Attached files
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| 8-K - 8-K - Rally Software Development Corp | a15-13485_18k.htm |
Exhibit 99.1
Rally Announces First Quarter Fiscal Year 2016 Financial Results
BOULDER, Colo., June 4, 2015 /PRNewswire/ — Rally (NYSE: RALY), a leading global provider of software and services to drive agility, today announced financial results for its first quarter of fiscal year 2016 ended April 30, 2015.
First quarter fiscal year 2016 results:
· Revenues of $24.5 million, an increase of 26% compared to the same period one year ago.
· GAAP net loss of $(6.9) million, or a loss of $(0.27) per basic and diluted share based on 25.5 million weighted average shares of common stock outstanding, as compared to a GAAP net loss of $(8.5) million, or a loss of $(0.34) per basic and diluted share based on 24.8 million weighted average shares of common stock outstanding in the same period one year ago.
· Non-GAAP net loss of $(5.2) million, or $(0.20) per basic and diluted share, as compared to a non-GAAP net loss of $(6.8) million, or $(0.27) per basic and diluted share in the same period one year ago (see the table titled “Reconciliation of GAAP to non-GAAP Financial Measures”).
· Total paid seats increased to over 276,000, a 22% increase over the total paid seats in the same period one year ago.
Cash flow from operations in the first quarter was $1.2 million. Cash and cash equivalents and short-term investments at April 30, 2015, excluding restricted cash, were $67.7 million.
About Rally
Rally delivers software and services that drive agility. Organizations worldwide use Rally’s solutions to navigate evolving market demands, improve performance, and accelerate the pace of innovation to deliver value faster. Rally’s enterprise-class cloud-based platform transforms the way organizations manage the software development lifecycle by aligning software development with strategic business objectives, facilitating collaboration, and increasing transparency. By applying Agile and Lean approaches, Rally’s consulting and training services help companies innovate, lead, adapt, and deliver.
© 2015 Rally Software Development Corp. All rights reserved. Rally, Rally Software, and the Rally logo are trademarks or registered trademarks of Rally Software Development Corp. in the United States and other countries. All other trademarks are properties of their respective owners.
Non-GAAP Financial Measures
To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with Generally Accepted Accounting Principles (GAAP), we have provided certain measures that have not been prepared in accordance with GAAP. These non-GAAP financial measures include non-GAAP results for cost of revenue, gross profit, gross margin, operating expenses, net loss and basic and diluted net loss per share, which are in
addition to, and, not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.
Our non-GAAP financial measures exclude stock-based compensation expense and amortization of acquired intangible assets. We believe the presentation of operating results excluding stock-based compensation expense and the amortization of acquired intangible assets provides useful supplemental information to investors and facilitates the analysis of our core operating results and comparison of operating results across reporting periods and is therefore useful to investors in analyzing and assessing our past and future operating performance.
Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures. A reconciliation of the non-GAAP financial measures to such GAAP measures can be found in the accompanying financial statements included with this press release.
Investor Relations contact:
Rally Software Development Corp.
ir@rallydev.com
Rally Software Development Corp.
Condensed Consolidated Balance Sheets
(Unaudited, in thousands)
|
|
|
April 30, |
|
January 31, |
| ||
|
|
|
2015 |
|
2015 |
| ||
|
ASSETS |
|
|
|
|
| ||
|
|
|
|
|
|
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|
Current assets: |
|
|
|
|
| ||
|
Cash and cash equivalents |
|
$ |
14,564 |
|
$ |
15,175 |
|
|
Short-term investments |
|
53,152 |
|
51,410 |
| ||
|
Restricted cash |
|
— |
|
15 |
| ||
|
Accounts receivable, net |
|
19,014 |
|
25,986 |
| ||
|
Other receivables |
|
384 |
|
117 |
| ||
|
Prepaid expenses and other current assets |
|
3,799 |
|
3,393 |
| ||
|
Total current assets |
|
90,913 |
|
96,096 |
| ||
|
|
|
|
|
|
| ||
|
Property and equipment, net |
|
5,444 |
|
5,419 |
| ||
|
Goodwill |
|
2,049 |
|
2,104 |
| ||
|
Intangible assets, net |
|
1,250 |
|
1,382 |
| ||
|
Restricted cash |
|
4,200 |
|
4,200 |
| ||
|
Other assets |
|
503 |
|
671 |
| ||
|
|
|
|
|
|
| ||
|
Total assets |
|
$ |
104,359 |
|
$ |
109,872 |
|
|
|
|
|
|
|
| ||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
| ||
|
|
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|
|
|
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Current liabilities: |
|
|
|
|
| ||
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Accounts payable |
|
$ |
3,467 |
|
$ |
3,230 |
|
|
Accrued liabilities |
|
4,353 |
|
5,511 |
| ||
|
Deferred revenue |
|
43,733 |
|
43,978 |
| ||
|
Other current liabilities |
|
2,657 |
|
1,909 |
| ||
|
Total current liabilities |
|
54,210 |
|
54,628 |
| ||
|
|
|
|
|
|
| ||
|
Deferred revenue, net of current portion |
|
458 |
|
697 |
| ||
|
Other long-term liabilities |
|
1,105 |
|
876 |
| ||
|
|
|
|
|
|
| ||
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Total liabilities |
|
55,773 |
|
56,201 |
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|
|
|
|
|
|
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|
Stockholders’ equity: |
|
|
|
|
| ||
|
Common stock |
|
3 |
|
3 |
| ||
|
Additional paid-in capital |
|
185,374 |
|
183,532 |
| ||
|
Accumulated deficit |
|
(136,350 |
) |
(129,424 |
) | ||
|
Accumulated other comprehensive income (loss) |
|
(441 |
) |
(440 |
) | ||
|
Total stockholders’ equity |
|
48,586 |
|
53,671 |
| ||
|
|
|
|
|
|
| ||
|
Total liabilities and stockholders’ equity |
|
$ |
104,359 |
|
$ |
109,872 |
|
Rally Software Development Corp.
Condensed Consolidated Statements of Operations
(unaudited, in thousands, except per share amounts)
|
|
|
Three Months Ended |
| ||||
|
|
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April 30, |
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|
|
|
2015 |
|
2014 |
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Revenue: |
|
|
|
|
| ||
|
Subscription and support |
|
$ |
19,203 |
|
$ |
16,105 |
|
|
Perpetual license |
|
267 |
|
639 |
| ||
|
Total product revenue |
|
19,470 |
|
16,744 |
| ||
|
|
|
|
|
|
| ||
|
Professional services |
|
4,981 |
|
2,687 |
| ||
|
|
|
|
|
|
| ||
|
Total revenue |
|
24,451 |
|
19,431 |
| ||
|
|
|
|
|
|
| ||
|
Cost of revenue (1) (2): |
|
|
|
|
| ||
|
Product |
|
2,977 |
|
2,396 |
| ||
|
Professional services |
|
4,033 |
|
2,771 |
| ||
|
Total cost of revenue |
|
7,010 |
|
5,167 |
| ||
|
|
|
|
|
|
| ||
|
Gross profit |
|
17,441 |
|
14,264 |
| ||
|
|
|
|
|
|
| ||
|
Operating expenses (1): |
|
|
|
|
| ||
|
Sales and marketing |
|
12,992 |
|
11,410 |
| ||
|
Research and development |
|
6,314 |
|
5,986 |
| ||
|
General and administrative |
|
5,164 |
|
5,188 |
| ||
|
Total operating expenses |
|
24,470 |
|
22,584 |
| ||
|
|
|
|
|
|
| ||
|
Loss from operations |
|
(7,029 |
) |
(8,320 |
) | ||
|
|
|
|
|
|
| ||
|
Other income (expense): |
|
|
|
|
| ||
|
Interest and other income |
|
52 |
|
39 |
| ||
|
Loss on foreign currency transactions and other gain (loss) |
|
(84 |
) |
(82 |
) | ||
|
|
|
|
|
|
| ||
|
Loss before provision for income taxes |
|
(7,061 |
) |
(8,363 |
) | ||
|
Provision (credit) for income taxes |
|
(135 |
) |
118 |
| ||
|
Net loss |
|
$ |
(6,926 |
) |
$ |
(8,481 |
) |
|
|
|
|
|
|
| ||
|
Net loss per share attributable to common stockholders, basic and diluted |
|
$ |
(0.27 |
) |
$ |
(0.34 |
) |
|
|
|
|
|
|
| ||
|
Weighted average common shares outstanding, basic and diluted |
|
25,538 |
|
24,816 |
| ||
(1) Includes stock-based compensation expense as follows:
|
|
|
Three Months Ended |
| ||||
|
|
|
April 30, |
| ||||
|
|
|
2015 |
|
2014 |
| ||
|
Cost of product revenue |
|
$ |
94 |
|
$ |
95 |
|
|
Cost of professional services revenue |
|
73 |
|
89 |
| ||
|
Sales and marketing |
|
435 |
|
438 |
| ||
|
Research and development |
|
305 |
|
412 |
| ||
|
General and administrative |
|
656 |
|
522 |
| ||
|
|
|
|
|
|
| ||
|
|
|
$ |
1,563 |
|
$ |
1,556 |
|
|
(2) Includes amortization expense of acquired intangible assets as follows: |
|
|
|
|
|
|
Cost of product revenue |
|
$ |
132 |
|
$ |
132 |
|
Rally Software Development Corp.
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
|
|
|
Three Months Ended |
| ||||
|
|
|
April 30, |
| ||||
|
|
|
2015 |
|
2014 |
| ||
|
Cash flow from operating activities: |
|
|
|
|
| ||
|
Net loss |
|
$ |
(6,926 |
) |
$ |
(8,481 |
) |
|
|
|
|
|
|
| ||
|
Adjustments to reconcile net loss to net cash provided by (used) in operating activities: |
|
|
|
|
| ||
|
Depreciation and amortization |
|
762 |
|
724 |
| ||
|
Noncash stock-based compensation expense |
|
1,563 |
|
1,556 |
| ||
|
Other |
|
5 |
|
19 |
| ||
|
Changes in operating assets and liabilities: |
|
|
|
|
| ||
|
Accounts receivable |
|
6,972 |
|
5,742 |
| ||
|
Other receivables |
|
(268 |
) |
(30 |
) | ||
|
Prepaid and other current assets |
|
(405 |
) |
(867 |
) | ||
|
Restricted cash |
|
15 |
|
— |
| ||
|
Other assets |
|
155 |
|
36 |
| ||
|
Accounts payable and accrued expenses |
|
(1,159 |
) |
(1,183 |
) | ||
|
Deferred revenue |
|
(484 |
) |
(1,075 |
) | ||
|
Other current liabilities |
|
748 |
|
815 |
| ||
|
Other long-term liabilities |
|
228 |
|
(15 |
) | ||
|
|
|
|
|
|
| ||
|
Net cash provided by (used) in operating activities |
|
1,206 |
|
(2,759 |
) | ||
|
|
|
|
|
|
| ||
|
Cash flow from investing activities: |
|
|
|
|
| ||
|
Purchase of property and equipment |
|
(365 |
) |
(648 |
) | ||
|
Purchase of investments |
|
(27,958 |
) |
— |
| ||
|
Proceeds from maturities of investments |
|
26,225 |
|
— |
| ||
|
Proceeds from sale of property and equipment |
|
1 |
|
1 |
| ||
|
|
|
|
|
|
| ||
|
Net cash (used) in investing activities |
|
(2,097 |
) |
(647 |
) | ||
|
|
|
|
|
|
| ||
|
Cash flow from financing activities: |
|
|
|
|
| ||
|
Proceeds from exercise of common stock options |
|
470 |
|
246 |
| ||
|
Proceeds from issuance of common stock warrants |
|
20 |
|
— |
| ||
|
Payment of payroll taxes related to net settled restricted stock units |
|
(210 |
) |
— |
| ||
|
|
|
|
|
|
| ||
|
Net cash provided by financing activities |
|
280 |
|
246 |
| ||
|
|
|
|
|
|
| ||
|
Net (decrease) in cash and cash equivalents during period |
|
(611 |
) |
(3,160 |
) | ||
|
|
|
|
|
|
| ||
|
Cash and cash equivalents at beginning of period |
|
15,175 |
|
88,891 |
| ||
|
Cash and cash equivalents at end of period |
|
$ |
14,564 |
|
$ |
85,731 |
|
Rally Software Development Corp.
Reconciliation of GAAP to Non-GAAP Financial Measures
(unaudited, in thousands, except per share amounts)
|
|
|
Three Months Ended |
| ||||
|
|
|
April 30, |
| ||||
|
|
|
2015 |
|
2014 |
| ||
|
|
|
|
|
|
| ||
|
GAAP product cost of revenue |
|
$ |
2,977 |
|
$ |
2,396 |
|
|
Amortization expense of acquired intangible assets |
|
(132 |
) |
(132 |
) | ||
|
Stock-based compensation expense |
|
(94 |
) |
(95 |
) | ||
|
Non-GAAP product cost of revenue |
|
$ |
2,751 |
|
$ |
2,169 |
|
|
|
|
|
|
|
| ||
|
GAAP professional services cost of revenue |
|
$ |
4,033 |
|
$ |
2,771 |
|
|
Stock-based compensation expense |
|
(73 |
) |
(89 |
) | ||
|
Non-GAAP professional services cost of revenue |
|
$ |
3,960 |
|
$ |
2,682 |
|
|
|
|
|
|
|
| ||
|
GAAP gross profit |
|
$ |
17,441 |
|
$ |
14,264 |
|
|
Amortization expense of acquired intangible assets |
|
132 |
|
132 |
| ||
|
Stock-based compensation expense |
|
167 |
|
184 |
| ||
|
Non-GAAP gross profit |
|
$ |
17,740 |
|
$ |
14,580 |
|
|
|
|
|
|
|
| ||
|
Gross margin: |
|
|
|
|
| ||
|
GAAP |
|
71 |
% |
73 |
% | ||
|
Non-GAAP |
|
73 |
% |
75 |
% | ||
|
|
|
|
|
|
| ||
|
Product gross margin: |
|
|
|
|
| ||
|
GAAP |
|
85 |
% |
86 |
% | ||
|
Non-GAAP |
|
86 |
% |
87 |
% | ||
|
|
|
|
|
|
| ||
|
Professional services gross margin: |
|
|
|
|
| ||
|
GAAP |
|
19 |
% |
(3 |
)% | ||
|
Non-GAAP |
|
20 |
% |
0 |
% | ||
|
|
|
|
|
|
| ||
|
GAAP sales and marketing expense |
|
$ |
12,992 |
|
$ |
11,410 |
|
|
Stock-based compensation expense |
|
(435 |
) |
(438 |
) | ||
|
Non-GAAP sales and marketing expense |
|
$ |
12,557 |
|
$ |
10,972 |
|
|
|
|
|
|
|
| ||
|
GAAP research and development expense |
|
$ |
6,314 |
|
$ |
5,986 |
|
|
Stock-based compensation expense |
|
(305 |
) |
(412 |
) | ||
|
Non-GAAP research and development expense |
|
$ |
6,009 |
|
$ |
5,574 |
|
|
|
|
|
|
|
| ||
|
GAAP general and administrative expense |
|
$ |
5,164 |
|
$ |
5,188 |
|
|
Stock-based compensation expense |
|
(656 |
) |
(522 |
) | ||
|
Non-GAAP general and administrative expense |
|
$ |
4,508 |
|
$ |
4,666 |
|
|
|
|
|
|
|
| ||
|
GAAP net loss |
|
$ |
(6,926 |
) |
$ |
(8,481 |
) |
|
Amortization expense of acquired intangible assets |
|
132 |
|
132 |
| ||
|
Stock-based compensation expense |
|
1,563 |
|
1,556 |
| ||
|
Non-GAAP net loss |
|
$ |
(5,231 |
) |
$ |
(6,793 |
) |
|
|
|
|
|
|
| ||
|
Basic and diluted net loss per share: |
|
|
|
|
| ||
|
GAAP basic and diluted net loss per share |
|
$ |
(0.27 |
) |
$ |
(0.34 |
) |
|
Amortization expense of acquired intangible assets |
|
0.01 |
|
0.01 |
| ||
|
Stock-based compensation expense |
|
0.06 |
|
0.06 |
| ||
|
Non-GAAP basic and diluted net loss per share |
|
$ |
(0.20 |
) |
$ |
(0.27 |
) |
|
|
|
|
|
|
| ||
|
Shares used to calculate basic and diluted net loss per share |
|
25,538 |
|
24,816 |
| ||