Full Year Revenue Growth of 22%; Full Year Operating Cash Flow 32% of Revenue

BOSTON, Feb. 11, 2016 (GLOBE NEWSWIRE) -- LogMeIn, Inc. (NASDAQ:LOGM), a leading provider of cloud-based connectivity, today announced its results for the fourth quarter and fiscal year ended December 31, 2015.

Fourth quarter 2015 highlights include:

  • Revenue was $76.1 million, up 27% compared with the fourth quarter of 2014
  • Adjusted EBITDA was $20.9 million and adjusted EBITDA margin was 27.5% versus $14.9 million and 24.9% in the fourth quarter of 2014
  • Non-GAAP net income was $13.2 million, or $0.51 per diluted share, as compared to $9.0 million, or $0.35 per diluted share, in the fourth quarter of 2014
  • GAAP net income was $6.2 million, or $0.24 per diluted share, as compared to GAAP net income of $3.3 million, or $0.13 per diluted share, in the fourth quarter of 2014
  • Cash flow from operations was $13.8 million, or 18% of revenue
  • Total deferred revenue was $137.0 million, up 30% from $105.3 million in the fourth quarter of 2014
  • The Company closed the quarter with cash, cash equivalents and short-term investments of $208.4 million

Fiscal year 2015 highlights include:

  • Revenue was $271.6 million, up 22% compared with fiscal year 2014
  • Adjusted EBITDA was $67.6 million and adjusted EBITDA margin was 24.9%, compared to $49.5 million and 22.3% in fiscal year 2014
  • Non-GAAP net income was $42.7 million, or $1.66 per diluted share, as compared to $29.9 million, or $1.18 per diluted share, in fiscal year 2014.
  • GAAP net income was $14.6 million, or $0.56 per diluted share, as compared to GAAP net income of $8.0 million, or $0.31 per diluted share, for fiscal year 2014
  • Cash flow from operations was $85.8 million, or 32% of revenue

“We are happy to report a great quarter and a very strong year with top and bottom line results that exceeded the high-end of our guidance,” said Bill Wagner, President and CEO of LogMeIn.  “Perhaps more importantly, we made encouraging progress on our key collaboration, identity and IoT growth initiatives in Q4 and throughout 2015, which we believe lay the foundation for continued, profitable growth in 2016 and beyond.”

“As we set our sights ahead, we are focused on solving the changing needs of our customers while expanding our total addressable market in ways that maximize shareholder value.  In 2016 we will enable professionals to collaborate in new ways, help people be more productive and secure by solving the challenges of identity and access management, and empower companies to support their customers and products in an increasingly connected world.”

Business Outlook   
Based on information available as of February 11, 2016, the Company is issuing guidance for the first quarter 2016 and fiscal year 2016. 

First Quarter 2016:  The Company expects first quarter revenue to be in the range of $77.5 million to $78.0 million.

Adjusted EBITDA is expected to be in the range of $14.0 million to $14.8 million.  

Non-GAAP net income is expected to be in the range of $7.6 million to $7.9 million, or $0.29 to $0.30 per diluted share.  Non-GAAP net income excludes an estimated $9.1 million in stock-based compensation expense, $0.3 million in litigation related expense, and $5.4 million in acquisition related costs and amortization.

Non-GAAP net income for the first quarter assumes an effective tax rate of approximately 30%. Non-GAAP net income per diluted share for the first quarter of 2016 is based on an estimated 26.3 million fully-diluted weighted average shares outstanding.

Including stock-based compensation expense, litigation related expense, and acquisition related costs and amortization, we expect to report a GAAP net loss in the range of $3.1 million to $2.4 million, or $0.12 to $0.10 per share.         

The GAAP net loss for the first quarter assumes an effective tax rate of approximately 20%. GAAP net loss per share for the first quarter of 2016 is based on an estimated 25.2 million average basic shares outstanding.

Fiscal year 2016:  The Company expects full year 2016 revenue to be in the range of $322.0 million to $326.0 million. 

Adjusted EBITDA is expected to be in the range of $76.5 million to $80.0 million.

Non-GAAP net income is expected to be in the range of $44.7 million to $46.6 million, or $1.70 to $1.77 per diluted share. Non-GAAP net income excludes an estimated $40.0 million in stock-based compensation expense, $0.9 million in litigation related expense, and $18.1 million in acquisition related costs and amortization.

Non-GAAP net income for the full fiscal year 2016 assumes an effective tax rate of approximately 30%.  Non-GAAP net income per diluted share for 2016 is based on an estimated 26.3 million fully-diluted weighted average shares outstanding.

Including stock-based compensation expense, litigation related expense, and acquisition related costs and amortization, we expect to report GAAP net income in the range of $3.3 million to $6.0 million, or $0.13 to $0.23 per diluted share.

The GAAP net income for the full year assumes an effective tax rate of 20%.  GAAP net income per share for 2016 is based on an estimated 26.3 million fully-diluted weighted average shares outstanding.

A reconciliation of the most comparable GAAP financial measures to non-GAAP measures used above is included in the tables attached to this release.

Conference Call Information for Today, Thursday, February 11, 2016
The Company will host a corresponding conference call and live webcast at 5:00 p.m. Eastern Time today.  To access the conference call, dial 877-407-9124 (for the U.S.) or 201-689-8584 (for international callers).  A live webcast will be available on the Investor Relations section of the Company’s corporate website at https://www.logmeininc.com and via replay beginning approximately two hours after the completion of the call until the Company’s announcement of its financial results for the next quarter.  An audio replay of the call will also be available to investors beginning at approximately 8:00 p.m. Eastern Time on February 11, 2016 until 11:59 p.m. Eastern Time on February 18, 2016, by dialing 877-660-6853 (for the U.S.) or 201-612-7415 (for international callers) and entering passcode 13629010.

Non-GAAP Financial Measures
This press release contains non-GAAP financial measures including adjusted EBITDA, adjusted EBITDA margin, non-GAAP operating income, non-GAAP income before provision for income taxes, non-GAAP provision for income taxes, non-GAAP net income, non-GAAP net income per diluted share and non-GAAP cash flow from operations.

Adjusted EBITDA is GAAP net income excluding provision for income taxes, interest income, interest expense, and other (expense) income, net, depreciation and amortization, acquisition related costs, stock-based compensation expense, and litigation related expense.  Adjusted EBITDA margin is calculated by dividing adjusted EBITDA by revenue.  Non-GAAP operating income excludes acquisition related costs and amortization, stock-based compensation expense, and litigation related expense. Non-GAAP provision for income taxes excludes the tax impact of acquisition related costs and amortization, stock-based compensation expense, and litigation related expense. Non-GAAP net income and non-GAAP net income per diluted share exclude acquisition related costs and amortization, stock-based compensation expense, and litigation related expense. Non-GAAP cash flow from operations excludes payments and receipts related to litigation related costs, and acquisition related payments.

The exclusion of certain expenses in the calculation of non-GAAP financial measures should not be construed as an inference that these costs are unusual or infrequent. We anticipate excluding these expenses in the future presentation of our non-GAAP financial measures. The Company believes that these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to the Company's financial condition and results of operations. The Company's management uses these non-GAAP measures to compare the Company's performance to that of prior periods and uses these measures in financial reports prepared for management and the Company's board of directors. The Company believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing the Company's financial measures with other software-as-a-service companies, many of which present similar non-GAAP financial measures to investors. The Company does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant elements that are required by GAAP to be recorded in the Company's financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by management in determining these non-GAAP financial measures. In order to compensate for these limitations, management of the Company presents its non-GAAP financial measures in connection with its GAAP results. The Company urges investors to review the reconciliation of its non-GAAP financial measures to the comparable GAAP financial measures, which it includes in press releases announcing quarterly financial results, and not to rely on any single financial measure to evaluate the Company's business. Reconciliation tables of the most comparable GAAP financial measures to the non-GAAP measures used in this press release are included in this release.

About LogMeIn, Inc.
LogMeIn, Inc. (NASDAQ:LOGM) simplifies how people connect to each other and the world around them. With millions of users worldwide, our cloud-based solutions make it possible for people and companies to connect and engage with their workplace, colleagues, customers and products anywhere, anytime. LogMeIn is headquartered in Boston with offices in Bangalore, Budapest, Dublin, London, San Francisco, and Sydney.

Cautionary Language Concerning Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding the popularity, value and effectiveness of the Company's products and services, the Company’s profitability and growth, the size and growth potential of the Company’s markets, and their potential impact on future shareholder value, the success of and demand for the Company’s new and existing products and services, and the Company's financial guidance for fiscal year 2016 and the first quarter of 2016. These forward-looking statements are made as of the date they were first issued and were based on current expectations, estimates, forecasts and projections as well as the beliefs and assumptions of management. Words such as "expect," "anticipate," "should," "believe," "hope," "target," "project," "goals," "estimate," "potential," "predict," "may," "will," "might," "could," "intend," variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond the Company's control.  The Company's actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to, dependence on the remote support and software market, customer adoption of the Company's solutions, the Company’s ability to execute on its strategic initiatives, the Company’s ability to integrate acquired products or companies, the Company's ability to attract new customers and retain existing customers, adverse economic conditions in general and adverse economic conditions specifically affecting the markets in which the Company operates, the effectiveness of the Company’s cybersecurity measures, intellectual property litigation, the Company's ability to continue to promote and maintain its brand in a cost-effective manner, the Company's ability to compete effectively, the Company's ability to develop and introduce new products and add-ons or enhancements to existing products, the Company's ability to manage growth, the Company's ability to attract and retain key personnel, the Company's ability to protect its intellectual property and other proprietary rights, the result of any pending litigation, and other risks detailed in the Company's other publicly available filings with the Securities and Exchange Commission. Past performance is not necessarily indicative of future results. The forward-looking statements included in this press release represent the Company's views as of the date of this press release. The Company anticipates that subsequent events and developments will cause its views to change. The Company undertakes no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These forward-looking statements should not be relied upon as representing the Company's views as of any date subsequent to the date of this press release.

LogMeIn is a registered trademark of LogMeIn, Inc. in the US and other countries around the world.

 

LogMeIn, Inc. 
Condensed Consolidated Balance Sheets (unaudited) 
(In thousands) 
      
      
     
 December 31, December 31,  
  2014    2015    
      
ASSETS   
Current assets:     
Cash and cash equivalents$    100,960  $    123,143   
Marketable securities   100,209     85,284   
Accounts receivable, net    18,286     16,011   
Prepaid expenses and other current assets    4,545     11,997   
Restricted cash, current portion   1,492     -   
Deferred income taxes   5,403     -   
Total current assets   230,895     236,435   
Property and equipment, net   13,476     21,711   
Restricted cash   2,531     2,467   
Intangibles, net   18,983     71,590   
Goodwill   37,928     117,545   
Other assets   4,756     5,753   
Deferred income tax assets   9,280     198   
Total assets$    317,849  $    455,699   
      
LIABILITIES AND EQUITY  
Current liabilities:     
Accounts payable$    7,055  $    10,327   
Accrued liabilities   29,482     31,674   
Deferred revenue, current portion   101,672     134,297   
Total current liabilities   138,209     176,298   
Long-term debt   -     60,000   
Deferred revenue, net of current portion   3,578     2,692   
Deferred tax liabilities   -     5,812   
Other long-term liabilities   2,218     3,086   
Total liabilities   144,005     247,888   
Commitments and contingencies     
Preferred stock   -     -   
Equity:     
Common stock   267     275   
Additional paid-in capital   237,203     276,793   
Retained earnings   6,516     21,074   
Accumulated other comprehensive loss   (3,117)    (5,216)  
Treasury stock   (67,025)    (85,115)  
Total equity   173,844     207,811   
Total liabilities and equity$    317,849  $    455,699   
      

 

LogMeIn, Inc. 
Condensed Consolidated Statements of Operations (unaudited) 
(In thousands, except share and per share data) 
          
          
  Three Months Ended December 31, Twelve Months Ended December 31, 
   2014    2015    2014    2015   
          
Revenue  $    59,899  $    76,084  $    221,956  $    271,600  
Cost of revenue    7,881     10,263     28,732     35,458  
Gross profit    52,018     65,821     193,224     236,142  
Operating expenses         
Research and development    9,080     12,839     33,516     42,597  
Sales and marketing    30,654     36,027     119,508     138,946  
General and administrative    8,514     9,263     30,526     33,034  
Legal settlements    -     -     -     3,600  
Amortization of acquired intangibles    234     1,072     987     1,916  
Total operating expenses    48,482     59,201     184,537     220,093  
Income from operations    3,536     6,620     8,687     16,049  
Interest income    175     123     604     654  
Interest expense    -     (314)    (2)    (574) 
Other (expense) income, net    (97)    411     105     1,389  
Income before income taxes    3,614     6,840     9,394     17,518  
Provision for income taxes    (301)    (605)    (1,439)    (2,960) 
Net income $    3,313  $    6,235  $    7,955  $    14,558  
          
Net income per share:         
Basic $    0.14  $    0.25  $    0.33  $    0.59  
Diluted $    0.13  $    0.24  $    0.31  $    0.56  
Weighted average shares outstanding:         
Basic  24,395,499   25,103,035   24,385,297   24,826,363  
Diluted  25,387,526   25,954,651   25,386,199   25,779,928  
         
          
          
          
Calculation of Non-GAAP Operating Income, Non-GAAP Net Income and Non-GAAP Diluted Net Income per share (unaudited) 
(In thousands, except share and per share data) 
          
          
  Three Months Ended December 31, Twelve Months Ended December 31, 
   2014    2015    2014    2015   
          
GAAP Income from operations $    3,536  $    6,620  $    8,687  $    16,049  
Add Back:         
Stock-based compensation expense    6,348     7,264     24,769     26,499  
Litigation related expenses    174     87     475     4,963  
Acquisition related costs and amortization     2,689     4,412     8,237     11,216  
Non-GAAP Operating income    12,747     18,383     42,168     58,727  
Other income, net    78     220     707     1,469  
Non-GAAP Income before income taxes    12,825     18,603     42,875     60,196  
Non-GAAP Provision for income taxes     (3,840)    (5,392)    (12,948)    (17,528) 
Non-GAAP Net income $    8,985  $    13,211  $    29,927  $    42,668  
          
Non-GAAP Diluted net income per share: $    0.35  $    0.51  $    1.18  $    1.66  
Diluted weighted average shares outstanding used in         
computing per share amounts:  25,387,526   25,954,651   25,386,199   25,779,928  
         
          
          
          
Calculation of Adjusted EBITDA (unaudited) 
(In thousands) 
          
  Three Months Ended December 31, Twelve Months Ended December 31, 
   2014    2015    2014    2015   
          
GAAP Net income $    3,313  $    6,235  $    7,955  $    14,558  
Add Back:         
Stock-based compensation expense    6,348     7,264     24,769     26,499  
Litigation related expenses    174     87     475     4,963  
Acquisition related costs     1,973     2,512     4,466     6,345  
Interest income, interest expense and other (expense) income, net    (78)    (220)    (707)    (1,469) 
Income tax expense    301     605     1,439     2,960  
Depreciation and amortization expense    2,856     4,466     11,137     13,698  
Adjusted EBITDA $    14,887   $20,949  $    49,534  $    67,554  
          
          
          
Stock-Based Compensation Expense (unaudited) 
(In thousands) 
          
          
  Three Months Ended December 31, Twelve Months Ended December 31, 
   2014    2015    2014    2015   
          
Stock-based compensation expense:         
Cost of revenue $    303  $    428  $    1,107  $    1,560  
Research and development    1,006     1,137     3,653     5,188  
Sales and marketing    1,974     3,118     9,033     11,090  
General and administrative    3,065     2,581     10,976     8,661  
Total stock based-compensation $    6,348  $    7,264  $    24,769  $    26,499  
          

 


LogMeIn, Inc. 
Condensed Consolidated Statements of Cash Flows (unaudited) 
(In thousands) 
          
          
          
  Three Months Ended December 31, Twelve Months Ended December 31, 
   2014    2015    2014    2015   
Cash flows from operating activities         
Net income  $    3,313  $    6,235  $    7,955  $    14,558  
Adjustments to reconcile net income to net cash         
provided by operating activities:         
Depreciation and amortization    2,856     4,466     11,137     13,698  
Amortization of premiums on investments    46     89     224     328  
Amortization of debt issuance costs    -     55     -     187  
Provision for bad debts    50     9     102     61  
Benefit from deferred income taxes    (3,229)    (1,076)    (2,707)    (1,062) 
Excess tax benefits realized from stock-based awards    (377)    (2,527)    (383)    (2,743) 
Stock-based compensation    6,348     7,264     24,769     26,499  
Other, net    (8)    (13)    21     (12) 
Changes in assets and liabilities, excluding the effect of acquisitions:         
Accounts receivable    (7,628)    293     (5,804)    2,224  
Prepaid expenses and other current assets    3,251     79     1,822     (2,794) 
Other assets    165     (172)    476     (454) 
Accounts payable    1,143     (1,601)    1,727     1,420  
Accrued liabilities    5,627     5,110     9,234     2,288  
Deferred revenue    3,238     (5,976)    23,983     28,874  
Other long-term liabilities    472     1,521     1,597     2,698  
 Net cash provided by operating activities    15,267     13,756     74,153     85,770  
Cash flows from investing activities         
Purchases of marketable securities    (45,369)    (35,165)    (95,342)    (92,335) 
Proceeds from sale or disposal or maturity of marketable securities    45,045     35,000     95,045     107,042  
Purchases of property and equipment    (1,774)    (3,297)    (7,471)    (14,219) 
Intangible asset additions    (762)    60     (2,529)    (2,375) 
Cash paid for acquisitions, net of cash acquired    -     (107,575)    (22,449)    (107,575) 
Decrease (increase) in restricted cash and deposits    3     -     (196)    1,488  
Net cash used in investing activities    (2,857)    (110,977)    (32,942)    (107,974) 
Cash flows from financing activities         
Borrowings under credit facility    -     60,000     -     60,000  
Proceeds from issuance of common stock upon option exercises    4,612     2,543     17,595     17,794  
Excess tax benefits realized from stock-based awards    377     2,527     383     2,743  
Payments of withholding taxes in connection with restricted stock unit vesting    (481)    (493)    (5,766)    (11,641) 
Payment of debt issuance costs    -     (11)    -     (988) 
Payment of contingent consideration    -     -     -     (226) 
Purchase of treasury stock    (10,458)    (3,358)    (36,500)    (18,090) 
Net cash (used in) provided by financing activities    (5,950)    61,208     (24,288)    49,592  
Effect of exchange rate changes on cash and          
cash equivalents and restricted cash    (1,841)    (1,256)    (5,220)    (5,205) 
Net increase (decrease) in cash and cash equivalents    4,619     (37,269)    11,703     22,183  
Cash and cash equivalents, beginning of period    96,341     160,412     89,257     100,960  
Cash and cash equivalents, end of period $    100,960  $    123,143  $    100,960  $    123,143  
          
      
          
          
Calculation of Non-GAAP Cash Flows from Operating Activities (unaudited) 
(In thousands) 
          
          
  Three Months Ended December 31, Twelve Months Ended December 31, 
   2014    2015    2014    2015   
          
GAAP Cash flows from operating activities $    15,267  $    13,756  $    74,153  $    85,770  
Add Back:         
Litigation related payments    9     350     530     5,152  
Acquisition related payments    158     420     304     437  
Cash flows from operating activities before litigation related payments and          
acquisition related payments $    15,434  $    14,526  $    74,987  $    91,359  
          

 


 

 

Contact Information:
Investors 
Rob Bradley    
LogMeIn, Inc.
781-897-1301
rbradley@LogMeIn.com

Press
Craig VerColen
LogMeIn, Inc.
781-897-0696
Press@LogMeIn.com

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