Delaware | 001-38983 | 26-3542036 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) |
☐ | 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)) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Common Stock, $0.001 par value | LVGO | The Nasdaq Global Select Market |
Exhibit | Description | |
99.1 | ||
Livongo Health, Inc. | ||
By: | /s/ Lee Shapiro | |
Name: | Lee Shapiro | |
Title: | Chief Financial Officer | |
• | Strong Full Year Revenue of $170.2 million, up 149% from 2018 |
• | Ends year with 222,700 enrolled Livongo for Diabetes Members, up 96% year-over-year |
• | 2020 revenue guidance range of $280 million to $290 million |
• | Revenue: Total revenue for the quarter was $50.4 million, up 137% year-over-year. |
• | Gross Margin: GAAP gross margin of 78.3% and non-GAAP gross margin of 79.2%, which reflects continued scaling in the delivery of our offerings and includes an adjustment related to capitalization of device costs for certain solutions. |
• | Net Loss: GAAP net loss of $6.0 million, and net loss per share attributable to common stockholders of ($0.06) on a diluted basis, which includes an adjustment related to capitalization of a portion of sales commissions; and non-GAAP net income of $2.3 million, and non-GAAP net income per share attributable to common stockholders of $0.02 on a diluted basis. |
• | Adjusted EBITDA: $1.6 million in the fourth quarter of 2019 compared to ($10.2) million in the fourth quarter of 2018. |
• | Livongo for Diabetes Members: 222,700 Members as of December 31, 2019, up 96% year-over-year. |
• | Livongo Clients: 804 Clients as of December 31, 2019, up 95% year-over-year. |
• | Estimated Value of Agreements (EVA): $76.7 million, up from $56.1 million in the fourth quarter of 2018. It consists of the estimated value of agreements signed in the quarter with new Clients or expansions entered into with existing Clients. |
• | Revenue: Total revenue for the quarter was $50.2 million, exceeding our guidance range of $49.0 million to $49.5 million, and up 137% year-over-year. This was driven by the continued adoption of our Applied Health Signals platform. |
• | Gross Margin: GAAP gross margin of 78.2% and non-GAAP gross margin of 79.2%. |
• | Net Loss: GAAP net loss of $6.0 million, and net loss per share attributable to common stockholders of ($0.06) on a diluted basis; and non-GAAP net income of $2.3 million, and non-GAAP net income per share attributable to common stockholders of $0.02 on a diluted basis. |
• | Adjusted EBITDA: $1.6 million in the fourth quarter of 2019 compared to ($10.2) million in the fourth quarter of 2018, and exceeding our guidance range of ($5.5) million to ($5.0) million. |
• | Revenue: Total revenue for the year was $170.2 million, up 149% year-over-year, and exceeding our guidance range of $168.5 million to $169.0 million. This was driven by the continued adoption of our Applied Health Signals platform. |
• | Gross Margin: GAAP gross margin of 72.9% and non-GAAP gross margin of 73.9%. |
• | Net Loss: GAAP net loss of $55.3 million, and net loss per share attributable to common stockholders of ($1.09) on a diluted basis; and non-GAAP net loss of $19.7 million, and non-GAAP net loss per share attributable to common stockholders of ($0.39) on a diluted basis. |
• | Adjusted EBITDA: ($20.1) million in 2019 compared to ($27.7) million in 2018, and exceeding our guidance range of between ($26.7) million to ($26.1) million. |
• | EVA: $284.5 million, up 84% from $154.5 million in 2018. |
• | Revenue: Total revenue for the year was $169.9 million, up 148% year-over-year, and exceeding our guidance range of $168.5 million to $169.0 million. This was driven by the continued adoption of our Applied Health Signals platform. |
• | Gross Margin: GAAP gross margin of 72.8% and non-GAAP gross margin of 73.8%. |
• | Net Loss: GAAP net loss of $54.9 million, and net loss per share attributable to common stockholders of ($1.08) on a diluted basis; and non-GAAP net loss of $19.2 million, and non-GAAP net loss per share attributable to common stockholders of ($0.38) on a diluted basis. |
• | Adjusted EBITDA: ($19.6) million in 2019 compared to ($27.7) million in 2018, and exceeding our guidance range of between ($26.7) million to ($26.1) million. |
• | For the year 2020, the company expects revenue to grow between 65% and 71% to the range of $280.0 million to $290.0 million, ahead of our preliminary guidance of approximately $276.0 million. Adjusted EBITDA is expected to be in the range of ($22.0) million to ($20.0) million. |
• | For the first quarter of 2020, the company expects revenue in the range of $60.0 million to $62.0 million, and adjusted EBITDA in the range of ($5.5) million to ($4.5) million. |
December 31, 2019 | December 31, 2018 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 241,738 | $ | 108,928 | |||
Short-term investment | 150,000 | — | |||||
Accounts receivable, net of allowance for doubtful accounts of $1,245 and $575 as of December 31, 2019 and 2018, respectively | 40,875 | 16,623 | |||||
Inventories | 28,983 | 8,934 | |||||
Deferred costs, current(1) | 16,051 | 6,022 | |||||
Prepaid expenses and other current assets | 9,860 | 4,935 | |||||
Total current assets | 487,507 | 145,442 | |||||
Property and equipment, net | 10,354 | 5,837 | |||||
Restricted cash, noncurrent | 1,270 | 179 | |||||
Goodwill | 35,801 | 15,709 | |||||
Intangible assets, net | 16,469 | 5,154 | |||||
Deferred costs, noncurrent(1) | 5,700 | 2,447 | |||||
Other noncurrent assets | 3,460 | 5,485 | |||||
TOTAL ASSETS | $ | 560,561 | $ | 180,253 | |||
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS’ EQUITY (DEFICIT) | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 8,362 | $ | 6,377 | |||
Accrued expenses and other current liabilities(1) | 27,801 | 16,152 | |||||
Deferred revenue, current | 3,945 | 1,614 | |||||
Advance payments from partner, current | 1,767 | 293 | |||||
Total current liabilities | 41,875 | 24,436 | |||||
Deferred revenue, noncurrent | 654 | 437 | |||||
Advance payment from partner, noncurrent | 7,754 | 6,432 | |||||
Other noncurrent liabilities | 2,914 | 3,825 | |||||
TOTAL LIABILITIES | 53,197 | 35,130 | |||||
Commitments and contingencies | |||||||
Redeemable convertible preferred stock, par value of $0.001 per share | — | 236,929 | |||||
Stockholders’ equity (deficit): | |||||||
Preferred stock, par value of $0.001 per share | — | — | |||||
Common stock, par value of $0.001 per share | 95 | 18 | |||||
Additional paid-in capital | 671,467 | 21,789 | |||||
Accumulated deficit(1) | (164,198 | ) | (113,613 | ) | |||
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT) | 507,364 | (91,806 | ) | ||||
TOTAL LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS’ EQUITY (DEFICIT) | $ | 560,561 | $ | 180,253 |
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Revenue(1) | $ | 50,356 | $ | 21,206 | $ | 170,198 | $ | 68,431 | |||||||
Cost of revenue(2)(3)(8) | 10,936 | 6,898 | 46,158 | 20,269 | |||||||||||
Gross profit | 39,420 | 14,308 | 124,040 | 48,162 | |||||||||||
Operating expenses: | |||||||||||||||
Research and development(2)(6) | 12,763 | 8,376 | 49,842 | 24,861 | |||||||||||
Sales and marketing(1)(2)(3)(6)(9) | 20,868 | 12,041 | 78,060 | 36,433 | |||||||||||
General and administrative(2)(4)(5)(6) | 13,678 | 8,215 | 55,676 | 23,063 | |||||||||||
Change in fair value of contingent consideration | (168 | ) | (1,200 | ) | 843 | (1,200 | ) | ||||||||
Total operating expenses | 47,141 | 27,432 | 184,421 | 83,157 | |||||||||||
Loss from operations | (7,721 | ) | (13,124 | ) | (60,381 | ) | (34,995 | ) | |||||||
Other income, net | 1,686 | 671 | 3,742 | 1,641 | |||||||||||
Loss before provision for income taxes | (6,035 | ) | (12,453 | ) | (56,639 | ) | (33,354 | ) | |||||||
Provision for (benefit from) income taxes | 8 | 7 | (1,369 | ) | 28 | ||||||||||
Net loss | $ | (6,043 | ) | $ | (12,460 | ) | $ | (55,270 | ) | $ | (33,382 | ) | |||
Accretion of redeemable convertible preferred stock | — | (42 | ) | (96 | ) | (162 | ) | ||||||||
Net loss attributable to common stockholders | $ | (6,043 | ) | $ | (12,502 | ) | $ | (55,366 | ) | $ | (33,544 | ) | |||
Net loss per share attributable to common stockholders, basic and diluted | $ | (0.06 | ) | $ | (0.72 | ) | $ | (1.09 | ) | $ | (2.02 | ) | |||
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted(7) | 94,347 | 17,300 | 50,930 | 16,573 |
(1) | We adopted Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASC 606”) for the year ended December 31, 2019 using modified retrospective method to client contracts that were not completed as of January 1, 2019 and recorded an opening balance adjustment to reduce our accumulated deficit by $4.7 million. See impact of ASC 606 on our results of operations under "ASC 606 Adoption Impact on Results of Operations" below. |
(2) | Includes stock-based compensation expense as follows: |
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Cost of revenue | $ | 45 | $ | 8 | $ | 151 | $ | 18 | |||||||
Research and development | 1,870 | 1,217 | 8,182 | 2,188 | |||||||||||
Sales and marketing | 2,265 | 227 | 7,659 | 916 | |||||||||||
General and administrative | 2,947 | 1,908 | 16,640 | 3,210 | |||||||||||
Total stock-based compensation expense | $ | 7,127 | $ | 3,360 | $ | 32,632 | $ | 6,332 |
(3) | Includes amortization of intangible assets as follows: |
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Cost of revenue | $ | 420 | $ | 128 | $ | 1,520 | $ | 320 | |||||||
Sales and marketing | 276 | 96 | 1,065 | 272 | |||||||||||
Total amortization of intangible assets | $ | 696 | $ | 224 | $ | 2,585 | $ | 592 |
(4) | Includes acquisition-related expenses as follows: |
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
General and administrative | $ | — | $ | 113 | $ | 236 | $ | 354 | |||||||
Total acquisition-related expenses | $ | — | $ | 113 | $ | 236 | $ | 354 |
(5) | Includes secondary offering costs as follows: |
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Secondary offering costs | $ | 348 | $ | — | $ | 348 | $ | — | |||||||
Total secondary offering costs | $ | 348 | $ | — | $ | 348 | $ | — |
(6) | Includes secondary offering related payroll taxes as follows: |
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Research and development | $ | 30 | $ | — | $ | 30 | $ | — | |||||||
Sales and marketing | 87 | — | 87 | — | |||||||||||
General and administrative | 175 | — | 175 | — | |||||||||||
Total secondary offering related payroll taxes | $ | 292 | $ | — | $ | 292 | $ | — |
(7) | For the 2019 periods, the weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted, include the weighted-average outstanding shares for the following common stock issued in connection with our IPO in July 2019: (i) all shares of redeemable convertible preferred stock then outstanding, totaling 58,615 shares, were automatically converted into an equivalent number of shares of common stock on a one-to-one basis and (ii) we sold 14,590 shares of our common stock at an offering price of $28.00 per share, including 1,903 shares of common stock pursuant to the exercise in full of the underwriters' option to purchase additional shares. |
(8) | Includes a one-time adjustment for the deferral of device costs for Livongo for Hypertension and Livongo for Prediabetes and Weight Management which will be amortized in future periods. |
(9) | Includes a one-time adjustment for the capitalization of a portion of sales commissions which will be amortized in future periods. |
Year Ended December 31, | |||||||
2019 | 2018 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||
Net loss | $ | (55,270 | ) | $ | (33,382 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
Depreciation and amortization expense | 3,326 | 1,263 | |||||
Amortization of intangible assets | 2,585 | 592 | |||||
Change in fair value of contingent consideration | 843 | (1,200 | ) | ||||
Allowance for doubtful accounts | 854 | 476 | |||||
Stock-based compensation expense | 32,632 | 6,332 | |||||
Loss on disposal of property and equipment | — | 3 | |||||
Deferred income taxes | (1,396 | ) | — | ||||
Changes in operating assets and liabilities, net of impact of acquisitions: | |||||||
Accounts receivable, net | (23,769 | ) | (9,174 | ) | |||
Inventories | (20,049 | ) | (5,963 | ) | |||
Deferred costs | (8,611 | ) | (4,475 | ) | |||
Prepaid expenses and other assets | (4,476 | ) | (1,911 | ) | |||
Accounts payable | 1,986 | 2,562 | |||||
Accrued expenses and other liabilities | 8,011 | 8,286 | |||||
Deferred revenue | 1,142 | 595 | |||||
Advance payments from partner | 2,796 | 2,956 | |||||
Net cash used in operating activities | (59,396 | ) | (33,040 | ) | |||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||
Purchases of property and equipment | (1,995 | ) | (954 | ) | |||
Capitalized internal-use software costs | (5,199 | ) | (3,562 | ) | |||
Purchase of short-term investments | (150,000 | ) | — | ||||
Acquisitions, net of cash acquired | (27,435 | ) | (12,268 | ) | |||
Change in escrow deposit | 434 | (7,000 | ) | ||||
Net cash used in investing activities | (184,195 | ) | (23,784 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||
Proceeds from issuance of common stock upon initial public offering, net of issuance costs | 377,787 | — | |||||
Proceeds from exercise of stock options, net of repurchases | 3,096 | 1,658 | |||||
Proceeds from exercise of common stock warrants | 60 | — | |||||
Proceeds from issuance of redeemable convertible preferred stock, net of issuance costs | — | 104,750 | |||||
Taxes paid related to net share settlement of equity awards | (1,035 | ) | — | ||||
Payment of deferred purchase consideration | — | (2,000 | ) | ||||
Payment of contingent consideration | (2,416 | ) | — | ||||
Net cash provided by financing activities | 377,492 | 104,408 | |||||
Net increase in cash, cash equivalents, and restricted cash | 133,901 | 47,584 | |||||
Cash, cash equivalents, and restricted cash, beginning of period | 109,107 | 61,523 | |||||
Cash, cash equivalents, and restricted cash, end of period | $ | 243,008 | $ | 109,107 | |||
Reconciliation of cash, cash equivalents, and restricted cash: | |||||||
Cash and cash equivalents | $ | 241,738 | $ | 108,928 | |||
Restricted cash | 1,270 | 179 | |||||
Total cash, cash equivalents, and restricted cash, end of period | $ | 243,008 | $ | 109,107 |
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||||||||||
2019 | 2019 | 2019 | 2018 | 2019 | 2019 | 2019 | 2018 | ||||||||||||||||||||||||
ASC 606 | 606 Impact | ASC 605 | ASC 605 | ASC 606 | 606 Impact | ASC 605 | ASC 605 | ||||||||||||||||||||||||
(in thousands except per share amounts) | |||||||||||||||||||||||||||||||
Revenue | $ | 50,356 | $ | (108 | ) | $ | 50,248 | $ | 21,206 | $ | 170,198 | $ | (345 | ) | $ | 169,853 | $ | 68,431 | |||||||||||||
Cost of revenue | 10,936 | — | 10,936 | 6,898 | 46,158 | — | 46,158 | 20,269 | |||||||||||||||||||||||
Gross profit | 39,420 | (108 | ) | 39,312 | 14,308 | 124,040 | (345 | ) | 123,695 | 48,162 | |||||||||||||||||||||
Gross margin | 78.3 | % | — | % | 78.2 | % | 67.5 | % | 72.9 | % | (0.1 | )% | 72.8 | % | 70.4 | % | |||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||
Research and development | 12,763 | — | 12,763 | 8,376 | 49,842 | — | 49,842 | 24,861 | |||||||||||||||||||||||
Sales and marketing | 20,868 | (155 | ) | 20,713 | 12,041 | 78,060 | (703 | ) | 77,357 | 36,433 | |||||||||||||||||||||
General and administrative | 13,678 | — | 13,678 | 8,215 | 55,676 | — | 55,676 | 23,063 | |||||||||||||||||||||||
Change in fair value of contingent consideration | (168 | ) | — | (168 | ) | (1,200 | ) | 843 | — | 843 | (1,200 | ) | |||||||||||||||||||
Total operating expenses | 47,141 | (155 | ) | 46,986 | 27,432 | 184,421 | (703 | ) | 183,718 | 83,157 | |||||||||||||||||||||
Loss from operations | (7,721 | ) | 47 | (7,674 | ) | (13,124 | ) | (60,381 | ) | 358 | (60,023 | ) | (34,995 | ) | |||||||||||||||||
Other income, net | 1,686 | — | 1,686 | 671 | 3,742 | — | 3,742 | 1,641 | |||||||||||||||||||||||
Loss before provision for income taxes | (6,035 | ) | 47 | (5,988 | ) | (12,453 | ) | (56,639 | ) | 358 | (56,281 | ) | (33,354 | ) | |||||||||||||||||
Provision for (benefit from) income taxes | 8 | — | 8 | 7 | (1,369 | ) | — | (1,369 | ) | 28 | |||||||||||||||||||||
Net loss | $ | (6,043 | ) | $ | 47 | $ | (5,996 | ) | $ | (12,460 | ) | $ | (55,270 | ) | $ | 358 | $ | (54,912 | ) | $ | (33,382 | ) | |||||||||
Accretion of redeemable convertible preferred stock | — | — | — | (42 | ) | (96 | ) | — | (96 | ) | (162 | ) | |||||||||||||||||||
Net loss attributable to common stockholders | $ | (6,043 | ) | $ | 47 | $ | (5,996 | ) | $ | (12,502 | ) | $ | (55,366 | ) | $ | 358 | $ | (55,008 | ) | $ | (33,544 | ) | |||||||||
Net loss per share attributable to common stockholders, basic and diluted | $ | (0.06 | ) | $ | — | $ | (0.06 | ) | $ | (0.72 | ) | $ | (1.09 | ) | $ | 0.01 | $ | (1.08 | ) | $ | (2.02 | ) | |||||||||
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted | 94,347 | 94,347 | 17,300 | 50,930 | 50,930 | 16,573 |
Three Months Ended December 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||
GAAP (ASC 606) | Stock-Based Compensation Expense | Amortization of Intangible Assets | Acquisition Related Expenses | Secondary Offering Costs | Secondary Offering Related Payroll Taxes | Change in Fair Value of Contingent Consideration | Tax Impact | Non-GAAP (ASC 606) | ASC 606 Impact | Non-GAAP (ASC 605) | |||||||||||||||||||||||||||||||||
Revenue | $ | 50,356 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 50,356 | $ | (108 | ) | $ | 50,248 | ||||||||||||||||||||
Cost of revenue | $ | 10,936 | $ | (45 | ) | $ | (420 | ) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 10,471 | $ | — | $ | 10,471 | |||||||||||||||||||
Gross profit | $ | 39,420 | $ | 45 | $ | 420 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 39,885 | $ | (108 | ) | $ | 39,777 | ||||||||||||||||||||
Gross margin | 78.3 | % | 79.2 | % | 79.2 | % | |||||||||||||||||||||||||||||||||||||
Research and development | $ | 12,763 | $ | (1,870 | ) | $ | — | $ | — | $ | — | $ | (30 | ) | $ | — | $ | — | $ | 10,863 | $ | — | $ | 10,863 | |||||||||||||||||||
Sales and marketing | $ | 20,868 | $ | (2,265 | ) | $ | (276 | ) | $ | — | $ | — | $ | (87 | ) | $ | — | $ | — | $ | 18,240 | $ | (140 | ) | $ | 18,100 | |||||||||||||||||
General and administrative | $ | 13,678 | $ | (2,947 | ) | $ | — | $ | — | $ | (348 | ) | $ | (175 | ) | $ | — | $ | — | $ | 10,208 | $ | — | $ | 10,208 | ||||||||||||||||||
Change in fair value of contingent consideration | $ | (168 | ) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 168 | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||
Total operating expenses | $ | 47,141 | $ | (7,082 | ) | $ | (276 | ) | $ | — | $ | (348 | ) | $ | (292 | ) | $ | 168 | $ | — | $ | 39,311 | $ | (140 | ) | $ | 39,171 | ||||||||||||||||
Loss from operations | $ | (7,721 | ) | $ | 7,127 | $ | 696 | $ | — | $ | 348 | $ | 292 | $ | (168 | ) | $ | — | $ | 574 | $ | 32 | $ | 606 | |||||||||||||||||||
Loss before provision for income taxes | $ | (6,035 | ) | $ | 7,127 | $ | 696 | $ | — | $ | 348 | $ | 292 | $ | (168 | ) | $ | — | $ | 2,260 | $ | 32 | $ | 2,292 | |||||||||||||||||||
Net (loss) income | $ | (6,043 | ) | $ | 7,127 | $ | 696 | $ | — | $ | 348 | $ | 292 | $ | (168 | ) | $ | — | $ | 2,252 | $ | 32 | $ | 2,284 | |||||||||||||||||||
Net (loss) income attributable to common stockholders | $ | (6,043 | ) | $ | 7,127 | $ | 696 | $ | — | $ | 348 | $ | 292 | $ | (168 | ) | $ | — | $ | 2,252 | $ | 32 | $ | 2,284 | |||||||||||||||||||
Net (loss) income per share attributable to common stockholders, diluted | $ | (0.06 | ) | $ | 0.02 | $ | — | $ | 0.02 | ||||||||||||||||||||||||||||||||||
Weighted-average shares used in computing net (loss) income per share attributable to common stockholders, diluted | 94,347 | 112,143 | 112,143 |
Three Months Ended December 31, 2018 | |||||||||||||||||||||||||||||||||||
GAAP (ASC 605) | Stock-Based Compensation Expense | Amortization of Intangible Assets | Acquisition Related Expenses | Secondary Offering Costs | Secondary Offering Related Payroll Taxes | Change in Fair Value of Contingent Consideration | Tax Impact | Non-GAAP (ASC 605) | |||||||||||||||||||||||||||
Cost of revenue | $ | 6,898 | $ | (8 | ) | $ | (128 | ) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 6,762 | |||||||||||||||
Gross profit | $ | 14,308 | $ | 8 | $ | 128 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 14,444 | |||||||||||||||||
Gross margin | 67.5 | % | 68.1 | % | |||||||||||||||||||||||||||||||
Research and development | $ | 8,376 | $ | (1,217 | ) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 7,159 | ||||||||||||||||
Sales and marketing | $ | 12,041 | $ | (227 | ) | $ | (96 | ) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 11,718 | |||||||||||||||
General and administrative | $ | 8,215 | $ | (1,908 | ) | $ | — | $ | (113 | ) | $ | — | $ | — | $ | — | $ | — | $ | 6,194 | |||||||||||||||
Change in fair value of contingent consideration | $ | (1,200 | ) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 1,200 | $ | — | $ | — | ||||||||||||||||
Total operating expenses | $ | 27,432 | $ | (3,352 | ) | $ | (96 | ) | $ | (113 | ) | $ | — | $ | — | $ | 1,200 | $ | — | $ | 25,071 | ||||||||||||||
Loss from operations | $ | (13,124 | ) | $ | 3,360 | $ | 224 | $ | 113 | $ | — | $ | — | $ | (1,200 | ) | $ | — | $ | (10,627 | ) | ||||||||||||||
Loss before provision for income taxes | $ | (12,453 | ) | $ | 3,360 | $ | 224 | $ | 113 | $ | — | $ | — | $ | (1,200 | ) | $ | — | $ | (9,956 | ) | ||||||||||||||
Net loss | $ | (12,460 | ) | $ | 3,360 | $ | 224 | $ | 113 | $ | — | $ | — | $ | (1,200 | ) | $ | — | $ | (9,963 | ) | ||||||||||||||
Net loss attributable to common stockholders | $ | (12,502 | ) | $ | 3,360 | $ | 224 | $ | 113 | $ | — | $ | — | $ | (1,200 | ) | $ | — | $ | (10,005 | ) | ||||||||||||||
Net loss per share attributable to common stockholders, diluted | $ | (0.72 | ) | $ | (0.58 | ) | |||||||||||||||||||||||||||||
Weighted-average shares used in computing net loss per share attributable to common stockholders, diluted | 17,300 | 17,300 |
Year Ended December 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||
GAAP (ASC 606) | Stock-Based Compensation Expense | Amortization of Intangible Assets | Acquisition Related Expenses | Secondary Offering Costs | Secondary Offering Related Payroll Taxes | Change in Fair Value of Contingent Consideration | Tax Impact | Non-GAAP (ASC 606) | ASC 606 Impact | Non-GAAP (ASC 605) | |||||||||||||||||||||||||||||||||
Revenue | $ | 170,198 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 170,198 | $ | (345 | ) | $ | 169,853 | ||||||||||||||||||||
Cost of revenue | $ | 46,158 | $ | (151 | ) | $ | (1,520 | ) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 44,487 | $ | — | $ | 44,487 | |||||||||||||||||||
Gross profit | $ | 124,040 | $ | 151 | $ | 1,520 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 125,711 | $ | (345 | ) | $ | 125,366 | ||||||||||||||||||||
Gross margin | 72.9 | % | 73.9 | % | 73.8 | % | |||||||||||||||||||||||||||||||||||||
Research and development | $ | 49,842 | $ | (8,182 | ) | $ | — | $ | — | $ | — | $ | (30 | ) | $ | — | $ | — | $ | 41,630 | $ | — | $ | 41,630 | |||||||||||||||||||
Sales and marketing | $ | 78,060 | $ | (7,659 | ) | $ | (1,065 | ) | $ | — | $ | — | $ | (87 | ) | $ | — | $ | — | $ | 69,249 | $ | (910 | ) | $ | 68,339 | |||||||||||||||||
General and administrative | $ | 55,676 | $ | (16,640 | ) | $ | — | $ | (236 | ) | $ | (348 | ) | $ | (175 | ) | $ | — | $ | — | $ | 38,277 | $ | — | $ | 38,277 | |||||||||||||||||
Change in fair value of contingent consideration | $ | 843 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | (843 | ) | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||
Total operating expenses | $ | 184,421 | $ | (32,481 | ) | $ | (1,065 | ) | $ | (236 | ) | $ | (348 | ) | $ | (292 | ) | $ | (843 | ) | $ | — | $ | 149,156 | $ | (910 | ) | $ | 148,246 | ||||||||||||||
Loss from operations | $ | (60,381 | ) | $ | 32,632 | $ | 2,585 | $ | 236 | $ | 348 | $ | 292 | $ | 843 | $ | — | $ | (23,445 | ) | $ | 565 | $ | (22,880 | ) | ||||||||||||||||||
Loss before provision for income taxes | $ | (56,639 | ) | $ | 32,632 | $ | 2,585 | $ | 236 | $ | 348 | $ | 292 | $ | 843 | $ | — | $ | (19,703 | ) | $ | 565 | $ | (19,138 | ) | ||||||||||||||||||
Provision for (benefit from) income taxes | $ | (1,369 | ) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 1,396 | $ | 27 | $ | — | $ | 27 | ||||||||||||||||||||
Net loss | $ | (55,270 | ) | $ | 32,632 | $ | 2,585 | $ | 236 | $ | 348 | $ | 292 | $ | 843 | $ | (1,396 | ) | $ | (19,730 | ) | $ | 565 | $ | (19,165 | ) | |||||||||||||||||
Net loss attributable to common stockholders | $ | (55,366 | ) | $ | 32,632 | $ | 2,585 | $ | 236 | $ | 348 | $ | 292 | $ | 843 | $ | (1,396 | ) | $ | (19,826 | ) | $ | 565 | $ | (19,261 | ) | |||||||||||||||||
Net loss per share attributable to common stockholders, diluted | $ | (1.09 | ) | $ | (0.39 | ) | $ | 0.01 | (0.38 | ) | |||||||||||||||||||||||||||||||||
Weighted-average shares used in computing net loss per share attributable to common stockholders, diluted | 50,930 | 50,930 | 50,930 |
Year Ended December 31, 2018 | |||||||||||||||||||||||||||||||||||
GAAP (ASC 605) | Stock-Based Compensation Expense | Amortization of Intangible Assets | Acquisition Related Expenses | Secondary Offering Costs | Secondary Offering Related Payroll Taxes | Change in Fair Value of Contingent Consideration | Tax Impact | Non-GAAP (ASC 605) | |||||||||||||||||||||||||||
Cost of revenue | $ | 20,269 | $ | (18 | ) | $ | (320 | ) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 19,931 | |||||||||||||||
Gross profit | $ | 48,162 | $ | 18 | $ | 320 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 48,500 | |||||||||||||||||
Gross margin | 70.4 | % | 70.9 | % | |||||||||||||||||||||||||||||||
Research and development | $ | 24,861 | $ | (2,188 | ) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 22,673 | ||||||||||||||||
Sales and marketing | $ | 36,433 | $ | (916 | ) | $ | (272 | ) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 35,245 | |||||||||||||||
General and administrative | $ | 23,063 | $ | (3,210 | ) | $ | — | $ | (354 | ) | $ | — | $ | — | $ | — | $ | — | $ | 19,499 | |||||||||||||||
Change in fair value of contingent consideration | $ | (1,200 | ) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 1,200 | $ | — | $ | — | ||||||||||||||||
Total operating expenses | $ | 83,157 | $ | (6,314 | ) | $ | (272 | ) | $ | (354 | ) | $ | — | $ | — | $ | 1,200 | $ | — | $ | 77,417 | ||||||||||||||
Loss from operations | $ | (34,995 | ) | $ | 6,332 | $ | 592 | $ | 354 | $ | — | $ | — | $ | (1,200 | ) | $ | — | $ | (28,917 | ) | ||||||||||||||
Loss before provision for income taxes | $ | (33,354 | ) | $ | 6,332 | $ | 592 | $ | 354 | $ | — | $ | — | $ | (1,200 | ) | $ | — | $ | (27,276 | ) | ||||||||||||||
Net loss | $ | (33,382 | ) | $ | 6,332 | $ | 592 | $ | 354 | $ | — | $ | — | $ | (1,200 | ) | $ | — | $ | (27,304 | ) | ||||||||||||||
Net loss attributable to common stockholders | $ | (33,544 | ) | $ | 6,332 | $ | 592 | $ | 354 | $ | — | $ | — | $ | (1,200 | ) | $ | — | $ | (27,466 | ) | ||||||||||||||
Net loss per share attributable to common stockholders, diluted | $ | (2.02 | ) | $ | (1.66 | ) | |||||||||||||||||||||||||||||
Weighted-average shares used in computing net loss per share attributable to common stockholders, diluted | 16,573 | 16,573 |
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||||||||||
2019 | 2019 | 2019 | 2018 | 2019 | 2019 | 2019 | 2018 | ||||||||||||||||||||||||
ASC 606 | 606 Impact | ASC 605 | ASC 605 | ASC 606 | 606 Impact | ASC 605 | ASC 605 | ||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||||
Gross profit | $ | 39,420 | $ | (108 | ) | $ | 39,312 | $ | 14,308 | $ | 124,040 | $ | (345 | ) | $ | 123,695 | $ | 48,162 | |||||||||||||
Add: | |||||||||||||||||||||||||||||||
Stock-based compensation expense | 45 | — | 45 | 8 | 151 | — | 151 | 18 | |||||||||||||||||||||||
Amortization of intangible assets | 420 | — | 420 | 128 | 1,520 | — | 1,520 | 320 | |||||||||||||||||||||||
Adjusted gross profit | $ | 39,885 | $ | (108 | ) | $ | 39,777 | $ | 14,444 | $ | 125,711 | $ | (345 | ) | $ | 125,366 | $ | 48,500 | |||||||||||||
Adjusted gross margin (as a percentage of revenue) | 79.2 | % | 79.2 | % | 68.1 | % | 73.9 | % | 73.8 | % | 70.9 | % |
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||||||||||
2019 | 2019 | 2019 | 2018 | 2019 | 2019 | 2019 | 2018 | ||||||||||||||||||||||||
ASC 606 | 606 Impact | ASC 605 | ASC 605 | ASC 606 | 606 Impact | ASC 605 | ASC 605 | ||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||
Net loss | $ | (6,043 | ) | $ | 47 | $ | (5,996 | ) | $ | (12,460 | ) | $ | (55,270 | ) | $ | 358 | $ | (54,912 | ) | $ | (33,382 | ) | |||||||||
Add: | |||||||||||||||||||||||||||||||
Depreciation and amortization(1) | 1,014 | — | 1,014 | 456 | 3,326 | — | 3,326 | 1,263 | |||||||||||||||||||||||
Amortization of intangible assets | 696 | — | 696 | 224 | 2,585 | — | 2,585 | 592 | |||||||||||||||||||||||
Stock-based compensation expense | 7,127 | (15 | ) | 7,112 | 3,360 | 32,632 | 207 | 32,839 | 6,332 | ||||||||||||||||||||||
Acquisition-related expenses(2) | — | — | — | 113 | 236 | — | 236 | 354 | |||||||||||||||||||||||
Secondary offering costs(3) | 348 | — | 348 | — | 348 | — | 348 | — | |||||||||||||||||||||||
Secondary offering related payroll taxes(4) | 292 | — | 292 | — | 292 | — | 292 | — | |||||||||||||||||||||||
Change in fair value of contingent consideration | (168 | ) | — | (168 | ) | (1,200 | ) | 843 | — | 843 | (1,200 | ) | |||||||||||||||||||
Other income, net(5) | (1,686 | ) | — | (1,686 | ) | (671 | ) | (3,742 | ) | — | (3,742 | ) | (1,641 | ) | |||||||||||||||||
Provision for (benefit from) income taxes | 8 | — | 8 | 7 | (1,369 | ) | — | (1,369 | ) | 28 | |||||||||||||||||||||
Adjusted EBITDA | $ | 1,588 | $ | 32 | $ | 1,620 | $ | (10,171 | ) | $ | (20,119 | ) | $ | 565 | $ | (19,554 | ) | $ | (27,654 | ) |
(1) | Depreciation and amortization includes depreciation of property and equipment and amortization of capitalized internal-use software costs. |
(2) | Acquisition-related expenses consist primarily of transaction and transition related fees and expenses, including legal, accounting, and other professional fees. |
(3) | Secondary offering costs consist of transaction related fees and expenses, including legal, accounting, and other professional fees associated with our secondary offering completed in December 2019. |
(4) | Secondary offering related payroll taxes consist of payroll tax expenses associated with equity awards released. |
(5) | Other income, net includes interest income, interest expense, and other income (expense). |
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
(dollars in thousands) | |||||||||||||||
Clients | 804 | 413 | 804 | 413 | |||||||||||
Enrolled Diabetes Members | 222,683 | 113,854 | 222,683 | 113,854 | |||||||||||
Estimated Value of Agreements(1) | $ | 76,671 | $ | 56,101 | $ | 284,502 | $ | 154,468 |
(1) | Previously referred to as total contract value |