Attached files
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| 8-K - 8-K - ELLIE MAE INC | elli-8kx2015x1231.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE
Ellie Mae Reports Fourth Quarter and Full Year 2015 Results
Record Quarterly Seat Bookings of 16,200
Fiscal Year 2015 Revenue Up 57% to $253.9 Million
PLEASANTON, CA - February 11, 2016 - Ellie Mae® (NYSE:ELLI), a leading provider of innovative on-demand software solutions and services for the residential mortgage industry, today reported results for the fourth quarter and full year ended December 31, 2015.
Fourth Quarter 2015 Highlights
• | Revenue of $64.9 million, up 39% from $46.6 million in Q4 2014 |
• | Adjusted EBITDA of $17.1 million, up 34% from $12.8 million in Q4 2014 |
• | Net income of $4.8 million, compared to $4.3 million in Q4 2014 |
• | Record 16,200 SaaS Encompass® seats booked |
Full Year 2015 Highlights
• | Record revenue of $253.9 million, up 57% from $161.5 million in 2014 |
• | Adjusted EBITDA of $74.7 million, up 62% from $46.0 million in 2014 |
• | Net income of $22.3 million, compared to $14.8 million in 2014 |
• | 49,500 SaaS Encompass seats booked, up 35% in 2015 |
• | 136,167 active Encompass users, up 25% at the end of 2015 |
• | Revenue per average active Encompass user of $1,996, up 24% in 2015 |
“Our better than expected fourth quarter performance capped an outstanding year for Ellie Mae,” said Jonathan Corr, president and CEO of Ellie Mae. “Fourth quarter year-over-year revenue growth of 39% was driven by the continued ramp of Encompass users and adoption of our services. Total seat bookings reached an all-time high of 16,200 during the quarter and included a record 8,700 new customer seats, demonstrating our ongoing business momentum and the value of our offerings. Even with the record number of seats we booked in 2015, our new business pipeline remains very robust.”
“We have built a powerful all-in-one mortgage management platform and network that provides one system of record for lenders to originate and fund mortgages, is deeply integrated with a broad array of vendors, investors and agencies, and allows lenders to achieve loan quality, regulatory compliance and operating efficiency. Building on our successes, as we enter 2016 we plan to continue to drive growth by adding new users, introducing new services, and driving continued adoption of all our services.”
Financial Results
Total revenue for the fourth quarter of 2015 was $64.9 million, compared to $46.6 million for the fourth quarter of 2014. Net income for the fourth quarter of 2015 was $4.8 million, or $0.16 per diluted share, compared to net income of $4.3 million, or $0.14 per diluted share, for the fourth quarter of 2014.
On a non-GAAP basis, adjusted net income for the fourth quarter of 2015 was $13.5 million, or $0.44 per diluted share, compared to $11.5 million, or $0.38 per diluted share, for the fourth quarter of 2014. Adjusted EBITDA for the fourth quarter of 2015 was $17.1 million, compared to $12.8 million for the fourth quarter of 2014.
Total revenue for 2015 was $253.9 million compared to $161.5 million for 2014. Net income for 2015 was $22.3 million, or $0.72 per diluted share, compared to net income of $14.8 million, or $0.50 per diluted share, for 2014.
On a non-GAAP basis, adjusted net income for 2015 was $52.2 million, or $1.69 per diluted share, compared to $34.1 million, or $1.15 per diluted share, for 2014. Adjusted EBITDA for 2015 was $74.7 million, compared to adjusted EBITDA of $46.0 million for 2014.
Additional information about the non-GAAP financial measures presented in this release, including a reconciliation of the non-GAAP financial measures to their related GAAP financial measures, is set forth below under the section entitled “Use of Non-GAAP Financial Measures.”
Key Operating Metrics:
• | The total number of active Encompass users increased 25% year-over-year to 136,167; |
• | The total number of active users of the SaaS version of Encompass increased 43% year-over-year to 121,406, or 89% of all active Encompass users; and |
• | Revenue per average active Encompass user in the fourth quarter increased 10% year-over-year to $475. |
First Quarter and Full Year 2016 Financial Outlook
For the first quarter of 2016, our revenue is expected to be in the range of $67.5 million to $68.5 million. Net income is expected to be $1.0 million to $1.5 million, or $0.03 to $0.05 per diluted share. Adjusted net income is expected to be in the range of $8.9 million to $9.7 million, or $0.29 to $0.31 per diluted share. Adjusted EBITDA is expected to be in the range of $14.0 million to $15.1 million.
For the full year 2016, revenue is expected to be in the range of $317.0 million to $321.0 million. Net income is expected to be $22.2 million to $24.2 million, or $0.71 to $0.76 per diluted share. Adjusted net income is expected to be in the range of $56.1 million to $59.1 million, or $1.79 to $1.86 per diluted share. Adjusted EBITDA is expected to be in the range of $90.0 million to $94.5 million.
Quarterly Conference Call
Ellie Mae will discuss its fourth quarter and full year 2015 results today, February 11, 2016, via teleconference at 4:30 p.m. Eastern Time. To access the call, please dial 877-876-9177 or 785-424-1666 at least five minutes prior to the 4:30 p.m. Eastern Time start time. A live webcast of the call will be available on the Investor Relations section of the Company’s website at http://ir.elliemae.com. An audio replay of the call will be available through February 25, 2016 by dialing 888-203-1112 or 719-457-0820 and entering access code 9605419.
Use of Non-GAAP Financial Measures
Ellie Mae (the “Company”) provides investors with the non-GAAP financial measures of adjusted net income, adjusted EBITDA, and free cash flow in addition to the traditional GAAP operating performance measure of net income as part of its overall assessment of its performance. Adjusted net income consists of net income plus amortization of intangible assets, impairment loss on intangible assets, and stock-based compensation expense. EBITDA consists of net income plus depreciation, amortization of intangible assets, impairment loss on intangible assets, and income tax provision, less other income, net and income tax benefit. Adjusted EBITDA consists of EBITDA plus stock-based compensation expense. Free cash flow consists of net cash provided by operating activities less acquisition of property and equipment and internal-use software, net. Ellie Mae uses adjusted net income and adjusted EBITDA as measures of operating performance because they enable period to period comparisons by excluding potential differences caused by variations in the age and depreciable lives of fixed assets, the amortization of intangibles related to acquisitions, loss on impairment of intangible assets, and changes in interest expense and interest income that are influenced by capital market conditions. The Company also believes it is useful to exclude stock-based compensation expense from adjusted net income and adjusted EBITDA because the amount of non-cash expense associated with stock-based awards made at certain prices and points in time (a) do not necessarily reflect how the company’s business is performing at any particular time and (b) can vary significantly between periods due to the timing of new stock-based awards. These non-GAAP measures are not measurements of the Company’s financial performance under GAAP and have limitations as analytical tools. Accordingly, these non-GAAP financial measures should not be considered a substitute for, or superior to, net income or operating income or other financial measures calculated in accordance with GAAP. The Company cautions that other companies in Ellie Mae’s industry may calculate adjusted net income, EBITDA, and adjusted EBITDA differently than the Company does, further limiting their usefulness as a comparative measure. A reconciliation of net income to adjusted net income and adjusted EBITDA is included in the tables below.
Disclosure Information
Ellie Mae uses the investor relations section on its website as means of complying with its disclosure obligations under Regulation FD. Accordingly, investors should monitor Ellie Mae’s investor relations website in addition to following Ellie Mae’s press releases, SEC filings, and public conference calls and webcasts.
About Ellie Mae
Ellie Mae (NYSE:ELLI) is a leading provider of innovative on-demand software solutions and services for the residential mortgage industry. Mortgage lenders of all sizes use Ellie Mae’s Encompass® all-in-one mortgage management solution, Mavent Compliance Service, and AllRegs research, reference and education resources to improve compliance, loan quality, and efficiency across the entire mortgage lifecycle. Visit EllieMae.com or call 877.355.4362 to learn more.
Forward-Looking Statements
This press release contains forward-looking statements under the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. These forward-looking statements include projected revenue, net income (loss), adjusted EBITDA, and adjusted net income for the first quarter and fiscal year 2016. These statements involve known and unknown risks, uncertainties, and other factors which may cause Ellie Mae’s results to be materially different than those expressed or implied in such statements. Such differences may be based on factors such as changes in the volume of residential mortgages in the United States; changes in other macroeconomic factors affecting the residential real estate industry; changes in strategic planning decisions by management; our ability to manage growth and expenses as we continue to scale our business; reallocation of internal resources; costs incurred and delays in developing new products; changes in anticipated rates of existing customer conversions and SaaS seat additions, and new customer acquisitions; the possibility that economic benefits of future opportunities may never materialize, including unexpected variations in market growth and demand for the acquired products and technologies; delays and disruptions, including changing relationships with partners, customers, employees or suppliers; the satisfactory performance, reliability and availability of our products and services; the amount of costs incurred in connection with supporting and integrating new customers and partners; ongoing personnel and logistical challenges of managing a larger organization; changes in other macroeconomic factors affecting the residential real estate industry and other risk factors included in documents that Ellie Mae has filed with the Securities and Exchange Commission, including but not limited to its Annual Report on Form 10-K for the year ended December 31, 2014 as updated from time to time by our quarterly reports on Form 10-Q and our other filings with the Securities and Exchange Commission. Other unknown or unpredictable factors also could have material adverse effects on Ellie Mae’s future results. The forward-looking statements included in this press release are made only as of the date hereof. Ellie Mae cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. Finally, Ellie Mae expressly disclaims any intent or obligation to update any forward-looking statements to reflect subsequent events or circumstances, unless otherwise required by law.
IR Contacts:
Edgar Luce
Executive VP and CFO
Ellie Mae, Inc.
(925) 227-7079
IR@elliemae.com
or
Lisa Laukkanen
The Blueshirt Group for Ellie Mae, Inc.
(415) 217-4967
lisa@blueshirtgroup.com
# # #
© 2016 Ellie Mae, Inc. Ellie Mae®, Encompass®, AllRegs®, DataTrac®, Ellie Mae Network™, Mavent®, Mortgage Returns®, Prospect Manager, Total Quality Loan™, True CRM®, TQL™ and the Ellie Mae logo are trademarks of Ellie Mae, Inc. or its subsidiaries. All rights reserved. Other company and product names may be trademarks or copyrights of their respective owners.
Ellie Mae, Inc. | |||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
(UNAUDITED) | |||||||
(in thousands, except share and per share amounts) | |||||||
December 31, 2015 | December 31, 2014 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 34,396 | $ | 26,756 | |||
Short-term investments | 48,975 | 49,352 | |||||
Accounts receivable, net of allowances for doubtful accounts of $124 and $66 as of December 31, 2015 and December 31, 2014, respectively | 28,568 | 20,403 | |||||
Prepaid expenses and other current assets | 9,874 | 16,021 | |||||
Total current assets | 121,813 | 112,532 | |||||
Property and equipment, net | 81,360 | 28,694 | |||||
Long-term investments | 55,473 | 58,679 | |||||
Intangible assets, net | 22,810 | 21,452 | |||||
Deposits and other assets | 8,888 | 3,425 | |||||
Goodwill | 74,547 | 65,338 | |||||
Total assets | $ | 364,891 | $ | 290,120 | |||
Liabilities and Stockholders’ Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 9,911 | $ | 6,726 | |||
Accrued and other current liabilities | 37,307 | 16,822 | |||||
Acquisition holdback, net of discount | — | 522 | |||||
Deferred revenue | 15,864 | 9,729 | |||||
Total current liabilities | 63,082 | 33,799 | |||||
Leases payable, net of current portion | 685 | 443 | |||||
Other long-term liabilities | 10,273 | 2,994 | |||||
Total liabilities | 74,040 | 37,236 | |||||
Stockholders’ equity: | |||||||
Common stock, $0.0001 par value per share; 140,000,000 authorized shares, 29,566,511 and 28,907,147 shares issued and outstanding as of December 31, 2015 and December 31, 2014, respectively | 3 | 3 | |||||
Additional paid-in capital | 285,342 | 242,527 | |||||
Accumulated other comprehensive loss | (257 | ) | (95 | ) | |||
Retained earnings | 5,763 | 10,449 | |||||
Total stockholders’ equity | 290,851 | 252,884 | |||||
Total liabilities and stockholders’ equity | $ | 364,891 | $ | 290,120 | |||
Ellie Mae, Inc. | |||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||||||||||||||
(UNAUDITED) | |||||||||||||||
(in thousands, except share and per share amounts) | |||||||||||||||
Quarter ended December 31, | Year ended December 31, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Revenues | $ | 64,867 | $ | 46,577 | $ | 253,937 | $ | 161,537 | |||||||
Cost of revenues(1) | 23,555 | 14,720 | 84,208 | 46,283 | |||||||||||
Gross profit | 41,312 | 31,857 | 169,729 | 115,254 | |||||||||||
Operating expenses: | |||||||||||||||
Sales and marketing(1) | 10,562 | 7,753 | 38,208 | 26,544 | |||||||||||
Research and development(1) | 11,734 | 8,880 | 40,451 | 28,228 | |||||||||||
General and administrative(1) | 14,103 | 11,261 | 57,212 | 39,361 | |||||||||||
Total operating expenses | 36,399 | 27,894 | 135,871 | 94,133 | |||||||||||
Income from operations | 4,913 | 3,963 | 33,858 | 21,121 | |||||||||||
Other income, net | 180 | 145 | 619 | 488 | |||||||||||
Income before income taxes | 5,093 | 4,108 | 34,477 | 21,609 | |||||||||||
Income tax provision (benefit) | 271 | (192 | ) | 12,219 | 6,786 | ||||||||||
Net income | $ | 4,822 | $ | 4,300 | $ | 22,258 | $ | 14,823 | |||||||
Net income per share of common stock: | |||||||||||||||
Basic | $ | 0.16 | $ | 0.15 | $ | 0.76 | $ | 0.53 | |||||||
Diluted | $ | 0.16 | $ | 0.14 | $ | 0.72 | $ | 0.50 | |||||||
Weighted average common shares used in computing net income per share of common stock: | |||||||||||||||
Basic | 29,483,605 | 28,457,087 | 29,179,352 | 27,858,828 | |||||||||||
Diluted | 30,959,344 | 30,068,225 | 30,842,584 | 29,593,873 | |||||||||||
Net income | $ | 4,822 | $ | 4,300 | $ | 22,258 | $ | 14,823 | |||||||
Other comprehensive income, net of taxes: | |||||||||||||||
Unrealized loss on investments | (319 | ) | (58 | ) | (162 | ) | (61 | ) | |||||||
Comprehensive income | $ | 4,503 | $ | 4,242 | $ | 22,096 | $ | 14,762 | |||||||
(1)Includes stock-based compensation expense of the following for the periods presented: | |||||||||||||||
Cost of revenues | $ | 1,029 | $ | 514 | $ | 3,218 | $ | 1,579 | |||||||
Sales and marketing | 779 | 435 | 2,752 | 1,562 | |||||||||||
Research and development | 1,470 | 1,062 | 5,431 | 3,672 | |||||||||||
General and administrative | 3,359 | 1,997 | 12,840 | 7,735 | |||||||||||
$ | 6,637 | $ | 4,008 | $ | 24,241 | $ | 14,548 | ||||||||
Ellie Mae, Inc. | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
(UNAUDITED) | |||||||
(in thousands) | |||||||
Year ended December 31, | |||||||
2015 | 2014 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net income | $ | 22,258 | $ | 14,823 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation | 10,842 | 5,605 | |||||
Provision for uncollectible accounts receivable | 31 | 1 | |||||
Amortization of intangible assets | 5,180 | 2,779 | |||||
Impairment loss on intangible assets | 562 | 1,968 | |||||
Amortization of discount related to acquisition holdback | — | 36 | |||||
Legal settlement | (522 | ) | — | ||||
Stock-based compensation expense | 24,241 | 14,548 | |||||
Excess tax benefit from exercise of stock options | (11,387 | ) | (5,852 | ) | |||
Loss on sale of property and equipment | 97 | 693 | |||||
Deferred income taxes | 2,823 | 395 | |||||
Amortization of investment premium | 1,033 | 1,280 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | (7,974 | ) | (8,380 | ) | |||
Prepaid expenses and other current assets | 1,381 | (4,867 | ) | ||||
Deposits and other assets | (1,985 | ) | (1,146 | ) | |||
Accounts payable | 290 | 2,675 | |||||
Accrued, other current and other liabilities | 34,511 | 13,436 | |||||
Deferred revenue | 5,849 | 2,604 | |||||
Net cash provided by operating activities | 87,230 | 40,598 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Acquisition of property and equipment | (24,768 | ) | (6,813 | ) | |||
Acquisition of internal-use software | (27,608 | ) | (13,021 | ) | |||
Proceeds from sale of property and equipment | 58 | — | |||||
Purchases of investments | (60,816 | ) | (64,748 | ) | |||
Maturities of investments | 63,204 | 57,986 | |||||
Acquisitions, net of cash acquired | (16,419 | ) | (34,641 | ) | |||
Net cash used in investing activities | (66,349 | ) | (61,237 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Payment of capital lease obligations | (3,745 | ) | (1,178 | ) | |||
Proceeds from issuance of common stock under employee stock plans | 14,199 | 10,161 | |||||
Payments for repurchase of common stock | (31,530 | ) | — | ||||
Tax payments related to shares withheld for vested restricted stock units | (3,552 | ) | (902 | ) | |||
Excess tax benefit from stock-based compensation | 11,387 | 5,852 | |||||
Net cash provided by (used in) financing activities | (13,241 | ) | 13,933 | ||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 7,640 | (6,706 | ) | ||||
CASH AND CASH EQUIVALENTS, Beginning of period | 26,756 | 33,462 | |||||
CASH AND CASH EQUIVALENTS, End of period | $ | 34,396 | $ | 26,756 | |||
Ellie Mae, Inc. | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - (continued) | |||||||
(UNAUDITED) | |||||||
(in thousands) | |||||||
Year ended December 31, | |||||||
2015 | 2014 | ||||||
Supplemental disclosure of cash flow information: | |||||||
Cash paid for interest | $ | 133 | $ | 40 | |||
Cash paid for income taxes | $ | 104 | $ | 126 | |||
Supplemental disclosure of non-cash investing and financing activities: | |||||||
Fixed asset purchases accrued but not paid | $ | 3,662 | $ | 921 | |||
Stock-based compensation capitalized to property and equipment | $ | 1,126 | $ | 534 | |||
Acquisition of property and equipment under capital leases | $ | 6,998 | $ | 1,269 | |||
Ellie Mae, Inc. | |||||||||||||||
NON-GAAP RECONCILIATION | |||||||||||||||
(UNAUDITED) | |||||||||||||||
(in thousands, except share and per share amounts) | |||||||||||||||
Quarter ended December 31, | Year ended December 31, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Net income | $ | 4,822 | $ | 4,300 | $ | 22,258 | $ | 14,823 | |||||||
Depreciation | 3,518 | 1,672 | 10,842 | 5,605 | |||||||||||
Amortization of intangible assets | 1,491 | 1,204 | 5,180 | 2,779 | |||||||||||
Other income, net | (180 | ) | (145 | ) | (619 | ) | (488 | ) | |||||||
Impairment loss on intangible assets | 562 | 1,968 | 562 | 1,968 | |||||||||||
Income tax provision (benefit) | 271 | (192 | ) | 12,219 | 6,786 | ||||||||||
EBITDA | 10,484 | 8,807 | 50,442 | 31,473 | |||||||||||
Stock-based compensation expense | 6,637 | 4,008 | 24,241 | 14,548 | |||||||||||
Adjusted EBITDA | $ | 17,121 | $ | 12,815 | $ | 74,683 | $ | 46,021 | |||||||
Net income | $ | 4,822 | $ | 4,300 | $ | 22,258 | $ | 14,823 | |||||||
Stock-based compensation expense | 6,637 | 4,008 | 24,241 | 14,548 | |||||||||||
Impairment loss on intangible assets | 562 | 1,968 | 562 | 1,968 | |||||||||||
Amortization of intangible assets | 1,491 | 1,204 | 5,180 | 2,779 | |||||||||||
Adjusted net income | $ | 13,512 | $ | 11,480 | $ | 52,241 | $ | 34,118 | |||||||
Shares used to compute non-GAAP net income per share | |||||||||||||||
Basic | 29,483,605 | 28,457,087 | 29,179,352 | 27,858,828 | |||||||||||
Diluted | 30,959,344 | 30,068,225 | 30,842,584 | 29,593,873 | |||||||||||
Adjusted net income per share | |||||||||||||||
Basic | $ | 0.46 | $ | 0.40 | $ | 1.79 | $ | 1.22 | |||||||
Diluted | $ | 0.44 | $ | 0.38 | $ | 1.69 | $ | 1.15 | |||||||
Net cash provided by operating activities | $ | 22,694 | $ | 15,818 | $ | 87,230 | $ | 40,598 | |||||||
Acquisition of property and equipment and internal-use software, net | (10,993 | ) | (6,995 | ) | (52,318 | ) | (19,834 | ) | |||||||
Free cash flow | $ | 11,701 | $ | 8,823 | $ | 34,912 | $ | 20,764 | |||||||
Ellie Mae, Inc. | |||||||||||||||
NON-GAAP RECONCILIATION | |||||||||||||||
(UNAUDITED) | |||||||||||||||
(in thousands, except share and per share amounts) | |||||||||||||||
First Quarter 2016 Projected Range | Fiscal 2016 Projected Range | ||||||||||||||
Net income | $ | 1,000 | $ | 1,500 | $ | 22,200 | $ | 24,200 | |||||||
Depreciation | 4,800 | 4,800 | 21,000 | 21,800 | |||||||||||
Amortization of intangible assets | 1,500 | 1,500 | 5,800 | 6,100 | |||||||||||
Income tax provision/other | 300 | 600 | 12,900 | 13,600 | |||||||||||
EBITDA | 7,600 | 8,400 | 61,900 | 65,700 | |||||||||||
Stock-based compensation expense | 6,400 | 6,700 | 28,100 | 28,800 | |||||||||||
Adjusted EBITDA | $ | 14,000 | $ | 15,100 | $ | 90,000 | $ | 94,500 | |||||||
Net income | $ | 1,000 | $ | 1,500 | $ | 22,200 | $ | 24,200 | |||||||
Stock-based compensation expense | 6,400 | 6,700 | 28,100 | 28,800 | |||||||||||
Amortization of intangible assets | 1,500 | 1,500 | 5,800 | 6,100 | |||||||||||
Adjusted net income | $ | 8,900 | $ | 9,700 | $ | 56,100 | $ | 59,100 | |||||||
Shares used to compute non-GAAP net income per share | |||||||||||||||
Basic | 29,500,000 | 29,500,000 | 29,600,000 | 30,100,000 | |||||||||||
Diluted | 31,200,000 | 31,200,000 | 31,300,000 | 31,800,000 | |||||||||||
Projected net income per share | |||||||||||||||
Basic | $ | 0.03 | $ | 0.05 | $ | 0.75 | $ | 0.80 | |||||||
Diluted | $ | 0.03 | $ | 0.05 | $ | 0.71 | $ | 0.76 | |||||||
Adjusted net income per share | |||||||||||||||
Basic | $ | 0.30 | $ | 0.33 | $ | 1.90 | $ | 1.96 | |||||||
Diluted | $ | 0.29 | $ | 0.31 | $ | 1.79 | $ | 1.86 | |||||||