Apptio Announces Results for the Second Quarter of 2017
BELLEVUE, Wash., Aug. 2, 2017 /PRNewswire/ -- Apptio, Inc. (NASDAQ:APTI), the business management system of record for hybrid IT, today announced results for the quarter ended June 30, 2017.
"In the second quarter, we achieved record revenue of $45.2 million, strong gross margins, and an improving bottom line," said Sunny Gupta, co-founder and CEO, Apptio. "We were pleased with continued progress toward our goals of accessing a broad market, shortening deployment times, and innovating on our hybrid IT and public cloud capabilities."
Second Quarter Financial Summary
-- Subscription revenue was $37.2 million, an increase of 19% from the
second quarter of 2016, and comprised 82% of total revenue. Services
revenue was $8.0 million, an increase of 8% from the second quarter of
2016. Total revenue was $45.2 million, an increase of 17% from the
second quarter of 2016.
-- GAAP gross margin was 68%, higher than the second quarter of 2016 GAAP
gross margin of 66%. Non-GAAP gross margin improved to 69%, as compared
to non-GAAP gross margin of 67% in the second quarter of 2016.
-- GAAP operating margin was negative 16%, improving from GAAP operating
margin of negative 21% in the second quarter of 2016. Non-GAAP operating
margin improved to negative 8%, as compared to non-GAAP operating margin
of negative 15% in the second quarter of 2016.
-- GAAP net loss per basic and diluted share was $0.18 based on 39.2
million weighted average shares outstanding, compared to a GAAP net loss
per basic and diluted share of $0.69 based on 13.0 million weighted
average shares outstanding in the second quarter of 2016.
-- Non-GAAP net loss per basic and diluted share was $0.08 based on 39.2
million weighted average shares outstanding, compared to a non-GAAP net
loss per basic and diluted share of $0.50 based on 13.0 million weighted
average shares outstanding in the second quarter of 2016.
-- For the three months ended June 30, 2017, net cash used in operating
activities was $10.2 million as compared to $11.4 million in the
comparable period last year. Free cash flow was negative $10.9 million,
as compared to negative $13.5 million in the three months ended June 30,
2016.
-- Cash, cash equivalents and marketable securities were approximately
$124.1 million as of June 30, 2017.
Recent Business Highlights
-- Announced new real-time cloud analytics for AWS, which provides IT
leaders hourly, daily, and monthly visibility into the cost and
consumption of their public cloud environments alongside private cloud
and on-premises investments.
-- Completed the European TBM Summit, which was attended by more than 350
senior IT leaders in London, demonstrating Apptio's increased momentum
in Europe.
-- Continued to strengthen our Board of Directors with the addition of
Kathleen Philips, Zillow Group CFO.
Financial Outlook
Apptio provides guidance based on current market conditions and expectations and actual results may differ materially. Please refer to the company's comments below regarding Forward Looking Statements. Apptio is initiating guidance for the third quarter ending September 30, 2017 and for the full year 2017 as follows:
Third quarter of 2017:
-- Total revenue is expected to be in the range of $44.5 to $45.0 million
-- Non-GAAP operating loss between $3.5 and $4.0 million
Full year 2017:
-- Total revenue is expected to be in the range of $180.0 and $183.0
million
-- Non-GAAP operating loss between $14.0 and $16.0 million
All forward-looking non-GAAP financial measures contained in this section titled "Financial Outlook" exclude the effects of stock-based compensation expense.
Conference Call Information
Apptio plans to host a conference call today to discuss the results. The call is scheduled to begin at 2:00 p.m. PT/ 5:00 p.m. ET and can be accessed by dialing 844-233-0116 (passcode: 50339694), or if outside North America, by dialing 574-990-1011 (passcode: 50339694). Individuals may also access the live teleconference from the investor relations section of the Apptio website at investors.apptio.com. A replay will be available following completion of the live broadcast.
About Apptio
Apptio (NASDAQ: APTI) is the business management system of record for hybrid IT. We transform the way IT runs its business and makes decisions. With our cloud-based applications, IT leaders manage, plan and optimize their technology investments across on-premises and cloud. With Apptio, IT leaders become strategic partners to the business by demonstrating the value of IT investments, accelerate innovation and shift their technology investments from running the business to digital innovation. Hundreds of customers choose Apptio as their business system of record for hybrid IT. For more information, please visit www.Apptio.com.
Forward-Looking Statements
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding our strategy, prospects, customer demand, application adoption and our financial outlook for the third quarter of, and full year, 2017. Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. Actual results may differ materially from the results predicted, and reported results should not be considered as an indication of future performance. The potential risks and uncertainties that could cause actual results to differ from the results predicted include, among others, those risks and uncertainties included under the caption "Risk Factors" and elsewhere in our filings with the U.S. Securities and Exchange Commission, including, without limitation, the Form 10-Q filed with the SEC on May 5, 2017. All information provided in this release and in the attachments is as of the date hereof, and we undertake no duty to update this information unless required by law.
Non-GAAP Financial Measures
To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with Generally Accepted Accounting Principles in the United States of America (GAAP), we use the following non-GAAP financial measures: non-GAAP gross margin, non-GAAP operating loss, non-GAAP net loss per basic and diluted share, and free cash flow. In computing these measures, with the exception of free cash flow, we exclude the effects of stock-based compensation expense. We define free cash flow as net cash used in operating activities, less the purchases of property and equipment. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, and our non-GAAP measures may be different from non-GAAP measures used by other companies.
We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Our management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses and expenditures that may not be indicative of our ongoing core business operating results. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when analyzing historical performance and liquidity and planning, forecasting, and analyzing future periods.
For a reconciliation of these non-GAAP financial measures to GAAP measures, please see the tables captioned "Results of Operations GAAP to Non-GAAP Reconciliation" included at the end of this release. We have not reconciled guidance for non-GAAP metrics to their most directly comparable GAAP measures because such items that impact these measures are not within our control or cannot be reasonably predicted.
Apptio, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2017 2016 2017 2016
---- ---- ---- ----
Revenue
Subscription $37,247 $31,404 $73,434 $61,681
Professional services 7,978 7,375 15,722 13,941
----- ----- ------ ------
Total revenue 45,225 38,779 89,156 75,622
Cost of revenue
Subscription 7,252 6,559 15,102 13,039
Professional services 7,267 6,596 14,836 12,712
----- ----- ------ ------
Total cost of revenue 14,519 13,155 29,938 25,751
------ ------ ------ ------
Gross profit 30,706 25,624 59,218 49,871
------ ------ ------ ------
Operating expenses
Research and development 10,263 8,626 19,921 17,057
Sales and marketing 21,094 19,669 40,120 35,956
General and administrative 6,620 5,504 13,154 10,684
----- ----- ------ ------
Total operating expenses 37,977 33,799 73,195 63,697
------ ------ ------ ------
Loss from operations (7,271) (8,175) (13,977) (13,826)
Other income (expense)
Interest income (expense) and
other, net 264 (377) 500 (434)
Foreign exchange gain (loss) 120 (295) 68 (407)
--- ---- --- ----
Loss before provision for income
taxes (6,887) (8,847) (13,409) (14,667)
Provision for income taxes (126) (138) (151) (214)
---- ---- ---- ----
Net loss $(7,013) $(8,985) $(13,560) $(14,881)
======= ======= ======== ========
Net loss per share attributable
to common stockholders, basic
and diluted $(0.18) $(0.69) $(0.35) $(1.14)
====== ====== ====== ======
Weighted-average shares used to
compute net loss per share
attributable to common
stockholders, basic and diluted 39,175 13,036 38,793 13,016
====== ====== ====== ======
Apptio, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
June 30, December 31,
2017 2016
---- ----
Assets
Current assets
Cash and cash equivalents $39,834 $42,007
Short-term investments 84,275 36,741
Accounts receivable, net of allowance for
doubtful accounts
of $492 and $122 50,763 58,587
Prepaid expenses and other current assets 5,776 5,440
----- -----
Total current assets 180,648 142,775
Long-term assets
Property and equipment, net of accumulated
depreciation
of $19,897 and $17,091 12,300 12,827
Long-term investments -- 38,446
Other long-term assets 971 734
--- ---
Total assets $193,919 $194,782
======== ========
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable $4,550 $3,574
Accrued payroll and other expenses 14,015 14,073
Deferred revenue 93,450 97,885
Deferred rent 843 799
Capital leases 32 43
--- ---
Total current liabilities 112,890 116,374
------- -------
Long-term liabilities
Deferred revenue, net of current portion 3,868 2,254
Deferred rent, net of current portion 3,927 4,360
Capital leases, net of current portion 36 51
Asset retirement obligation 187 175
--- ---
Total liabilities 120,908 123,214
------- -------
Stockholders' equity
Class A and Class B Common stock 4 4
Additional paid-in capital 287,038 271,982
Accumulated other comprehensive loss (147) (94)
Accumulated deficit (213,884) (200,324)
-------- --------
Total stockholders' equity 73,011 71,568
------ ------
Total liabilities and stockholders' equity $193,919 $194,782
======== ========
Apptio, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2017 2016 2017 2016
---- ---- ---- ----
Cash flows from operating activities
Net loss $(7,013) $(8,985) $(13,560) $(14,881)
Adjustments to reconcile net loss to net
cash (used in) provided by operating
activities
Depreciation and amortization 1,552 1,502 3,082 2,985
Amortization of premiums on investments 31 2 54 15
Loss (gain) on disposal of property and
equipment 3 5 (4) 25
Stock-based compensation 3,685 2,510 7,310 4,415
Accretion of expense on line of credit fees 9 42 18 72
Remeasurement of preferred stock warrant
liability -- 7 -- (8)
Foreign exchange loss (gain) 107 -- (68) --
Change in operating assets and liabilities
Accounts receivable (12,768) (14,811) 7,330 8,543
Prepaid expenses and other assets 1,191 56 1,481 (761)
Accounts payable (758) 1,030 1,037 1,475
Accrued expenses (769) 3,694 (1,727) (1,942)
Deferred revenue 4,750 3,726 (2,820) (1,041)
Deferred rent (198) (167) (398) (306)
---- ---- ---- ----
Net cash (used in) provided by operating
activities (10,178) (11,389) 1,735 (1,409)
------- ------- ----- ------
Cash flows from investing activities
Purchases of property and equipment (691) (2,128) (2,236) (2,320)
Proceeds from sale of equipment -- -- 9 --
Proceeds from maturities of investments 12,900 6,245 19,700 6,245
Purchases of investments (7,453) -- (28,898) --
Payment of security deposits (20) (25) (29) (52)
--- --- --- ---
Net cash provided by (used in) investing
activities 4,736 4,092 (11,454) 3,873
----- ----- ------- -----
Cash flows from financing activities
Proceeds from exercise of common stock
options 4,937 124 5,495 511
Proceeds from purchases of stock under
employee stock purchase plan 2,251 -- 2,251 --
Payment of initial public offering costs -- (40) (243) (218)
Proceeds from long-term debt -- 10,000 -- 20,000
Principal payments on capital lease
obligations (10) (13) (21) (23)
Payment of capitalized loan fees -- (236) -- (236)
Net cash provided by financing activities 7,178 9,835 7,482 20,034
----- ----- ----- ------
Foreign currency effect on cash, cash
equivalents and restricted cash 194 (209) 64 (202)
--- ---- --- ----
Net increase (decrease) in cash, cash
equivalents and restricted cash 1,930 2,329 (2,173) 22,296
Cash, cash equivalents and restricted cash
Beginning of period 37,904 39,723 42,007 19,756
------ ------ ------ ------
End of period $39,834 $42,052 $39,834 $42,052
======= ======= ======= =======
Apptio, Inc.
Results of Operations GAAP to Non-GAAP Reconciliation
(In thousands, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2017 2016 2017 2016
---- ---- ---- ----
Revenue
Subscription $37,247 $31,404 $73,434 $61,681
Professional services 7,978 7,375 15,722 13,941
----- ----- ------ ------
Total revenue 45,225 38,779 89,156 75,622
Cost of revenue reconciliation:
GAAP subscription 7,252 6,559 15,102 13,039
Non-GAAP adjustment:
Stock-based compensation (240) (191) (597) (332)
---- ---- ---- ----
Non-GAAP subscription cost of revenue 7,012 6,368 14,505 12,707
----- ----- ------ ------
GAAP professional services 7,267 6,596 14,836 12,712
Non-GAAP adjustment:
Stock-based compensation (230) (213) (548) (367)
---- ---- ---- ----
Non-GAAP professional services
cost of revenue $7,037 $6,383 $14,288 $12,345
------ ------ ------- -------
Gross profit and gross margin reconciliation:
GAAP subscription gross profit $29,995 $24,845 $58,332 $48,642
Non-GAAP adjustment:
Stock-based compensation 240 191 597 332
--- --- --- ---
Non-GAAP subscription gross profit 30,235 25,036 58,929 48,974
------ ------ ------ ------
GAAP subscription gross margin 80.5% 79.1% 79.4% 78.9%
Non-GAAP subscription gross margin 81.2% 79.7% 80.2% 79.4%
GAAP professional services gross profit 711 779 886 1,229
Non-GAAP adjustment:
Stock-based compensation 230 213 548 367
--- --- --- ---
Non-GAAP professional services gross profit 941 992 1,434 1,596
--- --- ----- -----
GAAP professional services gross margin 8.9% 10.6% 5.6% 8.8%
Non-GAAP professional services gross margin 11.8% 13.5% 9.1% 11.4%
GAAP gross profit 30,706 25,624 59,218 49,871
Non-GAAP adjustment:
Stock-based compensation 470 404 1,145 699
--- --- ----- ---
Non-GAAP gross profit $31,176 $26,028 $60,363 $50,570
------- ------- ------- -------
GAAP gross margin 67.9% 66.1% 66.4% 65.9%
Non-GAAP gross margin 68.9% 67.1% 67.7% 66.9%
Operating expenses reconciliation:
GAAP research and development $10,263 $8,626 $19,921 $17,057
Non-GAAP adjustment:
Stock-based compensation (1,112) (714) (2,153) (1,267)
------ ---- ------ ------
Non-GAAP research and development 9,151 7,912 17,768 15,790
As a % of total revenue, non-GAAP 20.2% 20.4% 19.9% 20.9%
GAAP sales and marketing 21,094 19,669 40,120 35,956
Non-GAAP adjustment:
Stock-based compensation (1,077) (806) (2,077) (1,441)
------ ---- ------ ------
Non-GAAP sales and marketing 20,017 18,863 38,043 34,515
As a % of total revenue, non-GAAP 44.3% 48.6% 42.7% 45.6%
GAAP General and administrative 6,620 5,504 13,154 10,684
Non-GAAP adjustment:
Stock-based compensation (1,026) (586) (1,935) (1,008)
------ ---- ------ ------
Non-GAAP general and administrative 5,594 4,918 11,219 9,676
As a % of total revenue, non-GAAP 12.4% 12.7% 12.6% 12.8%
Loss from operations reconciliation:
GAAP loss from operations (7,271) (8,175) (13,977) (13,826)
Non-GAAP adjustment:
Stock-based compensation 3,685 2,510 7,310 4,415
----- ----- ----- -----
Non-GAAP loss from operations $(3,586) $(5,665) $(6,667) $(9,411)
------- ------- ------- -------
Loss from operations as a percentage of
revenue:
GAAP loss from operations (16.1%) (21.1%) (15.7%) (18.3%)
Non-GAAP loss from operations (7.9%) (14.6%) (7.5%) (12.4%)
Net loss reconciliation:
GAAP $(7,013) $(8,985) $(13,560) $(14,881)
Non-GAAP adjustment:
Stock-based compensation 3,685 2,510 7,310 4,415
----- ----- ----- -----
Non-GAAP Net loss $(3,328) $(6,475) $(6,250) $(10,466)
======= ======= ======= ========
Basic and diluted net loss per share
reconciliation:
GAAP $(0.18) $(0.69) $(0.35) $(1.14)
Non-GAAP $(0.08) $(0.50) $(0.16) $(0.80)
39,175 13,036 38,793 13,016
Shares used to compute basic and diluted GAAP
and Non-GAAP net loss per share
Apptio, Inc.
Free Cash Flow Non-GAAP Reconciliation
(In thousands)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2017 2016 2017 2016
---- ---- ---- ----
Net cash (used in)
provided by
operating activities $(10,178) $(11,389) $1,735 $(1,409)
Less: purchases of
property and
equipment (691) (2,128) (2,236) (2,320)
---- ------ ------ ------
Free cash flow $(10,869) $(13,517) $(501) $(3,729)
======== ======== ===== =======
© 2017 Apptio, Inc. All rights reserved. Apptio and the Apptio logo are registered trademarks of Apptio, Inc. All other brand and product names are trademarks or registered trademarks of their respective holders.
Investor Contact:
Susanna Morgan
(425) 279-6101
ir@apptio.com
Media Contact:
Sarah Vreugdenhil
(425) 279-6097
pr@apptio.com
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