MobileIron Announces Strong Third Quarter 2018 Results

Delivers Record Revenue and Profit 19% Recurring Revenue Growth 14% Billings Growth

MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)-- MobileIron (NASDAQ:MOBL), the secure foundation for modern work, today announced results for its third quarter ended September 30, 2018.

Third Quarter 2018 Financial Highlights

  • Revenue was $49.3 million, up 8% year-over-year.
  • Recurring revenue was $39.7 million, up 19% year-over-year.
  • Billings were $57.2 million, up 14% year-over-year.
  • GAAP net loss per share was $0.07; non-GAAP net income per share was $0.02.
  • Cash generated in operating activities was $860 thousand.

“Our third quarter financial results demonstrate the significant progress we are making in the business. We have increased our revenue and billings growth rate each quarter this year as our sales execution improves and our new products gain traction with customers. Combining strong momentum in the market with continued fiscal discipline allowed us to deliver record revenue and profit in Q3 and add more than $20 million in cash and equivalents to the balance sheet over the last year,” said Simon Biddiscombe, CEO, MobileIron. “Our proven products continue to garner accolades from leading industry analyst firms and we have once again been named a Leader by IDC. Integrating our UEM platform with Threat Defense and Cloud Access has cemented our status as a preferred solution for leading global companies looking to navigate the increasingly challenging mobile security landscape.”

Financial Outlook

The company is providing the following outlook for its fourth quarter 2018 (ending December 31, 2018):

  • Revenue is expected to be between $53 million and $56 million, growth of 8% to 14% year-over-year.
  • Billings are expected to be between $64 million and $67 million, growth of 6% to 11% year-over-year.
  • Non-GAAP gross margin is expected to be approximately 85%.
  • Non-GAAP operating expenses are expected to be approximately $43 million.

Share Repurchase

The company announced a share repurchase authorization for up to $25 million. The program will run over 2 years and be funded using the company's cash on hand and cash generated from operations.

Any repurchases would be made in the open market, in privately negotiated transactions, and may be made from time to time or in one or more larger repurchases. The program will be conducted in compliance with the Securities and Exchange Commission's Rule 10b-18 and applicable legal requirements. The amount and timing of any repurchases made under the repurchase program will depend on a variety of factors, including available liquidity, cash flow and market conditions.

Business Highlights

Milestones and Recognition

Platform

  • Released new versions of MobileIron Cloud, Access, AppConnect, Docs@Work, Derived Credentials (PIV-D), Email+, Tunnel, and Web@Work.

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 nine months ended September 30, 2017 and 2018.

Conference Call and Webcast

MobileIron will report final results for the third quarter of fiscal year 2018 on Tuesday, October 30, 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 and statements relating to the timing and extent of any stock repurchases. 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 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.

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 SEPTEMBER 30, 2018
(Amounts in thousands)
(Unaudited)
             
    December 31, 2017   September 30, 2018
Assets            
Current assets:            
Cash and cash equivalents (1)   $ 85,833     $ 99,191  
Short-term investments (1)     6,797       3,096  
Accounts receivable - net     50,629       49,851  
Deferred commissions - current     9,285       7,595  
Prepaid expenses and other current assets     5,510       8,264  
Total current assets     158,054       167,997  
Property and equipment - net     8,812       7,481  
Deferred commissions - noncurrent     9,123       9,396  
Goodwill     5,475       5,475  
Other assets     2,976       4,622  
Total assets   $ 184,440     $ 194,971  
             

Liabilities and stockholders' equity

           
Current liabilities:            
Accounts payable   $ 1,369     $ 1,623  
Accrued expenses     25,070       23,707  
Unearned revenue - current     55,105       65,220  
Customer arrangements with termination rights     19,546       16,506  
Total current liabilities     101,090       107,056  
Unearned revenue - noncurrent     21,917       27,754  
Other long-term liabilities     1,881       1,664  
Total liabilities     124,888       136,474  
Stockholders’ equity:            
Common stock     10       11  
Additional paid-in capital     420,525       455,344  
Accumulated deficit     (360,983 )     (396,858 )
Total stockholders’ equity     59,552       58,497  
             
Total liabilities and stockholders' equity   $ 184,440     $ 194,971  
             
             
(1) Total cash and cash equivalents and short-term investments   $ 92,630     $ 102,287  
                 
 
MOBILEIRON, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2017 AND 2018
(Amounts in thousands, except for per share data)
(Unaudited)
    Three Months Ended
    September 30, 2017   September 30, 2018
Revenue:            
License   $ 16,531     $ 15,006  
Cloud services     9,539       13,199  
Software support and services     19,437       21,046  
Total revenue     45,507       49,251  
Cost of revenue:            
License (2)     708       529  
Cloud services (1)     2,318       3,331  
Software support and services (1)     4,681       4,613  
Restructuring expense     311       -  
Total cost of revenue     8,018       8,473  
Gross profit     37,489       40,778  
Operating expenses:            
Research and development (1)     19,581       18,465  
Sales and marketing (1)     23,920       22,867  

General and administrative (1)

    7,210       6,806  
Restructuring expense     489       -  
Total operating expenses     51,200       48,138  
Operating loss     (13,711 )     (7,360 )
Other income (expense) - net     188       181  
Loss before income taxes     (13,523 )     (7,179 )
Income tax expense     358       319  
Net loss   $ (13,881 )   $ (7,498 )
Net loss per share, basic and diluted   $ (0.15 )   $ (0.07 )
Weighted-average shares used to compute net loss per share, basic and diluted     95,024       104,032  
             
             
(1) Includes stock-based compensation expense as follows:            
Cost of revenue            
License   $ -     $ -  
Cloud services     225       423  
Software support and services     707       800  
Research and development     3,914       3,670  
Sales and marketing     2,258       2,653  
General and administrative     1,974       1,834  
    $ 9,078     $ 9,380  
             
(2) Includes amortization of intangible assets as follows:            
Cost of revenue            
Perpetual license   $ 137     $ -  
    $ 137     $ -  
             
 
MOBILEIRON, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2017 AND 2018
(Amounts in thousands, except for per share data)
(Unaudited)
    Nine Months Ended
    September 30, 2017   September 30, 2018
Revenue:            
License   $ 45,729     $ 41,327  
Cloud services     28,111       36,181  
Software support and services     56,855       61,561  
Total revenue     130,695       139,069  
Cost of revenue:            
License (2)     1,689       1,475  
Cloud services (1)     6,512       8,624  
Software support and services (1)     14,807       14,260  
Restructuring charge     311       -  
Total cost of revenue     23,319       24,359  
Gross profit     107,376       114,710  
Operating expenses:            
Research and development (1)     56,440       58,072  
Sales and marketing (1)     73,728       70,869  
General and administrative (1)     21,238       21,080  
Litigation settlement charge     1,143       -  
Restructuring charge     489       -  
Total operating expenses     153,038       150,021  
Operating loss     (45,662 )     (35,311 )
Other income (expense) - net     701       479  
Loss before income taxes     (44,961 )     (34,832 )
Income tax expense     881       1,043  
Net loss   $ (45,842 )   $ (35,875 )
Net loss per share, basic and diluted   $ (0.49 )   $ (0.35 )
Weighted-average shares used to compute net loss per share, basic and diluted     92,825       101,369  
             
             
(1) Includes stock-based compensation expense as follows:            
Cost of revenue            
License     -       -  
Cloud services     575       1,061  
Software support and services     2,284       2,611  
Research and development     11,046       11,780  
Sales and marketing     6,612       7,341  
General and administrative     5,732       5,700  
    $ 26,249     $ 28,493  
             
(2) Includes amortization of intangible assets as follows:            
Cost of revenue            
Perpetual license   $ 445     $ 100  
    $ 445     $ 100  
             
 
MOBILEIRON, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2017 AND 2018
(Amounts in thousands)
(Unaudited)
    Nine Months Ended
    September 30, 2017   September 30, 2018
             
Cash flows from operating activities:            
Net loss   $ (45,842 )   $ (35,875 )
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:            
Stock-based compensation expense     26,249       28,493  
Depreciation     2,430       2,856  
Amortization of intangible assets     445       100  
Provision for doubtful accounts     97       80  
Accretion of premium on investment securities     (36 )     (47 )
Loss on disposal of fixed assets     -       41  
Changes in operating assets and liabilities:            
Accounts receivable     (4,538 )     698  
Deferred commissions     435       1,417  
Other current and noncurrent assets     (936 )     (4,499 )
Accounts payable     1,241       68  
Unearned revenue     7,654       15,952  
Customer arrangements with termination rights     3,074       (3,041 )
Accrued expenses and other long-term liabilities     2,362      

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