Cvent Announces Second Quarter 2013 Financial Results
Total revenue of $26.9 million grows 36% year-over-year
Initial public offering, closed in August, raises $122.2 million in net proceeds
"We are pleased with the company's second quarter performance, which was highlighted by strong growth in revenue and increased demand from both new and existing customers of all sizes," said Reggie Aggarwal, Chief Executive Officer of Cvent. "We are at the early stages of transforming the meeting and events industry with our cloud-based platform, and we believe Cvent is uniquely positioned to capitalize on this multi-billion dollar market opportunity. We believe our recent IPO will help to further advance Cvent's leadership position by increasing our market awareness and providing us with increased resources to scale our business for the long-term."
Second Quarter 2013 Financial Highlights
Total revenue was $26.9 million, an increase of 36% from the comparable period in 2012.
Platform Subscription revenue was $18.8 million, an increase of 35% from the comparable period in 2012.
Marketing Solutions revenue was $8.1 million, an increase of 39% from the comparable period in 2012.
Operating Income (Loss)
GAAP operating loss was ($1.3) million, compared to operating income of $1.3 million in the comparable period in 2012.
Non-GAAP operating income was $2.3 million, compared to $4.0 million in the comparable period in 2012.
Net Income (Loss)
GAAP net loss was ($2.3) million, compared to net income of $0.5 million for the comparable period in 2012. GAAP net loss per share was ($0.07), based on 33.1 million pro forma diluted weighted average common shares outstanding, compared to a GAAP net income per share of $0.01 for the comparable period in 2012, based on 34.8 million diluted weighted average common shares outstanding.
Non-GAAP net income was $1.4 million, compared to $3.2 million in the comparable period in 2012. Non-GAAP net income per diluted share was $0.04, based on 34.6 million pro forma diluted weighted average common shares outstanding, compared to $0.09 for the second quarter of 2012, based on 34.8 million diluted weighted average common shares outstanding.
Adjusted EBITDA was $4.3 million, compared to $5.3 million in the comparable period in 2012.
Decreases in profitability compared to the year-ago period were due primarily to the impact of companies acquired during 2012, investments in R&D to enhance existing and develop new products, costs of preparing to be a public company and incremental sales & marketing investments.
Cash, cash equivalents and short-term investments at June 30, 2013 totaled $33.4 million, compared with $40.9 million at the end of the first quarter, with the decrease due primarily to the seasonality of invoicing patterns. Cash and cash equivalents do not include $122.2 million in net proceeds, after underwriting discounts and IPO-related expenses, generated from the completion of the company's initial public offering in August, 2013.
Second Quarter 2013 and Recent Business Highlights
Demonstrated success in signing platform subscriptions with new customers, including ADP, American Honda, Darden Restaurants, Disney, Kaiser Permanente, and Regeneron Pharmaceuticals, and renewals with Allscripts, Bucknell University and Russell Investments, among others.
Signed new customers, significant renewals and expanded relationships with Strategic Meeting Management customers such as Deere & Company, GE Capital and Halliburton, among others.
Added new customers and expanded existing relationships for marketing solutions with organizations such as Accor Europe, Crowne Plaza Hotels, Dorchester Collection, Fontainebleau Miami Beach, InterContinental Hotel Group of China and Sonesta Collection.
Renewed our relationship with HelmsBriscoe and entered into a new partnership with Experient, representing two of the largest professional meeting planning firms in the world. Each of these partners made multi-year commitments to use the Cvent Supplier Network as their sourcing platform, and each has historically sourced tens of thousands of meetings and millions of room nights per year.
Introduced a major new release of CrowdCompass that allows for multiple events to be created within one mobile app, as well as the OnArrival mobile app to streamline the onsite event check-in process for meetings and events.
Launched a new customer support center in partnership with Salesforce.com to provide our users with an array of on-demand resources.
Based on information available as of September 16, 2013, Cvent is issuing guidance for the third quarter and full year 2013 as indicated below.
Third Quarter 2013:
Total revenue is expected to be in the range of $27.5 million to $27.9 million.
GAAP net loss is expected to be in the range of $(2.7) million to $(2.3) million, or $(0.07) to $(0.06) per share, based on 39.7 million basic and diluted weighted average common shares outstanding.
Non-GAAP net income (loss) is expected to be in the range of a loss of $(0.1) million to income of $0.3 million, or breakeven to $0.01 per share, based on 39.7 million basic and 42.6 million diluted weighted average common shares outstanding.
Adjusted EBITDA is expected to be in the range of $2.1 million to $2.5 million.
Full Year 2013:
Total revenue is expected to be in the range of $107.8 million to $108.7 million.
GAAP net loss is expected to be in the range of $(7.8) million to $(7.4) million, or $(0.21) to $(0.20) per share, based on 36.5 million basic weighted average common shares outstanding.
Non-GAAP net income is expected to be in the range of $2.0 million to $2.5 million, or $0.05 to $0.07 per share, based on 38.0 million diluted weighted average common shares outstanding.
Adjusted EBITDA is expected to be in the range of $10.9 million to $11.3 million.
Conference Call Information
Cvent Second Quarter 2013 Financial Results Conference Call
Monday, September 16, 2013
5:00 p.m. ET
(800) 860-2442, domestic
(412) 858-4600, international
(877) 344-7529, passcode 10033406, domestic
(412) 317-0088, passcode 10033406, international
http://investors.cvent.com (live and replay)
The webcast will be archived on Cvent's website for a period of three months.
About Cvent, Inc.
Cvent, Inc. (NYS: CVT) is a leading cloud-based enterprise event management platform. Cvent offers software solutions to event planners for online event registration, venue selection, event management, mobile apps for events, e-mail marketing and web surveys. Cvent provides hotels with a targeted advertising platform designed to reach event planners looking for suitable venues. Cvent solutions optimize the entire event management value chain and have enabled clients around the world to manage hundreds of thousands of meetings and events.
Non-GAAP Financial Measures
This press release contains the following non-GAAP financial measures: Non-GAAP operating income, Adjusted EBITDA, Non-GAAP net income and Non-GAAP net income per share.
We believe that these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to Cvent's financial condition and results of operations. We use these non-GAAP measures for financial, operational and budgetary decision-making purposes, and to compare our performance to that of prior periods for trend analyses. We believe that these non-GAAP financial measures provide useful information regarding past financial performance and future prospects, and permit us to more thoroughly analyze key financial metrics used to make operational decisions. We believe that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial measures with other software companies, many of which present similar non-GAAP financial measures to investors.
We do not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in the Company's financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by management about which expenses and income are excluded or included in determining these non-GAAP financial measures. In order to compensate for these limitations, management presents non-GAAP financial measures in connection with GAAP results. We urge investors to review the reconciliation of our non-GAAP financial measures to the comparable GAAP financial measures, which are included in this press release, and not to rely on any single financial measure to evaluate our business. Additionally, we have not reconciled the non-GAAP guidance measures disclosed under "Business Outlook" to their corresponding GAAP measures because we do not provide guidance for the various reconciling items such as stock-based compensation, provision for income taxes, depreciation and amortization, costs related to acquisitions, and foreign currency remeasurement and transactions gains and losses, as certain items that impact these measures are out of our control or cannot be reasonably predicted. Accordingly, reconciliations to the non-GAAP guidance measures is not available without unreasonable effort.
Cvent excludes the following items as noted from these non-GAAP financial measures:
Interest income. Cvent excludes this income primarily because it is not considered a part of ongoing operating results.
Provision for income taxes. Cvent excludes this expense (benefit) from certain non-GAAP financial measures primarily because it is largely a non-cash expense (benefit) that Cvent does not consider a meaningful component of our operating results when assessing the performance of our business. The exclusion of this expense (benefit) facilitates the comparison of our business outlooks for future periods with the results from prior periods.
Depreciation and amortization. In accordance with GAAP, operating expenses include amortization of intangible assets such as software development and acquisition of technology. Cvent excludes these items from its non-GAAP financial measures because they are typically static expenses that Cvent does not consider part of ongoing operating results when assessing the performance of our business, and Cvent believes that doing so facilitates comparisons to its historical operating results and to the results of other companies in our industry, which have their own unique acquisition histories and varied approaches to capitalization of software development.
Stock-based compensation expense. Cvent's non-GAAP financial measures exclude stock-based compensation, which consists of expenses for stock options and other awards. Cvent excludes these expenses from its non-GAAP financial measures primarily because they are non-cash expenses that are not considered part of ongoing operating results when assessing the performance of our business. Excluding these amounts improves comparability of the performance of the business across periods, and to the results of other companies in our industry, which have their own unique histories associated with stock-based compensation.
Foreign currency remeasurement and transaction losses (gains). Cvent's non-GAAP financial measures excludes these losses (gains) primarily because they are non-cash, and are driven primarily by our India operations, which for accounting purposes is not considered a stand-alone entity and are remeasured instead of translated. In accordance with GAAP, the losses (gains) associated with remeasuring their financial statements, are recognized through our Consolidated Statements of Operations instead of through our Consolidated Balance Sheets, where translation losses (gains) from most foreign subsidiaries would be included. Excluding these amounts improves comparability of the performance of the business across periods and to the results of other companies in our industry, which generally recognize similar losses (gains) through their Consolidated Balance Sheets.
Costs related to acquisitions and disposition. Cvent's non-GAAP financial measures exclude contingent consideration included in compensation expense which relates to the potential cash payment to certain employees of acquired companies whose right to receive such payment is forfeited if they terminate their employment prior to the required service period. As the contingent payments are subject to continued employment, GAAP requires that it be accounted for as compensation expense and such expense is subject to revaluation. Cvent excludes this item from its non-GAAP financial measures primarily because it is a component of the deal consideration and it is not considered part of ongoing operating results when assessing the performance of our business. The exclusion of these expenses facilitates the comparison of post-acquisition operating results and to the results of other companies in our industry, which have their own unique acquisition histories.
Cautionary Language Concerning Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding our revenue, net income and profitability margins for the company's third quarter and year 2013 in the paragraphs under "Business Outlook" above, and other statements regarding our expectations regarding the growth of the meetings and events industry and our market position therein. These forward-looking statements are made as of the date of this press release and were based on current expectations, estimates, forecasts and projections as well as the beliefs and assumptions of management. Words such as "expect," "anticipate," "should," "believe," "hope," "target," "project," "goals," "estimate," "potential," "predict," "may," "will," "might," "could," "intend," variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond our control. Our actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to, our ability to renew existing customers and attract new customers; our ability to manage our growth effectively; and the volatility of quarterly results and expectations. For a detailed discussion of these and other risk factors, please refer to the risks detailed in our filings with the Securities and Exchange Commission, including, without limitation, our final prospectus for our initial public offering filed on August 9, 2013 and most recent Quarterly Report on Form 10-Q and subsequent periodic and current reports. Past performance is not necessarily indicative of future results. We anticipate that subsequent events and developments will cause our views to change. We undertake no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
Cash and cash equivalents
Accounts receivable, net of reserve of $244 and $505, respectively
Prepaid expenses and other current assets
Deferred tax assets
Total current assets
Property and equipment, net
Capitalized software development costs, net
Intangible assets, net
Other assets, non-current
Liabilities and Stockholders' Equity
Accrued and other current liabilities
Total current liabilities
Deferred tax liabilities, non-current
Other liabilities, non-current
Commitments and contingencies (Note 8)
Series A convertible preferred stock, $0.001 par value, 69,675,300 shares authorized and 17,418,807 issued and outstanding
Common stock, $0.001 par value; 154,492,987 shares authorized at June 30, 2013 and December 31, 2012; 16,376,377 and 15,901,183 shares issued and 15,856,163 and 15,380,969 outstanding at June 30, 2013 and December 31, 2012, respectively
Additional paid-in capital
Total stockholders' equity
Total liabilities and stockholders' equity
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
Three months ended
Six months ended
Cost of revenue(1)
Sales and marketing(1)
Research and development(1)
General and administrative(1)
Total operating expenses
Income from operations
Income (loss) from operations before income tax expense
Provision for income taxes
Net income (loss)
Net income (loss) per common share:
Weighted average common shares outstanding—basic
Weighted average common shares outstanding—diluted
Pro forma net loss per common share:
Pro forma weighted average common shares outstanding—basic
Pro forma weighted average common shares outstanding—diluted
(1) Stock-based compensation expense included in the above:
Cost of revenue
Sales and marketing
Research and development
General and administrative
CONSOLIDATED STATEMENT OF CASH FLOWS
Six Months Ended June 30,
Net income (loss)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization