• GAAP revenue of $283.8 million
  • Net loss of $6.3 million
  • Adjusted EBITDA of $87.5 million
  • Cash flow from operations of $51.3 million
  • Free cash flow of $40.7 million
  • Total subscribers on platform were approximately 4.852 million at September 30, 2018

BURLINGTON, Mass., Oct. 25, 2018 (GLOBE NEWSWIRE) --  Endurance International Group Holdings, Inc. (NASDAQ: EIGI), a leading provider of cloud-based platform solutions designed to help small and medium-sized businesses succeed online, today reported financial results for its third quarter ended September 30, 2018.

“We are pleased with our third quarter results and the operational progress we have made year to date,” commented Jeffrey H. Fox, president and chief executive officer of Endurance International Group.  "Our investment plans for 2018 were designed to simplify the business and deliver increased value to our customers. We believe we are positioned to transition back to revenue growth in 2019 as we deliver expanded solution value to customers of our key strategic brands."

Third Quarter 2018 Financial Highlights

  • Revenue for the third quarter of 2018 was $283.8 million, a decrease of 3.9 percent compared to $295.2 million for the third quarter of 2017.

  • Net loss for the third quarter of 2018 was $6.3 million compared to net loss of $40.3 million for the third quarter of 2017.

  • Net loss attributable to Endurance International Group Holdings, Inc. for the third quarter of 2018 was $6.3 million, or $(0.04) per diluted share, compared to net loss of $40.3 million, or $(0.29) per diluted share, for the third quarter of 2017.

  • Adjusted EBITDA for the third quarter of 2018 was $87.5 million, a decrease of 6.7 percent compared to $93.8 million for the third quarter of 2017.

  • Cash flow from operations for the third quarter of 2018 was $51.3 million, an increase of 10.5 percent compared to $46.4 million for the third quarter of 2017.

  • Free cash flow, defined as cash flow from operations less capital expenditures and capital lease obligations, for the third quarter of 2018 was $40.7 million, an increase of 27.6 percent compared to $31.9 million for the third quarter of 2017.

Third Quarter Operating Highlights

  • Total subscribers on platform at September 30, 2018 were approximately 4.852 million, compared to approximately 5.122 million subscribers at September 30, 2017 and approximately 4.918 million subscribers at June 30, 2018.  See “Total Subscribers” below.

  • Average revenue per subscriber, or ARPS, for the third quarter of 2018 was $19.36, compared to $19.03 for the third quarter of 2017 and $19.32 for the second quarter of 2018.  See “Average Revenue Per Subscriber” below.

Fiscal 2018 Guidance

The Company is updating its guidance for the full year ending December 31, 2018.  As of the date of this release, October 25, 2018, the Company expects:

 2017 Actual
as Reported
Prior GuidanceRevised Guidance
(as of October 25,  2018)
GAAP revenue$1.177 billion$1.140 to $1.160 billion$1.140 to $1.150 billion
Adjusted EBITDA$351 million$310 to $330 million$330 to $335 million
Free cash flow$151 million~$120 million~$120 million

As previously disclosed, the Company’s free cash flow guidance does not reflect the impact of the payment made in the second quarter of 2018 pursuant to its settlement with the U.S. Securities & Exchange Commission, or anticipated payments pursuant to the securities class action lawsuit settlements described in the Company’s Form 8-K filed on May 18, 2018. The class action lawsuit settlements remain subject to court approval, and will impact the Company’s actual free cash flow for 2018 if approved by the court and paid this year.

Adjusted EBITDA and free cash flow are non-GAAP financial measures. A reconciliation of these non-GAAP financial measures to their most comparable measure calculated in accordance with GAAP is provided in the financial statement tables included at the end of this press release.

First and Second Quarter 2018 Income Tax Expense Revision

The Company has revised its deferred income tax provision for the first and second quarter of 2018 to reflect a revision that favorably impacted net income (loss) for these periods.  This revision does not impact the previously reported figures for Adjusted EBITDA, Cash Flow from Operations or Free Cash Flow.

During fiscal year 2017, the Company began a process to reorganize, and in some instances, eliminate legal entities associated with certain products introduced in 2015 and 2016. This reorganization is expected to provide tax benefits, as the Company can deduct losses on the investments in these entities in its U.S. income tax filings. After further review of these losses, the Company has determined that a significant portion of these losses should have been reflected in its 2017 income tax provision calculations. This change in position does not impact the actual income tax provision recorded in 2017; however, due to the changes enacted in the 2017 Tax Cuts and Jobs Act, the manner in which net operating loss carryforwards are handled does impact the Company's 2018 provision for non-cash deferred income taxes. The details of the first and second quarter revision are shown in the tables at the end of this press release.

Conference Call and Webcast Information

Endurance International Group’s third quarter 2018 financial results teleconference and webcast is scheduled to begin at 8:00 a.m. EDT on Thursday, October 25, 2018. To participate on the live call, analysts and investors should dial (888) 734-0328 at least ten minutes prior to the call. Endurance International Group will also offer a live and archived webcast of the conference call, accessible from the Investor Relations section of the company’s website at http://ir.endurance.com.

Non-GAAP Financial Measures

In addition to our financial information presented in accordance with GAAP, we use adjusted EBITDA and free cash flow, which are non-GAAP financial measures, to evaluate the operating and financial performance of our business, identify trends affecting our business, develop projections and make strategic business decisions. A non-GAAP financial measure is a numerical measure of a company’s operating performance, financial position or cash flow that excludes amounts that are included in the most directly comparable measure calculated and presented in accordance with GAAP or includes amounts that are excluded from the most directly comparable measure calculated and presented in accordance with GAAP.

Our non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in our industry, as other companies in our industry may calculate non-GAAP financial results differently. In addition, there are limitations in using non-GAAP financial measures because they are not prepared in accordance with GAAP and exclude expenses that may have a material impact on our reported financial results. For example, adjusted EBITDA excludes interest expense, which has been and will continue to be for the foreseeable future a significant recurring expense in our business. The presentation of non-GAAP financial information is not meant to be considered in isolation from, or as a substitute for, the most directly comparable financial measures prepared in accordance with GAAP. We urge you to review the additional information about adjusted EBITDA and free cash flow shown below, including the reconciliations of these non-GAAP financial measures to their comparable GAAP financial measures, and not to rely on any single financial measure to evaluate our business.

Adjusted EBITDA is a non-GAAP financial measure that we calculate as net (loss) income, excluding the impact of interest expense (net), income tax expense (benefit), depreciation, amortization of other intangible assets, stock-based compensation, restructuring expenses, transaction expenses and charges, (gain) loss of unconsolidated entities, impairment of other long-lived assets, SEC investigations reserve (with respect to fiscal year and third quarter 2017), and shareholder litigation reserve. We view adjusted EBITDA as a performance measure and believe it helps investors evaluate and compare our core operating performance from period to period.

Free Cash Flow, or FCF, is a non-GAAP financial measure that we calculate as cash flow from operations less capital expenditures and capital lease obligations. We believe that FCF provides investors with an indicator of our ability to generate positive cash flows after meeting our obligations with regard to capital expenditures (including capital lease obligations).

Key Operating Metrics

Total Subscribers - We define total subscribers as the approximate number of subscribers that, as of the end of a period, are identified as subscribing directly to our products on a paid basis, excluding accounts that access our solutions via resellers or that purchase only domain names from us. Subscribers of more than one brand, and subscribers with more than one distinct billing relationship or subscription with us, are counted as separate subscribers. Total subscribers for a period reflects adjustments to add or subtract subscribers as we integrate acquisitions and/or are otherwise able to identify subscribers that meet, or do not meet, this definition of total subscribers. In the third quarter of 2018, these adjustments had a negligible impact on our total subscriber count.

Average Revenue Per Subscriber (ARPS) - We calculate ARPS as the amount of revenue we recognize in a period, including marketing development funds and other revenue not received from subscribers, divided by the average of the number of total subscribers at the beginning of the period and at the end of the period, which we refer to as average subscribers for the period, divided by the number of months in the period. See definition of “Total Subscribers” above. ARPS does not represent an exact measure of the average amount a subscriber spends with us each month, since our calculation of ARPS is impacted by revenues generated by non-subscribers.

Forward-Looking Statements
This press release includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements concerning our financial guidance for fiscal year 2018, our belief that we are positioned to transition back to revenue growth in 2019, our investment and operational plans, including our ability to execute these plans and expectations that these plans will simplify our business and deliver increased customer value, our expectation that our reorganization or elimination of certain of our legal entities will provide us with tax benefits, and our expectations of future growth and financial and operational performance in general. These forward-looking statements include, but are not limited to, plans, objectives, expectations and intentions and other statements contained in this press release that are not historical facts, and statements identified by words such as “expects,” “believes,” “estimates,” “may,” “continue,” “positions,” “confident,” and variations of such words or words of similar meaning and the use of future dates. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, we can give no assurance that these plans, intentions, expectations, strategies or prospects will be attained or achieved. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control including, without limitation: the possibility that our financial guidance may differ from expectations; the possibility that we may not be able to executive our investment or operational plans or that these plans will not result in the anticipated benefits to our business; the possibility that we will continue to experience decreases in our subscriber base; an adverse impact on our business from litigation or regulatory proceedings; an adverse impact on our business from our substantial indebtedness and the cost of servicing our debt; the rate of growth of the Small and Medium Business (“SMB”) market for our solutions; our inability to increase sales to our existing subscribers, or retain our existing subscribers; data breaches; system or Internet failures; our inability to maintain or improve our competitive position or market share; and other risks and uncertainties discussed in our filings with the SEC, including those set forth under the caption “Risk Factors” in our Quarterly Report on Form 10-Q for the three months ended June 30, 2018 filed with the SEC on August 2, 2018 and other reports we file with the SEC.

We assume no obligation to update any forward-looking statements contained in this document as a result of new information, future events or otherwise.

About Endurance International Group
Endurance International Group Holdings, Inc. (NASDAQ:EIGI) helps millions of small businesses worldwide with products and technology to enhance their online web presence, email marketing, business solutions, and more. The Endurance family of brands includes: Constant Contact, Bluehost, HostGator, Domain.com and SiteBuilder, among others. Headquartered in Burlington, Massachusetts, Endurance employs over 3,700 people across the United States, Brazil, India and the Netherlands. For more information, visit: www.endurance.com.

Endurance International Group and the compass logo are trademarks of The Endurance International Group, Inc.  Constant Contact, the Constant Contact logo and other brand names of Endurance International Group are trademarks of The Endurance International Group, Inc. or its subsidiaries.

Investor Contact:
Angela White
Endurance International Group
(781) 852-3450
ir@endurance.com

Press Contact:
Kristen Andrews
Endurance International Group
(781) 418-6716
press@endurance.com


Endurance International Group Holdings, Inc.
Consolidated Balance Sheets
(in thousands, except share and per share amounts)

 December 31, 2017 September 30, 2018
Assets  (unaudited)
Current assets:   
Cash and cash equivalents$66,493  $89,674 
Restricted cash2,625  1,832 
Accounts receivable15,945  14,105 
Prepaid domain name registry fees53,805  57,114 
Prepaid commissions  41,744 
Prepaid expenses and other current assets29,327  27,101 
Total current assets168,195  231,570 
Property and equipment—net95,452  79,315 
Goodwill1,850,582  1,849,264 
Other intangible assets—net455,440  377,670 
Deferred financing costs3,189  2,879 
Investments15,267  15,266 
Prepaid domain name registry fees, net of current portion10,806  11,337 
Prepaid commissions, net of current portion  42,081 
Other assets2,155  9,021 
Total assets$2,601,086  $2,618,403 
Liabilities, redeemable non-controlling interest and stockholders’ equity   
Current liabilities:   
Accounts payable$11,058  $10,812 
Accrued expenses79,991  70,204 
Accrued interest24,457  15,109 
Deferred revenue361,940  380,564 
Current portion of notes payable33,945  31,606 
Current portion of capital lease obligations7,630  7,595 
Deferred consideration—short term4,365  2,386 
Other current liabilities4,031  3,753 
Total current liabilities527,417  522,029 
Long-term deferred revenue90,972  96,419 
Notes payable—long term, net of original issue discounts of $25,811 and $22,445 and deferred financing costs of $37,736 and $33,515, respectively1,858,300  1,792,436 
Capital lease obligations—long term7,719  2,067 
Deferred tax liability19,696  36,498 
Deferred consideration—long term3,551  1,342 
Other liabilities10,426  11,014 
Total liabilities2,518,081  2,461,805 
Stockholders’ equity:   
Preferred Stock—par value $0.0001; 5,000,000 shares authorized; no shares issued or outstanding   
Common Stock—par value $0.0001; 500,000,000 shares authorized; 140,190,695 and 143,306,748 shares issued at December 31, 2017 and September 30, 2018, respectively; 140,190,695 and 143,306,411 outstanding at December 31, 2017 and September 30, 2018, respectively14  14 
Additional paid-in capital931,033  953,971 
Accumulated other comprehensive loss(541) (1,033)
Accumulated deficit(847,501) (796,354)
Total stockholders’ equity83,005  156,598 
Total liabilities and stockholders’ equity$2,601,086  $2,618,403 
 


Endurance International Group Holdings, Inc.
Consolidated Statements of Operations and Comprehensive Income (Loss)
(unaudited)
(in thousands, except share and per share amounts)

 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2018 2017 2018
Revenue$295,222  $283,770  $882,617  $862,896 
Cost of revenue158,865  128,945  454,197  393,597 
Gross profit136,357  154,825  428,420  469,299 
Operating expense:       
Sales and marketing66,276  63,831  211,154  197,733 
Engineering and development19,882  22,683  60,393  64,559 
General and administrative51,269  25,693  130,929  95,212 
Transaction expenses    773   
Total operating expense137,427  112,207  403,249  357,504 
(Loss) income from operations(1,070) 42,618  25,171  111,795 
Other income (expense):       
Other income (expense), net(600)   (600)  
Interest income203  289  506  720 
Interest expense(35,848) (37,527) (121,022) (111,923)
Total other expense—net(36,245) (37,238) (121,116) (111,203)
(Loss) income before income taxes and equity earnings of unconsolidated entities(37,315) 5,380  (95,945) 592 
Income tax expense2,982  11,715  11,384  8,826 
Loss before equity earnings of unconsolidated entities(40,297) (6,335) (107,329) (8,234)
Equity (income) loss of unconsolidated entities, net of tax(33)   (72) 2 
Net loss$(40,264) $(6,335) $(107,257) $(8,236)
Net loss attributable to non-controlling interest    277   
Excess accretion of non-controlling interest    7,247   
Total net loss attributable to non-controlling interest    7,524   
Net loss attributable to Endurance International Group Holdings, Inc.$(40,264) $(6,335) $(114,781) $(8,236)
Comprehensive income (loss):       
Foreign currency translation adjustments1,070  (644) 2,984  (2,489)
Unrealized gain (loss) on cash flow hedge, net of taxes of $48 and $256, and $(182) and $626 for the three and nine months ended September 30, 2017 and 2018, respectively83  812  (309) 1,996 
Total comprehensive loss$(39,111) $(6,167) $(112,106) $(8,729)
Basic net loss per share attributable to Endurance International Group Holdings, Inc.$(0.29) $(0.04) $(0.84) $(0.06)
Diluted net loss per share attributable to Endurance International Group Holdings, Inc.$(0.29) $(0.04) $(0.84) $(0.06)
Weighted-average common shares used in computing net loss per share attributable to Endurance International Group Holdings, Inc.:       
Basic137,793,609  143,107,122  136,688,115  141,946,574 
Diluted137,793,609  143,107,122  136,688,115  141,946,574 
 


Endurance International Group Holdings, Inc.
Consolidated Statements of Cash Flows
(unaudited)
(in thousands)

 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2018 2017 2018
Cash flows from operating activities:       
Net loss$(40,264) $(6,335) $(107,257) $(8,236)
Adjustments to reconcile net loss to net cash provided by operating activities:       
Depreciation of property and equipment13,571  11,889  40,733  36,753 
Amortization of other intangible assets35,347  26,177  104,554  77,890 
Impairment of long lived assets13,848    13,848   
Impairment of investments600    600   
Amortization of deferred financing costs1,873  1,722  5,403  4,708 
Amortization of net present value of deferred consideration127  60  504  311 
Dividend from minority interest50    100   
Amortization of original issue discounts1,059  1,083  2,791  3,209 
Stock-based compensation19,580  7,550  48,749  21,932 
Deferred tax expense (benefit)2,096  13,323  6,442  8,839 
Loss (gain) on sale of assets(189) (70) (317) 191 
(Gain) loss of unconsolidated entities(33)   (72) 2 
Financing costs expensed    5,487  1,228 
Loss on early extinguishment of debt    992  331 
Changes in operating assets and liabilities, net of acquisitions:       
Accounts receivable(2,231) (2,053) (872) 1,687 
Prepaid expenses and other current assets833  5,527  (510) (3,033)
Accounts payable and accrued expenses1,695  (2,841) (7,309) (15,721)
Deferred revenue(1,518) (4,691) 15,000  3,502 
Net cash provided by operating activities46,444  51,341  128,866  133,593 
Cash flows from investing activities:       
Purchases of property and equipment(12,800) (8,962) (32,095) (22,343)
Proceeds from sale of assets5  6  292  6 
Purchases of intangible assets(286)   (1,966)  
Net cash used in investing activities(13,081) (8,956) (33,769) (22,337)
Cash flows from financing activities:       
Proceeds from issuance of term loan and notes, net of original issue discounts    1,693,007  1,580,305 
Repayments of term loans(18,486) (25,401) (1,733,147) (1,656,094)
Payment of financing costs(244) (285) (6,304) (1,580)
Payment of deferred consideration  (304) (5,408) (4,500)
Payment of redeemable non-controlling interest(25,000)   (25,000)  
Principal payments on capital lease obligations(1,771) (1,700) (5,679) (5,609)
Proceeds from exercise of stock options416  300  1,548  756 
Net cash used in financing activities(45,085) (27,390) (80,983) (86,722)
Net effect of exchange rate on cash and cash equivalents and restricted cash80  (658) 2,156  (2,146)
Net increase (decrease) in cash and cash equivalents and restricted cash(11,642) 14,337  16,270  22,388 
Cash and cash equivalents and restricted cash:       
Beginning of period84,810  77,169  56,898  69,118 
End of period$73,168  $91,506  $73,168  $91,506 
Supplemental cash flow information:       
Interest paid$38,154  $37,678  $118,276  $110,139 
Income taxes paid$1,499  $1,603  $3,958  $3,725 
                


GAAP to Non-GAAP Reconciliation - Adjusted EBITDA

The following table presents a reconciliation of net loss calculated in accordance with GAAP to adjusted EBITDA (all data in thousands):

 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2018 2017 2018
Net loss$(40,264) $(6,335) $(107,257) $(8,236)
Interest expense, net(1)35,645  37,238  120,516  111,203 
Income tax expense (benefit)2,982  11,715  11,384  8,826 
Depreciation13,571  11,889  40,733  36,753 
Amortization of other intangible assets35,347  26,177  104,554  77,890 
Stock-based compensation19,580  7,550  48,749  21,932 
Restructuring expenses4,489  197  14,584  3,021 
Transaction expenses and charges    773   
(Income) loss of unconsolidated entities(33)   (72) 2 
Impairment of other long-lived assets14,448    14,448   
SEC investigations reserve8,000    8,000   
Shareholder litigation reserve  (935)   7,325 
Adjusted EBITDA$93,765  $87,496  $256,412  $258,716 

(1)  Interest expense includes impact of amortization of deferred financing costs, original issuance discounts and interest income.


GAAP to Non-GAAP Reconciliation – Free Cash Flow

The following table reflects the reconciliation of cash flow from operations to free cash flow (“FCF”) (all data in thousands):

 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2018 2017 2018
Cash flow from operations$46,444  $51,341  $128,866  $133,593 
Less:       
Capital expenditures and capital lease obligations(1)(14,571) (10,662) (37,774) (27,952)
Free cash flow$31,873  $40,679  $91,092  $105,641 

(1)  Capital expenditures during the three and nine months ended September 30, 2017 and 2018 includes $1.8 million and $1.7 million, and $5.7 million and $5.6 million, respectively, of principal payments under a three year capital lease for software. The remaining balance on the capital lease is $9.7 million as of September 30, 2018.


Average Revenue Per Subscriber - Calculation and Segment Detail

We present our financial results in the following three segments.

  • Web presence. The web presence segment consists primarily of our web hosting brands and related products such as website security, website design tools and services, and e-commerce products.

  • Email marketing. The email marketing segment consists of Constant Contact email marketing tools and related products and the SinglePlatform digital storefront product.

  • Domain. The domain segment consists of domain-focused brands and certain web hosting brands that are aligned with our domain-focused brands. This segment sells domain names and domain management services to resellers and end users, as well as premium domain names, and also generates advertising revenue from domain name parking.

The following table presents the calculation of ARPS, on a consolidated basis and by segment (all data in thousands, except ARPS data):

 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2018 2017 2018
Consolidated revenue$295,222  $283,770  $882,617  $862,896 
Consolidated total subscribers5,122  4,852  5,122  4,852 
Consolidated average subscribers for the period5,170  4,885  5,247  4,951 
Consolidated ARPS$19.03  $19.36  $18.69  $19.36 
        
Web presence revenue$159,530  $149,871  $483,661  $457,603 
Web presence subscribers3,957  3,682  3,957  3,682 
Web presence average subscribers for the period3,999  3,709  4,079  3,765 
Web presence ARPS$13.30  $13.47  $13.18  $13.50 
        
Email marketing revenue$101,526  $102,111  $298,401  $306,712 
Email marketing subscribers(1)523  499  523  499 
Email marketing average subscribers for the period527  502  533  509 
Email marketing ARPS$64.26  $67.88  $62.16  $66.97 
        
Domain revenue$34,166  $31,788  $100,555  $98,581 
Domain subscribers642  671  642  671 
Domain average subscribers for the period644  674  635  677 
Domain ARPS$17.68  $15.71  $17.59  $16.18 

(1)  Total email marketing subscriber count as of September 30, 2018 was impacted by a loss of approximately 10,500 subscribers, which resulted from changes made to Constant Contact’s account cancellation policy. These changes took place in the three months ended June 30, 2018, as previously disclosed.


The following table presents revenue, gross profit, and a reconciliation by segment of net income (loss) calculated in accordance with GAAP to adjusted EBITDA (all data in thousands):

 Three Months Ended September 30, 2017
 Web presence Email marketing Domain Total
 Revised(2)
Revenue$159,530  $101,526  $34,166  $295,222 
Gross profit$77,032  $65,286  $(5,961) $136,357 
        
Net (loss) income$(20,403) $2,202  $(22,063) $(40,264)
Interest expense, net(1)14,686  20,514  445  35,645 
Income tax expense (benefit)798  1,323  861  2,982 
Depreciation9,399  3,233  939  13,571 
Amortization of other intangible assets14,884  18,770  1,693  35,347 
Stock-based compensation15,510  1,668  2,402  19,580 
Restructuring expenses3,468  682  339  4,489 
Transaction expenses and charges       
(Gain) loss of unconsolidated entities(33)     (33)
Impairment of other long-lived assets600    13,848  14,448 
SEC investigations reserve4,323  2,751  926  8,000 
Shareholder litigation reserve       
Adjusted EBITDA$43,232  $51,143  $(610) $93,765 
        
 Three Months Ended September 30, 2018
 Web presence Email marketing Domain Total
Revenue$149,871  $102,111  $31,788  $283,770 
Gross profit$75,074  $71,356  $8,395  $154,825 
        
Net (loss) income$(7,565) $6,596  $(5,366) $(6,335)
Interest expense, net(1)18,132  17,128  1,978  37,238 
Income tax expense (benefit)6,136  4,179  1,400  11,715 
Depreciation8,401  2,538  950  11,889 
Amortization of other intangible assets11,941  13,384  852  26,177 
Stock-based compensation1,569  4,472  1,509  7,550 
Restructuring expenses54  141  2  197 
Transaction expenses and charges       
(Gain) loss of unconsolidated entities       
Impairment of other long-lived assets       
SEC investigations reserve       
Shareholder litigation reserve(768)   (167) (935)
Adjusted EBITDA$37,900  $48,438  $1,158  $87,496 


 Nine Months Ended September 30, 2017
 Web presence Email marketing Domain Total
 Revised(2)
Revenue$483,661  $298,401  $100,555  $882,617 
Gross profit$229,186  $188,181  $11,053  $428,420 
        
Net loss$(67,226) $(8,026) $(32,005) $(107,257)
Interest expense, net(1)50,877  68,212  1,427  120,516 
Income tax expense (benefit)12,645  (4,821) 3,560  11,384 
Depreciation27,401  10,632  2,700  40,733 
Amortization of other intangible assets44,431  55,697  4,426  104,554 
Stock-based compensation38,023  5,392  5,334  48,749 
Restructuring expenses8,944  4,743  897  14,584 
Transaction expenses and charges  773    773 
(Gain) loss of unconsolidated entities(72)     (72)
Impairment of other long-lived assets600    13,848  14,448 
SEC investigations reserve4,323  2,751  926  8,000 
Shareholder litigation reserve       
Adjusted EBITDA$119,946  $135,353  $1,113  $256,412 
        
 Nine Months Ended September 30, 2018
 Web presence Email marketing Domain Total
Revenue$457,603  $306,712  $98,581  $862,896 
Gross profit$225,149  $214,909  $29,241  $469,299 
        
Net (loss) income$(20,549) $22,350  $(10,037) $(8,236)
Interest expense, net(1)53,503  50,866  6,834  111,203 
Income tax expense (benefit)960  8,009  (143) 8,826 
Depreciation24,769  9,090  2,894  36,753 
Amortization of other intangible assets35,812  39,716  2,362  77,890 
Stock-based compensation12,066  7,168  2,698  21,932 
Restructuring expenses1,654  723  644  3,021 
Transaction expenses and charges       
Loss of unconsolidated entities2      2 
Impairment of other long-lived assets       
SEC investigations reserve       
Shareholder litigation reserve4,780  1,500  1,045  7,325 
Adjusted EBITDA$112,997  $139,422  $6,297  $258,716 

(1)  Interest expense includes impact of amortization of deferred financing costs, original issuance discounts and interest income.
(2)  As disclosed in the first quarter of 2018, we revised the allocation of our 2017 adjusted EBITDA between our web presence and domain segment to correct a misallocation of domain registration costs in our previously reported segment figures. This correction resulted in the reallocation of adjusted EBITDA from the domain segment to the web presence segment of $1.9 million and $4.9 million for the three and nine months ending September 30, 2017, respectively.  Consolidated adjusted EBITDA figures for these periods were not affected by this correction.


The following table represents the impact of the income statement revision to the first and second quarters of 2018 due to the revised deferred income tax provision (in thousands, except per share data):

 Three Months Ended March 31, 2018 Three Months Ended June 30, 2018
 Originally FiledAdjustmentRevised Originally FiledAdjustmentRevised
Loss before income taxes and equity earnings of unconsolidated subsidiaries$(4,444)$ $(4,444) $(344)$ $(344)
Income tax expense (benefit)2,617 (4,560)(1,943) 1,650 (2,596) (946)
Loss before equity earnings of unconsolidated subsidiaries(7,061)$4,560 $(2,501) (1,994)$2,596 $602 
Equity (income) loss of unconsolidated subsidiaries27  27  $(25)  (25)
Net income (loss)$(7,088)$4,560 $(2,528) $(1,969)$2,596 $627 
Comprehensive income (loss)         
Foreign currency translation580  580  (2,425)  (2,425)
Unrealized (gain) loss on cash flow hedge, net of tax1,041  1,041  144   144 
Total comprehensive loss$(5,467)$4,560 $(907) $(4,250)$2,596 $(1,654)
Basic net income (loss) per share$(0.05)$0.03 $(0.02) $(0.01)$0.01 $0.00 
Diluted net income (loss) per share$(0.05)$0.03 $(0.02) $(0.01)$0.01 $0.00 
Weighted-average common shares used in computing net income (loss) per share         
Basic140,361,982  140,361,982  142,340,561   142,340,561 
Diluted140,361,982  140,361,982  142,340,561 2,361,441  144,702,002 


The following table represents the impact of the revised deferred income tax provision on the impacted balance sheet accounts as of the dates shown (in thousands):

 March 31, 2018 June 30, 2018
 Originally FiledAdjustmentRevised Originally FiledAdjustmentRevised
Deferred tax liability27,679 (4,560)23,119  29,897 (7,156)22,741 
Total liabilities2,533,619 (4,560)2,529,059  2,490,106 (7,156)2,482,950 
Accumulated deficit(795,206)4,560 (790,646) (797,175)7,156 (790,019)
Total stockholders' equity144,189 4,560 148,749  147,759 7,156 154,915 
Total liabilities and stockholders' equity2,677,808  2,677,808  2,637,865  2,637,865 


The following table represents the impact of the revised deferred income tax provision on the impacted lines of the statement of cash flows for the periods shown (in thousands):

 Three Months Ended March 31, 2018 Three Months Ended June 30, 2018
 Originally FiledAdjustmentRevised Originally FiledAdjustmentRevised
Net income (loss)(7,088)4,560 (2,528) (9,057)7,156 (1,901)
Deferred tax expense492 (4,560)(4,068) 2,672 (7,156)(4,484)
Net cash provided by operating activities52,360  52,360  82,252  82,252 


GAAP to Non-GAAP Reconciliation of Fiscal Year 2018 Guidance (as of October 25, 2018) - Adjusted EBITDA

The following table reflects the reconciliation of fiscal year 2018 estimated net loss calculated in accordance with GAAP to fiscal year 2018 guidance for adjusted EBITDA. All figures shown are approximate.

($ in millions)Twelve Months Ending
December 31, 2018
Estimated net loss$(8)$(3)
Estimated interest expense (net) 150  150 
Estimated income tax expense (benefit) (6) (6)
Estimated depreciation 50  50 
Estimated amortization of acquired intangible assets 104  104 
Estimated stock-based compensation 30  30 
Estimated restructuring expenses 3  3 
Estimated transaction expenses and charges    
Estimated (gain) loss of unconsolidated entities    
Estimated impairment of other long-lived assets    
Estimated shareholder litigation reserve 7.3  7.3 
Adjusted EBITDA guidance$330 $335 


GAAP to Non-GAAP Reconciliation of Fiscal Year 2018 Guidance (as of October 25, 2018) - Free Cash Flow

The following table reflects the reconciliation of fiscal year 2018 estimated cash flow from operations calculated in accordance with GAAP to fiscal year 2018 guidance for free cash flow. All figures shown are approximate.

($ in millions)Twelve Months Ending
December 31, 2018
Estimated cash flow from operations$178 
Estimated capital expenditures and capital lease obligations (58)
Free cash flow guidance$120