MobileIron Announces Solid First Quarter 2019 Results
ARR Growth of 18%
Double digit revenue growth for second quarter in a row
MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)-- MobileIron (NASDAQ: MOBL), the secure foundation for modern work, today announced results for its first quarter ended March 31, 2019.
First Quarter 2019 Financial Highlights
- Revenue was $48.1 million, up 10% year-over-year.
- ARR was $167.2 million, up 18% year-over-year.
- Cash generated in operating activities was $7.8 million.
“MobileIron began 2019 with a solid first quarter, delivering revenue growth of 10% and robust ARR growth of 18%. Our team is executing on our objective of growing our recurring revenue base through subscription solutions with our best-in-class cloud products,” said Simon Biddiscombe, CEO, MobileIron. “As IT departments shift to address the threats of a Zero Trust world, we believe we are ideally poised to capitalize on this market. Already possessing the most comprehensive mobile security suite to address a Zero Trust environment, MobileIron will continue to deliver a roadmap of innovation to strengthen our security framework while enhancing the user’s experience. I am confident that our focus on market-leading innovation and customer satisfaction will continue to propel us on our upward growth trajectory.”
ARR Composition | |||||||||||||
Three Months Ended | |||||||||||||
March 31, | |||||||||||||
(in millions, except percentages) |
2018 |
2019 |
|||||||||||
Total ARR | $ | 142.2 | $ | 167.2 | |||||||||
Year-over-year percentage increase |
13% |
|
18% |
||||||||||
Subscription ARR | $ | 77.6 | $ | 100.4 | |||||||||
Year-over-year percentage increase |
17% |
|
29% |
||||||||||
Perpetual license support ARR | $ | 64.6 | $ | 66.8 | |||||||||
Year-over-year percentage increase |
9% |
|
3% |
||||||||||
Financial Outlook
The company is providing the following outlook for its second quarter 2019 (ending June 30, 2019):
- Revenue is expected to be between $49 million and $52 million, for growth of 6% to 13% year-over-year.
- Non-GAAP gross margin is expected to be approximately 82%.
- Non-GAAP operating expenses are expected to be approximately $46 million.
The company is reaffirming the following outlook for 2019 (ending December 31, 2019):
- Revenue is expected to be between $205 million and $215 million, for growth of 6% to 11%.
- We expect ARR to grow by approximately 20% by year end.
- We expect to generate non-GAAP operating profit.
First Quarter 2019 Business Highlights
Milestones and Recognition
- Recognized as a 2019 Gartner Peer Insights Customers’ Choice for Unified Endpoint Management Tools, for the second consecutive year. MobileIron is the only Leader in the Gartner UEM Magic Quadrant to be recognized with this distinction.
- Became the first UEM vendor to receive Common Criteria certification for MDM Protection Profile Version 3.0, from the US government-operated National Information Assurance Partnership (NIAP).
- Obtained certification from the Service Capability & Performance Standards for excellence in customer support for the second year in a row and MobileIron remains the only UEM vendor to receive this certification for excellence.
- Appointed Leslie Stretch to our Board of Directors. Currently Mr. Stretch is the CEO of the cloud company Medallia. He was previously the CEO of Callidus, which he transitioned from a perpetual license business to a cloud and subscription model.
- Announced partnership with NetMotion Software to enable secure, reliable access to mission-critical mobile apps and real-time data for mobile workforces for MobileIron’s UEM, Core, and Cloud offerings.
- Recognized as a Customer Experience Award winner by Info-Tech Research Group, an IT research and advisory company, for MobileIron’s top scores in the categories of Fair-Cost to Value (user satisfaction given software cost) and Net Emotional Footprint (user feeling towards vendor and product). This report is a detailed analysis of software vendors in the market and the report’s results are based on end-user feedback.
- Awarded two additional US patents for mobile security, bringing MobileIron’s total number of awarded patents to 84.
Platform
- Announced new capabilities to improve workforce productivity by strengthening access to corporate applications and services, including Mobile Application Management (MAM) for unmanaged devices and Frontline worker enablement, optimized security with mobile threat detection, and expanded OS compatibility for macOS, Android, and Windows 10 endpoints.
- Released new versions of MobileIron Cloud, Access, Core, AppConnect, Docs@Work, Derived Credentials (PIV-D), Email+, Tunnel, Sentry, and Web@Work.
- Integrated with Mopria Alliance for Android Enterprise mobile printing.
- Integrated with Mobile Box for iOS email and PIM.
- EBF published new Microsoft Office AppConfig integrations for Excel, OneDrive, OneNote, Outlook, PowerPoint, and Word.
- MobileIron Access now documented as an authentication provider with PingFederate delegated-IdP flow.
- Announced partnership with IDEMIA for eSIM and connectivity management.
All forward-looking non-GAAP financial measures contained in this section exclude estimates for stock-based compensation expense, amortization of intangible assets and restructuring expense. While a reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis, the company has provided a reconciliation of GAAP to non-GAAP financial measures in the financial statement tables included in this press release for its first quarter of 2018 and 2019.
Conference Call and Webcast
MobileIron will report final results for the first quarter and fiscal year 2019 on Thursday, April 25, 2019 after the close of the market and host a conference call and live webcast at 1:30 p.m. Pacific Time (4:30 p.m. ET) to discuss the company's financial results, product announcements and business highlights. Interested parties may access the call by dialing 1-866-602-7050 in the U.S. or 1-409-216-6455 from international locations (passcode 4868103). The live webcast will be available on the MobileIron Investor Relations website at http://investors.mobileiron.com. A replay will be available through the same link.
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements contain words such as “may,” “will,” “might,” “expect,” “believe,” “anticipate,” “could,” “would,” “estimate,” “continue,” “pursue,” or the negative thereof or comparable terminology, and may include (without limitation) information regarding our expectations, goals or intentions regarding future performance. Forward-looking statements in this press release include, but are not limited to, statements regarding MobileIron's revenue, operating expenses, cost structure, GAAP and non-GAAP financial metrics, as well as statements that we expect to continue to see progress through 2019 on executing on our objective of growing our recurring revenue base through subscription solutions with our best in class cloud products, that we believe we are ideally poised to capitalize on the market of IT departments shifting to address the threats of a Zero Trust world, that we will continue to deliver a roadmap of innovation to strengthen our security framework while enhancing the user’s experience, that our continued focus on market-leading innovation and customer satisfaction will continue to propel us on our upward growth trajectory, and all statements under the heading “Financial Outlook.” Forward-looking statements involve certain risks and uncertainties, and there are a significant number of factors that could cause actual results to differ materially from statements made in this press release, including, but not limited to, our limited operating history, quarterly fluctuations in our operating results, one-time expenses, including restructuring charges, seasonality, our need to develop new solutions and enhancements to compete in rapidly evolving markets, product defects, strength of our intellectual property portfolio, litigation, customer adoption, competitive pressures, billings type mix shift, our ability to scale, our ability to recruit and retain key personnel, and the quality of our support services.
Additional information on potential factors that could affect MobileIron's financial results is included in our SEC filings, including our reports on Forms 10-K, 10-Q and 8-K and other filings that we make with the SEC from time to time. All forward-looking statements in this press release are made as of the date hereof, based on information available to us as of the date hereof, and MobileIron does not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.
Disclosure Information
MobileIron uses the investor relations section on its website as the means of complying with its disclosure obligations under Regulation FD. Accordingly, we recommend that investors should monitor MobileIron’s investor relations website in addition to following MobileIron’s press releases, SEC filings, and public conference calls and webcasts.
About MobileIron
MobileIron provides the secure foundation for modern work. For more information, please visit www.mobileiron.com.
"MobileIron" is a registered trademark of MobileIron, Inc. in the United States and other countries. Trade names, trademarks, and service marks of other companies that are used in this press release belong to their respective owners.
Financial Results
MOBILEIRON, INC. | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
AS OF DECEMBER 31, 2018 AND MARCH 31, 2019 |
||||||||
(Amounts in thousands) | ||||||||
(Unaudited) | ||||||||
December 31, 2018 |
March 31, 2019 |
|||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents (1) | $ | 104,613 | $ | 106,447 | ||||
Short-term investments (1) | 1,000 | 547 | ||||||
Accounts receivable - net | 60,994 | 38,173 | ||||||
Deferred commissions - current | 8,265 | 8,785 | ||||||
Prepaid expenses and other current assets | 8,367 | 11,501 | ||||||
Total current assets | 183,239 | 165,453 | ||||||
Property and equipment - net | 7,046 | 6,455 | ||||||
Operating lease right-of-use assets | - | 16,328 | ||||||
Deferred commissions - noncurrent | 9,066 | 8,580 | ||||||
Goodwill | 5,475 | 5,475 | ||||||
Other assets | 5,561 | 5,076 | ||||||
Total assets | $ | 210,387 | $ | 207,367 | ||||
Liabilities and stockholders' equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 2,154 | $ | 2,431 | ||||
Accrued expenses | 27,347 | 17,838 | ||||||
Lease liabilities - current | - | 6,278 | ||||||
Unearned revenue - current | 74,177 | 74,112 | ||||||
Customer arrangements with termination rights | 19,367 | 17,183 | ||||||
Total current liabilities | 123,045 | 117,842 | ||||||
Lease liabilities - noncurrent | - | 11,802 | ||||||
Unearned revenue - noncurrent | 31,660 | 28,767 | ||||||
Other long-term liabilities | 1,565 | 155 | ||||||
Total liabilities | 156,270 | 158,566 | ||||||
Stockholders’ equity: | ||||||||
Common stock | 11 | 11 | ||||||
Additional paid-in capital | 462,004 | 477,389 | ||||||
Treasury stock | (3,831 | ) | (7,432 | ) | ||||
Accumulated deficit | (404,067 | ) | (421,167 | ) | ||||
Total stockholders’ equity | 54,117 | 48,801 | ||||||
Total liabilities and stockholders' equity | $ | 210,387 | $ | 207,367 | ||||
(1) Total cash and cash equivalents and short-term investments | $ | 105,613 | $ | 106,994 |
MOBILEIRON, INC. | ||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
FOR THE THREE MONTHS ENDED MARCH 31, 2018 AND 2019 | ||||||||
(Amounts in thousands, except for per share data) | ||||||||
(Unaudited) | ||||||||
Three Months Ended | ||||||||
March 31, 2018 | March 31, 2019 | |||||||
Revenue: | ||||||||
Cloud services | $ | 11,150 | $ | 15,261 | ||||
License | 12,441 | 11,371 | ||||||
Software support and services | 20,098 | 21,450 | ||||||
Total revenue | 43,689 | 48,082 | ||||||
Cost of revenue: | ||||||||
Cloud services (1) | 2,571 | 4,710 | ||||||
License (2) | 431 | 554 | ||||||
Software support and services (1) | 4,975 | 5,023 | ||||||
Restructuring expense | - | 76 | ||||||
Total cost of revenue | 7,977 | 10,363 | ||||||
Gross profit | 35,712 | 37,719 | ||||||
Operating expenses: | ||||||||
Research and development (1) | 21,335 | 21,829 | ||||||
Sales and marketing (1) | 23,681 | 24,487 | ||||||
General and administrative (1) | 7,222 | 7,919 | ||||||
Restructuring expense | - | 539 | ||||||
Total operating expenses | 52,238 | 54,774 | ||||||
Operating loss | (16,526 | ) | (17,055 | ) | ||||
Other income (expense) - net | 503 | 412 | ||||||
Loss before income taxes | (16,023 | ) | (16,643 | ) | ||||
Income tax expense | 347 | 457 | ||||||
Net loss | $ | (16,370 | ) | $ | (17,100 | ) | ||
Net loss per share, basic and diluted | $ | (0.17 | ) | $ | (0.16 | ) | ||
Weighted-average shares used to compute net loss per share, basic and diluted | 98,645 | 107,352 | ||||||
(1) Includes stock-based compensation expense as follows: | ||||||||
Cost of revenue | ||||||||
License | $ | - | $ | - | ||||
Cloud services | 344 | 612 | ||||||
Software support and services | 1,038 | 929 | ||||||
Research and development | 4,767 | 4,111 | ||||||
Sales and marketing | 2,529 | 2,274 | ||||||
General and administrative | 2,015 | 2,364 | ||||||
$ | 10,693 | $ | 10,290 | |||||
(2) Includes amortization of intangible assets as follows: | ||||||||
Cost of revenue | ||||||||
Perpetual license | $ | 100 | $ | - | ||||
$ | 100 | $ | - |
MOBILEIRON, INC. | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
FOR THE THREE MONTHS ENDED MARCH 31, 2018 AND 2019 | ||||||||
(Amounts in thousands) | ||||||||
(Unaudited) | ||||||||
Three Months Ended | ||||||||
March 31, 2018 | March 31, 2019 | |||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (16,370 | ) | $ | (17,100 | ) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
Stock-based compensation expense | 10,693 | 10,290 | ||||||
Depreciation | 970 | 932 | ||||||
Amortization of intangible assets | 100 | - | ||||||
Accretion of premium on investment securities | (12 | ) | - | |||||
Gain on disposal of fixed assets | 41 | - | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 14,438 | 22,821 | ||||||
Deferred commissions | 974 | (35 | ) | |||||
Other current and noncurrent assets | (656 | ) | (2,647 | ) | ||||
Accounts payable | 3 | 186 | ||||||
Unearned revenue | 3,903 | (2,958 | ) | |||||
Customer arrangements with termination rights | (2,360 | ) | (2,184 | ) | ||||
Accrued expenses and other long-term liabilities | (2,544 | ) | (1,489 | ) | ||||
Net cash provided by operating activities | 9,180 | 7,816 | ||||||
Cash flows from investing activities: | ||||||||
Purchase of property and equipment | (516 | ) | (177 | ) | ||||
Maturities of investment securities | 6,800 | 1,000 | ||||||
Purchases of investment securities | (2,986 | ) | (546 | ) | ||||
Net cash provided by investing activities | 3,298 | 277 | ||||||
Cash flows from financing activities: | ||||||||
Proceeds from employee stock purchase plan | 1,069 | 953 | ||||||
Taxes paid for net settlement of equity awards | (3,724 | ) | (4,409 | ) | ||||
Proceeds from exercise of stock options | 655 | 798 | ||||||
Repurchase of common stock | - | (3,601 | ) | |||||
Net cash used in financing activities | (2,000 | ) | (6,259 | ) | ||||
Net change in cash and cash equivalents | 10,478 | 1,834 | ||||||
Cash and cash equivalents at beginning of period | 85,833 | 104,613 | ||||||
Cash and cash equivalents at end of period | $ | 96,311 | $ | 106,447 | ||||
Non-GAAP Financial Measures and Reconciliations and Other Metrics
Non-GAAP Financial Measures
To supplement our financial results presented on a U.S. GAAP basis, we provide investors with certain non-GAAP financial measures, including non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income (loss), non-GAAP operating margin, non-GAAP net income (loss), non-GAAP net income (loss) per share and free cash flow. These non-GAAP financial measures exclude stock-based compensation, amortization of intangible assets, and restructuring expense.
Stock-based compensation expenses: In our non-GAAP financial measures, we have excluded the effect of stock-based compensation expenses. We exclude stock-based compensation expense because it is non-cash in nature and excluding this expense provides meaningful supplemental information regarding our operational performance. In particular, because of varying available valuation methodologies, subjective assumptions and the variety of award types that companies can use under FASB ASC Topic 718, we believe that providing non-GAAP financial meas