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Zynga Announces Second Quarter 2015 Financial Results
DELIVERS
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LAUNCHES TWO NEW GAMES WORLDWIDE: EMPIRES & ALLIES AND FARMVILLE: HARVEST SWAP
APPOINTS FRANK GIBEAU TO BOARD OF DIRECTORS
A photo accompanying this release is available at http://www.globenewswire.com/newsroom/prs/?pkgid=34993
"Our teams have been executing well and delivered strong Q2 results while also making significant progress against our best growth opportunities. In terms of our core franchises - FarmVille, Slots, Poker and Words With Friends - we beat our expectations and the teams did a good job delivering value for our players. We also launched Empires & Allies and FarmVille: Harvest Swap in Q2, and are excited for the upcoming launches of Dawn of Titans, CSR2 and our new Slots game later this year," said
Pincus continued, "We believe that social gaming has the opportunity to be as important a medium in people's lives as social networking and social media. We're excited to deliver on that promise by getting back to our entrepreneurial roots, innovating on game mechanics and leveraging world class data and analytics to accelerate our path. Finally, I want to thank our employees for their deep commitment and focus. Our teams have worked hard to lay the mobile-first foundation necessary to lead in social gaming. We look forward to building on that progress for the remainder of 2015 and beyond."
"We generated
Financial Results
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Bookings of
$174 million ; above high end of the guidance range
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Adjusted EBITDA of
$1 million ; above the high end of the guidance range
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Mobile bookings now represent 66% of overall bookings at
$115 million ; up 30% year-over-year
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Advertising bookings, excluding licensing and developer payments, up 44% year-over-year
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$1.1 billion in cash and marketable securities
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Implemented
$100 million cost reduction plan
- Positive free cash flow inclusive of investment in game development, marketing for new launches and infrastructure
Product Highlights
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Our Slots franchise - Wizard of Oz Slots and Hit It Rich! Slots - grew bookings 32% sequentially and recently secured a multiyear agreement with
Warner Bros. Interactive Entertainment to license the Willy Wonka and the Chocolate Factory brand
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Empires & Allies launched worldwide with a 4.5 Apple App Store star rating and strong engagement with players averaging 5 play sessions daily totaling 38 minutes; at
$0.26 , Q2 Average Daily Bookings per Average DAU (ABPU) nearly 3 times the company's ABPU in Q2
- FarmVille: Harvest Swap launched worldwide with a 4.5 Apple App Store Star rating and strong player retention
Player Metrics
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Average DAUs - 21 million; down 23% year-over-year and down 15% sequentially
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Average MAUs - 83 million; down 32% year-over-year and down 18% sequentially
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Average Daily Bookings per Average DAUs (ABPU) -
$0.091 ; up 29% year-over-year and up 21% sequentially
- Payer conversion (excluding NaturalMotion) - 1.6%; down 17% year-over-year and up 5% sequentially
Financial Highlights (in thousands, except per share data)
| Three Months Ended | Six Months Ended | |||
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| GAAP Results | ||||
| Revenue | $ 199,918 | $ 153,232 | $ 383,211 | $ 321,252 |
| Net loss | $ (26,868) | $ (62,533) | $ (73,364) | $ (123,716) |
| Diluted net loss per share | $ (0.03) | $ (0.07) | $ (0.08) | $ (0.14) |
| Non-GAAP Results | ||||
| Bookings | $ 174,462 | $ 175,102 | $ 341,872 | $ 336,460 |
| Adjusted EBITDA | $ 963 | $ 14,491 | $ 3,056 | $ 28,337 |
| Non-GAAP net income (loss) | $ (7,578) | $ 2,808 | $ (14,291) | $ (3,450) |
| Non-GAAP earnings (loss) per share | $ (0.01) | $ 0.00 | $ (0.02) | $ 0.00 |
Appoints
Today,
"
Prior to that, Gibeau was President of EA Labels from 2011 to 2013, where he oversaw IP development, worldwide product management and marketing for major console and PC properties including Battlefield,
Gibeau is currently the Vice Chairman of the
Gibeau joins
Second Quarter Operational Metrics
The company tracks operating metrics using internal systems which rely on internal company data and third party data. In the first quarter of 2015, the company modified its calculations to take into account our business's transition to mobile and updates to our operating metrics which utilize additional third party data to help us identify whether a player logged in under two or more accounts is the same individual. As a result of these changes, we revised the definitions for DAUs, MAUs, MUUs, and MUPs in the first quarter of 2015. We rely on the veracity of data provided by individuals and reported by third parties to calculate our metrics and reduce duplication of data. For comparative purposes, these key operating metrics have been revised for the second quarter of 2014 to reflect the updated definitions. The following comparisons are based on the revised numbers for 2014. Please
refer to our Quarterly Report on Form 10-Q for the quarter ended
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Average daily bookings per average DAU (ABPU) increased from
$0.071 in the second quarter of 2014 to$0.091 in the second quarter of 2015, up 29% year-over-year. On a consecutive quarter basis, ABPU was up 21% from$0.076 in the first quarter of 2015.
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Average monthly unique payers (MUPs) in the second quarter of 2015 were 1.0 million, compared to 1.4 million in the second quarter of 2014. On a consecutive quarter basis, MUPs were down 11% from 1.1 million in the first quarter of 2015.
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Average daily active users (DAUs) in the second quarter of 2015 were 21 million, compared to 27 million in the second quarter of 2014. On a consecutive quarter basis, DAUs were down 15% from 25 million in the first quarter of 2015. Web DAUs and Mobile DAUs were 4 million and 17 million in the second quarter of 2015, respectively.
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Average monthly active users (MAUs) in the second quarter of 2015 were 83 million, compared to 121 million in the second quarter of 2014. On a consecutive quarter basis, MAUs were down 18% from 100 million in the first quarter of 2015. Web MAUs and Mobile MAUs were 19 million and 64 million in the second quarter of 2015, respectively.
- Average monthly unique users (MUUs) in the second quarter of 2015 were 62 million, compared to 82 million in the second quarter of 2014. On a consecutive quarter basis, MUUs were down 15% from 73 million in the first quarter of 2015.
Second Quarter 2015 Financial Summary
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Revenue: Revenue was
$200 million for the second quarter of 2015, an increase of 30% compared to the second quarter of 2014 and an increase of 9% compared to the first quarter of 2015. Online game revenue was$162 million , an increase of 24% compared to the second quarter of 2014 and an increase of 10% compared to the first quarter of 2015. Advertising and other revenue was$38 million , an increase of 70% compared to the second quarter of 2014 and an increase of 7% compared to the first quarter of 2015. FarmVille 2, Zynga Poker, FarmVille 2: Country Escape, Hit it Rich! Slots, and Wizard of Oz Slots, accounted for 18%, 18%, 16%, 16%, and 10% of online game revenue, respectively, for the second quarter of 2015 compared to FarmVille 2, Zynga Poker, FarmVille 2: Country Escape and Hit it Rich! Slots accounted for 20%, 19%, 16% and 15%, respectively, for the first quarter of 2015.
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Bookings: Bookings were
$174 million for the second quarter of 2015, flat compared to the second quarter of 2014 and an increase of 4% compared to the first quarter of 2015.
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Net loss: Net loss was
$27 million for the second quarter of 2015, compared to net loss of$63 million for the second quarter of 2014 and compared to net loss of$46 million for the first quarter of 2015, which was primarily due to higher revenue in the second quarter of 2015.
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Adjusted EBITDA: Adjusted EBITDA was
$1 million for the second quarter of 2015, compared to$14 million for the second quarter of 2014 and$2 million in the first quarter of 2015. The year-over-year decrease in adjusted EBITDA in the second quarter of 2015 was primarily due to an increase in payment processing fees due to our increased mobile bookings mix, an increase in royalty expense for licensed intellectual property and an increase in hosting costs due to our data center migration.
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Non-GAAP net income (loss): Non-GAAP net loss was
$8 million for the second quarter of 2015, compared to non-GAAP net income of$3 million in the second quarter of 2014 and non-GAAP net loss of$7 million in the first quarter of 2015. The year-over-year change in non-GAAP net (income) loss in the second quarter of 2015 was primary due to an increase in payment processing fees due to our increased mobile bookings mix, an increase in royalty expense for licensed intellectual property and an increase in hosting costs due to our data center migration.
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Net loss per share: Diluted net loss per share was
$0.03 for the second quarter of 2015 compared to a diluted net loss per share of$0.07 for the second quarter of 2014 and diluted net loss per share of$0.05 for the first quarter of 2015.
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Non-GAAP earnings (loss) per share: Non-GAAP loss per share was
$0.01 for the second quarter of 2015 compared to a non-GAAP net earnings per share of$0.00 for the second quarter of 2014 and a non-GAAP net loss per share of$0.01 for the first quarter of 2015.
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Cash and cash flow: As of
June 30, 2015 , cash, cash equivalents and marketable securities were approximately$1.10 billion , compared to$1.10 billion as ofMarch 31, 2015 . Cash flow from operations was$4 million for the second quarter of 2015, compared to$18 million for the second quarter of 2014 and($47) million for the first quarter of 2015. Free cash flow was$1 million for the second quarter of 2015 compared to$14 million for the second quarter of 2014 and($49) million for the first quarter of 2015.
Restructuring charges from our cost reduction plan in the first quarter of 2015
We incurred a restructuring charge of
Third Quarter Outlook
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Revenue is projected to be in the range of
$175 million to$190 million
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Net loss (or income) is projected to be in the range of
($31) million to($23) million
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Net loss per share is projected to be
$0.03 based on a share count projected to be approximately 915 million shares
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Bookings are projected to be in the range of
$155 million to$170 million
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Adjusted EBITDA is projected to be in the range of
($17) million to($7) million
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Non-GAAP net loss per share is projected to be in the range of (
$0.02 ) to ($0.01 ), based on a share count projected to be approximately 915 million shares
Quarterly Earnings Letter and Conference Call Details
In addition to today's press release, a copy of our Q2 2015 Quarterly Earnings Letter, which outlines our second quarter 2015 financial results and business outlook, is available on our website at http://investor.zynga.com.
The live Q&A session can be accessed at http://investor.zynga.com - a replay of which will be available through the website after the call - or via the below conference dial-in number:
- Toll-Free Dial-In Number: (800) 537-0745
- International Dial-In Number: (253) 237-1142
- Conference ID: 85868530
About
The
Key Operating Metrics
We manage our business by tracking several operating metrics: "DAUs," which measure daily active users of our games, "MAUs," which measure monthly active users of our games, "MUUs," which measure monthly unique users of our games, "MUPs," which measure monthly unique payers in our games, and "ABPU," which measures our average daily bookings per average DAU, each of which is recorded by our internal analytics systems. The numbers for these operating metrics are calculated using internal company data based on tracking of user account activity. We also use third party network logins to help us track whether a player logged under two or more different user accounts is the same individual. We believe that the numbers are reasonable estimates of our user base for the applicable period of measurement; however, factors relating to user activity and systems may impact these numbers.
Please refer to our Quarterly Report on Form 10-Q for the quarter ended
MUUs and MUPs in this press release exclude MUUs and MUPs from NaturalMotion legacy games (
We acquired NaturalMotion in
Forward-Looking Statements
This press release contains forward-looking statements relating to, among other things, our outlook for the third quarter 2015 revenue, net loss, diluted net loss per share, weighted average diluted share count, bookings, Adjusted EBITDA, non-GAAP net income (loss) per share and non-GAAP weighted average diluted share count; certain other financial items necessary for GAAP to Non-GAAP reconciliation; our future operational plans, use of cash, strategies and prospects; our cost structure and cost reduction plans and estimated savings and charges, including our ability to work as a team to accelerate execution, drive profitability and nurture creativity and innovation while reducing costs and lowering discretionary spend; the breadth and depth of our game slate for 2015 and the success of this slate, including the success of the recently launched Empires & Allies and FarmVille:
Harvest Swap; our planned launch of mobile first games, including our planned launch of Dawn of Titans, CSR2 and a new mobile Slots game in 2015; the multi-year agreement our Slots franchise secured with
Forward-looking statements often include words such as "outlook," "project," "plan," "intend," "could," "should," "would," "will," "might," "anticipate," "estimate," "continue," "believe," "may," "target," "expect," or similar expressions, or the negative or plural of these words or expressions and statements in the future tense are generally forward-looking. The achievement or success of the matters covered by such forward-looking statements is subject to a number of risks, uncertainties, and assumptions. Moreover, we operate in a very competitive and rapidly changing environment and industry. New risks may also emerge from time to time. It is not possible for our management to predict all of the risks related to our business and operations, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results
to differ materially from those contained in any forward-looking statements we may make and reported results should not be considered as an indication of our future performance. Factors that could cause or contribute to such differences include, but are not limited to, the ability of key games, including our franchise games, to sustain or grow audiences, bookings and engagement; our relationship with Facebook, changes in the Facebook platform and/or changes in our agreement with Facebook; our relationship with Apple, Google and other Android platform providers, changes in the Android or iOS platforms and/or changes in our agreements with Apple, Google and/or other Android platform providers; our relationship and/or agreements with key licensing partners, additional platform providers or any key partners; the effectiveness of our cost-cutting activities and our ability to control and
reduce expenses, including our estimated savings and charges associated with our restructuring efforts; our ability to efficiently deploy employees, leverage our teams and talent, including shifting resources when necessary to prioritize more important projects; our ability to retain and attract new talent; our ability to work as a team to execute against our strategy; our use of working capital in general; attrition or decline in existing games, including franchise games; our ability to launch and monetize successfully new games and features for web and mobile in a timely manner and the success of these games and features, including planned features for our existing games; the process of integrating
More information about factors that could affect our operating results is included under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended
Non-GAAP Financial Measures
We have provided in this release non-GAAP financial information including bookings, Adjusted EBITDA, non-GAAP net loss, non-GAAP operating expense, free cash flow, non-GAAP provision for (benefit from) income taxes, and non-GAAP net loss per share, as a supplement to the consolidated financial statements, which are prepared in accordance with
Some limitations of bookings, Adjusted EBITDA, non-GAAP net loss, non-GAAP operating expense, free cash flow, non-GAAP provision for (benefit from) income taxes, and non-GAAP net loss per share:
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Adjusted EBITDA, non-GAAP operating expense, non-GAAP net loss and non-GAAP provision for (benefit from) expense do not include the impact of stock-based expense, impairment of intangible assets previously acquired, acquisition-related transaction expenses, contingent consideration fair value adjustments and restructuring expense;
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Total Bookings, Adjusted EBITDA, non-GAAP net loss and non-GAAP provision for (benefit from) expense do not reflect that we defer and recognize online game revenue and revenue from certain advertising transactions over the estimated average life of durable virtual goods or as virtual goods are consumed;
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Adjusted EBITDA does not reflect income tax expense;
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Adjusted EBITDA does not include other income (expense) net, which includes foreign exchange gains and losses and interest income;
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Adjusted EBITDA and non-GAAP operating expense excludes depreciation and amortization of intangible assets, while non-GAAP net loss excludes amortization of intangible assets from acquisitions. Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future;
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Adjusted EBITDA, non-GAAP operating expense and non-GAAP net loss do not include gains and losses associated with significant legal settlements;
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Non-GAAP net loss per share gives effect to all dilutive awards based on the treasury stock method that were excluded from the GAAP diluted earnings per share calculation in periods when non-GAAP net income (loss) is positive and GAAP net income (loss) is negative;
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Free cash flow is derived from net cash provided by operating activities less cash spent on capital expenditures and acquisitions, and removing the excess income tax benefits or costs associated with stock-based awards; and
- Other companies, including companies in our industry, may calculate bookings, Adjusted EBITDA, non-GAAP net loss, non-GAAP operating expense, free cash flow, non-GAAP provision for (benefit from) income taxes, and non-GAAP net loss per share differently or not at all, which will reduce their usefulness as a comparative measure.
Because of these limitations, you should consider bookings, Adjusted EBITDA, non-GAAP net income (loss), non-GAAP operating expense, free cash flow, non-GAAP provision for (benefit from) income taxes, and non-GAAP net income (loss) per share, along with other financial performance measures, including revenue, net income (loss), diluted net loss per share, cash flow from operations, GAAP operating expense, GAAP operating margin and our other financial results presented in accordance with GAAP. See the GAAP to non-GAAP reconciliations below for further details.
Contacts
Investors -
415-339-5266
investors@zynga.com
Press -
415-503-0303
press@zynga.com
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| CONSOLIDATED BALANCE SHEETS | ||
| (In thousands, unaudited) | ||
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2015 |
2014 |
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| Assets | ||
| Current assets: | ||
| Cash and cash equivalents | $ 475,428 | $ 131,303 |
| Marketable securities | 583,387 | 785,221 |
| Accounts receivable | 82,754 | 89,611 |
| Income tax receivable | 4,833 | 3,304 |
| Deferred tax assets | 948 | 2,765 |
| Restricted cash | 207 | 48,047 |
| Other current assets | 28,472 | 22,688 |
| Total current assets | 1,176,029 | 1,082,939 |
| Long-term marketable securities | 40,108 | 231,385 |
| Goodwill | 657,131 | 650,778 |
| Other intangible assets, net | 53,451 | 66,861 |
| Property and equipment, net | 283,946 | 297,919 |
| Other long-term assets | 17,976 | 18,911 |
| Total assets | $ 2,228,641 | $ 2,348,793 |
| Liabilities and stockholders' equity | ||
| Current liabilities: | ||
| Accounts payable | $ 27,727 | $ 14,965 |
| Other current liabilities | 69,402 | 164,150 |
| Deferred revenue | 151,550 | 189,923 |
| Total current liabilities | 248,679 | 369,038 |
| Deferred revenue | 915 | 3,882 |
| Deferred tax liabilities | 7,297 | 5,323 |
| Other non-current liabilities | 70,581 | 74,858 |
| Total liabilities | 327,472 | 453,101 |
| Stockholders' equity: | ||
| Common stock and additional paid in capital | 3,173,560 | 3,096,982 |
| Accumulated other comprehensive income (loss) | (24,685) | (29,175) |
| Accumulated deficit | (1,247,706) | (1,172,115) |
| Total stockholders' equity | 1,901,169 | 1,895,692 |
| Total liabilities and stockholders' equity | $ 2,228,641 | $ 2,348,793 |
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| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
| (In thousands, except per share data, unaudited) | ||||
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Three Months Ended |
Six Months Ended |
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| 2015 | 2014 | 2015 | 2014 | |
| Revenue: | ||||
| Online game | $ 162,161 | $ 130,966 | $ 310,124 | $ 263,236 |
| Advertising and other | 37,757 | 22,266 | 73,087 | 58,016 |
| Total revenue | 199,918 | 153,232 | 383,211 | 321,252 |
| Costs and expenses: | ||||
| Cost of revenue | 57,779 | 51,288 | 115,401 | 104,792 |
| Research and development | 90,896 | 93,722 | 198,416 | 191,306 |
| Sales and marketing | 41,119 | 41,608 | 72,958 | 71,461 |
| General and administrative | 37,805 | 32,831 | 78,186 | 90,167 |
| Total costs and expenses | 227,599 | 219,449 | 464,961 | 457,726 |
| Income (loss) from operations | (27,681) | (66,217) | (81,750) | (136,474) |
| Interest income (expense), net | 605 | 776 | 1,399 | 1,646 |
| Other income (expense), net | 1,199 | 896 | 9,558 | 2,021 |
| Income (loss) before income taxes | (25,877) | (64,545) | (70,793) | (132,807) |
| Provision for (benefit from) income taxes | 991 | (2,012) | 2,571 | (9,091) |
| Net income (loss) | $ (26,868) | $ (62,533) | $ (73,364) | $ (123,716) |
| Net income (loss) per share: | ||||
| Basic and diluted | $ (0.03) | $ (0.07) | $ (0.08) | $ (0.14) |
| Weighted average common shares used to compute net income (loss) per share: | ||||
| Basic and diluted | 911,699 | 872,784 | 905,058 | 861,591 |
| Stock-based expense included in the above line items: | ||||
| Cost of revenue | $ 772 | $ 1,002 | $ 1,844 | $ 2,281 |
| Research and development | 19,860 | 17,596 | 48,177 | 36,012 |
| Sales and marketing | 1,617 | 1,860 | 3,136 | 3,318 |
| General and administrative | 5,656 | 8,389 | 16,210 | 15,562 |
| Total stock-based expense | $ 27,905 | $ 28,847 | $ 69,367 | $ 57,173 |
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| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||
| (In thousands, unaudited) | ||||
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Three Months Ended |
Six Months Ended |
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| 2015 | 2014 | 2015 | 2014 | |
| Operating activities | ||||
| Net income (loss) | $ (26,868) | $ (62,533) | $ (73,364) | $ (123,716) |
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||
| Depreciation and amortization | 13,340 | 19,926 | 31,062 | 45,270 |
| Stock-based expense | 27,905 | 28,847 | 69,367 | 57,173 |
| Accretion and amortization on marketable securities | 1,797 | 2,612 | 3,884 | 5,398 |
| (Gain) loss from sales of investments, assets and other, net | 406 | 896 | (5,650) | 1,278 |
| Tax benefits (costs) from stock-based awards | -- | (436) | -- | -- |
| Excess tax benefits from stock-based awards | -- | 436 | -- | -- |
| Deferred income taxes | 243 | (1,140) | 1,241 | (9,075) |
| Changes in operating assets and liabilities: | ||||
| Accounts receivable, net | (3,233) | (7,495) | 6,857 | (10,883) |
| Income tax receivable | (331) | (1,413) | (1,529) | (1,278) |
| Other assets | (1,105) | (2,600) | (8,792) | (7,892) |
| Accounts payable | 11,699 | 10,181 | 12,762 | 1,584 |
| Deferred revenue | (25,457) | 21,870 | (41,340) | 14,961 |
| Other liabilities | 5,806 | 8,655 | (37,298) | 20,740 |
| Net cash provided by (used in) operating activities | 4,202 | 17,806 | (42,800) | (6,440) |
| Investing activities | ||||
| Purchase of marketable securities | -- | (295,445) | (101,091) | (470,174) |
| Sales and maturities of marketable securities | 256,112 | 292,794 | 490,667 | 526,420 |
| Acquisition of property and equipment | (3,127) | (3,415) | (5,239) | (4,649) |
| Proceeds from sale of property and equipment | -- | 121 | -- | 5,056 |
| Business acquisition, net of cash acquired | -- | -- | -- | (390,993) |
| Proceeds from sale of equity method investment | -- | -- | 10,507 | -- |
| Other investing activities, net | -- | 500 | -- | 700 |
| Net cash provided by (used in) investing activities | 252,985 | (5,445) | 394,844 | (333,640) |
| Financing activities | ||||
| Taxes paid related to net share settlement of equity awards | (405) | (298) | (1,413) | (753) |
| Proceeds from employee stock purchase plan and exercise of stock options | 945 | 1,414 | 4,335 | 10,923 |
| Excess tax benefits from stock-based awards | -- | (436) | -- | -- |
| Acquisition related contingent consideration payment | -- | -- | (10,790) | -- |
| Net cash provided by (used in) financing activities | 540 | 680 | (7,868) | 10,170 |
| Effect of exchange rate changes on cash and cash equivalents | 246 | 134 | (51) | 15 |
| Net increase (decrease) in cash and cash equivalents | 257,973 | 13,175 | 344,125 | (329,895) |
| Cash and cash equivalents, beginning of period | 217,455 | 122,453 | 131,303 | 465,523 |
| Cash and cash equivalents, end of period | $ 475,428 | $ 135,628 | $ 475,428 | $ 135,628 |
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||||||||
| RECONCILIATION OF GAAP TO NON-GAAP RESULTS | ||||||||
| (In thousands, except per share data, unaudited) | ||||||||
|
Three Months Ended |
Six Months Ended |
|||||||
| 2015 | 2014 | 2015 | 2014 | |||||
| Reconciliation of Revenue to Bookings | ||||||||
| Revenue | $ 199,918 | $ 153,232 | $ 383,211 | $ 321,252 | ||||
| Change in deferred revenue | (25,456) | 21,870 | (41,339) | 15,208 | ||||
| Bookings | $ 174,462 | $ 175,102 | $ 341,872 | $ 336,460 | ||||
| Reconciliation of Net income (loss) to Adjusted EBITDA | ||||||||
| Net income (loss) | $ (26,868) | $ (62,533) | $ (73,364) | $ (123,716) | ||||
| Provision for (benefit from) income taxes | 991 | (2,012) | 2,571 | (9,091) | ||||
| Other income (expense), net | (1,199) | (896) | (9,558) | (2,021) | ||||
| Interest income (expense), net | (605) | (776) | (1,399) | (1,646) | ||||
| Restructuring expense, net | 12,855 | (2,270) | 16,316 | 27,385 | ||||
| Depreciation and amortization | 13,340 | 19,926 | 31,062 | 45,270 | ||||
| Acquisition-related transaction expenses | -- | 265 | -- | 6,425 | ||||
| Contingent consideration fair value adjustment | -- | 12,070 | 9,400 | 13,350 | ||||
| Stock-based expense | 27,905 | 28,847 | 69,367 | 57,173 | ||||
| Change in deferred revenue | (25,456) | 21,870 | (41,339) | 15,208 | ||||
| Adjusted EBITDA | $ 963 | $ 14,491 | $ 3,056 | $ 28,337 | ||||
| Reconciliation of Net income (loss) to Non-GAAP net income (loss) | ||||||||
| Net income (loss) | $ (26,868) | $ (62,533) | $ (73,364) | $ (123,716) | ||||
| Acquisition-related transaction expenses | -- | 265 | -- | 6,425 | ||||
| Contingent consideration fair value adjustment | -- | 12,070 | 9,400 | 13,350 | ||||
| Stock-based expense | 27,905 | 28,847 | 69,367 | 57,173 | ||||
| Amortization of intangible assets from acquisitions | 6,160 | 6,591 | 12,424 | 9,198 | ||||
| Change in deferred revenue | (25,456) | 21,870 | (41,339) | 15,208 | ||||
| Restructuring expense, net | 12,855 | (2,270) | 16,316 | 27,385 | ||||
| Tax effect of non-GAAP adjustments to net income (loss) | (2,174) | (2,032) | (7,095) | (8,473) | ||||
| Non-GAAP net income (loss) | $ (7,578) | $ 2,808 | $ (14,291) | $ (3,450) | ||||
| Reconciliation of GAAP diluted shares to Non-GAAP diluted shares | ||||||||
| GAAP diluted shares | 911,699 | 872,784 | 905,058 | 861,591 | ||||
| Other dilutive equity awards (1) | -- | 44,109 | -- | -- | ||||
| Non-GAAP diluted shares | 911,699 | 916,893 | 905,058 | 861,591 | ||||
| Non-GAAP net income (loss) per share: | $ (0.01) | $ 0.00 | $ (0.02) | $ 0.00 | ||||
| Reconciliation of Cash provided by (used in) operating activities to Free cash flow | ||||||||
| Net cash provided by (used in) operating activities | 4,202 | 17,806 | (42,800) | (6,440) | ||||
| Acquisition of property and equipment | (3,127) | (3,415) | (5,239) | (4,649) | ||||
| Excess tax benefits (loss) from stock-based awards | -- | (436) | -- | -- | ||||
| Free cash flow | $ 1,075 | $ 13,955 | $ (48,039) | $ (11,089) | ||||
| Reconciliation of GAAP to Non-GAAP provision for (benefit from) income taxes | ||||||||
| GAAP provision for (benefit from) income taxes | 991 | (2,012) | 2,571 | (9,091) | ||||
| Stock-based expense | 2,847 | 790 | 7,411 | 3,763 | ||||
| Amortization of intangible assets from acquisitions | 643 | 332 | 1,332 | 606 | ||||
| Acquisition-related transaction expenses | -- | (224) | -- | 423 | ||||
| Contingent consideration fair value adjustment | -- | 744 | 1,035 | 878 | ||||
| Change in deferred revenue | (2,685) | 1,700 | (4,433) | 1,001 | ||||
| Restructuring expense, net | 1,369 | (1,310) | 1,750 | 1,802 | ||||
| Non-GAAP provision for (benefit from) income taxes | $ 3,165 | $ 20 | $ 9,666 | $ (618) | ||||
| (1) Gives effect to all dilutive awards based on the treasury stock method. | ||||||||
|
|
|
| RECONCILIATION OF GAAP TO NON-GAAP THIRD QUARTER 2015 OUTLOOK | |
| (In thousands, except per share data, unaudited) | |
| Third Quarter 2015 | |
| Reconciliation of Revenue to Bookings | |
| Revenue range |
|
| Change in deferred revenue | (20,000) |
| Bookings range |
|
| Reconciliation of Net income (loss) to Adjusted EBITDA | |
| Net income (loss) range |
|
| Provision for (benefit from) income taxes | 0 - 2,000 |
| Other income (expense), net | (2,000) |
| Interest income (expense), net | (1,000) |
| Restructuring expense, net | 1,000 |
| Depreciation and amortization | 11,000 |
| Stock-based expense | 25,000 |
| Change in deferred revenue | (20,000) |
| Adjusted EBITDA range |
|
| Reconciliation of Net income (loss) to Non-GAAP net income (loss) | |
| Net income (loss) range |
|
| Stock-based expense | 25,000 |
| Amortization of intangible assets from acquisitions | 6,000 |
| Change in deferred revenue | (20,000) |
| Restructuring expense, net | 1,000 |
| Tax effect of non-GAAP adjustments to net income (loss) | (1,000) |
| Non-GAAP net income (loss) range |
|
| GAAP and Non-GAAP diluted shares | 915,000 |
| Net income (loss) per share | $ (0.03) |
| Non-GAAP net income (loss) per share |
|
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