Verint Announces Q4 and FYE 2021 Results
Strong Fourth Quarter Results for Both Customer Engagement and Cyber Intelligence (now Cognyte)
Verint Becomes Pure-Play Customer Engagement Company Following Completion of Cognyte Spin
Customer Engagement Cloud Growth Accelerates in Q4; Raising Outlook for FYE 22 Cloud Revenue Growth
“On
Customer Engagement Q4 Highlights
-
Large Cloud Wins Across Multiple Industries (TCV): Including orders for$13 million (financial services),$8 million (insurance),$7 million (banking),$7 million (consumer services),$4 million (home services),$4 million (healthcare) and$4 million (business services) - Strong Cloud Revenue Growth: Cloud revenue up more than 30% year-over-year
- Strong Cloud Bookings Growth: New Perpetual License Equivalents (PLE) bookings up 15% year-over-year with approximately half of PLE bookings derived from SaaS
-
Improving Visibility: Exited the year with strong cloud momentum driving remaining performance obligations (RPO) to
$636 million , representing backlog growth of 29% year-over-year
Bodner continued, “We are pleased with our strong performance in Q4 across all key cloud metrics, our many competitive cloud wins and finishing the year ahead of guidance. We believe that behind our strong cloud momentum is our open cloud platform, expanding partner network and our strategy to help brands with their digital transformations. The momentum we experienced in the second half of last year increases our confidence and we are raising our outlook for the current year for cloud revenue growth to a range of 30% to 35%.”
Cyber Intelligence Q4 Highlights
-
GAAP Revenue:
$124.0 million for the quarter and$443.5 million for the year -
Non-GAAP Revenue:
$124.6 million for the quarter and$447.0 million for the year -
GAAP Estimated Fully Allocated Operating Income:
$4.9 million for the quarter and$26.7 million for the year -
Estimated Fully Allocated Adjusted EBITDA:
$23.8 million for the quarter and$89.7 million for the year
Bodner concluded, “The Cyber Intelligence business, which was part of
New Stock Repurchase Program
We are pleased to announce a new stock repurchase program in which we will use a portion of our strong cashflow generation to buy back stock. We plan to buy back up to the number of shares to be issued under our incentive equity program each year.
FYE 2022 Outlook
Our non-GAAP outlook for the year ending
-
Revenue:
$860 million with a range of +/- 2% - Cloud Revenue Growth: 30% to 35%
-
Diluted EPS:
$2.20 at the midpoint of our revenue guidance
Our non-GAAP outlook for the three months ended
-
Amortization of intangible assets of approximately
$12 million and$45 million , for the three months endingApril 30, 2021 and year endingJanuary 31, 2022 , respectively. -
Amortization of discount on convertible notes of approximately
$3 million and$4 million , for the three months endingApril 30, 2021 and year endingJanuary 31, 2022 , respectively.
Our non-GAAP outlook for the three months ending
-
Revenue adjustments are expected to be between approximately
$1 million and$2 million , and$3 million and$4 million , for the three months endingApril 30, 2021 and year endingJanuary 31, 2022 , respectively. -
Stock-based compensation is expected to be between approximately
$15 million and$18 million , and$65 million and$75 million , for the three months endingApril 30, 2021 and year endingJanuary 31, 2022 , respectively, assuming market prices for our common stock approximately consistent with current levels. -
Further costs associated with Verint’s
February 1, 2021 separation into two independent public companies are expected to be between approximately$3 million and$5 million , and$8 million and$12 million , for the three months endingApril 30, 2021 and year endingJanuary 31, 2022 , respectively.
Our non-GAAP outlook does not include the potential impact of any in-process business acquisitions that may close after the date hereof, and, unless otherwise specified, reflects foreign currency exchange rates approximately consistent with current rates.
We are unable, without unreasonable efforts, to provide a reconciliation for other GAAP measures which are excluded from our non-GAAP outlook, including the impact of future business acquisitions or acquisition expenses, future restructuring expenses, and non-GAAP income tax adjustments due to the level of unpredictability and uncertainty associated with these items. For these same reasons, we are unable to assess the probable significance of these excluded items. While historical results may not be indicative of future results, actual amounts for the three months and year ended
Conference Call Information
We will conduct a conference call today at
About Non-GAAP Financial Measures
This press release and the accompanying tables include non-GAAP financial measures. For a description of these non-GAAP financial measures, including the reasons management uses each measure, and reconciliations of non-GAAP financial measures presented for completed periods to the most directly comparable financial measures prepared in accordance with GAAP, please see the tables below as well as "Supplemental Information About Non-GAAP Financial Measures and Operating Metrics" at the end of this press release.
About
Cautions About Forward-Looking Statements
This press release contains forward-looking statements, including statements regarding expectations, predictions, views, opportunities, plans, strategies, beliefs, and statements of similar effect relating to
Table 1
Condensed Consolidated Statements of Operations (Unaudited) |
||||||||||||||||
|
|
Three Months Ended
|
|
Year Ended
|
||||||||||||
(in thousands, except per share data) |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Revenue: |
|
|
|
|
|
|
|
|
||||||||
Product |
|
$ |
127,029 |
|
|
$ |
124,337 |
|
|
$ |
406,254 |
|
|
$ |
454,875 |
|
Service and support |
|
222,071 |
|
|
214,866 |
|
|
867,451 |
|
|
848,759 |
|
||||
Total revenue |
|
349,100 |
|
|
339,203 |
|
|
1,273,705 |
|
|
1,303,634 |
|
||||
Cost of revenue: |
|
|
|
|
|
|
|
|
||||||||
Product |
|
28,223 |
|
|
39,106 |
|
|
96,161 |
|
|
127,183 |
|
||||
Service and support |
|
78,145 |
|
|
75,037 |
|
|
300,528 |
|
|
312,599 |
|
||||
Amortization of acquired technology |
|
5,598 |
|
|
5,722 |
|
|
18,905 |
|
|
23,984 |
|
||||
Total cost of revenue |
|
111,966 |
|
|
119,865 |
|
|
415,594 |
|
|
463,766 |
|
||||
Gross profit |
|
237,134 |
|
|
219,338 |
|
|
858,111 |
|
|
839,868 |
|
||||
Operating expenses: |
|
|
|
|
|
|
|
|
||||||||
Research and development, net |
|
64,794 |
|
|
58,135 |
|
|
240,169 |
|
|
231,683 |
|
||||
Selling, general and administrative |
|
143,101 |
|
|
124,579 |
|
|
478,242 |
|
|
488,871 |
|
||||
Amortization of other acquired intangible assets |
|
6,766 |
|
|
8,328 |
|
|
30,995 |
|
|
31,458 |
|
||||
Total operating expenses |
|
214,661 |
|
|
191,042 |
|
|
749,406 |
|
|
752,012 |
|
||||
Operating income |
|
22,473 |
|
|
28,296 |
|
|
108,705 |
|
|
87,856 |
|
||||
Other (expense) income, net: |
|
|
|
|
|
|
|
|
||||||||
Interest income |
|
416 |
|
|
1,103 |
|
|
2,808 |
|
|
5,620 |
|
||||
Interest expense |
|
(9,283) |
|
|
(10,235) |
|
|
(39,975) |
|
|
(40,378) |
|
||||
Other (expense) income, net |
|
(32,312) |
|
|
(996) |
|
|
(55,315) |
|
|
205 |
|
||||
Total other expense, net |
|
(41,179) |
|
|
(10,128) |
|
|
(92,482) |
|
|
(34,553) |
|
||||
(Loss) income before (benefit) provision for income taxes |
|
(18,706) |
|
|
18,168 |
|
|
16,223 |
|
|
53,303 |
|
||||
(Benefit) provision for income taxes |
|
(160) |
|
|
11,500 |
|
|
16,330 |
|
|
17,620 |
|
||||
Net (loss) income |
|
(18,546) |
|
|
6,668 |
|
|
(107) |
|
|
35,683 |
|
||||
Net income attributable to noncontrolling interests |
|
1,376 |
|
|
1,799 |
|
|
7,160 |
|
|
6,999 |
|
||||
Net (loss) income attributable to |
|
(19,922) |
|
|
4,869 |
|
|
(7,267) |
|
|
28,684 |
|
||||
Dividends on preferred stock |
|
(2,514) |
|
|
— |
|
|
(7,656) |
|
|
— |
|
||||
Net (loss) income attributable to |
|
$ |
(22,436) |
|
|
$ |
4,869 |
|
|
$ |
(14,923) |
|
|
$ |
28,684 |
|
|
|
|
|
|
|
|
|
|
||||||||
Net (loss) income per common share attributable to |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
$ |
(0.34) |
|
|
$ |
0.07 |
|
|
$ |
(0.23) |
|
|
$ |
0.43 |
|
Diluted |
|
$ |
(0.34) |
|
|
$ |
0.07 |
|
|
$ |
(0.23) |
|
|
$ |
0.43 |
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding: |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
65,753 |
|
|
65,994 |
|
|
65,173 |
|
|
66,129 |
|
||||
Diluted |
|
65,753 |
|
|
66,999 |
|
|
65,173 |
|
|
67,355 |
|
Table 2
Reconciliation of GAAP to Non-GAAP Measures by Segment (Unaudited) |
||||||||||||||||||||||||
|
|
Three Months Ended
|
||||||||||||||||||||||
|
|
2021 |
|
2020 |
||||||||||||||||||||
(in thousands) |
|
Customer
|
|
Cyber
|
|
Consolidated |
|
Customer
|
|
Cyber
|
|
Consolidated |
||||||||||||
REVENUE |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total GAAP revenue |
|
$ |
225,080 |
|
|
$ |
124,020 |
|
|
$ |
349,100 |
|
|
$ |
210,058 |
|
|
$ |
129,145 |
|
|
$ |
339,203 |
|
Revenue adjustments |
|
1,781 |
|
|
547 |
|
|
2,328 |
|
|
4,702 |
|
|
5,557 |
|
|
10,259 |
|
||||||
Total non-GAAP revenue |
|
$ |
226,861 |
|
|
$ |
124,567 |
|
|
$ |
351,428 |
|
|
$ |
214,760 |
|
|
$ |
134,702 |
|
|
$ |
349,462 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
ESTIMATED GROSS PROFIT AND GROSS MARGIN |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Segment products costs |
|
$ |
10,089 |
|
|
$ |
16,369 |
|
|
$ |
26,458 |
|
|
$ |
9,710 |
|
|
$ |
26,694 |
|
|
$ |
36,404 |
|
Segment service expenses |
|
57,682 |
|
|
18,732 |
|
|
76,414 |
|
|
54,377 |
|
|
16,642 |
|
|
71,019 |
|
||||||
Amortization of acquired technology |
|
5,373 |
|
|
225 |
|
|
5,598 |
|
|
5,361 |
|
|
361 |
|
|
5,722 |
|
||||||
Stock-based compensation expenses (1) |
|
270 |
|
|
79 |
|
|
349 |
|
|
2,301 |
|
|
679 |
|
|
2,980 |
|
||||||
Shared support expenses allocation (3) |
|
2,058 |
|
|
1,089 |
|
|
3,147 |
|
|
2,438 |
|
|
1,302 |
|
|
3,740 |
|
||||||
Total GAAP estimated fully allocated cost of revenue |
|
75,472 |
|
|
36,494 |
|
|
111,966 |
|
|
74,187 |
|
|
45,678 |
|
|
119,865 |
|
||||||
GAAP estimated fully allocated gross profit |
|
149,608 |
|
|
87,526 |
|
|
237,134 |
|
|
135,871 |
|
|
83,467 |
|
|
219,338 |
|
||||||
GAAP estimated fully allocated gross margin |
|
66.5 |
% |
|
70.6 |
% |
|
67.9 |
% |
|
64.7 |
% |
|
64.6 |
% |
|
64.7 |
% |
||||||
Revenue adjustments |
|
1,781 |
|
|
547 |
|
|
2,328 |
|
|
4,702 |
|
|
5,557 |
|
|
10,259 |
|
||||||
Amortization of acquired technology |
|
5,373 |
|
|
225 |
|
|
5,598 |
|
|
5,361 |
|
|
361 |
|
|
5,722 |
|
||||||
Stock-based compensation expenses (1) |
|
270 |
|
|
79 |
|
|
349 |
|
|
2,301 |
|
|
679 |
|
|
2,980 |
|
||||||
Acquisition expenses, net (4) |
|
12 |
|
|
6 |
|
|
18 |
|
|
38 |
|
|
20 |
|
|
58 |
|
||||||
Restructuring expenses (4) |
|
282 |
|
|
149 |
|
|
431 |
|
|
235 |
|
|
125 |
|
|
360 |
|
||||||
Separation expenses (4) |
|
33 |
|
|
17 |
|
|
50 |
|
|
— |
|
|
— |
|
|
— |
|
||||||
Impairment charges (4) |
|
233 |
|
|
124 |
|
|
357 |
|
|
— |
|
|
— |
|
|
— |
|
||||||
Non-GAAP estimated fully allocated gross profit |
|
$ |
157,592 |
|
|
$ |
88,673 |
|
|
$ |
246,265 |
|
|
$ |
148,508 |
|
|
$ |
90,209 |
|
|
$ |
238,717 |
|
Non-GAAP estimated fully allocated gross margin |
|
69.5 |
% |
|
71.2 |
% |
|
70.1 |
% |
|
69.2 |
% |
|
67.0 |
% |
|
68.3 |
% |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
ESTIMATED RESEARCH AND DEVELOPMENT, NET |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Segment expenses |
|
$ |
25,372 |
|
|
$ |
30,838 |
|
|
$ |
56,210 |
|
|
$ |
22,548 |
|
|
$ |
23,552 |
|
|
$ |
46,100 |
|
Stock-based compensation expenses (2) |
|
879 |
|
|
465 |
|
|
1,344 |
|
|
2,935 |
|
|
1,566 |
|
|
4,501 |
|
||||||
Shared support expenses allocation (3) |
|
4,735 |
|
|
2,505 |
|
|
7,240 |
|
|
4,913 |
|
|
2,621 |
|
|
7,534 |
|
||||||
GAAP estimated fully allocated research and development, net |
|
30,986 |
|
|
33,808 |
|
|
64,794 |
|
|
30,396 |
|
|
27,739 |
|
|
58,135 |
|
||||||
As a percentage of GAAP revenue |
|
13.8 |
% |
|
27.3 |
% |
|
18.6 |
% |
|
14.5 |
% |
|
21.5 |
% |
|
17.1 |
% |
||||||
Stock-based compensation expenses (2) |
|
(879) |
|
|
(465) |
|
|
(1,344) |
|
|
(2,935) |
|
|
(1,566) |
|
|
(4,501) |
|
||||||
Acquisition expenses, net (4) |
|
(24) |
|
|
(13) |
|
|
(37) |
|
|
(202) |
|
|
(108) |
|
|
(310) |
|
||||||
Restructuring expenses (4) |
|
(135) |
|
|
(72) |
|
|
(207) |
|
|
(270) |
|
|
(144) |
|
|
(414) |
|
||||||
Separation expenses (4) |
|
(178) |
|
|
(94) |
|
|
(272) |
|
|
— |
|
|
— |
|
|
— |
|
||||||
Other adjustments (4) |
|
(15) |
|
|
(7) |
|
|
(22) |
|
|
— |
|
|
— |
|
|
— |
|
||||||
Non-GAAP estimated fully allocated research and development, net |
|
$ |
29,755 |
|
|
$ |
33,157 |
|
|
$ |
62,912 |
|
|
$ |
26,989 |
|
|
$ |
25,921 |
|
|
$ |
52,910 |
|
As a percentage of non-GAAP revenue |
|
13.1 |
% |
|
26.6 |
% |
|
17.9 |
% |
|
12.6 |
% |
|
19.2 |
% |
|
15.1 |
% |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
ESTIMATED SELLING, GENERAL AND ADMINISTRATIVE EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Segment expenses |
|
$ |
45,020 |
|
|
$ |
22,302 |
|
|
$ |
67,322 |
|
|
$ |
41,011 |
|
|
$ |
25,002 |
|
|
$ |
66,013 |
|
Stock-based compensation expenses (2) |
|
5,529 |
|
|
3,623 |
|
|
9,152 |
|
|
12,390 |
|
|
6,614 |
|
|
19,004 |
|
||||||
Shared support expenses allocation (3) |
|
44,031 |
|
|
22,596 |
|
|
66,627 |
|
|
25,794 |
|
|
13,768 |
|
|
39,562 |
|
||||||
GAAP estimated fully allocated selling, general and administrative expenses |
|
94,580 |
|
|
48,521 |
|
|
143,101 |
|
|
79,195 |
|
|
45,384 |
|
|
124,579 |
|
||||||
As a percentage of GAAP revenue |
|
42.0 |
% |
|
39.1 |
% |
|
41.0 |
% |
|
37.7 |
% |
|
35.1 |
% |
|
36.7 |
% |
||||||
Stock-based compensation expenses (2) |
|
(5,529) |
|
|
(3,623) |
|
|
(9,152) |
|
|
(12,390) |
|
|
(6,614) |
|
|
(19,004) |
|
||||||
Acquisition expenses, net (4) |
|
(2,625) |
|
|
(1,390) |
|
|
(4,015) |
|
|
(1,298) |
|
|
(693) |
|
|
(1,991) |
|
||||||
Restructuring expenses (4) |
|
(2,607) |
|
|
(1,380) |
|
|
(3,987) |
|
|
(422) |
|
|
(226) |
|
|
(648) |
|
||||||
Separation expenses (4) |
|
(12,761) |
|
|
(6,752) |
|
|
(19,513) |
|
|
(2,336) |
|
|
(1,247) |
|
|
(3,583) |
|
||||||
Other adjustments (4) |
|
(276) |
|
|
(147) |
|
|
(423) |
|
|
(1,449) |
|
|
(773) |
|
|
(2,222) |
|
||||||
Non-GAAP estimated fully allocated selling, general and administrative expenses |
|
$ |
70,782 |
|
|
$ |
35,229 |
|
|
$ |
106,011 |
|
|
$ |
61,300 |
|
|
$ |
35,831 |
|
|
$ |
97,131 |
|
As a percentage of non-GAAP revenue |
|
31.2 |
% |
|
28.3 |
% |
|
30.2 |
% |
|
28.5 |
% |
|
26.6 |
% |
|
27.8 |
% |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
OPERATING INCOME, OPERATING MARGIN, AND ADJUSTED EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
GAAP estimated fully allocated operating income |
|
$ |
17,582 |
|
|
$ |
4,891 |
|
|
$ |
22,473 |
|
|
$ |
18,165 |
|
|
$ |
10,131 |
|
|
$ |
28,296 |
|
GAAP estimated fully allocated operating margin |
|
7.8 |
% |
|
3.9 |
% |
|
6.4 |
% |
|
8.6 |
% |
|
7.8 |
% |
|
8.3 |
% |
||||||
Revenue adjustments |
|
1,781 |
|
|
547 |
|
|
2,328 |
|
|
4,702 |
|
|
5,557 |
|
|
10,259 |
|
||||||
Amortization of acquired technology |
|
5,373 |
|
|
225 |
|
|
5,598 |
|
|
5,361 |
|
|
361 |
|
|
5,722 |
|
||||||
Amortization of other acquired intangible assets |
|
6,460 |
|
|
306 |
|
|
6,766 |
|
|
8,115 |
|
|
213 |
|
|
8,328 |
|
||||||
Stock-based compensation expenses (2) |
|
6,678 |
|
|
4,167 |
|
|
10,845 |
|
|
17,626 |
|
|
8,859 |
|
|
26,485 |
|
||||||
Acquisition expenses, net (4) |
|
2,661 |
|
|
1,409 |
|
|
4,070 |
|
|
1,538 |
|
|
821 |
|
|
2,359 |
|
||||||
Restructuring expenses (4) |
|
3,024 |
|
|
1,601 |
|
|
4,625 |
|
|
927 |
|
|
495 |
|
|
1,422 |
|
||||||
Separation expenses (4) |
|
12,972 |
|
|
6,863 |
|
|
19,835 |
|
|
2,336 |
|
|
1,247 |
|
|
3,583 |
|
||||||
Impairment charges (4) |
|
233 |
|
|
124 |
|
|
357 |
|
|
— |
|
|
— |
|
|
— |
|
||||||
Other adjustments (4) |
|
291 |
|
|
154 |
|
|
445 |
|
|
1,449 |
|
|
773 |
|
|
2,222 |
|
||||||
Non-GAAP estimated fully allocated operating income |
|
57,055 |
|
|
20,287 |
|
|
77,342 |
|
|
60,219 |
|
|
28,457 |
|
|
88,676 |
|
||||||
Depreciation and amortization (5) |
|
6,686 |
|
|
3,537 |
|
|
10,223 |
|
|
5,803 |
|
|
3,097 |
|
|
8,900 |
|
||||||
Estimated fully allocated adjusted EBITDA |
|
$ |
63,741 |
|
|
$ |
23,824 |
|
|
$ |
87,565 |
|
|
$ |
66,022 |
|
|
$ |
31,554 |
|
|
$ |
97,576 |
|
Non-GAAP estimated fully allocated operating margin |
|
25.1 |
% |
|
16.3 |
% |
|
22.0 |
% |
|
28.0 |
% |
|
21.1 |
% |
|
25.4 |
% |
||||||
Estimated fully allocated adjusted EBITDA margin |
|
28.1 |
% |
|
19.1 |
% |
|
24.9 |
% |
|
30.7 |
% |
|
23.4 |
% |
|
27.9 |
% |
|
|
Year Ended
|
||||||||||||||||||||||
|
|
2021 |
|
2020 |
||||||||||||||||||||
(in thousands) |
|
Customer
|
|
Cyber
|
|
Consolidated |
|
Customer
|
|
Cyber
|
|
Consolidated |
||||||||||||
REVENUE |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total GAAP revenue |
|
$ |
830,247 |
|
|
$ |
443,458 |
|
|
$ |
1,273,705 |
|
|
$ |
846,525 |
|
|
$ |
457,109 |
|
|
$ |
1,303,634 |
|
Revenue adjustments |
|
10,336 |
|
|
3,569 |
|
|
13,905 |
|
|
26,675 |
|
|
5,708 |
|
|
32,383 |
|
||||||
Total non-GAAP revenue |
|
$ |
840,583 |
|
|
$ |
447,027 |
|
|
$ |
1,287,610 |
|
|
$ |
873,200 |
|
|
$ |
462,817 |
|
|
$ |
1,336,017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
ESTIMATED GROSS PROFIT AND GROSS MARGIN |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Segment products costs |
|
$ |
34,518 |
|
|
$ |
56,519 |
|
|
$ |
91,037 |
|
|
$ |
35,455 |
|
|
$ |
83,291 |
|
|
$ |
118,746 |
|
Segment service expenses |
|
218,919 |
|
|
68,499 |
|
|
287,418 |
|
|
226,555 |
|
|
70,768 |
|
|
297,323 |
|
||||||
Amortization of acquired technology |
|
17,963 |
|
|
942 |
|
|
18,905 |
|
|
21,578 |
|
|
2,406 |
|
|
23,984 |
|
||||||
Stock-based compensation expenses (1) |
|
4,159 |
|
|
1,215 |
|
|
5,374 |
|
|
6,318 |
|
|
1,866 |
|
|
8,184 |
|
||||||
Shared support expenses allocation (3) |
|
8,410 |
|
|
4,450 |
|
|
12,860 |
|
|
10,125 |
|
|
5,404 |
|
|
15,529 |
|
||||||
Total GAAP estimated fully allocated cost of revenue |
|
283,969 |
|
|
131,625 |
|
|
415,594 |
|
|
300,031 |
|
|
163,735 |
|
|
463,766 |
|
||||||
GAAP estimated fully allocated gross profit |
|
546,278 |
|
|
311,833 |
|
|
858,111 |
|
|
546,494 |
|
|
293,374 |
|
|
839,868 |
|
||||||
GAAP estimated fully allocated gross margin |
|
65.8 |
% |
|
70.3 |
% |
|
67.4 |
% |
|
64.6 |
% |
|
64.2 |
% |
|
64.4 |
% |
||||||
Revenue adjustments |
|
10,336 |
|
|
3,569 |
|
|
13,905 |
|
|
26,675 |
|
|
5,708 |
|
|
32,383 |
|
||||||
Amortization of acquired technology |
|
17,963 |
|
|
942 |
|
|
18,905 |
|
|
21,578 |
|
|
2,406 |
|
|
23,984 |
|
||||||
Stock-based compensation expenses (1) |
|
4,159 |
|
|
1,215 |
|
|
5,374 |
|
|
6,318 |
|
|
1,866 |
|
|
8,184 |
|
||||||
Acquisition expenses, net (4) |
|
230 |
|
|
122 |
|
|
352 |
|
|
81 |
|
|
43 |
|
|
124 |
|
||||||
Restructuring expenses (4) |
|
1,432 |
|
|
757 |
|
|
2,189 |
|
|
1,644 |
|
|
877 |
|
|
2,521 |
|
||||||
Separation expenses (4) |
|
84 |
|
|
44 |
|
|
128 |
|
|
— |
|
|
— |
|
|
— |
|
||||||
Impairment charges (4) |
|
328 |
|
|
174 |
|
|
502 |
|
|
— |
|
|
— |
|
|
— |
|
||||||
Non-GAAP estimated fully allocated gross profit |
|
$ |
580,810 |
|
|
$ |
318,656 |
|
|
$ |
899,466 |
|
|
$ |
602,790 |
|
|
$ |
304,274 |
|
|
$ |
907,064 |
|
Non-GAAP estimated fully allocated gross margin |
|
69.1 |
% |
|
71.3 |
% |
|
69.9 |
% |
|
69.0 |
% |
|
65.7 |
% |
|
67.9 |
% |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
ESTIMATED RESEARCH AND DEVELOPMENT, NET |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Segment expenses |
|
$ |
95,785 |
|
|
$ |
105,867 |
|
|
$ |
201,652 |
|
|
$ |
101,002 |
|
|
$ |
90,708 |
|
|
$ |
191,710 |
|
Stock-based compensation expenses (2) |
|
6,237 |
|
|
3,299 |
|
|
9,536 |
|
|
8,754 |
|
|
4,672 |
|
|
13,426 |
|
||||||
Shared support expenses allocation (3) |
|
18,954 |
|
|
10,027 |
|
|
28,981 |
|
|
17,309 |
|
|
9,238 |
|
|
26,547 |
|
||||||
GAAP estimated fully allocated research and development, net |
|
120,976 |
|
|
119,193 |
|
|
240,169 |
|
|
127,065 |
|
|
104,618 |
|
|
231,683 |
|
||||||
As a percentage of GAAP revenue |
|
14.6 |
% |
|
26.9 |
% |
|
18.9 |
% |
|
15.0 |
% |
|
22.9 |
% |
|
17.8 |
% |
||||||
Stock-based compensation expenses (2) |
|
(6,237) |
|
|
(3,299) |
|
|
(9,536) |
|
|
(8,754) |
|
|
(4,672) |
|
|
(13,426) |
|
||||||
Acquisition expenses, net (4) |
|
(313) |
|
|
(166) |
|
|
(479) |
|
|
(546) |
|
|
(292) |
|
|
(838) |
|
||||||
Restructuring expenses (4) |
|
(1,119) |
|
|
(592) |
|
|
(1,711) |
|
|
(853) |
|
|
(455) |
|
|
(1,308) |
|
||||||
Separation expenses (4) |
|
(239) |
|
|
(127) |
|
|
(366) |
|
|
— |
|
|
— |
|
|
— |
|
||||||
Other adjustments (4) |
|
(22) |
|
|
(11) |
|
|
(33) |
|
|
— |
|
|
— |
|
|
— |
|
||||||
Non-GAAP estimated fully allocated research and development, net |
|
$ |
113,046 |
|
|
$ |
114,998 |
|
|
$ |
228,044 |
|
|
$ |
116,912 |
|
|
$ |
99,199 |
|
|
$ |
216,111 |
|
As a percentage of non-GAAP revenue |
|
13.4 |
% |
|
25.7 |
% |
|
17.7 |
% |
|
13.4 |
% |
|
21.4 |
% |
|
16.2 |
% |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
ESTIMATED SELLING, GENERAL AND ADMINISTRATIVE EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Segment expenses |
|
$ |
159,417 |
|
|
$ |
83,133 |
|
|
$ |
242,550 |
|
|
$ |
179,440 |
|
|
$ |
91,452 |
|
|
$ |
270,892 |
|
Stock-based compensation expenses (2) |
|
30,624 |
|
|
16,899 |
|
|
47,523 |
|
|
39,829 |
|
|
21,259 |
|
|
61,088 |
|
||||||
Shared support expenses allocation (3) |
|
123,519 |
|
|
64,650 |
|
|
188,169 |
|
|
102,293 |
|
|
54,598 |
|
|
156,891 |
|
||||||
GAAP estimated fully allocated selling, general and administrative expenses |
|
313,560 |
|
|
164,682 |
|
|
478,242 |
|
|
321,562 |
|
|
167,309 |
|
|
488,871 |
|
||||||
As a percentage of GAAP revenue |
|
37.8 |
% |
|
37.1 |
% |
|
37.5 |
% |
|
38.0 |
% |
|
36.6 |
% |
|
37.5 |
% |
||||||
Stock-based compensation expenses (2) |
|
(30,624) |
|
|
(16,899) |
|
|
(47,523) |
|
|
(39,829) |
|
|
(21,259) |
|
|
(61,088) |
|
||||||
Acquisition expenses, net (4) |
|
(836) |
|
|
(443) |
|
|
(1,279) |
|
|
(6,503) |
|
|
(3,471) |
|
|
(9,974) |
|
||||||
Restructuring expenses (4) |
|
(5,472) |
|
|
(2,895) |
|
|
(8,367) |
|
|
(1,786) |
|
|
(954) |
|
|
(2,740) |
|
||||||
Separation expenses (4) |
|
(30,877) |
|
|
(16,336) |
|
|
(47,213) |
|
|
(3,448) |
|
|
(1,840) |
|
|
(5,288) |
|
||||||
Other adjustments (4) |
|
508 |
|
|
268 |
|
|
776 |
|
|
(6,609) |
|
|
(3,528) |
|
|
(10,137) |
|
||||||
Non-GAAP estimated fully allocated selling, general and administrative expenses |
|
$ |
246,259 |
|
|
$ |
128,377 |
|
|
$ |
374,636 |
|
|
$ |
263,387 |
|
|
$ |
136,257 |
|
|
$ |
399,644 |
|
As a percentage of non-GAAP revenue |
|
29.3 |
% |
|
28.7 |
% |
|
29.1 |
% |
|
30.2 |
% |
|
29.4 |
% |
|
29.9 |
% |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
OPERATING INCOME, OPERATING MARGIN, AND ADJUSTED EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
GAAP estimated fully allocated operating income |
|
$ |
81,966 |
|
|
$ |
26,739 |
|
|
$ |
108,705 |
|
|
$ |
67,004 |
|
|
$ |
20,852 |
|
|
$ |
87,856 |
|
GAAP estimated fully allocated operating margin |
|
9.9 |
% |
|
6.0 |
% |
|
8.5 |
% |
|
7.9 |
% |
|
4.6 |
% |
|
6.7 |
% |
||||||
Revenue adjustments |
|
10,336 |
|
|
3,569 |
|
|
13,905 |
|
|
26,675 |
|
|
5,708 |
|
|
32,383 |
|
||||||
Amortization of acquired technology |
|
17,963 |
|
|
942 |
|
|
18,905 |
|
|
21,578 |
|
|
2,406 |
|
|
23,984 |
|
||||||
Amortization of other acquired intangible assets |
|
29,776 |
|
|
1,219 |
|
|
30,995 |
|
|
30,863 |
|
|
595 |
|
|
31,458 |
|
||||||
Stock-based compensation expenses (2) |
|
41,020 |
|
|
21,413 |
|
|
62,433 |
|
|
54,901 |
|
|
27,797 |
|
|
82,698 |
|
||||||
Acquisition expenses, net (4) |
|
1,379 |
|
|
731 |
|
|
2,110 |
|
|
7,130 |
|
|
3,806 |
|
|
10,936 |
|
||||||
Restructuring expenses (4) |
|
8,023 |
|
|
4,244 |
|
|
12,267 |
|
|
4,283 |
|
|
2,286 |
|
|
6,569 |
|
||||||
Separation expenses (4) |
|
31,200 |
|
|
16,507 |
|
|
47,707 |
|
|
3,448 |
|
|
1,840 |
|
|
5,288 |
|
||||||
Impairment charges (4) |
|
328 |
|
|
174 |
|
|
502 |
|
|
— |
|
|
— |
|
|
— |
|
||||||
Other adjustments (4) |
|
(486) |
|
|
(257) |
|
|
(743) |
|
|
6,609 |
|
|
3,528 |
|
|
10,137 |
|
||||||
Non-GAAP estimated fully allocated operating income |
|
221,505 |
|
|
75,281 |
|
|
296,786 |
|
|
222,491 |
|
|
68,818 |
|
|
291,309 |
|
||||||
Depreciation and amortization (5) |
|
27,254 |
|
|
14,419 |
|
|
41,673 |
|
|
21,737 |
|
|
11,602 |
|
|
33,339 |
|
||||||
Estimated fully allocated adjusted EBITDA |
|
$ |
248,759 |
|
|
$ |
89,700 |
|
|
$ |
338,459 |
|
|
$ |
244,228 |
|
|
$ |
80,420 |
|
|
$ |
324,648 |
|
Non-GAAP estimated fully allocated operating margin |
|
26.4 |
% |
|
16.8 |
% |
|
23.0 |
% |
|
25.5 |
% |
|
14.9 |
% |
|
21.8 |
% |
||||||
Estimated fully allocated adjusted EBITDA margin |
|
29.6 |
% |
|
20.1 |
% |
|
26.3 |
% |
|
28.0 |
% |
|
17.4 |
% |
|
24.3 |
% |
(1) Represents the stock-based compensation expenses applicable to cost of revenue, allocated approximately proportional to our annual operations and service expense wages for each segment for years ended
(2) Represents the stock-based compensation expenses applicable to research and development, net and selling, general and administrative, allocated approximately proportional to our non-GAAP segment revenue for the years ended
(3) Represents our shared support expenses (as disclosed in footnote 18 to our
(4) Represents the portion of our acquisition expenses, net and restructuring expenses, separation expenses, impairment charges and other adjustments, allocated approximately proportional to our annual non-GAAP segment revenue for the years ended
(5) Represents certain depreciation and amortization expenses, which are otherwise included in our non-GAAP operating income, allocated approximately proportional to our non-GAAP segment revenue for the years ended
Table 3
Reconciliation of GAAP to Non-GAAP Measures (Unaudited) |
||||||||||||||||
|
|
Three Months Ended
|
|
Year Ended
|
||||||||||||
(in thousands, except per share data) |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Table of Reconciliation from GAAP Other Expense, Net to Non-GAAP Other Expense, Net |
||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
GAAP other expense, net |
|
$ |
(41,179) |
|
|
$ |
(10,128) |
|
|
$ |
(92,482) |
|
|
$ |
(34,553) |
|
Unrealized losses on derivatives, net |
|
357 |
|
|
— |
|
|
1,115 |
|
|
1,485 |
|
||||
Amortization of convertible note discount |
|
3,263 |
|
|
3,184 |
|
|
12,883 |
|
|
12,490 |
|
||||
Expenses and losses on debt modification or retirement |
|
— |
|
|
— |
|
|
1,462 |
|
|
— |
|
||||
Change in fair value of future tranche right |
|
33,312 |
|
|
— |
|
|
56,146 |
|
|
— |
|
||||
Acquisition expenses, net |
|
14 |
|
|
(22) |
|
|
(3,629) |
|
|
(90) |
|
||||
Non-GAAP other expense, net(1) |
|
$ |
(4,233) |
|
|
$ |
(6,966) |
|
|
$ |
(24,505) |
|
|
$ |
(20,668) |
|
|
|
|
|
|
|
|
|
|
||||||||
Table of Reconciliation from GAAP (Benefit) Provision for Income Taxes to Non-GAAP Provision for Income Taxes |
||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
GAAP (benefit) provision for income taxes |
|
$ |
(160) |
|
|
$ |
11,500 |
|
|
$ |
16,330 |
|
|
$ |
17,620 |
|
GAAP effective income tax rate |
|
0.9 |
% |
|
63.3 |
% |
|
100.7 |
% |
|
33.1 |
% |
||||
Non-GAAP tax adjustments |
|
2,726 |
|
|
(5,911) |
|
|
1,197 |
|
|
4,085 |
|
||||
Non-GAAP provision for income taxes |
|
$ |
2,566 |
|
|
$ |
5,589 |
|
|
$ |
17,527 |
|
|
$ |
21,705 |
|
Non-GAAP effective income tax rate |
|
3.5 |
% |
|
6.8 |
% |
|
6.4 |
% |
|
8.0 |
% |
||||
|
|
|
|
|
|
|
|
|
||||||||
Table of Reconciliation from GAAP Net (Loss) Income Attributable to |
||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
GAAP net (loss) income attributable to |
|
$ |
(22,436) |
|
|
$ |
4,869 |
|
|
$ |
(14,923) |
|
|
$ |
28,684 |
|
Revenue adjustments |
|
2,328 |
|
|
10,259 |
|
|
13,905 |
|
|
32,383 |
|
||||
Amortization of acquired technology |
|
5,598 |
|
|
5,722 |
|
|
18,905 |
|
|
23,984 |
|
||||
Amortization of other acquired intangible assets |
|
6,766 |
|
|
8,328 |
|
|
30,995 |
|
|
31,458 |
|
||||
Stock-based compensation expenses |
|
10,845 |
|
|
26,485 |
|
|
62,433 |
|
|
82,698 |
|
||||
Unrealized losses on derivatives, net |
|
357 |
|
|
— |
|
|
1,115 |
|
|
1,485 |
|
||||
Amortization of convertible note discount |
|
3,263 |
|
|
3,184 |
|
|
12,883 |
|
|
12,490 |
|
||||
Expenses and losses on debt modification or retirement |
|
— |
|
|
— |
|
|
1,462 |
|
|
— |
|
||||
Change in fair value of future tranche right |
|
33,312 |
|
|
— |
|
|
56,146 |
|
|
— |
|
||||
Acquisition expenses, net |
|
4,084 |
|
|
2,339 |
|
|
(1,519) |
|
|
10,846 |
|
||||
Restructuring expenses |
|
4,625 |
|
|
1,419 |
|
|
12,267 |
|
|
6,569 |
|
||||
Separation expenses |
|
19,835 |
|
|
3,583 |
|
|
47,707 |
|
|
5,288 |
|
||||
Impairment charges |
|
357 |
|
|
— |
|
|
502 |
|
|
— |
|
||||
Other adjustments |
|
445 |
|
|
2,222 |
|
|
(743) |
|
|
10,137 |
|
||||
Non-GAAP tax adjustments |
|
(2,726) |
|
|
5,911 |
|
|
(1,197) |
|
|
(4,085) |
|
||||
Dividends, reversed due to assumed conversion of preferred stock |
|
2,514 |
|
|
— |
|
|
7,656 |
|
|
— |
|
||||
Total adjustments |
|
91,603 |
|
|
69,452 |
|
|
262,517 |
|
|
213,253 |
|
||||
Non-GAAP net income attributable to |
|
$ |
69,167 |
|
|
$ |
74,321 |
|
|
$ |
247,594 |
|
|
$ |
241,937 |
|
|
|
|
|
|
|
|
|
|
||||||||
Table Comparing GAAP Diluted Net (Loss) Income Per Common Share Attributable to |
||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
GAAP diluted net (loss) income per common share attributable to |
|
$ |
(0.34) |
|
|
$ |
0.07 |
|
|
$ |
(0.23) |
|
|
$ |
0.43 |
|
Non-GAAP diluted net income per common share attributable to |
|
$ |
0.98 |
|
|
$ |
1.11 |
|
|
$ |
3.60 |
|
|
$ |
3.59 |
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP weighted-average shares used in computing diluted net (loss) income per common share attributable to |
|
65,753 |
|
|
66,999 |
|
|
65,173 |
|
|
67,355 |
|
||||
Additional weighted-average shares applicable to non-GAAP diluted net income per common share attributable to |
|
4,846 |
|
|
— |
|
|
3,654 |
|
|
— |
|
||||
Non-GAAP diluted weighted-average shares used in computing net income per common share attributable to |
|
70,599 |
|
|
66,999 |
|
|
68,827 |
|
|
67,355 |
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Table of Reconciliation from GAAP Net (Loss) Income Attributable to |
||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
GAAP net (loss) income attributable to |
|
$ |
(19,922) |
|
|
$ |
4,869 |
|
|
$ |
(7,267) |
|
|
$ |
28,684 |
|
As a percentage of GAAP revenue |
|
(5.7) |
% |
|
1.4 |
% |
|
(0.6) |
% |
|
2.2 |
% |
||||
Net income attributable to noncontrolling interest |
|
1,376 |
|
|
1,799 |
|
|
7,160 |
|
|
6,999 |
|
||||
(Benefit) provision for income taxes |
|
(160) |
|
|
11,500 |
|
|
16,330 |
|
|
17,620 |
|
||||
Other expense, net |
|
41,179 |
|
|
10,128 |
|
|
92,482 |
|
|
34,553 |
|
||||
Depreciation and amortization(2) |
|
26,158 |
|
|
22,951 |
|
|
97,416 |
|
|
88,783 |
|
||||
Revenue adjustments |
|
2,328 |
|
|
10,259 |
|
|
13,905 |
|
|
32,383 |
|
||||
Stock-based compensation expenses |
|
10,845 |
|
|
26,485 |
|
|
62,433 |
|
|
82,698 |
|
||||
Acquisition expenses, net |
|
4,064 |
|
|
2,359 |
|
|
2,100 |
|
|
10,936 |
|
||||
Restructuring expenses |
|
4,629 |
|
|
1,421 |
|
|
12,267 |
|
|
6,567 |
|
||||
Separation expenses |
|
16,266 |
|
|
3,583 |
|
|
41,874 |
|
|
5,288 |
|
||||
Impairment charges |
|
357 |
|
|
— |
|
|
502 |
|
|
— |
|
||||
Other adjustments |
|
445 |
|
|
2,222 |
|
|
(743) |
|
|
10,137 |
|
||||
Adjusted EBITDA |
|
$ |
87,565 |
|
|
$ |
97,576 |
|
|
$ |
338,459 |
|
|
$ |
324,648 |
|
As a percentage of non-GAAP revenue |
|
24.9 |
% |
|
27.9 |
% |
|
26.3 |
% |
|
24.3 |
% |
Table of Reconciliation from Gross Debt to Net Debt |
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||
Current maturities of long-term debt |
|
|
|
|
|
$ |
386,713 |
|
|
$ |
4,250 |
|
Long-term debt |
|
|
|
|
|
402,781 |
|
|
832,798 |
|
||
Unamortized debt discounts and issuance costs |
|
|
|
|
|
7,518 |
|
|
22,327 |
|
||
Gross debt |
|
|
|
|
|
797,012 |
|
|
859,375 |
|
||
Less: |
|
|
|
|
|
|
|
|
||||
Cash and cash equivalents |
|
|
|
|
|
663,843 |
|
|
379,146 |
|
||
Restricted cash and cash equivalents, and restricted bank time deposits |
|
|
|
|
|
27,057 |
|
|
43,860 |
|
||
Short-term investments |
|
|
|
|
|
51,013 |
|
|
20,215 |
|
||
Net debt, excluding long-term restricted cash, cash equivalents, time deposits, and investments |
|
|
|
|
|
55,099 |
|
|
416,154 |
|
||
Long-term restricted cash, cash equivalents, time deposits and investments |
|
|
|
|
|
15,712 |
|
|
26,363 |
|
||
Net debt, including long-term restricted cash, cash equivalents, time deposits, and investments |
|
|
|
|
|
$ |
39,387 |
|
|
$ |
389,791 |
|
|
|
|
|
|
|
|
|
|
(1) For the three months ended
(2) Adjusted for financing fee amortization.
Table 4
(Unaudited) |
||||||||||||||||
|
|
Three Months Ended
|
|
Year Ended
|
||||||||||||
(in thousands) |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
GAAP net (loss) income attributable to |
|
$ |
(22,436) |
|
|
$ |
4,869 |
|
|
$ |
(14,923) |
|
|
$ |
28,684 |
|
Future tranche right revaluation (1) |
|
33,312 |
|
|
— |
|
|
56,146 |
|
|
— |
|
||||
Adjusted net income attributable to |
|
$ |
10,876 |
|
|
$ |
4,869 |
|
|
$ |
41,223 |
|
|
$ |
28,684 |
|
(1) In the year ended
Table 5
GAAP to Non-GAAP Customer Engagement Revenue and Cloud Metrics (Unaudited) |
||||||||||||||||
|
|
Three Months Ended
|
|
Year Ended
|
||||||||||||
(in thousands) |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Table of Reconciliation from |
||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
Software (includes cloud and support) revenue - GAAP |
|
$ |
199,079 |
|
|
$ |
180,836 |
|
|
$ |
717,464 |
|
|
$ |
714,260 |
|
Perpetual revenue - GAAP |
|
42,025 |
|
|
40,526 |
|
|
141,840 |
|
|
179,882 |
|
||||
Cloud revenue - GAAP |
|
85,966 |
|
|
61,234 |
|
|
277,411 |
|
|
220,477 |
|
||||
Support revenue - GAAP |
|
71,088 |
|
|
79,076 |
|
|
298,213 |
|
|
313,901 |
|
||||
Professional services revenue - GAAP |
|
$ |
26,001 |
|
|
$ |
29,222 |
|
|
$ |
112,783 |
|
|
$ |
132,265 |
|
Total revenue - GAAP |
|
$ |
225,080 |
|
|
$ |
210,058 |
|
|
$ |
830,247 |
|
|
$ |
846,525 |
|
|
|
|
|
|
|
|
|
|
||||||||
Estimated software (includes cloud and support) revenue adjustments |
|
$ |
1,781 |
|
|
$ |
4,702 |
|
|
$ |
10,336 |
|
|
$ |
26,675 |
|
Estimated perpetual revenue adjustments |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
||||
Estimated cloud revenue adjustments |
|
1,772 |
|
|
4,637 |
|
|
10,163 |
|
|
26,346 |
|
||||
Estimated support revenue adjustments |
|
9 |
|
|
65 |
|
|
173 |
|
|
329 |
|
||||
Estimated professional services revenue adjustments |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
||||
Total estimated revenue adjustments |
|
$ |
1,781 |
|
|
$ |
4,702 |
|
|
$ |
10,336 |
|
|
$ |
26,675 |
|
|
|
|
|
|
|
|
|
|
||||||||
Software (includes cloud and support) revenue - non-GAAP |
|
$ |
200,860 |
|
|
$ |
185,538 |
|
|
$ |
727,800 |
|
|
$ |
740,935 |
|
Perpetual revenue - non-GAAP |
|
42,025 |
|
|
40,526 |
|
|
141,840 |
|
|
179,882 |
|
||||
Cloud revenue - non-GAAP |
|
87,738 |
|
|
65,871 |
|
|
287,574 |
|
|
246,823 |
|
||||
Support revenue - non-GAAP |
|
71,097 |
|
|
79,141 |
|
|
298,386 |
|
|
314,230 |
|
||||
Professional services revenue - non-GAAP |
|
$ |
26,001 |
|
|
$ |
29,222 |
|
|
$ |
112,783 |
|
|
$ |
132,265 |
|
Total revenue - non-GAAP |
|
$ |
226,861 |
|
|
$ |
214,760 |
|
|
$ |
840,583 |
|
|
$ |
873,200 |
|
|
|
|
|
|
|
|
|
|
||||||||
Table of Reconciliation from GAAP Cloud Revenue to Non-GAAP Cloud Revenue |
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
SaaS revenue - GAAP |
|
$ |
69,851 |
|
|
$ |
46,715 |
|
|
$ |
217,952 |
|
|
$ |
163,943 |
|
Bundled SaaS revenue - GAAP |
|
39,345 |
|
|
31,406 |
|
|
145,962 |
|
|
115,925 |
|
||||
Unbundled SaaS revenue - GAAP (1) |
|
30,506 |
|
|
15,309 |
|
|
71,990 |
|
|
48,018 |
|
||||
Optional managed services revenue - GAAP |
|
$ |
16,115 |
|
|
$ |
14,519 |
|
|
$ |
59,459 |
|
|
$ |
56,534 |
|
Cloud revenue - GAAP |
|
$ |
85,966 |
|
|
$ |
61,234 |
|
|
$ |
277,411 |
|
|
$ |
220,477 |
|
|
|
|
|
|
|
|
|
|
||||||||
Estimated SaaS revenue adjustments |
|
$ |
1,546 |
|
|
$ |
4,267 |
|
|
$ |
9,165 |
|
|
$ |
24,464 |
|
Estimated bundled SaaS revenue adjustments |
|
1,503 |
|
|
4,225 |
|
|
8,988 |
|
|
23,500 |
|
||||
Estimated unbundled SaaS revenue adjustments |
|
43 |
|
|
42 |
|
|
177 |
|
|
964 |
|
||||
Estimated optional managed services revenue adjustments |
|
$ |
226 |
|
|
$ |
370 |
|
|
$ |
998 |
|
|
$ |
1,882 |
|
Estimated cloud revenue adjustments |
|
$ |
1,772 |
|
|
$ |
4,637 |
|
|
$ |
10,163 |
|
|
$ |
26,346 |
|
|
|
|
|
|
|
|
|
|
||||||||
SaaS revenue - non-GAAP |
|
$ |
71,397 |
|
|
$ |
50,982 |
|
|
$ |
227,117 |
|
|
$ |
188,407 |
|
Bundled SaaS revenue - non-GAAP |
|
40,848 |
|
|
35,631 |
|
|
154,950 |
|
|
139,425 |
|
||||
Unbundled SaaS revenue - non-GAAP (1) |
|
30,549 |
|
|
15,351 |
|
|
72,167 |
|
|
48,982 |
|
||||
Optional managed services revenue - non-GAAP |
|
$ |
16,341 |
|
|
$ |
14,889 |
|
|
$ |
60,457 |
|
|
$ |
58,416 |
|
Cloud revenue - non-GAAP |
|
$ |
87,738 |
|
|
$ |
65,871 |
|
|
$ |
287,574 |
|
|
$ |
246,823 |
|
|
|
|
|
|
|
|
|
|
||||||||
Table of New SaaS ACV |
|
|
|
|
|
|
|
|||||||||
New SaaS ACV |
|
$ |
21,907 |
|
|
$ |
15,785 |
|
|
$ |
66,155 |
|
|
$ |
49,710 |
|
New SaaS ACV Growth YoY |
|
38.8 |
% |
|
35.4 |
% |
|
33.1 |
% |
|
71.0 |
% |
||||
|
|
|
|
|
|
|
|
|
||||||||
Table of New Perpetual License Equivalent Bookings |
|
|
|
|
|
|
|
|||||||||
New perpetual license equivalent bookings (2) |
|
$ |
82,313 |
|
|
$ |
71,465 |
|
|
$ |
258,307 |
|
|
$ |
270,801 |
|
New perpetual license equivalent bookings change YoY |
|
15.2 |
% |
|
(10.3) |
% |
|
(4.6) |
% |
|
5.3 |
% |
(1) As our bookings mix has rapidly shifted to cloud, we are now including support revenue associated with unbundled SaaS within SaaS. In order to conform with this presentation, unbundled SaaS revenue for the three months ended
(2) As our bookings mix has rapidly shifted to cloud, we are now calculating the conversion factor based on the in-period mix. The conversion factor was 2.0x, 1.9x and 1.9x for the years ended
Table 6
GAAP to Non-GAAP Cyber Intelligence Revenue Metrics (Unaudited) |
||||||||||||||||
|
|
Three Months Ended
|
|
Year Ended
|
||||||||||||
(in thousands) |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Recurring revenue - GAAP |
|
$ |
58,588 |
|
|
$ |
52,092 |
|
|
$ |
223,405 |
|
|
$ |
192,578 |
|
Nonrecurring revenue - GAAP |
|
65,432 |
|
|
77,053 |
|
|
220,053 |
|
|
264,531 |
|
||||
Total revenue - GAAP |
|
$ |
124,020 |
|
|
$ |
129,145 |
|
|
$ |
443,458 |
|
|
$ |
457,109 |
|
|
|
|
|
|
|
|
|
|
||||||||
Estimated recurring revenue adjustments |
|
$ |
547 |
|
|
$ |
471 |
|
|
$ |
3,569 |
|
|
$ |
622 |
|
Estimated nonrecurring revenue adjustments |
|
— |
|
|
5,086 |
|
|
— |
|
|
5,086 |
|
||||
Total estimated revenue adjustments |
|
$ |
547 |
|
|
$ |
5,557 |
|
|
$ |
3,569 |
|
|
$ |
5,708 |
|
|
|
|
|
|
|
|
|
|
||||||||
Recurring revenue - non-GAAP |
|
$ |
59,135 |
|
|
$ |
52,563 |
|
|
$ |
226,974 |
|
|
$ |
193,200 |
|
Nonrecurring revenue - non-GAAP |
|
65,432 |
|
|
82,139 |
|
|
220,053 |
|
|
269,617 |
|
||||
Total revenue - non-GAAP |
|
$ |
124,567 |
|
|
$ |
134,702 |
|
|
$ |
447,027 |
|
|
$ |
462,817 |
|
|
|
|
|
|
|
|
|
|
Table 7
GAAP to Non-GAAP Segment and Shared Support Metrics (Unaudited) |
||||||||||||||||
|
|
Three Months Ended
|
|
Year Ended
|
||||||||||||
(in thousands) |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Segment expenses - GAAP (1) |
|
$ |
245,120 |
|
|
$ |
249,479 |
|
|
$ |
908,112 |
|
|
$ |
981,507 |
|
Shared support expenses - GAAP (2) |
|
81,507 |
|
|
61,428 |
|
|
256,888 |
|
|
234,271 |
|
||||
Total expenses - GAAP |
|
$ |
326,627 |
|
|
$ |
310,907 |
|
|
$ |
1,165,000 |
|
|
$ |
1,215,778 |
|
|
|
|
|
|
|
|
|
|
||||||||
Estimated segment expense adjustments |
|
$ |
(22,341) |
|
|
$ |
(32,378) |
|
|
$ |
(97,322) |
|
|
$ |
(114,106) |
|
Estimated shared support expense adjustments |
|
(30,201) |
|
|
(17,740) |
|
|
(76,855) |
|
|
(56,963) |
|
||||
Total estimated expense adjustments |
|
$ |
(52,542) |
|
|
$ |
(50,118) |
|
|
$ |
(174,177) |
|
|
$ |
(171,069) |
|
|
|
|
|
|
|
|
|
|
||||||||
Segment expenses - non-GAAP (1) |
|
$ |
222,779 |
|
|
$ |
217,101 |
|
|
$ |
810,790 |
|
|
$ |
867,401 |
|
Shared support expenses - non-GAAP (2) |
|
51,306 |
|
|
43,688 |
|
|
180,033 |
|
|
177,308 |
|
||||
Total expenses - non-GAAP |
|
$ |
274,085 |
|
|
$ |
260,789 |
|
|
$ |
990,823 |
|
|
$ |
1,044,709 |
|
(1) Segment expenses include expenses incurred directly by the two historical segments.
(2) Shared support expenses include certain operating expenses that are provided by shared resources or are otherwise generally not controlled by segment management. The majority of which are for administrative support functions, such as information technology, human resources, finance, legal, and other general corporate support, and for occupancy expenses.
Table 8
Calculation of Change in Revenue on a Constant Currency Basis (Unaudited) |
||||||||||||||
|
|
GAAP Revenue |
|
Non-GAAP Revenue |
||||||||||
(in thousands, except percentages) |
|
Three Months
|
Year
|
|
Three Months
|
Year
|
||||||||
Total Revenue |
|
|
|
|
|
|
||||||||
Revenue for the three months and year ended |
|
$ |
339,203 |
|
$ |
1,303,634 |
|
|
$ |
349,462 |
|
$ |
1,336,017 |
|
Revenue for the three months and year ended |
|
$ |
349,100 |
|
$ |
1,273,705 |
|
|
$ |
351,428 |
|
$ |
1,287,610 |
|
Revenue for the three months and year ended |
|
$ |
346,000 |
|
$ |
1,273,000 |
|
|
$ |
348,000 |
|
$ |
1,287,000 |
|
Reported period-over-period revenue change |
|
2.9 |
% |
(2.3) |
% |
|
0.6 |
% |
(3.6) |
% |
||||
% impact from change in foreign currency exchange rates |
|
(0.9) |
% |
— |
% |
|
(1.0) |
% |
(0.1) |
% |
||||
Constant currency period-over-period revenue change |
|
2.0 |
% |
(2.3) |
% |
|
(0.4) |
% |
(3.7) |
% |
||||
|
|
|
|
|
|
|
||||||||
Customer Engagement |
|
|
|
|
|
|
||||||||
Revenue for the three months and year ended |
|
$ |
210,058 |
|
$ |
846,525 |
|
|
$ |
214,760 |
|
$ |
873,200 |
|
Revenue for the three months and year ended |
|
$ |
225,080 |
|
$ |
830,247 |
|
|
$ |
226,861 |
|
$ |
840,583 |
|
Revenue for the three months and year ended |
|
$ |
223,000 |
|
$ |
829,000 |
|
|
$ |
224,000 |
|
$ |
839,000 |
|
Reported period-over-period revenue change |
|
7.2 |
% |
(1.9) |
% |
|
5.6 |
% |
(3.7) |
% |
||||
% impact from change in foreign currency exchange rates |
|
(1.0) |
% |
(0.2) |
% |
|
(1.3) |
% |
(0.2) |
% |
||||
Constant currency period-over-period revenue change |
|
6.2 |
% |
(2.1) |
% |
|
4.3 |
% |
(3.9) |
% |
||||
|
|
|
|
|
|
|
||||||||
Cyber Intelligence |
|
|
|
|
|
|
||||||||
Revenue for the three months and year ended |
|
$ |
129,145 |
|
$ |
457,109 |
|
|
$ |
134,702 |
|
$ |
462,817 |
|
Revenue for the three months and year ended |
|
$ |
124,020 |
|
$ |
443,458 |
|
|
$ |
124,567 |
|
$ |
447,027 |
|
Revenue for the three months and year ended |
|
$ |
123,000 |
|
$ |
444,000 |
|
|
$ |
124,000 |
|
$ |
448,000 |
|
Reported period-over-period revenue change |
|
(4.0) |
% |
(3.0) |
% |
|
(7.5) |
% |
(3.4) |
% |
||||
% impact from change in foreign currency exchange rates |
|
(0.8) |
% |
0.1 |
% |
|
(0.4) |
% |
0.2 |
% |
||||
Constant currency period-over-period revenue change |
|
(4.8) |
% |
(2.9) |
% |
|
(7.9) |
% |
(3.2) |
% |
(1) Revenue for the three months and year ended
For further information see "Supplemental Information About Constant Currency" at the end of this press release.
Table 9
Condensed Consolidated Balance Sheets (Unaudited) |
||||||||
|
|
|
||||||
(in thousands, except share and per share data) |
|
2021 |
|
2020 |
||||
Assets |
|
|
|
|
||||
Current Assets: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
663,843 |
|
|
$ |
379,146 |
|
Restricted cash and cash equivalents, and restricted bank time deposits |
|
27,057 |
|
|
43,860 |
|
||
Short-term investments |
|
51,013 |
|
|
20,215 |
|
||
Accounts receivable, net of allowance for doubtful accounts of |
|
381,158 |
|
|
382,435 |
|
||
Contract assets, net |
|
57,033 |
|
|
64,961 |
|
||
Inventories |
|
20,083 |
|
|
20,495 |
|
||
Prepaid expenses and other current assets |
|
77,555 |
|
|
87,946 |
|
||
Total current assets |
|
1,277,742 |
|
|
999,058 |
|
||
Property and equipment, net |
|
106,242 |
|
|
116,111 |
|
||
Operating lease right-of-use assets |
|
88,889 |
|
|
102,149 |
|
||
|
|
1,485,590 |
|
|
1,469,211 |
|
||
Intangible assets, net |
|
149,043 |
|
|
197,764 |
|
||
Deferred income taxes |
|
14,489 |
|
|
13,802 |
|
||
Other assets |
|
139,300 |
|
|
117,963 |
|
||
Total assets |
|
$ |
3,261,295 |
|
|
$ |
3,016,058 |
|
|
|
|
|
|
||||
Liabilities, Temporary Equity, and Stockholders' Equity |
|
|
|
|
||||
Current Liabilities: |
|
|
|
|
||||
Accounts payable |
|
$ |
76,975 |
|
|
$ |
71,604 |
|
Accrued expenses and other current liabilities |
|
311,706 |
|
|
229,698 |
|
||
Current maturities of long-term debt |
|
386,713 |
|
|
4,250 |
|
||
Contract liabilities |
|
388,045 |
|
|
397,350 |
|
||
Total current liabilities |
|
1,163,439 |
|
|
702,902 |
|
||
Long-term debt |
|
402,781 |
|
|
832,798 |
|
||
Long-term contract liabilities |
|
38,539 |
|
|
40,565 |
|
||
Operating lease liabilities |
|
79,886 |
|
|
90,372 |
|
||
Deferred income taxes |
|
36,976 |
|
|
39,829 |
|
||
Other liabilities |
|
51,641 |
|
|
67,155 |
|
||
Total liabilities |
|
1,773,262 |
|
|
1,773,621 |
|
||
Commitments and Contingencies |
|
|
|
|
||||
Temporary Equity: |
|
|
|
|
||||
Preferred stock - |
|
200,628 |
|
|
— |
|
||
Equity component of currently redeemable convertible notes |
|
4,841 |
|
|
— |
|
||
Total temporary equity |
|
205,469 |
|
|
— |
|
||
Stockholders' Equity: |
|
|
|
|
||||
Common stock - |
|
70 |
|
|
68 |
|
||
Additional paid-in capital |
|
1,726,166 |
|
|
1,660,889 |
|
||
|
|
(208,124) |
|
|
(174,134) |
|
||
Accumulated deficit |
|
(113,797) |
|
|
(105,590) |
|
||
Accumulated other comprehensive loss |
|
(136,878) |
|
|
(151,865) |
|
||
|
|
1,267,437 |
|
|
1,229,368 |
|
||
Noncontrolling interests |
|
15,127 |
|
|
13,069 |
|
||
Total stockholders' equity |
|
1,282,564 |
|
|
1,242,437 |
|
||
Total liabilities, temporary equity, and stockholders' equity |
|
$ |
3,261,295 |
|
|
$ |
3,016,058 |
|
Table 10
Condensed Consolidated Statements of Cash Flows (Unaudited) |
||||||||
|
|
Year Ended
|
||||||
(in thousands) |
|
2021 |
|
2020 |
||||
Cash flows from operating activities: |
|
|
|
|
||||
Net (loss) income |
|
$ |
(107) |
|
|
$ |
35,683 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
||||
Depreciation and amortization |
|
100,408 |
|
|
91,532 |
|
||
Provision for doubtful accounts |
|
3,777 |
|
|
2,572 |
|
||
Stock-based compensation, excluding cash-settled awards |
|
62,289 |
|
|
82,698 |
|
||
Change in fair value of future tranche right |
|
56,146 |
|
|
— |
|
||
Amortization of discount on convertible notes |
|
12,883 |
|
|
12,490 |
|
||
(Benefit) provision from deferred income taxes |
|
(3,735) |
|
|
2,145 |
|
||
Non-cash losses (gains) on derivative financial instruments, net |
|
1,362 |
|
|
(599) |
|
||
Other non-cash items, net |
|
(8,188) |
|
|
4,544 |
|
||
Changes in operating assets and liabilities, net of effects of business combinations and divestitures: |
|
|
|
|
||||
Accounts receivable |
|
(2,288) |
|
|
(6,894) |
|
||
Contract assets |
|
8,379 |
|
|
(1,470) |
|
||
Inventories |
|
(1,508) |
|
|
1,752 |
|
||
Prepaid expenses and other assets |
|
(16,736) |
|
|
13,523 |
|
||
Accounts payable and accrued expenses |
|
49,430 |
|
|
(14,488) |
|
||
Contract liabilities |
|
(11,332) |
|
|
27,575 |
|
||
Other liabilities |
|
902 |
|
|
(13,290) |
|
||
Other, net |
|
2,164 |
|
|
131 |
|
||
Net cash provided by operating activities |
|
253,846 |
|
|
237,904 |
|
||
|
|
|
|
|
||||
Cash flows from investing activities: |
|
|
|
|
||||
Cash paid for business combinations, including adjustments, net of cash acquired |
|
— |
|
|
(74,096) |
|
||
Purchases of property and equipment |
|
(27,880) |
|
|
(35,028) |
|
||
Purchases of investments |
|
(151,116) |
|
|
(47,407) |
|
||
Maturities and sales of investments |
|
120,937 |
|
|
59,324 |
|
||
Settlements of derivative financial instruments not designated as hedges |
|
159 |
|
|
3,093 |
|
||
Cash paid for capitalized software development costs |
|
(12,444) |
|
|
(17,222) |
|
||
Change in restricted bank time deposits, including long-term portion |
|
31,238 |
|
|
(14,215) |
|
||
Other investing activities |
|
1,863 |
|
|
(250) |
|
||
Net cash used in investing activities |
|
(37,243) |
|
|
(125,801) |
|
||
|
|
|
|
|
||||
Cash flows from financing activities: |
|
|
|
|
||||
Proceeds from issuance of preferred stock and future tranche right, net of issuance costs |
|
197,254 |
|
|
— |
|
||
Proceeds from borrowings |
|
155,000 |
|
|
45,000 |
|
||
Repayments of borrowings and other financing obligations |
|
(207,165) |
|
|
(6,478) |
|
||
Payments to repurchase convertible notes |
|
(13,032) |
|
|
— |
|
||
Payments of equity issuance, debt issuance, and other debt-related costs |
|
(2,287) |
|
|
(212) |
|
||
Dividends or distributions paid to noncontrolling interests |
|
(5,414) |
|
|
(5,488) |
|
||
Purchases of treasury stock |
|
(36,836) |
|
|
(113,690) |
|
||
Preferred stock dividend payments |
|
(1,589) |
|
|
— |
|
||
Payments of deferred purchase price and contingent consideration for business combinations (financing portion) and other financing activities |
|
(13,998) |
|
|
(30,454) |
|
||
Net cash provided by (used in) financing activities |
|
71,933 |
|
|
(111,322) |
|
||
Foreign currency effects on cash, cash equivalents, restricted cash, and restricted cash equivalents |
|
(60) |
|
|
(1,823) |
|
||
Net increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents |
|
288,476 |
|
|
(1,042) |
|
||
Cash, cash equivalents, restricted cash, and restricted cash equivalents, beginning of year |
|
411,657 |
|
|
412,699 |
|
||
Cash, cash equivalents, restricted cash, and restricted cash equivalents, end of year |
|
$ |
700,133 |
|
|
$ |
411,657 |
|
|
|
|
|
|
||||
Reconciliation of cash, cash equivalents, restricted cash, and restricted cash equivalents at end of year to the consolidated balance sheets: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
663,843 |
|
|
$ |
379,146 |
|
Restricted cash and cash equivalents included in restricted cash and cash equivalents, and restricted bank time deposits |
|
25,910 |
|
|
24,513 |
|
||
Restricted cash and cash equivalents included in other assets |
|
10,380 |
|
|
7,998 |
|
||
Total cash, cash equivalents, restricted cash, and restricted cash equivalents |
|
$ |
700,133 |
|
|
$ |
411,657 |
|
See notes to consolidated financial statements.
Supplemental Information About Non-GAAP Financial Measures and Operating Metrics
This press release contains non-GAAP financial measures, consisting of non-GAAP revenue, non-GAAP software revenue (includes cloud and support), non-GAAP perpetual revenue, non-GAAP support revenue, non-GAAP professional services revenue, non-GAAP recurring revenue, non-GAAP nonrecurring revenue, non-GAAP cloud revenue, non-GAAP SaaS revenue, non-GAAP bundled SaaS revenue, non-GAAP unbundled SaaS revenue, non-GAAP optional managed services revenue, estimated GAAP fully allocated cost of revenue, estimated GAAP and non-GAAP fully allocated gross profit and gross margins, estimated GAAP and non-GAAP fully allocated research and development, net, estimated GAAP and non-GAAP fully allocated selling, general and administrative expenses, estimated GAAP and non-GAAP fully allocated operating income and operating margins, non-GAAP other income (expense), net, non-GAAP provision (benefit) for income taxes and non-GAAP effective income tax rate, non-GAAP net income attributable to
We believe these non-GAAP financial measures, used in conjunction with the corresponding GAAP measures, provide investors with useful supplemental information about the financial performance of our business by:
- facilitating the comparison of our financial results and business trends between periods, by excluding certain items that either can vary significantly in amount and frequency, are based upon subjective assumptions, or in certain cases are unplanned for or difficult to forecast,
- facilitating the comparison of our financial results and business trends with other technology companies who publish similar non-GAAP measures, and
- allowing investors to see and understand key supplementary metrics used by our management to run our business, including for budgeting and forecasting, resource allocation, and compensation matters.
We also make these non-GAAP financial measures available because a number of our investors have informed us that they find this supplemental information useful.
Non-GAAP financial measures should not be considered in isolation as substitutes for, or superior to, comparable GAAP financial measures. The non-GAAP financial measures we present have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP, and these non-GAAP financial measures should only be used to evaluate our results of operations in conjunction with the corresponding GAAP financial measures. These non-GAAP financial measures do not represent discretionary cash available to us to invest in the growth of our business, and we may in the future incur expenses similar to or in addition to the adjustments made in these non-GAAP financial measures. Other companies may calculate similar non-GAAP financial measures differently than we do, limiting their usefulness as comparative measures.
Our non-GAAP financial measures are calculated by making the following adjustments to our GAAP financial measures:
Revenue adjustments. We exclude from our non-GAAP revenue the impact of fair value adjustments required under GAAP relating to cloud services and customer support contracts acquired in a business acquisition, which would have otherwise been recognized on a stand-alone basis. We believe that it is useful for investors to understand the total amount of revenue that we and the acquired company would have recognized on a stand-alone basis under GAAP, absent the accounting adjustment associated with the business acquisition. Our non-GAAP revenue also reflects certain adjustments from aligning an acquired company’s revenue recognition policies to our policies. We believe that our non-GAAP revenue measure helps management and investors understand our revenue trends and serves as a useful measure of ongoing business performance.
Amortization of acquired technology and other acquired intangible assets. When we acquire an entity, we are required under GAAP to record the fair values of the intangible assets of the acquired entity and amortize those assets over their useful lives. We exclude the amortization of acquired intangible assets, including acquired technology, from our non-GAAP financial measures because they are inconsistent in amount and frequency and are significantly impacted by the timing and size of acquisitions. We also exclude these amounts to provide easier comparability of pre- and post-acquisition operating results.
Stock-based compensation expenses. We exclude stock-based compensation expenses related to restricted stock awards, stock bonus programs, bonus share programs, and other stock-based awards from our non-GAAP financial measures. We evaluate our performance both with and without these measures because stock-based compensation is typically a non-cash expense and can vary significantly over time based on the timing, size and nature of awards granted, and is influenced in part by certain factors which are generally beyond our control, such as the volatility of the price of our common stock. In addition, measurement of stock-based compensation is subject to varying valuation methodologies and subjective assumptions, and therefore we believe that excluding stock-based compensation from our non-GAAP financial measures allows for meaningful comparisons of our current operating results to our historical operating results and to other companies in our industry.
Unrealized gains and losses on certain derivatives, net. We exclude from our non-GAAP financial measures unrealized gains and losses on certain foreign currency derivatives which are not designated as hedges under accounting guidance. We exclude unrealized gains and losses on foreign currency derivatives that serve as economic hedges against variability in the cash flows of recognized assets or liabilities, or of forecasted transactions. These contracts, if designated as hedges under accounting guidance, would be considered “cash flow” hedges. These unrealized gains and losses are excluded from our non-GAAP financial measures because they are non-cash transactions which are highly variable from period to period. Upon settlement of these foreign currency derivatives, any realized gain or loss is included in our non-GAAP financial measures.
Amortization of convertible note discount. Our non-GAAP financial measures exclude the amortization of the imputed discount on our convertible notes. Under GAAP, certain convertible debt instruments that may be settled in cash upon conversion are required to be bifurcated into separate liability (debt) and equity (conversion option) components in a manner that reflects the issuer’s assumed non-convertible debt borrowing rate. For GAAP purposes, we are required to recognize imputed interest expense on the difference between our assumed non-convertible debt borrowing rate and the coupon rate on our 1.50% convertible notes. This difference is excluded from our non-GAAP financial measures because we believe that this expense is based upon subjective assumptions and does not reflect the cash cost of our convertible debt.
Expenses and losses on debt modification or retirement. We exclude from our non-GAAP financial measures losses on early retirements of debt attributable to refinancing or repaying our debt, and expenses incurred to modify debt terms, because we believe they are not reflective of our ongoing operations.
Change in fair value of future tranche right. On
Acquisition expenses, net. In connection with acquisition activity (including with respect to acquisitions that are not consummated), we incur expenses, including legal, accounting, and other professional fees, integration costs, changes in the fair value of contingent consideration obligations, and other costs. Integration costs may consist of information technology expenses as systems are integrated across the combined entity, consulting expenses, marketing expenses, and professional fees, as well as non-cash charges to write-off or impair the value of redundant assets. We exclude these expenses from our non-GAAP financial measures because they are unpredictable, can vary based on the size and complexity of each transaction, and are unrelated to our continuing operations or to the continuing operations of the acquired businesses.
Restructuring expenses. We exclude restructuring expenses from our non-GAAP financial measures, which include employee termination costs, facility exit costs, certain professional fees, asset impairment charges, and other costs directly associated with resource realignments incurred in reaction to changing strategies or business conditions. All of these costs can vary significantly in amount and frequency based on the nature of the actions as well as the changing needs of our business and we believe that excluding them provides easier comparability of pre- and post-restructuring operating results.
Separation expenses. On
Impairment charges and other adjustments. We exclude from our non-GAAP financial measures asset impairment charges (other than those already included within restructuring or acquisition activity), rent expense for redundant facilities, gains or losses on sales of property, gains or losses on settlements of certain legal matters, and certain professional fees unrelated to our ongoing operations, including fees and expenses (or recoveries) related to a shareholder proxy contest that was settled in
Non-GAAP income tax adjustments. We exclude our GAAP provision (benefit) for income taxes from our non-GAAP measures of net income attributable to
Customer Engagement Revenue Metrics and Operating Metrics
Software (includes cloud and support) includes software licenses, appliances, SaaS and optional managed services. Recurring Software Revenue includes SaaS, optional managed services, and support revenue.
Cloud revenue primarily consists of SaaS and optional managed services.
SaaS revenue includes bundled SaaS, software with standard managed services and unbundled SaaS (including associated support) that we account for as term licenses where managed services are purchased separately.
Optional Managed Services is recurring services that are intended to improve our customers operations and reduce expenses.
New SaaS Annual Contract Value (ACV) includes the annualized contract value of all new SaaS contracts received within the period; in cases where SaaS is offered to partners through usage-based contracts, we include the incremental value of usage contracts over a rolling four quarters.
New Perpetual License Equivalent Bookings are used to normalize between perpetual and SaaS bookings and measure overall software bookings growth. We calculate new perpetual license equivalent bookings by adding to perpetual licenses an amount equal to New SaaS ACV bookings multiplied by a conversion factor that normalizes the mix of bundled and unbundled SaaS and perpetual bookings in a given period. The conversion factor used is based on our order mix and may change from period to period. The conversion factor was 1.9x for both the years ended
Cyber Intelligence Recurring and Nonrecurring Revenue Metrics
Recurring revenue, on both a GAAP and non-GAAP basis, primarily consists of initial and renewal support, subscription software licenses, and SaaS in certain limited transactions.
Nonrecurring revenue, on both a GAAP and non-GAAP basis, primarily consists of our perpetual licenses, long-term projects including software customizations that are recognized over time using a percentage of completion (“POC”) method, consulting, implementation and installation services, training, and hardware.
We believe that recurring and nonrecurring revenue provide investors with useful insight into the nature and sustainability of our revenue streams. The recurrence of these revenue streams in future periods depends on a number of factors including contractual periods and customers' renewal decisions. Please see “Revenue adjustments” above for an explanation for why we present these revenue numbers on both a GAAP and non-GAAP basis.
Adjusted EBITDA
Adjusted EBITDA is a non-GAAP measure defined as net income (loss) before interest expense, interest income, income taxes, depreciation expense, amortization expense, revenue adjustments, restructuring expenses, acquisition expenses, and other expenses excluded from our non-GAAP financial measures as described above. We believe that adjusted EBITDA is also commonly used by investors to evaluate operating performance between companies because it helps reduce variability caused by differences in capital structures, income taxes, stock-based compensation, accounting policies, and depreciation and amortization policies. Adjusted EBITDA is also used by credit rating agencies, lenders, and other parties to evaluate our creditworthiness.
Net Debt
Net Debt is a non-GAAP measure defined as the sum of long-term and short-term debt on our consolidated balance sheet, excluding unamortized discounts and issuance costs, less the sum of cash and cash equivalents, restricted cash, restricted cash equivalents, restricted bank time deposits, and restricted investments (including long-term portions), and short-term investments. We use this non-GAAP financial measure to help evaluate our capital structure, financial leverage, and our ability to reduce debt and to fund investing and financing activities and believe that it provides useful information to investors.
Supplemental Information About Constant Currency
Because we operate on a global basis and transact business in many currencies, fluctuations in foreign currency exchange rates can affect our consolidated
Unless otherwise indicated, our financial outlook for revenue, operating margin, and diluted earnings per share, which is provided on a non-GAAP basis, reflects foreign currency exchange rates approximately consistent with rates in effect when the outlook is provided.
We also incur foreign exchange gains and losses resulting from the revaluation and settlement of monetary assets and liabilities that are denominated in currencies other than the entity’s functional currency. We periodically report our historical non-GAAP diluted net income per share both inclusive and exclusive of these net foreign exchange gains or losses. Our financial outlook for diluted earnings per share includes net foreign exchange gains or losses incurred to date, if any, but does not include potential future gains or losses.
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Investor Relations
(631) 962-9672
matthew.frankel@verint.com
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