RealPage Reports Q3 2011 Financial Results
- 2011 Q3 Non-GAAP total revenue increases 41.4% to $67.9 million
- 2011 Q3 adjusted EBITDA increases 65.2% to $15.0 million
- 2011 Q3 Non-GAAP earnings per share increases 150.0% to $0.10 per diluted share
CARROLLTON, Texas, Nov. 1, 2011 /PRNewswire/ -- RealPage, Inc. (NASDAQ: RP), a leading provider of on-demand software and software-enabled services to the rental housing industry, today announced financial results for its third quarter ended September 30, 2011.
(Logo: http://photos.prnewswire.com/prnh/20110912/DA66533LOGO)
Steve Winn, chairman and CEO of RealPage, said, "The third quarter of 2011 was strong and significant for RealPage. We displayed robust financial performance highlighted by annual contract value year-over-year growth of 48.9% and on demand organic growth of 25.8%. This demonstrates our ability to expand market share and cross sell additional software products and services into our installed base. As we previously announced during the quarter, we also completed the strategic acquisition of MyNewPlace®, which vastly expanded our capabilities around organic lead generation, performance-based lead generation and consumer Internet marketing."
Third Quarter 2011 Financial Highlights
- Non-GAAP total revenue was $67.9 million, an increase of 41.4% year-over-year;
- Non-GAAP on demand revenue was $63.0 million, an increase of 46.3% year-over-year;
- Adjusted EBITDA was $15.0 million, an increase of 65.2% year-over-year;
- Non-GAAP net income was $7.0 million, or $0.10 per diluted share, a year-over-year increase of 124.3% and 150.0%, respectively;
- GAAP net loss attributable to common stockholders was $1.1 million, or $0.02 per diluted share, a year-over-year increase of 238.2% and 100.0%, respectively; and
- Net cash provided by operating activities was $10.5 million, an increase of 60.1% year-over-year.
Financial Outlook
RealPage management expects to achieve the following results during its fourth quarter ended December 31, 2011:
- Non-GAAP total revenue is expected to be in the range of $73.0 million to $74.5 million;
- Adjusted EBITDA is expected to be in the range of $15.6 million to $16.1 million;
- Non-GAAP net income is expected to be in the range of $7.0 million to $7.3 million, or $0.10 per diluted share;
- Tax rate of approximately 40.0%; and
- Weighted average shares outstanding of approximately 72.8 million.
RealPage management expects to achieve the following results during its calendar year ended December 31, 2011:
- Non-GAAP total revenue is expected to be in the range of $260.4 million to $261.9 million;
- Adjusted EBITDA is expected to be in the range of $56.5 million to $57.0 million;
- Non-GAAP net income is expected to be in the range of $25.3 million to $25.6 million, or $0.35 to $0.36 per diluted share;
- Tax rate of approximately 40.0%; and
- Full year weighted average shares outstanding of approximately 72.4 million.
Please note that the above statements are forward looking and that Non-GAAP total revenue includes an adjustment for the effect of deferred revenue from acquired companies that is required to be written down for GAAP purposes under purchase accounting rules. In addition, the above statements also include the impact of acquisitions and exclude any impact resulting from the Yardi Systems litigation. Actual results may differ materially. Please reference the information under the caption "Non-GAAP Financial Measures" as part of this press release.
Conference Call and Webcast
The Company will host a conference call today at 5:00 p.m. EDT to discuss its financial results. Participants are encouraged to listen to the presentation via a live web broadcast at www.realpage.com on the Investor Relations section. In addition, a live dial-in is available domestically at 866-743-9666 and internationally at 760-298-5103. A replay will be available at 800-642-1687 or 706-645-9291, passcode 23528150, until November 11, 2011.
About RealPage
Located in Carrollton, Texas, a suburb of Dallas, RealPage provides on demand (also referred to as "Software-as-a-Service" or "SaaS") products and services to apartment communities and single family rentals across the United States. Its on demand product lines include OneSite® property management systems that automate the leasing, renting, management, and accounting of conventional, affordable, tax credit, student living, senior living and military housing properties; LeaseStar™ expert managed marketing that enables owners to originate, syndicate, manage and capture leads more effectively and at less overall cost; YieldStar® asset optimization systems that enable owners and managers to optimize rents to achieve the overall highest yield, or combination of rent and occupancy, at each property; Velocity™ billing and utility management services that increase collections and reduce delinquencies; LeasingDesk® risk mitigation systems that are designed to reduce a community's exposure to risk and liability; OpsTechnology® spend management systems that help owners manage and control operating expenses; and Compliance Depot™ vendor management and qualification services to assist a community in managing its compliance vendor program. Supporting this family of SaaS products is a suite of shared cloud services including electronic payments, document management, decision support and learning. RealPage's MyNewPlace® subsidiary is one of the nation's largest apartment and home rental websites, offering apartment owners and managers qualified, prospective residents through subscription, pay-per-lead and LeaseMatch pay-per-lease programs. Through its Propertyware subsidiary, RealPage also provides software and services to single-family rentals and low density, centrally-managed multifamily housing. For more information, call 1-87-REALPAGE or visit www.realpage.com.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains "forward-looking" statements relating to RealPage, Inc.'s expected, possible or assumed future results of operations and potential growth and plans, management, branding and profit margins of MyNewPlace as well as market performance, opportunities and developments. These forward-looking statements are based on management's beliefs and assumptions and on information currently available to management. Forward-looking statements include all statements that are not historical facts and may be identified by terms such as "expects," "believes," "plans" or similar expressions and the negatives of those terms. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, the following: (a) the possibility that general economic conditions or uncertainty cause information technology spending, particularly in the rental housing industry, to be reduced or purchasing decisions to be delayed; (b) an increase in customer cancellations; (c) the inability to increase sales to existing customers and to attract new customers; (d) RealPage, Inc.'s failure to integrate acquired businesses and any future acquisitions successfully; (e) the timing and success of new product introductions by RealPage, Inc. or its competitors; (f) changes in RealPage, Inc.'s pricing policies or those of its competitors; (g) litigation; and (h) such other risk and uncertainties described more fully in documents filed with or furnished to the Securities and Exchange Commission ("SEC"), including RealPage's Form 10-Q previously filed with the SEC on August 9, 2011. All information provided in this release is as of the date hereof and RealPage, Inc. undertakes no duty to update this information except as required by law.
Non-GAAP Financial Measures
This press release contains non-GAAP financial measures. These measures differ from GAAP in that they exclude amortization of intangible assets, stock-based compensation expenses, any impact related to the Yardi Systems litigation, acquisition-related deferred revenue adjustments, and acquisition related expenses (including any purchase accounting adjustments). Reconciliation tables comparing GAAP financial measures to non-GAAP financial measures are included at the end of this release.
We define Adjusted EBITDA as net (loss) income plus acquisition-related deferred revenue adjustment, depreciation and asset impairment, amortization of intangible assets, net interest expense, income tax expense (benefit), stock-based compensation expense, any impact related to the Yardi Systems litigation and acquisition-related expense.
We believe that the use of Adjusted EBITDA is useful to investors and other users of our financial statements in evaluating our operating performance because it provides them with an additional tool to compare business performance across companies and across periods. We believe that:
- Adjusted EBITDA provides investors and other users of our financial information consistency and comparability with our past financial performance, facilitates period-to-period comparisons of operations and facilitates comparisons with our peer companies, many of which use similar non-GAAP financial measures to supplement their GAAP results; and
- it is useful to exclude certain non-cash charges, such as depreciation and asset impairment, amortization of intangible assets and stock-based compensation and non-core operational charges, such as acquisition-related expense and any impact related to the Yardi Systems litigation, from Adjusted EBITDA because the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations and these expenses can vary significantly between periods as a result of new acquisitions, full amortization of previously acquired tangible and intangible assets or the timing of new stock-based awards, as the case may be.
We use Adjusted EBITDA in conjunction with traditional GAAP operating performance measures 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 and to communicate with our board of directors concerning our financial performance.
We do not place undue reliance on Adjusted EBITDA as our only measure of operating performance. Adjusted EBITDA should not be considered as a substitute for other measures of liquidity or financial performance reported in accordance with GAAP. There are limitations to using non-GAAP financial measures, including that other companies may calculate these measures differently than we do, that they do not reflect our capital expenditures or future requirements for capital expenditures and that they do not reflect changes in, or cash requirements for, our working capital. We compensate for the inherent limitations associated with using Adjusted EBITDA measures through disclosure of these limitations, presentation of our financial statements in accordance with GAAP and reconciliation of Adjusted EBITDA to the most directly comparable GAAP measure, net (loss) income.
Condensed Consolidated Statements of Operations |
||||||||||
For the Three and Nine Months Ended September 30, 2011 and 2010 |
||||||||||
(unaudited, in thousands, except per share data) |
||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||
September 30, |
September 30, |
|||||||||
2011 |
2010 |
2011 |
2010 |
|||||||
Revenue: |
||||||||||
On demand |
$ 62,765 |
$ 43,097 |
$ 172,741 |
$ 120,393 |
||||||
On premise |
1,772 |
2,127 |
5,045 |
6,419 |
||||||
Professional and other |
3,118 |
2,804 |
9,052 |
7,403 |
||||||
Total revenue |
67,655 |
48,028 |
186,838 |
134,215 |
||||||
Cost of revenue(1) |
27,585 |
20,203 |
78,078 |
56,595 |
||||||
Gross profit |
40,070 |
27,825 |
108,760 |
77,620 |
||||||
Operating expense: |
||||||||||
Product development(1) |
11,230 |
9,127 |
32,083 |
26,431 |
||||||
Sales and marketing(1) |
17,688 |
9,428 |
44,992 |
25,793 |
||||||
General and administrative(1) |
11,840 |
6,969 |
31,190 |
20,230 |
||||||
Total operating expense |
40,758 |
25,524 |
108,265 |
72,454 |
||||||
Operating income (loss) |
(688) |
2,301 |
495 |
5,166 |
||||||
Interest expense and other, net |
(684) |
(1,822) |
(2,582) |
(4,749) |
||||||
Net income (loss) before income taxes |
(1,372) |
479 |
(2,087) |
417 |
||||||
Income tax expense (benefit) |
(266) |
187 |
(615) |
164 |
||||||
Net income (loss) income |
$ (1,106) |
$ 292 |
$ (1,472) |
$ 253 |
||||||
Net loss attributable to common |
||||||||||
stockholders |
||||||||||
Basic |
$ (1,106) |
$ (327) |
$ (1,472) |
$ (2,691) |
||||||
Diluted |
$ (1,106) |
$ (327) |
$ (1,472) |
$ (2,691) |
||||||
Net loss per share attributable |
||||||||||
to common stockholders |
||||||||||
Basic |
$ (0.02) |
$ (0.01) |
$ (0.02) |
$ (0.08) |
||||||
Diluted |
$ (0.02) |
$ (0.01) |
$ (0.02) |
$ (0.08) |
||||||
Weighted average shares used in |
||||||||||
computing net income (loss) per share |
||||||||||
attributable to common stockholders |
||||||||||
Basic |
68,792 |
43,636 |
68,096 |
31,878 |
||||||
Diluted |
68,792 |
43,636 |
68,096 |
31,878 |
||||||
(1) |
Includes stock-based compensation |
Three Months Ended |
Nine Months Ended |
|||||||
expense as follows: |
September 30, |
September 30, |
||||||||
2011 |
2010 |
2011 |
2010 |
|||||||
Cost of revenue |
$ 459 |
$ 140 |
$ 1,069 |
$ 407 |
||||||
Product development |
1,258 |
627 |
3,343 |
1,664 |
||||||
Sales and marketing |
3,433 |
201 |
8,793 |
541 |
||||||
General and administrative |
1,258 |
391 |
3,025 |
1,133 |
||||||
$ 6,408 |
$ 1,359 |
$ 16,230 |
$ 3,745 |
|||||||
Condensed Consolidated Balance Sheets |
||||||
At September 30, 2011 and December 31, 2010 |
||||||
(unaudited, in thousands except share data) |
||||||
September 30, |
December 31, |
|||||
2011 |
2010 |
|||||
Assets |
||||||
Current assets: |
||||||
Cash and cash equivalents |
$ 47,491 |
$ 118,010 |
||||
Restricted cash |
20,334 |
15,346 |
||||
Accounts receivable, less allowance for doubtful accounts of $1,003 and $1,370 at |
||||||
September 30, 2011 and December 31, 2010, respectively |
36,739 |
29,577 |
||||
Deferred tax asset, net of valuation allowance |
601 |
1,529 |
||||
Other current assets |
12,111 |
6,060 |
||||
Total current assets |
117,276 |
170,522 |
||||
Property, equipment and software, net |
26,552 |
24,515 |
||||
Goodwill |
128,632 |
73,885 |
||||
Identified intangible assets, net |
115,141 |
54,361 |
||||
Deferred tax asset, net of valuation allowance |
2,760 |
17,322 |
||||
Other assets |
2,855 |
2,187 |
||||
Total assets |
$ 393,216 |
$ 342,792 |
||||
Liabilities and stockholders' equity |
||||||
Current liabilities: |
||||||
Accounts payable |
$ 8,259 |
$ 4,787 |
||||
Accrued expenses and other current liabilities |
27,401 |
15,436 |
||||
Current portion of deferred revenue |
51,204 |
47,717 |
||||
Current portion of long-term debt |
10,768 |
10,781 |
||||
Customer deposits held in restricted accounts |
20,278 |
15,253 |
||||
Total current liabilities |
117,910 |
93,974 |
||||
Deferred revenue |
8,910 |
7,947 |
||||
Long-term debt, less current portion |
47,173 |
55,258 |
||||
Other long-term liabilities |
5,926 |
13,029 |
||||
Total liabilities |
179,919 |
170,208 |
||||
Stockholders' equity: |
||||||
Preferred stock, $0.001 par value, 10,000,000 shares authorized and zero shares |
||||||
outstanding at September 30, 2011 and December 31, 2010, respectively |
- |
- |
||||
Common stock, $0.001 par value per share: 125,000,000 shares authorized, |
||||||
72,027,632 and 68,703,366 shares issued and 71,766,288 and 68,490,277 shares |
||||||
outstanding at September 30, 2011 and December 31, 2010, respectively |
72 |
69 |
||||
Additional paid-in capital |
306,220 |
263,219 |
||||
Treasury stock, at cost: 261,344 and 213,089 shares at September 30, 2011 and |
(1,741) |
(958) |
||||
December 31, 2010, respectively |
||||||
Accumulated deficit |
(91,202) |
(89,730) |
||||
Accumulated other comprehensive loss |
(52) |
(16) |
||||
Total stockholders' equity |
213,297 |
172,584 |
||||
Total liabilities and stockholders' equity |
$ 393,216 |
$ 342,792 |
||||
Condensed Consolidated Statements of Cash Flows |
|||||||||||
For the Three and Nine Months Ended September 30, 2011 and 2010 |
|||||||||||
(unaudited, in thousands) |
|||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||
September 30, |
September 30, |
||||||||||
2011 |
2010 |
2011 |
2010 |
||||||||
Cash flows from operating activities: |
|||||||||||
Net (loss) income |
$ (1,106) |
$ 292 |
$ (1,472) |
$ 253 |
|||||||
Adjustments to reconcile net (loss) income to net cash |
|||||||||||
provided by operating activities: |
|||||||||||
Depreciation and amortization |
7,442 |
5,312 |
21,458 |
14,856 |
|||||||
Deferred tax benefit |
(663) |
(76) |
(1,430) |
(162) |
|||||||
Stock-based compensation |
6,408 |
1,359 |
16,230 |
3,745 |
|||||||
Loss on sale of assets |
3 |
54 |
398 |
57 |
|||||||
Acquisition-related contingent consideration |
(3) |
39 |
102 |
39 |
|||||||
Changes in assets and liabilities, net of assets acquired |
|||||||||||
and liabilities assumed in business combinations: |
(1,603) |
(436) |
(5,587) |
(4,047) |
|||||||
Net cash provided by operating activities |
10,478 |
6,544 |
29,699 |
14,741 |
|||||||
Cash flows from investing activities: |
|||||||||||
Purchases of property, equipment and software |
(5,140) |
(2,709) |
(10,782) |
(7,427) |
|||||||
Acquisition of businesses, net of cash acquired |
(67,786) |
(3,939) |
(87,817) |
(17,231) |
|||||||
Net cash used by investing activities |
(72,926) |
(6,648) |
(98,599) |
(24,658) |
|||||||
Cash flows from financing activities: |
|||||||||||
Stock issuance costs from public offerings |
$ - |
$ 57,688 |
$ (775) |
$ 57,688 |
|||||||
Payments on debt, net |
(2,782) |
(23,081) |
(8,524) |
(12,763) |
|||||||
Preferred stock dividend |
- |
(666) |
- |
(666) |
|||||||
Issuance of common stock |
1,062 |
447 |
8,499 |
664 |
|||||||
Purchase of treasury stock |
(310) |
(16) |
(783) |
(20) |
|||||||
Net cash (used) provided by financing activities |
(2,030) |
34,372 |
(1,583) |
44,903 |
|||||||
Net (decrease) increase in cash and cash equivalents |
(64,478) |
34,268 |
(70,483) |
34,986 |
|||||||
Effect of exchange rate on cash |
(16) |
(6) |
(36) |
(19) |
|||||||
Cash and cash equivalents: |
|||||||||||
Beginning of period |
111,985 |
5,132 |
118,010 |
4,427 |
|||||||
End of period |
$ 47,491 |
$ 39,394 |
$ 47,491 |
$ 39,394 |
|||||||
Reconciliation of GAAP to Non-GAAP Measures |
||||||||||||
For the Three and Nine Months Ended September 30, 2011 and 2010 |
||||||||||||
(unaudited, in thousands) |
||||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||
September 30, |
September 30, |
|||||||||||
2011 |
2010 |
2011 |
2010 |
|||||||||
Revenue: |
$ 67,655 |
$ 48,028 |
$ 186,838 |
$ 134,215 |
||||||||
Acquisition-related deferred revenue adjustment |
276 |
- |
520 |
- |
||||||||
Non-GAAP revenue |
$ 67,931 |
$ 48,028 |
$ 187,358 |
$ 134,215 |
||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||
September 30, |
September 30, |
|||||||||||
2011 |
2010 |
2011 |
2010 |
|||||||||
Adjusted Gross Profit: |
||||||||||||
Gross profit |
$ 40,070 |
$ 27,825 |
$ 108,760 |
$ 77,620 |
||||||||
Acquisition-related deferred revenue adjustment |
276 |
- |
520 |
- |
||||||||
Depreciation |
1,428 |
1,328 |
4,437 |
3,947 |
||||||||
Amortization of intangible assets |
2,323 |
1,980 |
6,730 |
4,965 |
||||||||
Stock-based compensation expense |
459 |
140 |
1,069 |
407 |
||||||||
Adjusted gross profit |
$ 44,556 |
$ 31,273 |
$ 121,516 |
$ 86,939 |
||||||||
Adjusted gross profit |
65.6% |
65.1% |
64.9% |
64.8% |
||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||
September 30, |
September 30, |
|||||||||||
2011 |
2010 |
2011 |
2010 |
|||||||||
Adjusted EBITDA: |
||||||||||||
Net (loss) income |
$ (1,106) |
$ 292 |
$ (1,472) |
$ 253 |
||||||||
Acquisition-related deferred revenue adjustment |
276 |
- |
520 |
- |
||||||||
Depreciation, asset impairment and loss on sale of asset |
2,696 |
2,606 |
8,570 |
7,657 |
||||||||
Amortization of intangible assets |
4,749 |
2,760 |
13,286 |
7,256 |
||||||||
Interest expense, net |
684 |
1,823 |
2,199 |
4,759 |
||||||||
Income tax expense (benefit) |
(266) |
187 |
(615) |
164 |
||||||||
Litigation-related expense |
605 |
- |
961 |
- |
||||||||
Stock-based compensation expense |
6,408 |
1,359 |
16,230 |
3,745 |
||||||||
Acquisition-related expense |
969 |
60 |
1,199 |
453 |
||||||||
Adjusted EBITDA |
$ 15,015 |
$ 9,087 |
$ 40,878 |
$ 24,287 |
||||||||
Adjusted EBITDA Margin |
22.1% |
18.9% |
21.8% |
18.1% |
||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||
September 30, |
September 30, |
|||||||||||
2011 |
2010 |
2011 |
2010 |
|||||||||
Non-GAAP Total Product Development: |
||||||||||||
Product Development |
$ 11,230 |
$ 9,127 |
$ 32,083 |
$ 26,431 |
||||||||
Less: Stock-based compensation expense |
1,258 |
627 |
3,343 |
1,664 |
||||||||
Non-GAAP Total Product Development: |
$ 9,972 |
$ 8,500 |
$ 28,740 |
$ 24,767 |
||||||||
Non-GAAP Total Product Development as % of Revenue: |
14.7% |
17.7% |
15.3% |
18.5% |
||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||
September 30, |
September 30, |
|||||||||||
2011 |
2010 |
2011 |
2010 |
|||||||||
Non-GAAP Total Sales and Marketing: |
||||||||||||
Sales and Marketing |
$ 17,688 |
$ 9,428 |
$ 44,992 |
$ 25,793 |
||||||||
Less: Amortization of intangible assets |
2,426 |
780 |
6,556 |
2,291 |
||||||||
Stock-based compensation expense |
3,433 |
201 |
8,793 |
541 |
||||||||
Non-GAAP Total Sales and Marketing: |
$ 11,829 |
$ 8,447 |
$ 29,643 |
$ 22,961 |
||||||||
Non-GAAP Total Sales and Marketing as % of Revenue: |
17.4% |
17.6% |
15.8% |
17.1% |
||||||||
Reconciliation of GAAP to Non-GAAP Measures |
||||||||||||
For the Three and Nine Months Ended September 30, 2011 and 2010 |
||||||||||||
(unaudited, in thousands) |
||||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||
September 30, |
September 30, |
|||||||||||
2011 |
2010 |
2011 |
2010 |
|||||||||
Non-GAAP Total General and Administrative: |
||||||||||||
General and Administrative |
$ 11,840 |
$ 6,969 |
$ 31,190 |
$ 20,230 |
||||||||
Less: Acquisition-related expense |
969 |
60 |
1,199 |
453 |
||||||||
Stock-based compensation expense |
1,258 |
391 |
3,025 |
1,133 |
||||||||
Litigation related expense |
605 |
- |
961 |
- |
||||||||
Non-GAAP Total General and Administrative: |
$ 9,008 |
$ 6,518 |
$ 26,005 |
$ 18,644 |
||||||||
Non-GAAP Total General and Administrative as % of Revenue: |
13.3% |
13.6% |
13.9% |
13.9% |
||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||
September 30, |
September 30, |
|||||||||||
2011 |
2010 |
2011 |
2010 |
|||||||||
Non-GAAP Total Operating Expenses: |
||||||||||||
Operating Expenses |
$ 40,758 |
$ 25,524 |
$ 108,265 |
$ 72,454 |
||||||||
Less: Amortization of intangible assets |
2,426 |
780 |
6,556 |
2,291 |
||||||||
Acquisition-related expense |
969 |
60 |
1,199 |
453 |
||||||||
Stock-based compensation expense |
5,949 |
1,219 |
15,161 |
3,338 |
||||||||
Litigation related expense |
605 |
- |
961 |
- |
||||||||
Non-GAAP Total Operating Expenses: |
$ 30,809 |
$ 23,465 |
$ 84,388 |
$ 66,372 |
||||||||
Non-GAAP Total Operating Expenses as % of Revenue: |
45.4% |
48.9% |
45.0% |
49.5% |
||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||
September 30, |
September 30, |
|||||||||||
2011 |
2010 |
2011 |
2010 |
|||||||||
Non-GAAP Operating Income: |
||||||||||||
Operating (loss) income |
$ (688) |
$ 2,301 |
$ 495 |
$ 5,166 |
||||||||
Acquisition-related deferred revenue adjustment |
276 |
- |
520 |
- |
||||||||
Amortization of intangible assets |
4,749 |
2,760 |
13,286 |
7,256 |
||||||||
Stock-based compensation expense |
6,408 |
1,359 |
16,230 |
3,745 |
||||||||
Acquisition-related expense |
969 |
60 |
1,199 |
453 |
||||||||
Litigation related expense |
605 |
- |
961 |
- |
||||||||
Non-GAAP operating income |
$ 12,319 |
$ 6,480 |
$ 32,691 |
$ 16,620 |
||||||||
Non-GAAP operating margin |
18.1% |
13.5% |
17.4% |
12.4% |
||||||||
Reconciliation of GAAP to Non-GAAP Measures |
||||||||||||
For the Three and Nine Months Ended September 30, 2011 and 2010 |
||||||||||||
(unaudited, in thousands, except per share data) |
||||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||
September 30, |
September 30, |
|||||||||||
2011 |
2010 |
2011 |
2010 |
|||||||||
Non-GAAP Net Income: |
||||||||||||
Net (loss) income |
$ (1,106) |
$ 292 |
$ (1,472) |
$ 253 |
||||||||
Acquisition-related deferred revenue adjustment |
276 |
- |
520 |
- |
||||||||
Amortization of intangible assets |
4,749 |
2,760 |
13,286 |
7,256 |
||||||||
Stock-based compensation expense |
6,408 |
1,359 |
16,230 |
3,745 |
||||||||
Accelerated interest expense related to preferred notes payable |
- |
530 |
- |
530 |
||||||||
Acquisition-related expense |
969 |
60 |
1,199 |
453 |
||||||||
Litigation related expense |
605 |
- |
961 |
- |
||||||||
Loss on sale of assets |
1 |
- |
398 |
- |
||||||||
Subtotal of tax deductible items |
13,008 |
4,709 |
32,594 |
11,984 |
||||||||
Tax impact of tax deductible items(1) |
(5,203) |
(1,884) |
(13,038) |
(4,794) |
||||||||
Tax expense resulting from applying effective tax rate(2) |
283 |
(5) |
220 |
(3) |
||||||||
Non-GAAP net income |
$ 6,982 |
$ 3,112 |
$ 18,304 |
$ 7,440 |
||||||||
Non-GAAP net income per share - diluted |
$ 0.10 |
$ 0.04 |
$ 0.26 |
$ 0.12 |
||||||||
Weighted average shares - diluted |
68,792 |
43,636 |
68,096 |
31,878 |
||||||||
Conversion of redeemable convertible preferred stock(3) |
- |
29,044 |
- |
29,044 |
||||||||
Weighted average effect of dilutive securities |
3,025 |
3,477 |
3,363 |
2,037 |
||||||||
Non-GAAP weighted average shares - diluted |
71,817 |
76,157 |
71,459 |
62,959 |
||||||||
(1) |
Reflects the removal of the tax benefit associated with the amortization of intangible assets, stock-based compensation expense, |
|||||||||||
acquisition-related deferred revenue adjustment and acquisition-related expense. |
||||||||||||
(2) |
Represents adjusting to a normalized effective tax rate of 40%. |
|||||||||||
(3) |
Represents common shares from the conversion of redeemable convertible preferred shares as if the shares were converted as of |
|||||||||||
the beginning of the indicated period. |
||||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||
September 30, |
September 30, |
|||||||||||
2011 |
2010 |
2011 |
2010 |
|||||||||
Annualized on demand revenue per average on demand unit: |
||||||||||||
On demand revenue |
$ 62,765 |
$ 43,097 |
$ 172,741 |
$ 120,393 |
||||||||
Acquisition-related deferred revenue adjustment |
276 |
- |
520 |
- |
||||||||
Non-GAAP on demand revenue |
$ 63,041 |
$ 43,097 |
$ 173,261 |
$ 120,393 |
||||||||
Ending on demand units |
7,074 |
5,567 |
7,074 |
5,567 |
||||||||
Average on demand units |
6,727 |
5,387 |
6,370 |
5,059 |
||||||||
Annualized on demand revenue per average on demand unit |
$ 37.49 |
$ 32.00 |
$ 36.27 |
$ 31.73 |
||||||||
Annual value of on demand revenue(1) |
$ 265,204 |
$ 178,144 |
||||||||||
(1) |
This metric represents management's estimate for the current annual run-rate value of on demand customer relationships. This metric |
|||||||||||
is calculated by multiplying ending on demand units times annualized on demand revenue per average on demand unit for the periods |
||||||||||||
presented. |
||||||||||||
SOURCE RealPage, Inc.
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