First Quarter Highlights
- Total revenue of $99.2 million grew 27% yoy on a GAAP basis and 32% in constant currency
- Added 900 net new customers. Total customers 35,300 globally
- Revenue retention rate of 111%
- Gross profit percentage of 74%, Non-GAAP gross profit percentage of 76%
- GAAP EPS of $(0.07) per diluted share, Non-GAAP EPS of $0.08 per diluted share
LEXINGTON, Mass., Aug. 05, 2019 (GLOBE NEWSWIRE) -- Mimecast Limited (NASDAQ: MIME), a leading email and data security company, today announced financial results for the first quarter ended June 30, 2019.
“Our Threat Intelligence Service and our Cyber Alliance Program are enabling customers and partners to leverage the power of the Mimecast platform to gain greater understanding of the threats they face and enhance cyber resilience.” stated Peter Bauer, CEO of Mimecast.
Mimecast’s CFO, Rafe Brown, commented, “Strong customer retention and sales of additional services resulted in first quarter revenue and adjusted EBITDA that exceeded our guidance.”
First Quarter 2020 Financial Highlights
- Revenue: Revenue for the first quarter of 2020 was $99.2 million, an increase of 27% compared to $78.4 million of revenue in the first quarter of 2019. Revenue on a constant currency basis increased 32% compared to the first quarter of 2019.
- Customers: Added 900 net new customers in the first quarter of 2020, compared to 900 net new customers in the first quarter of 2019. We now serve 35,300 organizations globally.
- Revenue Retention Rate: Revenue retention rate was 111% in the first quarter of 2020, compared to 110% in the first quarter of 2019.
- Gross Profit Percentage: Gross profit percentage was 74% in the first quarter of 2020, compared to 73% in the first quarter of 2019.
- Non-GAAP Gross Profit Percentage: Non-GAAP gross profit percentage was 76% in the first quarter of 2020, compared to 74% in the first quarter of 2019.
- Net loss: Net loss was $4.0 million, or $(0.07) per diluted share, based on 61.4 million diluted shares outstanding, compared to a net loss of $3.5 million, or $(0.06) per diluted share, based on 59.2 million diluted shares outstanding in the first quarter of 2019.
- Non-GAAP Net Income: Non-GAAP net income was $5.0 million, or $0.08 per diluted share, based on 63.9 million diluted shares outstanding, compared to a non-GAAP net income of $2.2 million or $0.04 per diluted share, based on 62.6 million diluted shares outstanding in the first quarter of 2019.
- Adjusted EBITDA: Adjusted EBITDA was $13.5 million, representing an Adjusted EBITDA margin of 13.6%, up from 12.7% in the first quarter of 2019.
- Operating Cash Flow: Operating cash flow was $28.5 million in the first quarter of 2020, compared to $16.6 million in the first quarter of 2019.
- Free Cash Flow, Cash and Investments: Free cash flow was $19.4 million in the first quarter of 2020, compared to $9.1 million in the first quarter of 2019. Cash and short-term investments as of June 30, 2019 were $196.8 million.
Reconciliations of the non-GAAP financial measures provided in this press release to their most directly comparable GAAP financial measures are provided in the financial tables included at the end of this press release. An explanation of these measures and how they are calculated is also included under the heading “Non-GAAP Financial Measures.”
Business Highlights
- Mimecast launched a new Cyber Alliance Program focused on bringing complementary software vendors together to share threat intelligence for the greater good of our joint customers. Powered by Mimecast’s broad open API library, partners, vendors, and customers can access a powerful set of tools to build a more comprehensive understanding of the threats organizations face. More information here: https://www.mimecast.com/tech-connect/
- Mimecast Threat Intelligence is now available for all customers. This new service is designed to offer easily digestible and actionable insights into threats impacting organizations. The service is accessed, and threats remediated, through the Mimecast Threat Dashboard. Customers can also access this service though our Threat Feed API’s for integration with SIEM, SOAR, and EDR providers.
- Targeted Threat Protection added 1,300 new subscriptions in the first quarter. In total, 24,400 customers now use the service.
- On average, Mimecast customers used 3.2 services in the first quarter of 2020. This represents an increase from the average of 3.0 services used by customers in the first quarter of 2019.
- A total of 46% of customers used Mimecast in conjunction with Microsoft Office 365® during the first quarter of 2020, compared to 34% in the first quarter of 2019. In total, 16,300 customers of all sizes have selected Mimecast to enhance their security, archive their data, and provide uptime assurance for their Office 365 investments.
Business Outlook
Mimecast is providing guidance for the second quarter and fiscal year 2020.
Second Quarter 2020 Guidance:
For the second quarter of 2020, revenue is expected to be in the range of $101.1 million to $102.1 million and constant currency revenue growth is expected to be in the range of 26% to 27%. Adjusted EBITDA for the second quarter is expected to be in the range of $17.6 million to $18.6 million. Our revenue guidance for the second quarter is based on exchange rates as of July 31, 2019 and includes an estimated negative impact of $2.3 million resulting from the strengthening of the U.S. dollar compared to the prior year.
Fiscal Year 2020 Guidance:
For the full year 2020, revenue is expected to be in the range of $414.0 million to $422.6 million and constant currency revenue growth is expected to be in the range of 25% to 27%. Adjusted EBITDA is expected to be in the range of $71.6 million to $73.6 million. Our revenue guidance for full year 2020 is based on exchange rates as of July 31, 2019 and includes an estimated negative impact of $11.1 million resulting from the strengthening of the U.S. dollar compared to the prior year, and a negative foreign exchange impact of $5.8 million compared to our prior fiscal year 2020 guidance.
GAAP net loss is the most comparable GAAP measure to Adjusted EBITDA. Adjusted EBITDA differs from GAAP net loss in that it excludes depreciation, amortization, disposals and impairment of long-lived assets, acquisition-related gains and expenses, litigation-related expenses, share-based compensation expense, restructuring expense, interest income and interest expense, the provision for income taxes and foreign exchange income (expense). Prior to the adoption of Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842) (ASC 842), on April 1, 2019, Adjusted EBITDA also included rent paid in the period related to locations which had been accounted for as build-to-suit facilities. Mimecast is unable to predict with reasonable certainty the ultimate outcome of these exclusions without unreasonable effort. Therefore, Mimecast has not provided guidance for GAAP loss or a reconciliation of forward-looking Adjusted EBITDA guidance to GAAP net loss.
Conference Call and Webcast Information
Mimecast will host a conference call to discuss these financial results for investors and analysts at 4:30 pm EDT (UTC-04:00) on August 5, 2019. To access the conference call, dial (844) 402-0879 for the U.S. and Canada and (478) 219-0767 for international callers and enter conference ID# 5594623. The call will also be webcast live on the investor relations section of the Company’s website https://investors.mimecast.com. An audio replay of the call will be available two hours after the live call ends by dialing (855) 859-2056 for U.S. and Canada and (404) 537-3406 for international callers and entering conference ID# 5594623. In addition, an archive of the webcast will be available on the investor relations section of the Company’s website https://investors.mimecast.com.
About Mimecast
Mimecast is a cybersecurity provider that helps thousands of organizations worldwide make email safer, restore trust and bolster cyber resilience. Mimecast’s expanded cloud suite enables organizations to implement a comprehensive cyber resilience strategy. From email and web security, archive and data protection to awareness training, uptime assurance and more, Mimecast helps organizations stand strong in the face of cyberattacks, human error and technical failure. www.mimecast.com
Mimecast and the Mimecast logo are registered trademarks of Mimecast. All other third-party trademarks and logos contained in this press release are the property of their respective owners.
Non-GAAP Financial Measures
We have provided in this press release financial information that has not been prepared in accordance with GAAP. We use these non-GAAP financial measures internally in analyzing our financial results and believe they are useful to investors, as a supplement to GAAP measures, in evaluating our ongoing operational performance. We believe that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial results with other companies in our industry, many of which present similar non-GAAP financial measures to investors.
Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures provided in the financial statement tables included below in this press release.
Revenue Constant Currency Growth Rate. We believe revenue constant currency growth rate is a key indicator of our operating results. We calculate revenue constant currency growth rate by translating revenue from entities reporting in foreign currencies into U.S. dollars using the comparable foreign currency exchange rates from the prior fiscal period. To determine projected revenue growth rates on a constant currency basis for the second quarter and full year 2020, expected revenue from entities reporting in foreign currencies is translated into U.S. dollars using the comparable prior year period’s monthly average foreign currency exchange rates.
Non-GAAP gross profit and Non-GAAP gross profit percentage. We define non-GAAP gross profit as gross profit, adjusted to exclude: share-based compensation expense and amortization of acquired intangible assets. We define non-GAAP gross profit percentage as non-GAAP gross profit divided by GAAP revenue. We consider these non-GAAP financial measures to be useful metrics for management and investors because they exclude the effect of non-cash charges for share-based compensation expense and amortization of acquired intangibles so that our management and investors can compare our recurring core business net results over multiple periods. There are a number of limitations related to the use of non-GAAP gross profit and non-GAAP gross profit percentage versus gross profit and gross profit percentage calculated in accordance with GAAP. For example, as noted above, non-GAAP gross profit and gross profit percentage excludes share-based compensation expense and amortization of acquired intangible assets. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP gross profit and non-GAAP gross profit percentage and evaluates non-GAAP gross profit and non-GAAP gross profit percentage together with gross profit and gross profit percentage calculated in accordance with GAAP.
Non-GAAP operating expenses and Non-GAAP income from operations. We provide investors with certain non-GAAP financial measures, including non-GAAP research and development expense, non-GAAP sales and marketing expense, non-GAAP general and administrative expense and non-GAAP income from operations (collectively the “non-GAAP operating financial measures”). These non-GAAP operating financial measures exclude the following, as applicable (as reflected in the reconciliation tables that follow): share-based compensation expense, amortization of acquired intangible assets, impairment of long-lived assets, restructuring expense, acquisition-related gains and expenses and litigation-related expenses. We consider these non-GAAP operating financial measures to be useful metrics for management and investors because it excludes the effect of share-based compensation expense and certain “one-time” charges so that our management and investors can compare our recurring core business net results over multiple periods. There are a number of limitations related to the use of these non-GAAP operating financial measures versus the applicable financial measures calculated in accordance with GAAP. For example, as noted above, the non-GAAP operating financial measures exclude share-based compensation expense and certain “one-time” charges. In addition, the components of the costs that we exclude in our calculation of non-GAAP operating financial measures may differ from the components that our peer companies exclude when they report their non-GAAP results of operations. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP operating financial measures and evaluates non-GAAP operating financial measures together with the applicable financial measures calculated in accordance with GAAP.
Non-GAAP net income. We define non-GAAP net income as net loss, adjusted to exclude: share-based compensation expense, amortization of acquired intangible assets, impairment of long-lived assets, restructuring expense, acquisition-related gains and expenses, litigation-related expenses and the income tax effect of non-GAAP adjustments. We consider this non-GAAP financial measure to be a useful metric for management and investors because it excludes the effect of share-based compensation expense, certain “one-time” charges and related income tax effects so that our management and investors can compare our recurring core business net results over multiple periods. There are a number of limitations related to the use of non-GAAP net income versus net loss calculated in accordance with GAAP. For example, as noted above, non-GAAP net income excludes share-based compensation expense, certain “one-time” charges and related income tax effects. In addition, the components of the costs that we exclude in our calculation of non-GAAP net income may differ from the components that our peer companies exclude when they report their non-GAAP results of operations. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP net income and evaluating non-GAAP net income together with net loss calculated in accordance with GAAP.
Adjusted EBITDA and Adjusted EBITDA margin. We believe that Adjusted EBITDA and Adjusted EBITDA margin are key indicators of our operating results. We define Adjusted EBITDA as net loss, adjusted to exclude: depreciation, amortization, disposals and impairment of long-lived assets, acquisition-related gains and expenses, litigation-related expenses, share-based compensation expense, restructuring expense, interest income and interest expense, the provision for income taxes and foreign exchange income (expense). Prior to the adoption of ASC 842 on April 1, 2019, Adjusted EBITDA also included rent paid in the period related to locations which had been accounted for as build-to-suit facilities. We define Adjusted EBITDA margin as Adjusted EBITDA over GAAP revenue in the period. We use Adjusted EBITDA as part of our overall assessment of our performance, for planning purposes, including the preparation of our annual operating budget, to evaluate the effectiveness of our business strategies, to communicate with our board of directors concerning our financial performance and for establishing incentive compensation metrics for executives and other senior employees.
Free cash flow. We define free cash flow as net cash provided by operating activities minus capital expenditures. We consider free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that, after the acquisition of property, equipment and capitalized software, can be used for strategic opportunities, including investing in our business, and strengthening the balance sheet. Analysis of free cash flow facilitates management’s comparisons of our operating results to competitors’ operating results. A limitation of using free cash flow versus the GAAP measure of net cash provided by operating activities as a means for evaluating our company is that free cash flow does not represent the total increase or decrease in the cash balance from operations for the period because it excludes cash used for capital expenditures during the period. Management compensates for this limitation by providing information about our capital expenditures on the face of the cash flow statement and in the liquidity and capital resources discussion included in our annual and quarterly reports filed with the Securities and Exchange Commission.
Safe Harbor for Forward-Looking Statements
Statements in this press release regarding management’s future expectations, beliefs, intentions, goals, strategies, plans or prospects, including, without limitation, the efficacy of Mimecast’s Threat Intelligence Service and Cyber Alliance Program, and Mimecast’s future financial performance on both a GAAP and non-GAAP basis under the heading “Business Outlook” above, may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. All statements, other than statements of historical fact, are statements that could be deemed forward-looking statements, including statements containing the words “predicts,” “plan,” “expects,” “anticipates,” “believes,” “goal,” “target,” “estimate,” “potential,” “may,” “might,” “could,” “see,” “seek,” “forecast,” and similar words. Mimecast intends all such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors including, but not limited to, the ability to attract new customers and retain existing customers, competitive conditions, data breaches, compliance with data privacy and data transfer laws and regulations, service disruptions, the impact of acquisitions, the effect of the withdrawal of the United Kingdom from the European Union, risks associated with failure to protect the Company’s intellectual property or claims that the Company infringes the intellectual property of others, the global nature of the Company’s business, including foreign currency exchange rate fluctuations and the other risks, uncertainties and factors detailed in Mimecast’s filings with the Securities and Exchange Commission. As a result of such risks, uncertainties and factors, Mimecast’s actual results may differ materially from any future results, performance or achievements discussed in or implied by the forward-looking statements contained herein. Mimecast is providing the information in this press release as of this date and assumes no obligations to update the information included in this press release or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
MIMECAST LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
| Three months ended June 30, | ||||||||
| 2019 | 2018 | |||||||
| Revenue | $ | 99,231 | $ | 78,404 | ||||
| Cost of revenue | 25,467 | 20,976 | ||||||
| Gross profit | 73,764 | 57,428 | ||||||
| Operating expenses | ||||||||
| Research and development | 19,385 | 13,100 | ||||||
| Sales and marketing | 43,370 | 34,203 | ||||||
| General and administrative | 15,447 | 12,214 | ||||||
| Total operating expenses | 78,202 | 59,517 | ||||||
| Loss from operations | (4,438 | ) | (2,089 | ) | ||||
| Other income (expense) | ||||||||
| Interest income | 982 | 444 | ||||||
| Interest expense | (1,280 | ) | (527 | ) | ||||
| Foreign exchange income (expense) and other, net | 956 | (441 | ) | |||||
| Total other income (expense), net | 658 | (524 | ) | |||||
| Loss before income taxes | (3,780 | ) | (2,613 | ) | ||||
| Provision for income taxes | 230 | 858 | ||||||
| Net Loss | $ | (4,010 | ) | $ | (3,471 | ) | ||
| Net loss per ordinary share | ||||||||
| Basic and diluted | $ | (0.07 | ) | $ | (0.06 | ) | ||
| Weighted-average number of ordinary shares outstanding | ||||||||
| Basic and diluted | 61,444 | 59,175 | ||||||
MIMECAST LIMITED
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
(unaudited)
| As of June 30, | As of March 31, | |||||||
| 2019 | 2019 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 174,812 | $ | 137,576 | ||||
| Short-term investments | 22,025 | 35,941 | ||||||
| Accounts receivable, net | 68,495 | 80,953 | ||||||
| Deferred contract costs, net | 8,802 | 8,140 | ||||||
| Prepaid expenses and other current assets | 15,621 | 25,871 | ||||||
| Total current assets | 289,755 | 288,481 | ||||||
| Property and equipment, net | 65,655 | 94,202 | ||||||
| Operating lease right-of-use assets | 133,350 | — | ||||||
| Intangible assets, net | 29,154 | 30,623 | ||||||
| Goodwill | 108,722 | 107,575 | ||||||
| Deferred contract costs, net of current portion | 30,103 | 28,250 | ||||||
| Other assets | 6,195 | 5,156 | ||||||
| Total assets | $ | 662,934 | $ | 554,287 | ||||
| Liabilities and shareholders' equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 7,411 | $ | 9,457 | ||||
| Accrued expenses and other current liabilities | 37,438 | 44,309 | ||||||
| Deferred revenue | 162,814 | 163,102 | ||||||
| Current portion of finance lease obligations | 938 | 844 | ||||||
| Current portion of operating lease obligations | 27,846 | — | ||||||
| Current portion of long-term debt | 4,695 | 4,059 | ||||||
| Total current liabilities | 241,142 | 221,771 | ||||||
| Deferred revenue, net of current portion | 12,309 | 12,472 | ||||||
| Long-term finance lease obligations | 1,122 | 1,381 | ||||||
| Operating lease liabilities | 121,330 | — | ||||||
| Long-term debt | 91,655 | 92,797 | ||||||
| Construction financing lease obligations | — | 36,650 | ||||||
| Other non-current liabilities | 4,268 | 15,581 | ||||||
| Total liabilities | 471,826 | 380,652 | ||||||
| Commitments and contingencies | ||||||||
| Shareholders' equity | ||||||||
| Ordinary shares, $0.012 par value, 300,000,000 shares authorized; 61,728,891 and 61,158,051 shares issued and outstanding as of June 30, 2019 and March 31, 2019, respectively | 740 | 734 | ||||||
| Additional paid-in capital | 281,130 | 263,388 | ||||||
| Accumulated deficit | (85,470 | ) | (83,632 | ) | ||||
| Accumulated other comprehensive loss | (5,292 | ) | (6,855 | ) | ||||
| Total shareholders' equity | 191,108 | 173,635 | ||||||
| Total liabilities and shareholders' equity | $ | 662,934 | $ | 554,287 | ||||
MIMECAST LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
| Three months ended June 30, | ||||||||
| 2019 | 2018 | |||||||
| Operating activities | ||||||||
| Net loss | $ | (4,010 | ) | $ | (3,471 | ) | ||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 7,442 | 6,926 | ||||||
| Share-based compensation expense | 10,034 | 5,181 | ||||||
| Amortization of deferred contract costs | 2,116 | 1,386 | ||||||
| Amortization of debt issuance costs | 157 | — | ||||||
| Amortization of operating lease right-of-use assets | 7,677 | — | ||||||
| Other non-cash items | (42 | ) | (19 | ) | ||||
| Unrealized currency gains on foreign denominated transactions | (856 | ) | (111 | ) | ||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable | 11,927 | 6,079 | ||||||
| Prepaid expenses and other current assets | 8,856 | 1,569 | ||||||
| Deferred contract costs | (4,806 | ) | (3,835 | ) | ||||
| Other assets | (638 | ) | (98 | ) | ||||
| Accounts payable | (808 | ) | 108 | |||||
| Deferred revenue | 1,295 | 2,521 | ||||||
| Operating lease liabilities | (5,145 | ) | — | |||||
| Accrued expenses and other liabilities | (4,675 | ) | 398 | |||||
| Net cash provided by operating activities | 28,524 | 16,634 | ||||||
| Investing activities | ||||||||
| Purchases of strategic investments | (3,025 | ) | — | |||||
| Maturities of investments | 14,000 | 17,000 | ||||||
| Purchases of property, equipment and capitalized software | (9,161 | ) | (7,575 | ) | ||||
| Net cash provided by investing activities | 1,814 | 9,425 | ||||||
| Financing activities | ||||||||
| Proceeds from issuance of ordinary shares | 8,870 | 5,904 | ||||||
| Withholding taxes related to net share settlement of restricted share units | (1,137 | ) | — | |||||
| Payments on debt | (625 | ) | — | |||||
| Payments on finance lease obligations | (166 | ) | (203 | ) | ||||
| Payments on construction financing lease obligations | — | (413 | ) | |||||
| Net cash provided by financing activities | 6,942 | 5,288 | ||||||
| Effect of foreign exchange rates on cash | (44 | ) | (2,156 | ) | ||||
| Net increase in cash and cash equivalents | 37,236 | 29,191 | ||||||
| Cash and cash equivalents at beginning of period | 137,576 | 78,339 | ||||||
| Cash and cash equivalents at end of period | $ | 174,812 | $ | 107,530 | ||||
Key Performance Indicators
In addition to traditional financial metrics, such as revenue and revenue growth trends, we monitor several other non-GAAP financial measures and non-financial metrics to help us evaluate growth trends, establish budgets, measure the effectiveness of our sales and marketing efforts and assess operational efficiencies. The key performance indicators that we monitor are as follows:
| Three months ended June 30, | ||||||||
| 2019 | 2018 | |||||||
| (dollars in thousands) | ||||||||
| Revenue constant currency growth rate (1) | 32 | % | 31 | % | ||||
| Revenue retention rate (2) | 111 | % | 110 | % | ||||
| Total customers (3) | 35,300 | 31,300 | ||||||
| Gross profit percentage | 74 | % | 73 | % | ||||
| Adjusted EBITDA (1) | $ | 13,503 | $ | 9,958 | ||||
__________________
| (1 | ) | Adjusted EBITDA and revenue constant currency growth rates are non-GAAP measures. For a reconciliation of Adjusted EBITDA and revenue constant currency growth rates to the nearest comparable GAAP measures, see “Reconciliation of Non-GAAP Financial Measures” below. |
| (2 | ) | We calculate our revenue retention rate by annualizing constant currency revenue recorded on the last day of the measurement period for only those customers in place throughout the entire measurement period. This revenue includes renewed revenue contracts as well as additional revenue derived from the sale of additional seat licenses as well as additional services sold to these existing customers. We divide the result by revenue on a constant currency basis on the first day of the measurement period for all customers in place at the beginning of the measurement period. The measurement period is the trailing twelve months. The revenue on a constant currency basis is based on the average exchange rates in effect during the respective period. |
| (3 | ) | Reflects the customer count on the last day of the period rounded to the nearest hundred customers. We define a customer as an entity with an active subscription contract as of the measurement date. A customer is typically a parent company or, in a few cases, a significant subsidiary that works with us directly. |
Reconciliation of Non-GAAP Financial Measures
The following table presents a reconciliation of revenue growth rate, as reported, to revenue constant currency growth rate:
| Three months ended June 30, | ||||||||
| 2019 | 2018 | |||||||
| (dollars in thousands) | ||||||||
| Reconciliation of Revenue Constant Currency Growth Rate: | ||||||||
| Revenue, as reported | $ | 99,231 | $ | 78,404 | ||||
| Revenue year-over-year growth rate, as reported | 27 | % | 35 | % | ||||
| Estimated impact of foreign currency fluctuations | 5 | % | (4 | )% | ||||
| Revenue constant currency growth rate | 32 | % | 31 | % | ||||
| Exchange rate for period | ||||||||
| USD | 1.000 | 1.000 | ||||||
| ZAR | 0.070 | 0.079 | ||||||
| GBP | 1.286 | 1.362 | ||||||
| AUD | 0.700 | 0.757 | ||||||
The following tables present a reconciliation of selected GAAP results to Non-GAAP results (in thousands):
| Three months ended June 30, | ||||||||
| 2019 | 2018 | |||||||
| (dollars in thousands) | ||||||||
| Reconciliation of Non-GAAP Gross Profit: | ||||||||
| GAAP gross profit | $ | 73,764 | $ | 57,428 | ||||
| GAAP gross profit percentage | 74 | % | 73 | % | ||||
| Plus: | ||||||||
| Share-based compensation expense | 787 | 404 | ||||||
| Amortization of acquired intangible assets | 625 | 39 | ||||||
| Non-GAAP gross profit | $ | 75,176 | $ | 57,871 | ||||
| Non-GAAP gross profit percentage | 76 | % | 74 | % | ||||
| Three months ended June 30, | ||||||||
| 2019 | 2018 | |||||||
| GAAP research and development | $ | 19,385 | $ | 13,100 | ||||
| Less: | ||||||||
| Share-based compensation expense | 2,549 | 1,330 | ||||||
| Amortization of acquired intangible assets | — | — | ||||||
| Acquisition-related expenses | — | — | ||||||
| Litigation-related expenses | — | — | ||||||
| Non-GAAP research and development | $ | 16,836 | $ | 11,770 | ||||
| Three months ended June 30, | ||||||||
| 2019 | 2018 | |||||||
| GAAP sales and marketing | $ | 43,370 | $ | 34,203 | ||||
| Less: | ||||||||
| Share-based compensation expense | 3,782 | 1,831 | ||||||
| Amortization of acquired intangible assets | 30 | 4 | ||||||
| Acquisition-related expenses | — | — | ||||||
| Litigation-related expenses | — | — | ||||||
| Non-GAAP sales and marketing | $ | 39,558 | $ | 32,368 | ||||
| Three months ended June 30, | ||||||||
| 2019 | 2018 | |||||||
| GAAP general and administrative | $ | 15,447 | $ | 12,214 | ||||
| Less: | ||||||||
| Share-based compensation expense | 2,916 | 1,616 | ||||||
| Amortization of acquired intangible assets | — | — | ||||||
| Acquisition-related expenses | — | 730 | ||||||
| Litigation-related expenses | 350 | — | ||||||
| Non-GAAP general and administrative | $ | 12,181 | $ | 9,868 | ||||
| Three months ended June 30, | ||||||||
| 2019 | 2018 | |||||||
| GAAP loss from operations | $ | (4,438 | ) | $ | (2,089 | ) | ||
| Plus: | ||||||||
| Share-based compensation expense | 10,034 | 5,181 | ||||||
| Amortization of acquired intangible assets | 655 | 43 | ||||||
| Acquisition-related expenses | — | 730 | ||||||
| Litigation-related expenses | 350 | — | ||||||
| Non-GAAP income from operations | $ | 6,601 | $ | 3,865 | ||||
The following table presents a reconciliation of net loss to Non-GAAP net income (in thousands, except per share amounts):
| Three months ended June 30, | ||||||||
| 2019 | 2018 | |||||||
| Reconciliation of Non-GAAP Net Income: | ||||||||
| Net loss | $ | (4,010 | ) | $ | (3,471 | ) | ||
| Share-based compensation expense | 10,034 | 5,181 | ||||||
| Amortization of acquired intangible assets | 655 | 43 | ||||||
| Acquisition-related expenses (1) | — | 730 | ||||||
| Litigation-related expenses (2) | 350 | — | ||||||
| Income tax effect of Non-GAAP adjustments | (2,066 | ) | (275 | ) | ||||
| Non-GAAP net income | $ | 4,963 | $ | 2,208 | ||||
| Non-GAAP net income per ordinary share - basic | $ | 0.08 | $ | 0.04 | ||||
| Non-GAAP net income per ordinary share - diluted | $ | 0.08 | $ | 0.04 | ||||
| Weighted-average number of ordinary shares used in computing Non-GAAP net income per ordinary share: | ||||||||
| Basic | 61,444 | 59,175 | ||||||
| Diluted | 63,871 | 62,584 | ||||||
_________________
| (1 | ) | Acquisition-related expenses relate to costs incurred for acquisition activity in the year ended March 31, 2019. See Note 10 of the notes to our consolidated financial statements, included in the Company’s Quarterly Report on Form 10-Q for further information. |
| (2 | ) | Litigation-related expenses relate to amounts accrued for loss contingencies. See Note 13 of the notes to our consolidated financial statements, included in the Company’s Quarterly Report on Form 10-Q for further information. |
The following table presents a reconciliation of Net loss to Adjusted EBITDA (in thousands):
| Three months ended June 30, | ||||||||
| 2019 | 2018 | |||||||
| Reconciliation of Adjusted EBITDA: | ||||||||
| Net loss | $ | (4,010 | ) | $ | (3,471 | ) | ||
| Depreciation, amortization and disposals of long-lived assets | 7,455 | 6,926 | ||||||
| Rent expense related to build-to-suit facilities | — | (890 | ) | |||||
| Interest expense, net | 298 | 83 | ||||||
| Provision for income taxes | 230 | 858 | ||||||
| Share-based compensation expense | 10,034 | 5,181 | ||||||
| Foreign exchange (income) expense | (854 | ) | 541 | |||||
| Acquisition-related expenses (1) | — | 730 | ||||||
| Litigation-related expenses (2) | 350 | — | ||||||
| Adjusted EBITDA | $ | 13,503 | $ | 9,958 | ||||
_________________
| (1 | ) | Acquisition-related expenses relate to costs incurred for acquisition activity in the year ended March 31, 2019. See Note 10 of the notes to our consolidated financial statements, included in the Company’s Quarterly Report on Form 10-Q for further information. |
| (2 | ) | Litigation-related expenses relate to amounts accrued for loss contingencies. See Note 13 of the notes to our consolidated financial statements, included in the Company’s Quarterly Report on Form 10-Q for further details. |
The following table presents a reconciliation of Net cash provided by operating activities to Free Cash Flow (in thousands):
| Three months ended June 30, | ||||||||
| 2019 | 2018 | |||||||
| Reconciliation of Free Cash Flow: | ||||||||
| Net cash provided by operating activities | $ | 28,524 | $ | 16,634 | ||||
| Purchases of property, equipment and capitalized software | (9,161 | ) | (7,575 | ) | ||||
| Free Cash Flow | $ | 19,363 | $ | 9,059 | ||||
Share-based compensation expense for the three months ended June 30, 2019 and 2018 (in thousands):
| Three months ended June 30, | ||||||||
| 2019 | 2018 | |||||||
| Cost of revenue | $ | 787 | $ | 404 | ||||
| Research and development | 2,549 | 1,330 | ||||||
| Sales and marketing | 3,782 | 1,831 | ||||||
| General and administrative | 2,916 | 1,616 | ||||||
| Total share-based compensation expense | $ | 10,034 | $ | 5,181 | ||||
Amortization of acquired intangible assets for the three months ended June 30, 2019 and 2018 (in thousands):
| Three months ended June 30, | ||||||||
| 2019 | 2018 | |||||||
| Cost of revenue | $ | 625 | $ | 39 | ||||
| Sales and marketing | 30 | 4 | ||||||
| Total amortization of acquired intangible assets | $ | 655 | $ | 43 | ||||
Mimecast Social Media Resources
- LinkedIn: Mimecast
- Facebook: Mimecast
- Twitter: @Mimecast
- Blog: Cyber Resilience Insights
Press Contact
Alison Raymond Walsh
Press@Mimecast.com
617-393-7126
Investor Contact
Robert Sanders
Investors@Mimecast.com
617-393-7074