MobileIron Announces Strong Second Quarter 2018 Results

Delivered Revenue and Billings Above Guidance
Surpassed 17,000 Cumulative Customers
 
MOUNTAIN VIEW, Calif., July 31, 2018 -- MobileIron (NASDAQ:MOBL), the secure foundation for modern work, today announced results for its second quarter ended June 30, 2018.
 
Second Quarter 2018 Financial Highlights

  1. Revenue was $46.1 million, up 7% year-over-year.
  2. Recurring revenue was $36.9 million, up 17% year-over-year.
  3. Billings were $50.6 million, up 13% year-over-year.
  4. GAAP net loss per share was $0.12; non-GAAP net loss per share was $0.04.
  5. Cash used in operating activities was $2.9 million.

 
“MobileIron delivered a strong second quarter, beating guidance on revenue, billings and operating expenses.  We had solid traction with our new products, Access and Threat Defense, and drove recurring revenue growth of 17% over last year,” said Simon Biddiscombe, CEO, MobileIron.  “With improving new product performance and strengthening sales execution, MobileIron clearly gained momentum in the second quarter and I am looking forward to continuing that in the second half of 2018.”
 
Business Highlights
Platform

  1. Added MobileIron Authenticator to the comprehensive MobileIron Access cloud security solution.  Authenticator allows organizations to verify a user’s identity using the phone as a second factor of authentication and can be tailored to endpoint type, app type, network, and user location.
  2. Integrated with McAfee ePolicy Orchestrator (ePO), a centralized management platform on which enterprises rely to define and monitor their endpoint security policies.  The integration enables common customers to extend existing security policies to mobile endpoints for the first time.
  3. Released 38 major and 35 minor product releases in the first half of 2018 across our client, cloud, and server solutions.

 
Milestones and Recognition

  1. Appointed Scott Hill Chief Financial Officer. Mr. Hill brings nearly 20 years of experience leading finance teams at global companies.
  2. Surpassed 17,000 customers.
  3. Named by Gartner as a Leader in its inaugural Magic Quadrant for Unified Endpoint Management Tools.*
  4. Named the top Mobile Device Management and Enterprise Mobility Management solution in the 6th annual Compass Intelligence awards.
  5. Appointed Frédéric Gillant Vice President of Sales for Asia Pacific. Mr. Gillant brings 28 years of IT industry experience and 18 years in Asia Pacific leadership.
  6. Awarded 7 additional US patents for mobile security, bringing the total to 74.

 
Financial Outlook
The company is providing the following outlook for its third quarter 2018 (ending September 30, 2018):

  1. Revenue is expected to be between $47 million and $50 million, growth of 3% to 10% year-over-year.
  2. Billings are expected to be between $52 million and $55 million, growth of 3% to 9% year-over-year.
  3. Non-GAAP gross margin is expected to be approximately 85%.
  4. Non-GAAP operating expenses are expected to be between $42 million and $43 million.

 
The company is reaffirming its outlook for 2018 (ending December 31, 2018):

  1. Revenue is expected to be between $190 million and $200 million, growth of 6% to 11% over 2017.
  2. Billings are expected to be between $210 million and $220 million, growth of 5% to 10% over 2017.
  3. Non-GAAP operating margin is expected to be between -5% and breakeven for 2018.

 
All forward-looking non-GAAP financial measures contained in this section exclude estimates for stock-based compensation expenses. 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 three and six months ended June 30, 2017 and 2018.

Conference Call and Webcast
MobileIron will report final results for the second quarter of fiscal year 2018 on Tuesday, July 31, 2018 after the close of the market and host a conference call and live webcast at 1:30 p.m. Pacific Daylight Time (4:30 p.m. EDT) to discuss the company's financial results and business highlights. Interested parties may access the call by dialing 1-855-327-6837 in the U.S. or 1-631-891-4304 from international locations. 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 that involve risks and uncertainties, including, but not limited to, statements regarding MobileIron's revenue, operating expenses, cost structure, GAAP and non-GAAP financial metrics, projected financial results and trends in MobileIron's business. 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, seasonality, our need to develop new solutions and enhancements to compete in rapidly evolving markets, product defects, strength of intellectual property portfolio, 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. 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.

 
* Gartner "Magic Quadrant for Unified Endpoint Management Tools" by Chris Silva, Rich Doheny, Bryan Taylor, Rob Smith, Manjunath Bhat, 23 July 2018.

Disclaimer:
Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner's research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.
 
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, 2017 AND JUNE 30, 2018
(Amounts in thousands)
(Unaudited)
 
   

December 31, 2017

 

    June 30, 2018    

Assets        
Current assets:        
Cash and cash equivalents (1)   $ 85,833     $ 95,067  
Short-term investments (1)     6,797       2,996  
Accounts receivable - net     50,629       42,232  
Deferred commissions - current     9,285       7,798  
Prepaid expenses and other current assets     5,510       6,978  
Total current assets     158,054       155,071  
Property and equipment - net     8,812       7,978  
Deferred commissions - noncurrent     9,123       9,130  
Goodwill     5,475       5,475  
Other assets     2,976       3,087  
Total assets   $ 184,440     $ 180,741  
         
Liabilities and stockholders' equity        
Current liabilities:        
Accounts payable   $ 1,369     $ 1,648  
Accrued expenses     25,070       21,393  
Unearned revenue - current     55,105       59,790  
Customer arrangements with termination rights     19,546       19,512  
Total current liabilities     101,090       102,343  
Unearned revenue - noncurrent     21,917       23,144  
Other long-term liabilities     1,881       1,809  
Total liabilities     124,888       127,296  
Stockholders’ equity:        
Common stock     10       11  
Additional paid-in capital     420,525       442,794  
Accumulated deficit     (360,983 )     (389,360 )
Total stockholders’ equity     59,552       53,445  
         
Total liabilities and stockholders' equity   $ 184,440     $ 180,741  
         
         
(1) Total cash and cash equivalents and short-term investments   $ 92,630     $ 98,063  
 
MOBILEIRON, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2017 AND 2018
(Amounts in thousands, except for per share data)
(Unaudited)
 
    Three Months Ended
    June 30, 2017   June 30, 2018
Revenue:        
License   $ 14,778     $ 13,880  
Cloud services     9,549       11,832  
Software support and services     18,752       20,417  
Total revenue     43,079       46,129  
Cost of revenue:        
License (2)     534       515  
Cloud services (1)     2,248       2,722  
Software support and services (1)     5,249       4,672  
Total cost of revenue     8,031       7,909  
Gross profit     35,048       38,220  
Operating expenses:        
Research and development (1)     19,666       18,272  
Sales and marketing (1)     26,145       24,321  
General and administrative (1)     7,840       7,052  
Total operating expenses     53,651       49,645  
Operating loss     (18,603 )     (11,425 )
Other income (expense) - net     339       (205 )
Loss before income taxes     (18,264 )     (11,630 )
Income tax expense     324       377  
Net loss   $ (18,588 )   $ (12,007 )
Net loss per share, basic and diluted   $ (0.20 )   $ (0.12 )
Weighted-average shares used to compute net loss per share, basic and diluted     92,963       101,313  
         
         
(1) Includes stock-based compensation expense as follows:        
Cost of revenue        
License   $ -     $ -  
Cloud services     268       294  
Software support and services     958       773  
Research and development     4,366       3,343  
Sales and marketing     2,582       2,159  
General and administrative     2,450       1,851  
    $ 10,624     $ 8,420  
         
(2) Includes amortization of intangible assets as follows:        
Cost of revenue        
Perpetual license   $ 154     $ -  
    $ 154     $ -  
 
MOBILEIRON, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED June 30, 2017 AND 2018
(Amounts in thousands, except for per share data)
(Unaudited)
 
    Six Months Ended
    June 30, 2017   June 30, 2018
Revenue:        
License   $ 29,198     $ 26,321  
Cloud services     18,572       22,982  
Software support and services     37,418       40,515  
Total revenue     85,188       89,818  
Cost of revenue:        
License (2)     981       946  
Cloud services (1)     4,194       5,293  
Software support and services (1)     10,126       9,647  
Total cost of revenue     15,301       15,886  
Gross profit     69,887       73,932  
Operating expenses:        
Research and development (1)     36,859       39,607  
Sales and marketing (1)     49,808       48,002  
General and administrative (1)     14,028       14,274  
Litigation settlement charge     1,143       -  
Total operating expenses     101,838       101,883  
Operating loss     (31,951 )     (27,951 )
Other income - net     513       298  
Loss before income taxes     (31,438 )     (27,653 )
Income tax expense     523       724  
Net loss   $ (31,961 )   $ (28,377 )
Net loss per share, basic and diluted   $ (0.35 )   $ (0.28 )
Weighted-average shares used to compute net loss per share, basic and diluted     91,708       100,003  
         
         
(1) Includes stock-based compensation expense as follows:        
Cost of revenue        
License     -       -  
Cloud services     350       638  
Software support and services     1,577       1,811  
Research and development     7,132       8,110  
Sales and marketing     4,354       4,688  
General and administrative     3,758       3,866  
    $ 17,171     $ 19,113  
         
(2) Includes amortization of intangible assets as follows:        
Cost of revenue        
Perpetual license   $ 308     $ 100  
    $ 308     $ 100  
 
MOBILEIRON, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2017 AND 2018
(Amounts in thousands)
(Unaudited)
 
    Six Months Ended
    June 30, 2017   June 30, 2018
         
Cash flows from operating activities:        
Net loss   $ (31,961 )   $ (28,377 )
Adjustments to reconcile net loss to net cash used in operating activities:        
Stock-based compensation expense     17,171       19,113  
Depreciation     1,533       1,794  
Amortization of intangible assets     308       100  
Provision for doubtful accounts     50       -  
Accretion of premium on investment securities     (32 )     (29 )
Gain on disposal of fixed assets     -       41  
Changes in operating assets and liabilities:        
Accounts receivable     2,363       7,751  
Deferred commissions     832       1,481  
Other current and noncurrent assets     (6,675 )     (1,036 )
Accounts payable     1,562       43  
Unearned revenue     4,434       5,912  
Customer arrangements with termination rights     817       (34 )
Accrued expenses and other long-term liabilities     6,482       (524 )
Net cash provided by (used in) operating activities     (3,116 )     6,235  
         
Cash flows from investing activities:        
Purchase of property and equipment     (922 )     (765 )
Maturities of investment securities     32,915       9,800  
Purchases of investment securities     -       (5,970 )

Net cash provided by investing activities

    31,993       3,065  
         
Cash flows from financing activities:        
Proceeds from employee stock purchase plan     2,391       2,249  
Taxes paid for net settlement of stock-settled bonus     (3,149 )    

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