Exhibit 99.1

Mimecast Announces Fourth Quarter and Full Year 2018 Financial Results

Fourth Quarter Highlights

 

Total revenue of $73.4 million grew 40% yoy on a GAAP basis and 33% in constant currency

 

Added 1,200 new customers. Total customers 30,400 globally

 

Revenue retention rate of 110%

 

Gross profit percentage of 73%

 

GAAP EPS of $(0.14) per diluted share, Non-GAAP EPS of $(0.05) per diluted share

Lexington, MA – May 14, 2018 (GLOBE NEWSWIRE) Mimecast Limited (NASDAQ: MIME), a leading email and data security company, today announced financial results for the fourth quarter and full year ended March 31, 2018.

“I’m extremely pleased with how we performed in 2018.  We worked tirelessly to bolster our customers’ cyber resilience through the constant innovation of our platform and the introduction of new services like Sync and Recover” stated Peter Bauer, CEO of Mimecast.

Mimecast’s CFO Peter Campbell noted, “We are proud of our ability to consistently exceed expectations on revenue at the same time showing improvements in our bottom line as we progress to our long-term targets.”

Fourth Quarter 2018 Financial Highlights

 

Revenue: GAAP revenue for the fourth quarter of 2018 was $73.4 million, an increase of 40% compared to $52.4 million of GAAP revenue in the fourth quarter of 2017. Revenue on a constant currency basis increased 33% compared to the fourth quarter of 2017.

 

Customers: Added 1,200 net new customers in the fourth quarter of 2018. We now serve over 30,400 organizations globally.

 

Revenue Retention Rate: Revenue retention rate was 110% in the fourth quarter of 2018, compared to 111% in the fourth quarter of 2017.

 

Gross Profit Percentage: Gross profit percentage was 73% in the fourth quarter of 2018, compared to 74% in the fourth quarter of 2017.

 

GAAP Net Loss: GAAP net loss was $8.3 million, or $(0.14) per diluted share, based on 58.3 million weighted-average shares outstanding.

 

Adjusted EBITDA: Adjusted EBITDA was $7.2 million, representing an Adjusted EBITDA margin of 9.8% up from 6.8% in the fourth quarter of 2017.

 

Non-GAAP Net Loss: Non-GAAP net loss was $3.1 million, or $(0.05) per share, based on 58.3 million diluted shares outstanding.

 

Free Cash Flow, Cash and Investments: Mimecast generated $1.9 million of free cash flow in the fourth quarter of 2018. Cash and short-term investments as of March 31, 2018 were $137.2 million.

Full Year 2018 Financial Highlights

 

Revenue: GAAP revenue for 2018 was $261.9 million, an increase of 40% compared to the $186.6 million of GAAP revenue in 2017. Revenue on a constant currency basis increased 38% compared to 2017.

 

Customers: Added 4,000 net new customers in 2018.

 

Revenue Retention Rate: Revenue retention rate was 110% for 2018.

 

Gross Profit Percentage: Gross profit percentage was 73% in 2018, consistent with 73% in 2017.

 

GAAP Net Loss: GAAP net loss was $14.1 million, or $(0.25) per diluted share, based on 57.3 million weighted-average shares outstanding.

1

 


 

Adjusted EBITDA: Adjusted EBITDA was $25.8 million, representing an Adjusted EBITDA margin of 9.8% up from 6.3% in 2017.

 

Non-GAAP Net Loss: Non-GAAP net loss was $0.9 million, or $(0.01) per share, based on 57.3 million diluted shares outstanding.

 

Free Cash Flow: Mimecast generated $11.9 million of free cash flow in 2018.

Reconciliations of the non-GAAP financial measures provided in this press release to their most directly comparable GAAP financial measures are provided in the financial tables included at the end of this press release. An explanation of these measures and how they are calculated is also included under the heading “Non-GAAP Financial Measures.”

Business Highlights

 

Sales of Targeted Threat Protection increased during the fourth quarter, with 1,800 customers purchasing the service.  In total, 56% of our customers are now using Targeted Threat Protection.

 

A total of 31% of customers used Mimecast in conjunction with Microsoft® Office 365™ during the fourth quarter compared to 21% in the fourth quarter of 2017. More than 9,500 customers of all sizes have selected Mimecast to enhance their security, archive their data, and to provide uptime assurance for their Office 365 investments.

 

Christina Van Houten joined Mimecast in the role of Chief Strategy Officer.  She is responsible for corporate development, product management, and market strategy. Christina is a veteran of the enterprise technology industry, bringing more than two decades of experience with some of the world’s largest firms including Oracle, IBM, Infor Global Solutions, Netezza and ProfitLogic.

 

Mimecast announced enhanced email cyber resilience with new detection, remediation and threat intelligence capabilities for Targeted Threat Protection.   New features include supply chain impersonation protection, similar domain detection, the integration of automated intelligence feeds and the introduction of automated threat remediation capabilities.

Business Outlook

Mimecast is providing guidance for the first quarter and fiscal year 2019.

First Quarter 2019 Guidance:

For the first quarter of 2019, constant currency revenue growth is expected to be in the range of 26% to 28% and revenue is expected to be in the range of $76.3 million to $77.1 million. Our guidance is based on exchange rates as of April 30, 2018 and includes an estimated positive impact of $2.8 million resulting from the weakening of the U.S. dollar compared to the prior year. Adjusted EBITDA for the first quarter is expected to be in the range of $9.0 million to $10.0 million.  

Fiscal Year 2019 Guidance:

For the full year 2019, revenue is expected to be in the range of $327.0 million to $338.0 million or 23% to 27% revenue growth in constant currency.  Foreign exchange rate fluctuations are positively impacting this guidance by an estimated $6.3 million. Adjusted EBITDA is expected to be in the range of $49.0 million to $51.0 million.

GAAP net loss is the most comparable GAAP measure to Adjusted EBITDA. Adjusted EBITDA differs from GAAP net loss in that it excludes depreciation, amortization, disposals and impairments of long-lived assets, share-based compensation expense, restructuring expense, interest income and interest expense, the provision for income taxes and foreign exchange (expense) income and includes rent paid in the period related to locations which are accounted for as build-to-suit facilities. Mimecast is unable to predict with reasonable certainty the ultimate outcome of these exclusions without unreasonable effort. Therefore, Mimecast has not provided guidance for GAAP net loss or a reconciliation of forward-looking Adjusted EBITDA guidance to GAAP net loss.


2

 


Conference Call and Webcast Information

Mimecast will host a conference call to discuss these financial results for investors and analysts at 4:30 pm EDT (UTC-05:00) on May 14, 2018. To access the conference call, dial (844) 815-2878 for the U.S. and Canada and (615) 800-6885 for international callers and enter conference ID# 1159538.  The call will also be webcast live on the investor relations section of the Company’s website http://investors.mimecast.com.  An audio replay of the call will be available two hours after the live call ends by dialing (855) 859-2056 for U.S. and Canada or (404) 537-3406 for international callers, and entering passcode ID# 1159538.  In addition, an archive of the webcast will be available on the investor relations section of the company’s website http://investors.mimecast.com.

About Mimecast Limited

Mimecast Limited (NASDAQ: MIME) makes business email and data safer for more than 30,400 customers and millions of employees worldwide. Founded in 2003, the Company’s next-generation cloud-based security, archiving and continuity services protect email, and deliver comprehensive email risk management in a single, fully-integrated subscription service. Mimecast reduces email risk and the complexity and cost of managing the array of point solutions traditionally used to protect email and its data. For customers that have migrated to cloud services like Microsoft® Office 365™, Mimecast mitigates single vendor exposure by strengthening security coverage, combating downtime and improving archiving.

 

Mimecast and the Mimecast logo are registered trademarks of Mimecast. All other third party trademarks and logos contained in this press release are the property of their respective owners.

 

Non-GAAP Financial Measures

We have provided in this press release financial information that has not been prepared in accordance with GAAP. We use these non-GAAP financial measures internally in analyzing our financial results and believe they are useful to investors, as a supplement to GAAP measures, in evaluating our ongoing operational performance. We believe 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 our financial results with other companies in our industry, many of which present similar non-GAAP financial measures to investors.

Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures provided in the financial statement tables included below in this press release.

Revenue Constant Currency Growth Rate. We believe revenue constant currency growth rate is a key indicator of our operating results. We calculate revenue constant currency growth rate by translating revenue from entities reporting in foreign currencies into U.S. dollars using the comparable foreign currency exchange rates from the prior fiscal period. To determine projected revenue growth rates on a constant currency basis for the first quarter and full year 2019, expected revenue from entities reporting in foreign currencies will be translated into U.S. dollars using the comparable prior year period’s monthly average foreign currency exchange rates.

Adjusted EBITDA and Adjusted EBITDA margin. We believe that Adjusted EBITDA and Adjusted EBITDA margin are key indicators of our operating results. We define Adjusted EBITDA as net loss, adjusted to exclude: depreciation, amortization, disposals and impairments of long-lived assets, share-based compensation expense, restructuring expense, interest income and interest expense, the provision for income taxes and foreign exchange (expense) income predominantly related to the elimination of intercompany balances and includes rent paid in the period related to locations which are accounted for as build-to-suit facilities. We define Adjusted EBITDA margin as Adjusted EBITDA over revenue in the period.

Non-GAAP net (loss) income. We define non-GAAP net (loss) income as net loss less share-based compensation expense, amortization of acquired intangible assets, impairment of long-lived assets, restructuring expenses and the income tax effect of non-GAAP adjustments. We consider this non-GAAP financial measure to be a useful metric for management and investors because it excludes the effect of share-based compensation expense, certain other “one-time” charges and related income tax effects so that our management and investors can compare our recurring core business net results over multiple periods. There are a number of limitations related to the use of non-GAAP net (loss) income versus net loss calculated in accordance with GAAP. For example, as noted above, non-GAAP net (loss) income excludes share-based compensation expense, certain other “one-time” charges and related income tax effects. In addition, the components of the costs that we exclude in our calculation of non-GAAP net (loss) income may differ from the components that our peer companies exclude when they report their non-GAAP results of operations. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP net (loss) income and evaluating non-GAAP net (loss) income together with net loss calculated in accordance with GAAP.

3

 


Free cash flow. We define free cash flow as net cash provided by operating activities minus capital expenditures. We consider free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that, after the acquisition of property, equipment and capitalized software, can be used for strategic opportunities, including investing in our business, and strengthening the balance sheet. Analysis of free cash flow facilitates management’s comparisons of our operating results to competitors’ operating results. A limitation of using free cash flow versus the GAAP measure of net cash provided by operating activities as a means for evaluating our company is that free cash flow does not represent the total increase or decrease in the cash balance from operations for the period because it excludes cash used for capital expenditures during the period. Management compensates for this limitation by providing information about our capital expenditures on the face of the cash flow statement and in the liquidity and capital resources discussion included in our annual and quarterly reports filed with the Securities and Exchange Commission.

Safe Harbor for Forward-Looking Statements

Statements in this press release regarding management’s future expectations, beliefs, intentions, goals, strategies, plans or prospects, including, without limitation, the statements relating to our progress on achieving long-term financial targets, the future success of new products and services, and Mimecast’s future financial performance on both a GAAP and non-GAAP basis under the heading “Business Outlook” above, may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. All statements, other than statements of historical fact, are statements that could be deemed forward-looking statements, including statements containing the words “predicts,” “plan,” “expects,” “anticipates,” “believes,” “goal,” “target,” “estimate,” “potential,” “may,” “might,” “could,” “see,” “seek,” “forecast,” and similar words. Mimecast intends all such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 21E of the Exchange Act and the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors including those risks, uncertainties and factors detailed in Mimecast’s filings with the Securities and Exchange Commission. As a result of such risks, uncertainties and factors, Mimecast’s actual results may differ materially from any future results, performance or achievements discussed in or implied by the forward-looking statements contained herein. Mimecast is providing the information in this press release as of this date and assumes no obligations to update the information included in this press release or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4

 


MIMECAST LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(unaudited)

 

 

 

Three months ended March 31,

 

 

Year Ended March 31,

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Revenue

 

$

73,401

 

 

$

52,409

 

 

$

261,897

 

 

$

186,563

 

Cost of revenue

 

 

20,176

 

 

 

13,454

 

 

 

69,699

 

 

 

50,314

 

Gross profit

 

 

53,225

 

 

 

38,955

 

 

 

192,198

 

 

 

136,249

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

12,185

 

 

 

6,607

 

 

 

38,373

 

 

 

22,593

 

Sales and marketing

 

 

32,342

 

 

 

26,489

 

 

 

121,246

 

 

 

96,154

 

General and administrative

 

 

10,360

 

 

 

7,828

 

 

 

36,989

 

 

 

27,875

 

Impairment of long-lived assets

 

 

1,712

 

 

 

 

 

 

1,712

 

 

 

 

Restructuring

 

 

2,532

 

 

 

 

 

 

2,532

 

 

 

 

Total operating expenses

 

 

59,131

 

 

 

40,924

 

 

 

200,852

 

 

 

146,622

 

Loss from operations

 

 

(5,906

)

 

 

(1,969

)

 

 

(8,654

)

 

 

(10,373

)

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

456

 

 

 

203

 

 

 

1,310

 

 

 

510

 

Interest expense

 

 

(442

)

 

 

(24

)

 

 

(598

)

 

 

(268

)

Foreign exchange (expense) income

 

 

(1,452

)

 

 

158

 

 

 

(3,511

)

 

 

6,892

 

Other income, net

 

 

72

 

 

 

 

 

 

72

 

 

 

 

Total other income (expense), net

 

 

(1,366

)

 

 

337

 

 

 

(2,727

)

 

 

7,134

 

Loss before income taxes

 

 

(7,272

)

 

 

(1,632

)

 

 

(11,381

)

 

 

(3,239

)

Provision for income taxes

 

 

982

 

 

 

986

 

 

 

2,705

 

 

 

2,202

 

Net loss

 

$

(8,254

)

 

$

(2,618

)

 

$

(14,086

)

 

$

(5,441

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per ordinary share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.14

)

 

$

(0.05

)

 

$

(0.25

)

 

$

(0.10

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average number of ordinary shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

58,264

 

 

 

55,375

 

 

 

57,269

 

 

 

54,810

 

5

 


MIMECAST LIMITED

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

(unaudited)

 

 

 

As of March 31,

 

 

 

2018

 

 

2017

 

Assets

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

78,339

 

 

$

51,319

 

Short-term investments

 

 

58,871

 

 

 

60,347

 

Accounts receivable, net

 

 

65,392

 

 

 

44,358

 

Prepaid expenses and other current assets

 

 

15,302

 

 

 

10,054

 

Total current assets

 

 

217,904

 

 

 

166,078

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

123,822

 

 

 

32,009

 

Intangible assets, net

 

 

9,819

 

 

 

1,590

 

Goodwill

 

 

5,631

 

 

 

5,363

 

Other assets

 

 

1,222

 

 

 

312

 

Total assets

 

$

358,398

 

 

$

205,352

 

 

 

 

 

 

 

 

 

 

Liabilities and shareholders' equity

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

$

6,052

 

 

$

3,558

 

Accrued expenses and other current liabilities

 

 

34,088

 

 

 

20,713

 

Deferred revenue

 

 

123,057

 

 

 

84,159

 

Current portion of capital lease obligations

 

 

1,125

 

 

 

233

 

Current portion of long-term debt

 

 

 

 

 

1,725

 

Total current liabilities

 

 

164,322

 

 

 

110,388

 

 

 

 

 

 

 

 

 

 

Deferred revenue, net of current portion

 

 

18,045

 

 

 

11,189

 

Long-term capital lease obligations

 

 

2,390

 

 

 

245

 

Construction financing lease obligation

 

 

67,205

 

 

 

 

Other non-current liabilities

 

 

6,444

 

 

 

1,538

 

Total liabilities

 

 

258,406

 

 

 

123,360

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders' equity

 

 

 

 

 

 

 

 

Ordinary shares, $0.012 par value, 300,000,000 shares authorized; 58,949,644

   and 55,901,996 shares issued and outstanding as of March 31, 2018 and 2017,

   respectively

 

 

707

 

 

 

671

 

Additional paid-in capital

 

 

212,839

 

 

 

183,752

 

Accumulated deficit

 

 

(108,207

)

 

 

(94,017

)

Accumulated other comprehensive loss

 

 

(5,347

)

 

 

(8,414

)

Total shareholders' equity

 

 

99,992

 

 

 

81,992

 

Total liabilities and shareholders' equity

 

$

358,398

 

 

$

205,352

 

6

 


MIMECAST LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

 

 

 

Three months ended March 31,

 

 

Year ended March 31,

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Operating activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(8,254

)

 

$

(2,618

)

 

$

(14,086

)

 

$

(5,441

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

6,382

 

 

 

3,178

 

 

 

18,960

 

 

 

11,881

 

Share-based compensation expense

 

 

3,036

 

 

 

2,345

 

 

 

11,734

 

 

 

10,294

 

Provision for doubtful accounts

 

 

43

 

 

 

4

 

 

 

185

 

 

 

87

 

Impairment of long-lived assets

 

 

1,712

 

 

 

 

 

 

1,712

 

 

 

 

Loss (gain) on disposal of fixed assets

 

 

180

 

 

 

(1

)

 

 

181

 

 

 

(4

)

Other non-cash items

 

 

(7

)

 

 

66

 

 

 

184

 

 

 

132

 

Unrealized currency loss (gain) on foreign denominated transactions

 

 

1,531

 

 

 

(203

)

 

 

2,958

 

 

 

(6,496

)

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(10,527

)

 

 

(5,712

)

 

 

(18,120

)

 

 

(11,750

)

Prepaid expenses and other current assets

 

 

(4,410

)

 

 

(3,261

)

 

 

(5,037

)

 

 

(2,752

)

Other assets

 

 

(9

)

 

 

1,899

 

 

 

33

 

 

 

1,861

 

Accounts payable

 

 

(864

)

 

 

(1,693

)

 

 

(104

)

 

 

758

 

Deferred revenue

 

 

19,325

 

 

 

13,868

 

 

 

39,042

 

 

 

29,072

 

Accrued expenses and other liabilities

 

 

6,649

 

 

 

2,025

 

 

 

8,770

 

 

 

4,872

 

Net cash provided by operating activities

 

 

14,787

 

 

 

9,897

 

 

 

46,412

 

 

 

32,514

 

Investing activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchases of investments

 

 

(28,959

)

 

 

(10,036

)

 

 

(76,948

)

 

 

(67,550

)

Maturities of investments

 

 

23,000

 

 

 

7,000

 

 

 

77,808

 

 

 

7,000

 

Purchases of property, equipment and capitalized software

 

 

(12,909

)

 

 

(5,134

)

 

 

(34,498

)

 

 

(18,491

)

Payments for acquisitions

 

 

 

 

 

 

 

 

(1,381

)

 

 

(5,574

)

Net cash used in investing activities

 

 

(18,868

)

 

 

(8,170

)

 

 

(35,019

)

 

 

(84,615

)

Financing activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from issuance of ordinary shares

 

 

7,519

 

 

 

2,513

 

 

 

17,039

 

 

 

4,476

 

Payments on debt

 

 

(194

)

 

 

(930

)

 

 

(1,825

)

 

 

(4,559

)

Payments on capital lease obligations

 

 

(623

)

 

 

(249

)

 

 

(1,039

)

 

 

(249

)

Payments on construction financing lease obligation

 

 

(1,019

)

 

 

 

 

 

(1,019

)

 

 

 

Net cash provided by (used in) financing activities

 

 

5,683

 

 

 

1,334

 

 

 

13,156

 

 

 

(332

)

Effect of foreign exchange rates on cash

 

 

747

 

 

 

396

 

 

 

2,471

 

 

 

(2,388

)

Net increase (decrease) in cash and cash equivalents

 

 

2,349

 

 

 

3,457

 

 

 

27,020

 

 

 

(54,821

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at beginning of period

 

 

75,990

 

 

 

47,862

 

 

 

51,319

 

 

 

106,140

 

Cash and cash equivalents at end of period

 

$

78,339

 

 

$

51,319

 

 

$

78,339

 

 

$

51,319

 

7

 


Key Performance Indicators

In addition to traditional financial metrics, such as revenue and revenue growth trends, we monitor several other non-GAAP financial measures and non-financial metrics to help us evaluate growth trends, establish budgets, measure the effectiveness of our sales and marketing efforts and assess operational efficiencies. The key performance indicators that we monitor are as follows:

 

 

 

Three months ended March 31,

 

 

Year Ended March 31,

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

 

 

(dollars in thousands)

 

Revenue constant currency growth rate (1)

 

 

33

%

 

 

45

%

 

 

38

%

 

 

39

%

Revenue retention rate (2)

 

 

110

%

 

 

111

%

 

 

110

%

 

 

111

%

Total customers (3)

 

 

30,400

 

 

 

26,400

 

 

 

30,400

 

 

 

26,400

 

Gross profit percentage

 

 

73

%

 

 

74

%

 

 

73

%

 

 

73

%

Adjusted EBITDA (1)

 

$

7,223

 

 

$

3,554

 

 

$

25,752

 

 

$

11,802

 

 

(1)

Adjusted EBITDA and revenue constant currency growth rates are non-GAAP measures. For a reconciliation of Adjusted EBITDA and revenue constant currency growth rates to the nearest comparable GAAP measures, see “Reconciliation of Non-GAAP Financial Measures” below.

 

(2)

We calculate our revenue retention rate by annualizing constant currency revenue recorded on the last day of the measurement period for only those customers in place throughout the entire measurement period. We include add-on, or upsell, revenue from additional employees and services purchased by existing customers. We divide the result by revenue on a constant currency basis on the first day of the measurement period for all customers in place at the beginning of the measurement period. The measurement period is the trailing twelve months. The revenue on a constant currency basis is based on the average exchange rates in effect during the respective period.

 

(3)

Reflects the customer count on the last day of the period rounded to the nearest hundred customers. We define a customer as an entity with an active subscription contract as of the measurement date. A customer is typically a parent company or, in a few cases, a significant subsidiary that works with us directly.

Reconciliation of Non-GAAP Financial Measures

The following table presents a reconciliation of revenue growth rate, as reported to revenue constant currency growth rate:

 

 

 

Three months ended March 31,

 

 

Year Ended March 31,

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

 

 

(dollars in thousands)

 

Reconciliation of Revenue Constant Currency Growth Rate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue, as reported

 

$

73,401

 

 

$

52,409

 

 

$

261,897

 

 

$

186,563

 

Revenue year-over-year growth rate, as reported

 

 

40

%

 

 

42

%

 

 

40

%

 

 

32

%

Estimated impact of foreign currency fluctuations

 

 

(7

)%

 

 

3

%

 

 

(2

)%

 

 

7

%

Revenue constant currency growth rate

 

 

33

%

 

 

45

%

 

 

38

%

 

 

39

%

The following table presents a reconciliation of net loss to Adjusted EBITDA:

 

 

 

Three months ended March 31,

 

 

Year Ended March 31,

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

 

 

(in thousands)

 

Reconciliation of Adjusted EBITDA:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(8,254

)

 

$

(2,618

)

 

$

(14,086

)

 

$

(5,441

)

Depreciation, amortization and disposals of long-lived assets

 

 

6,562

 

 

 

3,178

 

 

 

19,141

 

 

 

11,881

 

Rent expense related to build-to-suit facilities

 

 

(785

)

 

 

 

 

 

(785

)

 

 

 

Interest income, net

 

 

(14

)

 

 

(179

)

 

 

(712

)

 

 

(242

)

Provision for income taxes

 

 

982

 

 

 

986

 

 

 

2,705

 

 

 

2,202

 

Share-based compensation expense

 

 

3,036

 

 

 

2,345

 

 

 

11,734

 

 

 

10,294

 

Impairments of long-lived assets (1)

 

 

1,712

 

 

 

 

 

 

1,712

 

 

 

 

Restructuring (1)

 

 

2,532

 

 

 

 

 

 

2,532

 

 

 

 

Foreign exchange expense (income)

 

 

1,452

 

 

 

(158

)

 

 

3,511

 

 

 

(6,892

)

Adjusted EBITDA

 

$

7,223

 

 

$

3,554

 

 

$

25,752

 

 

$

11,802

 

 

(1) The impairments of long-lived assets and the restructuring expense during the three months and year ended March 31, 2018 related to the exit from our former North American headquarters facility located in Watertown, Massachusetts.

8

 


The following table presents a reconciliation of Net loss to Non-GAAP net (loss) income (in thousands, except per share amounts):

 

 

 

Three months ended March 31,

 

 

Year Ended March 31,

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Reconciliation of Non-GAAP Net (Loss) Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(8,254

)

 

$

(2,618

)

 

$

(14,086

)

 

$

(5,441

)

Share-based compensation expense

 

 

3,036

 

 

 

2,345

 

 

 

11,734

 

 

 

10,294

 

Amortization of acquired intangible assets (1)

 

 

43

 

 

 

43

 

 

 

170

 

 

 

64

 

Impairment of long-lived assets (2)

 

 

1,712

 

 

 

 

 

 

1,712

 

 

 

 

Restructuring (2)

 

 

2,532

 

 

 

 

 

 

2,532

 

 

 

 

Income tax effect of Non-GAAP adjustments

 

 

(2,186

)

 

 

123

 

 

 

(2,917

)

 

 

(288

)

Non-GAAP net (loss) income

 

$

(3,117

)

 

$

(107

)

 

$

(855

)

 

$

4,629

 

Non-GAAP net (loss) income per ordinary share - basic

 

$

(0.05

)

 

$

(0.00

)

 

$

(0.01

)

 

$

0.08

 

Non-GAAP net (loss) income per ordinary share - diluted

 

$

(0.05

)

 

$

(0.00

)

 

$

(0.01

)

 

$

0.08

 

Weighted-average number of ordinary shares used in

   computing Non-GAAP net (loss) income per ordinary share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

58,264

 

 

 

55,375

 

 

 

57,269

 

 

 

54,810

 

Diluted

 

 

58,264

 

 

 

55,375

 

 

 

57,269

 

 

 

58,971

 

 

 

(1) Prior period amounts have been updated to conform to the current period presentation.

(2) The impairments of long-lived assets and the restructuring expense during the three months and year ended March 31, 2018 related to the exit from our former North American headquarters facility located in Watertown, Massachusetts.

The following table presents a reconciliation of Net cash provided by operating activities to Free Cash Flow (in thousands):

 

 

 

Three months ended March 31,

 

 

Year Ended March 31,

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Reconciliation of Free Cash Flow:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by operating activities

 

$

14,787

 

 

$

9,897

 

 

$

46,412

 

 

$

32,514

 

Purchases of property, equipment and capitalized software

 

 

(12,909

)

 

 

(5,134

)

 

 

(34,498

)

 

 

(18,491

)

Free Cash Flow

 

$

1,878

 

 

$

4,763

 

 

$

11,914

 

 

$

14,023

 

Share-based compensation expense for the three and twelve months ended March 31, 2018 and 2017 (in thousands):

 

 

 

Three months ended March 31,

 

 

Year Ended March 31,

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Cost of revenue

 

$

267

 

 

$

152

 

 

$

1,053

 

 

$

1,353

 

Research and development

 

 

609

 

 

 

405

 

 

 

2,555

 

 

 

1,873

 

Sales and marketing

 

 

1,212

 

 

 

1,082

 

 

 

4,477

 

 

 

4,719

 

General and administrative

 

 

948

 

 

 

706

 

 

 

3,649

 

 

 

2,349

 

Total share-based compensation expense

 

$

3,036

 

 

$

2,345

 

 

$

11,734

 

 

$

10,294

 

 


9

 


Revenue Constant Currency Growth Rate reconciliation (dollars in millions):

 

 

 

Three months ended March 31,

 

 

Year Ended March 31,

 

 

 

2018

 

 

2017

 

 

% Change

 

 

2018

 

 

2017

 

 

% Change

 

Total revenue as reported

 

$

73.4

 

 

$

52.4

 

 

 

40

%

 

$

261.9

 

 

$

186.6

 

 

 

40

%

Estimated impact of foreign currency fluctuations

 

 

 

 

 

 

 

 

 

 

(7

)%

 

 

 

 

 

 

 

 

 

 

(2

)%

Total revenue constant currency growth rate

 

 

 

 

 

 

 

 

 

 

33

%