K. Liu's Week in Review
May the 4th be with you on this Star Wars Day. We were treated to another heavy dose of earnings this week, but we begin as always with a few strategic moves. Pluralsight (PS) paid $170 million in cash to acquire GitPrime, equating to a multiple of 5x-6x estimated 2020 billings. GitPrime connects to most major code repositories in existence and captures developer commits, providing a view into their productivity. The addition of GitPrime provides technology leaders with an end-to-end platform for benchmarking the productivity and talent of their teams, developing their skills and measuring their proficiency. Once integrated, GitPrime is expected to boost next year’s billings growth by 500bps and be accretive in 2020. Pluralsight was one of many to report this week, exceeding expectations for the quarter but providing a mixed outlook reflecting higher revenues and lower earnings. ANSYS (ANSS) announced a tuck-in acquisition of its own, purchasing most of the assets of DfR Solutions, the developer of an automated design reliability analysis solution called Sherlock. The integration of Sherlock with its own solutions provides customers with a complete toolkit to quickly analyze electronic failures early in the design cycle. ANSYS also delivered a beat and raise this week, but shares traded down slightly perhaps due to a modest 3% increase in annual contract value at quarter-end. In another tuck-in deal where terms were not disclosed, Smartsheet (SMAR) acquired 10,000ft, a SaaS platform for real-time capacity planning, research management, and reporting used to improve decision making and forecasting. Finally, we note that PROS Holdings (PRO) priced a $125 million convertible debt offering this week. The notes mature in 2024, pay interest semi-annually at an annual rate of 1.0%, and have an initial conversion price of $66.05 per share, representing a 29% premium to the close price prior to the proposed offering. The company plans to utilize a portion of the proceeds to exchange and retire its convertible notes maturing in 2019.
On the earnings front, we digested results from 34 companies this week. Over 60% exceeded expectations on both the top and bottom lines and only two missed, but neither was among the worst performers. Interestingly, while 12 of the 21 that beat also raised their expectations for the year, only three had what we would characterize as meaningful moves higher. In fact, three of those that beat and raised also traded down on the week. Zix (ZIXI) was a big outperformer, rising over 45% for the week, as double-digit organic growth coupled with contribution from the company’s acquisition of AppRiver drove a strong beat and raise. While enterprise video management vendor Qumu (QUMU) opted to reaffirm its prior FY ’19 guidance following a big Q1 beat, shares increased over 48% for the week. Management highlighted strong enterprise sales and large term license renewals as drivers for the upside and also talked up the convergence of video conferencing solutions (a la those available from Zoom) with its own enterprise streaming and management capabilities. Shopify (SHOP), which provides small and medium-sized businesses with a platform to sell across multiple channels, saw shares trade up over 18% for the week on its beat and raise, and data analytics vendor Alteryx (AYX) increased over 13% on the heels of its strong results and guidance. Of note, contact center software provider Five9 (FIVN), cybersecurity vendor Fortinet (FTNT), and communications API provider Twilio (TWLO) saw their shares decline despite positive results and guidance.
While Shopify’s stock continues to defy gravity, another SMB-focused vendor Endurance International Group (EIGI) saw its shares come crashing down amid mixed results and a reduced outlook for the year. Management attributed its lower guidance to the timing of advancements in one of its hosting brands and delayed monetization of certain initiatives in its Email Marketing and Domain segments. Still, expectations remain for a return to positive growth in 2H. Benefitfocus’ (BNFT) shares were down 15% this week despite a Q1 beat and no change to full year expectations. Management’s guidance for Q2 reflected a loss well in excess of Street expectations, and the company’s Chief Financial Officer announced his departure for personal reasons. Low-code platform provider Appian (APPN) reported in line results, but a lower outlook for the year driven by the offloading of services to partners prompted an 8.9% decline in the stock. The table below depicts each company’s quarterly results and subsequent estimate revisions.
Finishing up with the usual executive moves, ServiceNow (NOW) announced that its Chief Financial Officer Mike Scarpelli plans to leave the company following its Q2 earnings release as he searches for another innovative start-up to help scale. Splunk (SPLK) appointed Jason Child as its Chief Financial Officer. Mr. Child previously served in that role at Opendoor and has also held that title at Jawbone and Groupon. Ceridian HCM Holding (CDAY) promoted 14-year veteran Christopher Armstrong to Chief Operating Officer. Smartsheet (SMAR) appointed Anna Griffin, formerly CA Technologies’ Senior Vice President of Corporate Marketing, as its Chief Marketing Officer, and Yext (YEXT) announced that Patrick Blair was joining from Palo Alto Networks to serve as its EVP, Global Commercial Business.
Mergers and Acquisitions
ANSS: ANSYS Acquires Assets of Electronics Automated Design Analysis Leader DfR Solutions
ANSYS announced the acquisition of substantially all the assets of DfR Solutions, the developer of Sherlock, the industry’s only automated design reliability analysis software.
The combination of Sherlock with ANSYS’ solutions provides a complete designer-level toolkit enabling customers to quickly and easily analyze for electronics failure earlier in the design cycle.
DfR Solutions has customers across many electronic technology markets and industries, including avionics and aerospace, automotive, consumer electronics, industrial, medical, defense, and telecommunications.
Neither terms of the transaction nor DfR Solutions’ financial profile were disclosed.
Pluralsight To Acquire GitPrime, the Leading Developer Productivity Platform
Pluralsight announced that the company has agreed to acquire GitPrime for $170 million in cash, representing a multiple of 5x-6x estimated 2020 billings.
GitPrime connects to major code repositories in use, including GitHub, Bitbucket, GitLab, and others, which enables it to capture virtually every developer code commit, providing a view into the application of their skills in real time.
The addition of GitPrime’s developer productivity capabilities with Pluralsight’s skill measurement and skill development capabilities is expected to provide technology leaders with a complete platform for benchmarking the talent of their teams, developing their skills, and measuring the proficiency of team members.
SMAR: Smartsheet Acquires 10,000ft to Enhance Resource Management Capabilities
Smartsheet announced the acquisition of 10,000ft, a SaaS platform for real-time capacity planning, research management, and reporting used by customers to improve decision making and forecasting.
10,000ft has over 1,000 customers in verticals like consulting, advertising and creative agencies, consumer products, and technology.
Terms of the transaction were not provided, and additional details regarding the financial impact of the acquisition will be provided as part of the Q1 ’20 earnings release.
Notable News
CDAY: Ceridian Names Christopher Armstrong Chief Operating Officer
Ceridian announced the appointment of Christopher Armstrong as Executive Vice President, Chief Operating Officer.
Mr. Armstrong has been with Ceridian for 14 years and most recently served as its Executive Vice President, Operations.
PRO: PROS Holdings, Inc. Announces Pricing of $125 Million Convertible Senior Note Offering
PROS Holdings announced the pricing of its previously announced offering of $125 million aggregate principal amount of convertible senior notes due 2024 in a private placement to qualified institutional buyers.
The notes will pay interest semiannually at an annual rate of 1.0% and will have an initial conversion rate of 15.1394 shares of PRO common stock, representing an initial conversion price of approximately $66.05 per share.
The initial purchasers have also been granted an option to buy an additional $18.75 million aggregate principal amount of convertible notes.
PROS anticipates net proceeds of approximately $120.6 million (or approximately $138.9 million if the initial purchasers exercise their option to purchase additional notes in full).
PROS plans to exchange and retire approximately $122.1 million principal amount of PROS’ outstanding 2.0% convertible senior notes due 2019 for consideration of $76.8 million in cash and approximately 2.18 million shares.
NOW: ServiceNow CFO Mike Scarpelli To Leave Company in Q3 2019
Chief Financial Officer Mike Scarpelli plans to leave the company following the release of its Q2 ’19 earnings.
Mr. Scarpelli plans to search for another opportunity to scale an innovative start-up.
SMAR: Smartsheet Appoints Anna Griffin as Chief Marketing Officer to Support Global Growth
Smartsheet announced that Anna Griffin has joined the company as its Chief Marketing Officer with responsibilities for the company’s global marketing initiatives.
Ms. Griffin previously served as CA Technologies’ Senior Vice President of Corporate Marketing and was Juniper Networks’ Vice President of Global Marketing prior to that.
SPLK: Splunk Appoints Jason Child as Chief Financial Officer
Splunk announced the appointment of Jason Child as Senior Vice President and Chief Financial Officer, succeeding Dave Conte, who previously announced his retirement in November 2018.
Mr. Child most recently served as Chief Financial Officer at Opendoor and has also served in that role at Jawbone and Groupon in the past.
YEXT: Patrick Blair Joins Yext as EVP, Global Commercial Business
Yext announced the appointment of Patrick Blair as EVP, Global Commercial Business, a role in which he will oversee the company’s mid-enterprise and mid-market sales and services around the world.
Mr. Blair most recently served as Palo Alto Networks’ Senior Vice President of Americas Sales and prior to that served as Executive Vice President at Salesforce.
Earnings Releases
AKAM: Akamai Reports First Quarter 2019 Financial Results
Akamai reported Q1 ’19 results above expectations and raised its FY ’19 guidance ranges.
Revenue was $706.5 million (+5.7% Y/Y), exceeding management’s guidance of $690.0-$704.0 million and consensus of $698.3 million. Adjusted EBITDA was $299.1 million (42.3% margin), also exceeding management’s guidance and consensus of $289.6 million. Non-GAAP EPS were $1.10, beating management’s guidance of $1.00-$1.05 and consensus of $1.02.
Rapid growth in Akamai’s Cloud Security business and strong traffic growth from Media customers drove the upside in Q1.
Within the security portfolio, Bot Manager, which utilizes AI and machine learning to distinguish between human and machine generated requests, remains the fastest selling new product with nearly 400 customers under contract.
Following the acquisition of Janrain, the company has created the Akamai Identity Cloud, a new service to aid customers in preventing credential abuse and account fraud, manage and protect consumer data, and comply with regional data regulations.
Akamai has $1.1 billion remaining under its share repurchase authorization and plans to return a large percentage of free cash flow through share repurchases balanced against preserving flexibility for strategic opportunities.
Management’s Q2 guidance includes revenue of $688.0-$702.0 million, an adjusted EBITDA margin of 40%-41% (implies adjusted EBITDA of $275.2-$287.8 million), and non-GAAP EPS of $0.97-$1.02. Consensus called for $693.3 million in revenue, $282.4 million in adjusted EBITDA, and $0.98 in non-GAAP EPS.
For FY ’19, management raised its prior revenue and non-GAAP EPS guidance ranges from $2.810-$2.855 billion and $4.00-$4.15, respectively, to $2.820-$2.860 billion and $4.05-$4.20.
APPF: AppFolio, Inc. Announces First Quarter 2019 Financial Results
AppFolio reported mixed Q1 ’19 results and reaffirmed prior expectations for FY ’19.
Revenue of $57.1 million (+34.8% Y/Y) was slightly ahead of the Street’s $56.7 million. Operating income was $(58,000) and EPS were $0.11, missing consensus of $0.17.
Q1 results included $0.5 million in subscription revenue from the January acquisition of Dynasty.
Key metrics: 13,409 property manager customers managing 4.08 million units at quarter-end; core solutions revenue increased 28% Y/Y to $20.8 million.
The company released AppFolio Investment Management and expanded the capabilities of AppFolio Property Manager PLUS.
Management reaffirmed prior FY ’19 guidance for $250.0-$255.0 million in revenue.
AYX: Alteryx Announces First Quarter 2019 Financial Results
Alteryx reported Q1 ’19 results above expectations and raised guidance for FY ’19.
Revenue was $76.0 million (+51.0% Y/Y), exceeding management’s $69.0-$72.0 million guidance and consensus of $71.4 million. Non-GAAP operating income of $1.4 million (1.9% margin) easily topped management’s $(8.0)-$(5.0) million guidance and consensus of $(4.8) million. Non-GAAP EPS of $0.04 also beat guidance of $(0.13)-$(0.08) and consensus of $(0.07).
Key metrics: 4,973 customers (+35.4% Y/Y) at quarter-end; 277 net new customers added in Q1; dollar-based net expansion rate of 134%, up from 129% in the year-ago period.
Performance continues to be driven by strong global execution along with an enterprise focus on digital transformation.
Management’s Q2 guidance calls for $74.0-$77.0 million in revenue, above consensus of $72.7 million; non-GAAP operating income of $(7.0)-$(4.0) million, below consensus of $(2.1) million; and non-GAAP EPS of $(0.09)-$(0.04), which leaves consensus at the high-end.
For FY ’19, management now anticipates revenue of $355.0-$360.0 million and non-GAAP EPS of $0.38-$0.45, above prior expectations for $345.0-$350.0 million in revenue and $0.36-$0.42 in non-GAAP EPS.
ANSS: ANSYS Announces Strong Q1 2019 Results and Raises FY 2019 Outlook for Revenue and EPS
ANSYS posted Q1 ’19 results above expectations and raised guidance for FY ’19.
Non-GAAP revenue of $319.9 million (+12.9% Y/Y) exceeded management’s $290.0-$310.0 million guidance and consensus of $306.5 million. Non-GAAP operating income of $137.2 million (42.9% margin) was well ahead of the Street’s $118.2 million. Non-GAAP EPS of $1.29 beat management’s $0.98-$1.11 guidance and consensus of $1.09.
Annual contract value increased 3% Y/Y to $303.5 million; deferred revenue and backlog increased 13% Y/Y to $673 million.
Q1 included a deal with an Asian telecommunications company to design and analyze the 5G networks they are building and management highlighted many use cases within the high-tech industry for its product portfolio given megatrends like 5G, AI, autonomy, electrification and data centers.
The pace of hiring in Q1 was slower than anticipated due to integration activities associated with the Granta Design and Helic acquisitions.
Guidance for Q2 calls for $325.0-$345.0 million in non-GAAP revenue, leaving consensus of $341.7 million near the high-end, and $1.18-$1.30 in non-GAAP EPS, falling short of the Street’s $1.39.
Management raised its prior FY ’19 non-GAAP revenue and non-GAAP EPS guidance from $1.41-$1.47 billion and $5.55-$6.00, respectively, to $1.43-$1.48 billion and $5.75-$6.10. Guidance for ACV was also increased from $1.410-$1.465 billion to $1.425-$1.470 billion.
Long-term targets for double-digit growth and a 43%-45% margin in 2020 remain intact.
APPN: Appian Announces First Quarter 2019 Financial Results
Appian reported Q1 ’19 results in line with expectations, but lowered its top and bottom line guidance for FY ‘19.
Total revenue was $59.6 million (+15.2% Y/Y), within management’s $59.5-$59.8 million guidance and in line with consensus of $59.7 million. Non-GAAP operating income was $(10.2) million (-17.1% margin), also within guidance and in line with consensus. Non-GAAP EPS of $(0.16) were in line with management’s guidance and consistent with Street expectations.
Subscription revenue retention was 116% in the quarter.
Partners contributed 63% of new logos in Q1 and delivered 61% more total contract value versus the prior quarter.
Management’s Q2 guidance calls for total revenue of $63.3-$63.8 million, non-GAAP operating income of $(11.5)-$(11.0) million, and non-GAAP EPS of $(0.18)-$(0.17), which was mixed relative to consensus of $63.3 million in revenue, $(8.7) million in non-GAAP operating income and $(0.13) in non-GAAP EPS.
For FY ’19, management lowered its revenue guidance from $258.5-$262.5 million to $255.0-$258.0 million despite an increase in its expectations for subscription revenue, reduced its non-GAAP operating income guidance from $(29.5)-$(27.5) million to $(35.5)-$(32.5) million, and lowered its non-GAAP EPS guidance from $(0.46)-$(0.42) to $(0.55)-$(0.50).
BNFT: Benefitfocus Announces First Quarter 2019 Financial Results
Benefitfocus reported Q1 ’19 results above consensus and reaffirmed prior expectations for FY ’19.
Total revenue was $68.3 million (+9.5% Y/Y), near the high-end of management’s $66.5-$68.5 million guidance and above consensus of $67.8 million. Adjusted EBITDA was $3.6 million (5.3% margin), well above management’s $(0.5)-$1.5 million guidance and the Street’s $0.7 million. Non-GAAP EPS were $(0.21), a penny below consensus of $(0.20).
Net benefit eligible lives grew to 15.5 million at quarter-end and includes approximately 2 million eligible lives from the acquisition of Connecture; over 300 premier brokers exiting Q1; added 9 new BenefitsPlace suppliers.
Management expects average revenue per user (ARPU) to expand throughout 2019 driven by new product offerings, improving interactions with consumers, and expanding BenefitsPlace access through the company’s medical carrier customers.
Guidance for Q2 includes $66.5-$68.5 million in revenue, $(5.0)-$(3.0) million in adjusted EBITDA, and $(0.46)-$(0.40) in non-GAAP EPS, missing consensus expectations for $71.0 million, $1.7 million, and $(0.17) in revenue, adjusted EBITDA and non-GAAP EPS, respectively.
Management reaffirmed prior FY ’19 guidance of $301.0-$309.0 million in revenue and $15.0-$20.0 million in adjusted EBITDA.
The company also announced the resignation of Chief Financial Officer Jonathon Dussault for personal reasons. Lou Anne Gilmore, the company’s Vice President of Corporate Development, has been named interim Chief Financial Officer.
BLKB: Blackbaud Announces 2019 First Quarter Results
Blackbaud reported Q1 ’19 results consistent with Street expectations and reaffirmed prior guidance for FY ’19.
Non-GAAP revenue was $216.5 million (+5.9% Y/Y), above consensus of $212.2 million. Non-GAAP operating income of $36.0 million (16.6% margin) was slightly ahead of the Street’s $35.2 million. Non-GAAP EPS of $0.51 were in line with consensus.
Nonprofit Resource Management, Blackbaud’s first jointly developed solution with Microsoft, is currently in development and the companies are working in close collaboration with early adopters.
Transformation of the company’s sales structure is largely complete, and the focus is now on ramping sales headcount and improving productivity.
The acquisition of YourCause earlier this year adds another $0.5 billion in total addressable market opportunity.
Management was not surprised to see Salesforce acquire Salesforce.org and emphasized that the company sees relatively little competition in several of its vertical markets.
Management reaffirmed its prior FY ’19 guidance calling for $880.0-$910.0 million in non-GAAP revenue and $2.11-$2.28 in non-GAAP EPS.
BL: BlackLine Announces First Quarter Financial Results
BlackLine delivered Q1 ’19 results above expectations and raised guidance for FY ’19.
Revenues of $64.1 million (+25.0% Y/Y) were above management’s $62.8-$63.8 million guidance and consensus of $63.3 million. Non-GAAP operating income was $0.4 million (0.6% margin). Non-GAAP EPS of $0.02 beat management’s $(0.02)-$0.00 guidance and consensus of $(0.01).
Key metrics: added 76 net new customers in Q1 for a total of 2,707; expanded the user base to 226,979; dollar-based net revenue retention rate of 108%; renewal rate of 97%.
The company’s reseller partnership with SAP is very new, but some SolEx deals closed in Europe and South Africa during the quarter and sales results were consistent with BlackLine’s expectations.
Guidance for Q2 includes $67.4-$68.4 million in revenue and $0.00-$0.03 in non-GAAP EPS, in line with consensus of $67.6 million in revenue and $0.02 in non-GAAP EPS.
Management raised its FY ’19 guidance slightly from $275.0-$280.0 million and $0.14-$0.17 in revenue and non-GAAP EPS, respectively, to $276.0-$281.0 million and $0.15-$0.18.
CBLK: Carbon Black Announces First Quarter 2019 Financial Results
Carbon Black reported solid Q1 ’19 results and raised the midpoints of its FY ’19 top and bottom line guidance ranges.
Total revenue was $58.6 million (+20.9% Y/Y), ahead of management’s $56.5-$57.5 million guidance and consensus of $57.1 million. Non-GAAP operating income of $(15.8) million (-27.0% margin) was within management’s $(16.0)-$(15.5) million guidance and in line with consensus of $(15.7) million. Non-GAAP EPS were $(0.22), also in line with guidance and consensus.
Key metrics: ARR of $226.0 million (+24% Y/Y); add 314 customers in Q1 for a total of 5,339 customers (+33% Y/Y) and 3,169 cloud customers (+69% Y/Y) at quarter-end; 87% gross retention rate.
Entered 2019 with five products available on the company’s cloud platform, the Predictive Security Cloud (PSC).
The two newest PSC products, CB LiveOps and CB ThreatHunter, landed new customer wins individually and as part of multi-product deals, while on-premise products did well in the federal vertical.
Management is encouraged by several leading indicators, including North American inside sales bookings for PSC products comprising over 70% of the team’s bookings, the signing of over 100 multi-product PSC deals in Q1, and PSC representing two-thirds of the total pipeline.
Management’s Q2 guidance includes revenue of $59.0-$60.0 million, non-GAAP operating income of $(12.6)-$(11.6) million, and non-GAAP EPS of $(0.18)-$(0.16), consistent with consensus expectations for $58.4 million in revenue, $(12.4) million in non-GAAP operating income, and $(0.17) in non-GAAP EPS.
For FY ’19, management raised the low-end of its prior revenue guidance, which now calls for $241.0-$244.0 million, maintained its non-GAAP operating income guidance of $(45.0)-$(43.0) million, and increased its non-GAAP EPS guidance by a penny to $(0.63)-$(0.60).
CDAY: Ceridian Reports First Quarter 2019 Results
Ceridian’s Q1 ’19 results were mixed relative to consensus and Q2 guidance was light, but management reaffirmed its prior FY ’19 expectations.
Total revenue of $203.7 million (+7.9% Y/Y) was within management’s $203.0-$205.0 million guidance and just shy of the Street’s $204.3 million. Adjusted EBITDA of $49.8 million (24.4% margin) exceeded management’s $46.0-$48.0 million guidance and consensus of $47.0 million.
Key metrics: added 133 net new customers; 3,851 Dayforce customers (+22.1% Y/Y) live at quarter-end; revenue per customer increased 7% Y/Y to $121,000; incremental revenue per customer rose to $158,00 from $155,000 last year.
Management expects Dayforce growth to approach 30% by year-end.
Guidance for Q2 includes total revenue of $191.0-$193.0 million and adjusted EBITDA of $37.0-$39.0 million, below consensus of $197.0 million in revenue and $42.7 million in adjusted EBITDA.
Management reaffirmed prior FY ’19 expectations for $810.0-$815.0 million in revenue and $182.0-$187.0 million in adjusted EBITDA.
EIGI: Endurance International Group Reports 2019 First Quarter Results
Endurance International Group reported mixed Q1 ’19 results and lowered guidance for FY ’19.
Revenue was $280.7 million (-3.7% Y/Y), below consensus of $283.8 million. Adjusted EBITDA was $78.5 million (28.0% margin), above consensus of $76.5 million. EPS of $(0.02) were in line with the Street.
Key metrics: total subscribers of 4.783 million (-4.5% Y/Y) at quarter-end; average revenue per subscriber (ARPS) of $19.52 (+1.1% Y/Y).
While expectations for revenue growth to turn positive in 2H ’19 remain intact, management reduced its prior FY ’19 guidance ranges to reflect the timing of advancements in one of the company’s hosting brands and delayed monetization related to certain initiatives in the Email Marketing and Domain segments.
Management’s FY ’19 guidance now calls for $1.12-$1.14 billion in revenue, $300.0-$320.0 million in adjusted EBITDA, and $110.0-$120.0 million in free cash flow, all of which are down from $1.14-$1.16 billion in revenue, $310.0-$330.0 million in adjusted EBITDA, and $115.0-$125.0 million in free cash flow previously.
FEYE: FireEye Reports Financial Results for First Quarter 2019
FireEye reported Q1 ’19 results generally in line with expectations and increased billings guidance for the year.
Revenue of $210.5 million (+5.8% Y/Y) was in line with management’s $208.0-$212.0 million guidance and consensus of $210.2 million. Non-GAAP operating income of $(6.4) million (-3.1% margin) was below consensus of $(3.7) million. Non-GAAP EPS of $(0.03) were at the midpoint of management’s $(0.04)-$(0.02) guidance and in line with consensus.
Non-GAAP billings increased 3.9% Y/Y to $181.9 million, also exceeding guidance for $170.0-$180.0 million.
The company’s growth strategy is predicated on differentiating through its combination of products and services, competing with its Network, Email and Endpoint products, simplifying go-to-market motions, and improving its channel strategy.
Closed 33 transactions greater than $1 million.
Guidance for Q2 calls for revenue of $212.0-$216.0 million, a non-GAAP operating margin of 1.0%-3.0% (or non-GAAP operating income of $2.1-$6.5 million), and non-GAAP EPS of $0.01-$0.03. Consensus was higher at $216.1 million in revenue, $9.5 million in non-GAAP operating income, and $0.04 in non-GAAP EPS.
Management reaffirmed its prior FY ’19 revenue and non-GAAP EPS guidance of $880.0-$890.0 million and $0.17-$0.21, respectively, and increased its billings guidance from $910.0-$930.0 million to $915.0-$935.0 million.
FIVN: Five9 Reports First Quarter Revenue Growth of 27% to a Record $74.5 Million
Five9 reported Q1 ’19 results ahead of expectations and raised guidance for FY ’19.
Revenue of $74.5 million (+26.5% Y/Y) surpassed management’s $70.0-$71.0 million guidance and consensus of $70.8 million. Adjusted EBITDA of $11.8 million (15.9% margin) was above consensus of $10.5 million. Non-GAAP EPS were $0.16, beating management’s $0.11-$0.13 guidance and the Street’s $0.13.
Enterprise momentum continued with enterprise subscriptions increasing 36% on a LTM basis driven by dollar-based net retention of 107%.
Five9’s Spring Release 2019 focuses on enhancing capabilities that appeal to larger enterprises, expanding SDKs and APIs to provide deeper integration with CRM and UC systems, and adding new voice points-of-presence in Latin America and Europe.
Management’s Q2 guidance calls for revenue of $72.0-$73.0 million, above consensus of $70.8 million, and non-GAAP EPS of $0.11-$0.13, in line with the Street’s $0.12.
For the full year, management raised both revenue and non-GAAP EPS guidance from $298.5-$301.5 million and $0.58-$0.62, respectively, to $304.0-$307.0 million and $0.61-$0.66.
FTNT: Fortinet Reports First Quarter 2019 Financial Results
Fortinet reported Q1 ’19 results above consensus and raised guidance for FY ‘19.
Revenue of $472.6 million (+18.4% Y/Y) was within management’s $465.0-$475.0 million guidance and above the Street’s $471.8 million. Non-GAAP operating income was $96.6 million (20.4% margin), above management’s guidance and consensus of $85.7 million. Non-GAAP EPS of $0.46 beat management’s $0.37-$0.39 guidance and consensus of $0.39.
Billings of $551.6 million (+19.1% Y/Y) were driven by strong growth in Japan and APAC.
Fortinet closed 35 deals in excess of $1 million with the dollar value of those deals up 20% Y/Y in Q1.
Fortinet is leading the transition to security-driven networking with a portfolio of integrated secure WiFi, SD-WAN, and 5G products.
Management’s Q2 guidance includes revenue of $505.0-$515.0 million and non-GAAP EPS of $0.49-$0.51, in line with consensus of $510.2 million and $0.49, respectively.
Management raised its FY ’19 billings and non-GAAP EPS guidance from $2.45-$2.50 billion and $2.05-$2.10, respectively, to $2.47-$2.52 billion and $2.10-$2.15, and increased the low-end of its revenue outlook, which now calls for $2.07-$2.10 billion.
GDDY: GoDaddy Reports First Quarter 2019 Earnings Results
GoDaddy reported Q1 ’19 results below Street expectations, but guided Q2 revenue in line with consensus and reaffirmed its prior FY ’19 guidance.
Revenue of $710.0 million (+12.1% Y/Y) was at the midpoint of management’s guidance and just shy of the Street’s $711.3 million. EPS of $0.07 were below consensus of $0.10.
Key metrics: bookings of $870.5 million (+11.2% Y/Y); 18.8 million customers (+6.4% Y/Y) at quarter-end; ARPU of $150 (+8.5% Y/Y).
This year, GoDaddy has directed the bulk of its new marketing efforts and discretionary spend in the U.S. after largely investing internationally over the last several years.
International has reached a $1 billion run rate and priorities there are to localize existing products, support and marketing; to launch products tailored to each markets’ unique needs; and to drive deeper customer engagement.
Management’s guidance for Q2 revenues of $730.0-$740.0 million was in line with consensus of $733.9 million.
Management reiterated its prior FY ’19 guidance for $2.97-$3.00 billion in revenue and $730.0-$745.0 million in unlevered free cash flow.
INST: Instructure Reports First Quarter 2019 Financial Results
Instructure reported Q1 ’19 results above expectations, but provided mixed guidance for Q2 and FY ’19.
Revenue of $58.1 million (+21.0% Y/Y) was above management’s $56.9-$57.5 million guidance and consensus of $57.2 million. Non-GAAP operating income of $(4.4) million (-7.6% margin) also exceeded consensus of $(5.6) million. Non-GAAP EPS of $(0.11) beat management’s guidance of $(0.16)-$(0.14) and the Street’s $(0.15).
The next chapter in Instructure’s journey is predicated on expanding the company’s impact in education, growing into the employee development market, and supporting the convergence of the academic and professional worlds.
Canvas highlights included full campus rollouts at Rutgers University and Florida State College, while Bridge continued to make headway with 70 academic institutions using the product at present.
TTM billings increased 18.1% Y/Y to $233.0 million.
The acquisitions of MasteryConnect and Portfolium, along with lower gross margin Y/Y, will weigh on near-term profitability.
Management’s Q2 guidance includes revenue of $61.8-$62.4 million, slightly ahead of the Street’s $61.4 million, and non-GAAP EPS of $(0.25)-$(0.23), below consensus of $(0.17).
For FY ’19, management’s revised outlook includes a slight increase to the low-end of its prior revenue guidance and a slight decrease in its prior non-GAAP EPS guidance. Specifically, management’s FY ’19 guidance calls for revenue and non-GAAP EPS of $257.0-$260.0 million and $(0.68)-$(0.58), respectively, versus prior expectations for $256.0-$260.0 and $(0.65)-$(0.59). Management also reaffirmed expectations for Instructure to be free cash flow neutral by year-end.
LPSN: LivePerson Announces First Quarter 2019 Results
Total revenue was $66.4 million (+14.0% Y/Y), within management’s $65.8-$66.8 million guidance and in line with the Street’s $66.2 million. Adjusted EBITDA was $(3.2) million (-4.9% margin), also within guidance and in line with consensus of $(3.1) million. EPS of $(0.31) were in line with consensus.
Key metrics: signed 118 deals in the quarter and added 66 new customer contracts; TTM average revenue per enterprise and mid-market customer increased 24% Y/Y to $300,000.
New customer signings increased nearly 90% Y/Y in terms of deal count and by over 150% Y/Y in annual contract value.
Much of Q1 was spent increasing the overall capacity of the company with a major push in hiring both engineering and go-to-market resources.
LivePerson is on track to add over 60 quota-carrying reps, sales development reps, and channel partners by the end of June.
Q2 guidance includes $69.5-$70.5 million in revenue, $(5.3)-$(3.3) million in adjusted EBITDA, and $(0.33)-$(0.29) in EPS. Consensus called for $70.1 million in revenue, $(1.1) million in adjusted EBITDA, and $(0.31) in EPS.
Management reaffirmed its prior FY ’19 guidance of $284.5-$291.5 million in revenue, $10.0-$15.0 million in adjusted EBITDA, and $(0.92)-$(0.83) in EPS.
MSTR: MicroStrategy Announces First Quarter 2019 Financial Results
MicroStrategy reported Q1 ’19 results below expectations.
Revenues of $115.4 million (-6.2% Y/Y) were below consensus of $123.5 million. Non-GAAP operating income of $(7.4) million (-7.4% margin) also fell short of the Street’s $(1.6) million. EPS of $(0.77) were considerably below consensus of $0.08.
Management stated that the highlight in Q1 was the introduction of MicroStrategy 2019, the company’s latest platform release bringing together Federated Analytics, Transformational Mobility, and HyperIntelligence capabilities.
Nearly 200 customers have upgraded to MicroStrategy 2019 and early feedback has been positive.
57 pilot engagements with HyperIntelligence have been completed and MicroStrategy is currently engaged in 169 different projects with an element of hyper pilot; 30 HyperIntelligence deals closed in Q1 and 549 opportunities remain in the pipeline.
10% of product license revenue was comprised of “Bring Your Own License” solutions in which customers use MicroStrategy’s cloud solutions to deploy in their own cloud instance.
Management believes the company remains on track to deliver constant currency revenue growth for the year.
NTCT: NETSCOUT Reports Financial Results for Fourth Quarter and Full Fiscal Year 2019
NETSCOUT reported Q4 ’19 results consistent with the company’s preannouncement and guided FY ’20 below consensus.
Non-GAAP revenue of $235.2 million (-1.4% Y/Y) was in line with management’s updated guidance of $235.0 million. Adjusted EBITDA was $76.0 million (32.3% margin). Non-GAAP EPS of $0.66 exceeded management’s original guidance of $0.59-$0.64.
Excluding the divestiture of the Handheld Network Test (HNT) tools business, organic growth was 3.3% driven by strong growth in enterprise sales.
A higher mix of Arbor security and software-only transactions boosted product gross margin to 80%.
Management continues to believe revenues from the company’s largest service provider customers has stabilized.
Guidance for Q1 includes revenues of $195.0-$200.0 million and non-GAAP EPS of $0.06-$0.08, below consensus of $202.2 milion and $0.16.
Management’s FY ’20 guidance calls for $885.0-$915.0 million and $1.40-$1.45 in revenues and non-GAAP EPS respectively, below the Street’s $922.1 million and $1.51.
OTEX: OpenText Reports Third Quarter Fiscal Year 2019 Financial Results
OpenText reported Q3 ’19 results above expectations, but management’s commentary regarding Q4 points to a more tempered sequential uptick than anticipated by the Street.
Total revenues of $719.1 million (+4.9% Y/Y) were above consensus of $710.4 million. Adjusted EBITDA of $261.8 million (36.4% margin) also exceeded consensus of $250.3 million. Non-GAAP EPS were $0.64, beating the Street’s $0.60.
Key metrics: annual recurring revenues increased 5.4% Y/Y to $549.4 million; 20 customer transactions in excess of $1 million, including 8 in the OpenText Cloud and 12 on-premise.
The company’s core content services market, which represents a $15 billion total addressable market, delivered double-digit cloud growth and a 38.5% adjusted EBITDA margin.
Quarterly factors to consider for Q4 include ongoing global recession concerns, a negative revenue impact of approximately $20 million due to FX, no sequential uplift relative to Q3 given the strong performance, and a positive long-term outlook.
Reflecting confidence in the company’s long-term model and cash flow performance, OpenText also announced a 15% increase in its quarterly cash dividend to $0.1746 per share.
PAYC: Paycom Software, Inc. Reports First Quarter 2019 Results, Raises Guidance for Full Year 2019
Paycom Software delivered Q1 ’19 results above expectations and raised guidance for FY ’19.
Revenues of $199.9 million (+29.9% Y/Y) were ahead of management’s $194.0-$196.0 million guidance and consensus of $195.5 million. Adjusted EBITDA of $103.3 million (51.7% margin) also exceeded management’s $97.0-$99.0 million guidance and consensus of $98.3 million. Non-GAAP EPS of $1.19 beat the Street’s $1.11.
Management attributed the Q1 performance to the strength of the company’s software offering, focused sales efforts and its concentrated employee usage strategy.
The release of Direct Data Exchange, which tracks all data changes made to HR databases by employees and others to identify operating inefficiencies caused by duplicative data entry, was highlighted as a highly differentiated enhancement for clients.
Paycom recently broke ground on a new operations center in Grapevine, TX and plans to expand its sales organization throughout 2019 and beyond.
Guidance for Q2 includes revenues of $162.5-$164.5 million and adjusted EBITDA of $62.5-$64.5 million, comparing favorably with consensus expectations for $162.6 million in revenue and $62.1 million in adjusted EBITDA.
Management raised its prior FY ’19 guidance from $710.0-$712.0 million in revenue and $288.0-$290.0 million in adjusted EBITDA to $718.0-$720.0 million and $296.0-$298.0 million in revenue and adjusted EBITDA, respectively.
PS: Pluralsight Announces First Quarter 2019 Results
Pluralsight reported Q1 ’19 results ahead of expectations, but provided a mixed outlook for Q2 and FY ’19.
Revenue was $69.6 million (+40.2% Y/Y), above management’s $68.0-$68.5 million guidance and consensus of $68.4 million. Non-GAAP operating income of $(10.3) million (-14.8% margin) was also above consensus of $(11.7) million. Non-GAAP EPS were $(0.07), exceeding management’s $(0.09)-$(0.08) guidance and the Street’s $(0.09).
Key metrics: billings increased 41% Y/Y to $77.9 million; dollar-based net retention rate was 128%; 318 customers with annual billings in excess of $100,000 at quarter-end.
Pluralsight remains committed to expanding quota-carrying sales headcount to the high-200s and possibly the 300s this year.
Q2 guidance includes revenue of $73.5-$74.0 million, above consensus of $72.3 million, and non-GAAP EPS of $(0.15)-$(0.13), below the Street’s $(0.08).
Management raised its FY ’19 revenue guidance from $306.0-$314.0 million to $312.0-$318.0 million, but reduced its non-GAAP EPS expectations from $(0.32)-$(0.26) to $(0.42)-$(0.38).
Post-integration, the pending acquisition of GitPrime is expected to boost 2020 billings growth by 500 basis points and be neutral to non-GAAP EPS.
QLYS: Qualys Announces First Quarter 2019 Financial Results
Qualys reported upside Q1 ’19 results and raised its FY ’19 non-GAAP EPS guidance on an unchanged revenue outlook.
Revenues of $75.3 million (+16.1% Y/Y) were above the high-end of management’s $74.5-$75.2 million guidance and consensus of $74.9 million. Non-GAAP operating income of $24.2 million (32.1% margin) also exceeded consensus of $21.0 million. Non-GAAP EPS of $0.49 beat management’s $0.41-$0.43 guidance and the Street’s $0.42.
Key metrics: billings increased 22.8% Y/Y to $85.2 million; Cloud Agent adoption over the past 12 months rose to 17.9 million subscriptions, up from 16.2 million in the prior year period; new products released since 2015 comprised 23% of total bookings; average sales size increased 15%.
Qualys aims to make its Cloud Agents ubiquitous as it enables customers to consolidate a plethora of enterprise agents spanning vulnerability management, policy compliance, IOC, FIM, asset inventory and now patch management.
Q2 guidance includes revenues of $78.2-$78.7 million, in line with consensus of $78.5 million, and non-GAAP EPS of $0.46-$0.48, above the Street’s $0.45.
Management reaffirmed prior FY ’19 revenue guidance of $320.0-$323.0 million and increased its non-GAAP EPS expectations from $1.84-$1.89 to $1.89-$1.94.
QUMU: Qumu Announces First Quarter 2019 Results, Reiterates Confidence in Annual Guidance
Qumu reported Q1 ’19 results well above consensus and reaffirmed prior expectations for FY ’19.
Revenue of $7.1 million (+46.9% Y/Y) exceeded consensus of $5.6 million. Adjusted EBITDA of $0.2 million also exceeded consensus of $(1.3) million. EPS of $(0.10) were well ahead of the Street’s $(0.23).
Gross margin reached a record high driven by major opportunities generated by channel partners, which involved large term license renewals and limited hardware sales.
Landed seven significant new enterprise customers in Q1; customer retention rate was 92%.
The sales pipeline remains strong with over 3.5 times revenue coverage for 2019.
Management reiterated its prior FY ’19 expectations for annual contract value bookings growth of 20%-25%, revenue of $27 million, adjusted EBITDA of $(1.5) million, and net loss of approximately $(5.1) million.
RDWR: Radware Announces First Quarter 2019 Earnings
Radware reported Q1 ’19 results above expectations and provided mixed guidance for Q2.
Revenues of $61.4 million (+12.6% Y/Y) were above management’s $58.5-$60.0 million guidance and consensus of $59.3 million. Non-GAAP operating income was $7.6 million (12.4% margin), also above consensus of $4.6 million. Non-GAAP EPS of $0.18 beat management’s $0.12-$0.13 guidance and the Street’s $0.13.
Q1 results were boosted somewhat by the recognition of some carrier revenues that were anticipated in Q2.
The company has already released a fully integrated Bot Management solution into its Cloud WAF following the acquisition of ShieldSquare in mid-March and has won its first customer for the service.
Stable headcount excluding the 62 employees added from ShieldSquare was below plan, and Radware is in the process of increasing its sales force and support staff.
While pipeline related to the Cisco partnership has increased significantly, revenue contribution remains below plan due to longer sales cycles.
The Board of Directors has authorized a new one-year $40 million share repurchase plan.
Management’s Q2 guidance calls for revenues of $59.0-$61.0 million, below consensus of $62.0 million, and non-GAAP EPS of $0.12-$0.15, in line with the Street’s $0.13.
RPD: Rapid7 Announces First Quarter 2019 Financial Results
Rapid7 reported Q1 ’19 results ahead of expectations and raised revenue guidance for FY ’19.
Revenue of $73.2 million (+34.2% Y/Y) exceeded management’s $68.9-$70.5 million guidance and consensus of $69.9 million. Non-GAAP operating income was $0.6 million (0.8% margin), well above management’s $(5.5)-$(4.5) million guidance and consensus of $(4.5) million. Non-GAAP EPS were $0.02, beating guidance and consensus of $(0.08).
Key metrics: ARR of $268.2 million (+50.8% Y/Y); 7,934 customers (+11.5% Y/Y); ARR per customer of 33.8 (+35.2% Y/Y); 120% renewal rate.
Rapid7 remains excited by the expansionary parts of its SecOps portfolio, which saw triple-digit ARR growth in InsightIDR and strong adoption for InsightAppSec.
Acquired NetFort Technologies, a provider of end-to-end network traffic visibility and analytics cloud, virtual and physical platforms, for $15.0 million in cash in April.
The company’s 2019 goals are to focus on growth, make it easier for customers to adopt its platform, and to drive leverage in the business.
Guidance for Q2 calls for revenue of $74.3-$75.9 million, $(4.7)-$(3.7) million in non-GAAP operating income, and $(0.08)-$(0.06) in non-GAAP EPS, which was mixed relative to the Street’s $73.6 million in revenue, $(1.3) million in non-GAAP operating income and $(0.01) in non-GAAP EPS.
Management raised its FY ’19 revenue guidance from $304.0-$312.0 million to $312.0-$318.0 million, while leaving its prior profitability expectations unchanged.
SHOP: Shopify Announces First-Quarter 2019 Financial Results
Shopify reported Q1 ’19 results above expectations and raised guidance for FY ’19.
Total revenue of $320.5 million (+49.5% Y/Y) exceeded management’s guidance of $305.0-$310.0 million and consensus of $309.9 million. Non-GAAP operating income was $(1.4) million (-0.4% margin), ahead of management’s $(15.0)-$(13.0) million guidance and consensus of $(12.8) million. Non-GAAP EPS were $0.09, beating consensus of $(0.04).
Key metrics: Monthly Recurring Revenue (MRR) of $44.2 million (+36% Y/Y); Gross Merchandise Volume (GMV) of $11.9 billion (+50% Y/Y); Gross Payments Volume (GPV) of $4.9 billion (+63% Y/Y).
The number of orders processed on Shopify Pay has more than doubled Y/Y to over 10 million transactions as 30 million buyers have opted-in to the service.
Merchant adds for Shopify Plus nearly matched prior quarter levels despite Q4 typically representing a stronger period.
Shopify Shipping rolled out more favorable pricing to merchants for its USPS offering.
Shopify Capital issued $87.8 million (+45% Y/Y) in merchant cash advances and loans in the quarter.
Partners added over 200 apps in Q1, bringing the total to over 2,700 and the company has over 19,000 partners that referred merchants to the platform in the past 12 months.
Shopify plans to spend $30 million on brand marketing over the remainder of the year.
Guidance for Q2 includes $345.0-$350.0 million in revenue, above consensus of $342.4 million, and non-GAAP operating income of $(8.0)-$(6.0) million, below consensus of $(2.9) million.
Management raised its prior FY ’19 guidance from $1.46-$1.48 billion in revenue and $10.0-$20.0 million in non-GAAP operating income to $1.48-$1.50 billion and $20.0-$30.0 million, respectively.
DATA: Tableau Reports First Quarter 2019 Financial Results
Tableau Software reported mixed Q1 ’19 results and raised the low-end of its prior FY ’19 guidance ranges.
Total revenue was $282.5 million (+14.7% Y/Y), within management’s guidance of $278.0-$292.0 million, but short of the Street’s $287.3 million. Non-GAAP operating income of $(2.7) million (-1.0% margin) was at the high-end of management’s guidance and above the Street’s $(4.6) million. Non-GAAP EPS of $0.02 beat management’s guidance and the Street’s $(0.01).
Key metrics: 16 customers with purchases in excess of $1 million; ARR of $902.0 million (+40.5% Y/Y), including subscription ARR of $510.1 million (+114.8% Y/Y); remaining performance obligations of $254.0 million (+121.8% Y/Y); combined renewal rates remain in excess of 90%.
Strong customer demand was driven by healthy customer expansion activity and continued subscription adoption, which rose to 84% of the mix in Q1
Management’s Q2 guidance calls for revenue of $313.0-$328.0 million, a 7%-10% non-GAAP operating margin (implies non-GAAP operating income of $21.9-$32.8 million), and non-GAAP EPS of $0.22-$0.33, falling short of the Street’s $330.5 million in revenue, $41.5 million in non-GAAP operating income, and $0.41 in non-GAAP EPS.
For FY ’19, management raised its ARR guidance from $1.12-$1.15 billion to $1.13-$1.16 billion and increased the low-end of its revenue and non-GAAP EPS guidance, which now calls for $1.34-$1.40 billion and $1.58-$1.85, respectively.
TWLO: Twilio Announces First Quarter 2019 Results
Twilio’s Q1 ’19 results topped expectations and management raised guidance for FY ’19.
Total revenue of $233.1 million (+80.6% Y/Y) exceeded management’s $222.0-$225.0 million guidance and consensus of $223.7 million. Non-GAAP operating income of $3.4 million (1.4% margin) was above management’s guidance for a slight loss, and non-GAAP EPS of $0.05 also beat guidance of $0.00-$0.01 and the Street’s $0.01.
Key metrics: 154,797 active customer accounts (+186.7% Y/Y) at quarter-end; dollar-based net expansion rate of 146%.
Q1 was the first full quarter of general availability for Flex, and feedback from early adopters has been great.
The integration of SendGrid remains on track with early traction in the company’s cross-selling motion.
Twilio’s base revenues increased over 60% Y/Y on an organic basis, while SendGrid’s growth exceeded 30%.
Verizon is establishing a new application-to-person (A2P) offering for long code SMS messages that will add a $0.25 fee per message to all businesses with A2P SMS messaging use cases beginning in mid-May; Twilio plans to pass the fee along to customers, which will not impact gross profit dollars but will impact the gross margin percentage.
Management’s Q2 guidance includes revenue of $262.0-$265.0 million, non-GAAP operating income of breakeven to $1.0 million, and non-GAAP EPS of $0.02-$0.03, above consensus of $253.4 million in revenue, $(1.2) million in non-GAAP operating income, and $0.02 in non-GAAP EPS.
Management raised its FY ’19 revenue and non-GAAP EPS guidance from $1.065-$1.077 million and $0.08-$0.11, respectively, to $1.102-$1.111 million and $0.11-$0.13. Non-GAAP operating income guidance remained relatively unchanged with the low-end moving up from $4.0 million to $5.0 million and high-end remaining intact at $8.0 million.
TYL: Tyler Technologies Reports Earnings for First Quarter 2019
Tyler Technologies reported mixed Q1 ’19 results and reaffirmed prior expectations for FY ’19.
Non-GAAP revenues of $248.8 million (+12.4% Y/Y) fell short of the Street’s $252.1 million. Non-GAAP operating income of $63.0 million (25.3% margin) was approximately in line with consensus of $63.7 million. Non-GAAP EPS of $1.22 were also in line with consensus.
Key metrics: total backlog of $1.26 billion (+4.9% Y/Y), including software-related backlog of $1.22 billion (+4.8% Y/Y) at quarter-end; bookings increased 17% Y/Y to $228 million; added 128 new subscription-based arrangements and converted 13 existing on-premises clients; signed 35 new contract with software licenses in excess of $100,000.
The quarter was heavily weighted towards subscription arrangements, which comprised 54% of total new software contract value in Q1, and new business for the company’s ERP solutions was robust.
Management reaffirmed prior guidance of $1.09-$1.11 billion in non-GAAP revenues and $5.20-$5.35 in non-GAAP EPS.
UPLD: Upland Software Reports First Quarter 2019 Financial Results
Upland Software reported Q1 ’19 results in line with expectations and reaffirmed prior guidance for FY ’19.
Total revenue of $48.5 million (+53.4% Y/Y) was within management’s $47.9-$48.9 million guidance and in line with consensus of $48.4 million. Adjusted EBITDA of $17.8 million (36.6% margin) was at the high-end of guidance and slightly above consensus of $17.5 million. Non-GAAP EPS of $0.53 beat consensus by a penny.
Key metrics: added 161 new customers, including 28 major accounts; expanded 231 existing relationships, including 24 major expansions.
Management’s Q2 guidance includes revenue of $49.9-$51.9 million and adjusted EBITDA of $17.7-$18.7 million, in line with consensus of $50.4 million and $18.2 million, respectively.
Management reaffirmed its FY ’19 guidance for $202.4-$206.4 million in revenues and $73.7-$76.1 million in adjusted EBITDA.
VIAV: VIAVI Announces Third Quarter Fiscal 2019 Results
VIAVI reported Q3 ’19 results above expectations and guided Q4 in line with consensus.
Net revenue of $265.2 million (+21.3% Y/Y) was near the high-end of management’s guidance and above consensus of $258.8 million. Non-GAAP operating income was $39.0 million (14.7% margin). Non-GAAP EPS of $0.13 were at the high-end of management’s $0.11-$0.13 guidance and beat consensus by a penny.
OSP segment revenue outpaced expectations due to upside from both Anti-Counterfeiting and 3D Sensing.
NSE revenue increased significantly Y/Y due to the acquisitions of the AvComm and Wireless businesses as well as organic growth in Fiber products; book to bill for the segment was below 1.
Management’s Q4 guidance calls for net revenue of $268.0-$288.0 million and non-GAAP EPS of $0.14-$0.16, both of which were in line with Street expectations for $274.0 million in revenue and $0.15 in non-GAAP EPS.
WK: Workiva Announces First Quarter 2019 Financial Results
Workiva reported Q1 ’19 results ahead of expectations and raised its FY ’19 revenue outlook slightly.
Total revenue of $70.0 million (+16.8% Y/Y) was above management’s $68.8-$69.3 million guidance and consensus of $69.1 million. Non-GAAP operating income of $0.9 million (1.2% margin) exceeded management’s expectations for a loss and consensus of $(1.7) million. Non-GAAP EPS of $0.01 also beat management’s guidance and the Street’s $(0.04).
Key metrics: added 26 customers for a total of 3,366 customers (+7.3% Y/Y) at quarter-end; 95.7% revenue retention rate excluding add-ons and 110.7% including add-ons; 493 customers (+47.2% Y/Y) with an annual contract value in excess of $100,000 at quarter-end.
Workiva plans to accelerate hiring in the next few quarters to capitalize on attractive opportunities for revenue growth.
For Q2, management anticipates revenue of $68.6-$69.1 million, non-GAAP operating income of $(4.7)-$(4.2) million, and non-GAAP EPS of $(0.11)-$(0.10), all of which compared favorably versus Street expectations for $68.6 million, $(4.9) million, and $(0.12) in revenue, non-GAAP operating income, and non-GAAP EPS, respectively.
Management raised its FY ’19 revenue guidance slightly from $282.5-$284.5 million to $284.0-$286.0 million, while leaving prior profitability expectations generally intact.
ZEN: Zendesk Announces First Quarter 2019 Results
Zendesk reported Q1 ’19 results slightly ahead of expectations and raised the midpoint of its FY ’19 guidance ranges.
Revenue was $181.5 million (+39.8% Y/Y), slightly above management’s $178.0-$180.0 million guidance and consensus of $179.5 million. Non-GAAP operating income of $0.6 million (0.3% margin) was also ahead of management’s guidance of $(2.0) million to breakeven and consensus of $(0.5) million. Non-GAAP EPS were $0.04, beating consensus by a penny.
Key metrics: paid customer accounts reached 145,600; The Zendesk Suite had over 3,500 paid customers at quarter-end; dollar-based net expansion rate of 118%; remaining performance obligations (RPO) of $441 million, up 54% Y/Y.
Management’s Q2 guidance includes $191.0-$193.0 million in revenue and $0-$2.0 million in non-GAAP operating income, in line with consensus of $191.3 million in revenue and $1.1 million in non-GAAP operating income.
For FY ’19, management raised its prior revenue guidance from $795.0-$805.0 million to $802.0-$810.0 million and increased the low-end of its non-GAAP operating income from $13.0 to $14.0 million, resulting in a revised outlook of $14.0-$18.0 million.
ZIXI: Zix Reports First Quarter 2019 Financial Results
Zix reported Q1 ’19 results above expectations and raised guidance for FY ’19.
Revenue of $29.3 million (+75.9% Y/Y) exceeded management’s $26.5-$27.5 million guidance and consensus of $27.2 million. Adjusted EBITDA was $5.8 million (19.8% margin), above consensus of $3.8 million. Non-GAAP EPS of $0.07 beat management’s $0.03-$0.04 guidance and consensus of $0.04.
On a standalone basis, Zix recorded organic growth of 10%, achieved record first year orders of $4 million, and had record total orders of $22.4 million.
Total billings increased 14.6% Y/Y to $28.5 million; total ARR increased 174.9% to $188.0 million; organic ARR increased 15% to $78.3 million; overall organic ARR growth for Zix and AppRiver was 16%.
Net dollar retention was 100% in the quarter.
Management’s Q2 guidance includes $44.5-$45.0 million in revenue and $0.11-$0.12 in non-GAAP EPS, above consensus of $44.4 million in revenue and $0.08 in non-GAAP EPS.
Management raised its prior FY ’19 revenue guidance from $164.0-$167.0 million to $167.0-$169.0 million and increased its non-GAAP EPS guidance from $0.30-$0.33 to $0.40-$0.42. FY ’19 ARR guidance was also raised from $200.0-$207.0 million to $202.0-$209.0 million.
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 NetScout Systems (NTCT).