Full Year Revenue Growth of 22%; Full Year Operating Cash Flow 32% of Revenue

BOSTON, Feb. 11, 2016 (GLOBE NEWSWIRE) -- LogMeIn, Inc. (NASDAQ:LOGM), a leading provider of cloud-based connectivity, today announced its results for the fourth quarter and fiscal year ended December 31, 2015.

Fourth quarter 2015 highlights include:
  • Revenue was $76.1 million, up 27% compared with the fourth quarter of 2014
  • Adjusted EBITDA was $20.9 million and adjusted EBITDA margin was 27.5% versus $14.9 million and 24.9% in the fourth quarter of 2014
  • Non-GAAP net income was $13.2 million, or $0.51 per diluted share, as compared to $9.0 million, or $0.35 per diluted share, in the fourth quarter of 2014
  • GAAP net income was $6.2 million, or $0.24 per diluted share, as compared to GAAP net income of $3.3 million, or $0.13 per diluted share, in the fourth quarter of 2014
  • Cash flow from operations was $13.8 million, or 18% of revenue
  • Total deferred revenue was $137.0 million, up 30% from $105.3 million in the fourth quarter of 2014
  • The Company closed the quarter with cash, cash equivalents and short-term investments of $208.4 million

Fiscal year 2015 highlights include:
  • Revenue was $271.6 million, up 22% compared with fiscal year 2014
  • Adjusted EBITDA was $67.6 million and adjusted EBITDA margin was 24.9%, compared to $49.5 million and 22.3% in fiscal year 2014
  • Non-GAAP net income was $42.7 million, or $1.66 per diluted share, as compared to $29.9 million, or $1.18 per diluted share, in fiscal year 2014.
  • GAAP net income was $14.6 million, or $0.56 per diluted share, as compared to GAAP net income of $8.0 million, or $0.31 per diluted share, for fiscal year 2014
  • Cash flow from operations was $85.8 million, or 32% of revenue

"We are happy to report a great quarter and a very strong year with top and bottom line results that exceeded the high-end of our guidance," said Bill Wagner, President and CEO of LogMeIn.  "Perhaps more importantly, we made encouraging progress on our key collaboration, identity and IoT growth initiatives in Q4 and throughout 2015, which we believe lay the foundation for continued, profitable growth in 2016 and beyond."

"As we set our sights ahead, we are focused on solving the changing needs of our customers while expanding our total addressable market in ways that maximize shareholder value.  In 2016 we will enable professionals to collaborate in new ways, help people be more productive and secure by solving the challenges of identity and access management, and empower companies to support their customers and products in an increasingly connected world."

Business Outlook   Based on information available as of February 11, 2016, the Company is issuing guidance for the first quarter 2016 and fiscal year 2016. 

First Quarter 2016:  The Company expects first quarter revenue to be in the range of $77.5 million to $78.0 million.

Adjusted EBITDA is expected to be in the range of $14.0 million to $14.8 million.  

Non-GAAP net income is expected to be in the range of $7.6 million to $7.9 million, or $0.29 to $0.30 per diluted share.  Non-GAAP net income excludes an estimated $9.1 million in stock-based compensation expense, $0.3 million in litigation related expense, and $5.4 million in acquisition related costs and amortization.

Non-GAAP net income for the first quarter assumes an effective tax rate of approximately 30%. Non-GAAP net income per diluted share for the first quarter of 2016 is based on an estimated 26.3 million fully-diluted weighted average shares outstanding.

Including stock-based compensation expense, litigation related expense, and acquisition related costs and amortization, we expect to report a GAAP net loss in the range of $3.1 million to $2.4 million, or $0.12 to $0.10 per share.         

The GAAP net loss for the first quarter assumes an effective tax rate of approximately 20%. GAAP net loss per share for the first quarter of 2016 is based on an estimated 25.2 million average basic shares outstanding.

Fiscal year 2016:  The Company expects full year 2016 revenue to be in the range of $322.0 million to $326.0 million. 

Adjusted EBITDA is expected to be in the range of $76.5 million to $80.0 million.

Non-GAAP net income is expected to be in the range of $44.7 million to $46.6 million, or $1.70 to $1.77 per diluted share. Non-GAAP net income excludes an estimated $40.0 million in stock-based compensation expense, $0.9 million in litigation related expense, and $18.1 million in acquisition related costs and amortization.

Non-GAAP net income for the full fiscal year 2016 assumes an effective tax rate of approximately 30%.  Non-GAAP net income per diluted share for 2016 is based on an estimated 26.3 million fully-diluted weighted average shares outstanding.

Including stock-based compensation expense, litigation related expense, and acquisition related costs and amortization, we expect to report GAAP net income in the range of $3.3 million to $6.0 million, or $0.13 to $0.23 per diluted share.

The GAAP net income for the full year assumes an effective tax rate of 20%.  GAAP net income per share for 2016 is based on an estimated 26.3 million fully-diluted weighted average shares outstanding.

A reconciliation of the most comparable GAAP financial measures to non-GAAP measures used above is included in the tables attached to this release.

Conference Call Information for Today, Thursday, February 11, 2016 The Company will host a corresponding conference call and live webcast at 5:00 p.m. Eastern Time today.  To access the conference call, dial 877-407-9124 (for the U.S.) or 201-689-8584 (for international callers).  A live webcast will be available on the Investor Relations section of the Company's corporate website at https://www.logmeininc.com and via replay beginning approximately two hours after the completion of the call until the Company's announcement of its financial results for the next quarter.  An audio replay of the call will also be available to investors beginning at approximately 8:00 p.m. Eastern Time on February 11, 2016 until 11:59 p.m. Eastern Time on February 18, 2016, by dialing 877-660-6853 (for the U.S.) or 201-612-7415 (for international callers) and entering passcode 13629010.

Non-GAAP Financial MeasuresThis press release contains non-GAAP financial measures including adjusted EBITDA, adjusted EBITDA margin, non-GAAP operating income, non-GAAP income before provision for income taxes, non-GAAP provision for income taxes, non-GAAP net income, non-GAAP net income per diluted share and non-GAAP cash flow from operations.

Adjusted EBITDA is GAAP net income excluding provision for income taxes, interest income, interest expense, and other (expense) income, net, depreciation and amortization, acquisition related costs, stock-based compensation expense, and litigation related expense.  Adjusted EBITDA margin is calculated by dividing adjusted EBITDA by revenue.  Non-GAAP operating income excludes acquisition related costs and amortization, stock-based compensation expense, and litigation related expense. Non-GAAP provision for income taxes excludes the tax impact of acquisition related costs and amortization, stock-based compensation expense, and litigation related expense. Non-GAAP net income and non-GAAP net income per diluted share exclude acquisition related costs and amortization, stock-based compensation expense, and litigation related expense. Non-GAAP cash flow from operations excludes payments and receipts related to litigation related costs, and acquisition related payments.

The exclusion of certain expenses in the calculation of non-GAAP financial measures should not be construed as an inference that these costs are unusual or infrequent. We anticipate excluding these expenses in the future presentation of our non-GAAP financial measures. The Company believes that these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to the Company's financial condition and results of operations. The Company's management uses these non-GAAP measures to compare the Company's performance to that of prior periods and uses these measures in financial reports prepared for management and the Company's board of directors. The Company believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing the Company's financial measures with other software-as-a-service companies, many of which present similar non-GAAP financial measures to investors. The Company does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant elements that are required by GAAP to be recorded in the Company's financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by management in determining these non-GAAP financial measures. In order to compensate for these limitations, management of the Company presents its non-GAAP financial measures in connection with its GAAP results. The Company urges investors to review the reconciliation of its non-GAAP financial measures to the comparable GAAP financial measures, which it includes in press releases announcing quarterly financial results, and not to rely on any single financial measure to evaluate the Company's business. Reconciliation tables of the most comparable GAAP financial measures to the non-GAAP measures used in this press release are included in this release.

About LogMeIn, Inc. LogMeIn, Inc. (NASDAQ:LOGM) simplifies how people connect to each other and the world around them. With millions of users worldwide, our cloud-based solutions make it possible for people and companies to connect and engage with their workplace, colleagues, customers and products anywhere, anytime. LogMeIn is headquartered in Boston with offices in Bangalore, Budapest, Dublin, London, San Francisco, and Sydney.

Cautionary Language Concerning Forward-Looking Statements This press release contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding the popularity, value and effectiveness of the Company's products and services, the Company's profitability and growth, the size and growth potential of the Company's markets, and their potential impact on future shareholder value, the success of and demand for the Company's new and existing products and services, and the Company's financial guidance for fiscal year 2016 and the first quarter of 2016. These forward-looking statements are made as of the date they were first issued and were based on current expectations, estimates, forecasts and projections as well as the beliefs and assumptions of management. Words such as "expect," "anticipate," "should," "believe," "hope," "target," "project," "goals," "estimate," "potential," "predict," "may," "will," "might," "could," "intend," variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond the Company's control.  The Company's actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to, dependence on the remote support and software market, customer adoption of the Company's solutions, the Company's ability to execute on its strategic initiatives, the Company's ability to integrate acquired products or companies, the Company's ability to attract new customers and retain existing customers, adverse economic conditions in general and adverse economic conditions specifically affecting the markets in which the Company operates, the effectiveness of the Company's cybersecurity measures, intellectual property litigation, the Company's ability to continue to promote and maintain its brand in a cost-effective manner, the Company's ability to compete effectively, the Company's ability to develop and introduce new products and add-ons or enhancements to existing products, the Company's ability to manage growth, the Company's ability to attract and retain key personnel, the Company's ability to protect its intellectual property and other proprietary rights, the result of any pending litigation, and other risks detailed in the Company's other publicly available filings with the Securities and Exchange Commission. Past performance is not necessarily indicative of future results. The forward-looking statements included in this press release represent the Company's views as of the date of this press release. The Company anticipates that subsequent events and developments will cause its views to change. The Company undertakes no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These forward-looking statements should not be relied upon as representing the Company's views as of any date subsequent to the date of this press release.

LogMeIn is a registered trademark of LogMeIn, Inc. in the US and other countries around the world.

 
LogMeIn, Inc.  
Condensed Consolidated Balance Sheets (unaudited)  
(In thousands)  
           
           
         
  December 31,   December 31,    
    2014       2015      
           
ASSETS      
Current assets:          
Cash and cash equivalents $     100,960     $     123,143      
Marketable securities     100,209         85,284      
Accounts receivable, net      18,286         16,011      
Prepaid expenses and other current assets      4,545         11,997      
Restricted cash, current portion     1,492         -      
Deferred income taxes     5,403         -      
Total current assets     230,895         236,435      
Property and equipment, net     13,476         21,711      
Restricted cash     2,531         2,467      
Intangibles, net     18,983         71,590      
Goodwill     37,928         117,545      
Other assets     4,756         5,753      
Deferred income tax assets     9,280         198      
Total assets $     317,849     $     455,699      
           
LIABILITIES AND EQUITY    
Current liabilities:          
Accounts payable $     7,055     $     10,327      
Accrued liabilities     29,482         31,674      
Deferred revenue, current portion     101,672         134,297      
Total current liabilities     138,209         176,298      
Long-term debt     -         60,000      
Deferred revenue, net of current portion     3,578         2,692      
Deferred tax liabilities     -         5,812      
Other long-term liabilities     2,218         3,086      
Total liabilities     144,005         247,888      
Commitments and contingencies          
Preferred stock     -         -      
Equity:          
Common stock     267         275      
Additional paid-in capital     237,203         276,793      
Retained earnings     6,516         21,074      
Accumulated other comprehensive loss     (3,117 )       (5,216 )    
Treasury stock     (67,025 )       (85,115 )    
Total equity     173,844         207,811      
Total liabilities and equity $     317,849     $     455,699      
           

 
LogMeIn, Inc.  
Condensed Consolidated Statements of Operations (unaudited)  
(In thousands, except share and per share data)  
                   
                   
    Three Months Ended December 31,   Twelve Months Ended December 31,  
      2014       2015       2014       2015    
                   
Revenue    $     59,899     $     76,084     $     221,956     $     271,600    
Cost of revenue       7,881         10,263         28,732         35,458    
Gross profit       52,018         65,821         193,224         236,142    
Operating expenses                  
Research and development       9,080         12,839         33,516         42,597    
Sales and marketing       30,654         36,027         119,508         138,946    
General and administrative       8,514         9,263         30,526         33,034    
Legal settlements       -         -         -         3,600    
Amortization of acquired intangibles       234         1,072         987         1,916    
Total operating expenses       48,482         59,201         184,537         220,093    
Income from operations       3,536         6,620         8,687         16,049    
Interest income       175         123         604         654    
Interest expense       -         (314 )       (2 )       (574 )  
Other (expense) income, net       (97 )       411         105         1,389    
Income before income taxes       3,614         6,840         9,394         17,518    
Provision for income taxes       (301 )       (605 )       (1,439 )       (2,960 )  
Net income   $     3,313     $     6,235     $     7,955     $     14,558    
                   
Net income per share:                  
Basic   $     0.14     $     0.25     $     0.33     $     0.59    
Diluted   $     0.13     $     0.24     $     0.31     $     0.56    
Weighted average shares outstanding:                  
Basic     24,395,499       25,103,035       24,385,297       24,826,363    
Diluted     25,387,526       25,954,651       25,386,199       25,779,928    
                 
                   
                   
                   
Calculation of Non-GAAP Operating Income, Non-GAAP Net Income and Non-GAAP Diluted Net Income per share (unaudited)  
(In thousands, except share and per share data)  
                   
                   
    Three Months Ended December 31,   Twelve Months Ended December 31,  
      2014       2015       2014       2015    
                   
GAAP Income from operations   $     3,536     $     6,620     $     8,687     $     16,049    
Add Back:                  
Stock-based compensation expense       6,348         7,264         24,769         26,499    
Litigation related expenses       174         87         475         4,963    
Acquisition related costs and amortization        2,689         4,412         8,237         11,216    
Non-GAAP Operating income       12,747         18,383         42,168         58,727    
Other income, net       78         220         707         1,469    
Non-GAAP Income before income taxes       12,825         18,603         42,875         60,196    
Non-GAAP Provision for income taxes        (3,840 )       (5,392 )       (12,948 )       (17,528 )  
Non-GAAP Net income   $     8,985     $     13,211     $     29,927     $     42,668    
                   
Non-GAAP Diluted net income per share:   $     0.35     $     0.51     $     1.18     $     1.66    
Diluted weighted average shares outstanding used in                  
computing per share amounts:     25,387,526       25,954,651       25,386,199       25,779,928    
                 
                   
                   
                   
Calculation of Adjusted EBITDA (unaudited)  
(In thousands)  
                   
    Three Months Ended December 31,   Twelve Months Ended December 31,  
      2014       2015       2014       2015    
                   
GAAP Net income   $     3,313     $     6,235     $     7,955     $     14,558    
Add Back:                  
Stock-based compensation expense       6,348         7,264         24,769         26,499    
Litigation related expenses       174         87         475         4,963    
Acquisition related costs        1,973         2,512         4,466         6,345    
Interest income, interest expense and other (expense) income, net       (78 )       (220 )       (707 )       (1,469 )  
Income tax expense       301         605         1,439         2,960    
Depreciation and amortization expense       2,856         4,466         11,137         13,698    
Adjusted EBITDA   $     14,887      $ 20,949     $     49,534     $     67,554    
                   
                   
                   
Stock-Based Compensation Expense (unaudited)  
(In thousands)  
                   
                   
    Three Months Ended December 31,   Twelve Months Ended December 31,  
      2014       2015       2014       2015    
                   
Stock-based compensation expense:                  
Cost of revenue   $     303     $     428     $     1,107     $     1,560    
Research and development       1,006         1,137         3,653         5,188    
Sales and marketing       1,974         3,118         9,033         11,090    
General and administrative       3,065         2,581         10,976         8,661    
Total stock based-compensation   $     6,348     $     7,264     $     24,769     $     26,499    
                   

 

LogMeIn, Inc.  
Condensed Consolidated Statements of Cash Flows (unaudited)  
(In thousands)  
                   
                   
                   
    Three Months Ended December 31,   Twelve Months Ended December 31,  
      2014       2015       2014       2015    
Cash flows from operating activities                  
Net income    $     3,313     $     6,235     $     7,955     $     14,558    
Adjustments to reconcile net income to net cash                  
provided by operating activities:                  
Depreciation and amortization       2,856         4,466         11,137         13,698    
Amortization of premiums on investments       46         89         224         328    
Amortization of debt issuance costs       -         55         -         187    
Provision for bad debts       50         9         102         61    
Benefit from deferred income taxes       (3,229 )       (1,076 )       (2,707 )       (1,062 )  
Excess tax benefits realized from stock-based awards       (377 )       (2,527 )       (383 )       (2,743 )  
Stock-based compensation       6,348         7,264         24,769         26,499    
Other, net       (8 )       (13 )       21         (12 )  
Changes in assets and liabilities, excluding the effect of acquisitions:                  
Accounts receivable       (7,628 )       293         (5,804 )       2,224    
Prepaid expenses and other current assets       3,251         79         1,822         (2,794 )  
Other assets       165         (172 )       476         (454 )  
Accounts payable       1,143         (1,601 )       1,727         1,420    
Accrued liabilities       5,627         5,110         9,234         2,288    
Deferred revenue       3,238         (5,976 )       23,983         28,874    
Other long-term liabilities       472         1,521         1,597         2,698    
 Net cash provided by operating activities       15,267         13,756         74,153         85,770    
Cash flows from investing activities                  
Purchases of marketable securities       (45,369 )       (35,165 )       (95,342 )       (92,335 )  
Proceeds from sale or disposal or maturity of marketable securities       45,045         35,000         95,045         107,042    
Purchases of property and equipment       (1,774 )       (3,297 )       (7,471 )       (14,219 )  
Intangible asset additions       (762 )       60         (2,529 )       (2,375 )  
Cash paid for acquisitions, net of cash acquired       -         (107,575 )       (22,449 )       (107,575 )  
Decrease (increase) in restricted cash and deposits       3         -         (196 )       1,488    
Net cash used in investing activities       (2,857 )       (110,977 )       (32,942 )       (107,974 )  
Cash flows from financing activities                  
Borrowings under credit facility       -         60,000         -         60,000    
Proceeds from issuance of common stock upon option exercises       4,612         2,543         17,595         17,794    
Excess tax benefits realized from stock-based awards       377         2,527         383         2,743    
Payments of withholding taxes in connection with restricted stock unit vesting       (481 )       (493 )       (5,766 )       (11,641 )  
Payment of debt issuance costs       -         (11 )       -         (988 )  
Payment of contingent consideration       -         -         -         (226 )  
Purchase of treasury stock       (10,458 )       (3,358 )       (36,500 )       (18,090 )  
Net cash (used in) provided by financing activities       (5,950 )       61,208         (24,288 )       49,592    
Effect of exchange rate changes on cash and                   
cash equivalents and restricted cash       (1,841 )       (1,256 )       (5,220 )       (5,205 )  
Net increase (decrease) in cash and cash equivalents       4,619         (37,269 )       11,703         22,183    
Cash and cash equivalents, beginning of period       96,341         160,412         89,257         100,960    
Cash and cash equivalents, end of period   $     100,960     $     123,143     $     100,960     $     123,143    
                   
           
                   
                   
Calculation of Non-GAAP Cash Flows from Operating Activities (unaudited)  
(In thousands)  
                   
                   
    Three Months Ended December 31,   Twelve Months Ended December 31,  
      2014       2015       2014       2015    
                   
GAAP Cash flows from operating activities   $     15,267     $     13,756     $     74,153     $     85,770    
Add Back:                  
Litigation related payments       9         350         530         5,152    
Acquisition related payments       158         420         304         437    
Cash flows from operating activities before litigation related payments and                   
acquisition related payments   $     15,434     $     14,526     $     74,987     $     91,359    
                   

 

 

 
Contact Information:Investors Rob Bradley    LogMeIn, Inc.781-897-1301rbradley@LogMeIn.comPressCraig VerColenLogMeIn, Inc.781-897-0696Press@LogMeIn.com

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