Delaware | 001-38031 | 20-5158650 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS 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 the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 | Results of Operations and Financial Condition. |
Item 9.01. | Financial Statements and Exhibits. |
99.1 | Press Release dated February 15, 2018. |
MULESOFT, INC. | ||
By: | /s/ Matt Langdon | |
Matt Langdon Chief Financial Officer |
Exhibit No. | Description of Exhibit | ||
Press Release dated February 15, 2018. |
• | Revenue: Total revenue was $88.7 million in Q4 2017, an increase of 60% year-over-year. Subscription and support revenue was $70.6 million, an increase of 57% year-over-year. Professional services and other revenue was $18.1 million, an increase of 75% year-over-year. |
• | Gross margin: GAAP gross margin was 71.2% in Q4 2017, compared to 72.7% in the year ago period. Non‑GAAP gross margin was 72.9% in Q4 2017, compared to 73.2% in the year-ago period. On a non-GAAP basis, gross margin for subscription and support and professional services revenue each increased year-over-year; however, total gross margin decreased due to the higher mix of services revenue, which has a lower gross margin than subscription and support. |
• | Operating loss: GAAP operating loss was $25.5 million in Q4 2017, compared to a GAAP operating loss of $12.8 million in the year-ago period. Non-GAAP operating loss in Q4 2017 was $16.0 million, compared to a non-GAAP operating loss of $10.6 million in the year-ago period. Non‑GAAP sales and marketing expense as a percentage of revenue improved to 59% compared to 62% a year ago, despite higher commissions as a result of strong sales activity in the quarter. |
• | Net loss per share: GAAP net loss per share attributable to common stockholders was $0.19 based on 130.4 million weighted-average shares outstanding in Q4 2017, compared to GAAP net loss per share attributable to common stockholders of $0.52 based on 25.4 million weighted-average shares outstanding in Q4 2016. |
• | Deferred revenue: Total deferred revenue was $211.4 million at the end of Q4 2017, an increase of 56% year-over-year. Short-term deferred revenue was $202.0 million at the end of Q4 2017, an increase of 55% year-over-year. |
• | Cash: Cash provided by (used in) operating activities was $8.9 million in Q4 2017, compared to ($8.6) million in the year-ago period. Free cash flow, which is a non-GAAP measure that reflects cash from operating activities less cash used for capital expenditures, was $7.6 million for Q4 2017, compared to ($10.9) million in the year-ago period. |
• | Revenue: Total revenue was $296.5 million in FY 2017, an increase of 58% year-over-year. Subscription and support revenue was $238.0 million, an increase of 56% year-over-year. Professional services and other revenue was $58.5 million, an increase of 68% year-over-year. |
• | Gross margin: GAAP gross margin was 72.6% in FY 2017, compared to 73.9% in the year-ago period. Non‑GAAP gross margin was 74.1% in FY 2017, compared to 74.4% in the year-ago period. On a non-GAAP basis, gross margin for both subscription and support and professional services revenue increased year-over-year; however, total gross margin decreased due to the higher mix of services revenue, which has a lower gross margin than subscription and support. |
• | Operating loss: GAAP operating loss was $79.8 million in FY 2017, compared to a GAAP operating loss of $48.4 million in the year-ago period. Non-GAAP operating loss in FY 2017 was $51.7 million, compared to a non-GAAP operating loss of $31.9 million in the year-ago period. |
• | Net loss per share: GAAP net loss per share attributable to common stockholders was $0.75 based on 106.7 million weighted-average shares outstanding in FY 2017, compared to GAAP net loss per share attributable to common stockholders of $2.73 based on 21.6 million weighted-average shares outstanding in FY 2016. |
• | Cash: Cash provided by (used in) operating activities was $2.0 million in FY 2017, compared to ($2.4) million in the year-ago period. Free cash flow, which is a non-GAAP measure that reflects cash from operating activities less cash used for capital expenditures, was ($2.9) million in FY 2017, compared to ($6.9) million in the year-ago period. |
• | Appointment of Two New Board Members: MuleSoft appointed Yvonne Wassenaar and Marcus Ryu to its board of directors. Wassenaar and Ryu bring a combined 40 years of technology |
• | Forty-five customers with over $1.0 million in annual contract value: Executing successfully on its land-and-expand strategy and delivering value to customers, MuleSoft ended 2017 with 45 customers with over $1.0 million in annual contract value, up from 30 at year-end 2016. |
• | Top Place to Work in Multiple Geographies: MuleSoft was ranked the #1 Top Workplace for mid-sized companies by the Bay Area News Group, owner of the San Jose Mercury News. It is the fifth consecutive year that MuleSoft has been named a top employer on the list. In addition, MuleSoft was named one of the Best Places to Work for a third time by the San Francisco Business Times and Silicon Valley Business Journal. Additionally, MuleSoft received accolades for being a top place to work in Australia, Argentina, and the United Kingdom. |
• | Total revenue between $87 million and $90 million |
• | Non-GAAP operating loss between $10 million and $13 million |
• | Non-GAAP net loss per share between $0.07 and $0.09 |
• | Weighted-average shares outstanding of approximately 131 million |
• | Total revenue between $405 million and $415 million |
• | Non-GAAP operating loss between $35 million and $40 million |
• | Non-GAAP net loss per share between $0.26 and $0.30 |
• | Non-GAAP weighted-average shares outstanding of approximately 133 million |
December 31, | |||||||
2017 | 2016 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 79,568 | $ | 35,101 | |||
Investments | 124,603 | 63,361 | |||||
Trade receivables, net of allowance for doubtful accounts of $527 and $446 as of December 31, 2017 and December 31, 2016 | 111,863 | 72,324 | |||||
Prepaid expenses and other current assets | 18,987 | 18,854 | |||||
Total current assets | 335,021 | 189,640 | |||||
Investments, noncurrent | 143,108 | 4,151 | |||||
Property and equipment, net | 6,791 | 5,231 | |||||
Restricted cash | 784 | 671 | |||||
Goodwill | 814 | 787 | |||||
Intangible assets, net | 789 | 1,797 | |||||
Other assets | 5,289 | 661 | |||||
Total assets | $ | 492,596 | $ | 202,938 | |||
Liabilities and Stockholders' Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 2,219 | $ | 1,879 | |||
Accrued expenses | 12,158 | 7,797 | |||||
Accrued compensation and related expenses | 31,065 | 16,369 | |||||
Deferred revenue, current | 201,976 | 130,045 | |||||
Total current liabilities | 247,418 | 156,090 | |||||
Deferred revenue, noncurrent | 9,456 | 5,569 | |||||
Other liabilities | 2,775 | 1,176 | |||||
Total liabilities | 259,649 | 162,835 | |||||
Stockholders' equity: | |||||||
Convertible preferred stock | — | 255,946 | |||||
Common stock | 3 | 1 | |||||
Additional paid-in capital | 552,260 | 22,241 | |||||
Accumulated deficit | (316,218 | ) | (236,230 | ) | |||
Accumulated other comprehensive loss | (3,098 | ) | (1,855 | ) | |||
Total stockholders' equity | 232,947 | 40,103 | |||||
Total liabilities and stockholders' equity | $ | 492,596 | $ | 202,938 |
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Revenue: | ||||||||||||||||
Subscription and support | $ | 70,605 | $ | 45,006 | $ | 237,980 | $ | 152,843 | ||||||||
Professional services and other | 18,109 | 10,347 | 58,476 | 34,904 | ||||||||||||
Total revenue | 88,714 | 55,353 | 296,456 | 187,747 | ||||||||||||
Cost of revenue: (1) | ||||||||||||||||
Subscription and support | 6,062 | 4,182 | 20,001 | 13,722 | ||||||||||||
Professional services and other | 19,521 | 10,952 | 61,269 | 35,341 | ||||||||||||
Total cost of revenue | 25,583 | 15,134 | 81,270 | 49,063 | ||||||||||||
Gross profit | 63,131 | 40,219 | 215,186 | 138,684 | ||||||||||||
Operating expenses: (1) | ||||||||||||||||
Research and development | 18,608 | 9,969 | 64,585 | 32,862 | ||||||||||||
Sales and marketing | 56,933 | 35,190 | 184,583 | 122,630 | ||||||||||||
General and administrative | 13,058 | 7,896 | 45,813 | 31,577 | ||||||||||||
Total operating expenses | 88,599 | 53,055 | 294,981 | 187,069 | ||||||||||||
Loss from operations | (25,468 | ) | (12,836 | ) | (79,795 | ) | (48,385 | ) | ||||||||
Interest income | 1,000 | 151 | 2,483 | 465 | ||||||||||||
Other income (expense), net | (394 | ) | 8 | (1,015 | ) | (340 | ) | |||||||||
Net loss before provision for income taxes | (24,862 | ) | (12,677 | ) | (78,327 | ) | (48,260 | ) | ||||||||
Provision for income taxes | 226 | 414 | 1,653 | 1,339 | ||||||||||||
Net loss | $ | (25,088 | ) | $ | (13,091 | ) | $ | (79,980 | ) | $ | (49,599 | ) | ||||
Net loss attributable to common stockholders | $ | (25,088 | ) | $ | (13,091 | ) | $ | (79,980 | ) | $ | (59,035 | ) | ||||
Net loss per share attributable to common stockholders, basic and diluted | $ | (0.19 | ) | $ | (0.52 | ) | $ | (0.75 | ) | $ | (2.73 | ) | ||||
Weighted-average shares used in computing net loss per share, basic and diluted | 130,423,175 | 25,364,224 | 106,742,923 | 21,623,610 | ||||||||||||
(1) Includes stock-based compensation expenses, and other compensation expenses related to the 2016 Tender Offer as follows (in thousands): | ||||||||||||||||
Cost of subscription and support revenue | $ | 320 | $ | 90 | $ | 945 | $ | 255 | ||||||||
Cost of professional services and other revenue | 1,172 | 188 | 3,442 | 675 | ||||||||||||
Research and development | 2,428 | 625 | 6,994 | 2,831 | ||||||||||||
Sales and marketing | 4,166 | 844 | 12,646 | 8,619 | ||||||||||||
General and administrative | 1,352 | 457 | 4,043 | 4,120 | ||||||||||||
Total stock-based compensation expenses | $ | 9,438 | $ | 2,204 | $ | 28,070 | $ | 16,500 |
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net loss | $ | (25,088 | ) | $ | (13,091 | ) | $ | (79,980 | ) | $ | (49,599 | ) | ||||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||||||||||
Stock-based compensation | 9,438 | 2,204 | 28,070 | 6,552 | ||||||||||||
Other non-cash compensation related to 2016 Tender Offer | — | — | — | 9,948 | ||||||||||||
Depreciation and amortization | 1,006 | 746 | 3,833 | 1,949 | ||||||||||||
Amortization of investment premiums | 284 | 125 | 766 | 559 | ||||||||||||
Provision for doubtful accounts | (180 | ) | (75 | ) | 81 | 206 | ||||||||||
Tax benefits from employee stock plans | — | 95 | — | 321 | ||||||||||||
Loss on disposal of property and equipment | 74 | — | 134 | 6 | ||||||||||||
Other | — | — | — | 13 | ||||||||||||
Changes in assets and liabilities: | ||||||||||||||||
Trade receivables | (27,606 | ) | (25,598 | ) | (39,658 | ) | (25,106 | ) | ||||||||
Prepaid expenses and other current assets | (407 | ) | (9,112 | ) | (2,024 | ) | (6,836 | ) | ||||||||
Other assets | (3,022 | ) | (91 | ) | (4,628 | ) | (343 | ) | ||||||||
Accounts payable | 873 | (66 | ) | 380 | 1,090 | |||||||||||
Accrued expenses | (517 | ) | (415 | ) | 4,637 | 1,127 | ||||||||||
Accrued compensation and related expenses | 13,199 | 6,468 | 12,759 | 4,705 | ||||||||||||
Other liabilities | 441 | 600 | 1,599 | 1,096 | ||||||||||||
Deferred revenue | 40,409 | 29,575 | 76,012 | 51,931 | ||||||||||||
Net cash provided by (used in) operating activities | 8,904 | (8,635 | ) | 1,981 | (2,381 | ) | ||||||||||
Cash flows from investing activities: | ||||||||||||||||
Purchases of investments | (58,289 | ) | (19,259 | ) | (319,709 | ) | (41,214 | ) | ||||||||
Sales of investments | 40,051 | — | 42,476 | 24,536 | ||||||||||||
Maturities of investments | 27,050 | 21,100 | 74,957 | 39,650 | ||||||||||||
Purchases of property and equipment | (1,287 | ) | (2,310 | ) | (4,835 | ) | (4,501 | ) | ||||||||
Business combinations, net of cash acquired | — | (1,000 | ) | (106 | ) | (1,000 | ) | |||||||||
Net cash provided by (used in) investing activities | 7,525 | (1,469 | ) | (207,217 | ) | 17,471 | ||||||||||
Cash flows from financing activities: | ||||||||||||||||
Net proceeds from issuance of common stock in initial public offering | — | — | 236,360 | — | ||||||||||||
Proceeds from employee stock purchase plan | 2,552 | — | 7,031 | — | ||||||||||||
Repurchase of common shares | — | (601 | ) | — | (3,208 | ) | ||||||||||
Proceeds from issuance of common stock upon exercise of options and warrants | 4,565 | 1,375 | 7,998 | 4,281 | ||||||||||||
Payments of costs related to initial public offering | — | (1,730 | ) | (1,823 | ) | (1,730 | ) | |||||||||
Net cash provided by (used in) financing activities | 7,117 | (956 | ) | 249,566 | (657 | ) | ||||||||||
Impact of foreign exchange on cash and cash equivalents | (136 | ) | (539 | ) | 250 | (1,044 | ) | |||||||||
Net increase (decrease) in cash | 23,410 | (11,599 | ) | 44,580 | 13,389 | |||||||||||
Cash, cash equivalents and restricted cash, Beginning of period | 56,942 | 47,371 | 35,772 | 22,383 | ||||||||||||
Cash, cash equivalents and restricted cash, End of period | $ | 80,352 | $ | 35,772 | $ | 80,352 | $ | 35,772 |
Supplemental disclosures of cash flow information: | ||||||||||||||||
Cash paid for income taxes | $ | 117 | $ | 323 | $ | 1,084 | $ | 764 | ||||||||
Supplemental disclosures of non-cash investing and financing information: | ||||||||||||||||
Deemed dividends on preferred stock | $ | — | $ | 9,436 | $ | — | $ | 9,436 | ||||||||
Costs related to the initial public offering, accrued but unpaid | $ | — | $ | 266 | $ | — | $ | 266 | ||||||||
Liability for purchase of property and equipment | $ | 41 | $ | 91 | $ | 41 | $ | 91 |
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Cost of subscription and support revenue on a GAAP basis | $ | 6,062 | $ | 4,182 | $ | 20,001 | $ | 13,722 | ||||||||
Stock-based compensation expenses | (320 | ) | (90 | ) | (945 | ) | (255 | ) | ||||||||
Cost of subscription and support revenue on a non-GAAP basis | $ | 5,742 | $ | 4,092 | $ | 19,056 | $ | 13,467 | ||||||||
Gross margin on subscription and support revenue on a GAAP basis | 91.4 | % | 90.7 | % | 91.6 | % | 91.0 | % | ||||||||
Stock-based compensation expenses | 0.5 | % | 0.2 | % | 0.4 | % | 0.2 | % | ||||||||
Gross margin on subscription and support revenue on a non-GAAP basis | 91.9 | % | 90.9 | % | 92.0 | % | 91.2 | % | ||||||||
Cost of professional services and other revenue on a GAAP basis | $ | 19,521 | $ | 10,952 | $ | 61,269 | $ | 35,341 | ||||||||
Stock-based compensation expenses | (1,172 | ) | (188 | ) | (3,442 | ) | (675 | ) | ||||||||
Cost of professional services and other revenue on a non-GAAP basis | $ | 18,349 | $ | 10,764 | $ | 57,827 | $ | 34,666 | ||||||||
Gross margin on professional services and other revenue on a GAAP basis | (7.8 | )% | (5.8 | )% | (4.8 | )% | (1.3 | )% | ||||||||
Stock-based compensation expenses | 6.5 | % | 1.8 | % | 5.9 | % | 1.9 | % | ||||||||
Gross margin on professional services and other revenue on a non-GAAP basis | (1.3 | )% | (4.0 | )% | 1.1 | % | 0.6 | % | ||||||||
Gross profit on a GAAP basis | $ | 63,131 | $ | 40,219 | $ | 215,186 | $ | 138,684 | ||||||||
Stock-based compensation expenses | 1,492 | 278 | 4,387 | 930 | ||||||||||||
Gross profit on a non-GAAP basis | $ | 64,623 | $ | 40,497 | $ | 219,573 | $ | 139,614 | ||||||||
Gross margin on total revenue on a GAAP basis | 71.2 | % | 72.7 | % | 72.6 | % | 73.9 | % | ||||||||
Stock-based compensation expenses | 1.7 | % | 0.5 | % | 1.5 | % | 0.5 | % | ||||||||
Gross margin on total revenue on a non-GAAP basis | 72.9 | % | 73.2 | % | 74.1 | % | 74.4 | % | ||||||||
Research and development expenses on a GAAP basis | $ | 18,608 | $ | 9,969 | $ | 64,585 | $ | 32,862 | ||||||||
Stock-based compensation expenses | (2,428 | ) | (625 | ) | (6,994 | ) | (2,831 | ) | ||||||||
Research and development expenses on a non-GAAP basis | $ | 16,180 | $ | 9,344 | $ | 57,591 | $ | 30,031 | ||||||||
Sales and marketing expenses on a GAAP basis | $ | 56,933 | $ | 35,190 | $ | 184,583 | $ | 122,630 | ||||||||
Stock-based compensation expenses | (4,166 | ) | (844 | ) | (12,646 | ) | (8,619 | ) | ||||||||
Sales and marketing expenses on a non-GAAP basis | $ | 52,767 | $ | 34,346 | $ | 171,937 | $ | 114,011 | ||||||||
General and administrative expenses on a GAAP basis | $ | 13,058 | $ | 7,896 | $ | 45,813 | $ | 31,577 | ||||||||
Stock-based compensation expenses | (1,352 | ) | (457 | ) | (4,043 | ) | (4,120 | ) |
General and administrative expenses on a non-GAAP basis | $ | 11,706 | $ | 7,439 | $ | 41,770 | $ | 27,457 | ||||||||
Total operating expenses on a GAAP basis | $ | 88,599 | $ | 53,055 | $ | 294,981 | $ | 187,069 | ||||||||
Stock-based compensation expenses | (7,946 | ) | (1,926 | ) | (23,683 | ) | (15,570 | ) | ||||||||
Total operating expenses on a non-GAAP basis | $ | 80,653 | $ | 51,129 | $ | 271,298 | $ | 171,499 | ||||||||
Operating loss on a GAAP basis | $ | (25,468 | ) | $ | (12,836 | ) | $ | (79,795 | ) | $ | (48,385 | ) | ||||
Stock-based compensation expenses | 9,438 | 2,204 | 28,070 | 16,500 | ||||||||||||
Operating loss on a non-GAAP basis | $ | (16,030 | ) | $ | (10,632 | ) | $ | (51,725 | ) | $ | (31,885 | ) | ||||
Net loss attributable to common stockholders on a GAAP basis | $ | (25,088 | ) | $ | (13,091 | ) | $ | (79,980 | ) | $ | (59,035 | ) | ||||
Deemed dividend to preferred stockholders from 2016 Tender Offer | — | — | — | 9,436 | ||||||||||||
Stock-based compensation expenses | 9,438 | 2,204 | 28,070 | 16,500 | ||||||||||||
Net loss on a non-GAAP basis | $ | (15,650 | ) | $ | (10,887 | ) | $ | (51,910 | ) | $ | (33,099 | ) | ||||
Net loss per share attributable to common stockholders, basic and diluted | $ | (0.19 | ) | $ | (0.52 | ) | $ | (0.75 | ) | $ | (2.73 | ) | ||||
Deemed dividend to preferred stockholders from 2016 Tender Offer | — | — | — | 0.44 | ||||||||||||
Stock-based compensation expenses | 0.07 | 0.09 | 0.26 | 0.76 | ||||||||||||
Convertible preferred stock | — | 0.33 | 0.08 | 1.23 | ||||||||||||
Net loss per share attributable to common stockholders, basic and diluted, on a non-GAAP basis | $ | (0.12 | ) | $ | (0.10 | ) | $ | (0.41 | ) | $ | (0.30 | ) | ||||
GAAP weighted-average shares used to compute net loss per share attributable to common stockholders, basic and diluted | 130,423,175 | 25,364,224 | 106,742,923 | 21,623,610 | ||||||||||||
Convertible preferred shares issued and outstanding at beginning of the period | — | 87,200,703 | 19,091,802 | 89,296,160 | ||||||||||||
Non-GAAP weighted-average shares used to compute Non-GAAP net loss per share attributable to common stockholders, basic and diluted | 130,423,175 | 112,564,927 | 125,834,725 | 110,919,770 |
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Net cash provided by (used in) operating activities | $ | 8,904 | $ | (8,635 | ) | $ | 1,981 | $ | (2,381 | ) | ||||||
Less: Purchases of property and equipment | (1,287 | ) | (2,310 | ) | (4,835 | ) | (4,501 | ) | ||||||||
Free cash flow | $ | 7,617 | $ | (10,945 | ) | $ | (2,854 | ) | $ | (6,882 | ) |
K]X;[^K+Y655;5K%>4#SRO*X46B(A0TC,0
MN;,<@ C*>H93T(Z8NZW1MNS;QV[6[6W!'WK)7TTD$Z9E=4 (AKI[M4MX=TFD9Y45"3]P%9'U
M./3V Z+^\5K]1 SN5S SZ9GZ&?H/^K#D^X*JFEPMY(BJH1,IL7SB8&.8"E$Z
MQVR*1-S" =2BIP*4/,1$ #QU$O@\,W+NWPH)/ZC&>G7H,R?\ Q/WR@=4\?=V
M%B /TB0=2!U)4 ?B20!]I('J<*R[=X?_ );&.)N17S6ARO\ 6"*#XK)<8R *=0OB:0<-O#Q*!_(=N[#X.Y&Y!F1[50R0
M6HD9U52#%"HZ9E2PUR$ YY1(_P!Y ZXCURGY0\/<2PR1WJZ1U=^1211496HJ
M"