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): February 8, 2018

 

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)

 

3850 N. Wilke Road

Arlington Heights, Illinois 60004

(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)

 

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 February 8, 2018, Paylocity Holding Corporation (the “Company”) issued a press release announcing financial results for the three month period ended December 31, 2017.  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 February 8, 2018 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 February 8, 2018.

 

2



 

EXHIBIT INDEX

 

Exhibit No.

 

Description

99.1

 

Press Release issued by Paylocity Holding Corporation dated February 8, 2018.

 

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: February 8, 2018

By:

/s/ Toby J. Williams

 

 

Toby J. Williams

 

 

Chief Financial Officer

 

 

4


Exhibit 99.1

 

 

Paylocity Announces Second Quarter Fiscal Year 2018 Financial Results

 

·                  Q2 2018 Total Revenue of $86.0 million, up 25% year-over-year

·                  Q2 2018 Recurring Revenue of $83.1 million, up 26% year-over-year

 

Arlington Heights, IL. — February 8, 2018 — Paylocity Holding Corporation (Nasdaq: PCTY), a cloud-based provider of payroll and human capital management software solutions, today announced financial results for the second quarter of fiscal year 2018, which ended December 31, 2017.

 

“I was pleased with the 25% total revenue growth we saw in the second quarter while also continuing to drive scale throughout our business model,” said Steve Beauchamp, Chief Executive Officer of Paylocity. “We continue to focus on investments in both our product and our people, highlighted this quarter by the launch of our Compensation and Survey modules and the recognition received by Glassdoor as one of the Best Places to Work in 2018.”

 



 

Second Quarter Fiscal 2018 Financial Highlights

 

Revenue:

 

·                  Total revenue was $86.0 million, an increase of 25% from the second quarter of fiscal year 2017.

 

·                  Total recurring revenue was $83.1 million, representing 97% of total revenue and an increase of 26% from the second quarter of fiscal year 2017.

 

Operating Income (Loss):

 

·                  GAAP operating income was $0.1 million, compared to an operating loss of ($1.6) million in the second quarter of fiscal year 2017.

 

·                  Non-GAAP operating income was $8.7 million, compared to non-GAAP operating income of $5.4 million in the second quarter of fiscal year 2017.

 

Net Income (Loss):

 

·                  GAAP net income was $0.4 million. This compares to a net loss of ($1.7) million for the second quarter of fiscal year 2017. Net income per share was $0.01 for the second quarter of fiscal year 2018 based on 54.8 million diluted weighted average common shares outstanding. Net loss per share was ($0.03) for the second quarter of fiscal year 2017, based on 51.4 million basic and diluted weighted average common shares outstanding.

 

·                  Non-GAAP net income was $9.0 million. This compares to non-GAAP net income of $5.4 million for the second quarter of fiscal year 2017. Non-GAAP net income per share was $0.16 for the second quarter of fiscal year 2018, based on 54.8 million diluted weighted average common shares outstanding. Non-GAAP net income per share was $0.10 for the second quarter of fiscal year 2017, based on 53.9 million pro forma diluted weighted average common shares outstanding.

 

Adjusted EBITDA:

 

·                  Adjusted EBITDA, a non-GAAP measure, was $15.2 million compared to Adjusted EBITDA of $9.9 million in the second quarter of fiscal year 2017.

 



 

Balance Sheet and Cash Flow:

 

·                  Cash and cash equivalents totaled $111.0 million at the end of the quarter.

 

·                  Cash flow from operations for the second quarter of fiscal year 2018 was $26.0 million compared to $13.5 million for the second quarter of fiscal year 2017.

 

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 February 8, 2018, Paylocity is issuing guidance for the third quarter and full fiscal year 2018 as indicated below.

 

Third Quarter 2018:

 

·                  Total revenue is expected to be in the range of $110.0 million to $111.0 million.

·                  Adjusted EBITDA is expected to be in the range of $32.3 million to $33.3 million.

·                  Non-GAAP net income is expected to be in the range of $25.0 million to $26.0 million, or $0.45 to $0.47 per share, based on approximately 55 million diluted weighted average common shares outstanding.

 

Fiscal Year 2018:

 

·                  Total revenue is expected to be in the range of $369.0 million to $371.0 million.

·                  Adjusted EBITDA is expected to be in the range of $76.0 million to $77.0 million.

·                  Non-GAAP net income is expected to be in the range of $48.0 million to $49.0 million, or $0.87 to $0.89 per share, based on approximately 55 million diluted weighted average common shares outstanding.

 

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 second quarter fiscal year 2018 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 http://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 3271209. A replay of the call will be available and archived via webcast at www.paylocity.com.

 

About Paylocity

 

Paylocity is a provider of cloud-based payroll and human capital management, or HCM, software solutions. Paylocity’s comprehensive and easy-to-use solutions enable its clients to manage their workforces more effectively.  Paylocity’s solutions help drive strategic human capital decision-making and improve employee engagement by enhancing the human resource, payroll and finance capabilities of its clients. For more information, visit www.paylocity.com.

 

Source: Paylocity

 

Non-GAAP Financial Measures

The company uses certain non-GAAP financial measures in this release, including Adjusted EBITDA, adjusted gross profit, adjusted recurring gross profit, non-GAAP operating income (loss), non-GAAP net income (loss), non-GAAP net income (loss) per share, non-GAAP sales and marketing, non-GAAP total research and development and non-GAAP general and administrative. 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. Adjusted gross profit and adjusted recurring gross profit are 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 (loss) is adjusted to eliminate stock-based compensation expense and employer payroll taxes related to stock releases and option exercises and the amortization of acquired intangibles. 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 and the amortization of acquired intangibles. Non-GAAP net income (loss) and non-GAAP net income (loss) per share are adjusted to eliminate stock-based compensation expense and employer payroll taxes related to stock releases and option exercises and the amortization of acquired intangibles. Pro forma diluted weighted

 



 

average number of common shares are adjusted for the weighted average effect of potentially diluted shares. 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. 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, risks related to regulatory, legislative and judicial uncertainty in Paylocity’s markets, including the potential repeal or replacement of the Affordable Care Act; 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, including but not limited to the assessment of the need for a valuation allowance against its deferred tax position; potential adverse tax consequences to Paylocity as a result of the recently enacted Federal Tax Cut and Jobs 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 11, 2017.  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, 

 

December 31, 

 

 

 

2017

 

2017

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

103,468

 

$

111,027

 

Accounts receivable, net

 

2,040

 

2,739

 

Prepaid expenses and other

 

14,879

 

7,456

 

 

 

 

 

 

 

Total current assets before funds held for clients

 

120,387

 

121,222

 

Funds held for clients

 

942,459

 

1,345,702

 

 

 

 

 

 

 

Total current assets

 

1,062,846

 

1,466,924

 

Long-term prepaid expenses

 

1,535

 

1,072

 

Capitalized internal-use software, net

 

17,394

 

18,786

 

Property and equipment, net

 

40,756

 

48,354

 

Intangible assets, net

 

8,907

 

8,189

 

Goodwill

 

6,003

 

6,003

 

 

 

 

 

 

 

Total assets

 

$

1,137,441

 

$

1,549,328

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

2,046

 

$

1,794

 

Accrued expenses

 

30,301

 

29,128

 

 

 

 

 

 

 

Total current liabilities before client fund obligations

 

32,347

 

30,922

 

Client fund obligations

 

942,459

 

1,345,702

 

 

 

 

 

 

 

Total current liabilities

 

974,806

 

1,376,624

 

Deferred rent

 

14,621

 

14,243

 

Deferred income tax liabilities, net

 

401

 

308

 

 

 

 

 

 

 

Total liabilities

 

$

989,828

 

$

1,391,175

 

Stockholders’ equity:

 

 

 

 

 

Preferred stock, $0.001 par value, 5,000 authorized, no shares issued and outstanding at June 30, 2017 and December 31, 2017

 

$

 

$

 

Common stock, $0.001 par value, 155,000 shares authorized at June 30, 2017 and December 31, 2017; 51,738 shares issued and outstanding at June 30, 2017 and 52,590 shares issued and outstanding at December 31, 2017

 

52

 

53

 

Additional paid-in capital

 

192,837

 

202,512

 

Accumulated deficit

 

(45,276

)

(44,302

)

Accumulated other comprehensive loss

 

 

(110

)

Total stockholders’ equity

 

$

147,613

 

$

158,153

 

Total liabilities and stockholders’ equity

 

$

1,137,441

 

$

1,549,328

 

 



 

PAYLOCITY HOLDING CORPORATION

Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss)

(in thousands, except per share data)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

December 31, 

 

December 31, 

 

 

 

2016

 

2017

 

2016

 

2017

 

Revenues:

 

 

 

 

 

 

 

 

 

Recurring fees

 

$

65,347

 

$

81,292

 

$

127,267

 

$

158,586

 

Interest income on funds held for clients

 

731

 

1,783

 

1,448

 

3,400

 

 

 

 

 

 

 

 

 

 

 

Total recurring revenues

 

66,078

 

83,075

 

128,715

 

161,986

 

Implementation services and other

 

2,576

 

2,929

 

4,961

 

5,518

 

 

 

 

 

 

 

 

 

 

 

Total revenues

 

68,654

 

86,004

 

133,676

 

167,504

 

Cost of revenues:

 

 

 

 

 

 

 

 

 

Recurring revenues

 

20,716

 

25,638

 

39,819

 

49,729

 

Implementation services and other

 

9,667

 

11,202

 

18,923

 

22,070

 

 

 

 

 

 

 

 

 

 

 

Total cost of revenues

 

30,383

 

36,840

 

58,742

 

71,799

 

Gross profit

 

38,271

 

49,164

 

74,934

 

95,705

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Sales and marketing

 

17,735

 

21,598

 

35,746

 

42,778

 

Research and development

 

7,222

 

9,274

 

14,523

 

18,169

 

General and administrative

 

14,957

 

18,159

 

28,815

 

34,110

 

 

 

 

 

 

 

 

 

 

 

Total operating expenses

 

39,914

 

49,031

 

79,084

 

95,057

 

Operating income (loss)

 

(1,643

)

133

 

(4,150

)

648

 

Other income

 

4

 

141

 

43

 

250

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

(1,639

)

274

 

(4,107

)

898

 

Income tax expense (benefit)

 

32

 

(157

)

132

 

(76

)

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(1,671

)

$

431

 

$

(4,239

)

$

974

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive loss, net of tax

 

 

 

 

 

 

 

 

 

Unrealized losses on securities, net of tax

 

 

(105

)

 

(110

)

Total other comprehensive loss, net of tax

 

 

(105

)

 

(110

)

Comprehensive income (loss)

 

$

(1,671

)

$

326

 

$

(4,239

)

$

864

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share:

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.03

)

$

0.01

 

$

(0.08

)

$

0.02

 

Diluted

 

$

(0.03

)

$

0.01

 

$

(0.08

)

$

0.02

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

Basic

 

51,384

 

52,502

 

51,308

 

52,197

 

Diluted

 

51,384

 

54,818

 

51,308

 

54,639

 

 

Stock-based compensation expense and employer payroll taxes related to stock releases and option exercises are included in the above line items:

 

 

 

Three months ended
December 31,

 

Six months ended
December 31,

 

 

 

2016

 

2017

 

2016

 

2017

 

Cost of revenue - recurring

 

$

600

 

$

753

 

$

1,205

 

$

1,490

 

Cost of revenue - implementation services and other

 

373

 

390

 

721

 

834

 

Sales and marketing

 

1,697

 

2,212

 

3,294

 

4,263

 

Research and development

 

877

 

956

 

1,777

 

2,053

 

General and administrative

 

3,127

 

3,895

 

5,848

 

6,861

 

Total

 

$

6,674

 

$

8,206

 

$

12,845

 

$

15,501

 

 



 

PAYLOCITY HOLDING CORPORATION

Unaudited Consolidated Statements of Cash Flows

(in thousands)

 

 

 

Six Months Ended

 

 

 

December 31, 

 

 

 

2016

 

2017

 

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(4,239

)

$

974

 

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

 

 

Stock-based compensation expense

 

12,448

 

14,424

 

Depreciation and amortization expense

 

9,103

 

13,438

 

Deferred income tax expense (benefit)

 

102

 

(93

)

Provision for doubtful accounts

 

60

 

76

 

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

 

 

(141

)

Net realized losses on sales of available-for-sale securities

 

 

2

 

Loss on disposal of equipment

 

97

 

106

 

Changes in operating assets and liabilities:

 

 

 

 

 

Accounts receivable

 

(446

)

(775

)

Prepaid expenses and other

 

845

 

1,583

 

Accounts payable

 

46

 

(88

)

Accrued expenses

 

(2,626

)

(1,290

)

Tenant improvement allowance

 

 

5,952

 

Net cash provided by operating activities

 

15,390

 

34,168

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

Purchases of available-for-sale securities from funds held for clients

 

 

(95,207

)

Proceeds from sales and maturities of available-for-sale securities from funds held for clients

 

 

23,181

 

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

 

147,151

 

(331,078

)

Capitalized internal-use software costs

 

(6,279

)

(7,146

)

Purchases of property and equipment

 

(10,038

)

(7,998

)

Lease allowances used for tenant improvements

 

 

(5,952

)

Net cash provided by (used in) investing activities

 

130,834

 

(424,200

)

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

Net change in client fund obligations

 

(147,151

)

403,243

 

Proceeds from employee stock purchase plan

 

1,823

 

2,045

 

Taxes paid related to net share settlement of equity awards

 

(5,135

)

(7,697

)

Net cash provided by (used in) financing activities

 

(150,463

)

397,591

 

Net Change in Cash and Cash Equivalents

 

(4,239

)

7,559

 

Cash and Cash Equivalents—Beginning of Period

 

86,496

 

103,468

 

Cash and Cash Equivalents—End of Period

 

$

82,257

 

$

111,027

 

Supplemental Disclosure of Non-Cash Investing and Financing Activities

 

 

 

 

 

Purchase of property and equipment and internal-use software, accrued but not paid

 

$

2,172

 

$

482

 

Supplemental Disclosure of Cash Flow Information

 

 

 

 

 

Cash paid for income taxes, net of refunds

 

$

26

 

$

60

 

 



 

Paylocity Holding Corporation

Reconciliation of GAAP to non-GAAP Financial Measures

(In thousands except per share data)

 

 

 

Three months
Ended
December 31,

 

Six months
Ended
December 31,

 

 

 

2016

 

2017

 

2016

 

2017

 

Reconciliation from gross profit to adjusted gross profit:

 

 

 

 

 

 

 

 

 

Gross profit

 

$

38,271

 

$

49,164

 

$

74,934

 

$

95,705

 

Amortization of capitalized internal-use software costs

 

1,950

 

3,314

 

3,634

 

6,703

 

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

 

973

 

1,143

 

1,926

 

2,324

 

Adjusted gross profit

 

$

41,194

 

$

53,621

 

$

80,494

 

$

104,732

 

 

 

 

Three months
Ended
December 31,

 

Six months
Ended
December 31,

 

 

 

2016

 

2017

 

2016

 

2017

 

Reconciliation from total recurring revenues to adjusted recurring gross profit:

 

 

 

 

 

 

 

 

 

Total recurring revenues

 

$

66,078

 

$

83,075

 

$

128,715

 

$

161,986

 

Cost of recurring revenues

 

20,716

 

25,638

 

39,819

 

49,729

 

Recurring gross profit

 

45,362

 

57,437

 

88,896

 

112,257

 

Amortization of capitalized internal-use software costs

 

1,950

 

3,314

 

3,634

 

6,703

 

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

 

600

 

753

 

1,205

 

1,490

 

Adjusted recurring gross profit

 

$

47,912

 

$

61,504

 

$

93,735

 

$

120,450

 

 

 

 

Three months
Ended
December 31,

 

Six months
Ended
December 31,

 

 

 

2016

 

2017

 

2016

 

2017

 

Reconciliation from operating income (loss) to non-GAAP operating income:

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

$

(1,643

)

$

133

 

$

(4,150

)

$

648

 

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

 

6,674

 

8,206

 

12,845

 

15,501

 

Amortization of acquired intangibles

 

381

 

359

 

762

 

718

 

Non-GAAP operating income

 

$

5,412

 

$

8,698

 

$

9,457

 

$

16,867

 

 

 

 

Three months
Ended
December 31,

 

Six months
Ended
December 31,

 

 

 

2016

 

2017

 

2016

 

2017

 

Reconciliation from net income (loss) to non-GAAP net income:

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(1,671

)

$

431

 

$

(4,239

)

$

974

 

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

 

6,674

 

8,206

 

12,845

 

15,501

 

Amortization of acquired intangibles

 

381

 

359

 

762

 

718

 

Non-GAAP net income

 

$

5,384

 

$

8,996

 

$

9,368

 

$

17,193

 

 

 

 

Three months
Ended
December 31,

 

Six months
Ended
December 31,

 

 

 

2016

 

2017

 

2016

 

2017

 

Reconciliation from diluted weighted-average number of common shares as reported to pro forma diluted weighted-average number of common shares

 

 

 

 

 

 

 

 

 

Diluted weighted-average number of common shares, as reported

 

51,384

 

54,818

 

51,308

 

54,639

 

Weighted-average effect of potentially dilutive shares

 

2,534

 

 

2,689

 

 

Pro forma diluted weighted-average number of common shares

 

53,918

 

54,818

 

53,997

 

54,639

 

 

 

 

Three months
Ended
December 31,

 

Six months
Ended
December 31,

 

 

 

2016

 

2017

 

2016

 

2017

 

Calculation of non-GAAP net income per share:

 

 

 

 

 

 

 

 

 

Non-GAAP net income

 

$

5,384

 

$

8,996

 

$

9,368

 

$

17,193

 

Pro forma diluted weighted-average number of common shares

 

53,918

 

54,818

 

53,997

 

54,639

 

Non-GAAP net income per share

 

$

0.10

 

$

0.16

 

$

0.17

 

$

0.31

 

 



 

 

 

Three months
Ended
December 31,

 

Six months
Ended
December 31,

 

 

 

2016

 

2017

 

2016

 

2017

 

Reconciliation from net income (loss) to Adjusted EBITDA:

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(1,671

)

$

431

 

$

(4,239

)

$

974

 

Interest expense

 

 

 

 

 

Income tax expense (benefit)

 

32

 

(157

)

132

 

(76

)

Depreciation and amortization expense

 

4,835

 

6,765

 

9,103

 

13,438

 

EBITDA

 

3,196

 

7,039

 

4,996

 

14,336

 

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

 

6,674

 

8,206

 

12,845

 

15,501

 

Adjusted EBITDA

 

$

9,870

 

$

15,245

 

$

17,841

 

$

29,837

 

 

 

 

Three months
Ended
December 31,

 

Six months
Ended
December 31,

 

 

 

2016

 

2017

 

2016

 

2017

 

Reconciliation of non-GAAP Sales and Marketing:

 

 

 

 

 

 

 

 

 

Sales and Marketing

 

$

17,735

 

$

21,598

 

$

35,746

 

$

42,778

 

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

 

1,697

 

2,212

 

3,294

 

4,263

 

Non-GAAP Sales and Marketing

 

$

16,038

 

$

19,386

 

$

32,452

 

$

38,515

 

 

 

 

Three months
Ended
December 31,

 

Six months
Ended
December 31,

 

 

 

2016

 

2017

 

2016

 

2017

 

Reconciliation of non-GAAP Total Research and Development:

 

 

 

 

 

 

 

 

 

Research and Development

 

$

7,222

 

$

9,274

 

$

14,523

 

$

18,169

 

Capitalized internal-use software costs

 

3,392

 

3,395

 

6,279

 

7,146

 

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

 

877

 

956

 

1,777

 

2,053

 

Non-GAAP Total Research and Development

 

$

9,737

 

$

11,713

 

$

19,025

 

$

23,262

 

 

 

 

Three months
Ended
December 31,

 

Six months
Ended
December 31,

 

 

 

2016

 

2017

 

2016

 

2017

 

Reconciliation of non-GAAP General and Administrative:

 

 

 

 

 

 

 

 

 

General and Administrative

 

$

14,957

 

$

18,159

 

$

28,815

 

$

34,110

 

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

 

3,127

 

3,895

 

5,848

 

6,861

 

Amortization of acquired intangibles

 

381

 

359

 

762

 

718

 

Non-GAAP General and Administrative

 

$

11,449

 

$

13,905

 

$

22,205

 

$

26,531