Tangoe, Inc. Announces Second Quarter 2013 Financial Results
Tangoe, Inc. Announces Second Quarter 2013 Financial Results
- Total revenue of $46.4 million, up 28% year-over-year
- GAAP operating income of $0.8 million; non-GAAP operating income of $6.8 million
- GAAP EPS of $0.01; non-GAAP EPS of $0.16, up 60% year-over-year
- Adjusted EBITDA of $7.3 million, up 55% year-over-year, and with a quarterly adjusted EBITDA margin of 16%
ORANGE, Conn.--(BUSINESS WIRE)-- Tangoe, Inc. (NAS: TNGO) , a leading global provider of communications lifecycle management (CLM) software and related services, today announced financial results for its second quarter ended June 30, 2013.
"We are pleased with the company's second quarter performance, which led to revenue and profitability that were at or above the high end of our guidance," stated Al Subbloie, president and CEO of Tangoe. "Our results this quarter were highlighted by a record number of new account wins, as we continued to benefit from the increase in our sales and marketing investments. Looking forward, the combination of ongoing cross-sell and up-sell activity, traction with our strategic alliance partners, and international expansion positions Tangoe to further penetrate the multi-billion dollar CLM market opportunity."
Second Quarter 2013 Financial Highlights
- Revenue: Total revenue for the second quarter was $46.4 million, an increase of 28% on a year-over-year basis. Recurring technology and services revenue was $41.4 million, an increase of 29% on a year-over-year basis. Strategic consulting, software licenses and other services revenue contributed the remaining $5.0 million of total revenue for the second quarter of 2013.
- Operating Income: GAAP operating income for the second quarter was $0.8 million,compared to a GAAP operating income of $0.5 million for the second quarter of 2012. Non-GAAP operating income for the second quarter was $6.8 million,compared to $4.2 million for the second quarter of 2012.
Net Income: GAAP net income for the second quarter was $0.6 million, compared to $0.3 million of net income for the same period last year. GAAP diluted income per share for the second quarter was $0.01, based on 40.2 million weighted-average diluted shares outstanding, compared to income per share of $0.01, based on 41.1 million weighted-average diluted shares outstanding, for the same period last year.
Non-GAAP net income for the second quarter was $6.4 million, up 52% compared to $4.2 million for the second quarter of 2012. Non-GAAP diluted net income per share for the second quarter was $0.16 based on 40.2 million weighted-average diluted shares outstanding compared to $0.10 per share based on 41.1 million weighted-average diluted shares outstanding for the same period last year.
- Adjusted EBITDA: Adjusted EBITDA for the second quarter was $7.3 million, an increase of 55% compared to $4.7 million for the second quarter of 2012. Adjusted EBITDA margin was 15.7% for the second quarter of 2013, an increase compared to a 13.0% margin for the same period last year.
Cash and Cash Flow: As of June 30, 2013, Tangoe had cash and cash equivalents of $44.1 million, an increase of $0.5 million from the end of the prior quarter due primarily to the generation of unlevered free cash flow which was partially offset by the repurchase of common stock and payment of deferred purchase price obligations for acquisitions during the quarter.
The company generated $4.8 million in net cash from operations for the second quarter of 2013, compared to $4.0 million during the second quarter of 2012. The company generated $4.1 million in unlevered free cash flow for the quarter, compared to $3.7 million during the second quarter of 2012.
A reconciliation of GAAP to non-GAAP financial measures has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading "Non-GAAP Financial Measures."
As of August 7, 2013, Tangoe is providing guidance for its third quarter and full year 2013:
- Third Quarter 2013 Guidance: Total revenue is expected to be in the range of $47.5 million to $48.0 million. Adjusted EBITDA is expected to be in the range of $7.9 million to $8.2 million. Non-GAAP net income per share is expected to be approximately $0.17 based on approximately 40.9 million weighted-average diluted shares outstanding.
- Full Year 2013 Guidance: Total revenue is expected to be in the range of $189.0 million to $191.0 million. Adjusted EBITDA is expected to be in the range of $31.0 million to $32.0 million. Non-GAAP net income per share is expected to be in the range of $0.67 to $0.70 based on approximately 40.7 million weighted-average diluted shares outstanding.
Quarterly Conference Call
Tangoe will host a conference call today at 5:00 p.m. EDT to review the company's financial results for the second quarter 2013 and business outlook. To access this call, dial 888.778.8913 (United States), or 913.312.1471 (international), with conference ID #6356273. A live webcast of the conference call will be accessible from the investor relations page of Tangoe's website at http://investor.tangoe.com, and a recording will be archived and accessible at http://investor.tangoe.com/events.cfm. A recording of this conference call will also be available through August 21, 2013, by dialing 877.870.5176 (United States), or 858.384.5517 (international). The recording access code is #6356273.
Tangoe (NAS: TNGO) is a leading global provider of Communications Lifecycle Management (CLM) software and services to a wide range of global enterprises. CLM encompasses the entire lifecycle of an enterprise's communications assets and services, including planning and sourcing, procurement and provisioning, inventory and usage management, mobile device management, real-time telecommunication expense management, invoice processing, expense allocation and accounting, forward and reverse logistics, and asset decommissioning and disposal. Tangoe's Communications Management Platform (CMP) is an on-demand suite of software designed to manage and optimize the complex processes and expenses associated with this lifecycle for both fixed and mobile communications assets and services. Tangoe's customers can also manage their communications assets and services by engaging Tangoe's client service group.
Additional information about Tangoe can be found at www.tangoe.com. Tangoe is a registered trademark of Tangoe, Inc.
Non-GAAP Financial Measures
Adjusted EBITDA discussed in this press release is defined as net income plus interest expense, income tax provision, depreciation and amortization, amortization of marketing agreement intangible assets, stock-based compensation expense and, for 2013 only, restructuring charge; less amortization of leasehold interest, interest income and, for 2013 only, other income. Non-GAAP operating income excludes stock-based compensation expense, amortization of intangible assets and, for 2013 only, restructuring charge. Non-GAAP net income excludes stock-based compensation expense, amortization of intangible assets, amortization of debt discount, and, for 2013 only, restructuring charge and other income. Unlevered free cash flow is defined as net cash provided by operating activities plus net interest payments, less capital expenditures. Management presents these non-GAAP financial measures because it considers them to be important supplemental measures of performance. Management uses the non-GAAP financial measures for planning purposes, including analysis of the company's performance against prior periods, the preparation of operating budgets and determination of appropriate levels of operating and capital investments. Management also believes that the non-GAAP financial measures provide additional insight for analysts and investors in evaluating the company's financial and operational performance. However, these non-GAAP financial measures have limitations as an analytical tool and are not intended to be an alternative to financial measures prepared in accordance with GAAP. We intend to provide these non-GAAP financial measures as part of our future earnings discussions and, therefore, the inclusion of these non-GAAP financial measures will provide consistency in our financial reporting. A reconciliation of these non-GAAP measures to GAAP is provided in the accompanying tables.
This press release contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, included in this press release regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans and objectives of management are forward-looking statements. The words "anticipate," "believe," "estimate," "expect," "intend," "may," "plan," "would," "target" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements include, among other things, statements about our estimates regarding future revenue and financial performance. We may not actually achieve the expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the expectations disclosed in the forward-looking statements we make. More information about potential factors that could affect our business and financial results is contained in our Quarterly Report on Form 10-Q as filed with the Securities and Exchange Commission on May 10, 2013. Additional information will also be set forth in our future quarterly reports on Form 10-Q, annual reports on Form 10-K and other filings that we make with the Securities and Exchange Commission. We do not intend, and undertake no duty, to release publicly any updates or revisions to any forward-looking statements contained herein.
|Consolidated Statements of Operations (unaudited)|
|(in thousands, except per share amounts)|
Three Months Ended
Six Months Ended
|June 30,||June 30,|
|Recurring technology and services||$||32,075||$||41,385||$||62,831||$||81,433|
|Strategic consulting, software licenses and other||4,182||5,022||7,573||9,834|
|Cost of revenue:|
|Recurring technology and services||14,797||18,871||29,113||37,626|
|Strategic consulting, software licenses and other||1,789||1,965||3,247||4,026|
|Total cost of revenue||16,586||20,836||32,360||41,652|
|Sales and marketing||5,913||8,205||11,457||15,597|
|General and administrative||7,046||8,669||13,747||16,796|
|Research and development||4,174||4,804||7,863||9,749|
|Depreciation and amortization||1,996||2,548||3,871||5,037|
|Income from operations||542||846||1,106||1,782|
|Other income (expense), net|
|Income before income tax provision||371||965||717||2,320|
|Income tax provision||33||415||187||646|
|Net income per common share:|
|Weighted average number of common shares:|
|Consolidated Balance Sheets|
|December 31,||June 30,|
|Cash and cash equivalents||$||50,211||$||44,056|
|Accounts receivable - net||38,309||39,844|
|Prepaid expenses and other current assets||3,384||3,619|
|Total current assets||91,904||87,519|
|COMPUTERS, FURNITURE AND EQUIPMENT-NET||3,999||3,941|
|Security deposits and other non-current assets||1,291||1,178|
|LIABILITIES AND STOCKHOLDERS' EQUITY|
|Deferred revenue-current portion||9,648||10,436|
|Notes payable-current portion||22,443||13,438|
|Other current liabilities||305||932|
|Total current liabilities||53,559||42,342|
|Deferred rent and other non-current liabilities||3,543||3,298|
|Deferred revenue-less current portion||1,415||1,571|
|Notes payable-less current portion||131||178|
|COMMITMENT AND CONTINGENCIES|
|Additional paid-in capital||191,581||194,173|
|Warrants for common stock||10,610||10,610|
|Other comprehensive gain (loss)||182||(976||)|
|Total stockholders' equity||148,620||151,728|
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY||$||207,268|