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Exhibit 99.1

Contact:

Investor Relations:

The Blueshirt Group

Nicole Gunderson

IR@mindbodyonline.com

888-782-7155

Media Contact:

Jennifer Saxon

jennifer.saxon@mindbodyonline.com

805-419-2839     

MINDBODY Reports Second Quarter 2016 Financial Results

Company delivers 36% revenue growth over Q2 2015

San Luis Obispo, CA – July 27, 2016 (GLOBE NEWSWIRE) — MINDBODY, Inc. (NASDAQ:MB), the leading provider of cloud-based business management software for the wellness services industry, today announced financial results for the second quarter ended June 30, 2016.

“The second quarter produced excellent results, highlighted by consistently strong revenue growth and substantial improvement on the bottom line,” said Rick Stollmeyer, Co-founder and Chief Executive Officer of MINDBODY. “In particular, we are pleased with our traction among higher value subscribers. These businesses range from independent practitioners to multi-location enterprise businesses. These are the subscribers most likely to grow, producing increasing future transaction volumes and meaningful inventory for our consumer app and our API partners.”

Second Quarter 2016 Financial Results

 

    Total revenue in the second quarter of 2016 was $33.6 million, a 36% increase year over year.

 

    Subscription and services revenue was $20.1 million, a 35% increase year over year.

 

    Payments revenue was $12.9 million, a 39% increase year over year.

 

    GAAP net loss attributable to common stockholders in the second quarter of 2016 was $(6.6) million or $(0.16) per basic and diluted share, compared to a GAAP net loss attributable to common stockholders of $(13.3) million, or $(0.87) per basic and diluted share, in the second quarter of 2015.

 

    Non-GAAP net loss1 in the second quarter of 2016 was $(4.2) million or $(0.10) per basic and diluted share, compared to a non-GAAP net loss of $(7.0) million, or $(0.21) per basic and diluted share in the second quarter of 2015.

 

    Adjusted EBITDA loss1 for the second quarter of 2016 was $(1.9) million, compared to an Adjusted EBITDA loss of $(5.2) million for the second quarter of 2015.

Recent Business Highlights

 

    End of period subscribers grew 22% year over year to 55,771.

 

    Average monthly revenue per subscriber (ARPS) grew 9% year over year to approximately $202.

 

    Dollar-based net expansion rate was 111%, compared to 115% as of the end of the second quarter of 2015. This metric nets the effects of subscriber churn against the increasing value of subscribers retained, indicating the tendency of our subscriber cohorts to gain value over time.

 

    Payments volume increased 29% year over year to approximately $1.6 billion.


    MINDBODY and Under Armour have entered into a strategic partnership that will enable both companies to create a healthier world by seamlessly connecting the world’s largest digital health and fitness community to our inventory of fitness activities.

 

    Brett White, Chief Financial Officer, has taken on the additional role and responsibilities of Chief Operating Officer.

 

1 A reconciliation of GAAP to non-GAAP financial measures is provided in the financial statement tables included in this press release. An explanation of these measures is also included under the heading “Non-GAAP Financial Measures.”

“We had a successful second quarter highlighted by robust growth in both brick and mortar subscribers and payments volume.” said Brett White, Chief Financial Officer and Chief Operating Officer. “These results demonstrate the ongoing strength of the wellness services market we serve and we look forward to continuing to extend our market leadership.”

Outlook

For the third quarter of 2016, MINDBODY expects to report:

 

    Revenue in the range of $34.5 to $35.5 million, representing 32% to 36% growth over the third quarter of 2015.

 

    Non-GAAP net loss in the range of $(4.0) to $(5.0) million and weighted average shares outstanding for the third quarter of approximately 39.8 million shares.

For the full year of 2016, MINDBODY expects to report:

 

    Revenue in the range of $137.0 to $139.0 million, representing 35% to 37% growth over 2015.

 

    Non-GAAP net loss in the range of $(16.3) to $(18.3) million and weighted average shares outstanding for the fourth quarter of approximately 40.0 million shares and 39.8 million shares for the full year.

The forward-looking non-GAAP financial measures contained in this section entitled “Outlook” exclude estimates for stock-based compensation expense. Stock-based compensation expense is impacted by MINDBODY’s future hiring and retention needs, which are difficult to predict and subject to change, as well as the future fair market value of MINDBODY’s Class A common stock, which is difficult to estimate accurately and is subject to unpredictable fluctuations. As it is expected that the variability of MINDBODY’s stock-based compensation expense will have a significant impact on its future GAAP financial results, a reconciliation of GAAP to non-GAAP financial measures is not available on a forward-looking basis without unreasonable effort.

Quarterly Conference Call and Related Information

MINDBODY will discuss its quarterly results today at 1:30 p.m. PT (4:30 p.m. ET)

 

    Dial in: To access the call, please dial (844) 494 0191, or outside the U.S. (508) 637 5581, with Conference ID# 34073682 at least five minutes prior to the 1:30 p.m. PT start time.

 

    Webcast and Related Investor Materials: A live webcast and replay of the call, as well as related investor materials, will be available at http://investors.mindbodyonline.com/ under the Events and Presentations menu.

 

    Audio replay: An audio replay will be available between 4:00 p.m. PT July 27, 2016 and 8:59 p.m. PT July 30, 2016 by calling (855) 859 2056 or (404) 537 3406, with Passcode 34073682.

About MINDBODY

MINDBODY, Inc. (NASDAQ: MB) is the leading provider of cloud-based business management software for the wellness services industry and an emerging consumer marketplace. Over 55,000 local businesses and 316,000 wellness practitioners in over 130 countries and territories use MINDBODY’s integrated software and payments platform to run,


market and build their businesses. These practitioners provide a variety of wellness services to approximately 31 million active consumers who use the MINDBODY platform to more easily evaluate, engage and transact with them to live healthier and happier lives. For more information, visit mindbodyonline.com.

© 2016 MINDBODY, Inc. All rights reserved. MINDBODY, the Enso logo and Love Your Business are trademarks or registered trademarks of MINDBODY, Inc. in the United States and/or other countries. Other company and product names may be trademarks of the respective companies with which they are associated.

Forward Looking Statements

This press release and the accompanying conference call contain forward-looking statements about our business and growth strategy; expectations about the value associated with subscribers; expectations about the market we serve and our position in this market; current estimates of third quarter and full year 2016 revenue, non-GAAP net loss, and weighted average shares outstanding; current estimate of fourth quarter weighted average shares outstanding; expectations about our growth and the timing of profitability on an adjusted EBITDA basis; performance of, and demand for, our products, including our mobile apps and marketing platform; our partnerships with Under Armour and JIYO; the influence of network effects across our platform; and expectations regarding operating expenses and gross margins for the remainder of 2016.

These forward-looking statements involve risks and uncertainties. If any of these risks or uncertainties materialize, or if any of our assumptions prove incorrect, our actual results could differ materially from the results expressed or implied by these forward-looking statements. These risks and uncertainties include risks associated with: our limited operating history in a new and unproven market; engagement of our subscribers and their consumers; the return on our strategic investments; execution of our plans and strategies, including with respect to mobile products and features and corporate wellness offerings; any failure of our security measures, including the risk that such measures may be insufficient to secure our subscriber and consumer data adequately or that we may become subject to attacks that degrade or deny the ability of our subscribers and consumers to access our platform; our ability to timely and effectively scale and adapt our existing technology and network infrastructure to ensure that our solutions are accessible at all times with short or no perceptible load times; our ability to maintain our rate of revenue growth and manage our expenses and investment plans; any decrease in subscriber demand for our software products, features and/or service offerings; changes in privacy or other regulations that could impact our ability to serve our subscribers and their consumers or adversely impact our monetization efforts; increasing competition; our ability to manage our growth, including internationally; and our ability to recruit and retain our employees; general economic, market and business conditions; and the risks described in the other filings we make with the Securities and Exchange Commission from time to time, including the risks described under the heading “Risk Factors” in our Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission on March 4, 2016 and the risks described under the heading “Risk Factors” that will be in our Quarterly Report on Form 10-Q, which will be filed with the Securities and Exchange Commission for the quarterly period ended June 30, 2016, which should be read in conjunction with our financial results and forward-looking statements and are available on the SEC Filings section of the Investor Relations page of our website at http://investors.mindbodyonline.com/.

All forward-looking statements in this press release are based on information available to us as of the date hereof, and we do not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.

Non-GAAP Financial Measures

In this press release, MINDBODY has provided financial information that has not been prepared in accordance with generally accepted accounting principles in the United States (GAAP). We disclose the following non-GAAP financial measures in this press release: Adjusted EBITDA, non-GAAP net loss, and non-GAAP net loss per share, basic and diluted.


We use these non-GAAP financial measures internally in analyzing our financial results and evaluating our ongoing operational performance. We believe that these non-GAAP financial measures provide an additional tool for investors to use in understanding and evaluating ongoing operating results and trends in the same manner as our management and board of directors. Our use of these non-GAAP financial measures has limitations as an analytical tool, and you should not consider them in isolation or as a substitute for analysis of our financial results as reported under GAAP. Because of these and other limitations, you should consider these non-GAAP financial measures along with other GAAP-based financial performance measures, including various cash flow metrics, net loss, and our GAAP financial results. We have provided a reconciliation of these non-GAAP financial measures to their most directly comparable GAAP measures in the financial statement tables included in this press release, and investors are encouraged to review the reconciliation.

Adjusted EBITDA

We define Adjusted EBITDA as our net loss before stock-based compensation expense, depreciation and amortization, change in fair value of contingent consideration, change in fair value of preferred stock warrant, provision for income taxes, and other income (expense), net, which consisted of interest income and expense, and other miscellaneous other income (expense). We have provided below a reconciliation of Adjusted EBITDA to net loss, the most directly comparable GAAP financial measure. We have presented Adjusted EBITDA in this press release because it is a key measure used by our management and board of directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget, and to develop short and long-term operational plans. In particular, we believe that the exclusion of the amounts eliminated in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core business. Adjusted EBITDA has a number of limitations, including the following: (1) although depreciation and amortization expense are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; (2) Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs, the potentially dilutive impact of stock-based compensation, or tax payments that may represent a reduction in cash available to us; and (3) other companies, including companies in our industry, may calculate Adjusted EBITDA or similarly titled measures differently, which reduces its usefulness as a comparative measure.

Non-GAAP net loss and non-GAAP net loss per share, basic and diluted

We define non-GAAP net loss as the respective GAAP balance attributable to common stockholders adjusted for: (1) stock-based compensation expense, (2) accretion of redeemable convertible preferred stock, and (3) deemed dividend – preferred stock modification. Non-GAAP net loss per share, basic and diluted, is calculated as non-GAAP net loss divided by the non-GAAP weighted-average shares outstanding that are adjusted to assume the conversion of outstanding redeemable convertible preferred stock into common stock as of the beginning of the period. These non-GAAP financial measures have a number of limitations, including the following: these non-GAAP financial measures exclude stock-based compensation expense, which has been and will continue to be for the foreseeable future a significant recurring expense in MINDBODY’s business; and other companies, including companies in our industry, may exclude different non-recurring items in their calculation of these non-GAAP financial measures, which reduces their usefulness as a comparative measure.

###


MINDBODY, INC.

Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)

(Unaudited)

 

     June 30,     December 31,  
     2016     2015  

ASSETS

    

Current assets:

    

Cash and cash equivalents

   $ 87,910      $ 93,405   

Accounts receivable, net of allowance for doubtful accounts of $144 and $90 as of June 30, 2016 and December 31, 2015

     8,017        6,643   

Prepaid expenses and other current assets

     3,644        3,082   
  

 

 

   

 

 

 

Total current assets

     99,571        103,130   

Property and equipment, net

     34,013        31,754   

Intangible assets, net

     484        636   

Goodwill

     5,396        5,396   

Other noncurrent assets

     498        498   
  

 

 

   

 

 

 

TOTAL ASSETS

   $ 139,962      $ 141,414   
  

 

 

   

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

    

Current liabilities:

    

Accounts payable

   $ 6,424      $ 4,426   

Accrued expenses and other liabilities

     9,666        7,911   

Deferred revenue, current portion

     4,124        3,367   

Other current liabilities

     669        645   
  

 

 

   

 

 

 

Total current liabilities

     20,883        16,349   

Deferred revenue, noncurrent portion

     2,614        1,886   

Deferred rent, noncurrent portion

     1,340        1,254   

Financing obligation on leases, noncurrent portion

     15,750        15,961   

Other noncurrent liabilities

     188        181   
  

 

 

   

 

 

 

Total liabilities

     40,775        35,631   

Stockholders’ equity:

    

Class A common stock, par value of $0.000004 per share; 1,000,000,000 shares authorized,
19,644,157 shares issued and outstanding as of June 30, 2016; 1,000,000,000 shares authorized, 14,931,016 shares issued and outstanding as of December 31, 2015

     —          —     

Class B common stock, par value of $0.000004 per share; 100,000,000 shares authorized, 20,080,000 shares issued and outstanding as of June 30, 2016; 100,000,000 shares authorized, 24,296,346 shares issued and outstanding as of December 31, 2015

     —          —     

Additional paid-in capital

     276,954        270,436   

Accumulated other comprehensive loss

     (241     (271

Accumulated deficit

     (177,526     (164,382
  

 

 

   

 

 

 

Total stockholders’ equity

     99,187        105,783   
  

 

 

   

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

   $ 139,962      $ 141,414   
  

 

 

   

 

 

 


MINDBODY, INC.

Condensed Consolidated Statements of Operations

(in thousands, except share and per share data)

(Unaudited)

 

     Three Months Ended June 30,     Six Months Ended June 30,  
     2016     2015     2016     2015  

Revenue (1)

   $ 33,561      $ 24,760      $ 65,568      $ 47,023   

Cost of revenue (2)

     10,713        8,809        20,685        17,502   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     22,848        15,951        44,883        29,521   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses:

        

Sales and marketing (2)

     13,706        11,820        26,935        21,537   

Research and development (2)

     7,594        5,476        15,011        10,201   

General and administrative (2)

     7,681        7,262        15,204        14,042   

Change in fair value of contingent consideration

     —          (11     —          (11
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     28,981        24,547        57,150        45,769   
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss from operations

     (6,133     (8,596     (12,267     (16,248

Change in fair value of preferred stock warrant

     —          125        —          (25

Interest income

     40        3        56        6   

Interest expense

     (332     (266     (660     (283

Other income (expense), net

     (61     (53     (136     (92
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss before provision for income taxes

     (6,486     (8,787     (13,007     (16,642

Provision for income taxes

     64        62        137        68   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

     (6,550     (8,849     (13,144     (16,710

Accretion of redeemable convertible preferred stock

     —          (4,403     —          (9,862

Deemed dividend—preferred stock modification

     —          —          —          1,748   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss attributable to common stockholders

   $ (6,550   $ (13,252   $ (13,144   $ (24,824
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss per share attributable to common stockholders, basic and diluted

   $ (0.16   $ (0.87   $ (0.33   $ (1.88
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted-average shares used to compute net loss per share attributable to common stockholders, basic and diluted

     39,706,473        15,267,325        39,578,246        13,231,844   
  

 

 

   

 

 

   

 

 

   

 

 

 

(1)    Total revenue by category is presented below:

       

 
     Three Months Ended June 30,     Six Months Ended June 30,  

Revenue:

     2016        2015        2016        2015   

Subscription and services

     20,112        14,920        39,369        28,381   

Payments

     12,904        9,279        25,056        17,301   

Product and other

     545        561        1,143        1,341   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenue

   $ 33,561      $ 24,760      $ 65,568      $ 47,023   
  

 

 

   

 

 

   

 

 

   

 

 

 

(2)    Stock-based compensation expense included above was as follows:

       

 
     Three Months Ended June 30,     Six Months Ended June 30,  
     2016     2015     2016     2015  

Cost of revenue

   $ 220      $ 132      $ 435      $ 232   

Sales and marketing

     440        903        1,023        1,444   

Research and development

     470        162        965        258   

General and administrative

     1,253        628        1,873        1,031   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total stock-based compensation expense

   $ 2,383      $ 1,825      $ 4,296      $ 2,965   
  

 

 

   

 

 

   

 

 

   

 

 

 


MINDBODY, INC.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

 

     Six Months Ended June 30,  
     2016     2015  

CASH FLOWS FROM OPERATING ACTIVITIES

    

Net loss

   $ (13,144   $ (16,710

Adjustments to reconcile net loss to net cash used in operating activities:

    

Depreciation and amortization

     3,658        2,849   

Stock-based compensation expense

     4,297        2,965   

Change in fair value of preferred stock warrant

     —          25   

Other

     384        264   

Changes in operating assets and liabilities net of effects of acquisitions:

    

Accounts receivable

     (1,673     (1,519

Prepaid expenses and other current assets

     (541     335   

Other assets

     10        77   

Accounts payable

     (73     58   

Accrued expenses and other liabilities

     1,797        1,760   

Deferred revenue

     1,483        295   

Deferred rent

     86        175   
  

 

 

   

 

 

 

Net cash used in operating activities

     (3,716     (9,426
  

 

 

   

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

    

Purchase of property and equipment

     (3,796     (6,531

Change in restricted cash and deposits

     —          788   

Acquisition of business

     —          (3,000
  

 

 

   

 

 

 

Net cash used in investing activities

     (3,796     (8,743
  

 

 

   

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

    

Proceeds from initial public offering

     —          93,093   

Payments of deferred offering cost

     —          (2,604

Proceeds from employee stock purchase plan

     1,679        —     

Proceeds from exercise of equity awards

     543        60   

Repayment on financing and capital lease obligations

     (188     (63

Other

     (33     (73
  

 

 

   

 

 

 

Net cash provided by financing activities

     2,001        90,413   
  

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents

     16        (73
  

 

 

   

 

 

 

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS

     (5,495     72,171   

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

     93,405        34,675   
  

 

 

   

 

 

 

CASH AND CASH EQUIVALENTS, END OF PERIOD

   $ 87,910      $ 106,846   
  

 

 

   

 

 

 


Reconciliation of Adjusted EBITDA

 

  

     Three Months Ended June 30,     Six Months Ended June 30,  
     2016     2015     2016     2015  
     (in thousands)  

Net loss

   $ (6,550   $ (8,849   $ (13,144   $ (16,710

Stock-based compensation expense

     2,383        1,825        4,296        2,965   

Depreciation and amortization

     1,810        1,631        3,658        2,849   

Change in fair value of contingent consideration

     —          (11     —          (11

Change in fair value of preferred stock warrant

     —          (125     —          25   

Provision for income taxes

     64        62        137        68   

Other (income) expense, net

     353        316        739        369   
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ (1,940   $ (5,151   $ (4,314   $ (10,445
  

 

 

   

 

 

   

 

 

   

 

 

 

Reconciliation of net loss:

  

     Three Months Ended June 30,     Six Months Ended June 30,  
     2016     2015     2016     2015  
     (in thousands)  

GAAP net loss attributable to common stockholders

   $ (6,550   $ (13,252   $ (13,144   $ (24,824

Stock-based compensation expense

     2,383        1,825        4,296        2,965   

Accretion of redeemable convertible preferred stock

     —          4,403        —          9,862   

Deemed dividend—preferred stock modification

     —          —          —          (1,748
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net loss

   $ (4,167   $ (7,024   $ (8,848   $ (13,745
  

 

 

   

 

 

   

 

 

   

 

 

 

Reconciliation of net loss per share, basic and diluted:

  

     Three Months Ended June 30,     Six Months Ended June 30,  
     2016     2015     2016     2015  

GAAP net loss per share attributable to common stockholders, basic and diluted:

   $ (0.16   $ (0.87   $ (0.33   $ (1.88

Non-GAAP adjustments to net loss per share

     0.06        0.41        0.11        0.84   

Non-GAAP adjustments to weighted-average shares used to compute net loss per share

     —          0.25        —          0.61   
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net loss per share, basic and diluted (1)

   $ (0.10   $ (0.21   $ (0.22   $ (0.42
  

 

 

   

 

 

   

 

 

   

 

 

 

Reconciliation of weighted-average shares used to compute net loss per share:

  

     Three Months Ended June 30,     Six Months Ended June 30,  
     2016     2015     2016     2015  

GAAP weighted-average shares used to compute net loss per share, basic and diluted

     39,706,473        15,267,325        39,578,246        13,231,844   

Conversion of preferred stock into common stock

     —          17,720,297        —          19,188,830   
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP weighted average shares used to compute net loss per share, basic and diluted

     39,706,473        32,987,622        39,578,246        32,420,674   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) Non-GAAP net loss per share is calculated as non-GAAP net loss divided by the non-GAAP weighted-average shares outstanding that are adjusted to assume the conversion of outstanding preferred redeemable convertible stock to common stock as of the beginning of the period.