CallidusCloud Reports Q4 2017 Total Revenue Of $69.5 Million And $253.1 Million In 2017

  • Q4 SaaS Revenue Increases 30% to $54.6 Million
  • Cash from Operations of $13.0 Million, up 45% Year over Year
  • 2017 SaaS Revenue of $198.2 Million, up 31% Year over Year
  • SaaS Deferred Revenue of $129.3 Million, up 31% Year over Year

DUBLIN, Calif., Feb. 08, 2018 (GLOBE NEWSWIRE) -- Callidus Software Inc. (NASDAQ:CALD), a global leader in cloud-based sales, marketing, learning and customer experience solutions, today announced financial results for the year ended December 31, 2017.

Recent Acquisition AnnouncementOn January 29, 2018, CallidusCloud entered into a merger agreement with SAP America, Inc. ("SAP") under which SAP will acquire CallidusCloud for $36.00 per share in an all-cash transaction valued at approximately $2.5 billion, inclusive of CallidusCloud's net cash.

In light of this, CallidusCloud will not hold a conference call to discuss these financial results.

Financial Highlights for the Fourth Quarter 2017 SaaS revenue was $54.6 million, an increase of 30% over the same quarter in the prior year. Maintenance revenue was $450,000, resulting in total recurring revenue of $55.0 million. SaaS revenue growth continued to benefit from success in our Lead to Money suite. Professional services revenue was $14.1 million. Total revenue was $69.5 million for the fourth quarter, an increase of 24% year-over-year. Normalized SaaS billings growth was 28% for the trailing twelve-month period. Normalized billings growth for the quarter was 38%. Cash and short-term investments were $150.5 million. Cash flow from operations for the quarter was $13.0 million, compared to $9.0 million in the same quarter of the prior year.

GAAP Performance
  • Recurring revenue gross margin was 73%, compared to 74% for the same quarter in the prior year.
  • Overall gross margin was 62%, consistent with the corresponding period in the prior year.
  • Operating loss was $3.8 million, compared to $4.2 million for the same quarter in the prior year.
  • Pre-tax loss was $3.4 million, compared to $4.4 million for the same quarter in the prior year.  

Non-GAAP PerformanceThe following non-GAAP measures are described below and are reconciled to the corresponding GAAP measures at the end of this press release.
  • Recurring revenue gross margin was 77%, consistent with the corresponding period in the prior year.
  • Overall gross margin was 67%, compared to 66% for the same quarter in the prior year.
  • Operating income was $8.6 million, compared to $5.8 million for the same quarter in the prior year.
  • Pre-tax income was $9.0 million, compared to $5.6 million for the same quarter in the prior year. 

Financial Highlights for the Full Year 2017 SaaS revenue was $198.2 million, an increase of 31% over the prior year, while maintenance revenue was $2.8 million, resulting in total recurring revenue of $201.0 million. Professional services revenue was $51.7 million. Total reported revenue was $253.1 million for the year, an increase of 22%. Cash flow from operations for the full year was $43.0 million, reflecting a 44% increase over last year.

GAAP Performance
  • Recurring revenue gross margin was 72%, compared to 74% in the prior year.
  • Overall gross margin was 61%, compared to 62% in the prior year.
  • Operating loss was $21.4 million, compared to $17.4 million in the prior year.
  • Pre-tax loss was $20.5 million, compared to $17.8 million in the prior year. 

Non-GAAP PerformanceThe following non-GAAP measures are described below and are reconciled to the corresponding GAAP measures at the end of this press release.
  • Recurring revenue gross margin was 76%, compared to 77% in the prior year.
  • Overall gross margin was 65%, compared to 66% in the prior year.
  • Operating income was $24.1 million, compared to $18.1 million in the prior year.
  • Pre-tax income was $25.1 million, compared to $17.7 million in the prior year. 

Financial Outlook

Following the announcement made on January 29, 2018, regarding CallidusCloud's entry into a definitive agreement to be acquired by SAP, the Company will not provide outlook for its 2018 financial results. Furthermore, the Company is withdrawing all previously issued financial guidance for the full year 2018.

For more information, please visit: http://www.calliduscloud.com/about-us/investor-relations/

About CallidusCloudCallidus Software Inc. (NASDAQ: CALD), doing business as CallidusCloud ®, is the global leader in cloud-based sales, marketing, learning and customer experience solutions. CallidusCloud enables organizations to accelerate and maximize their Lead to Money process with a complete suite of solutions that identify the right leads, ensure proper territory and quota distribution, enable sales forces, automate configure price quote, and streamline sales compensation - driving bigger deals, faster. Over 6,400 leading organizations, across all industries, rely on CallidusCloud to optimize the Lead to Money process to close more deals for more money in record time.

For more information, please visit  www.calliduscloud.com.

Non-GAAP Financial MeasuresIn this release, CallidusCloud has provided additional financial information that has not been prepared in accordance with GAAP. This information includes non-GAAP gross margin, non-GAAP recurring revenue gross margin, non-GAAP operating expenses, non-GAAP operating income, and non-GAAP net income before provision for income taxes. CallidusCloud uses non-GAAP measures internally in analyzing its financial results and believes that they are useful to investors as a supplement to GAAP measures in evaluating CallidusCloud's operating performance. CallidusCloud believes that the use of these non-GAAP measures provides additional insight for investors to use in evaluation of ongoing operating results and trends and in comparing its financial measures with other companies in CallidusCloud's industry, many of which present non-GAAP financial measures that may resemble our non-GAAP financial measures. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.

Our non-GAAP measures reflect adjustments based on the following items:

Stock-based compensation expense: We have excluded the effect of stock-based compensation expense from our non-GAAP gross profit, recurring revenue gross profit, operating expenses, operating income, and net income before provision for income taxes. We believe the exclusion of stock-based compensation expense provides a useful comparison of our operating results to our peers.

Restructuring and other expense: We have excluded the effect of restructuring and other expense from our non-GAAP operating expenses, operating income and net income before provision for income taxes. Restructuring and other expense consists of employee severance and facility exit costs. We feel it is useful to investors to understand the effects of these items on our financial results.

Patent litigation and settlement costs: We have excluded patent litigation and settlement costs from our non-GAAP gross profit, recurring revenue gross profit, operating expenses, operating income, and net income before provision for income taxes. We believe patent litigation and settlement costs are not indicative of our ongoing business operations, and are inconsistent in amount and frequency; as such we exclude these costs during our evaluation of our business performance.

Non-cash amortization of acquired intangible assets: We have excluded the effect of amortization of acquired intangibles which include developed technology, customer relationships, trade names, domain names, patents and licenses, and order backlog from our non-GAAP gross profit, recurring revenue gross profit, operating expenses, operating income, other income and expense, and net income before provision for income taxes. Amortization of acquired intangibles are significantly affected by timing, and as such, can be inconsistent in amount and nature. 

Acquisition-related costs: We have excluded the costs related to acquisitions from our non-GAAP operating expenses, operating income, net income and net income before provision for income taxes. These costs include legal and transactional costs associated with acquisition activities as well as expense related to earnouts that we would not have otherwise incurred in the periods presented as part of our continuing operations. We believe the exclusion of acquisition-related costs provides a useful comparison of our operating results to our peers.

Cash taxes: Cash taxes are defined as GAAP current income tax expense excluding the related tax amount for non-cash and non-GAAP items.

Additionally, CallidusCloud believes the following supplemental non-GAAP financial information is useful to investors and others in assessing its operating performance. A calculation of the supplemental non-GAAP financial information is provided in the table titled "Non-GAAP Supplemental Financial Information."
  • SaaS billings is calculated as SaaS revenue plus the sequential change in SaaS deferred revenue in a period.
  • Normalized SaaS billings is calculated as SaaS revenue plus the sequential change in SaaS deferred revenue, reduced by the remaining deferred revenue acquired during the period, plus or minus the effect of multiple year SaaS billings in that period.

We believe that normalized SaaS billings provide valuable insight into the sales of our solutions and the performance of our business. We do not consider normalized SaaS billings as a substitute for revenue recognition or revenue measurement.

Note on Forward-Looking StatementsThe forward-looking statements included in this press release, including for example statements regarding the proposed merger with SAP and estimates of future revenues, reflect management's best judgment based on factors currently known and involve risks and uncertainties. These risks and uncertainties include, but are not limited to, the risk that parties may be unable to consummate the proposed merger with SAP due to failure to satisfy conditions to the completion of the merger, including the receipt of stockholder approval or regulatory approval, which might not be obtained on the terms expected, on the anticipated schedule or at all, and other risks detailed in periodic reports we file with the Securities and Exchange Commission, including our most recent Quarterly Report on Form 10-Q which may be obtained by contacting CallidusCloud's Investor Relations department at 415-445-3232, or from the Investor Relations section of CallidusCloud's website ( http://www.calliduscloud.com/about-us/investor-relations/). Actual results may differ materially from those presently reported. We assume no obligation to update the information contained in this release.

© 2018 Callidus Software Inc. All rights reserved. Callidus, Callidus Software, the Callidus Software logo, CallidusCloud, the CallidusCloud logo, Badgeville, BridgeFront, Clicktools, Datahug, iCentera, Lead to Money, LeadFormix, LeadRocket, Learning Heroes, LearningSeat, Learnpass, Litmos, the Litmos logo, OrientDB, Producer Pro, RevSym, SalesGenius, Surve, Syncfrog, Thunderbridge, and ViewCentral are trademarks, service marks, or registered trademarks of Callidus Software Inc. and its affiliates in the United States and other countries. All other brand, service or product names are trademarks or registered trademarks of their respective companies or owners.

Investor Relations Contact                                           Carolyn BassMarket Street Partners(415) 445-3232 cald@marketstreetpartners.com
 
 
 
CALLIDUS SOFTWARE INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
  Three Months Ended December 31,     Twelve Months Ended December 31,
  2017   2016     2017   2016
Revenue:                
Recurring $ 55,021     $ 44,225       $ 201,006     $ 162,586  
Services and license   14,490       11,857         52,085       44,132  
Total revenue   69,511       56,082         253,091       206,718  
Cost of revenue:                
Recurring   15,074       11,671         55,482       42,719  
Services and license   11,088       9,537         43,010       35,358  
Total cost of revenue   26,162       21,208         98,492       78,077  
Gross profit   43,349       34,874         154,599       128,641  
                 
Operating expenses:                
Sales and marketing   24,599       21,659         93,439       78,601  
Research and development   10,130       8,585         37,681       31,712  
General and administrative   12,375       9,350         43,738       35,795  
Income from settlement and patent licensing         (500 )             (500 )
Restructuring and other   61               1,189       482  
Total operating expenses   47,165       39,094         176,047       146,090  
Operating loss   (3,816 )     (4,220 )       (21,448 )     (17,449 )
Interest income and other income (expense)   379       (67 )       1,021       (122 )
Interest expense   (8 )     (137 )       (66 )     (267 )
Loss before provision (benefit) for income taxes   (3,445 )     (4,424 )       (20,493 )     (17,838 )
Provision (benefit) for income taxes   (1,243 )     373         (220 )     1,128  
Net loss $ (2,202 )   $ (4,797 )     $ (20,273 )   $ (18,966 )
Net loss per share                
Basic and Diluted $ (0.03 )   $ (0.08 )     $ (0.31 )   $ (0.32 )
                 
Weighted average shares used in computing net loss per share:                
  Basic and Diluted   65,995       63,663         65,272       58,852  
                 

  
 
 
CALLIDUS SOFTWARE INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(unaudited)
             
    December 31,     December 31,
    2017   2016
ASSETS
Current assets:              
Cash and cash equivalents                                                                             $ 75,251     $ 148,008  
Short-term investments       75,248       39,266  
Accounts receivable, net       76,750       55,464  
Prepaid and other current assets     24,007       18,275  
Total current assets     251,256       261,013  
             
Property and equipment, net     57,058       35,456  
Goodwill     96,092       63,957  
Intangible assets, net     36,641       21,659  
Deposits and other non-current assets     6,400       4,416  
Total assets   $ 447,447     $ 386,501  
         
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:            
Accounts payable   $ 3,973     $ 3,573  
Accrued payroll and related expenses     21,079       17,831  
Accrued expenses     26,190       15,126  
Deferred revenue     133,313       99,758  
Total current liabilities     184,555       136,288  
             
Deferred revenue, non-current     506       3,209  
Deferred income taxes, non-current     2,252       1,541  
Other non-current liabilities     15,175       8,602  
Total liabilities     202,488       149,640  
           
Stockholders' equity:            
Common stock     66       64  
Additional paid-in capital     583,490       559,200  
Treasury stock     (14,430 )     (14,430 )
Accumulated other comprehensive loss     (1,062 )     (5,141 )
Accumulated deficit     (323,105 )     (302,832 )
Total stockholders' equity     244,959       236,861  
Total liabilities and stockholders' equity   $ 447,447     $ 386,501  
         

   
 
 
CALLIDUS SOFTWARE INC.
  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
             
    Twelve Months Ended December 31,
    2017   2016
Cash flows from operating activities:            
Net loss                                                           $ (20,273 )   $ (18,966 )
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:            
Depreciation expense     11,738       8,041  
Amortization of intangible assets     8,677       6,431  
Provision for doubtful accounts     1,602       1,548  
Stock-based compensation     33,420       29,123  
Excess tax benefits from stock-based compensation     -       (59 )
Deferred income taxes     (1,660 )     210  
Loss on disposal of property and equipment     5       23  
Loss on foreign currency from mark-to-market derivatives     180       23  
Net amortization on investments     125       170  
             
Changes in operating assets and liabilities:            
Accounts receivable     (19,517 )     (12,439 )
Prepaid and other current assets     (2,091 )     (6,118 )
Other non-current assets     (1,877 )     (426 )
Accounts payable     622       (1,088 )
Accrued expenses     707       (1,237 )
Accrued payroll and related expenses     2,766       5,321  
Accrued restructuring and other expenses     56       252  
Deferred revenue     28,480       18,970  
Net cash provided by operating activities     42,960       29,779  
             
Cash flows from investing activities:            
Purchases of investments     (80,738 )     (37,409 )
Proceeds from maturities of investments     37,009       16,715  
Proceeds from sale of investments     5,644       726  
Purchases of property and equipment     (19,519 )     (15,599 )
Purchases of intangible assets     (458 )     (962 )
Acquisitions, net of cash acquired     (44,790 )     (22,574 )
Change in restricted cash     (1,355 )     -  
Net cash used in investing activities     (104,207 )     (59,103 )
             
Cash flows from financing activities:            
Proceeds from follow-on offering, net of issuance costs     -       100,345  
Proceeds from issuance of common stock     5,951       4,384  
Restricted stock units acquired to settle employee withholding liability     (15,184 )     (3,479 )
Excess tax benefits from stock-based compensation     -       59  
Payment of consideration related to acquisitions     (2,400 )     (510 )
Net cash (used in) provided by financing activities     (11,633 )     100,799  
Effect of foreign currency exchange rates on cash and cash equivalents     123       (699 )
Net (decrease) increase in cash and cash equivalents     (72,757 )     70,776  
Cash and cash equivalents at beginning of period     148,008       77,232  
Cash and cash equivalents at end of period   $ 75,251     $ 148,008  
             
             

  
                   
CALLIDUS SOFTWARE INC.
GAAP TO NON-GAAP ADJUSTMENT SUMMARY
(In thousands)
(unaudited)
                   
GAAP to Non-GAAP adjustments include stock-based compensation, amortization of acquired intangible assets, patent litigation and settlement costs, acquisition-related costs, restructuring and other expenses as follows:
 
    Three Months EndedDecember 31,     Twelve Months Ended December 31,
    2017     2016       2017      2016
Cost of revenue:                  
Recurring   $     2,334     $    1,410       $ 7,661     $ 5,067  
Services and license                                               571       530         2,340       2,097  
Operating expenses:                  
Sales and marketing     2,949       3,091         11,026       10,707  
Research and development     2,041       1,556         7,157       5,147  
General and administrative     4,476       3,396         16,170       12,010  
Restructuring and other     61       -         1,189       482  
Total   $ 12,432     $ 9,983       $ 45,543     $ 35,510  
                   

 
 
 
CALLIDUS SOFTWARE INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except for percentages)
(unaudited)
                         
      Three Months Ended     Twelve Months Ended
      December 31,     December 31,
      2017     2016     2017     2016
                         
Non-GAAP gross profit reconciliation:                          
                         
Gross profit   $ 43,349     $ 34,874     $ 154,599     $ 128,641  
                         
Gross margin     62 %       62 %       61 %       62 %  
Add back:                            
Stock-based compensation     1,037       819       4,087       3,736  
Non-cash amortization of acquired intangible assets     1,868       1,121       5,914       3,428  
Non-GAAP gross profit   $ 46,254     $ 36,814     $ 164,600     $ 135,805  
                         
Gross margin     67 %       66 %       65 %       66 %  
                         
Non-GAAP recurring revenue gross profit reconciliation:                        
                         
Recurring revenue gross profit   $ 39,947     $ 32,554     $ 145,524     $ 119,867  
                         
Recurring revenue gross margin     73 %       74 %       72 %       74 %  
Add back:                        
Stock-based compensation     466       289       1,748       1,639  
Non-cash amortization of acquired intangible assets     1,868       1,121       5,914       3,428  
Non-GAAP recurring revenue gross profit   $ 42,281     $ 33,964     $ 153,186     $ 124,934  
                         
Non-GAAP recurring revenue gross margin     77 %       77 %       76 %       77 %  
                         
Non-GAAP operating expense reconciliation:                        
                         
Operating expenses   $ 47,165     $ 39,094     $ 176,047     $ 146,090  
Operating expenses, as a % of total revenue     68 %       70 %       70 %       71 %  
Subtract:                        
Stock-based compensation     (7,046 )     (7,394 )     (29,548 )     (25,387 )
Non-cash amortization of acquired intangible assets     (514 )     (490 )     (1,921 )     (1,797 )
Patent litigation and settlement costs     (31 )     (29 )     (115 )     (115 )
Acquisition-related costs     (1,875 )     (130 )     (2,769 )     (565 )
Restructuring and other     (61 )     -       (1,189 )     (482 )
Non-GAAP operating expenses   $ 37,638     $ 31,051     $ 140,505     $ 117,744  
Non-GAAP operating expenses, as a %  of total revenue     54 %       55 %       56 %       57 %  
                         
                         
                         
CALLIDUS SOFTWARE INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except for percentages)
(unaudited)
                         
                         
      Three Months Ended     Twelve Months Ended
      December 31,     December 31,
      2017     2016     2017     2016
Non-GAAP operating income (loss) reconciliation:                        
                         
Operating loss   $     (3,816 )   $   (4,220 )   $ (21,448 )   $ (17,449 )
Operating loss, as a % of total  revenue     (5)%       (8)%       (8)%       (8)%  
Add back:                        
Stock-based compensation     8,083       8,214       33,635       29,123  
Non-cash amortization of acquired intangible assets     2,382       1,610       7,835       5,225  
Patent litigation and settlement costs     31       29       115       115  
Acquisition-related costs     1,875       130       2,769       565  
Restructuring and other     61       -       1,189       482  
Non-GAAP operating income   $ 8,616     $ 5,763     $ 24,095     $ 18,061  
Non-GAAP operating income, as a %  of total revenue     12 %       10 %       10 %       9 %  
                         
Non-GAAP net income (loss) before provision (benefit) for income taxes reconciliation:                  
                         
Net loss before provision (benefit) for income taxes   $ (3,445 )   $ (4,424 )   $ (20,493 )   $ (17,838 )
Net loss before provision (benefit) for income taxes, as a % of total revenue     (5)%       (8)%       (8)%       (9)%  
Add back:                        
Stock-based compensation     8,083       8,214       33,635       29,123  
Non-cash amortization of acquired intangible assets     2,382       1,610       7,835       5,225  
Patent litigation and settlement costs     31       29       115       115  
Acquisition-related costs     1,875       130       2,769       565  
Restructuring and other     61       -       1,189       482  
Non-GAAP net income before provision (benefit) for income taxes   $ 8,987     $ 5,559     $ 25,050     $ 17,672  
Non-GAAP net income before provision (benefit for income taxes, as a % of total revenue     13 %       10 %       10 %       9 %  
                         
Cash taxes   $ 557     $ 224     $ 1,277     $ 791  
                         
Weighted average shares - basic     65,995       63,663       65,272       58,852  
Weighted average shares - diluted     67,768       65,637       67,212       60,910  
                         

 
                         
CALLIDUS SOFTWARE INC.
Non-GAAP Supplemental Financial Information
(In thousands, except for percentages)
(unaudited)
                         
                         
      Three Months Ended     Trailing Twelve Months Ended
      December 31,     December 31,
SaaS Billings     2017     2016     2017     2016
SaaS revenue   $      54,565     $     42,104     $ 198,206     $ 151,524  
                         
Add back:                            
Increase in SaaS deferred revenue     21,381       11,474       30,237       27,628  
SaaS billings                                             $ 75,946     $ 53,578     $ 228,443     $ 179,152  
                         
SaaS billings growth rate     42 %       55 %       28 %       41%  
                         
Normalized Billings                        
SaaS billings   $ 75,946     $ 53,578     $ 228,443     $ 179,152  
Multi-year billings     33       1,434       2,833       1,698  
Remaining deferred revenue from acquisitions (1,215 )     (814 )     (1,724 )     (1,450 )
Normalized SaaS billings   $ 74,764     $ 54,198     $ 229,552     $ 179,400  
                         
Normalized SaaS billings growth rate     38 %       48 %       28 %       36 %  
                         

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Three-Part FREE Webinar Series

Three-Part FREE Webinar Series

March 24 Full-Day Course Offering: Professional Approach to Trading SPX

March 24 Full-Day Course Offering: Professional Approach to Trading SPX