RALLY SOFTWARE DEVELOPMENT CORP. BOULDER, Colo., June 4, 2015 /PRNewswire/ -- Rally (NYSE: RALY), a leading global provider of software and services to drive agility, today announced financial results for its first quarter of fiscal year 2016 ended April 30, 2015.
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First quarter fiscal year 2016 results:
-- Revenues of $24.5 million, an increase of 26% compared to the same
period one year ago.
-- GAAP net loss of $(6.9) million, or a loss of $(0.27) per basic and
diluted share based on 25.5 million weighted average shares of common
stock outstanding, as compared to a GAAP net loss of $(8.5) million, or
a loss of $(0.34) per basic and diluted share based on 24.8 million
weighted average shares of common stock outstanding in the same period
one year ago.
-- Non-GAAP net loss of $(5.2) million, or $(0.20) per basic and diluted
share, as compared to a non-GAAP net loss of $(6.8) million, or $(0.27)
per basic and diluted share in the same period one year ago (see the
table titled "Reconciliation of GAAP to non-GAAP Financial Measures").
-- Total paid seats increased to over 276,000, a 22% increase over the
total paid seats in the same period one year ago.
Cash flow from operations in the first quarter was $1.2 million. Cash and cash equivalents and short-term investments at April 30, 2015, excluding restricted cash, were $67.7 million.
About Rally
Rally delivers software and services that drive agility. Organizations worldwide use Rally's solutions to navigate evolving market demands, improve performance, and accelerate the pace of innovation to deliver value faster. Rally's enterprise-class cloud-based platform transforms the way organizations manage the software development lifecycle by aligning software development with strategic business objectives, facilitating collaboration, and increasing transparency. By applying Agile and Lean approaches, Rally's consulting and training services help companies innovate, lead, adapt, and deliver.
© 2015 Rally Software Development Corp. All rights reserved. Rally, Rally Software, and the Rally logo are trademarks or registered trademarks of Rally Software Development Corp. in the United States and other countries. All other trademarks are properties of their respective owners.
Non-GAAP Financial Measures
To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with Generally Accepted Accounting Principles (GAAP), we have provided certain measures that have not been prepared in accordance with GAAP. These non-GAAP financial measures include non-GAAP results for cost of revenue, gross profit, gross margin, operating expenses, net loss and basic and diluted net loss per share, which are in addition to, and, not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.
Our non-GAAP financial measures exclude stock-based compensation expense and amortization of acquired intangible assets. We believe the presentation of operating results excluding stock-based compensation expense and the amortization of acquired intangible assets provides useful supplemental information to investors and facilitates the analysis of our core operating results and comparison of operating results across reporting periods and is therefore useful to investors in analyzing and assessing our past and future operating performance.
Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures. A reconciliation of the non-GAAP financial measures to such GAAP measures can be found in the accompanying financial statements included with this press release.
Rally Software Development Corp.
Condensed Consolidated Balance Sheets
(Unaudited, in thousands)
April 30, January 31,
2015 2015
---- ----
ASSETS
Current assets:
Cash and
cash
equivalents $14,564 $15,175
Short-term
investments 53,152 51,410
Restricted
cash - 15
Accounts
receivable,
net 19,014 25,986
Other
receivables 384 117
Prepaid
expenses
and other
current
assets 3,799 3,393
----- -----
Total
current
assets 90,913 96,096
Property
and
equipment,
net 5,444 5,419
Goodwill 2,049 2,104
Intangible
assets,
net 1,250 1,382
Restricted
cash 4,200 4,200
Other
assets 503 671
--- ---
Total
assets $104,359 $109,872
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts
payable $3,467 $3,230
Accrued
liabilities 4,353 5,511
Deferred
revenue 43,733 43,978
Other
current
liabilities 2,657 1,909
----- -----
Total
current
liabilities 54,210 54,628
Deferred
revenue,
net of
current
portion 458 697
Other long-
term
liabilities 1,105 876
----- ---
Total
liabilities 55,773 56,201
------ ------
Stockholders' equity:
Common
stock 3 3
Additional
paid-in
capital 185,374 183,532
Accumulated
deficit (136,350) (129,424)
Accumulated
other
comprehensive
income
(loss) (441) (440)
---- ----
Total
stockholders'
equity 48,586 53,671
------ ------
Total
liabilities
and
stockholders'
equity $104,359 $109,872
======== ========
Rally Software Development Corp.
Condensed Consolidated Statements of Operations
(unaudited, in thousands, except per share amounts)
Three Months Ended
April 30,
---------
2015 2014
---- ----
Revenue:
Subscription
and
support $19,203 $16,105
Perpetual
license 267 639
--- ---
Total
product
revenue 19,470 16,744
Professional
services 4,981 2,687
Total
revenue 24,451 19,431
------ ------
Cost of revenue (1) (2):
Product 2,977 2,396
Professional
services 4,033 2,771
-----
Total cost
of revenue 7,010 5,167
----- -----
Gross
profit 17,441 14,264
------ ------
Operating expenses (1):
Sales and
marketing 12,992 11,410
Research
and
development 6,314 5,986
General and
administrative 5,164 5,188
Total
operating
expenses 24,470 22,584
------ ------
Loss from
operations (7,029) (8,320)
Other income (expense):
Interest
and other
income 52 39
Loss on foreign
currency
transactions and
other gain (loss)
(84) (82)
Loss before
provision
for income
taxes (7,061) (8,363)
Provision
(credit)
for income
taxes (135) 118
Net loss $(6,926) $(8,481)
======= =======
Net loss per share attributable to
common stockholders, basic and
diluted
$(0.27) $(0.34)
====== ======
Weighted average
common shares
outstanding, basic
and diluted
25,538 24,816
====== ======
(1) Includes stock-based
compensation expense as follows:
Three Months Ended
April 30,
2015 2014
---- ----
Cost of
product
revenue $94 $95
Cost of
professional
services
revenue 73 89
Sales and
marketing 435 438
Research
and
development 305 412
General and
administrative 656 522
$1,563 $1,556
====== ======
(2) Includes amortization expense of
acquired intangible assets as
follows:
Cost of
product
revenue $132 $132
==== ====
Rally Software Development Corp.
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
Three Months Ended
April 30,
---------
2015 2014
---- ----
Cash flow from operating activities:
Net loss $(6,926) $(8,481)
Adjustments to reconcile net loss to net cash
provided by (used) in operating activities:
Depreciation and
amortization 762 724
Noncash stock-based
compensation expense 1,563 1,556
Other 5 19
Changes in operating assets and liabilities:
Accounts receivable 6,972 5,742
Other receivables (268) (30)
Prepaid and other
current assets (405) (867)
Restricted cash 15 -
Other assets 155 36
Accounts payable and
accrued expenses (1,159) (1,183)
Deferred revenue (484) (1,075)
Other current
liabilities 748 815
Other long-term
liabilities 228 (15)
Net cash provided by (used) in
operating activities 1,206 (2,759)
-----
Cash flow from investing activities:
Purchase of property
and equipment (365) (648)
Purchase of investments (27,958) -
Proceeds from
maturities of
investments 26,225 -
Proceeds from sale of
property and equipment 1 1
Net cash (used) in investing
activities (2,097) (647)
-------
Cash flow from financing activities:
Proceeds from exercise
of common stock
options 470 246
Proceeds from issuance
of common stock
warrants 20 -
Payment of payroll
taxes related to net
settled restricted
stock units (210) -
Net cash provided by financing
activities 280 246
---
Net (decrease) in cash and
cash equivalents during
period (611) (3,160)
Cash and cash
equivalents at
beginning of period 15,175 88,891
------ ------
Cash and cash
equivalents at end of
period $14,564 $85,731
======= =======
Rally Software Development Corp.
Reconciliation of GAAP to Non-GAAP Financial Measures
(unaudited, in thousands, except per share amounts)
Three Months Ended
April 30,
---------
2015 2014
---- ----
GAAP product cost of revenue $2,977 $2,396
Amortization expense of acquired
intangible assets (132) (132)
Stock-based compensation expense (94) (95)
Non-GAAP product cost of revenue $2,751 $2,169
====== ======
GAAP professional services cost of
revenue $4,033 $2,771
Stock-based compensation expense (73) (89)
Non-GAAP professional services
cost of revenue $3,960 $2,682
====== ======
GAAP gross profit $17,441 $14,264
Amortization expense of acquired
intangible assets 132 132
Stock-based compensation expense 167 184
Non-GAAP gross profit $17,740 $14,580
======= =======
Gross margin:
GAAP 71% 73%
=== ===
Non-GAAP 73% 75%
=== ===
Product gross margin:
GAAP 85% 86%
=== ===
Non-GAAP 86% 87%
=== ===
Professional services gross margin:
GAAP 19% (3%)
=== ===
Non-GAAP 20% 0%
=== ===
GAAP sales and marketing expense $12,992 $11,410
Stock-based compensation expense (435) (438)
Non-GAAP sales and marketing
expense $12,557 $10,972
======= =======
GAAP research and development
expense $6,314 $5,986
Stock-based compensation expense (305) (412)
Non-GAAP research and development
expense $6,009 $5,574
====== ======
GAAP general and administrative
expense $5,164 $5,188
Stock-based compensation expense (656) (522)
Non-GAAP general and
administrative expense $4,508 $4,666
====== ======
GAAP net loss $(6,926) $(8,481)
Amortization expense of acquired
intangible assets 132 132
Stock-based compensation expense 1,563 1,556
Non-GAAP net loss $(5,231) $(6,793)
======= =======
Basic and diluted net loss per share:
GAAP basic and diluted net loss per
share $(0.27) $(0.34)
Amortization expense of acquired
intangible assets 0.01 0.01
Stock-based compensation expense 0.06 0.06
---- ----
Non-GAAP basic and diluted net
loss per share $(0.20) $(0.27)
====== ======
Shares used to calculate basic and
diluted net loss per share 25,538 24,816
====== ======
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