K. Liu's Week in Review
With results from the last of the March quarter reporters out, it remains clear that most vendors experienced elongating sales cycles in the final weeks of Q1 but have seen activity levels rebound thus far in Q2. That said, few have expressed any great confidence that recent trends will remain intact through the more critical selling period near quarter-end and only a small minority are willing to put forth expectations beyond the current quarter. Of the three companies in the observability space that reported this week, Datadog (DDOG) impressed the most following strong Q1 results, upside Q2 guidance and an uplift in the company’s outlook for the year. Despite intensifying competition, Datadog’s land and expand model coupled with usage-based pricing has remained effective in capturing new logos and sustaining strong dollar-based net revenue retention rates. Of note, usage has increased of late due to the company’s exposure to customers in the streaming media, gaming, food delivery and collaboration industries. Dynatrace (DT) reported similar dynamics, outperforming in its fiscal Q4 despite a modest impact on new bookings from COVID-19 in March. Guidance for the company’s fiscal Q1 also came in ahead of consensus as bookings are off to a strong start in April and demand for mobile monitoring is surging. However, Dynatrace’s full year outlook was mixed relative to Street expectations, perhaps reflecting a degree of caution given the uncertainty that prevails. Finally, New Relic (NEWR) also reported quarterly results above expectations although management’s commentary reflected more of an impact from the pandemic. Sales cycles elongated and some customers sought more flexible payment terms as the quarter progressed. Guidance for the current quarter was mixed although that was more of a function of expected gross margin compression in the current fiscal year as New Relic transitions to the public cloud and sunsets its own data centers. Still, the company refrained from providing a full year outlook, suggesting a higher degree of uncertainty relative to its peers.
At Cornerstone OnDemand (CSOD), founder and CEO Adam Miller will become co-chair of the company’s Board of Directors. Phil Saunders, former CEO of recently acquired Saba Software, will take the reins of the combined company, effective June 15, 2020. With sales to new logos proving more challenging in the current environment, the merger between Cornerstone and Saba appears timely given ample cross-sell and up-sell opportunity into a base of some 7,000 customers. Moreover, management has identified an incremental $15 million in synergies on top of the $35 million initially anticipated. Of course, the combination came at a hefty, albeit lowered, price tag, and management sought to assuage any balance sheet concerns by presenting an improving liquidity picture even if Cornerstone is unable to generate any new ARR for the next seven quarters. The bigger question in our mind is how customers will perceive the company’s plans to undertake limited integration of the two platforms. Other notable executive moves this week include PROS Holdings’ (PRO) appointment of Les Rechan as Chief Operating Officer, a newly created role in which he will oversee all go-to-market and customer experience and engagement functions, and Salesforce’s (CRM) promotion of Gavin Patterson to President and Chief Revenue Officer, putting him in charge of the company’s global sales organization.
In other news, Agilysys (AGYS) secured $35 million in funding through the sale of convertible preferred stock with a 5.25% dividend and a conversion price of approximately $20.17 per share to MAK Capital One, an investment firm led by Agilysys’ Chairman, Michael Kaufman. On an as-converted basis, MAK Capital now owns approximately 16% of outstanding shares. CyberArk (CYBR) acquired Idaptive for $70 million in cash, representing a multiple of approximately 4x recurring revenue. The acquisition of Idaptive’s Identity as a Service platform, which includes capabilities for single sign-on, multi-factor authentication and identity lifecycle management, expands the company’s total addressable market opportunity into the $25 billion access management space and more than doubles the company’s annual recurring revenue base. Speaking of identity, Ping Identity (PING) priced a follow-on offering of 8.5 million shares by selling stockholders, including Vista Funds and several named executive officers, at $24.00 per share, representing a 15% discount to the close price prior to the announced offering. The underwriters have been granted a 30-day option to purchase up to an additional 1.275 million shares on the same terms and conditions.
Mergers & Acquisitions
CyberArk Acquires Identity as a Service Leader Idaptive
CyberArk (CYBR) has acquired IDaptive Holdings, a leading provider of Identity as a Service solutions spanning single-sign on, multi-factor authentication and identity lifecycle management, for $70 million in cash.
The acquisition expands CyberArk’s total addressable market into the $25 billion access management market and extends its ability to manage and protect identities with various levels of privileges across hybrid and multi-cloud environments.
Idaptive more than doubles the company’s SaaS ARR, adding $16-$18 million to CyberArk’s $13 million base.
Earnings Releases
8x8, Inc. Reports Fourth Quarter and Fiscal 2020 Financial Results
8x8 (EGHT) reported Q4 ’20 results above expectations and guided Q1 generally in line with consensus.
Revenue of $121.5 million (+29.6% Y/Y) was above guidance for $118.9-$119.4 million and consensus of $119.3 million. Non-GAAP operating income was $(12.9) million (-10.7% margin), ahead of the Street’s $(14.0) million. Non-GAAP EPS of $(0.12) beat consensus of $(0.14).
Key metrics: annual recurring revenue (ARR) of $426.4 million (+34% Y/Y); closed 42 deals with ARR over $100,000 for a total of 611 customers (+50% Y/Y) with ARR over $100,000; net dollar retention was just under 100%.
The results were driven by continued success with mid-market and enterprise customers as well as strong execution in the channel, which drove 54% of new bookings and increased bookings 63% Y/Y.
Higher churn in legacy small business VoIP customers has put pressure on the net dollar retention rate, although management noted that net dollar retention rate in the enterprise and mid-market segment has been just under 110%.
8x8 launched its first standalone paid meeting product in April and has already seen significant activity.
Q1 guidance for revenue of $120.0-$121.0 million and pre-tax income of $(12.0) million (implies approximately $(0.12) in non-GAAP EPS) was generally in line with Street expectations for $121.0 million in revenue and $(0.11) in non-GAAP EPS.
While management refrained from providing FY ’21 guidance, expectations for the company to exit the year at breakeven non-GAAP profitability remain intact and service revenues are expected to increase 17%-18%.
Absolute Reports Fiscal 2020 Third Quarter Financial Results
Absolute (ABT-CA) reported Q3 ’20 results above expectations and raised its adjusted EBITDA guidance for FY ’20.
Revenue of $26.1 million (+4.7% Y/Y) was ahead of consensus of $25.7 million. Adjusted EBITDA was $6.1 million (23.2% margin), exceeding the Street’s $4.6 million. EPS of $0.05 beat consensus by a penny.
Key metrics: annual contract value (ACV) base was $101.4 million (+7% Y/Y); incremental ACV from new customers was $1.0 million; net ACV retention from existing customers was 100%.
The move to work from home towards quarter-end resulted in more devices connecting to Absolute’s platform with increases in both new and refurbished devices among enterprise customers and an uptick in demand in education.
Adjusted EBITDA has outpaced expectations thus far in the year due to efficient cost management, and management remains committed to the company’s dividend so long as the distribution does not limit its ability to operate the business.
Management reaffirmed its FY ’20 revenue guidance of $103.0-$106.0 million and raised its adjusted EBITDA margin outlook from 18%-22% to 21%-25%.
AudioEye Reports First Quarter 2020 Results
AudioEye (AEYE) reported Q1 ’20 results above consensus and reiterated its expectation for positive cash flow in 2021.
Revenue of $4.3 million (+114.6% Y/Y) exceeded consensus of $3.7 million. Operating income of $(1.7) million (-39.8% margin) was ahead of the Street’s $(2.1) million. EPS of $(0.19) beat consensus of $(0.23).
Key metrics: monthly recurring revenue (MRR) was $1.4 million (+17% Q/Q); bookings were $3.9 million (+14% Y/Y); total customer count over 11,000 (+900% Y/Y); remaining performance obligation of $17.2 million (+88% Y/Y).
Strong bookings in the quarter reflected consistent execution in the enterprise channel and improved performance within the vertical partner channel.
Expansion opportunity with existing partners remains substantial and is starting to take-off, and AudioEye is also seeing a lot of positive activity in its new digital marketplace.
As of the end of April, total customer count had grown to over 16,000 and MRR was approximately $1.5 million.
Management reaffirmed prior expectations for cash flow positivity in FY ’21.
Commvault Announces Fiscal 2020 Fourth Quarter Financial Results
Commvault (CVLT) reported Q4 ’20 results below expectations and guided Q1 ’21 short of consensus.
Revenues of $164.7 million (-9.2% Y/Y) were below consensus of $173.0 million. Non-GAAP operating income was $18.3 million (11.1% margin), also below consensus of $24.8 million. Non-GAAP EPS of $0.30 missed consensus of $0.38.
While COVID-19 impacted APJ and EMEA throughout the quarter and then extended into the Americas in March, the company was able to add 150 additional subscription customers in the quarter.
Approximately $10.0 million of completed subscription renewals were excluded from revenue and will be recognized in Q1 ’21 when the current subscriptions are due to expire.
The company has seen a decline in the volume of smaller portfolio transactions and believes customers may defer routine capacity add-ons until economic conditions begin to stabilize.
Short-term adjustments to the expense structure have been made to align with the current environment, most notably a temporary reduction in salaries.
Q1 guidance for revenue of $150.0-$155.0 million and a non-GAAP operating margin of 5.0%-7.0% (implies non-GAAP operating income of $7.5-$10.9 million) fell short of Street expectations for $164.6 million in revenue and $19.2 million in non-GAAP operating income.
Cornerstone OnDemand Announces First Quarter 2020 Financial Results
Cornerstone OnDemand (CSOD) reported Q1 ’20 results above expectations.
Revenue of $150.1 million (+7.2% Y/Y) was above guidance for $147.0-$150.0 million and consensus of $147.7 million. Non-GAAP operating income was $24.9 million (16.6% margin), exceeding consensus of $18.6 million. Non-GAAP EPS of $0.23 missed the Street’s $0.24.
Key metrics: 3,693 customers (+3.5% Y/Y) at quarter-end; approximately 7,000 customers on a pro forma basis including the recently acquired Saba customer base.
Due to the pandemic, new logo acquisition trended down at the end of Q1 as sales cycles began lengthening, and the company’s ability to cross-sell new products to clients also slowed a bit.
Per management, even if all new sales ceased for the next seven quarters, total liquidity would still rise from approximately $150 million on a pro forma basis at the end of Q1 ’20 to over $225 million at the end of FY ’21.
On a standalone basis, Saba ended 2019 with $243 million (+2% Y/Y) in ARR, comprised of core ARR of $200 million growing 10% and migration ARR of $44 million declining 23%, and unlevered free cash flow of $85 million.
Due to significant product overlap with Saba, the two products will not be integrated; rather, feature sets will be connected where they make sense and duplicated efforts will be eliminated to free up capacity for innovation.
Cornerstone has been able to augment and accelerate the synergies from the Saba acquisition and now expects to realize $50 million in run-rate synergies exiting the year versus prior expectations for $35 million over a two-year period.
CyberArk Announces First Quarter 2020 Results
CyberArk (CYBR) reported Q1 ’20 results above expectations but guided Q2 below consensus.
Revenue of $106.8 million (+11.4% Y/Y) was within guidance for $106.0-$110.0 million and above consensus of $105.6 million. Non-GAAP operating income of $21.5 million (20.2% margin) exceeded guidance for $16.5-$19.5 million and consensus of $14.6 million. Non-GAAP EPS of $0.50 beat guidance for $0.35-$0.41 and consensus of $0.36.
Key metrics: signed nearly 160 new logos; add-on revenue from increasing customers increased 25% Y/Y and comprised 79% of license revenue; SaaS revenue represented close to 5% of license revenue.
Deal flow was strong and pipeline generation accelerated significantly in late March, although management noted license revenues were affected by COVID-19 uncertainty as some deals were pushed or canceled and others downsized.
April and early May have been strong, management has been pleased with close rates, and the number of opportunities progressing through the funnel has continued to rise.
Q2 guidance for revenue of $95.0-$105.0 million, non-GAAP operating income of $7.0-$16.0 million and non-GAAP EPS of $0.17-$0.35 fell short of Street expectations for $107.0 million, $16.7 million and $0.36, respectively.
Given the uncertainty associated with the COVID-19 pandemic, management withdrew its prior FY ’20 guidance.
Datadog Announces First Quarter Results
Datadog (DDOG) reported Q1 ’20 results above expectations and raised its FY ’20 guidance.
Revenue of $131.2 million (+87.4% Y/Y) exceeded guidance for $117.0-$119.0 million and consensus of $117.9 million. Non-GAAP operating income was $16.1 million (12.3% margin), exceeding guidance for $(7.0)-$(5.0) million and consensus of $(6.5) million. Non-GAAP EPS of $0.06 beat guidance for $(0.02)-$(0.01) and consensus of $(0.01).
Key metrics: billings were $137.9 million (+55% Y/Y); 960 customers with $100k+ ARR (+89% Y/Y); added 1,000 net new customers for a total of 11,500 customers (+40% Y/Y) at quarter-end; dollar-based retention rate was over 130%.
Datadog again saw broad-based strength across new logos and expansions as well as across customer segments and channels.
COVID-19 had no material impact on the quarter although some hard-hit industries began to be affected late in Q1 while others like streaming media, gaming, food delivery and collaboration substantially increased usage.
Management estimates that less than 10% of ARR comes from industries most negatively impact by the COVID-19 pandemic and less than 15% from a long tail of small businesses.
Although not seen yet, management’s guidance assumes some deal slippage due to the pandemic as well as some downward pressure in the dollar-based net retention rate in the next two quarters.
Q2 guidance for revenue of $134.0-$136.0 million, non-GAAP operating income of $(1.0)-$1.0 million and non-GAAP EPS of $0.00-$0.01 was above Street expectations for $126.4 million in revenue, $(8.3) million in non-GAAP operating income and $(0.02) in non-GAAP EPS.
Management raised its FY ’20 guidance for revenue, non-GAAP operating income and non-GAAP EPS for $535.0-$545.0 million, $(30.0)-$(20.0) million and $(0.07)-$(0.03), respectively, to $555.0-$565.0 million, $0-$10.0 million and $0.02-$0.06.
Dynatrace Reports Fourth Quarter and Full Year Fiscal Year 2020 Financial Results
Dynatrace (DT) reported Q4 ’20 results above expectations and provided a mixed outlook for FY ’21.
Revenue of $150.6 million (+29.6% Y/Y) was above guidance for $147.0-$148.0 million and consensus of $146.3 million. Non-GAAP operating income of $36.0 million (23.9% margin) also exceeded guidance for $33.5-$34.5 million and consensus of $33.5 million. Non-GAAP EPS of $0.11 beat guidance and consensus of $0.08.
Key metrics: annualized recurring revenue (ARR) of $572.8 million (+42% Y/Y); added 165 net new Dynatrace customers for a total of 2,373 (+74% Y/Y) at quarter-end; Dynatrace net expansion rate was 123%; Dynatrace ARR per customer was $220,000; Dynatrace ARR was 92% of total ARR versus 70% last year.
Despite a two-week pause in mid-March as the pandemic took hold, the company was only modestly impacted on the new bookings side with linearity and close rates generally in line with prior Q4s, new logos up and net expansion strong.
Digital experience has been a popular module extension, but Dynatrace has seen a surge in demand for mobile monitoring.
Management noted that the company is off to a fast start in its June quarter with April bookings a bit stronger than last year.
Q1 guidance for revenue of $148.0-$150.0 million, non-GAAP operating income of $38.0-$40.0 million and non-GAAP EPS of $0.09-$0.10 compared favorably with Street expectations for $149.5 million in revenue, $32.5 million in non-GAAP operating income and $0.07 in non-GAAP EPS.
Management’s FY ’21 outlook for revenue of $630.0-$640.0 million was short of Street expectations for $649.5 million but guidance for non-GAAP operating income and EPS of $146.0-$156.0 million and $0.39-$0.42, respectively, was above consensus of $146.4 million and $0.33.
Mimecast Announces Fourth Quarter and Full Year 2020 Financial Results
Mimecast (MIME) reported Q4 ’20 results above expectations and provided a mixed outlook for FY ’21.
Revenue of $114.2 million (+23.9% Y/Y) was above guidance for $112.9-$114.0 million and consensus of $112.6 million. Adjusted EBITDA of $24.0 million (21.0% margin) exceeded guidance for $20.2-$21.2 million and consensus of $20.5 million. Non-GAAP EPS of $0.15 beat consensus of $0.12.
Key metrics: added 1,200 net new customers for a total of 38,100 at quarter-end; average order value was $11,900 (+11% Y/Y); average services per customer was 3.3; revenue retention rate of 107%.
COVID-19 had no significant impact on Q4 revenue but did impact bookings to the tune of approximately $4 million as some customers deferred changes to their email security provider due to constraints on their IT team’s time and resources.
While new pipeline generation slowed in the last two weeks of March, pipeline build began to recover in April and through the first week of May.
Management expects business from new logos to remain below its targeted run rate for the first half of FY ’21 and gradually improve in 2H; anticipates lower levels of upsell to existing customers; and assumes net revenue retention of 106% to 107%.
Q1 guidance for revenue of $112.8-$113.8 million and adjusted EBITDA of $23.5-$24.5 million was mixed versus Street expectations for $116.0 million in revenue and $20.4 million in adjusted EBITDA.
Management’s FY ’21 guidance for revenue and adjusted EBITDA of $475.0-$485.0 million and $94.0-$96.0 million, respectively, was also mixed relative to consensus of $493.5 million and $91.5 million.
New Relic Announces Fourth Quarter and Full Fiscal Year 2020 Results
New Relic (NEWR) reported Q4 ’20 results above expectations and provided mixed guidance for Q1 ’21.
Revenue of $159.7 million (+20.9% Y/Y) was above guidance for $154.0-$156.0 million and consensus of $153.5 million. Non-GAAP operating income of $3.5 million (2.2% margin) exceeded guidance for $(2.0) million to breakeven and consensus of $(1.2) million. Non-GAAP EPS of $0.14 beat guidance for $0.02-$0.06 and consensus of $0.03.
Key metrics: annual recurring revenue (ARR) of $636 million; added 67 paid business accounts with over $100,000 in ARR for a total of 993 (+16% Y/Y) at quarter-end; dollar-based net expansion rate of 116%.
The first months of the quarter were positive but headwinds emerged in March as the pandemic and recession resulted in longer sales cycles and customers began imposing cost-cutting programs or requesting more flexible payment terms.
On the product side, New Relic has shipped an AIOps offering, New Relic AI, following a successful beta period, and recently shipped New Relic Edge with Infinite Tracing, a differentiated solution for tail-based sampling.
Gross margin is expected to decline from 84% in Q4 to the high-70s in FY ’21 as New Relic moves to the public cloud and sunsets its data centers.
Q1 guidance for revenue of $158.0-$160.0 million, non-GAAP operating income of $(3.0) million to breakeven and non-GAAP EPS of $(0.01)-$0.04 was mixed versus Street expectations for $159.7 million in revenue, $1.8 million in non-GAAP operating income and $0.08 in non-GAAP EPS.
NICE Reports 27% Growth in Cloud Revenue for the First Quarter of 2020
NICE (NICE) reported Q1 ’20 results above expectations and provided a mixed outlook for Q2.
Non-GAAP revenue of $411.2 million (+8.8% Y/Y) was at the midpoint of guidance for $406.0-$416.0 million and slightly above consensus of $410.1 million. Non-GAAP operating income of $110.5 million (26.9% margin) was also ahead of the Street’s $110.2 million. Non-GAAP EPS of $1.34 was within guidance for $1.27-$1.37 and beat the Street’s $1.32.
Strong growth in the cloud was again driven by CXone, which had multiple seven-figure ACV deals with many new logos.
NICE launched CXone@Home in response to the requisite shift of contact center employees to work from home and has already seen a few dozen organizations adopt the offering with many more in the pipeline.
Management expects that some customers may delay decisions in the near-term, making it difficult to predict license revenue.
Q2 guidance for $387.0-$397.0 million in non-GAAP revenue and $1.28-$1.38 in non-GAAP EPS was mixed relative to Street expectations for $407.8 million in revenue and $1.32 in non-GAAP EPS.
Due to uncertainties related to the COVID-19 pandemic, management withdrew its prior FY ’20 guidance.
RADCOM Reports First Quarter 2020 Results
RADCOM (RDCM) reported mixed Q1 ’20 results and reaffirmed its FY ’20 revenue outlook.
Revenues of $8.3 million (+37.7% Y/Y) were slightly ahead of the Street’s $8.0 million. Non-GAAP operating income was $(2.5) million (-30.3% margin), below consensus of $(1.7) million. Non-GAAP EPS of $(0.17) missed consensus of $(0.11).
In Q1, RADCOM worked closely with Rakuten Mobile to help prepare them for their commercial launch and continues to support them following their launch of the first fully virtualized mobile network in April.
Although management acknowledged that COVID-19 could affect sales cycles, RADCOM continues to see a flow of new RFP activity with no significant disruption in its ability to pursue this new business.
The next stage of the 5G standard has been postponed until June 2020 due to COVID-19 but most operators are moving forward with their network roadmap as planned.
Expenses in Q1 were impacted by one-time hardware component expenses related to a project as well as delayed grants.
Management reaffirmed its FY ’20 guidance for revenue of $35.0-$38.0 million.
SharpSpring Reports First Quarter 2020 Results
SharpSpring (SHSP) reported mixed Q1 ’20 results and reaffirmed prior guidance for FY ’20.
Revenue of $7.1 million (+32.4% Y/Y) was above consensus of $6.9 million. Adjusted EBITDA of $(1.8) million (-25.0% margin) was short of consensus of $(1.4) million. Non-GAAP EPS of $(0.07) beat consensus of $(0.14).
Key metrics: added 321 new customers expected to generate ARR of $2.3 million over the next year; 2,000 agency customers, over 500 direct customers and over 8,500 total businesses using the SharpSpring Marketing Automation platform at quarter-end; net revenue retention was 99.6%; customer acquisition cost was $8,750.
In Q1, SharpSpring experienced margin compression due to low contribution margin from the acquired Perfect Audience business but has since seen meaningful expansion following the expiration of a shared service contract in March.
Although SharpSpring’s customer base is mostly geared towards small and medium-sized businesses, management believes the relatively low attrition rates since the outbreak will continue as most customers are B2B-focused organizations and have the wherewithal to hire a digital marketing agency to grow sales.
Management reiterated prior guidance for FY ’20 revenue of $30.0-$31.0 million.
Synchronoss Technologies Announces First Quarter 2020 Results
Synchronoss Technologies (SNCR) reported Q1 results above consensus and reaffirmed its FY ’20 adjusted EBITDA outlook.
Revenues of $77.1 million (-12.5% Y/Y) were above consensus of $74.4 million. Adjusted EBITDA of $1.8 million (2.3% margin) was also above consensus of $1.3 million. Non-GAAP EPS of $0.06 beat consensus of $(0.42).
Q1 results exceeded internal expectations, and management noted that the company has seen little indication of cancellations or deferral of deals in the business.
COVID-19 is having an impact on Synchronoss’ customers, however, as a high percentage of its carriers’ retail stores remain closed with no clear timeline for reopening and transactions associated with new phone activations and upgrades are down.
To shore up cash and position the company for when COVID-19 subsides, Synchronoss has taken actions to reduce operating expenses by over $40 million on an annual basis, of which $30 million will be realized in 2020.
All revenue generating teams, product management, marketing, go-to-market and delivery have been consolidated under Chief Commercial Officer Jeff Miller.
In its digital business, Synchronoss has sold STI to APC Holdings and has signed a new commercial agreement with STI APC to resell Synchronoss’ digital platforms.
Due to uncertainties related to COVID-19, management withdrew its prior FY ’20 revenue guidance but reaffirmed its adjusted EBITDA outlook of $25.0-$35.0 million.
Tufin Announces First Quarter 2020 Results
Tufin (TUFN) reported Q1 ‘20 results in line with its April 23 pre-announcement and refrained from providing guidance.
Revenue of $21.2 million (-5.4% Y/Y) was in line with the company’s pre-announced range of $21.0-$21.3 million. Non-GAAP operating income of $(13.3) million (-62.3% margin) was also within the pre-announced range of $(13.8)-$(13.0) million. Non-GAAP EPS of $(0.37) beat consensus of $(0.40).
Business was progressing well through the first two months of Q1 but was disrupted by COVID-19 towards quarter-end as customers shifted towards enabling remote work and others instituted budget freezes.
While some of the deals that slipped have since closed, the timing and monetization of other opportunities remain uncertain.
Tufin has taken actions to reduce costs, including modest headcount reductions, temporary compensation reductions, a temporary hiring freeze and cuts in nonessential spending.
Guidance for FY ’20 was previously withdrawn due to the uncertainty associated with the COVID-19 pandemic, and management opted not to provide Q2 guidance at this time.
Wix Reports First Quarter 2020 Results
Wix.com (WIX) reported Q1 ‘20 non-GAAP EPS above expectations and guided Q2 revenue ahead of consensus.
Revenue of $216.0 million (+23.9% Y/Y) was in line with guidance for $215.0-$217.0 million and consensus of $216.2 million. Non-GAAP operating income of $(4.2) million (-1.9% margin) exceeded consensus of $(6.1) million. Non-GAAP EPS of $(0.01) beat consensus of $(0.03).
Key metrics: collections of $248.9 million (+24% Y/Y) were at the high-end of guidance for $247.0-$249.0 million, comprised of $208.8 million (+18% Y/Y) from Creative Subscriptions and $40.1 million (+71% Y/Y) from Business Solutions; added 162,000 net premium subscriptions (+12% Y/Y); added 6.9 million registered users for a total of 172 million (+16% Y/Y).
In mid-March, Wix experienced a brief period of volatility arising from COVID-19 that impacted revenue and collections, but these trends have since reversed and the business has accelerated in conjunction with demand for creating an online presence.
In April, Wix added over 3.2 million new registered users (+63% Y/Y); increased collections from users acquired in the month by 76%; increased net premium subscriptions 207%, grew Wix Stores and Wix Restaurants subscriptions by 580% and 167%; respectively; and saw gross merchandise volume transacted across all payment methods increase 110% Y/Y.
Q2 guidance for revenue of $231.0-$233.0 million exceeded consensus of $227.5 million.
Due to the rapid changes arising from the COVID-19 pandemic, management withdrew its prior FY ’20 guidance.
Notable News
Agilysys Announces $35 Million Convertible Preferred Investment by MAK Capital
Agilysys (AGYS) has secured a $35 million investment from MAK Capital One, an investment management firm led by Michael Kaufman who also serves as Chairman of the Board of Directors of Agilysys.
MAK Capital has agreed to purchase $35 million of convertible preferred stock with a 5.25% dividend, payable in cash or in-kind for up to 50% of any dividend payment at the company’s election, and a conversion price of $20.1676 per share.
On an as-converted basis, MAK Capital now owns approximately 16.3% of Agilysys’ common shares outstanding.
Cornerstone Announces Leadership Transition
Cornerstone OnDemand (CSOD) announced that Founder and Chief Executive Officer, Adam Miller, will become co-chair of the Board of Directors.
Phil Saunders, the former CEO of Saba Software, has been appointed CEO of Cornerstone, effective June 15, 2020.
Ping Identity Announces Pricing of Follow-on Offering of Common Stock by Selling Shareholders
Ping Identity (PING) priced a secondary offering of 8.5 million shares by Vista Funds and several named executive officers, at $24.00 per share, representing a 15.4% discount to the close price prior to the announced offering.
The selling shareholders have also granted the underwriters a 30-day option to purchase up to an additional 1.275 million shares on the same terms and conditions.
The company will not receive any proceeds from the offering.
PROS Appoints Les Rechan as Chief Operating Officer
PROS Holdings (PRO) has appointed Les Rechan as Chief Operating Officer, a newly created role in which he will be responsible for all go-to-market and customer experience and engagement functions.
Mr. Rechan served on the company’s Board of Directors between 2015 and May 2020, and most recently served as President and Chief Executive Officer of Solace Corp.
Salesforce Appoints Gavin Patterson President and Chief Revenue Officer
Salesforce (CRM) has appointed Gavin Patterson as President and Chief Revenue Officer, a role in which he will lead the company’s global sales organization.
Mr. Patterson joined the company in 2019 as Chair of Europe, the Middle East and Africa, and was named President and CEO of Salesforce International earlier this year.