UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 


 

FORM 8-K

 

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): October 30, 2019

 

PAYLOCITY HOLDING CORPORATION

(Exact name of registrant as specified in charter)

 

Delaware

 

001-36348

 

46-4066644

(State or Other Jurisdiction of
Incorporation)

 

(Commission File Number)

 

(I.R.S. Employer Identification
Number)

 

1400 American Lane

Schaumburg, Illinois, 60173

(Address of principal executive offices, including zip code)

 

(847) 463-3200

(Registrant’s telephone number, including area code)

 

Not Applicable

(Former name or former address, if changed since last report)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Common Stock, par value $0.001 per share

 

PCTY

 

The NASDAQ Global Select Market LLC

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

o  Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

 

 

 


 

Item 2.02 Results of Operations and Financial Condition.

 

On October 30, 2019, Paylocity Holding Corporation (the “Company”) issued a press release announcing financial results for the three month period ended September 30, 2019.  The press release contains forward-looking statements regarding the Company, and includes cautionary statements identifying important factors that could cause actual results to differ materially from those anticipated.

 

The press release issued October 30, 2019 is furnished herewith as Exhibit 99.1. The information in this Item 2.02, including Exhibit 99.1, is being furnished and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liability of that Section, nor shall such information be deemed to be incorporated by reference in any registration statement or other document filed under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as otherwise stated in such filing.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit No.

 

Description

99.1

 

Press Release issued by Paylocity Holding Corporation dated October 30, 2019.

 

2


 

EXHIBIT INDEX

 

Exhibit No.

 

Description

99.1

 

Press Release issued by Paylocity Holding Corporation dated October 30, 2019.

 

3


 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

PAYLOCITY HOLDING CORPORATION

 

 

 

 

 

 

Date: October 30, 2019

By:

/s/ Toby J. Williams

 

 

Toby J. Williams

 

 

Chief Financial Officer

 

4


Exhibit 99.1

 

 

Paylocity Announces First Quarter Fiscal Year 2020 Financial Results

 

·                  Q1 2020 Total Revenue of $126.7 million, up 26% year-over-year

 

SCHAUMBURG, IL. — October 30, 2019 — Paylocity Holding Corporation (Nasdaq: PCTY), a leading provider of payroll and human capital management software solutions, today announced financial results for the first quarter of fiscal year 2020, which ended September 30, 2019.

 

“We had a nice start to fiscal 2020, with $126.7 million in total revenue and 26% revenue growth over the first quarter of last fiscal year,” said Steve Beauchamp, Chief Executive Officer of Paylocity. “Last week we hosted a record number of attendees at our annual Elevate Client Conference, where we continued our commitment to providing innovative software that appeals to the modern workforce by announcing a number of enhancements across our platform, including the launch of Community, an employee-focused social communication platform designed for clients to increase employee connection, engagement and productivity.”

 


 

First Quarter Fiscal 2020 Financial Highlights

 

Revenue:

 

·                  Total revenue was $126.7 million, an increase of 26% from the first quarter of fiscal year 2019.

 

·                  Total recurring and other revenue was $121.9 million, representing 96% of total revenue and an increase of 26% from the first quarter of fiscal year 2019.

 

Operating Income:

 

·                  GAAP operating income was $6.0 million in the first quarter of fiscal year 2020 versus $3.8 million in the first quarter of fiscal year 2019.

 

·                  Non-GAAP operating income was $21.5 million in the first quarter of fiscal year 2020 versus $15.3 million in the first quarter of fiscal year 2019.

 

Net Income:

 

·                  GAAP net income was $13.9 million or $0.25 per share for the three months ended September 30, 2019 based on 55.7 million diluted weighted average common shares outstanding versus $9.9 million or $0.18 per share for the three months ended September 30, 2018 based on 55.5 million diluted weighted average common shares outstanding

 

Adjusted EBITDA:

 

·                  Adjusted EBITDA, a non-GAAP measure, was $30.5 million in the first quarter of fiscal year 2020 versus $23.3 million in the first quarter of fiscal year 2019.

 

Balance Sheet and Cash Flow:

 

·                  Cash, cash equivalents and invested corporate cash totaled $131.1 million as of the end of the quarter.

 

·                  Cash flow from operations for the first quarter of fiscal year 2020 was $8.3 million compared to $7.3 million for the first quarter of fiscal year 2019.

 


 

A reconciliation of GAAP to non-GAAP financial measures has been provided in this press release, including the accompanying tables.  An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”

 

Business Outlook

 

Based on information available as of October 30, 2019, Paylocity is issuing guidance for the second quarter and full fiscal year 2020 as indicated below.

 

Second Quarter 2020:

 

·                  Total revenue is expected to be in the range of $129.5 million to $130.5 million, which represents 21 - 22% growth over the second quarter of fiscal 2019 total revenue.

 

·                  Adjusted EBITDA, a non-GAAP measure, is expected to be in the range of $30.0 million to $31.0 million.

 

Fiscal Year 2020:

 

·                  Total revenue is expected to be in the range of $567.0 million to $569.0 million, which represents 22% growth over fiscal 2019 total revenue.

 

·                  Adjusted EBITDA, a non-GAAP measure, is expected to be in the range of $163.5 million to $165.5 million.

 

We are unable to reconcile these forward-looking non-GAAP financial measures to their directly comparable GAAP financial measures because the information which is needed to complete a reconciliation is unavailable at this time without unreasonable effort.

 

Conference Call Details

 

Paylocity will host a conference call to discuss its first quarter fiscal year 2020 results at 4:00 p.m. Central Time today (5:00 Eastern Time). A live audio webcast of the conference call, together with detailed financial information, can be accessed through the company’s Investor Relations Web site at www.paylocity.com. Participants who choose to call in to the conference call can do so by dialing (855) 226-3021 or (315) 625-6892, passcode 6666736. A replay of the call will be available and archived via webcast at www.paylocity.com.

 

About Paylocity

 

Paylocity (NASDAQ: PCTY) is a leading provider of payroll and human capital management (HCM) software solutions. Paylocity’s comprehensive product suite delivers a unified platform for professionals to make strategic decisions in the areas of benefits, core HR, payroll, talent, and workforce management, while cultivating a modern workplace and improving employee engagement. Founded in 1997 and headquartered in Schaumburg, Ill., Paylocity has consistently been recognized

 


 

nationally for its innovation, culture, and growth. Most recently, Paylocity was honored as #20 on Glassdoor’s Best Places to Work Employees’ Choice list; highlighted on several G2 Crowd Grid® Reports, including leading Satisfaction scores on 13 HCM software-focused reports; recognized as a top HR performer on the Workforce 100; and ranked #27 on Crain’s Fast 50 list of fastest-growing Chicago-area companies, among receiving a number of other national and local awards. For more information about Paylocity, visit www.paylocity.com.

 

Non-GAAP Financial Measures

 

The company uses certain non-GAAP financial measures in this release, including Adjusted EBITDA, adjusted gross profit, non-GAAP operating income, non-GAAP net income, non-GAAP net income per share, non-GAAP sales and marketing, non-GAAP total research and development and non-GAAP general and administrative and free cash flow. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position or cash flow that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. We define Adjusted EBITDA as net income (loss) before interest expense, income tax expense (benefit), and depreciation and amortization expense, adjusted to eliminate stock-based compensation expense and employer payroll taxes related to stock releases and option exercises and other items as described later in this release. Adjusted gross profit is adjusted to eliminate stock-based compensation expense and employer payroll taxes related to stock releases and option exercises and amortization of capitalized internal-use software costs. Non-GAAP operating income is adjusted to eliminate stock-based compensation expense and employer payroll taxes related to stock releases and option exercises, the amortization of acquired intangibles and other items as described later in this release. Non-GAAP sales and marketing expense is adjusted to eliminate stock-based compensation expense and employer payroll taxes related to stock releases and option exercises. Non-GAAP general and administrative expense is adjusted to eliminate stock-based compensation expense and employer payroll taxes related to stock releases and option exercises, the amortization of acquired intangibles and other items as described later in this release. Non-GAAP net income and non-GAAP net income per share are adjusted to eliminate stock-based compensation expense and employer payroll taxes related to stock releases and option exercises, the amortization of acquired intangibles and other items as described later in this release, including the income tax effect on these items, the valuation allowance release, excess tax benefit related to employee stock-based compensation payments and the impact of tax reform. Non-GAAP total research and development is adjusted for capitalized internal-use software costs and to eliminate stock-based compensation expense and employer payroll taxes related to stock releases and option exercises. Free cash flow is defined as net cash provided by operating activities less capitalized internal-use software costs, purchase of property and equipment and lease allowances used for tenant improvements. Please note that other companies may define their non-GAAP financial measures differently than we do. Management presents certain non-GAAP financial measures in this release because it considers them to be important supplemental measures of performance. Management uses these non-GAAP financial measures for planning purposes, including analysis of the company’s performance against prior periods, the preparation of operating budgets and to determine appropriate levels of operating and capital investments. Management believes that these non-GAAP financial measures provide additional insight for analysts and investors in evaluating the company’s financial and operational performance. Management also intends to provide these non-GAAP financial measures as part of the company’s future earnings discussions and, therefore, the inclusion of the non-GAAP financial measures should provide consistency in

 


 

the company’s financial reporting. Non-GAAP financial measures have limitations as an analytical tool. Investors are encouraged to review the reconciliation of the non-GAAP measures to their most directly comparable GAAP measures provided in this release.

 

Safe Harbor/forward looking statements

 

This press release contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, included herein regarding Paylocity’s future operations, ability to scale its business, future financial position and performance, future revenues, projected costs, prospects, plans and objectives of management are forward-looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “will,” “would,” “seek” and similar expressions (or the negative of these terms) 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 management’s estimates regarding future revenues and financial performance and other statements about management’s beliefs, intentions or goals.  Paylocity may not actually achieve the expectations disclosed in the forward-looking statements, and you should not place undue reliance on Paylocity’s forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results or events to differ materially from the expectations disclosed in the forward-looking statements, including, but not limited to Paylocity’s ability to retain existing clients and to attract new clients to enter into subscriptions for its services; Paylocity’s ability to sell new products and retain subscriptions for its existing products to its new and existing clients; the challenges associated with a growing company’s ability to effectively service clients in a dynamic and competitive market; challenges associated with expanding and evolving a sales organization to effectively address new geographies and products and services; Paylocity’s reliance on and ability to expand its referral network of third parties; difficulties associated with accurately forecasting revenue and appropriately planning expenses; challenges with managing growth effectively; difficulties in forecasting Paylocity’s tax position; risks related to regulatory, legislative and judicial uncertainty in Paylocity’s markets, including the potential repeal or replacement of the Affordable Care Act; continued acceptance of SaaS as an effective method for delivery of payroll and HCM solutions; Paylocity’s ability to protect and defend its intellectual property; the risk that Paylocity’s security measures are compromised or the unauthorized access to customer data; unexpected events in the market for Paylocity’s solutions; changes in the competitive environment in Paylocity’s industry and the markets in which it operates; adverse changes in general economic or market conditions; changes in the employment rates of Paylocity’s clients and the resultant impact on revenue; and other risks and potential factors that could affect Paylocity’s business and financial results identified in Paylocity’s filings with the Securities and Exchange Commission (the “SEC”), including its 10-K filed with the SEC on August 9, 2019.  Additional information will also be set forth in Paylocity’s future quarterly reports on Form 10-Q, annual reports on Form 10-K and other filings that Paylocity makes with the SEC.  These forward-looking statements represent Paylocity’s expectations as of the date of this press release. Subsequent events may cause these expectations to change, and Paylocity disclaims any obligations to update or alter these forward-looking statements in the future, whether as a result of new information, future events or otherwise.

 


 

PAYLOCITY HOLDING CORPORATION

Unaudited Consolidated Balance Sheets

(in thousands, except per share data)

 

 

 

June 30, 

 

September 30, 

 

 

 

2019

 

2019

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

132,476

 

$

100,529

 

Corporate investments

 

29,314

 

29,130

 

Accounts receivable, net

 

4,358

 

3,906

 

Deferred contract costs

 

21,677

 

23,703

 

Prepaid expenses and other

 

13,895

 

13,941

 

Total current assets before funds held for clients

 

201,720

 

171,209

 

Funds held for clients

 

1,394,469

 

1,154,527

 

Total current assets

 

1,596,189

 

1,325,736

 

Capitalized internal-use software, net

 

27,486

 

29,634

 

Property and equipment, net

 

70,056

 

72,584

 

Operating lease right-of-use assets

 

 

50,865

 

Intangible assets, net

 

10,751

 

10,188

 

Goodwill

 

9,590

 

9,590

 

Long-term deferred contract costs

 

81,422

 

89,383

 

Long-term prepaid expenses and other

 

1,975

 

3,380

 

Deferred income tax assets

 

6,472

 

7,114

 

Total assets

 

$

1,803,941

 

$

1,598,474

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

3,954

 

$

5,061

 

Accrued expenses

 

57,625

 

51,496

 

Total current liabilities before client fund obligations

 

61,579

 

56,557

 

Client fund obligations

 

1,394,469

 

1,154,527

 

Total current liabilities

 

1,456,048

 

1,211,084

 

Deferred rent

 

31,263

 

 

Long-term operating lease liabilities

 

 

76,347

 

Other long-term liabilities

 

1,723

 

1,430

 

Deferred income tax liabilities, net

 

6,943

 

154

 

Total liabilities

 

$

1,495,977

 

$

1,289,015

 

Stockholders’ equity:

 

 

 

 

 

Preferred stock, $0.001 par value, 5,000 authorized, no shares issued and outstanding at June 30, 2019 and September 30, 2019

 

$

 

$

 

Common stock, $0.001 par value, 155,000 shares authorized at June 30, 2019 and September 30, 2019; 53,075 shares issued and outstanding at June 30, 2019 and 53,511 shares issued and outstanding at September 30, 2019

 

53

 

54

 

Additional paid-in capital

 

207,982

 

195,566

 

Retained earnings

 

99,817

 

113,723

 

Accumulated other comprehensive income

 

112

 

116

 

Total stockholders’ equity

 

$

307,964

 

$

309,459

 

Total liabilities and stockholders’ equity

 

$

1,803,941

 

$

1,598,474

 

 


 

PAYLOCITY HOLDING CORPORATION

Unaudited Consolidated Statements of Operations and Comprehensive Income

(in thousands, except per share data)

 

 

 

Three Months Ended

 

 

 

September 30, 

 

 

 

2018

 

2019

 

Revenues:

 

 

 

 

 

Recurring and other revenue

 

$

97,002

 

$

121,873

 

Interest income on funds held for clients

 

3,502

 

4,847

 

Total revenues

 

100,504

 

126,720

 

Cost of revenues

 

35,942

 

42,630

 

Gross profit

 

64,562

 

84,090

 

Operating expenses:

 

 

 

 

 

Sales and marketing

 

26,418

 

36,957

 

Research and development

 

11,400

 

14,394

 

General and administrative

 

22,968

 

26,739

 

Total operating expenses

 

60,786

 

78,090

 

Operating income

 

3,776

 

6,000

 

Other income

 

269

 

474

 

Income before income taxes

 

4,045

 

6,474

 

Income tax benefit

 

(5,807

)

(7,432

)

Net income

 

$

9,852

 

$

13,906

 

Other comprehensive income, net of tax

 

 

 

 

 

Unrealized gains on securities, net of tax

 

15

 

4

 

Total other comprehensive income, net of tax

 

15

 

4

 

Comprehensive income

 

$

9,867

 

$

13,910

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

Basic

 

$

0.19

 

$

0.26

 

Diluted

 

$

0.18

 

$

0.25

 

 

 

 

 

 

 

Weighted-average shares used in computing net income per share:

 

 

 

 

 

Basic

 

52,865

 

53,287

 

Diluted

 

55,487

 

55,713

 

 

Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises for each of the three months ended September 30 are included in the above line items:

 

 

 

Three Months Ended
September 30,

 

 

 

2018

 

2019

 

Cost of revenues

 

$

1,596

 

$

1,732

 

Sales and marketing

 

1,967

 

4,344

 

Research and development

 

1,664

 

1,800

 

General and administrative

 

5,759

 

6,153

 

Total stock-based compensation expense and employer payroll taxes related to stock releases and option exercises

 

$

10,986

 

$

14,029

 

 


 

PAYLOCITY HOLDING CORPORATION

Unaudited Consolidated Statements of Cash Flows

(in thousands)

 

 

 

Three Months Ended

 

 

 

September 30, 

 

 

 

2018 (1)

 

2019

 

Cash flows from operating activities:

 

 

 

 

 

Net income

 

$

9,852

 

$

13,906

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

Stock-based compensation expense

 

9,425

 

12,062

 

Depreciation and amortization expense

 

8,232

 

8,933

 

Deferred income tax benefit

 

(5,809

)

(7,431

)

Provision for doubtful accounts

 

30

 

 

Net accretion of discounts and amortization of premiums on available-for-sale securities

 

(407

)

(485

)

Amortization of debt issuance costs

 

 

33

 

Loss on disposal of equipment

 

241

 

85

 

Changes in operating assets and liabilities:

 

 

 

 

 

Accounts receivable

 

431

 

452

 

Deferred contract costs

 

(7,169

)

(9,987

)

Prepaid expenses and other

 

(853

)

(89

)

Accounts payable

 

(415

)

39

 

Accrued expenses and other

 

(6,214

)

(9,253

)

Net cash provided by operating activities

 

7,344

 

8,265

 

Cash flows from investing activities:

 

 

 

 

 

Purchases of available-for-sale securities and other

 

(75,807

)

(63,621

)

Proceeds from sales and maturities of available-for-sale securities

 

56,446

 

45,154

 

Capitalized internal-use software costs

 

(5,001

)

(6,714

)

Purchases of property and equipment

 

(2,428

)

(8,033

)

Net cash used in investing activities

 

(26,790

)

(33,214

)

Cash flows from financing activities:

 

 

 

 

 

Net change in client fund obligations

 

(57,458

)

(239,942

)

Repurchases of common shares

 

(34,679

)

 

Proceeds from exercise of stock options

 

85

 

 

Taxes paid related to net share settlement of equity awards

 

(17,880

)

(24,749

)

Payment of debt issuance costs

 

 

(669

)

Net cash used in financing activities

 

(109,932

)

(265,360

)

Net change in cash, cash equivalents and funds held for clients’ cash and cash equivalents

 

(129,378

)

(290,309

)

Cash, cash equivalents and funds held for clients’ cash and cash equivalents—beginning of period

 

1,239,731

 

1,426,143

 

Cash, cash equivalents and funds held for clients’ cash and cash equivalents—end of period

 

$

1,110,353

 

$

1,135,834

 

Supplemental Disclosure of Non-Cash Investing and Financing Activities

 

 

 

 

 

Purchases of property and equipment, accrued but not paid

 

$

1,064

 

$

1,249

 

Repurchases of common shares, accrued but not paid

 

$

313

 

$

 

Supplemental Disclosure of Cash Flow Information

 

 

 

 

 

Cash paid for income taxes, net of refunds

 

$

351

 

$

11

 

Reconciliation of cash, cash equivalents and funds held for clients’ cash and cash equivalents to the Consolidated Balance Sheets

 

 

 

 

 

Cash and cash equivalents

 

$

63,662

 

$

100,529

 

Funds held for clients’ cash and cash equivalents

 

1,046,691

 

1,035,305

 

Total cash, cash equivalents and funds held for clients’ cash and cash equivalents

 

$

1,110,353

 

$

1,135,834

 

 


(1)              Certain amounts have been reclassified to reflect the adoption of Accounting Standards Update (“ASU”) No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force).” Refer to Note 2 of the audited consolidated financial statements included in the Annual Report on Form 10-K for the fiscal year ended June 30, 2019.

 


 

Paylocity Holding Corporation   

Reconciliation of GAAP to non-GAAP Financial Measures

(In thousands except per share data)

 

 

 

Three Months Ended
September 30,

 

 

 

2018

 

2019

 

Reconciliation from gross profit to adjusted gross profit:

 

 

 

 

 

Gross profit

 

$

64,562

 

$

84,090

 

Amortization of capitalized internal-use software costs

 

4,212

 

4,457

 

Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises

 

1,596

 

1,732

 

Adjusted gross profit

 

$

70,370

 

$

90,279

 

 

 

 

Three Months Ended
September 30,

 

 

 

2018

 

2019

 

Reconciliation from operating income to non-GAAP operating income:

 

 

 

 

 

Operating income

 

$

3,776

 

$

6,000

 

Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises

 

10,986

 

14,029

 

Amortization of acquired intangibles

 

563

 

563

 

Other items(1)

 

 

956

 

Non-GAAP operating income

 

$

15,325

 

$

21,548

 

 

 

 

Three Months Ended
September 30,

 

 

 

2018

 

2019

 

Reconciliation from net income to non-GAAP net income:

 

 

 

 

 

Net income

 

$

9,852

 

$

13,906

 

Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises

 

10,986

 

14,029

 

Amortization of acquired intangibles

 

563

 

563

 

Other items(1)

 

 

956

 

Income tax effect on adjustments (2)

 

(10,390

)

(9,128

)

Non-GAAP net income

 

$

11,011

 

$

20,326

 

 

 

 

Three Months Ended
September 30,

 

 

 

2018

 

2019

 

Calculation of non-GAAP net income per share:

 

 

 

 

 

Non-GAAP net income

 

$

11,011

 

$

20,326

 

Diluted weighted-average number of common shares

 

55,487

 

55,713

 

Non-GAAP net income per share

 

$

0.20

 

$

0.36

 

 


 

 

 

Three Months Ended
September 30,

 

 

 

2018

 

2019

 

Reconciliation from net income to Adjusted EBITDA:

 

 

 

 

 

Net income

 

$

9,852

 

$

13,906

 

Interest expense

 

 

85

 

Income tax benefit

 

(5,807

)

(7,432

)

Depreciation and amortization expense

 

8,232

 

8,933

 

EBITDA

 

12,277

 

15,492

 

Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises

 

10,986

 

14,029

 

Other items(1)

 

 

956

 

Adjusted EBITDA

 

$

23,263

 

$

30,477

 

 

 

 

Three Months Ended
September 30,

 

 

 

2018

 

2019

 

Reconciliation of non-GAAP Sales and Marketing:

 

 

 

 

 

Sales and Marketing

 

$

26,418

 

$

36,957

 

Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises

 

1,967

 

4,344

 

Non-GAAP Sales and Marketing

 

$

24,451

 

$

32,613

 

 

 

 

Three Months Ended
September 30,

 

 

 

2018

 

2019

 

Reconciliation of non-GAAP Total Research and Development:

 

 

 

 

 

Research and Development

 

$

11,400

 

$

14,394

 

Capitalized internal-use software costs

 

5,001

 

6,714

 

Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises

 

1,664

 

1,800

 

Non-GAAP Total Research and Development

 

$

14,737

 

$

19,308

 

 

 

 

Three Months Ended
September 30,

 

 

 

2018

 

2019

 

Reconciliation of non-GAAP General and Administrative:

 

 

 

 

 

General and Administrative

 

$

22,968

 

$

26,739

 

Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises

 

5,759

 

6,153

 

Amortization of acquired intangibles

 

563

 

563

 

Other items(1)

 

 

956

 

Non-GAAP General and Administrative

 

$

16,646

 

$

19,067

 

 


(1)           Represents nonrecurring costs including certain litigation costs, lease exit costs and certain other transaction costs.

 


 

(2)           Income tax effect on adjustments: Includes the income tax effect on non-GAAP net income adjustments related to stock-based compensation expense and employer payroll taxes related to stock releases and option exercises, excess deductible federal and state tax windfall on stock-based compensation, and amortization of acquired intangibles and other items.