SOUTH SAN FRANCISCO, Calif., Dec. 1, 2014 (GLOBE NEWSWIRE) -- Envivio (Nasdaq:ENVI), a leading provider of software-based video processing and delivery solutions, today announced financial results for the third quarter of fiscal year 2015 ended October 31, 2014.
Financial Highlights
- Revenue for the third quarter of fiscal 2015 was $9.0 million, compared to $11.5 million in the second quarter of fiscal 2015 and $11.7 million in the third quarter of fiscal 2014.
- GAAP net loss for the third quarter of fiscal 2015 was $5.4 million, or $0.20 per share, compared to a net loss of $4.1 million, or $0.15 per share, in the second quarter of fiscal 2015 and net loss of $2.9 million, or $0.11 per share, in the third quarter of fiscal 2014.
- Non-GAAP net loss for the third quarter of fiscal 2015 was $4.1 million, or $0.15 per share, compared to net loss of $3.5 million, or $0.13 per share, in the second quarter of fiscal 2015 and net loss of $2.3 million, or $0.08 per share, in the third quarter of fiscal 2014.
"Our results were negatively impacted by softening macro-economic conditions within EMEA, and customer consolidation in the U.S., delaying certain projects. Despite our disappointing financial results, we are encouraged with the continued positive reception of our product offerings by our customers, as evidenced by our significant wins of U.S. Tier 1 service providers in the quarter. These wins are laying a foundation for future growth and are a testament to the strength of our technology and comprehensive solutions," said Julien Signès, Founder and CEO of Envivio.
"With consolidation in our customer base constraining industry-wide capital expenditures; we are taking action to reduce our expenses without diminishing our capacity to develop innovative market leading technologies," added Signès.
As of October 31, 2014, Envivio had cash and cash equivalents of $37.9 million, compared to $42.1 million at the end of the prior quarter.
Q3 Business and Product Highlights
- Tier 1 Operator Revenue – A U.S. tier one multi-screen operator placed a purchase order for Envivio products and services, which represented more than 10% of third quarter revenue.
- New customers – Envivio added three new customers to its roster of leading broadcast and operator companies.
- Launched new product – In October, Envivio announced the latest version of its network media processor, Envivio HaloTM 4. Halo supports a range of video platforms including all Apple devices, such as the most recently launched iPhones and iOS tablets.
- Awards and accolades – Envivio's technologies and services were nominated for a number of awards. Envivio was also named in Streaming Media's "100 in Online Video," while TechNavio Research named Envivio as a "Key Vendor for Global Video Services" in the connected TV market. This group of notable vendors also included Comcast, DIRECTV, Hulu and Netflix.
- Partnered with Huawei for 4K integration – In September, Huawei announced successful completion of end-to-end integration and verification for 4K videos on its IP Video Solution 2.0. Envivio participated in the launch with the integration of Huawei's technology with Envivio's Muse and 4Caster solutions.
Envivio recently reached an agreement in principle to settle the stockholder class action lawsuit originally filed in October 2012. The settlement remains subject to negotiation and execution of a definitive settlement agreement and court approval. The agreement, in principle, calls for Envivio to contribute approximately $1.0 million toward the settlement; the rest will be covered by Envivio's D&O insurance. The $1.0 million contribution amount is included in GAAP operating expenses as a one-time charge for the third quarter.
Conference Call Information
Envivio will host a conference call and live audio webcast for analysts and investors at 5:00 p.m. EST on December 1, 2014. The news release with the financial results will be accessible from the Company's website prior to the conference call.
- Parties in the United States and Canada can access the call by dialing 1-877-407-4018.
- International parties can access the call by dialing 1-201-689-8471.
- When dialing into the call, ask for the Envivio Third Quarter FY 2015 Financial Results.
The audio webcast will be accessible on Envivio's investor relations website at http://ir.envivio.com. A replay of the conference call will be available beginning at 8 p.m. EST December 1, 2014 through June 1, 2015 until 11:59 p.m. EST. To access the replay, parties in the United States and Canada should call 1-877-870-5176 and enter PIN 13595352. International parties should call 1-858-384-5517 and enter PIN 13595352.
Non-GAAP Financial Measurements
This news release dated December 1, 2014 contains non-GAAP financial measures. Tables are provided in this news release that reconcile the non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with Generally Accepted Accounting Principles (GAAP). These non-GAAP financial measures include non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating loss, non-GAAP net loss and non-GAAP net loss per share. To supplement the Company's consolidated financial statements presented on a GAAP basis, management believes that these non-GAAP measures provide useful information about the Company's core operating results and thus are appropriate to enhance the overall understanding of the Company's past financial performance and its prospects for the future. Management is excluding from its non-GAAP operating results Financial Accounting Standards Board ASC 718 (FAS 123R) stock-based compensation and the estimated settlement costs of the Company's stockholder class action lawsuit. Management uses these non-GAAP measures to evaluate the Company's financial results, and believes these measures provide useful information to investors. For its internal budgeting process, management also uses financial statements that do not include, when applicable, share-based compensation expense and the one-time settlement expense. The adjustments to the Company's GAAP results are made with the intent of providing both management and investors a more complete understanding of the Company's underlying operational results, trends and performance. The presentation of additional information is not meant to be considered in isolation or as a substitute for or superior to financial results determined in accordance with GAAP.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements about the continued positive reception of Envivio's product offerings by its customers, the potential for Envivio's design wins to lay a foundation for future growth, the actions that Envivio is taking to reduce its operating expenses and the effectiveness of those actions, Envivio maintaining its innovation in the video processing market, and statements related to the settlement in principle of the stockholder class action lawsuit. Actual results may vary materially due to a number of factors including, but not limited to, the risk that, upon completion of further closing procedures, that the financial results for the third quarter of fiscal year 2015 are different than the results set forth in this press release, unexpected changes in Envivio's business, changes in capital spending in the markets Envivio serves, the inability to convert bookings into revenue at all or in a timely basis within a quarterly period, Envivio's ability to successfully negotiate and enter into a definitive settlement agreement of the stockholder class action and court approval of that settlement, the failure of Envivio's target markets to develop as anticipated, the actions taken by Envivio to reduce operating expenses are not effective, disruption with existing or the failure to develop new relationships with channel partners, unpredictable sales cycles, fluctuations in our operating results, failure to develop new and enhanced products in a timely manner, the loss of a key customer, the loss of our sole source manufacturer, the loss of a key supplier, claims of technology infringement, general economic conditions and other risks detailed from time to time in Envivio's SEC reports. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Envivio undertakes no obligation to publicly release or otherwise disclose the result of any revision to these forward-looking statements that may be made as a result of events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
Product information is intended to outline our general product direction, is not a commitment, promise or legal obligation to deliver any material, code, or functionality, and should not be relied on in making a purchasing decision. The development, release, and timing of any features or functionality described for our products remains at our sole discretion. Envivio reserves the right to modify future product plans at any time. These new software options may be purchased separately when and if available.
About Envivio
Envivio (Nasdaq:ENVI) is a global market leader and innovator of video software solutions that are trusted by video service providers and content companies worldwide to power stunning video quality and captivating, personalized experiences to their millions of viewers on any device, over any network.
Leveraging its pioneering and technically superior virtualized video delivery solutions, Envivio enables video operators of any size to increase revenues and reduce costs while uniquely providing the best-in-class quality, reliability, efficiency, and scalability to support the new age of video anywhere.
Envivio is headquartered in South San Francisco, California with offices worldwide in France, China, Singapore and Japan. Visit www.envivio.com for more information, or connect with us on LinkedIn.
| ENVIVIO, INC. AND SUBSIDIARIES | ||||
| Condensed Consolidated Balance Sheets | ||||
| (UNAUDITED) | ||||
| October 31, | January 31, | |||
| 2014 | 2014 | |||
| (in thousands) | ||||
| Assets | ||||
| Current assets: | ||||
| Cash and cash equivalents | $ 37,896 | $ 47,873 | ||
| Accounts receivable, net of allowance for doubtful accounts | 8,884 | 10,766 | ||
| Inventory | 293 | 75 | ||
| Prepaid expenses and other current assets | 3,236 | 4,257 | ||
| Deferred inventory costs | 162 | 177 | ||
| Total current assets | 50,471 | 63,148 | ||
| Property and equipment, net | 4,079 | 3,924 | ||
| Other non-current assets | 189 | 207 | ||
| Total assets | $ 54,739 | $ 67,279 | ||
| Liabilities and stockholders' equity | ||||
| Current liabilities: | ||||
| Accounts payable | $ 6,822 | $ 5,772 | ||
| Accrued compensation | 4,354 | 5,308 | ||
| Accrued liabilities | 3,127 | 1,682 | ||
| Deferred revenue, current | 4,643 | 6,198 | ||
| Total current liabilities | 18,946 | 18,960 | ||
| Deferred revenue, net of current portion | 517 | 541 | ||
| Other non-current liabilities | 1,444 | 1,404 | ||
| Deferred rent | 536 | 698 | ||
| Total liabilities | 21,443 | 21,603 | ||
| Stockholders' equity: | ||||
| Common stock | 28 | 28 | ||
| Additional paid-in capital | 156,301 | 154,562 | ||
| Accumulated other comprehensive loss | (1,035) | (960) | ||
| Accumulated deficit | (121,998) | (107,954) | ||
| Total stockholders' equity | 33,296 | 45,676 | ||
| Total liabilities and stockholders' equity | $ 54,739 | $ 67,279 | ||
| See notes to condensed consolidated financial statements | ||||
| ENVIVIO, INC. AND SUBSIDIARIES | |||||
| Condensed Consolidated Statements of Operations | |||||
| (UNAUDITED) | |||||
| Three Months Ended | Nine Months Ended | ||||
| (in thousands, except for per share amounts) | |||||
| October 31, 2014 | July 31, 2014 | October 31, 2013 | October 31, 2014 | October 31, 2013 | |
| Revenue: | |||||
| Product | $ 5,961 | $ 8,852 | $ 9,384 | $ 20,924 | $ 24,434 |
| Professional services and support | 2,999 | 2,600 | 2,323 | 7,902 | 6,282 |
| Total revenue | 8,960 | 11,452 | 11,707 | 28,826 | 30,716 |
| Cost of revenue: | |||||
| Product | 2,553 | 4,077 | 3,524 | 8,681 | 8,885 |
| Professional services and support | 666 | 704 | 555 | 2,014 | 1,579 |
| Total cost of revenue | 3,219 | 4,781 | 4,079 | 10,695 | 10,464 |
| Gross profit | 5,741 | 6,671 | 7,628 | 18,131 | 20,252 |
| Operating expenses: | |||||
| Research and development | 2,173 | 2,257 | 2,491 | 6,931 | 6,897 |
| Sales and marketing | 5,047 | 5,374 | 5,014 | 15,488 | 14,955 |
| General and administrative | 3,816 | 2,989 | 2,939 | 9,485 | 8,434 |
| Total operating expenses | 11,036 | 10,620 | 10,444 | 31,904 | 30,286 |
| Loss from operations | (5,295) | (3,949) | (2,816) | (13,773) | (10,034) |
| Interest income (expense), net | (3) | 1 | 7 | 1 | 39 |
| Other income (expense), net | 23 | (55) | 9 | (65) | 24 |
| Loss before provision for income taxes | (5,275) | (4,003) | (2,800) | (13,837) | (9,971) |
| Income tax provision | 154 | 82 | 129 | 207 | 176 |
| Net loss | $ (5,429) | $ (4,085) | $ (2,929) | $ (14,044) | $ (10,147) |
| Net loss per share of common stock, basic and diluted | $ (0.20) | $ (0.15) | $ (0.11) | $ (0.51) | $ (0.37) |
| Shares used in computing net loss per share of common stock, basic and diluted | 27,712,288 | 27,496,793 | 27,116,388 | 27,454,013 | 27,096,605 |
| See notes to condensed consolidated financial statements. | |||||
| ENVIVIO, INC. AND SUBSIDIARIES | |||||
| Reconciliation of Non-GAAP Financial Measures | |||||
| (UNAUDITED) | |||||
| Three Months Ended | Nine Months Ended | ||||
| (In thousands except for share data) | |||||
| October 31, 2014 | July 31, 2014 | October 31, 2013 | October 31, 2014 | October 31, 2013 | |
| GAAP gross margin | $ 5,741 | $ 6,671 | $ 7,628 | $ 18,131 | $ 20,252 |
| Stock-based compensation | 7 | 7 | 1 | 22 | 3 |
| Non-GAAP gross margin | 5,748 | 6,678 | 7,629 | 18,153 | 20,255 |
| GAAP operating expenses | 11,036 | 10,620 | 10,444 | 31,904 | 30,286 |
| Stock-based compensation | (325) | (617) | (630) | (1,548) | (1,695) |
| Litigation settlement expense | (1,000) | -- | -- | (1,000) | -- |
| Non-GAAP operating expenses | 9,711 | 10,003 | 9,814 | 29,356 | 28,591 |
| GAAP operating loss | (5,295) | (3,949) | (2,816) | (13,773) | (10,034) |
| Stock-based compensation | 332 | 624 | 631 | 1,570 | 1,698 |
| Litigation settlement expense | 1,000 | -- | -- | 1,000 | -- |
| Non-GAAP operating loss | (3,963) | (3,325) | (2,185) | (11,203) | (8,336) |
| GAAP net loss | (5,429) | (4,085) | (2,929) | (14,044) | (10,147) |
| Stock-based compensation | 332 | 624 | 631 | 1,570 | 1,698 |
| Litigation settlement expense | 1,000 | -- | -- | 1,000 | -- |
| Non-GAAP net loss | $ (4,097) | $ (3,461) | $ (2,298) | $ (11,474) | $ (8,449) |
| GAAP net loss per share of common stock, basic and diluted | $ (0.20) | $ (0.15) | $ (0.11) | $ (0.51) | $ (0.37) |
| Non-GAAP net loss per share of common stock, basic and diluted | $ (0.15) | $ (0.13) | $ (0.08) | $ (0.42) | $ (0.31) |
| Shares used in computing net loss per share of common stock, basic and diluted | 27,712,288 | 27,496,793 | 27,116,388 | 27,454,013 | 27,096,605 |