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Exhibit 99.1
Contact:
MicroStrategy Incorporated
Investor Relations
ir@microstrategy.com
(703) 848-8600
MicroStrategy Announces
Fourth Quarter 2017 Financial Results
TYSONS CORNER, Va., January 25, 2018 - MicroStrategy
® Incorporated (Nasdaq: MSTR), a leading worldwide provider of enterprise analytics and mobility software, today announced financial results for the three-month period ended December 31, 2017 (the fourth quarter of its 2017 fiscal year).Fourth quarter 2017 revenues were $138.1 million versus $140.1 million for the fourth quarter of 2016, a 1.4% decrease. Product licenses and subscription services revenues for the fourth quarter of 2017 were $40.8 million versus $45.8 million for the fourth quarter of 2016, a 10.9% decrease. Product support revenues for the fourth quarter of 2017 were $75.0 million versus $72.7 million for the fourth quarter of 2016, a 3.2% increase. Other services revenues for the fourth quarter of 2017 were $22.3 million versus $21.6 million for the fourth quarter of 2016, a 3.1% increase. Foreign currency effects had a favorable impact on revenues for the fourth quarter of 2017.
Operating expenses for the fourth quarter of 2017 were $94.6 million versus $80.1 million for the fourth quarter of 2016, an 18.2% increase. MicroStrategy did not capitalize any software development costs during the fourth quarter of 2017 or 2016.
Income from operations for the fourth quarter of 2017 was $18.8 million versus $36.7 million for the fourth quarter of 2016. Net loss for the fourth quarter of 2017 was $26.2 million, or $(2.29) per share on a diluted basis, as compared to net income of $31.1 million, or $2.69 per share on a diluted basis, for the fourth quarter of 2016. This net loss included an estimated one-time tax charge of $44.0 million resulting from the recent enactment of U.S. corporate tax reform legislation. This charge is comprised of a $40.3 million tax expense related to the mandatory deemed repatriation of certain foreign earnings and profits, which we intend to elect to pay over an eight-year period beginning in 2018, and $3.7 million related to the re-measurement of net deferred tax assets arising from the new lower corporate tax rate effected by the legislation. Excluding the impact of this legislation, non-GAAP net income for the fourth quarter of 2017 was $17.8 million, or $1.55 per share on a diluted basis.
Additionally, non-GAAP income from operations, which excludes share-based compensation expense and restructuring costs, was $22.5 million for the fourth quarter of 2017 versus $40.1 million for the fourth quarter of 2016. The tables at the end of this press release include a reconciliation of GAAP to non-GAAP financial measures for the three months ended December 31, 2017 and 2016. An explanation of non-GAAP financial measures is also included under the heading Non-GAAP Financial Measures below.
As of December 31, 2017, MicroStrategy had cash and cash equivalents and short-term investments of $675.2 million, as compared to $589.4 million as of December 31, 2016, an increase of $85.8 million. As of December 31, 2017, MicroStrategy had 9.4 million shares of class A common stock and 2.0 million shares of class B common stock outstanding.
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Sales and marketing expenses increased $24.5 million for the nine months ended September 30, 2018, as compared to the same period in the prior year, primarily due to a $9.7 million increase in marketing and advertising costs, an $8.3 million increase in compensation and related costs due to an increase in staffing levels, a $3.3 million increase in travel and entertainment expenditures, a $1.1 million increase in subcontractor costs, a $1.1 million increase in facility and other related support costs, a $0.9 million increase in recruiting costs, and a $0.9 million net increase in share-based compensation expense, partially offset by a $0.5 million decrease in the amortization of capitalized variable compensation and a $0.2 million decrease in non-income taxes.
General and administrative expenses increased $1.2 million for the three months ended September 30, 2018, as compared to the same period in the prior year, primarily due to a $1.0 million increase in subcontractor costs, a $0.9 million increase in compensation and related costs due to an increase in staffing levels, a $0.3 million increase in facility and other related support costs, a $0.2 million increase in bad debt expense, and a $0.2 million increase in recruiting costs, partially offset by a $1.4 million net decrease in share-based compensation expense.
We have significantly accelerated the pace of our software development efforts and increased the frequency of our software releases subsequent to the release of MicroStrategy 10, which has resulted in our software development costs in recent periods being expensed as incurred.
Deferred revenue and advance payments represent subscription services, product support, and other services fees that are collected in advance and recognized over the contract service period, and product licenses revenues relating to multiple-element software arrangements that include future deliverables.
As of September 30, 2018, we estimated that approximately $35.7 million of additional share-based compensation expense for awards granted under the 2013 Equity Plan will be recognized over a remaining weighted average period of 3.2 years.
General and administrative expenses increased...Read more
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Product Licenses Transactions with Recognized...Read more
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Product licenses revenues decreased $2.1...Read more
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Financial Statements, Disclosures and Schedules
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Ticker: MSTR
CIK: 1050446
Form Type: 10-Q Quarterly Report
Accession Number: 0001564590-18-025131
Submitted to the SEC: Thu Oct 25 2018 12:22:19 PM EST
Accepted by the SEC: Thu Oct 25 2018
Period: Sunday, September 30, 2018
Industry: Prepackaged Software