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
- Recognized as a 2018 Gartner Peer Insights Customers’ Choice for Unified Endpoint Management Tools.
- Named a Leader in the 2018 IDC MarketScape for Unified Endpoint Management Software.
- Awarded 2 additional US patents for mobile security, bringing MobileIron’s total number of awarded patents to 77.
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 | |||||||