RealPage, Inc. : RealPage Reports Q1 2012 Financial Results
05/03/2012| 04:10pm US/Eastern
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CARROLLTON, Texas, May 3, 2012 /PRNewswire/ -- RealPage, Inc. (NASDAQ: RP), a leading provider of on-demand software and software-enabled services to the rental housing industry, today announced financial results for its first quarter ended March 31, 2012.
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"RealPage has started the year strongly as evidenced by our solid first quarter financial performance," says Steve Winn, Chairman and CEO of RealPage. "Non-GAAP total revenue performance was up 29% year over year and Adjusted EBITDA grew 35% over the same period. Our growth in on demand units and revenue per unit resulted in an annual customer value of $286 million, an increase of 34% compared to the prior year quarter. We believe this demonstrates our success in cross selling additional software solutions and services into our installed base and our ability to capture new units effectively across property managers and owners of all sizes."
First Quarter 2012 Financial Highlights
-- Non-GAAP total revenue was $74.5 million, an increase of 29.5%
year-over-year;
-- Non-GAAP on demand revenue was $70.8 million, an increase of 33.7%
year-over-year;
-- Adjusted EBITDA was $16.4 million, an increase of 35.4% year-over-year;
-- Non-GAAP net income was $7.6 million, or $0.10 per diluted share, a
year-over-year increase of 47.8% and 42.9%, respectively;
-- GAAP net income was $1.7 million, or $0.02 per diluted share, compared
to a GAAP net loss of $0.6 million, or $0.01 per diluted share, in the
prior year quarter; and
-- Net cash provided by operating activities was $10.9 million, an increase
of 17.7% year-over-year.
Financial Outlook
RealPage management expects to achieve the following results during its second quarter ended June 30, 2012:
-- Non-GAAP total revenue is expected to be in the range of $77.5 million
to $79.0 million;
-- Adjusted EBITDA is expected to be in the range of $16.8 million to $17.3
million;
-- Non-GAAP net income is expected to be in the range of $7.9 million to
$8.2 million, or $0.11 per diluted share;
-- Non-GAAP tax rate of approximately 40.0%; and
-- Weighted average shares outstanding of approximately 74.0 million.
RealPage management expects to achieve the following results during its calendar year ended December 31, 2012:
-- Non-GAAP total revenue is expected to be in the range of $321.5 million
to $330.0 million;
-- Adjusted EBITDA is expected to be in the range of $71.9 million to $75.0
million;
-- Non-GAAP net income is expected to be in the range of $34.0 million to
$36.0 million, or $0.46 to $0.49 per diluted share;
-- Non-GAAP tax rate of approximately 40.0%; and
-- Full year weighted average shares outstanding of approximately 74.1
million.
Please note that the above statements are forward looking and that Non-GAAP total revenue includes an adjustment for the effect of deferred revenue from acquired companies that is required to be written down for GAAP purposes under purchase accounting rules. In addition, the above statements also include the impact of acquisitions and exclude any impact resulting from the Yardi Systems litigation. Actual results may differ materially. Please reference the information under the caption "Non-GAAP Financial Measures" as part of this press release.
Conference Call and Webcast
The Company will host a conference call today at 5:00 p.m. EDT to discuss its financial results. Participants are encouraged to listen to the presentation via a live web broadcast at www.realpage.com on the Investor Relations section. In addition, a live dial-in is available domestically at 866-743-9666 and internationally at 760-298-5103. A replay will be available at 855-859-2056 or 404-537-3406, passcode 75552849, until May 13, 2012.
About RealPage
Located in Carrollton, Texas, a suburb of Dallas, RealPage provides on demand (also referred to as "Software-as-a-Service" or "SaaS") products and services to apartment communities and single family rentals across the United States. Its on demand product lines include OneSite® property management systems that automate the leasing, renting, management, and accounting of conventional, affordable, tax credit, student living, senior living and military housing properties; LeaseStar(TM) multichannel managed marketing that enables owners to originate, syndicate, manage and capture leads more effectively and at less overall cost; YieldStar® asset optimization systems that enable owners and managers to optimize rents to achieve the overall highest yield, or combination of rent and occupancy, at each property; Velocity(TM) billing and utility management services that increase collections and reduce delinquencies; LeasingDesk® risk mitigation systems that are designed to reduce a community's exposure to risk and liability; OpsTechnology® spend management systems that help owners manage and control operating expenses; and Compliance Depot(TM) vendor management and qualification services to assist a community in managing its compliance vendor program. Supporting this family of SaaS products is a suite of shared cloud services including electronic payments, document management, decision support and learning. RealPage's MyNewPlace® subsidiary is one of the largest lead generation apartment and home rental websites, offering apartment owners and managers qualified, prospective residents through subscription, pay-per-lead and LeaseMatch pay-per-lease programs. Through its Propertyware subsidiary, RealPage also provides software and services to single-family rentals and low density, centrally-managed multifamily housing. For more information, call 1-87-REALPAGE or visit www.realpage.com.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains "forward-looking" statements relating to RealPage, Inc.'s expected, possible or assumed future results of operations, growth, expenditures, tax rates, outstanding shares and potential benefits of completed acquisitions. These forward-looking statements are based on management's beliefs and assumptions and on information currently available to management. Forward-looking statements include all statements that are not historical facts and may be identified by terms such as "expects," "believes," "plans" or similar expressions and the negatives of those terms. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, the following: (a) the possibility that general economic conditions or uncertainty cause information technology spending, particularly in the rental housing industry, to be reduced or purchasing decisions to be delayed; (b) an increase in customer cancellations; (c) the inability to increase sales to existing customers and to attract new customers; (d) RealPage, Inc.'s failure to integrate acquired businesses and any future acquisitions successfully; (e) the timing and success of new product introductions by RealPage, Inc. or its competitors; (f) changes in RealPage, Inc.'s pricing policies or those of its competitors; (g) litigation; and (h) such other risk and uncertainties described more fully in documents filed with or furnished to the Securities and Exchange Commission ("SEC"), including RealPage's Annual Report on Form 10-K previously filed with the SEC on February 24, 2012. All information provided in this release is as of the date hereof and RealPage, Inc. undertakes no duty to update this information except as required by law.
Non-GAAP Financial Measures
This press release contains non-GAAP financial measures. These measures differ from GAAP in that they exclude amortization of intangible assets, stock-based compensation expenses, any impact related to the Yardi Systems litigation, acquisition-related deferred revenue adjustments, and acquisition related expenses (including any purchase accounting adjustments). Reconciliation tables comparing GAAP financial measures to non-GAAP financial measures are included at the end of this release.
We define Adjusted EBITDA as net (loss) income plus acquisition-related deferred revenue adjustment, depreciation and asset impairment, amortization of intangible assets, net interest expense, income tax expense (benefit), stock-based compensation expense, any impact related to the Yardi Systems litigation and acquisition-related expense.
We believe that the use of Adjusted EBITDA is useful to investors and other users of our financial statements in evaluating our operating performance because it provides them with an additional tool to compare business performance across companies and across periods. We believe that:
-- Adjusted EBITDA provides investors and other users of our financial
information consistency and comparability with our past financial
performance, facilitates period-to-period comparisons of operations and
facilitates comparisons with our peer companies, many of which use
similar non-GAAP financial measures to supplement their GAAP results;
and
-- it is useful to exclude certain non-cash charges, such as depreciation
and asset impairment, amortization of intangible assets and stock-based
compensation and non-core operational charges, such as
acquisition-related expense and any impact related to the Yardi Systems
litigation, from Adjusted EBITDA because the amount of such expenses in
any specific period may not directly correlate to the underlying
performance of our business operations and these expenses can vary
significantly between periods as a result of new acquisitions, full
amortization of previously acquired tangible and intangible assets or
the timing of new stock-based awards, as the case may be.
We use Adjusted EBITDA in conjunction with traditional GAAP operating performance measures as part of our overall assessment of our performance, for planning purposes, including the preparation of our annual operating budget, to evaluate the effectiveness of our business strategies and to communicate with our board of directors concerning our financial performance.
We do not place undue reliance on Adjusted EBITDA as our only measure of operating performance. Adjusted EBITDA should not be considered as a substitute for other measures of liquidity or financial performance reported in accordance with GAAP. There are limitations to using non-GAAP financial measures, including that other companies may calculate these measures differently than we do, that they do not reflect our capital expenditures or future requirements for capital expenditures and that they do not reflect changes in, or cash requirements for, our working capital. We compensate for the inherent limitations associated with using Adjusted EBITDA measures through disclosure of these limitations, presentation of our financial statements in accordance with GAAP and reconciliation of Adjusted EBITDA to the most directly comparable GAAP measure, net (loss) income.
Condensed Consolidated Statements of Operations
For the Three Months Ended March 31, 2012 and
2011
(unaudited, in thousands, except per share
data)
Three Months Ended
March 31,
---------
2012 2011
---- ----
Revenue:
On demand $70,718 $52,937
On premise 1,416 1,645
Professional and
other 2,283 2,966
----- -----
Total revenue 74,417 57,548
Cost of revenue(1) 30,613 24,683
------ ------
Gross profit 43,804 32,865
Operating expense:
Product
development(1) 11,313 10,316
Sales and
marketing(1) 16,806 12,794
General and
administrative(1) 12,303 9,776
------ -----
Total
operating
expense 40,422 32,886
------ ------
Operating income (loss) 3,382 (21)
Interest expense and
other, net (636) (1,166)
------
Income (loss) before
income taxes 2,746 (1,187)
Income tax expense
(benefit) 1,026 (539)
----- ----
Net income (loss) $1,720 $(648)
====== =====
Net income (loss) per
share
Basic $0.02 $(0.01)
Diluted $0.02 $(0.01)
Weighted average shares
used in
computing net income
(loss) per share
Basic 70,590 66,800
Diluted 73,170 66,800
(1) Includes stock-
based compensation Three Months Ended
expense as follows: March 31,
---------
2012 2011
---- ----
Cost of
revenue $689 $298
Product
development 1,062 980
Sales and
marketing 737 2,733
General and
administrative 1,500 842
$3,988 $4,853
====== ======
Condensed Consolidated Balance Sheets
At March 31, 2012 and December 31, 2011
(unaudited, in thousands, except share data)
March 31, December 31,
2012 2011
---- ----
Assets
Current assets:
Cash and cash
equivalents $49,575 $51,273
Restricted cash 22,557 19,098
Accounts
receivable, less
allowance for
doubtful
accounts
of $1,192 and $979 at March 31,
2012 and
December 31, 2011, respectively 42,648 43,883
Deferred tax
asset, net of
valuation
allowance 225 272
Other current
assets 10,069 10,232
------ ------
Total current assets 125,074 124,758
Property, equipment
and software, net 28,224 27,974
Goodwill 131,901 129,292
Identified
intangible assets,
net 110,507 112,308
Deferred tax asset,
net of valuation
allowance 2,008 2,539
Other assets 4,439 3,194
----- -----
Total assets $402,153 $400,065
======== ========
Liabilities and
stockholders'
equity
Current liabilities:
Accounts payable $8,043 $12,218
Accrued expenses
and other
current
liabilities 29,029 25,816
Current portion
of deferred
revenue 55,075 57,325
Customer deposits
held in
restricted
accounts 22,478 19,017
------ ------
Total current liabilities 114,625 114,376
Deferred revenue 9,579 8,693
Revolving credit
facility 45,000 50,312
Other long-term
liabilities 3,649 3,803
----- -----
Total liabilities 172,853 177,184
Stockholders'
equity:
Preferred stock,
$0.001 par
value,
10,000,000
shares
authorized and
zero shares
March 31, 2012
and December 31,
2011,
respectively - -
Common stock,
$0.001 par value
per share:
125,000,000
shares
authorized,
73,916,813 and
73,115,779
shares issued
and
73,433,527 and
72,701,571
shares
outstanding at
March 31, 2012
and December 31,
2011,
respectively 74 73
Additional paid-
in capital 322,712 316,964
Treasury stock,
at cost: 483,286
and 414,208
shares at (4,184) (3,138)
March 31, 2012
and December 31,
2011,
respectively
Accumulated
deficit (89,241) (90,961)
Accumulated other
comprehensive
loss (61) (57)
--- ---
Total stockholders' equity 229,300 222,881
------- -------
Total liabilities and
stockholders' equity $402,153 $400,065
======== ========
Condensed Consolidated Statements of Cash Flows
For the Three Months Ended March 31, 2012 and 2011
(unaudited, in thousands)
Three Months Ended
March 31,
---------
2012 2011
---- ----
Cash flows from operating activities:
Net income (loss) $1,720 $(648)
Adjustments to
reconcile net income
(loss) to net cash
provided by
operating
activities:
Depreciation and
amortization 7,878 6,773
Deferred tax
expense (benefit) 578 (778)
Stock-based
compensation 3,988 4,853
Loss on disposal of
assets 178 397
Acquisition-
related contingent
consideration 430 62
Changes in assets
and liabilities,
net of assets
acquired
and liabilities assumed in business
combinations: (3,870) (1,398)
------ ------
Net cash provided by operating
activities 10,902 9,261
Cash flows from investing activities:
Purchases of property,
equipment and
software (3,560) (1,954)
Acquisition of
businesses, net of
cash acquired (4,303) (184)
Intangible asset
purchase (75) -
----
Net cash used by investing activities (7,938) (2,138)
------ ------
Cash flows from financing activities:
Stock issuance costs
from public offerings $ - $(775)
Payments on and
proceeds from debt,
net (5,373) (2,961)
Issuance of common
stock 1,761 3,044
Purchase of treasury
stock (1,046) (186)
-------
Net cash used by financing activities (4,658) (878)
------ ----
Net (decrease) increase in cash and cash
equivalents (1,694) 6,245
Effect of exchange rate on cash (4) (12)
Cash and cash equivalents:
Beginning of period 51,273 118,010
------
End of period $49,575 $124,243
=======
Reconciliation of GAAP to Non-GAAP Measures
For the Three Months Ended March 31, 2012 and 2011
(unaudited, in thousands)
Three Months Ended
March 31,
---------
2012 2011
---- ----
Revenue: $74,417 $57,548
Acquisition-
related deferred
revenue
adjustment 81 -
Non-GAAP revenue $74,498 $57,548
======= =======
Three Months Ended
March 31,
---------
2012 2011
---- ----
Adjusted gross profit:
Gross profit $43,804 $32,865
Acquisition-
related
deferred
revenue
adjustment 81 -
Depreciation 1,585 1,490
Amortization
of intangible
assets 2,418 2,176
Stock-based
compensation
expense 689 298
--- ---
Adjusted gross
profit $48,577 $36,829
===============
Adjusted gross
profit 65.2% 64.0%
Three Months Ended
March 31,
---------
2012 2011
---- ----
Adjusted EBITDA:
Net income (loss) $1,720 $(648)
Acquisition-
related
deferred
revenue
adjustment 81 -
Depreciation,
asset
impairment
and loss on
disposal of
asset 3,227 3,124
Amortization
of intangible
assets 4,829 4,046
Interest
expense, net 638 783
Income tax
expense
(benefit) 1,026 (539)
Litigation-
related
expense 360 320
Stock-based
compensation
expense 3,988 4,853
Acquisition-
related
expense 553 186
Adjusted EBITDA $16,422 $12,125
===============
Adjusted EBITDA
margin 22.0% 21.1%
Three Months Ended
March 31,
---------
2012 2011
---- ----
Non-GAAP total product development:
Product
Development $11,313 $10,316
Less:
Amortization
of intangible
assets - -
Stock-based
compensation
expense 1,062 980
----- ---
Non-GAAP total
product
development: $10,251 $9,336
===============
Non-GAAP total
product
development as %
of non-GAAP
revenue: 13.8% 16.2%
Reconciliation of GAAP to Non-GAAP Measures
For the Three Months Ended March 31, 2012 and 2011
(unaudited, in thousands)
Three Months Ended
March 31,
---------
2012 2011
---- ----
Non-GAAP total sales and marketing:
Sales and marketing $16,806 $12,794
Less:
Amortization of
intangible
assets 2,411 1,870
Stock-based
compensation
expense 737 2,733
--- -----
Non-GAAP total
sales and
marketing: $13,658 $8,191
===============
Non-GAAP total
sales and marketing
as % of non-GAAP
revenue: 18.3% 14.2%
Three Months Ended
March 31,
---------
2012 2011
---- ----
Non-GAAP total general and administrative:
General and
administrative $12,303 $9,776
Less:
Acquisition-
related expense 553 186
Stock-based
compensation
expense 1,500 842
Litigation
related expense 360 320
Non-GAAP total
general and
administrative: $9,890 $8,428
===============
Non-GAAP total
general and
administrative as %
of non-GAAP
revenue: 13.3% 14.6%
Three Months Ended
March 31,
---------
2012 2011
---- ----
Non-GAAP total operating expenses:
Operating expenses $40,422 $32,886
Less:
Amortization of
intangible
assets 2,411 1,870
Acquisition-related expense 553 186
Stock-based
compensation
expense 3,299 4,555
Litigation
related expense 360 320
Non-GAAP total
operating expenses: $33,799 $25,955
====================
Non-GAAP total
operating expenses
as % of non-GAAP
revenue: 45.4% 45.1%
Three Months Ended
March 31,
---------
2012 2011
---- ----
Non-GAAP operating income:
Operating income
(loss) $3,382 $(21)
Acquisition-
related
deferred
revenue
adjustment 81 -
Amortization of
intangible
assets 4,829 4,046
Stock-based
compensation
expense 3,988 4,853
Acquisition-
related expense 553 186
Litigation
related expense 360 320
Non-GAAP operating
income $13,193 $9,384
==================
Non-GAAP operating
margin 17.7% 16.3%
Reconciliation of GAAP to Non-GAAP Measures
For the Three Months Ended March 31, 2012 and 2011
(unaudited, in thousands, except per share data)
Three Months Ended
March 31,
---------
2012 2011
---- ----
Non-GAAP net income:
Net income (loss) $1,720 $(648)
Acquisition-related deferred revenue adjustment 81 -
Amortization of intangible assets 4,829 4,046
Stock-based compensation expense 3,988 4,853
Acquisition-related expense 553 186
Litigation related expense 360 320
Loss on disposal of assets 178 397
Subtotal of tax deductible items 9,989 9,802
Tax impact of tax deductible items(1) (3,996) (3,921)
Tax expense resulting from applying effective tax rate(2) (72) (64)
--- ---
Non-GAAP net income $7,641 $5,169
Non-GAAP net income per share - diluted $0.10 $0.07
Weighted average shares - diluted 73,170 66,800
Weighted average effect of dilutive securities - 3,811
--- -----
Non-GAAP weighted average shares - diluted 73,170 70,611
(1) Reflects the removal of the tax benefit associated with the amortization of intangible assets, stock-based compensation expense, acquisition-
related deferred revenue adjustment and
acquisition-related expense.
(2) Represents adjusting to a normalized effective tax rate of 40%.
Three Months Ended
March 31,
---------
2012 2011
---- ----
Annualized on demand revenue per average on demand unit:
On demand revenue $70,718 $52,937
Acquisition-related deferred revenue adjustment 81 -
--- ---
Non-GAAP on demand revenue $70,799 $52,937
Ending on demand units 7,431 6,159
Average on demand units 7,366 6,113
Annualized on demand revenue per average on demand unit $38.45 $34.64
======
Annual customer value of on demand revenue(1) $285,722 $213,348
On demand customers 8,039 7,078
(1) This metric represents management's estimate for the current annual run-rate value of on demand customer relationships. This metric is calculated
by multiplying ending on demand units times annualized on demand revenue per average non-GAAP on demand unit for the periods presented.
SOURCE RealPage, Inc.
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