• Q4 SaaS Revenue Increases 30% to $54.6 Million
  • Cash from Operations of $13.0 Million, up 45% Year over Year
  • 2017 SaaS Revenue of $198.2 Million, up 31% Year over Year
  • SaaS Deferred Revenue of $129.3 Million, up 31% Year over Year

DUBLIN, Calif., Feb. 08, 2018 (GLOBE NEWSWIRE) -- Callidus Software Inc. (NASDAQ:CALD), a global leader in cloud-based sales, marketing, learning and customer experience solutions, today announced financial results for the year ended December 31, 2017.

Recent Acquisition Announcement
On January 29, 2018, CallidusCloud entered into a merger agreement with SAP America, Inc. (“SAP”) under which SAP will acquire CallidusCloud for $36.00 per share in an all-cash transaction valued at approximately $2.5 billion, inclusive of CallidusCloud’s net cash.

In light of this, CallidusCloud will not hold a conference call to discuss these financial results.

Financial Highlights for the Fourth Quarter 2017
SaaS revenue was $54.6 million, an increase of 30% over the same quarter in the prior year. Maintenance revenue was $450,000, resulting in total recurring revenue of $55.0 million. SaaS revenue growth continued to benefit from success in our Lead to Money suite. Professional services revenue was $14.1 million. Total revenue was $69.5 million for the fourth quarter, an increase of 24% year-over-year. Normalized SaaS billings growth was 28% for the trailing twelve-month period. Normalized billings growth for the quarter was 38%. Cash and short-term investments were $150.5 million. Cash flow from operations for the quarter was $13.0 million, compared to $9.0 million in the same quarter of the prior year.

GAAP Performance

  • Recurring revenue gross margin was 73%, compared to 74% for the same quarter in the prior year.
  • Overall gross margin was 62%, consistent with the corresponding period in the prior year.
  • Operating loss was $3.8 million, compared to $4.2 million for the same quarter in the prior year.
  • Pre-tax loss was $3.4 million, compared to $4.4 million for the same quarter in the prior year.  

Non-GAAP Performance
The following non-GAAP measures are described below and are reconciled to the corresponding GAAP measures at the end of this press release.

  • Recurring revenue gross margin was 77%, consistent with the corresponding period in the prior year.
  • Overall gross margin was 67%, compared to 66% for the same quarter in the prior year.
  • Operating income was $8.6 million, compared to $5.8 million for the same quarter in the prior year.
  • Pre-tax income was $9.0 million, compared to $5.6 million for the same quarter in the prior year. 

Financial Highlights for the Full Year 2017
SaaS revenue was $198.2 million, an increase of 31% over the prior year, while maintenance revenue was $2.8 million, resulting in total recurring revenue of $201.0 million. Professional services revenue was $51.7 million. Total reported revenue was $253.1 million for the year, an increase of 22%. Cash flow from operations for the full year was $43.0 million, reflecting a 44% increase over last year.

GAAP Performance

  • Recurring revenue gross margin was 72%, compared to 74% in the prior year.
  • Overall gross margin was 61%, compared to 62% in the prior year.
  • Operating loss was $21.4 million, compared to $17.4 million in the prior year.
  • Pre-tax loss was $20.5 million, compared to $17.8 million in the prior year. 

Non-GAAP Performance
The following non-GAAP measures are described below and are reconciled to the corresponding GAAP measures at the end of this press release.

  • Recurring revenue gross margin was 76%, compared to 77% in the prior year.
  • Overall gross margin was 65%, compared to 66% in the prior year.
  • Operating income was $24.1 million, compared to $18.1 million in the prior year.
  • Pre-tax income was $25.1 million, compared to $17.7 million in the prior year. 

Financial Outlook

Following the announcement made on January 29, 2018, regarding CallidusCloud’s entry into a definitive agreement to be acquired by SAP, the Company will not provide outlook for its 2018 financial results. Furthermore, the Company is withdrawing all previously issued financial guidance for the full year 2018.

For more information, please visit: http://www.calliduscloud.com/about-us/investor-relations/

About CallidusCloud
Callidus Software Inc. (NASDAQ:CALD), doing business as CallidusCloud®, is the global leader in cloud-based sales, marketing, learning and customer experience solutions. CallidusCloud enables organizations to accelerate and maximize their Lead to Money process with a complete suite of solutions that identify the right leads, ensure proper territory and quota distribution, enable sales forces, automate configure price quote, and streamline sales compensation – driving bigger deals, faster. Over 6,400 leading organizations, across all industries, rely on CallidusCloud to optimize the Lead to Money process to close more deals for more money in record time.

For more information, please visit www.calliduscloud.com.

Non-GAAP Financial Measures
In this release, CallidusCloud has provided additional financial information that has not been prepared in accordance with GAAP. This information includes non-GAAP gross margin, non-GAAP recurring revenue gross margin, non-GAAP operating expenses, non-GAAP operating income, and non-GAAP net income before provision for income taxes. CallidusCloud uses non-GAAP measures internally in analyzing its financial results and believes that they are useful to investors as a supplement to GAAP measures in evaluating CallidusCloud’s operating performance. CallidusCloud believes that the use of these non-GAAP measures provides additional insight for investors to use in evaluation of ongoing operating results and trends and in comparing its financial measures with other companies in CallidusCloud’s industry, many of which present non-GAAP financial measures that may resemble our non-GAAP financial measures. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.

Our non-GAAP measures reflect adjustments based on the following items:

Stock-based compensation expense: We have excluded the effect of stock-based compensation expense from our non-GAAP gross profit, recurring revenue gross profit, operating expenses, operating income, and net income before provision for income taxes. We believe the exclusion of stock-based compensation expense provides a useful comparison of our operating results to our peers.

Restructuring and other expense: We have excluded the effect of restructuring and other expense from our non-GAAP operating expenses, operating income and net income before provision for income taxes. Restructuring and other expense consists of employee severance and facility exit costs. We feel it is useful to investors to understand the effects of these items on our financial results.

Patent litigation and settlement costs: We have excluded patent litigation and settlement costs from our non-GAAP gross profit, recurring revenue gross profit, operating expenses, operating income, and net income before provision for income taxes. We believe patent litigation and settlement costs are not indicative of our ongoing business operations, and are inconsistent in amount and frequency; as such we exclude these costs during our evaluation of our business performance.

Non-cash amortization of acquired intangible assets: We have excluded the effect of amortization of acquired intangibles which include developed technology, customer relationships, trade names, domain names, patents and licenses, and order backlog from our non-GAAP gross profit, recurring revenue gross profit, operating expenses, operating income, other income and expense, and net income before provision for income taxes. Amortization of acquired intangibles are significantly affected by timing, and as such, can be inconsistent in amount and nature. 

Acquisition-related costs: We have excluded the costs related to acquisitions from our non-GAAP operating expenses, operating income, net income and net income before provision for income taxes. These costs include legal and transactional costs associated with acquisition activities as well as expense related to earnouts that we would not have otherwise incurred in the periods presented as part of our continuing operations. We believe the exclusion of acquisition-related costs provides a useful comparison of our operating results to our peers.

Cash taxes: Cash taxes are defined as GAAP current income tax expense excluding the related tax amount for non-cash and non-GAAP items.

Additionally, CallidusCloud believes the following supplemental non-GAAP financial information is useful to investors and others in assessing its operating performance. A calculation of the supplemental non-GAAP financial information is provided in the table titled “Non-GAAP Supplemental Financial Information.”

  • SaaS billings is calculated as SaaS revenue plus the sequential change in SaaS deferred revenue in a period.
  • Normalized SaaS billings is calculated as SaaS revenue plus the sequential change in SaaS deferred revenue, reduced by the remaining deferred revenue acquired during the period, plus or minus the effect of multiple year SaaS billings in that period.

We believe that normalized SaaS billings provide valuable insight into the sales of our solutions and the performance of our business. We do not consider normalized SaaS billings as a substitute for revenue recognition or revenue measurement.

Note on Forward-Looking Statements
The forward-looking statements included in this press release, including for example statements regarding the proposed merger with SAP and estimates of future revenues, reflect management’s best judgment based on factors currently known and involve risks and uncertainties. These risks and uncertainties include, but are not limited to, the risk that parties may be unable to consummate the proposed merger with SAP due to failure to satisfy conditions to the completion of the merger, including the receipt of stockholder approval or regulatory approval, which might not be obtained on the terms expected, on the anticipated schedule or at all, and other risks detailed in periodic reports we file with the Securities and Exchange Commission, including our most recent Quarterly Report on Form 10-Q which may be obtained by contacting CallidusCloud’s Investor Relations department at 415-445-3232, or from the Investor Relations section of CallidusCloud’s website (http://www.calliduscloud.com/about-us/investor-relations/). Actual results may differ materially from those presently reported. We assume no obligation to update the information contained in this release.

© 2018 Callidus Software Inc. All rights reserved. Callidus, Callidus Software, the Callidus Software logo, CallidusCloud, the CallidusCloud logo, Badgeville, BridgeFront, Clicktools, Datahug, iCentera, Lead to Money, LeadFormix, LeadRocket, Learning Heroes, LearningSeat, Learnpass, Litmos, the Litmos logo, OrientDB, Producer Pro, RevSym, SalesGenius, Surve, Syncfrog, Thunderbridge, and ViewCentral are trademarks, service marks, or registered trademarks of Callidus Software Inc. and its affiliates in the United States and other countries. All other brand, service or product names are trademarks or registered trademarks of their respective companies or owners.

Investor Relations Contact                                          
Carolyn Bass
Market Street Partners
(415) 445-3232
cald@marketstreetpartners.com

 
 
 
CALLIDUS SOFTWARE INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
 Three Months Ended
December 31,
  Twelve Months Ended
December 31,
 2017 2016  2017 2016
Revenue:        
Recurring$55,021  $44,225   $201,006  $162,586 
Services and license 14,490   11,857    52,085   44,132 
Total revenue 69,511   56,082    253,091   206,718 
Cost of revenue:        
Recurring 15,074   11,671    55,482   42,719 
Services and license 11,088   9,537    43,010   35,358 
Total cost of revenue 26,162   21,208    98,492   78,077 
Gross profit 43,349   34,874    154,599   128,641 
         
Operating expenses:        
Sales and marketing 24,599   21,659    93,439   78,601 
Research and development 10,130   8,585    37,681   31,712 
General and administrative 12,375   9,350    43,738   35,795 
Income from settlement and patent licensing    (500)      (500)
Restructuring and other 61       1,189   482 
Total operating expenses 47,165   39,094    176,047   146,090 
Operating loss (3,816)  (4,220)   (21,448)  (17,449)
Interest income and other income (expense) 379   (67)   1,021   (122)
Interest expense (8)  (137)   (66)  (267)
Loss before provision (benefit) for income taxes (3,445)  (4,424)   (20,493)  (17,838)
Provision (benefit) for income taxes (1,243)  373    (220)  1,128 
Net loss$(2,202) $(4,797)  $(20,273) $(18,966)
Net loss per share        
Basic and Diluted$(0.03) $(0.08)  $(0.31) $(0.32)
         
Weighted average shares used in computing net loss per share:        
  Basic and Diluted 65,995   63,663    65,272   58,852 
         

  

 
 
CALLIDUS SOFTWARE INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(unaudited)
       
  December 31,   December 31,
  2017 2016
ASSETS
Current assets:        
Cash and cash equivalents                                                                           $75,251  $148,008 
Short-term investments    75,248   39,266 
Accounts receivable, net    76,750   55,464 
Prepaid and other current assets  24,007   18,275 
Total current assets  251,256   261,013 
       
Property and equipment, net  57,058   35,456 
Goodwill  96,092   63,957 
Intangible assets, net  36,641   21,659 
Deposits and other non-current assets  6,400   4,416 
Total assets $447,447  $386,501 
     
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:      
Accounts payable $3,973  $3,573 
Accrued payroll and related expenses  21,079   17,831 
Accrued expenses  26,190   15,126 
Deferred revenue  133,313   99,758 
Total current liabilities  184,555   136,288 
       
Deferred revenue, non-current  506   3,209 
Deferred income taxes, non-current  2,252   1,541 
Other non-current liabilities  15,175   8,602 
Total liabilities  202,488   149,640 
      
Stockholders’ equity:      
Common stock  66   64 
Additional paid-in capital  583,490   559,200 
Treasury stock  (14,430)  (14,430)
Accumulated other comprehensive loss  (1,062)  (5,141)
Accumulated deficit  (323,105)  (302,832)
Total stockholders’ equity  244,959   236,861 
Total liabilities and stockholders’ equity $447,447  $386,501 
     

  

 
 
CALLIDUS SOFTWARE INC.
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
       
  Twelve Months Ended December 31,
  2017
 2016
Cash flows from operating activities:      
Net loss                                                         $(20,273) $(18,966)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:      
Depreciation expense  11,738   8,041 
Amortization of intangible assets  8,677   6,431 
Provision for doubtful accounts  1,602   1,548 
Stock-based compensation  33,420   29,123 
Excess tax benefits from stock-based compensation  -   (59)
Deferred income taxes  (1,660)  210 
Loss on disposal of property and equipment  5   23 
Loss on foreign currency from mark-to-market derivatives  180   23 
Net amortization on investments  125   170 
       
Changes in operating assets and liabilities:      
Accounts receivable  (19,517)  (12,439)
Prepaid and other current assets  (2,091)  (6,118)
Other non-current assets  (1,877)  (426)
Accounts payable  622   (1,088)
Accrued expenses  707   (1,237)
Accrued payroll and related expenses  2,766   5,321 
Accrued restructuring and other expenses  56   252 
Deferred revenue  28,480   18,970 
Net cash provided by operating activities  42,960   29,779 
       
Cash flows from investing activities:      
Purchases of investments  (80,738)  (37,409)
Proceeds from maturities of investments  37,009   16,715 
Proceeds from sale of investments  5,644   726 
Purchases of property and equipment  (19,519)  (15,599)
Purchases of intangible assets  (458)  (962)
Acquisitions, net of cash acquired  (44,790)  (22,574)
Change in restricted cash  (1,355)  - 
Net cash used in investing activities  (104,207)  (59,103)
       
Cash flows from financing activities:      
Proceeds from follow-on offering, net of issuance costs  -   100,345 
Proceeds from issuance of common stock  5,951   4,384 
Restricted stock units acquired to settle employee withholding liability  (15,184)  (3,479)
Excess tax benefits from stock-based compensation  -   59 
Payment of consideration related to acquisitions  (2,400)  (510)
Net cash (used in) provided by financing activities  (11,633)  100,799 
Effect of foreign currency exchange rates on cash and cash equivalents  123   (699)
Net (decrease) increase in cash and cash equivalents  (72,757)  70,776 
Cash and cash equivalents at beginning of period  148,008   77,232 
Cash and cash equivalents at end of period $75,251  $148,008 
       
       

  

          
CALLIDUS SOFTWARE INC.
GAAP TO NON-GAAP ADJUSTMENT SUMMARY
(In thousands)
(unaudited)
          
GAAP to Non-GAAP adjustments include stock-based compensation, amortization of acquired intangible assets, patent litigation and settlement costs, acquisition-related costs, restructuring and other expenses as follows:
 
  Three Months Ended
December 31,
  Twelve Months Ended
December 31,
  2017   2016    2017    2016
Cost of revenue:         
Recurring $    2,334  $   1,410   $7,661  $5,067 
Services and license                                            571   530    2,340   2,097 
Operating expenses:         
Sales and marketing  2,949   3,091    11,026   10,707 
Research and development  2,041   1,556    7,157   5,147 
General and administrative  4,476   3,396    16,170   12,010 
Restructuring and other  61   -    1,189   482 
Total $12,432  $9,983   $45,543  $35,510 
          

 

 
 
CALLIDUS SOFTWARE INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except for percentages)
(unaudited)
             
   Three Months Ended  Twelve Months Ended
   December 31,  December 31,
   2017  2016  2017  2016
             
Non-GAAP gross profit reconciliation:              
             
Gross profit $43,349  $34,874  $154,599  $128,641 
             
Gross margin  62%   62%   61%   62% 
Add back:                
Stock-based compensation  1,037   819   4,087   3,736 
Non-cash amortization of acquired intangible assets  1,868   1,121   5,914   3,428 
Non-GAAP gross profit $46,254  $36,814  $164,600  $135,805 
             
Gross margin  67%   66%   65%   66% 
             
Non-GAAP recurring revenue gross profit reconciliation:            
             
Recurring revenue gross profit $39,947  $32,554  $145,524  $119,867 
             
Recurring revenue gross margin  73%   74%   72%   74% 
Add back:            
Stock-based compensation  466   289   1,748   1,639 
Non-cash amortization of acquired intangible assets  1,868   1,121   5,914   3,428 
Non-GAAP recurring revenue gross profit $42,281  $33,964  $153,186  $124,934 
             
Non-GAAP recurring revenue gross margin  77%   77%   76%   77% 
             
Non-GAAP operating expense reconciliation:            
             
Operating expenses $47,165  $39,094  $176,047  $146,090 
Operating expenses, as a % of total revenue  68%   70%   70%   71% 
Subtract:            
Stock-based compensation  (7,046)  (7,394)  (29,548)  (25,387)
Non-cash amortization of acquired intangible assets  (514)  (490)  (1,921)  (1,797)
Patent litigation and settlement costs  (31)  (29)  (115)  (115)
Acquisition-related costs  (1,875)  (130)  (2,769)  (565)
Restructuring and other  (61)  -   (1,189)  (482)
Non-GAAP operating expenses $37,638  $31,051  $140,505  $117,744 
Non-GAAP operating expenses, as a % of total revenue  54%   55%   56%   57% 
             
             
             
CALLIDUS SOFTWARE INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except for percentages)
(unaudited)
             
             
   Three Months Ended  Twelve Months Ended
   December 31,  December 31,
   2017  2016  2017  2016
Non-GAAP operating income (loss) reconciliation:            
             
Operating loss $    (3,816) $  (4,220) $(21,448) $(17,449)
Operating loss, as a % of total revenue  (5)%   (8)%   (8)%   (8)% 
Add back:            
Stock-based compensation  8,083   8,214   33,635   29,123 
Non-cash amortization of acquired intangible assets  2,382   1,610   7,835   5,225 
Patent litigation and settlement costs  31   29   115   115 
Acquisition-related costs  1,875   130   2,769   565 
Restructuring and other  61   -   1,189   482 
Non-GAAP operating income $8,616  $5,763  $24,095  $18,061 
Non-GAAP operating income, as a % of total revenue  12%   10%   10%   9% 
             
Non-GAAP net income (loss) before provision (benefit) for income taxes reconciliation:         
             
Net loss before provision (benefit) for income taxes $(3,445) $(4,424) $(20,493) $(17,838)
Net loss before provision (benefit) for income taxes, as a % of total revenue  (5)%   (8)%   (8)%   (9)% 
Add back:            
Stock-based compensation  8,083   8,214   33,635   29,123 
Non-cash amortization of acquired intangible assets  2,382   1,610   7,835   5,225 
Patent litigation and settlement costs  31   29   115   115 
Acquisition-related costs  1,875   130   2,769   565 
Restructuring and other  61   -   1,189   482 
Non-GAAP net income before provision (benefit) for income taxes $8,987  $5,559  $25,050  $17,672 
Non-GAAP net income before provision (benefitfor income taxes, as a % of total revenue  13%   10%   10%   9% 
             
Cash taxes $557  $224  $1,277  $791 
             
Weighted average shares - basic  65,995   63,663   65,272   58,852 
Weighted average shares - diluted  67,768   65,637   67,212   60,910 
             

 

             
CALLIDUS SOFTWARE INC.
Non-GAAP Supplemental Financial Information
(In thousands, except for percentages)
(unaudited)
             
             
   Three Months Ended  Trailing Twelve Months Ended
   December 31,  December 31,
SaaS Billings  2017  2016  2017  2016
SaaS revenue $     54,565  $    42,104  $198,206  $151,524 
             
Add back:                
Increase in SaaS deferred revenue  21,381   11,474   30,237   27,628 
SaaS billings                                           $75,946  $53,578  $228,443  $179,152 
             
SaaS billings growth rate  42%   55%   28%   41% 
             
Normalized Billings            
SaaS billings $75,946  $53,578  $228,443  $179,152 
Multi-year billings  33   1,434   2,833   1,698 
Remaining deferred revenue from acquisitions(1,215)  (814)  (1,724)  (1,450)
Normalized SaaS billings $74,764  $54,198  $229,552  $179,400 
             
Normalized SaaS billings growth rate  38%   48%   28%   36%