2Q total revenue of $43.4 million, up 23% year-over-year
2Q non-GAAP earnings of $(0.07), up 50% year-over-year
PALO ALTO, Calif., July 31, 2014 (GLOBE NEWSWIRE) -- Jive Software, Inc. (Nasdaq:JIVE), the world's leading provider of modern communication and collaboration solutions for business, today announced financial results for its second quarter ended June 30, 2014.
"Jive delivered second quarter results that exceeded our guidance from both a revenue and profitability perspective. However, we also experienced a more challenging sales environment that resulted in elongated sales cycles, including several larger opportunities that did not close by the end of the quarter," said Tony Zingale, Chairman & CEO of Jive Software.
Zingale added, "We are continuing to execute against our go-to-market strategy and although it has been well received by customers we believe it will take additional time to fully recognize the benefits in our results. We remain enthusiastic about the long-term prospects associated with the global enterprise communication and collaboration market. We believe we are well positioned to capitalize on this opportunity with our unmatched platform, functionality and track record of delivering customer success."
Second Quarter 2014 Financial Highlights
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Revenue: Total revenue for the second quarter was $43.4 million, an increase of 23% on a year-over-year basis. Within total revenue, product revenue was $39.0 million for the second quarter, an increase of 24% on a year-over-year basis. Professional Services revenue for the second quarter was $4.3 million, an increase of 18% on a year-over-year basis.
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Non-GAAP Billings: Short-term billings, which Jive defines as revenue plus the change in short-term deferred revenue, were $46.1 million for the second quarter, an increase of 10% on a year-over-year basis. Total billings, which Jive defines as revenue plus the change in short and long-term deferred revenue, was $40.8 million compared to $42.0 in the year-ago period.
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Gross Profit: GAAP gross profit for the second quarter was $26.7 million, compared to $21.5 million for the second quarter of 2013. Non-GAAP gross profit was $28.6 million for the second quarter, representing a year-over-year increase of 22% and a non-GAAP gross margin of 66%.
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Loss from Operations: GAAP loss from operations for the second quarter was $14.4 million, compared to a loss of $18.8 million for the second quarter of 2013. Non-GAAP loss from operations was $4.4 million for the second quarter, compared to a loss of $9.2 million for the second quarter of 2013.
- Net Loss: GAAP net loss for the second quarter was $14.6 million, compared to a net loss of $17.8 million for the same period last year. GAAP net loss per share for the second quarter was $0.21 based on 70.2 million weighted-average shares outstanding, compared to a net loss per share of $0.27 based on 66.8 million weighted-average shares outstanding for the same period last year.
Non-GAAP net loss for the second quarter was $4.6 million, compared to a net loss of $9.5 million for the same period last year. Non-GAAP net loss per share for the second quarter was $0.07 based on 70.2 million weighted-average shares outstanding, compared to net a loss per share of $0.14 based on 66.8 million weighted-average shares outstanding for the same period last year.
- Balance Sheet and Cash Flow: As of June 30, 2014, Jive had cash and cash equivalents and marketable securities of $139.2 million, a decrease of $100 thousand from $139.3 million at the end of the first quarter.
The company generated $4.2 million in cash from operations and invested $3.0 million in capital expenditures, leading to free cash flow of $1.2 million for the second quarter. Negative free cash flow was $1.7 million for the second quarter of 2013. Free cash flow is defined as cash flows provided by operating activities minus cash flows used to purchase capital expenditures.
A reconciliation of GAAP to non-GAAP financial measures has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading "Non-GAAP Financial Measures."
Second Quarter 2014 Business Highlights
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Signed new customers and expanded existing relationships, including: Akamai Technologies, Artelia, Eli Lilly, Euroclear Bank, Gentex, GNS3 Inc., Humana, Huntsman International LLC, Intercontinental Exchange, Modern Times Group, Persistent Systems Inc., PricewaterhouseCoopers, ServiceMax, Sodexo Group, TI Automotive Systems, TVO and Univision, among others.
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Named one of the world's foremost vendors in enterprise collaboration and social networking by two independent research firms. Forrester Research named Jive a leader in The Forrester Wave™: Enterprise Social Platforms, Q2 2014 and Aragon Research ranked Jive as the top vendor in the leader category amongst all other global vendors in The Aragon Research Globe™ for Social Software, 2014.
- Strengthened reputation as one of the best places to work. Recent distinctions included Bay Area News Group's "Top Workplaces in the Bay Area," Oregon Business Magazine's "Best Companies to Work for in Oregon," and Portland Business Journal's "Oregon's Most Admired Companies." Jive also achieved a 4.3 out of 5 overall rating from both current and past employees on Glassdoor, the global standard for transparent employee workplace assessments.
Financial Outlook
As of July 31, 2014, Jive is initiating guidance for its third quarter 2014 and updating guidance for the full year 2014, as follows:
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Third Quarter 2014 Guidance: Total revenue is expected to be in the range of $44.0 million to $45.0 million. Non-GAAP loss from operations is expected to be in the range of $4.5 million to $6.5 million. Non-GAAP net loss per share is expected to be in the range of $0.08 to $0.10 based on approximately 71.1 million weighted-average diluted shares outstanding.
- Full Year 2014 Guidance: Total revenue is expected to be in the range of $172.0 million to $176.0 million. Non-GAAP loss from operations is expected to be in the range of $24.0 million to $28.0 million. Non-GAAP net loss per share is expected to be in the range of $0.35 to $0.43 based on approximately 70.7 million weighted-average diluted shares outstanding. Free cash flow is expected to be in the range of negative $15.0 million to negative $ 20.0 million.
With respect to the Company's expectations under "Financial Outlook" above, the Company has not reconciled non-GAAP loss from operations or non-GAAP net loss per share to GAAP loss from operations and GAAP net loss per share because the Company does not provide guidance for stock-based compensation, income taxes or amortization of intangible assets, which are reconciling items between those Non-GAAP and GAAP measures. As items that impact loss from operations and loss per share are out of the Company's control and/or cannot be reasonably predicted, the Company is unable to provide such guidance. Accordingly, a reconciliation to loss from operations and net loss per share is not available without unreasonable effort.
Quarterly Conference Call
Jive will host a conference call today at 2:00 p.m. PT (5:00 p.m. ET) to review the company's financial results for the second quarter 2014, in addition to discussing the company's outlook for the third quarter and full year 2014. To access this call, dial (888) 204-4610 (domestic) or (913) 312-1449 (international) with conference ID 6600060. A live webcast of the conference call will be accessible from the investor relations section of Jive's website at http://investors.jivesoftware.com/ and a replay will be archived and accessible at: http://investors.jivesoftware.com/events.cfm. A replay of this conference call can also be accessed through August 14, 2014, by dialing (877) 870-5176 (domestic) or (858) 384-5517 (international). The replay pass code is 6600060.
About Jive Software
Jive (Nasdaq:JIVE) is the leading provider of modern communication and collaboration solutions for business. Recognized as a leader by the industry's top analyst firms in multiple categories, Jive enables employees, partners and customers to work better together. More information can be found at www.jivesoftware.com or the Jive News Blog.
Non-GAAP Financial Measures
The Company uses certain non-GAAP financial measures in this release. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles.
Non-GAAP gross profit, loss from operations, net loss and net loss per share exclude stock-based compensation expenses and amortization of acquisition related intangible assets. Total billings is defined by the Company as revenue plus the change in total deferred revenue. Short-term billings is defined as revenue plus the change in short-term deferred revenue. Management presents these non-GAAP financial measures because it considers them to be important supplemental measures of performance. Management uses the non-GAAP financial measures for planning purposes, including analysis of the Company's performance against prior periods, the preparation of operating budgets and to determine appropriate levels of operating and capital investments. Management also believes that the non-GAAP financial measures provide additional insight for analysts and investors in evaluating the Company's financial and operational performance. However, these non-GAAP financial measures have limitations as an analytical tool and are not intended to be an alternative to financial measures prepared in accordance with GAAP. We intend to provide these non-GAAP financial measures as part of our future earnings discussions and, therefore, the inclusion of these non-GAAP financial measures will provide consistency in our financial reporting. A reconciliation of these non-GAAP measures to GAAP is provided in the accompanying tables.
Safe Harbor Statement
"Safe Harbor" statement under Private Securities Litigation Reform Act of 1995: This press release contains forward-looking statements, including statements concerning our financial guidance for the third fiscal quarter of 2014 and the full year of 2014, the future growth of the social business market, and our belief that we are well positioned to build upon our momentum in 2014. The achievement of success in the matters covered by such forward-looking statements involves substantial risks, uncertainties and assumptions. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, our results or events could differ materially from the results expressed or implied by the forward-looking statements we make.
The risk and uncertainties referred to above include, but are not limited to, risks associated with our limited operating history; expectations regarding the benefits of our relationship with Cisco; expectations regarding the widespread adoption of social business platforms by enterprises; uncertainty regarding the market for social business platforms; changes in the competitive dynamics of our market; our ability to increase and predict new subscription; subscription renewal or upsell rates and the impact these rates may have on our future revenues; our reliance on our own controls and third-party service providers to host some of our products; the risk that our security measures could be breached and unauthorized access to customer data could be obtained; potential third party intellectual property infringement claims; and the price volatility of our common stock.
More information about potential factors that could affect our business and financial results is contained in our prospectus as filed with the Securities and Exchange Commission. Additional information will also be set forth in our quarterly reports on Form 10-Q, annual reports on Form 10-K and other filings that we make with the Securities and Exchange Commission. We do not intend and undertake no duty to release publicly any updates or revisions to any forward-looking statements contained herein.
| JIVE SOFTWARE, INC. | ||||
| Consolidated Statements of Operations | ||||
| (In thousands, except per share amounts) | ||||
| (Unaudited) | ||||
| For the Three Months Ended | For the Six Months Ended | |||
| June 30, | June 30, | |||
| 2014 | 2013 | 2014 | 2013 | |
| Revenues: | ||||
| Product | $ 39,037 | $ 31,559 | $ 76,414 | $ 62,222 |
| Professional services | 4,338 | 3,683 | 7,990 | 6,872 |
| Total revenues | 43,375 | 35,242 | 84,404 | 69,094 |
| Cost of revenues: | ||||
| Product | 10,835 | 9,540 | 20,756 | 18,752 |
| Professional services | 5,805 | 4,215 | 11,339 | 8,063 |
| Total cost of revenues | 16,640 | 13,755 | 32,095 | 26,815 |
| Gross profit | 26,735 | 21,487 | 52,309 | 42,279 |
| Operating expenses: | ||||
| Research and development | 12,991 | 13,749 | 25,888 | 26,426 |
| Sales and marketing | 21,658 | 20,480 | 45,159 | 39,344 |
| General and administrative | 6,514 | 6,081 | 12,833 | 11,947 |
| Total operating expenses | 41,163 | 40,310 | 83,880 | 77,717 |
| Loss from operations | (14,428) | (18,823) | (31,571) | (35,438) |
| Other income (expense), net: | ||||
| Interest income | 60 | 62 | 101 | 131 |
| Interest expense | (64) | (105) | (147) | (180) |
| Other, net | (141) | (105) | (151) | (109) |
| Total other income (expense), net | (145) | (148) | (197) | (158) |
| Loss before provision for (benefit from) income taxes | (14,573) | (18,971) | (31,768) | (35,596) |
| Provision for (benefit from) income taxes | 57 | (1,191) | 186 | (1,215) |
| Net loss | $ (14,630) | $ (17,780) | $ (31,954) | $ (34,381) |
| Basic and diluted net loss per share | $ (0.21) | $ (0.27) | $ (0.46) | $ (0.52) |
| Shares used in basic and diluted per share calculations | 70,233 | 66,816 | 69,785 | 66,285 |
| JIVE SOFTWARE, INC. | ||
| Consolidated Balance Sheets | ||
| (In thousands, except share and per share data) | ||
| (Unaudited) | ||
| June 30, | December 31, | |
| 2014 | 2013 | |
| Assets | ||
| Current Assets: | ||
| Cash and cash equivalents | $ 30,499 | $ 38,415 |
| Short-term marketable securities | 69,521 | 69,809 |
| Accounts receivable, net of allowances | 38,935 | 58,829 |
| Prepaid expenses and other current assets | 12,426 | 9,425 |
| Total current assets | 151,381 | 176,478 |
| Marketable securities, noncurrent | 39,175 | 33,443 |
| Property and equipment, net of accumulated depreciation | 23,694 | 21,379 |
| Goodwill | 29,753 | 29,753 |
| Intangible assets, net of accumulated amortization | 11,870 | 14,310 |
| Other assets | 555 | 572 |
| Total assets | $ 256,428 | $ 275,935 |
| Liabilities and Stockholders' Equity | ||
| Current liabilities: | ||
| Accounts payable | $ 5,228 | $ 6,412 |
| Accrued payroll and related liabilities | 7,440 | 7,469 |
| Other accrued liabilities | 7,514 | 8,478 |
| Deferred revenue, current | 116,134 | 112,432 |
| Term debt, current | 2,400 | 2,400 |
| Total current liabilities | 138,716 | 137,191 |
| Deferred revenue, less current portion | 27,444 | 34,905 |
| Term debt, less current portion | 4,800 | 6,000 |
| Other long-term liabilities | 1,176 | 1,605 |
| Total liabilities | 172,136 | 179,701 |
| Commitments and contingencies | ||
| Stockholders' Equity: | ||
| Common stock | 7 | 7 |
| Less treasury stock at cost | (3,352) | (3,352) |
| Additional paid-in capital | 346,758 | 326,834 |
| Accumulated deficit | (259,485) | (227,531) |
| Accumulated other comprehensive income | 364 | 276 |
| Total stockholders' equity | 84,292 | 96,234 |
| Total liabilities and stockholders' equity | $ 256,428 | $ 275,935 |
| JIVE SOFTWARE, INC. | ||||
| Consolidated Statements of Cash Flows | ||||
| (In thousands) | ||||
| (Unaudited) | ||||
| Three Months Ended | Six Months Ended | |||
| June 30, | June 30, | |||
| 2014 | 2013 | 2014 | 2013 | |
| Cash flows from operating activities: | ||||
| Net loss | $ (14,630) | $ (17,780) | $ (31,954) | $ (34,381) |
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||
| Depreciation and amortization | 3,903 | 4,530 | 7,885 | 7,787 |
| Stock-based compensation | 8,808 | 8,250 | 18,625 | 14,389 |
| Change in deferred taxes | -- | (1,351) | 32 | (1,351) |
| (Increase) decrease, net of acquisitions, in: | ||||
| Accounts receivable, net | 9,212 | 135 | 19,894 | 11,712 |
| Prepaid expenses and other assets | (1,840) | (605) | (2,931) | (1,009) |
| Increase (decrease), net of acquisitions, in: | -- | |||
| Accounts payable | 1,571 | 565 | (890) | (355) |
| Accrued payroll and related liabilities | (564) | 295 | (311) | (1,963) |
| Other accrued liabilities | 133 | (587) | (628) | 100 |
| Deferred revenue | (2,572) | 6,710 | (3,759) | 11,068 |
| Other long-term liabilities | 168 | 52 | 115 | 40 |
| Net cash provided by operating activities | 4,189 | 214 | 6,078 | 6,037 |
| Cash flows from investing activities: | ||||
| Payments for purchase of property and equipment | (2,956) | (1,926) | (6,588) | (4,789) |
| Purchases of marketable securities | (43,560) | (31,288) | (62,194) | (58,780) |
| Sales of marketable securities | 7,601 | 14,068 | 11,101 | 23,721 |
| Maturities of marketable securities | 24,507 | 20,900 | 45,074 | 42,330 |
| Acquisitions, net of cash acquired | -- | (11,047) | -- | (11,047) |
| Net cash used in investing activities | (14,408) | (9,293) | (12,607) | (8,565) |
| Cash flows from financing activities: | ||||
| Proceeds from exercise of stock options | 480 | 1,708 | 1,528 | 5,341 |
| Taxes paid related to net share settlement of equity awards | (861) | (392) | (1,115) | (392) |
| Repayments of term loans | (600) | (600) | (1,200) | (1,200) |
| Earnout payment for prior acquisition | -- | -- | (576) | -- |
| Net cash provided by (used in) financing activities | (981) | 716 | (1,363) | 3,749 |
| Net increase (decrease) in cash and cash equivalents | (11,200) | (8,363) | (7,892) | 1,221 |
| Effect of exchange rate changes | (26) | 7 | (24) | 12 |
| Cash and cash equivalents, beginning of period | 41,725 | 58,544 | 38,415 | 48,955 |
| Cash and cash equivalents, end of period | $ 30,499 | $ 50,188 | $ 30,499 | $ 50,188 |
| JIVE SOFTWARE, INC. | ||||
| Reconciliation of Non-GAAP Information | ||||
| (In thousands, except per share data) | ||||
| (Unaudited) | ||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||
| 2014 | 2013 | 2014 | 2013 | |
| Gross profit, as reported | $ 26,735 | $ 21,487 | $ 52,309 | $ 42,279 |
| Add back: | ||||
| Stock-based compensation | 941 | 777 | 2,111 | 1,298 |
| Amortization related to acquisitions | 954 | 926 | 1,926 | 1,682 |
| Non-recurring acquisition expense | -- | 250 | -- | 250 |
| Gross profit, non-GAAP | $ 28,630 | $ 23,440 | $ 56,346 | $ 45,509 |
| Gross margin, non-GAAP | 66% | 67% | 67% | 66% |
| Three Months Ended June 30, | Six Months Ended June 30, | |||
| 2014 | 2013 | 2014 | 2013 | |
| Research and development, as reported | $ 12,991 | $ 13,749 | $ 25,888 | $ 26,426 |
| less: | ||||
| Stock-based compensation | 2,992 | 3,395 | 5,972 | 5,627 |
| Amortization related to acquisitions | 127 | 110 | 254 | 176 |
| Non-recurring acquisition expense | -- | 19 | -- | 19 |
| Research and development, non-GAAP | $ 9,872 | $ 10,225 | $ 19,662 | $ 20,604 |
| As percentage of total revenues, non-GAAP | 23% | 29% | 23% | 30% |
| Three Months Ended June 30, | Six Months Ended June 30, | |||
| 2014 | 2013 | 2014 | 2013 | |
| Sales and marketing, as reported | $ 21,658 | $ 20,480 | $ 45,159 | $ 39,344 |
| less: | ||||
| Stock-based compensation | 2,885 | 2,405 | 6,627 | 4,629 |
| Amortization related to acquisitions | 129 | 115 | 258 | 175 |
| Sales and marketing, non-GAAP | $ 18,644 | $ 17,960 | $ 38,274 | $ 34,540 |
| As percentage of total revenues, non-GAAP | 43% | 51% | 45% | 50% |
| Three Months Ended June 30, | Six Months Ended June 30, | |||
| 2014 | 2013 | 2014 | 2013 | |
| General and administrative, as reported | $ 6,514 | $ 6,081 | $ 12,833 | $ 11,947 |
| less: | ||||
| Stock-based compensation | 1,990 | 1,673 | 3,915 | 2,835 |
| General and administrative, non-GAAP | $ 4,524 | $ 4,408 | $ 8,918 | $ 9,112 |
| As percentage of total revenues, non-GAAP | 10% | 13% | 11% | 13% |
| Three Months Ended June 30, | Six Months Ended June 30, | |||
| 2014 | 2013 | 2014 | 2013 | |
| Loss from operations, as reported | $ (14,428) | $ (18,823) | $ (31,571) | $ (35,438) |
| Add back: | ||||
| Stock-based compensation | 8,808 | 8,250 | 18,625 | 14,389 |
| Amortization related to acquisitions | 1,210 | 1,151 | 2,438 | 2,033 |
| Non-recurring acquisition expense | -- | 269 | -- | 269 |
| Loss from operations, non-GAAP | $ (4,410) | $ (9,153) | $ (10,508) | $ (18,747) |
| Three Months Ended June 30, | Six Months Ended June 30, | |||
| 2014 | 2013 | 2014 | 2013 | |
| Loss before provision for (benefit from) income taxes, as reported | $ (14,573) | $ (18,971) | $ (31,768) | $ (35,596) |
| Add back: | ||||
| Stock-based compensation | 8,808 | 8,250 | 18,625 | 14,389 |
| Amortization related to acquisitions | 1,210 | 1,151 | 2,438 | 2,033 |
| Non-recurring acquisition expense | -- | 269 | -- | 269 |
| Loss before provision for (benefit from) income taxes, non-GAAP | $ (4,555) | $ (9,301) | $ (10,705) | $ (18,905) |
| Three Months Ended June 30, | Six Months Ended June 30, | |||
| 2014 | 2013 | 2014 | 2013 | |
| Net loss, as reported | $ (14,630) | $ (17,780) | $ (31,954) | $ (34,381) |
| Add back: | ||||
| Stock-based compensation | 8,808 | 8,250 | 18,625 | 14,389 |
| Amortization related to acquisitions | 1,210 | 1,151 | 2,438 | 2,033 |
| Non-recurring acquisition expense | -- | 269 | -- | 269 |
| Tax benefit related to acquisitions | -- | (1,351) | -- | (1,351) |
| Net loss, non-GAAP | $ (4,612) | $ (9,461) | $ (10,891) | $ (19,041) |
| Three Months Ended June 30, | Six Months Ended June 30, | |||
| 2014 | 2013 | 2014 | 2013 | |
| Basic and diluted net loss per share, as reported | $ (0.21) | $ (0.27) | $ (0.46) | $ (0.52) |
| Add back: | ||||
| Stock-based compensation | 0.12 | 0.13 | 0.27 | 0.22 |
| Amortization related to acquisitions | 0.02 | 0.02 | 0.03 | 0.03 |
| Non-recurring acquisition expense | -- | -- | -- | -- |
| Tax benefit related to acquisitions | -- | (0.02) | -- | (0.02) |
| Basic and diluted net loss per share, non-GAAP | $ (0.07) | $ (0.14) | $ (0.16) | $ (0.29) |
| Three Months Ended June 30, | Six Months Ended June 30, | |||
| 2014 | 2013 | 2014 | 2013 | |
| Total revenues | $ 43,375 | $ 35,242 | $ 84,404 | $ 69,094 |
| Deferred revenue, current, end of period | 116,134 | 96,794 | 116,134 | 96,794 |
| Less: Deferred revenue, current, beginning of period | (113,454) | (90,186) | (112,432) | (87,698) |
| Short-term billings | $ 46,055 | $ 41,850 | $ 88,106 | $ 78,190 |
| Three Months Ended June 30, | Six Months Ended June 30, | |||
| 2014 | 2013 | 2014 | 2013 | |
| Total revenues | $ 43,375 | $ 35,242 | $ 84,404 | $ 69,094 |
| Deferred revenue, end of period | 143,578 | 128,115 | 143,578 | 128,115 |
| Less: Deferred revenue, beginning of period | (146,150) | (121,405) | (147,337) | (117,047) |
| Billings | $ 40,803 | $ 41,952 | $ 80,645 | $ 80,162 |