consensus by $0.04 and was above management’s $(0.05)-$(0.03) guidance.
AMBR has rolled-out a new sales account management team to handle installed base up-sells and cross-sells, effectively doubling the capacity of sales directors responsible for new customer acquisition.
The company has implemented account-based marketing (ABM) in Europe and plans to roll-out ABM to the U.S. and China
TTM recurring revenue retention rate was 101%.
Management’s Q1 guidance was mixed relative to Street expectations with revenue guidance of $20.3MM-$20.9MM below consensus of $21.4MM, but non-GAAP operating income and EPS guidance of $(0.7)MM-$(0.1)MM and $(0.04)-$(0.02), respectively, exceeding the Street’s $(0.8)MM and $(0.03) estimates.
For FY ’19, management’s guidance includes revenues of $88.7MM-$91.7MM, non-GAAP operating income of breakeven to $3.0MM and non-GAAP EPS of $(0.06)-$0.04. Consensus called for $90.8MM in revenues, $(2.9)MM in non-GAAP operating income and $(0.09) in non-GAAP EPS.
Management believes AMBR can sustain double-digit subscription revenue growth and achieve double-digit adjusted EBITDA margin by 2020.
AKAM: Akamai Reports Fourth Quarter 2018 and Full-Year 2018 Financial Results
AKAM reported Q4 results ahead of Street expectations and provided mixed guidance for Q1 and FY ’19.
Revenue of $713.4MM (+6.5% Y/Y) exceeded management’s $692.0MM-$709.0MM guidance and consensus of $703.7MM. Non-GAAP operating income of $201.0MM (28.2% margin) was also above expectations. Non-GAAP EPS of $1.07 beat consensus by $0.07 and exceeded management’s $0.97-$103 guidance.
The strong results were attributed to rapid growth in Security, ongoing improvement in the Media and Carrier Division and a robust holiday commerce season for the Web Division.
Management’s Q1 guidance calls for revenues of $690.0MM-$704.0MM, below consensus of $710.1MM, and non-GAAP EPS of $1.00-$1.05, above consensus of $0.96.
For FY ’19, management guided to revenue of $2.81B-$2.86B and non-GAAP EPS of $4.00-$4.15, which was also mixed relative to consensus of $2.9B in revenues and $4.02 in non-GAAP EPS.
AKAM also announced a planned leadership transition with Ed McGowan, SVP of Finance, succeeding Jim Benson as EVP and CFO, effective March 1, 2019.
BCOV: Brightcove Announces Financial Results for Fourth Quarter and Fiscal Year 2018
BCOV reported mixed Q4 results and guidance.
Total revenue of $40.9MM (+1.9% Y/Y) fell short of management’s $41.0MM-$41.5MM guidance and consensus of $41.2MM. Adjusted EBITDA of $1.4MM (3.5% margin) was ahead of management’s $0.2MM-$0.7MM guidance and consensus of $0.3MM. Non-GAAP EPS of breakeven was better than the Street’s $(0.03) estimate and guidance of $(0.04)-$(0.03).
Key metrics: average annual subscription revenue per customer was $75k, excluding starter customers with average annualized revenue of $4.5k; recurring dollar retention rate was 104%; BCOV had 3,783 customers at quarter-end of which 2,226 were premium.
Guidance for Q1 was below consensus for revenues, adjusted EBITDA and non-GAAP EPS. For FY ’19, expectations for adjusted EBITDA and non-GAAP EPS encompassed the consensus forecasts despite a lower revenue outlook. Specifically, management guided to FY ’19 revenues, adjusted EBITDA and non-GAAP EPS of $168.0MM-$172.0MM, $5.2MM-$8.2MM and $(0.03)-$0.05, respectively. Consensus stood at $175.0MM, $6.3MM and $0.04.
Guidance does not include the pending acquisition of Ooyala for which BCOV paid $15.0MM in cash and stock. Management noted the purchase price equated to an EV/Sales multiple below 1x and the acquisition should be accretive to FY ’19 adjusted EBITDA.
BL: BlackLine Announces Fourth Quarter and Full Year Financial Results
Total revenues of $62.3MM (+24.6% Y/Y) exceeded management’s $61.0MM-$62.0MM guidance and consensus of $61.6MM. Non-GAAP operating income was $1.0MM (1.6% margin). Non-GAAP EPS of $0.03 beat management’s guidance and consensus of breakeven.
Key metrics: added 137 net new customers in Q4; 222.6k users across 2,631 total customers at the end of Q4; dollar-based net revenue retention rate of 108%.
Announced a new reseller agreement with SAP in Q4, and SAP has already landed several new customers on multiple continents.
BL’s 2019 focus is on driving growth and scaling the business by leveraging its consulting partnerships and new reseller agreement with SAP.
Management’s Q1 guidance calls for revenues of $62.8MM-$63.8MM and non-GAAP EPS of $(0.02)-$(0.00), both of which were below consensus of $63.6MM and $0.01, respectively.
Management’s FY ’19 guidance includes revenues of $275.0MM-$280.0MM and non-GAAP EPS of $0.14-$0.17, generally consistent with the Street’s $279.5MM and $0.15 projections.
CSOD: Cornerstone OnDemand Announces Fourth Quarter and Fiscal Year 2018 Financial Results
CSOD reported Q4 results above expectations and provided mixed guidance for FY ’19.
Revenue of $138.2MM (+4.8% Y/Y) was above management’s $128.0MM-$131.0MM guidance and consensus of $129.9MM. Non-GAAP operating income of $19.4MM (14.1% margin) was also above consensus of $18.3MM, and non-GAAP EPS of $0.26 beat the Street by $0.03.
CSOD ended the quarter with 3,535 (+8.8% Y/Y) clients and 40.2MM (+13.9% Y/Y) users; ARR was $510.0MM (+16.2% Y/Y); ARR per sales rep was up 50% Y/Y for the full year.
Management’s Q1 guidance calls for revenues of $134.5MM-$136.5MM, leaving the Street’s $136.5MM at the high-end. For FY ’19, guidance calls for revenues of $558.0MM-$568.0MM and non-GAAP operating income of $74.0MM-$84.0MM. Consensus stood at $567.1MM in revenues and $86.0MM in non-GAAP operating income.
FY ’19 ARR guidance is $575.0MM-$590.0MM, representing growth of 13%-16%.
The company continues to target the Rule of 40, defined as the sum of annual subscription revenue growth and unlevered free cash flow margin, by 2020, which should yield ~$2.00 per share in unlevered free cash flow.
CYBR: CyberArk Announces Record Fourth Quarter and Full Year 2018 Results
CYBR reported Q4 results ahead of expectations and guided FY ’19 above consensus.
Total revenues of $109.1MM (+35.7% Y/Y) exceeded management’s $94.75MM-$96.25MM guidance and the Street’s $95.9MM. Non-GAAP operating income of $39.8MM (36.5% margin) also beat guidance and the consensus forecast. Non-GAAP EPS of $0.89 was well ahead of management’s $0.58-$0.60 guidance and consensus of $0.59.
Key metrics: signed over 250 new logos in Q4 and ended the year with over 4,450 customers; 868 (+31.7% Y/Y) deals over $100k closed for the year.
2019 initiatives include increasing enterprise customer penetration; formalizing the company’s motion in the mid-market; driving adoption of CYBR’s application and privilege endpoint solutions; and delivering innovation.
Management’s Q1 guidance of $91.0MM-$93.0MM in revenues, $18.5MM-$20.0MM in non-GAAP operating income and $0.39-$0.42 in non-GAAP EPS exceeded consensus forecasts for $86.6MM, $16.9MM and $0.37, respectively.
FY ’19 guidance included revenues of $411.0MM-$415.0MM, non-GAAP operating income of $92.5MM-$95.5MM and non-GAAP EPS of $1.94-$2.00, all of which also compared favorably with Street expectations for $393.4MM, $91.5MM and $1.95, respectively.
ECOM reported Q4 results above expectations, but guidance for FY ’19 was mixed.
Total revenue of $34.8MM (+2.0% Y/Y) was within management’s guidance and approximately in line with consensus of $34.7MM. Adjusted EBITDA of $5.4MM (15.4% margin) exceeded management’s $3.2MM-$4.0MM guidance and consensus of $3.7MM. Non-GAAP EPS of $0.13 beat consensus by $0.06.
Key metrics: average revenue per customer was $46,286 (+8.4% Y/Y) in 2018; total customer count of 2,833, down from 2,840 a year ago; processed $10B+ (+12.4% Y/Y) in GMV for the year; ACV was $105.1MM (+5% Y/Y).
Europe and Australia performed well over the past year, while China proved challenging. Deceleration of marketplace GMV for Amazon and eBay also proved to be a headwind.
Management’s Q1 guidance includes revenues of $31.5MM-$32.0MM and adjusted EBITDA of $0.6MM-$1.0MM, both of which were below the Street’s $33.2MM in revenues and $1.4MM in adjusted EBITDA.
For FY ’19, management’s guidance calls for revenues of $136.0MM-$139.0MM, below consensus of $140.3MM, and adjusted EBITDA of $13.0MM-$15.0MM, above the Street’s $10.7MM.
ELLI: Ellie Mae Reports Fourth Quarter and Full Year 2018 Results
ELLI’s Q4 revenues outpaced expectations, but adjusted EBITDA and non-GAAP EPS fell short.
Revenues of $116.0MM (+2.8% Y/Y) were above consensus of $113.8MM and at the high end of management’s guidance. Adjusted EBITDA of $25.5MM (21.9% margin) was below guidance and consensus of $29.4MM. Non-GAAP EPS of $0.27 also missed management’s guidance and the Street’s $0.36.
Due to the pending acquisition of ELLI by Thoma Bravo for $99.00 per share in cash, the company did not host an earnings call or provide guidance.
HUBS: HubSpot Reports Q4 and Full Year 2018 Results
HUBS delivered Q4 results ahead of expectations and guided profitability in line on higher revenues for FY ’19.
Revenue of $144.0MM (+35.2% Y/Y) exceeded management’s $136.5MM-$137.5MM guidance and consensus of $137.5MM. Non-GAAP operating income of $14.2MM (9.8% margin) was also above management’s guidance and Street expectations. Non-GAAP EPS of $0.40 beat the Street’s $0.30 and guidance of $0.29-$0.31.
Key metrics: 56,628 (+36% Y/Y) total customers; average subscription revenue per customer was $10,012 (-2% Y/Y).
In 2018 HUBS shifted from an application company to a suite company and hopes to transform again to a platform company in 2019 with expanded API support, numerous projects to support its Enterprise tier and a strong partner community.
Management’s Q1 and FY ’19 revenue guidance ranges of $146.5MM-$147.5MM and $648.0MM-$652.0MM were ahead of the Street’s $146.0MM and $636.5MM estimates, respectively. Non-GAAP EPS guidance of $0.23-$0.25 for Q1 and $1.08-$1.16 for FY ’19 was in line with the Street’s $0.24 and $1.12.
LOGM: LogMeIn Announces Fourth Quarter and Fiscal Year 2018 Results
LOGM reported Q4 results ahead of expectations, but guided FY ’19 profitability well below consensus.
Non-GAAP revenue of $310.7MM (+11.0% Y/Y) exceeded management’s $304.0MM-$306.0MM guidance and consensus of $306.6MM. Adjusted EBITDA of $118.7MM (38.2% margin) also exceeded management’s guidance and consensus of $115.5MM. Non-GAAP EPS of $1.47 exceeded management’s $1.41-$1.42 guidance and the Street’s $1.41.
In conjunction with Q4 earnings, LOGM also announced a board succession plan in which the company’s co-founder and Chairman, Michael Simon, will resign from the board and be succeeded as Chairman by Robert Calderoni, a current member of the board.
Total company gross renewal rates across all products on an annualized dollar basis was approximately 80%.
To fund growth initiatives, LOGM plans to undertake a restructuring plan expected to yield annualized cost savings of $26MM.
The company plans to invest an incremental $75MM in 2019 to build on its momentum and ensure sustainable double-digit growth in the future.
Management’s Q1 guidance calls for revenues of $304.0MM-$306.0MM, adjusted EBITDA of $94.0MM-$96.0MM and non-GAAP EPS of $1.12-$1.15, all of which were below consensus of $306.6MM, $110.0MM and $1.36.
For FY ’19, management’s guidance includes revenues of $1.25B-$1.26B, adjusted EBITDA of $407.0MM-$412.0MM and non-GAAP EPS of $4.90-$4.97. Consensus called for revenues of $1.26B, adjusted EBITDA of $469.5MM and non-GAAP EPS of $5.78.
MAMS: MAM Software Reports Fiscal Second Quarter Results
MAMS reported Q2 ’19 results just shy of consensus, but reaffirmed prior guidance for FY ’19.
Net revenues of $9.0MM (+5.4% Y/Y) were short of the Street’s $9.5MM, while adjusted EBITDA of $1.2MM (13.5% margin) was approximately in line with consensus of $1.2MM. EPS of $0.06 were a penny above the Street.
Goodyear’s pilot of VAST Online is off to a good start with expectations that MAMS will go from three locations currently live to nearly 600 locations.
Other key metrics: Autopart Online customers increased 2% Q/Q to 494, resulting in 5,815 users at quarter end; Autowork Online subscribers increased 2% Y/Y to 3,001 subscribers.
Management reaffirmed its prior FY ’19 guidance calling for constant currency revenue growth of ~10% and adjusted EBITDA of $6.2MM-$6.7MM.
NICE: NICE Reports Strong Finish to 2018 with 30% Cloud Revenue Growth for the Fourth Quarter
NICE reported Q4 results above consensus and provided mixed guidance for FY ’19.
Non-GAAP (ASC 605) revenues of $419.9MM (+6.1% Y/Y) were ahead of the Street’s $417.0MM. Non-GAAP operating income was $118.7MM (28.3% margin). Non-GAAP EPS of $1.47 beat consensus of $1.41.
Q4 cloud revenue was +27% Y/Y.
Two highly differentiated platforms in CXone for customer engagement and X-Sight for financial crime and compliance provide significant runway for growth.
Robotic process automation (RPA) is another building block of NICE’s strategy, and NICE believes the company will cross the $2B revenue mark with an operating margin above 30% in five years.
Management’s Q1 guidance called for revenues of $370.0MM-$380.0MM, which compared favorably with the Street’s $371.5MM. However, Q1 non-GAAP EPS guidance of $1.05-$1.15 was below the Street’s $1.16.
For FY ’19, management guided to revenues of $1.56B-$1.58B, leaving the Street slightly above the high-end, but non-GAAP EPS guidance of $5.08-$5.28 was above consensus of $5.07.
PS: Pluralsight Announces Fourth Quarter and Year End 2018 Results
PS reported Q4 results ahead of expectations and raised guidance for FY ’19 slightly.
Revenue of $67.3MM (+41.9% Y/Y) topped management’s $65.0MM-$66.0MM guidance and consensus of $65.8MM. Non-GAAP operating income was $(12.7)MM (-18.9% margin). Non-GAAP EPS of $(0.09) beat the Street’s $(0.10).
Key metrics: dollar-based retention rate of 128%; 275 (+76% Y/Y) customers with annual billings over $100k; 810k B2B users.
Management’s Q1 guidance of $68.0MM-$68.5MM in revenues and $(0.09)-$(0.08) in non-GAAP EPS compared favorably with Street expectations for $67.4MM and $(0.09).
Management raised its prior FY ’19 guidance for revenues from $295.0MM-$310.0MM to $306.0MM-$314.0MM. Management also increased the low end of its non-GAAP EPS guidance from $(0.34)-$(0.26) to $(0.32)-$(0.28).
QLYS: Qualys Announces Fourth Quarter and Full Year 2018 Financial Results
QLYS reported a Q4 beat on the bottom line and guided non-GAAP EPS in line for FY ’19 on lower revenues.
Revenues of $74.2MM (+17.9% Y/Y) were in line with consensus of $74.1MM. Non-GAAP operating income was $22.8MM (30.8% margin). Non-GAAP EPS of $0.51 easily exceeded management’s $0.39-$0.41 guidance and consensus of $0.40.
Key metrics: Enterprise customers with 3+ solutions rose to 41% from 32%; products released in the past three years contributed 26% of Q4 bookings versus 15% last year; increased sales organization by over 20% in 2H ’18 and will do so again in 2019.
Plans for 2019 include the release of new solutions like Passive Network Discovery, Secure Access Control, Certificate Management and Cloud Security Management; the general availability of patch management; and acquisitions to enhance the company’s product suite.
Management’s Q1 guidance of $74.5MM-$75.2MM in revenues was below consensus of $77.2MM, but non-GAAP EPS guidance of $0.41-$0.43 was in line with the Street’s $0.42.
For FY ’19, management guided revenues to $320.0MM-$323.0MM and non-GAAP EPS to $1.84-$1.89. Consensus called for $331.2MM in revenues and $1.87 in non-GAAP EPS.
QUOT: Quotient Technology Inc. Reports Fourth Quarter and Full Year 2018 Financial Results
QUOT reported Q4 results consistent with its pre-announcement, but guided FY ’19 below Street expectations.
Revenues of $107.1MM (+15.0% Y/Y) were within management’s pre-announced range of $106.5MM-$107.5MM and in line with consensus of $107.0MM. Adjusted EBITDA of $16.5MM was also in line with consensus of $16.6MM.
Management noted Q4 was impacted by unexpected softness in CPG customer spend in December. New growth drivers including sponsored search, targeted coupons printed at checkout and more retailers on RPM should kick in starting Q2 ’19.
Transactions totaled 868.6MM (-10.5% Y/Y) in Q4; QUOT will stop providing this metric beginning in Q1 ’19 as the company is now focused on growth in total dollars across its customer base.
Management’s Q1 guidance includes revenues and adjusted EBITDA of $94.0MM-$98.0MM and $6.0MM-$8.0MM, respectively, both of which were below consensus of $104.1MM and $12.1MM.
For FY ’19, management guided to revenues of $460.0MM-$470.0MM and adjusted EBITDA of $66.0MM-$71.0MM, also falling short of the Street’s $483.0MM and $76.5MM projections.
RDCM: RADCOM Reports Fourth Quarter and Full Year 2018 Results
RDCM reported Q4 results generally consistent with Street expectations, but guided FY ’19 revenues below consensus.
Revenues of $4.0MM (-62.5% Y/Y) were ahead of the Street’s $3.8MM, while non-GAAP EPS of $(0.27) missed consensus by a penny. Non-GAAP operating income was $(4.2)MM.
Management’s revenue guidance for FY ’19 calls for $28.0MM-$32.0MM, below consensus of $35.9MM.
RDCM’s results and guidance reflect a slower-than-anticipated pace of NFV adoption and the timing of 5G deployments.
SHOP: Shopify Announces Fourth-Quarter and Full Year 2018 Financial Results
SHOP reported Q4 results above expectations and provided mixed guidance for FY ’19.
Revenues of $343.9MM (+54.3% Y/Y) exceeded management’s $315.0MM-$325.0MM guidance and consensus of $327.4MM. Adjusted operating income of $20.0MM (5.8% margin) also beat guidance of $16.0MM-$18.0MM and consensus of $17.2MM. Adjusted EPS of $0.26 was ahead of the Street’s $0.21.
Key metrics: MRR of $40.9MM (+37% Y/Y) at quarter-end; $14.0B in GMV (+54% Y/Y); $5.8B in GPV (+65% Y/Y); 820k+ merchants on the Shopify platform with ~5.3k merchants on Shopify Plus.
Management’s guidance for Q1 and FY ’19 was mixed with profitability lower on in line revenues. For Q1, management guided to revenues of $305.0MM-$310.0MM and adjusted operating income of $(15.0)MM-$(13.0)MM. Consensus was $307.8MM in revenues and $5.6MM in adjusted operating income. Guidance for the full year includes revenues and adjusted operating income of $1.46B-$1.48B and $10.0MM-$20.0MM, respectively, while consensus called for $1.48B and $57.5MM.
SPSC: SPS Commerce Reports Fourth Quarter and Full Year 2018 Financial Results
SPSC reported Q4 results above expectations and guided Q1 and FY ’19 ahead of the Street.
Revenues of $65.2MM (+12.3% Y/Y) exceeded management’s $63.4MM-$64.1MM guidance and consensus of $63.9MM. Adjusted EBITDA of $13.9MM (21.4% margin) was within guidance and in line with consensus. Non-GAAP EPS of $0.53 beat consensus of $0.46 and management’s $0.44-$0.46 guidance.
SPSC now has over 80k customers and 29.3k (+14% Y/Y) recurring revenue customers, including 2.4k that pay over $20k annually.
Management’s Q1 guidance included revenues of $65.8MM-$66.3MM, adjusted EBITDA of $15.0MM-$15.5MM and non-GAAP EPS of $0.50-$0.52, all of which compared favorably with Street expectations for $63.9MM, $13.9MM and $0.46, respectively.
Similarly, guidance for FY ’19 revenues of $273.7MM-$275.7MM, adjusted EBITDA of $62.5MM-$64.0MM and non-GAAP EPS of $2.03-$2.09 also fared well versus consensus of $274.2MM, $62.4MM and $2.04, respectively.
TLND: Talend Reports Fourth Quarter and Fiscal Year 2018 Financial Results
TLND reported Q4 results generally in line with consensus, but guidance for FY ’19 was mixed.
Revenue of $55.7MM (+34.1% Y/Y) was in line with consensus and within management’s guidance. Non-GAAP operating income of $(4.8)MM (-8.5% margin) was below management’s guidance and consensus of $(4.2)MM, but non-GAAP EPS of $(0.13) were $0.02 above the Street and within guidance.
Key metrics: ARR of $198.1MM (+33% Y/Y); total customers crossed 3,000; 472 (+34% Y/Y) enterprise customers with ARR over $100k; dollar-based net expansion rate of 120%.
Management’s Q1 guidance calls for revenues of $56.0MM-$57.0MM and non-GAAP EPS of $(0.32)-$(0.29), both of which fell short of the Street’s $57.3MM and $(0.15).
Guidance for FY ’19 includes revenues of $248.0MM-$250.0MM, in line with consensus of $248.8MM. However, non-GAAP EPS guidance of $(0.94)-$(0.88) was well below consensus of $(0.51).
TWLO: Twilio Announces Fourth Quarter and Full Year 2018 Results
TWLO delivered a top line beat in Q4 and provided mixed guidance for FY ’19.
Total revenue of $204.3MM (+77.3% Y/Y) exceeded management’s $183.0MM-$185.0MM guidance and consensus of $184.5MM. Non-GAAP operating income of $2.4MM (1.2% margin) was in line with Street expectations as was non-GAAP EPS of $0.04.
Q4 results were amplified by significant seasonal spending from a large international customer added earlier in the year and the mid-term elections in the U.S., which together added approximately 10 points to the Y/Y growth rate.
Key metrics: 64.3k (+31.3% Y/Y) active customer accounts; 147% dollar-based net expansion rate; 1,440 employees at quarter-end.
Management plans to continue investing across the company to support elevated growth over an extended period of time, rather than taking profits in the short term.
Recently acquired SendGrid generated $41MM in revenues during Q4. Q1 and FY ’19 guidance assumes SendGrid contributes $27MM-$28MM and $168MM-$170MM, respectively.
Q1 guidance includes revenues of $222.0MM-$225.0MM, above consensus of $185.9MM even after adjusting for the acquisition of SendGrid, and non-GAAP EPS of $0.00-$0.01, below the Street’s $0.02.
Management’s FY ’19 guidance calls for revenues of $1.065B-$1.077B, also above consensus of $829.5MM when excluding anticipated contribution from SendGrid, and non-GAAP EPS of $0.08-$0.11, below the Street’s $0.16.
TYPE: Monotype Announces Fourth Quarter and Full-Year 2018 Results
TYPE reported Q4 results well above expectations and guided FY ’19 in line.
Revenue of $71.4MM (+9.8% Y/Y) exceeded management’s $63.7MM-$67.7MM guidance and consensus of $65.2MM. Adjusted EBITDA of $26.8MM (37.5% margin) also surpassed guidance and the Street’s $20.5MM. Non-GAAP EPS of $0.45 beat the Street’s $0.23 and management’s $0.22-$0.25 guidance.
During the earnings call, management noted that a perpetual license transaction valued at $5MM contributed much of the upside in Q4. However, results still would have come in at the high-end of guidance absent that deal.
Enterprise sales revenues increased 45% Y/Y in Q4 and 36% Y/Y in 2018 with TYPE closing nearly 150 deals in excess of $100k. Management believes the enterprise sales opportunity may be greater than originally thought.
Olapic ARR declined 14% Y/Y due to churn in non-core verticals and the impact of GDPR. As the business has begun to stabilize, management anticipates Olapic revenues to be flat to down slightly in 2019 with growth in 2020.
Management’s Q1 revenue and adjusted EBITDA guidance of $55.5MM-$59.5MM and $12.5MM-$15.5MM leaves prior consensus estimates of $58.0MM and $15.0MM, at the higher end of the respective ranges. Non-GAAP EPS guidance of $0.19-$0.25 compares favorably with the Street’s $0.19.
For FY ’19, management’s outlook calls for revenues of $247.0MM-$257.0MM and adjusted EBITDA of $71.5MM-$78.5MM, consistent with the Street’s $249.6MM and $75.0MM. Non-GAAP EPS guidance of $1.18-$1.30 sits above consensus of $0.95.
Disclosure(s):
The author holds a long position in Brightcove (BCOV).