Attached files
| file | filename |
|---|---|
| 8-K - REALPAGE, INC. 8-K - RealPage, Inc. | a51285319.htm |
| EX-99.2 - EXHIBIT 99.2 - RealPage, Inc. | a51285319_ex992.htm |
| EX-99.3 - EXHIBIT 99.3 - RealPage, Inc. | a51285319_ex993.htm |
Exhibit 99.1
RealPage Reports Fourth Quarter and Full Year 2015 Financial Results
- Q4’15 total Non-GAAP revenue of $121.2 million, representing 16 percent year-over-year growth
- Q4’15 Adjusted EBITDA of $26.5 million, margin expands 530 basis points year-over-year
- Q4’15 Non-GAAP net income per diluted share of $0.16, representing 78 percent year-over-year growth
CARROLLTON, Texas--(BUSINESS WIRE)--February 23, 2016--RealPage, Inc. (NASDAQ:RP), a leading provider of on demand software and software-enabled services for the multifamily, commercial, single-family and vacation rental housing industries, today announced financial results for its fourth quarter and year ended December 31, 2015.
Fourth Quarter 2015 Financial Highlights
- Total Non-GAAP revenue of $121.2 million, an increase of 16 percent year-over-year;
- Adjusted EBITDA of $26.5 million, an increase of 54 percent year-over-year and 530 basis points margin expansion;
- Non-GAAP net income of $12.5 million, or $0.16 per diluted share, a year-over-year increase of 75 percent and 78 percent, respectively; and
- GAAP net income of $3.9 million, or $0.05 per diluted share, compared to GAAP net income of $0.1 million, or $0.00 per diluted share, in the prior year quarter.
Full Year 2015 Financial Highlights
- Total Non-GAAP revenue of $466.4 million, an increase of 15 percent year-over-year;
- Adjusted EBITDA of $92.2 million, an increase of 31 percent year-over-year and 240 basis points of margin expansion;
- Non-GAAP net income of $42.2 million, or $0.55 per diluted share, a year-over-year increase of 39 percent and 41 percent, respectively; and
- GAAP net loss of $9.2 million, or $0.12 per diluted share, compared to a GAAP net loss of $10.3 million, or $0.13 per diluted share, in the prior year. In connection with the preparation of the third quarter financial statements, the company identified certain indicators of impairment for identified intangibles within its Leasing and Marketing solutions. As a result, the company incurred a non-cash, non-tax-deductible income statement charge of $20.3 million during the third quarter to impair certain trade name intangible assets related primarily to its 2011 acquisition of Multifamily Technology Solutions, Inc.
Comments on the News
Steve Winn, Chairman and CEO of RealPage
“2015 was a great
year for RealPage as we further penetrated the underserved rental
housing industry with our software and data analytics solutions.
Financial results across most of our metrics improved considerably.
Specifically, Non-GAAP total revenue growth was 15% and Adjusted EBITDA
margin expansion was 240 basis points, both compared to last year. I am
also excited about our pending acquisition of NWP Services Corporation.
The acquisition will allow us to expand our footprint, and introduce new
resident-oriented solutions with greater speed and scale. For 2016, the
combined business is expected to grow over 20%.”
Bryan Hill, CFO and Treasurer of RealPage
“While revenue
growth and margin expansion during 2015 were both impressive, I am
particularly pleased with our operating cash flow performance of $96.0
million. This represents growth of 37% compared to 2014, underscores the
strength of our financial model, and highlights the returns we are
achieving from investments made in 2014 and 2015. Looking forward, 2016
offers many exciting opportunities for RealPage as we strive for total
revenue growth in excess of 20% with continued margin expansion, and
maintain our focus on disciplined capital allocation.”
Financial Outlook
RealPage management expects to achieve the following results during its first quarter ended March 31, 2016:
- Non-GAAP total revenue is expected to be in the range of $125.0 million to $127.0 million, which includes approximately $2.5 million from the acquisition of NWP that is expected to close in March of 2016;
- Adjusted EBITDA is expected to be in the range of $26.3 million to $27.3 million, which includes approximately $0.3 million from the acquisition of NWP; In addition, Adjusted EBITDA will exclude approximately $1.1 million of expense related to the company’s headquarters move for items such as duplicative rent expense and one-time moving expenses;
- Non-GAAP net income per diluted share is expected to be $0.16;
- Non-GAAP tax rate is expected to be approximately 40 percent; and
- Weighted average shares outstanding are expected to be approximately 77.5 million.
RealPage management expects to achieve the following results during its calendar year ended December 31, 2016:
- Non-GAAP total revenue is expected to be in the range of $565.0 million to $575.0 million, which includes approximately $45.0 million from the acquisition of NWP;
- Adjusted EBITDA is expected to be in the range of $118.0 million to $123.0 million, which includes approximately $5.0 million from the acquisition of NWP; In addition, Adjusted EBITDA will exclude approximately $5.0 million of expense related to the company’s headquarters move for items such as duplicative rent expense and one-time moving expenses;
- Non-GAAP net income per diluted share is expected to be in the range of $0.68 to $0.72;
- Non-GAAP tax rate is expected to be approximately 40 percent;
- Weighted average shares outstanding are expected to be approximately 78.3 million; and
- During 2016, the company expects to incur elevated capital expenditures related to its headquarters move and expansion of its data center capacity. Drivers of this spend will be related to leasehold improvements, new furniture and fixtures as well as costs to transition two of the company’s data centers. Total capital expenditures are expected to be $60.0 million, net of a $19.0 million tenant improvement reimbursement from the company’s landlord which will be disclosed as part of operating cash flow. The company expects annual capital expenditures to return to a level of approximately 5% of revenue for 2017 and beyond.
Please note that the above statements are forward looking and that total revenue may exclude certain adjustments and the impact of acquisitions. Actual results may differ materially. Please reference the information under the caption “Non-GAAP Financial Measures,” as well as reconciliation tables of GAAP financial measures to Non-GAAP financial measures, as set forth in this press release.
Conference Call and Webcast
The company will host a conference call on February 23, 2016 at 5:00 p.m. EST to discuss its financial results. Participants are encouraged to listen to the presentation via a live web broadcast on the Investor Relations section of the RealPage website. In addition, a live dial-in is available domestically at 866-807-9684 and internationally at 412-317-5415. A replay will be available at 877-344-7529 or 412-317-0088, passcode 10081330, until March 2, 2016.
About RealPage
RealPage, Inc. is a leading provider of comprehensive property management software solutions for the multifamily, commercial, single-family and vacation rental housing industries. These solutions help property owners increase efficiency, decrease expenses, enhance the resident experience and generate more revenue. Using its innovative SaaS platform, RealPage's on demand software enables easy system integration and streamlines online property management. Its product line covers the full spectrum of property management, leasing and marketing, asset optimization, and resident services solutions. Founded in 1998 and headquartered in Carrollton, Texas, RealPage currently serves over 11,000 clients worldwide from offices in North America, Europe and Asia. For more information about the company, visit http://www.realpage.com.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains “forward-looking” statements relating to RealPage, Inc.’s expected, possible or assumed future results; its pending acquisition of NWP Services Corporation and the benefits to be derived from such acquisition, including the opportunity to expand its footprint and introduce new solutions with greater speed and scale, and the potential contribution to the company’s total revenue growth rate; its focus on driving revenue growth and margin expansion; its focus on disciplined capital allocation and cross-selling solutions; its expenses to be incurred in connection with its headquarters move and data center expansion; and its expected future capital expenditure levels. These forward-looking statements are based on management's beliefs and assumptions and on information currently available to management. Forward-looking statements include all statements that are not historical facts and may be identified by terms such as “expects,” “believes,” “plans,” or similar expressions and the negatives of those terms. Those forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. The company may be required to revise its results upon finalizing its review of quarterly and full year results, which could cause or contribute to such differences. Additional factors that could cause or contribute to such differences include, but are not limited to, the following: (a) the possibility that general economic conditions, including leasing velocity or uncertainty, could cause information technology spending, particularly in the rental housing industry, to be reduced or purchasing decisions to be delayed; (b) an increase in insurance claims; (c) an increase in customer cancellations; (d) the inability to increase sales to existing customers and to attract new customers; (e) RealPage, Inc.’s failure to consummate pending acquisitions or to integrate acquired businesses and any future acquisitions successfully; (f) the timing and success of new product introductions by RealPage, Inc. or its competitors; (g) changes in RealPage, Inc.'s pricing policies or those of its competitors; (h) legal or regulatory proceedings; (i) the inability to achieve revenue growth or to enable margin expansion; and (j) such other risks and uncertainties described more fully in documents filed with or furnished to the Securities and Exchange Commission (“SEC”) by RealPage Inc., including its Quarterly Report on Form 10-Q previously filed with the SEC on November 5, 2015 and its Annual Report on Form 10-K previously filed with the SEC on March 2, 2015. All information provided in this release is as of the date hereof and RealPage Inc. undertakes no duty to update this information except as required by law.
Non-GAAP Financial Measures
This press release contains non-GAAP financial measures. These measures differ from traditional GAAP financial measures in that they (1) include acquisition-related and other deferred revenue adjustments; (2) exclude depreciation, loss on impairment and disposal of assets; amortization of intangible assets; stock-based compensation expenses; any duplicative rent and one-time moving costs in connection with the headquarters move; any impact related to the Yardi litigation (including related insurance litigation and settlement costs), collectively the “Yardi Litigation”; and acquisition related expenses (including any purchase accounting adjustments); and (3) include income taxes at a sustainable effective rate, which excludes the reversal of valuation allowances due to expected or realization of deferred tax assets.
We define non-GAAP total revenue as total revenue plus acquisition-related and other deferred revenue adjustments. We also define non-GAAP on demand revenue as on demand revenue plus acquisition-related and other deferred revenue adjustments. Non-GAAP net income is defined as net (loss) income plus acquisition-related and other deferred revenue adjustments; amortization of intangible assets; stock-based compensation expense; any duplicative rent and one-time moving costs in connection with the headquarters move; acquisition-related expense; any impact related to the Yardi Litigation; loss on disposal and impairment of assets; and an adjustment to income tax expense (benefit) to reflect our effective tax rate. Other non-GAAP measures such as non-GAAP product development, non-GAAP sales and marketing, non-GAAP general and administrative, and non-GAAP operating expense and income exclude amortization of intangible assets; litigation-related expense; loss on disposal and impairment of assets; and stock-based compensation when calculating their composition. In addition to these adjustments, non-GAAP operating income is adjusted for acquisition-related and other deferred revenue.
Adjusted gross profit is defined as gross profit plus acquisition-related and other deferred revenue adjustments, depreciation and amortization of intangible assets, and stock-based compensation.
We define Adjusted EBITDA as net (loss) income plus acquisition-related and other deferred revenue adjustments; depreciation, asset impairment and loss on disposal of assets; amortization of intangible assets; net interest expense; income tax expense (benefit); stock-based compensation expense; any duplicative rent and one-time moving costs in connection with the headquarters move; any impact related to the Yardi Litigation; and acquisition-related expenses.
Non-GAAP on demand revenue per average on demand unit represents non-GAAP on demand revenue for the period presented divided by average on demand units for the same period. For interim periods, the calculation is performed on an annualized basis. We calculate average on demand units as the average of the beginning and ending on demand units for each quarter in the period presented. We monitor this metric to measure our success in increasing the number of on demand software solutions utilized by our customers to manage their rental housing units, our overall revenue and profitability.
Non-GAAP on demand annual customer value, or “ACV”, represents management's estimate of the current annual run-rate value of on demand customer relationships. ACV is calculated by multiplying ending on demand units by annualized Non-GAAP on demand revenue per average on demand unit.
We believe that the non-GAAP financial measures defined above are useful to investors and other users of our financial statements in evaluating our operating performance because they provide additional tools to compare business performance across companies and across periods. We believe that:
- these non-GAAP financial measures provide investors and other users of our financial information consistency and comparability with our past financial performance, facilitate period-to-period comparisons of operations and facilitate comparisons with our peer companies, many of which use similar non-GAAP financial measures to supplement their GAAP results;
- it is useful to exclude certain non-cash charges, such as depreciation and asset impairment, amortization of intangible assets and stock-based compensation, duplicative rent and one-time moving costs and non-core operational charges, such as acquisition-related expenses and any impact related to the Yardi Litigation, from non-GAAP earnings measures, such as Adjusted EBITDA and non-GAAP net income, because the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations and these expenses can vary significantly between periods as a result of new acquisitions, full amortization of previously acquired tangible and intangible assets or the timing of new stock-based awards, as the case may be; and
- it is useful to include deferred revenue written down for GAAP purposes under purchase accounting rules and revenue deferred due to a lack of historical experience determining the settlement of the contractual obligation in order to appropriately measure the underlying performance of our business operations in the period of activity and associated expense.
We use the non-GAAP financial measures defined above in conjunction with traditional GAAP financial measures as part of our overall assessment of our performance; for planning purposes, including the preparation of our annual operating budget; to evaluate the effectiveness of our business strategies; and to communicate with our board of directors concerning our financial performance.
We do not place undue reliance on non-GAAP financial measures as our only measures of operating performance. Non-GAAP financial measures should not be considered as a substitute for other measures of financial performance or liquidity reported in accordance with GAAP. There are limitations to using non-GAAP financial measures, including that other companies may calculate these measures differently than we do, that they do not reflect changes in, or cash requirements for, our working capital, and they do not reflect our capital expenditures or future requirements. We compensate for the inherent limitations associated with using non-GAAP financial measures through disclosure of these limitations, presentation of our financial statements in accordance with GAAP, and reconciliation of non-GAAP financial measures to the most directly comparable GAAP measure.
| Consolidated Balance Sheets | ||||||||
| (in thousands, except share amounts) | ||||||||
| (unaudited) | ||||||||
| December 31, | December 31, | |||||||
| 2015 | 2014 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 30,911 | $ | 26,936 | ||||
| Restricted cash | 85,461 | 85,543 | ||||||
|
Accounts receivable, less allowance for doubtful accounts of $2,318 and $2,363 at December 31, 2015 and 2014, respectively |
74,192 | 64,845 | ||||||
| Prepaid expenses | 8,294 | 7,647 | ||||||
| Other current assets | 23,085 | 1,848 | ||||||
| Total current assets | 221,943 | 186,819 | ||||||
| Property, equipment and software, net | 82,198 | 72,616 | ||||||
| Goodwill | 220,097 | 193,378 | ||||||
| Identified intangible assets, net | 81,280 | 100,085 | ||||||
| Deferred tax assets, net | 12,051 | 8,337 | ||||||
| Other assets | 5,632 | 5,059 | ||||||
| Total assets | $ | 623,201 | $ | 566,294 | ||||
| Liabilities and stockholders’ equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 17,448 | $ | 14,830 | ||||
| Accrued expenses and other current liabilities | 28,294 | 22,905 | ||||||
| Current portion of deferred revenue | 84,200 | 73,485 | ||||||
|
Customer deposits held in restricted accounts |
85,405 | 85,489 | ||||||
| Total current liabilities | 215,347 | 196,709 | ||||||
| Deferred revenue | 6,979 | 6,903 | ||||||
| Revolving credit facility | 40,000 | 20,000 | ||||||
| Other long-term liabilities | 34,423 | 13,902 | ||||||
| Total liabilities | 296,749 | 237,514 | ||||||
| Stockholders’ equity: | ||||||||
|
Preferred stock, $0.001 par value: 10,000,000 shares authorized and zero shares issued and outstanding at December 31, 2015 and 2014, respectively |
— | — | ||||||
|
Common stock, $0.001 par value: 125,000,000 shares authorized, 82,919,033 and 83,211,650 shares issued and 78,793,670 and 79,037,351 shares outstanding at December 31, 2015 and 2014, respectively |
83 | 83 | ||||||
| Additional paid-in capital | 471,668 | 437,664 | ||||||
|
Treasury stock, at cost: 4,125,363 and 4,174,299 shares at December 31, 2015 and 2014, respectively |
(24,338 | ) | (33,398 | ) | ||||
| Accumulated deficit | (120,415 | ) | (75,360 | ) | ||||
|
Accumulated other comprehensive loss |
(546 | ) | (209 | ) | ||||
| Total stockholders’ equity | 326,452 | 328,780 | ||||||
| Total liabilities and stockholders’ equity | $ | 623,201 | $ | 566,294 | ||||
| Consolidated Statements of Operations | ||||||||||||||||
| (in thousands, except per share amounts) | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| Revenue: | ||||||||||||||||
| On demand | $ | 117,090 | $ | 101,261 | $ | 450,962 | $ | 390,622 | ||||||||
| On premise | 669 | 648 | 2,970 | 3,094 | ||||||||||||
| Professional and other | 3,941 | 2,555 | 14,588 | 10,835 | ||||||||||||
| Total revenue | 121,700 | 104,464 | 468,520 | 404,551 | ||||||||||||
| Cost of revenue(1) (2) | 50,818 | 46,518 | 198,613 | 174,871 | ||||||||||||
| Gross profit | 70,882 | 57,946 | 269,907 | 229,680 | ||||||||||||
| Operating expense: | ||||||||||||||||
| Product development(1) | 15,880 | 16,108 | 68,799 | 64,418 | ||||||||||||
| Sales and marketing(1) (2) | 30,410 | 27,593 | 123,108 | 111,563 | ||||||||||||
| General and administrative(1) | 17,017 | 16,011 | 68,814 | 69,202 | ||||||||||||
| Impairment of identified intangible assets | — | — | 20,801 | — | ||||||||||||
| Total operating expense | 63,307 | 59,712 | 281,522 | 245,183 | ||||||||||||
| Operating income (loss) | 7,575 | (1,766 | ) | (11,615 | ) | (15,503 | ) | |||||||||
| Interest expense and other, net | (401 | ) | (333 | ) | (1,449 | ) | (1,104 | ) | ||||||||
| Income (loss) before income taxes | 7,174 | (2,099 | ) | (13,064 | ) | (16,607 | ) | |||||||||
| Income tax expense (benefit) | 3,274 | (2,209 | ) | (3,846 | ) | (6,333 | ) | |||||||||
| Net income (loss) | $ | 3,900 | $ | 110 | $ | (9,218 | ) | $ | (10,274 | ) | ||||||
| Net income (loss) per share attributable to common shareholders | ||||||||||||||||
| Basic | $ | 0.05 | $ | — | $ | (0.12 | ) | $ | (0.13 | ) | ||||||
| Diluted | $ | 0.05 | $ | — | $ | (0.12 | ) | $ | (0.13 | ) | ||||||
|
Weighted average shares used in computing net income (loss) per share attributable to common shareholders |
||||||||||||||||
| Basic | 76,445 | 76,742 | 76,689 | 76,991 | ||||||||||||
| Diluted | 77,055 | 77,565 | 76,689 | 76,991 | ||||||||||||
|
(1) Includes stock-based compensation expense as follows: |
||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| Cost of revenue | $ | 779 | $ | 812 | $ | 4,046 | $ | 3,826 | ||||||||
| Product development | 1,535 | 1,874 | 8,585 | 8,637 | ||||||||||||
| Sales and marketing | 2,246 | 2,948 | 12,996 | 12,966 | ||||||||||||
| General and administrative | 2,896 | 2,622 | 12,495 | 11,621 | ||||||||||||
| $ | 7,456 | $ | 8,256 | $ | 38,122 | $ | 37,050 | |||||||||
| (2) Certain amounts in prior quarterly periods of 2015 have been reclassified to conform with current period presentation. | ||||||||||||||||
| Condensed Consolidated Statements of Cash Flows | ||||||||||||||||
| (in thousands) | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| Cash flows from operating activities: | ||||||||||||||||
| Net income (loss) | $ | 3,900 | $ | 110 | $ | (9,218 | ) | $ | (10,274 | ) | ||||||
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
||||||||||||||||
| Depreciation and amortization | 12,104 | 10,773 | 45,891 | 41,306 | ||||||||||||
| Deferred tax expense (benefit) | 3,608 | (1,880 | ) | (5,219 | ) | (7,891 | ) | |||||||||
| Stock-based compensation | 7,456 | 8,256 | 38,122 | 37,050 | ||||||||||||
| Excess tax benefit from stock options | (1,325 | ) | (2,248 | ) | (357 | ) | (2,248 | ) | ||||||||
| Loss on disposal and impairment of assets | 102 | 350 | 23,871 | 386 | ||||||||||||
| Acquisition-related consideration | (250 | ) | (391 | ) | (3,268 | ) | 173 | |||||||||
|
Changes in assets and liabilities, net of assets acquired and liabilities assumed in business combinations |
2,071 | 4,948 | 6,190 | 11,470 | ||||||||||||
| Net cash provided by operating activities | 27,666 | 19,918 | 96,012 | 69,972 | ||||||||||||
| Cash flows from investing activities: | ||||||||||||||||
| Purchases of property, equipment, and software | (14,600 | ) | (7,937 | ) | (33,384 | ) | (37,062 | ) | ||||||||
| Proceeds from disposal of property, equipment, and software | — | — | 305 | — | ||||||||||||
| Acquisition of businesses, net of cash acquired | — | (5 | ) | (45,282 | ) | (41,947 | ) | |||||||||
| Intangible asset additions | — | (260 | ) | — | (260 | ) | ||||||||||
| Net cash used in investing activities | (14,600 | ) | (8,202 | ) | (78,361 | ) | (79,269 | ) | ||||||||
| Cash flows from financing activities: | ||||||||||||||||
| Payments on and proceeds from debt, net | (4,145 | ) | (18,910 | ) | 19,418 | 18,250 | ||||||||||
| Payments of deferred acquisition-related consideration | (1,576 | ) | (2,412 | ) | (3,685 | ) | (6,419 | ) | ||||||||
| Issuance of common stock | 9,215 | 4,746 | 12,115 | 9,914 | ||||||||||||
| Excess tax benefit from stock options | 1,325 | 2,248 | 357 | 2,248 | ||||||||||||
| Purchase of treasury stock | (5,470 | ) | (1,093 | ) | (41,544 | ) | (22,215 | ) | ||||||||
| Net cash (used in) provided by financing activities | (651 | ) | (15,421 | ) | (13,339 | ) | 1,778 | |||||||||
| Net increase (decrease) in cash and cash equivalents | 12,415 | (3,705 | ) | 4,312 | (7,519 | ) | ||||||||||
| Effect of exchange rate on cash | (70 | ) | (29 | ) | (337 | ) | (47 | ) | ||||||||
| Cash and cash equivalents: | ||||||||||||||||
| Beginning of period | 18,566 | 30,670 | 26,936 | 34,502 | ||||||||||||
| End of period | $ | 30,911 | $ | 26,936 | $ | 30,911 | $ | 26,936 | ||||||||
| Reconciliation of GAAP to Non-GAAP Financial Measures | ||||||||||||||||||||||||
| For the Three and Twelve Months Ended December 31, 2015 and 2014 | ||||||||||||||||||||||||
| (in thousands, except per share amounts) | ||||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||
| December 31, | December 31, | |||||||||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||||
| Non-GAAP revenue: | ||||||||||||||||||||||||
| Revenue (GAAP) | $ | 121,700 | $ | 104,464 | $ | 468,520 | $ | 404,551 | ||||||||||||||||
| Acquisition-related and other deferred revenue | (545 | ) | (290 | ) | (2,157 | ) | 435 | |||||||||||||||||
| Non-GAAP revenue | $ | 121,155 | $ | 104,174 | $ | 466,363 | $ | 404,986 | ||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||
| December 31, | December 31, | |||||||||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||||
| Adjusted gross profit: | ||||||||||||||||||||||||
| Gross profit (GAAP)(4) | $ | 70,882 | $ | 57,946 | $ | 269,907 | $ | 229,680 | ||||||||||||||||
| Acquisition-related and other deferred revenue | (545 | ) | (290 | ) | (2,157 | ) | 435 | |||||||||||||||||
| Depreciation | 2,533 | 2,330 | 9,802 | 8,512 | ||||||||||||||||||||
| Amortization of intangible assets | 4,071 | 2,860 | 14,213 | 10,712 | ||||||||||||||||||||
| Stock-based compensation expense | 779 | 812 | 4,046 | 3,826 | ||||||||||||||||||||
| Adjusted gross profit | $ | 77,720 | $ | 63,658 | $ | 295,811 | $ | 253,165 | ||||||||||||||||
| Adjusted gross profit margin | 64.1 | % | 61.1 | % | 63.4 | % | 62.5 | % | ||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||
| December 31, | December 31, | |||||||||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||||
| Adjusted EBITDA: | ||||||||||||||||||||||||
| Net income (loss) (GAAP) | $ | 3,900 | $ | 110 | $ | (9,218 | ) | $ | (10,274 | ) | ||||||||||||||
| Acquisition-related and other deferred revenue | (545 | ) | (290 | ) | (2,157 | ) | 435 | |||||||||||||||||
| Depreciation, asset impairment, and loss on disposal of assets | 5,415 | 5,377 | 44,385 | 19,288 | ||||||||||||||||||||
| Amortization of intangible assets | 6,791 | 5,746 | 25,377 | 22,404 | ||||||||||||||||||||
| Acquisition-related expense | (188 | ) | (111 | ) | (1,841 | ) | 1,987 | |||||||||||||||||
| Interest expense, net | 401 | 337 | 1,367 | 1,117 | ||||||||||||||||||||
| Income tax expense (benefit) | 3,274 | (2,209 | ) | (3,846 | ) | (6,333 | ) | |||||||||||||||||
| Litigation-related expense | — | 31 | 2 | 4,915 | ||||||||||||||||||||
| Stock-based compensation expense | 7,456 | 8,256 | 38,122 | 37,050 | ||||||||||||||||||||
| Adjusted EBITDA | $ | 26,504 | $ | 17,247 | $ | 92,191 | $ | 70,589 | ||||||||||||||||
| Adjusted EBITDA margin | 21.9 | % | 16.6 | % | 19.8 | % | 17.4 | % | ||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||
| December 31, | December 31, | |||||||||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||||
|
Non-GAAP total product development: |
||||||||||||||||||||||||
| Product development (GAAP) | $ | 15,880 | $ | 16,108 | $ | 68,799 | $ | 64,418 | ||||||||||||||||
| Less: Asset impairment and loss on disposal of assets | 85 | — | 1,418 | — | ||||||||||||||||||||
| Stock-based compensation expense | 1,535 | 1,874 | 8,585 | 8,637 | ||||||||||||||||||||
| Non-GAAP total product development | $ | 14,260 | $ | 14,234 | $ | 58,796 | $ | 55,781 | ||||||||||||||||
| Non-GAAP total product development as % of non-GAAP revenue: | 11.8 | % | 13.7 | % | 12.6 | % | 13.8 | % | ||||||||||||||||
| Reconciliation of GAAP to Non-GAAP Financial Measures | ||||||||||||||||||||||
| For the Three and Twelve Months Ended December 31, 2015 and 2014 | ||||||||||||||||||||||
| (in thousands, except per share amounts) | ||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||||
| December 31, | December 31, | |||||||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||
| Non-GAAP total sales and marketing: | ||||||||||||||||||||||
| Sales and marketing (GAAP)(4) | $ | 30,410 | $ | 27,593 | $ | 123,108 | $ | 111,563 | ||||||||||||||
| Less: Amortization of intangible assets | 2,720 | 2,886 | 11,164 | 11,500 | ||||||||||||||||||
| Stock-based compensation expense | 2,246 | 2,948 | 12,996 | 12,966 | ||||||||||||||||||
| Non-GAAP total sales and marketing | $ | 25,444 | $ | 21,759 | $ | 98,948 | $ | 87,097 | ||||||||||||||
| Non-GAAP total sales and marketing as % of non-GAAP revenue: | 21.0 | % | 20.9 | % | 21.2 | % | 21.5 | % | ||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||||
| December 31, | December 31, | |||||||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||
| Non-GAAP total general and administrative: | ||||||||||||||||||||||
| General and administrative (GAAP) | $ | 17,017 | $ | 16,011 | $ | 68,814 | $ | 69,202 | ||||||||||||||
| Less: Asset impairment and loss on disposal of assets | 17 | 350 | 1,652 | 386 | ||||||||||||||||||
| Amortization of intangible assets | — | — | — | 192 | ||||||||||||||||||
| Acquisition-related expense | (188 | ) | (111 | ) | (1,841 | ) | 1,987 | |||||||||||||||
| Litigation-related expense | — | 31 | 2 | 4,915 | ||||||||||||||||||
| Stock-based compensation expense | 2,896 | 2,622 | 12,495 | 11,621 | ||||||||||||||||||
| Non-GAAP total general and administrative | $ | 14,292 | $ | 13,119 | $ | 56,506 | $ | 50,101 | ||||||||||||||
| Non-GAAP total general and administrative as % of non-GAAP revenue: | 11.8 | % | 12.6 | % | 12.1 | % | 12.4 | % | ||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||||
| December 31, | December 31, | |||||||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||
| Non-GAAP total operating expense: | ||||||||||||||||||||||
| Operating expense (GAAP)(4) | $ | 63,307 | $ | 59,712 | $ | 281,522 | $ | 245,183 | ||||||||||||||
| Less: Asset impairment and loss on disposal of assets | 102 | 350 | 23,871 | 386 | ||||||||||||||||||
| Amortization of intangible assets | 2,720 | 2,886 | 11,164 | 11,692 | ||||||||||||||||||
| Acquisition-related expense | (188 | ) | (111 | ) | (1,841 | ) | 1,987 | |||||||||||||||
| Litigation-related expense | — | 31 | 2 | 4,915 | ||||||||||||||||||
| Stock-based compensation expense | 6,677 | 7,444 | 34,076 | 33,224 | ||||||||||||||||||
| Non-GAAP total operating expense | $ | 53,996 | $ | 49,112 | $ | 214,250 | $ | 192,979 | ||||||||||||||
| Non-GAAP total operating expense as % of non-GAAP revenue: | 44.6 | % | 47.1 | % | 45.9 | % | 47.7 | % | ||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||||
| December 31, | December 31, | |||||||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||
| Non-GAAP operating income: | ||||||||||||||||||||||
| Operating income (loss) (GAAP) | $ | 7,575 | $ | (1,766 | ) | $ | (11,615 | ) | $ | (15,503 | ) | |||||||||||
| Acquisition-related and other deferred revenue | (545 | ) | (290 | ) | (2,157 | ) | 435 | |||||||||||||||
| Asset impairment and loss on disposal of assets | 102 | 350 | 23,871 | 386 | ||||||||||||||||||
| Amortization of intangible assets | 6,791 | 5,746 | 25,377 | 22,404 | ||||||||||||||||||
| Acquisition-related expense | (188 | ) | (111 | ) | (1,841 | ) | 1,987 | |||||||||||||||
| Litigation-related expense | — | 31 | 2 | 4,915 | ||||||||||||||||||
| Stock-based compensation expense | 7,456 | 8,256 | 38,122 | 37,050 | ||||||||||||||||||
| Non-GAAP operating income | $ | 21,191 | $ | 12,216 | $ | 71,759 | $ | 51,674 | ||||||||||||||
| Non-GAAP operating margin | 17.5 | % | 11.7 | % | 15.4 | % | 12.8 | % | ||||||||||||||
| Reconciliation of GAAP to Non-GAAP Financial Measures | ||||||||||||||||||||||||
| For the Three and Twelve Months Ended December 31, 2015 and 2014 | ||||||||||||||||||||||||
| (in thousands, except per share amounts) | ||||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||
| December 31, | December 31, | |||||||||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||||
| Non-GAAP net income: | ||||||||||||||||||||||||
| Net income (loss) (GAAP) | $ | 3,900 | $ | 110 | $ | (9,218 | ) | $ | (10,274 | ) | ||||||||||||||
| Tax deductible items: | ||||||||||||||||||||||||
| Acquisition-related and other deferred revenue | (545 | ) | (290 | ) | (2,157 | ) | 435 | |||||||||||||||||
| Asset impairment and loss on disposal of assets | 102 | 350 | 23,871 | 386 | ||||||||||||||||||||
| Amortization of intangible assets | 6,791 | 5,746 | 25,377 | 22,404 | ||||||||||||||||||||
| Acquisition-related expense | (188 | ) | (111 | ) | (1,841 | ) | 1,987 | |||||||||||||||||
| Litigation-related expense | — | 31 | 2 | 4,915 | ||||||||||||||||||||
| Stock-based compensation expense | 7,456 | 8,256 | 38,122 | 37,050 | ||||||||||||||||||||
| Subtotal of tax deductible items | 13,616 | 13,982 | 83,374 | 67,177 | ||||||||||||||||||||
| Tax impact of tax deductible items(1) | (5,447 | ) | (5,593 | ) | (33,350 | ) | (26,871 | ) | ||||||||||||||||
| Tax benefit (expense) resulting from applying effective tax rate(2) | 405 | (1,369 | ) | 1,380 | 310 | |||||||||||||||||||
| Non-GAAP net income | $ | 12,474 | $ | 7,130 | $ | 42,186 | $ | 30,342 | ||||||||||||||||
| Non-GAAP net income per share - diluted | $ | 0.16 | $ | 0.09 | $ | 0.55 | $ | 0.39 | ||||||||||||||||
| Weighted average shares - basic | 76,445 | 76,742 | 76,689 | 76,991 | ||||||||||||||||||||
| Weighted average effect of dilutive securities - non-GAAP | 610 | 823 | 611 | 725 | ||||||||||||||||||||
| Non-GAAP weighted average shares - diluted | 77,055 | 77,565 | 77,300 | 77,716 | ||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||
| December 31, | December 31, | |||||||||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||||
| Annualized non-GAAP on demand revenue per average on demand unit: | ||||||||||||||||||||||||
| On demand revenue (GAAP) | $ | 117,090 | $ | 101,261 | $ | 450,962 | $ | 390,622 | ||||||||||||||||
| Acquisition-related and other deferred revenue | (545 | ) | (290 | ) | (2,157 | ) | 435 | |||||||||||||||||
| Non-GAAP on demand revenue | 116,545 | 100,971 | 448,805 | 391,057 | ||||||||||||||||||||
| Ending on demand units | 10,568 | 9,560 | 10,568 | 9,560 | ||||||||||||||||||||
| Average on demand units | 10,487 | 9,528 | 10,118 | 9,361 | ||||||||||||||||||||
| Annualized non-GAAP on demand revenue per average on demand unit | $ | 44.45 | $ | 42.39 | ||||||||||||||||||||
| Non-GAAP on demand annual customer value(3) | $ | 469,748 | $ | 405,248 | ||||||||||||||||||||
| (1) | Reflects the removal of the tax benefit associated with the acquisition-related and other deferred revenue adjustment, asset impairment and loss on disposal of assets, amortization of intangible assets, acquisition-related expense, litigation-related expense, and stock-based compensation expense. | |
| (2) | Represents adjusting to a normalized effective tax rate of 40%. | |
| (3) | This metric represents management's estimate of the current annual run-rate value of on demand customer relationships. This metric is calculated by multiplying ending on demand units by annualized non-GAAP on demand revenue per average on demand unit for the periods presented. | |
| (4) | Certain amounts in prior quarterly periods of 2015 have been reclassified to conform with current period presentation. | |
CONTACT:
RealPage, Inc.
Investor Relations
Rhett Butler,
972-820-3773
rhett.butler@realpage.com