Tangoe, Inc. Announces Fourth Quarter And Full Year 2011 Financial Results

Tangoe, Inc. (NASDAQ: TNGO), a leading global provider of Communications Lifecycle Management (“CLM”) software and related services, today announced financial results for its fourth quarter and full year ended December 31, 2011.

“The fourth quarter marked a strong finish to 2011, as we exceeded the high end of guidance across all of our key operating metrics,” stated Albert Subbloie, president and CEO of Tangoe. “For the quarter and full year 2011, Tangoe continued to gain significant market share through a combination of organic growth and strategic acquisitions. Our momentum is being driven by a combination of new customer wins, strong cross-sell activity, best-in-class renewal rates and growing traction with our strategic alliance partners.”

Subbloie added, “The recent acquisitions of ProfitLine and Anomalous Networks have expanded our value proposition, customer base and distribution channels. We believe these strategic moves add to our strong business momentum as we begin 2012, and further enhance our ability to capitalize on the multi-billion dollar CLM market opportunity.”

Fourth Quarter 2011 Financial Highlights

• Revenue: Total revenue for the fourth quarter was $29.2 million, an increase of 57% on a year-over-year basis. Recurring technology and services revenue was $25.8 million, an increase of 61% on a year-over-year basis. Strategic consulting, software licenses and other services contributed the remaining $3.4 million of total revenue for the fourth quarter of 2011.
• Operating Income: GAAP operating income for the fourth quarter was $1.2 million, compared to operating income of $0.3 million for the fourth quarter of 2010. Non-GAAP operating income was $3.3 million, representing a record quarterly non-GAAP operating margin of 11.4% and an increase of 97% compared to $1.7 million for the fourth quarter of 2010.
• Net Income (Loss): GAAP net income for the fourth quarter was $0.9 million, compared to a $0.5 million net loss for the same period last year. GAAP diluted income per share for the fourth quarter was $0.02, based on 38.5 million weighted-average diluted shares outstanding, compared to a loss per share of $0.33, after deducting dividends and accretion related to our preferred stock and based on 4.5 million weighted-average shares outstanding for the same period last year.Non-GAAP net income for the fourth quarter was $3.0 million, up 157% compared to $1.2 million for the fourth quarter of 2010. Non-GAAP diluted net income per share for the fourth quarter was $0.08 based on 38.5 million weighted-average diluted shares outstanding, an increase of 100% compared to $0.04 per share based on 29.0 million weighted-average diluted shares outstanding for the same period last year.
• Adjusted EBITDA: Adjusted EBITDA for the fourth quarter was $3.7 million, an increase of 87% compared to $2.0 million for the fourth quarter of 2010. Adjusted EBITDA margin was a record 12.6% for the fourth quarter of 2011, an increase compared to a 10.6% margin for the same period last year.
• Cash and Cash Flow: As of December 31, 2011, Tangoe had cash and cash equivalents of $43.4 million, compared to $52.5 million at the end of the prior quarter. During the fourth quarter, the company used $14.5 million in cash related to the acquisition of ProfitLine.The company generated $4.8 million in net cash from operations for the fourth quarter of 2011, compared to $1.3 million during the fourth quarter of 2010. The Company generated $4.4 million in unlevered free cash flow for the quarter, an increase of 103% compared to $2.2 million during the fourth quarter of 2010.

Full Year 2011 Financial Highlights

• Revenue: Total revenue for the full year 2011 was $104.9 million, an increase of 53% on a year-over-year basis. Recurring technology and services revenue was $93.7 million, an increase of 62% on a year-over-year basis. Strategic consulting, software licenses and other services contributed the remaining $11.2 million of total revenue for 2011.
• Operating Income: GAAP operating income for the full year 2011 was $2.6 million, compared to operating income of $1.4 million for 2010. Non-GAAP operating income was $11.3 million, representing a record annual non-GAAP operating margin of 10.8% and an increase of 95% compared to $5.8 million for 2010.
• Net Income (Loss): GAAP net loss for the full year 2011 was $3.0 million, compared to a $1.8 million net loss for 2010. GAAP loss per share after deducting dividends and accretion related to our preferred stock was $0.31 based on 16.4 million weighted-average shares outstanding for the full year 2011, compared to a loss per share of $1.26 based on 4.4 million weighted-average shares outstanding for 2010.Non-GAAP net income for the full year 2011 was $8.8 million, up 152% compared to $3.5 million for 2010. Non-GAAP net income per share for 2011 was $0.26 based on 33.5 million weighted-average diluted shares outstanding, an increase of 117% compared to $0.12 per share based on 28.8 million weighted-average diluted shares outstanding for 2010.
• Adjusted EBITDA: Adjusted EBITDA for the full year 2011 was $12.7 million, an increase of 84% compared to $6.9 million for 2010. Adjusted EBITDA margin was a record 12.1% for 2011, an increase compared to a 10.0% margin for 2010.
• Cash Flow: The Company generated $10.1 million in net cash from operations during the full year 2011, compared to $3.4 million in 2010. The Company generated $10.6 million in unlevered free cash flow for 2011, an increase of 97% compared to $5.4 million for 2010.

A reconciliation of GAAP to non-GAAP financial measures has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”

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