Delaware | 001-34777 | 52-2130962 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under Exchange Act (17 CFR 240.13e-4(c)) |
Exhibit | ||
Number | Description | |
99.1 | Press release dated October 31, 2016 |
BROADSOFT, INC. | ||||||||
Date: | October 31, 2016 | By: | /s/ James A. Tholen | |||||
Name: | James A. Tholen | |||||||
Title: | Chief Financial Officer |
• | Total revenue increased 22% year-over-year to $84.1 million |
• | GAAP gross profit equaled 72% of total revenue; non-GAAP gross profit equaled 76% of total revenue |
• | GAAP income from operations totaled $1.6 million; non-GAAP income from operations totaled $17.3 million or 21% of revenue |
• | GAAP basic and diluted net loss per share equaled $(0.02) per common share; non-GAAP diluted earnings per share equaled $0.52 per common share |
September 30, 2016 | December 31, 2015 | ||||||
(Unaudited) | |||||||
Assets: | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 100,047 | $ | 175,857 | |||
Short-term investments | 149,354 | 72,531 | |||||
Accounts receivable, net of allowance for doubtful accounts of $207 and $85 at September 30, 2016 and December 31, 2015, respectively | 104,521 | 108,113 | |||||
Other current assets | 15,650 | 13,155 | |||||
Total current assets | 369,572 | 369,656 | |||||
Long-term assets: | |||||||
Property and equipment, net | 19,948 | 19,481 | |||||
Long-term investments | 117,807 | 102,385 | |||||
Intangible assets, net | 21,805 | 18,835 | |||||
Goodwill | 79,710 | 72,275 | |||||
Deferred tax assets | 10,917 | 1,661 | |||||
Other long-term assets | 7,397 | 8,081 | |||||
Total long-term assets | 257,584 | 222,718 | |||||
Total assets | $ | 627,156 | $ | 592,374 | |||
Liabilities and stockholders’ equity: | |||||||
Current liabilities: | |||||||
Accounts payable and accrued expenses | $ | 32,102 | $ | 28,667 | |||
Deferred revenue, current portion | 96,034 | 106,483 | |||||
Total current liabilities | 128,136 | 135,150 | |||||
Convertible senior notes | 197,759 | 188,331 | |||||
Deferred revenue | 6,015 | 4,571 | |||||
Other long-term liabilities | 6,078 | 7,289 | |||||
Total liabilities | 337,988 | 335,341 | |||||
Commitments and contingencies | |||||||
Stockholders’ equity: | |||||||
Preferred stock, $0.01 par value per share; 5,000,000 shares authorized at September 30, 2016 and December 31, 2015; no shares issued and outstanding at September 30, 2016 and December 31, 2015 | — | — | |||||
Common stock, par value $0.01 per share; 100,000,000 shares authorized at September 30, 2016 and December 31, 2015; 30,069,633 and 29,080,197 shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively. | 301 | 291 | |||||
Additional paid-in capital | 372,201 | 333,153 | |||||
Accumulated other comprehensive loss | (17,009 | ) | (13,810 | ) | |||
Accumulated deficit | (66,325 | ) | (62,601 | ) | |||
Total stockholders’ equity | 289,168 | 257,033 | |||||
Total liabilities and stockholders’ equity | $ | 627,156 | $ | 592,374 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
(Unaudited) | (Unaudited) | ||||||||||||||
Revenue: | |||||||||||||||
License software | $ | 31,486 | $ | 31,343 | $ | 95,992 | $ | 84,370 | |||||||
Subscription and maintenance support | 36,509 | 29,828 | 106,348 | 82,263 | |||||||||||
Professional services and other | 16,127 | 7,926 | 36,639 | 22,619 | |||||||||||
Total revenue | 84,122 | 69,097 | 238,979 | 189,252 | |||||||||||
Cost of revenue: | |||||||||||||||
License software | 1,799 | 2,444 | 5,697 | 7,984 | |||||||||||
Subscription and maintenance support | 11,894 | 9,787 | 34,060 | 28,958 | |||||||||||
Professional services and other | 10,060 | 9,429 | 27,340 | 20,949 | |||||||||||
Total cost of revenue | 23,753 | 21,660 | 67,097 | 57,891 | |||||||||||
Gross profit | 60,369 | 47,437 | 171,882 | 131,361 | |||||||||||
Operating expenses: | |||||||||||||||
Sales and marketing | 26,112 | 20,738 | 75,386 | 59,852 | |||||||||||
Research and development | 19,931 | 14,974 | 58,120 | 45,524 | |||||||||||
General and administrative | 12,759 | 10,955 | 36,675 | 31,366 | |||||||||||
Total operating expenses | 58,802 | 46,667 | 170,181 | 136,742 | |||||||||||
Income (loss) from operations | 1,567 | 770 | 1,701 | (5,381 | ) | ||||||||||
Other expense: | |||||||||||||||
Interest expense | 3,959 | 2,848 | 11,738 | 6,864 | |||||||||||
Interest income | (683 | ) | (323 | ) | (1,950 | ) | (819 | ) | |||||||
Other, net | (207 | ) | 4,089 | (533 | ) | 5,312 | |||||||||
Total other expense, net | 3,069 | 6,614 | 9,255 | 11,357 | |||||||||||
Loss before income taxes | (1,502 | ) | (5,844 | ) | (7,554 | ) | (16,738 | ) | |||||||
Benefit from income taxes | (897 | ) | (2,593 | ) | (2,545 | ) | (5,294 | ) | |||||||
Net loss | $ | (605 | ) | $ | (3,251 | ) | $ | (5,009 | ) | $ | (11,444 | ) | |||
Net loss per common share: | |||||||||||||||
Basic and diluted | $ | (0.02 | ) | $ | (0.11 | ) | $ | (0.17 | ) | $ | (0.39 | ) | |||
Weighted average common shares outstanding: | |||||||||||||||
Basic and diluted | 29,878 | 29,322 | 29,491 | 29,182 | |||||||||||
Stock-based compensation expense included above: | |||||||||||||||
Cost of revenue | $ | 2,225 | $ | 1,901 | $ | 6,118 | $ | 5,287 | |||||||
Sales and marketing | 4,973 | 2,812 | 13,321 | 10,048 | |||||||||||
Research and development | 4,249 | 2,428 | 11,414 | 8,933 | |||||||||||
General and administrative | 2,574 | 2,016 | 7,454 | 6,119 |
Nine Months Ended September 30, | |||||||
2016 | 2015 | ||||||
(in thousands) | |||||||
Cash provided by (used in): | |||||||
Operating activities | $ | 47,740 | $ | 18,246 | |||
Investing activities | (124,049 | ) | (24,695 | ) | |||
Financing activities | 1,025 | 117,927 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
(in thousands) | |||||||||||||||
Beginning of period deferred revenue balance | $ | 107,305 | $ | 107,726 | $ | 111,054 | $ | 101,456 | |||||||
End of period deferred revenue balance | 102,049 | 109,678 | 102,049 | 109,678 | |||||||||||
Increase (decrease) in deferred revenue | (5,256 | ) | 1,952 | (9,005 | ) | 8,222 | |||||||||
Revenue | 84,122 | 69,097 | 238,979 | 189,252 | |||||||||||
Revenue plus net change in deferred revenue | $ | 78,866 | $ | 71,049 | 229,974 | 197,474 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
(in thousands) | |||||||||||||||
Beginning of period deferred license software revenue balance | $ | 26,798 | $ | 32,582 | $ | 33,200 | $ | 26,495 | |||||||
End of period deferred license software revenue balance | 19,476 | 32,282 | 19,476 | 32,282 | |||||||||||
Increase (decrease) in deferred license software revenue | (7,322 | ) | (300 | ) | (13,724 | ) | 5,787 | ||||||||
License software revenue | 31,486 | 31,343 | 95,992 | 84,370 | |||||||||||
License software revenue plus net change in deferred license software revenue | $ | 24,164 | $ | 31,043 | $ | 82,268 | $ | 90,157 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
(in thousands) | |||||||||||||||
Beginning of period deferred subscription and maintenance support revenue balance | $ | 60,381 | $ | 53,951 | $ | 61,399 | $ | 52,764 | |||||||
End of period deferred subscription and maintenance support revenue balance | 58,154 | 49,598 | 58,154 | 49,598 | |||||||||||
Decrease in deferred subscription and maintenance support revenue | (2,227 | ) | (4,353 | ) | (3,245 | ) | (3,166 | ) | |||||||
Subscription and maintenance support revenue | 36,509 | 29,828 | 106,348 | 82,263 | |||||||||||
Subscription and maintenance support revenue plus net change in deferred subscription and maintenance support revenue | $ | 34,282 | $ | 25,475 | $ | 103,103 | $ | 79,097 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
(in thousands) | |||||||||||||||
Beginning of period deferred professional services and other revenue balance | $ | 20,126 | $ | 21,193 | $ | 16,455 | $ | 22,197 | |||||||
End of period deferred professional services and other revenue balance | 24,419 | 27,798 | 24,419 | 27,798 | |||||||||||
Increase in deferred professional services and other revenue | 4,293 | 6,605 | 7,964 | 5,601 | |||||||||||
Professional services and other revenue | 16,127 | 7,926 | 36,639 | 22,619 | |||||||||||
Professional services and other revenue plus net change in deferred professional services and other revenue | $ | 20,420 | $ | 14,531 | $ | 44,603 | $ | 28,220 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
(in thousands) | |||||||||||||||
Non-GAAP cost of revenue: | |||||||||||||||
GAAP license cost of revenue | $ | 1,799 | $ | 2,444 | $ | 5,697 | $ | 7,984 | |||||||
(percent of related revenue) | 6 | % | 8 | % | 6 | % | 9 | % | |||||||
Less: | |||||||||||||||
Stock-based compensation expense | 146 | 234 | 472 | 771 | |||||||||||
Amortization of acquired intangible assets | 334 | 430 | 1,003 | 1,297 | |||||||||||
Non-GAAP license cost of revenue | $ | 1,319 | $ | 1,780 | $ | 4,222 | $ | 5,916 | |||||||
(percent of related revenue) | 4 | % | 6 | % | 4 | % | 7 | % | |||||||
GAAP subscription and maintenance support cost of revenue | $ | 11,894 | $ | 9,787 | $ | 34,060 | $ | 28,958 | |||||||
(percent of related revenue) | 33 | % | 33 | % | 32 | % | 35 | % | |||||||
Less: | |||||||||||||||
Stock-based compensation expense | 952 | 607 | 2,438 | 2,329 | |||||||||||
Amortization of acquired intangible assets | 1,197 | 1,010 | 3,431 | 3,122 | |||||||||||
Non-GAAP subscription and maintenance support cost of revenue | $ | 9,745 | $ | 8,170 | $ | 28,191 | $ | 23,507 | |||||||
(percent of related revenue) | 27 | % | 27 | % | 27 | % | 29 | % | |||||||
GAAP professional services and other cost of revenue | $ | 10,060 | $ | 9,429 | $ | 27,340 | $ | 20,949 | |||||||
(percent of related revenue) | 62 | % | 119 | % | 75 | % | 93 | % | |||||||
Less: | |||||||||||||||
Stock-based compensation expense | 1,127 | 1,060 | 3,208 | 2,187 | |||||||||||
Amortization of acquired intangible assets | $ | 175 | $ | 175 | $ | 525 | $ | 233 | |||||||
Non-GAAP professional services and other cost of revenue | $ | 8,758 | $ | 8,194 | $ | 23,607 | $ | 18,529 | |||||||
(percent of related revenue) | 54 | % | 103 | % | 64 | % | 82 | % |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
(in thousands) | |||||||||||||||
Non-GAAP gross profit: | |||||||||||||||
GAAP gross profit | $ | 60,369 | $ | 47,437 | $ | 171,882 | $ | 131,361 | |||||||
(percent of total revenue) | 72 | % | 69 | % | 72 | % | 69 | % | |||||||
Plus: | |||||||||||||||
Stock-based compensation expense | 2,225 | 1,901 | 6,118 | 5,287 | |||||||||||
Amortization of acquired intangible assets | 1,706 | 1,615 | 4,959 | 4,652 | |||||||||||
Non-GAAP gross profit | $ | 64,300 | $ | 50,953 | $ | 182,959 | $ | 141,300 | |||||||
(percent of total revenue) | 76 | % | 74 | % | 77 | % | 75 | % | |||||||
GAAP license gross profit | $ | 29,687 | $ | 28,899 | $ | 90,295 | $ | 76,386 | |||||||
(percent of related revenue) | 94 | % | 92 | % | 94 | % | 91 | % | |||||||
Plus: | |||||||||||||||
Stock-based compensation expense | 146 | 234 | 472 | 771 | |||||||||||
Amortization of acquired intangible assets | 334 | 430 | 1,003 | 1,297 | |||||||||||
Non-GAAP license gross profit | $ | 30,167 | $ | 29,563 | $ | 91,770 | $ | 78,454 | |||||||
(percent of related revenue) | 96 | % | 94 | % | 96 | % | 93 | % | |||||||
GAAP subscription and maintenance support gross profit | $ | 24,615 | $ | 20,041 | $ | 72,288 | $ | 53,305 | |||||||
(percent of related revenue) | 67 | % | 67 | % | 68 | % | 65 | % | |||||||
Plus: | |||||||||||||||
Stock-based compensation expense | 952 | 607 | 2,438 | 2,329 | |||||||||||
Amortization of acquired intangible assets | 1,197 | 1,010 | 3,431 | 3,122 | |||||||||||
Non-GAAP subscription and maintenance support gross profit | $ | 26,764 | $ | 21,658 | $ | 78,157 | $ | 58,756 | |||||||
(percent of related revenue) | 73 | % | 73 | % | 73 | % | 71 | % | |||||||
GAAP professional services and other gross profit | $ | 6,067 | $ | (1,503 | ) | $ | 9,299 | $ | 1,670 | ||||||
(percent of related revenue) | 38 | % | (19 | )% | 25 | % | 7 | % | |||||||
Plus: | |||||||||||||||
Stock-based compensation expense | 1,127 | 1,060 | 3,208 | 2,187 | |||||||||||
Amortization of acquired intangible assets | $ | 175 | $ | 175 | $ | 525 | $ | 233 | |||||||
Non-GAAP professional services and other gross profit | $ | 7,369 | $ | (268 | ) | $ | 13,032 | $ | 4,090 | ||||||
(percent of related revenue) | 46 | % | (3 | )% | 36 | % | 18 | % |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
(in thousands) | |||||||||||||||
Non-GAAP income from operations: | |||||||||||||||
GAAP income (loss) from operations | $ | 1,567 | $ | 770 | $ | 1,701 | $ | (5,381 | ) | ||||||
(percent of total revenue) | 2 | % | 1 | % | 1 | % | (3 | )% | |||||||
Plus: | |||||||||||||||
Stock-based compensation expense | 14,021 | 9,157 | 38,307 | 30,387 | |||||||||||
Amortization of acquired intangible assets | 1,706 | 1,615 | 4,959 | 4,652 | |||||||||||
Non-GAAP income from operations | $ | 17,294 | $ | 11,542 | $ | 44,967 | $ | 29,658 | |||||||
(percent of total revenue) | 21 | % | 17 | % | 19 | % | 16 | % | |||||||
GAAP operating expense | $ | 58,802 | $ | 46,667 | $ | 170,181 | $ | 136,742 | |||||||
(percent of total revenue) | 70 | % | 68 | % | 71 | % | 72 | % | |||||||
Less: | |||||||||||||||
Stock-based compensation expense | 11,796 | 7,256 | 32,189 | 25,100 | |||||||||||
Non-GAAP operating expense | $ | 47,006 | $ | 39,411 | $ | 137,992 | $ | 111,642 | |||||||
(percent of total revenue) | 56 | % | 57 | % | 58 | % | 59 | % | |||||||
GAAP sales and marketing expense | $ | 26,112 | $ | 20,738 | $ | 75,386 | $ | 59,852 | |||||||
(percent of total revenue) | 31 | % | 30 | % | 32 | % | 32 | % | |||||||
Less: | |||||||||||||||
Stock-based compensation expense | 4,973 | 2,812 | 13,321 | 10,048 | |||||||||||
Non-GAAP sales and marketing expense | $ | 21,139 | $ | 17,926 | $ | 62,065 | $ | 49,804 | |||||||
(percent of total revenue) | 25 | % | 26 | % | 26 | % | 26 | % | |||||||
GAAP research and development expense | $ | 19,931 | $ | 14,974 | $ | 58,120 | $ | 45,524 | |||||||
(percent of total revenue) | 24 | % | 22 | % | 24 | % | 24 | % | |||||||
Less: | |||||||||||||||
Stock-based compensation expense | 4,249 | 2,428 | 11,414 | 8,933 | |||||||||||
Non-GAAP research and development expense | $ | 15,682 | $ | 12,546 | $ | 46,706 | $ | 36,591 | |||||||
(percent of total revenue) | 19 | % | 18 | % | 20 | % | 19 | % | |||||||
GAAP general and administrative expense | $ | 12,759 | $ | 10,955 | $ | 36,675 | $ | 31,366 | |||||||
(percent of total revenue) | 15 | % | 16 | % | 15 | % | 17 | % | |||||||
Less: | |||||||||||||||
Stock-based compensation expense | 2,574 | 2,016 | 7,454 | 6,119 | |||||||||||
Non-GAAP general and administrative expense | $ | 10,185 | $ | 8,939 | $ | 29,221 | $ | 25,247 | |||||||
(percent of total revenue) | 12 | % | 13 | % | 12 | % | 13 | % |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
(in thousands, except per share data) | |||||||||||||||
Non-GAAP net income and income per share: | |||||||||||||||
GAAP net loss | $ | (605 | ) | $ | (3,251 | ) | $ | (5,009 | ) | $ | (11,444 | ) | |||
(percent of total revenue) | (1 | )% | (5 | )% | (2 | )% | (6 | )% | |||||||
Adjusted for: | |||||||||||||||
Stock-based compensation expense | 14,021 | 9,157 | 38,307 | 30,387 | |||||||||||
Amortization of acquired intangible assets | 1,706 | 1,615 | 4,959 | 4,652 | |||||||||||
Non-cash interest expense on our convertible senior notes | 3,197 | 2,325 | 9,428 | 5,441 | |||||||||||
Foreign currency transaction losses (gains) | (207 | ) | 336 | (533 | ) | 1,559 | |||||||||
Loss on repurchase of convertible senior notes | — | 3,752 | — | 3,752 | |||||||||||
Non-cash tax benefit | (1,758 | ) | (2,994 | ) | (4,775 | ) | (6,402 | ) | |||||||
Non-GAAP net income | $ | 16,354 | $ | 10,940 | $ | 42,377 | $ | 27,945 | |||||||
(percent of total revenue) | 19 | % | 16 | % | 18 | % | 15 | % | |||||||
GAAP net loss per basic common share | $ | (0.02 | ) | $ | (0.11 | ) | $ | (0.17 | ) | $ | (0.39 | ) | |||
Adjusted for: | |||||||||||||||
Stock-based compensation expense | 0.47 | 0.31 | 1.30 | 1.04 | |||||||||||
Amortization of acquired intangible assets | 0.06 | 0.06 | 0.17 | 0.16 | |||||||||||
Non-cash interest expense on our convertible senior notes | 0.11 | 0.08 | 0.32 | 0.19 | |||||||||||
Foreign currency transaction losses (gains) | (0.01 | ) | 0.01 | (0.02 | ) | 0.05 | |||||||||
Loss on repurchase of convertible senior notes | — | 0.13 | — | 0.13 | |||||||||||
Non-cash tax benefit | (0.06 | ) | (0.10 | ) | (0.16 | ) | (0.22 | ) | |||||||
Non-GAAP net income per basic common share | $ | 0.55 | $ | 0.37 | $ | 1.44 | $ | 0.96 | |||||||
GAAP net loss per diluted common share | $ | (0.02 | ) | $ | (0.11 | ) | $ | (0.17 | ) | $ | (0.39 | ) | |||
Adjusted for: | |||||||||||||||
Stock-based compensation expense | 0.44 | 0.31 | 1.25 | 1.02 | |||||||||||
Amortization of acquired intangible assets | 0.05 | 0.05 | 0.16 | 0.16 | |||||||||||
Non-cash interest expense on our convertible senior notes | 0.10 | 0.08 | 0.31 | 0.18 | |||||||||||
Foreign currency transaction losses (gains) | (0.01 | ) | 0.01 | (0.02 | ) | 0.05 | |||||||||
Loss on repurchase of convertible senior notes | — | 0.13 | — | 0.13 | |||||||||||
Non-cash tax benefit | (0.06 | ) | (0.10 | ) | (0.16 | ) | (0.21 | ) | |||||||
Non-GAAP net income per diluted common share | $ | 0.52 | $ | 0.37 | $ | 1.39 | $ | 0.94 |