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Vocera Announces Third Quarter Revenue of $47.8 million

SAN JOSE, Calif. - October 25, 2018 - Vocera Communications, Inc. (NYSE: VCRA), a recognized leader in clinical communication and workflow solutions, today reported total revenue of $47.8 million for the third quarter of 2018, compared to revenue of $45.6 million in the third quarter of 2017.

“We had a great third quarter. Our success was broad based, with all market segments of our business performing well,” said Brent Lang, President and Chief Executive Officer of Vocera. “Several large customer wins validated our leadership position, and our solution continues to succeed against competitors. Cross-selling is gaining traction as customers seek a unified solution for their communication needs.”

Third quarter of 2018 financial highlights include:

Total revenue of $47.8 million, up 5% year-over-year
GAAP net loss per share of $(0.01); non-GAAP net income per share of $0.20
GAAP net loss of $(0.2) million; Adjusted EBITDA of $8.4 million
Deferred revenue and backlog of $117.2 million as of September 30, 2018
Cash, cash equivalents and short-term investments of $215.0 million as of September 30, 2018

Third Quarter 2018 Results
Total revenue for the third quarter of 2018 was $47.8 million, up 5% compared to last year. Keep in mind, and as previously disclosed, the recasting of our historical financials under ASC 606 raised revenue for the third quarter 2017 the most of all affected quarters, thereby lowering our third quarter year over year growth rate.

(in thousands)
Three months ended September 30,
 
2018
 
2017
 
% change
Product revenue
 
 
 
 
 
Device
$
17,031

 
$
16,524

 
3.1
 %
Software
10,310

 
9,494

 
8.6

Total product
$
27,341

 
$
26,018

 
5.1
 %
 
 
 
 
 
 
Service revenue
 
 
 
 
 
Maintenance and support
$
16,023

 
$
13,837

 
15.8
 %
Professional services and training
4,458

 
5,730

 
(22.2
)
Total service
20,481

 
19,567

 
4.7

Total revenue
$
47,822

 
$
45,585

 
4.9
 %






GAAP gross margin for the third quarter of 2018 was 65.1%, compared to 63.9% in the third quarter of 2017.
 
Three months ended September 30,
 
2018
 
2017
Gross margin
 
 
 
Product
75.1
%
 
72.3
%
Service
51.8

 
52.8

Total gross margin
65.1
%
 
63.9
%
 
 
 
 
Non-GAAP gross margin
 
 
 
Product
77.8
%
 
75.6
%
Service
56.0

 
56.3

Total non-GAAP gross margin
68.5
%
 
67.3
%

GAAP net loss for the third quarter of 2018 was $(0.2) million, or $(0.01) per share, compared to GAAP net income of $1.4 million, or $0.05 per share in the third quarter of 2017.
 
Three months ended September 30,
(in thousands except per share amounts)
2018
 
2017
Net income (loss)
$
(249
)
 
$
1,391

Net income (loss) per share
$
(0.01
)
 
$
0.05

Non-GAAP net income
$
6,403

 
$
7,565

Non-GAAP net income per share
$
0.20

 
$
0.25

Adjusted EBITDA
$
8,417

 
$
8,507


Deferred revenue at September 30, 2018, was $54.3 million compared to $55.2 million at December 31, 2017. Cash equivalents and short-term investments were $215.0 million at September 30, 2018 and $81.2 million at December 31, 2017.

Full Year and Fourth Quarter 2018 Guidance

For the full-year 2018, the Company expects revenue between $177.0 million and $182.0 million and a GAAP loss per share between $(0.45) and $(0.30). The Company expects non-GAAP net income per share to be between $0.41 and $0.54 and non-GAAP Adjusted EBITDA to be between $19.0 million and $23.0 million.

For the fourth quarter of 2018, the Company expects revenue between $46.3 million and $51.3 million and a GAAP loss per share between $(0.16) and $(0.02). The Company expects non-GAAP net income per share to be between $0.08 and $0.20 and non-GAAP Adjusted EBITDA to be between $5.3 million and $9.3 million.

Net income and earnings per share guidance for both the full-year and the fourth quarter of 2018 reflect the impact of the convertible senior notes.







(in millions except per share amounts)
Q4’18
 
FY’18
 
Low
 
High
 
Low
 
High
Revenue
$
46.3

 
$
51.3

 
$
177.0

 
$
182.0

Loss per share
$
(0.16
)
 
$
(0.02
)
 
$
(0.45
)
 
$
(0.30
)
Diluted non-GAAP net income per share
$
0.08

 
$
0.20

 
$
0.41

 
$
0.54

Adjusted EBITDA
$
5.3

 
$
9.3

 
$
19.0

 
$
23.0


Certain amounts in our release may not re-compute due to rounding. A reconciliation of non-GAAP to GAAP financial measures, and fourth quarter and full-year guidance, are included in the financial schedules. The Company’s re-cast financial statements for 2017 and 2016 are included in the Company’s accompanying financial schedules.

Conference Call Information
Vocera Communications will host a conference call at 5 p.m. ET (2 p.m. PT) today, October 25, 2018, to discuss the Company’s results.

Investors may access a free, live webcast of the call through the Investors section of the Company’s website at investors.vocera.com.

The call also can be accessed by dialing 833-238-7944, or 647-689-4192 for international callers, and using the access code 6891797.

A webcast replay of the call will be archived at investors.vocera.com.

Forward-Looking Statements
Statements in this press release that are not strictly historical in nature are forward-looking statements within the meaning of the U.S. federal securities laws, including our expected operating results for the fourth quarter and full year 2018. These forward-looking statements are based on limited information currently available to us and our management`s expectations, which are inherently subject to change and involve a number of risks and uncertainties.
Actual events or results may differ materially from those in any forward-looking statement due to various factors, including but not limited to, changes in regulations in the U.S. and other countries; the effects on government and commercial hospital customers of the federal budget and budgetary uncertainty; changes in healthcare insurance coverage and consumers’ utilization of healthcare and hospital services; our ability to achieve and maintain profitability; the demand for our various solutions in the healthcare and other markets; our lengthy and unpredictable sales cycle; our ability to offer high-quality services and support for our solutions; our ability to achieve anticipated strategic or financial benefits from our acquisitions; our ability to acquire the sole and limited source hardware and software components of our solutions; our ability to obtain the required capacity and product quality from our contract manufacturer; our ability to develop and introduce new solutions and features to existing solutions and to manage our growth; the impact of tax law reform on us or our customers; and the other factors described in our most recently filed Quarterly Report on Form 10-Q, as well as our other filings with the Securities and Exchange Commission (SEC). Our filings with the SEC are available on the Investors section of the Company’s web site at www.vocera.com. The financial and other information contained in this press release should be read in conjunction with the financial statements and notes thereto included in our filings with the SEC. Our operating results for any historical period, including the third quarter of 2018, are not necessarily





indicative of our operating results for any future periods. This press release speaks only as of its date. We assume no obligation to update the information in this press release, to revise any forward-looking statements, or to update the reasons actual events or results could differ materially from those anticipated in forward-looking statements.

Use of Non-GAAP Financial Information
This press release contains financial measures that are not calculated in accordance with U.S. generally accepted accounting principles (GAAP). Our management evaluates the Company’s results and makes operating decisions using various GAAP and non-GAAP measures. In addition to our GAAP results, we also consider non-GAAP gross margin, non-GAAP gross margin for products and for services, non-GAAP net income/(loss), non-GAAP income/(loss) per diluted share and non-GAAP operating expenses. We also present Adjusted EBITDA, a non-GAAP measure that we reconcile to net income/(loss). These non-GAAP measures should not be considered as a substitute for the corresponding financial measure derived in accordance with GAAP. We present the non-GAAP measures because we consider them to be important supplemental information for our investors for analyzing our performance, core operating results and trends. Investors are encouraged to review the reconciliation of non-GAAP financial measures to their most directly comparable GAAP measures included with this press release.
Our non-GAAP gross margins, non-GAAP net income/(loss), non-GAAP earnings/(loss) per diluted share, non-GAAP operating expenses, and Adjusted EBITDA are exclusive of certain items to facilitate management’s review of the comparability of our core operating results on a period to period basis because such items are not related to our ongoing core operating results as viewed by management. We define our “core operating results” as those revenues recorded in a particular period and the expenses incurred within that period that directly drive operating income in that period. Management uses these non-GAAP financial measures in making operating decisions because, in addition to meaningful supplemental information regarding operating performance, the measures give us a better understanding of how we should invest in research and development, fund infrastructure growth and evaluate the effectiveness of marketing strategies. In calculating the above non-GAAP results, management specifically adjusted for the following excluded items:
a) Stock-based compensation expense impact. We recognize equity plan-related compensation expenses, which represent the fair value of all share-based payments to employees, including grants of employee stock options and restricted stock units as non-GAAP adjustments in each period.
b) Amortization of acquired intangibles. We acquired certain companies in 2010, 2014 and 2016, and booked intangible assets related to these acquisitions. The amortization of these acquired intangible assets is excluded from non-GAAP net income because it is not related to ongoing controllable management decisions and because it is non-cash in nature.
c) Acquisition related expenses. In addition to the amortization of acquired intangibles mentioned above, we also adjust for certain acquisition-related expenses that we may incur including (i) professional service fees and (ii) transition costs. Professional service fees include third party costs related to the acquisition, such as due diligence costs, accounting fees, legal fees, valuation services and commissions, if any. Transition costs include retention payments, transitional employee costs and earn-out payments (including amounts relating to the distribution of purchase consideration among the selling equity holders) treated as compensation expense. We consider such costs and adjustments as highly variable in amount and frequency, being significantly impacted by the timing and size of any acquisitions. By excluding acquisition-related costs and adjustments from our non-GAAP measures, management can better focus on the organic continuing operations of our baseline and acquired businesses.





d) Restructuring costs. We exclude restructuring costs from non-GAAP measures because we do not regard these limited-term or one-time costs as reflective of normal costs we incur to operate our business. These are defined in U.S. GAAP to include one-time employee termination benefits, contract termination costs, and other associated costs, with respect to exit or disposal activities.
Management adjusts for the above items because management believes that, in general, these items possess one or more of the following characteristics: their magnitude and timing is largely outside of Vocera’s control; they are unrelated to the ongoing operation of the business in the ordinary course; they are unusual and we do not expect them to occur in the ordinary course of business; or they are non-operational, or non-cash expenses involving stock award grants.
We believe that the presentation of these non-GAAP financial measures is warranted for several reasons:
1) Such non-GAAP financial measures provide an additional analytical tool for understanding our financial performance by excluding the impact of items which may obscure trends in the core operating results of the business;
2) These non-GAAP financial measures facilitate comparisons to the operating results of other companies commonly compared to us, which use similar financial measures to supplement their GAAP results, thus enhancing the perspective of investors who wish to utilize such comparisons in their analysis of our performance; and
3) These non-GAAP financial measures are employed by our management in their own evaluation of performance and are utilized in financial and operational decision making processes, such as budget planning and forecasting.
Set forth below are additional reasons why share-based compensation expense is excluded from our non-GAAP financial measures:
i) While share-based compensation constitutes one of our ongoing and recurring expenses, it is not an expense that requires cash settlement by us. We therefore exclude these charges for purposes of evaluating core operating results. Thus, our non-GAAP measurements are presented exclusive of stock-based compensation expense to assist management and investors in evaluating our core operating results.
ii) We present share-based payment compensation expense in our reconciliation of non-GAAP financial measures on a pre-tax basis because the exact tax differences related to the timing and deductibility of share-based compensation are dependent upon the trading price of our common stock and the timing and exercise by employees of their stock options. As a result of these timing and market uncertainties, the tax effect related to share-based compensation expense would be inconsistent in amount and frequency and is therefore excluded from our non-GAAP results.
As stated above, we present non-GAAP financial measures because we consider them to be important supplemental measures of performance. However, non-GAAP financial measures have limitations as an analytical tool and should not be considered in isolation or as a substitute for our GAAP results. In the future, we expect to incur expenses similar to certain of the non-GAAP adjustments described above and expect to continue reporting non-GAAP financial measures excluding such items. Some of the limitations in relying on non-GAAP financial measures are:





Our stock options, restricted stock units, and stock purchase plans are important components of incentive compensation arrangements and will be reflected as expenses in our GAAP results for the foreseeable future; and
Other companies may calculate non-GAAP financial measures differently than us, limiting their usefulness as a comparative measure.
Pursuant to the requirements of SEC Regulation G, a detailed reconciliation between our non-GAAP and GAAP financial results is set forth in the financial tables referred to above, and linked to, this press release. Investors are advised to carefully review and consider this information strictly as a supplement to the GAAP results for the respective periods.
About Vocera:
The mission of Vocera Communications, Inc. is to simplify and improve the lives of healthcare professionals and patients, while enabling hospitals to enhance quality of care and operational efficiency. In 2000, when the company was founded, we began to forever change the way care teams communicate. Today, Vocera continues to offer the leading platform for clinical communication and workflow. More than 1,700 facilities worldwide, including nearly 1,500 hospitals and healthcare facilities, have selected our solutions for team members to text securely using smartphones or make calls with our hands-free, wearable Vocera Badge. Interoperability between Vocera and more than 140 clinical and operational systems helps reduce alarm fatigue, speed up staff response times, and improve patient care, safety and experience. In addition to healthcare, Vocera is at home in luxury hotels, aged care facilities, nuclear facilities, libraries, retail stores and more. Vocera makes a difference in any industry where workers are on the move and need to connect instantly with team members and access resources or information quickly. In 2017, Vocera made the list of Forbes 100 Most Trustworthy Companies in America.
Learn more at www.vocera.com, and follow @VoceraComm on Twitter.
The Vocera logo is a trademark of Vocera Communications, Inc. Vocera® is a trademark of Vocera Communications, Inc. registered in the United States and other jurisdictions. All other trademarks appearing in this release are the property of their respective owners.

Contacts:

Investors:             
Sue Dooley            
Vocera Communications, Inc.            
408.882.5971        
investorrelations@vocera.com

Media:
Philip Anast
Amendola Communications
312.576.6990
panast@acmarketingpr.com





Vocera Communications, Inc.
Condensed Consolidated Statements of Operations
(In Thousands, Except Per Share Amounts)
(Unaudited)

Three months ended September 30,
 
Nine months ended September 30,
 
2018
 
2017
 
2018
 
2017
Revenue
 
 
 
 
 
 
 
Product
$
27,341

 
$
26,018

 
$
70,252

 
$
67,062

Service
20,481

 
19,567

 
60,498

 
54,807

Total revenue
47,822

 
45,585

 
130,750

 
121,869

Cost of revenue
 
 
 
 
 
 
 
Product
6,819

 
7,208

 
19,847

 
20,424

Service
9,865

 
9,241

 
30,213

 
28,358

Total cost of revenue
16,684

 
16,449

 
50,060

 
48,782

Gross profit
31,138

 
29,136

 
80,690

 
73,087

Operating expenses
 
 
 
 
 
 
 
Research and development
7,993

 
6,644

 
22,630

 
20,944

Sales and marketing
15,654

 
14,840

 
45,942

 
45,008

General and administrative
6,438

 
6,088

 
18,973

 
17,767

Total operating expenses
30,085

 
27,572

 
87,545

 
83,719

Income (loss) from operations
1,053

 
1,564

 
(6,855
)
 
(10,632
)
Interest income
1,110

 
177

 
1,855

 
410

Interest expense
(2,106
)
 

 
(3,103
)
 

Other income (expense), net
(158
)
 
(41
)
 
(965
)
 
1

Income (loss) before income taxes
(101
)
 
1,700

 
(9,068
)
 
(10,221
)
Benefit from (provision for) income taxes
(148
)
 
(309
)
 
495

 
(1,050
)
Net income (loss)
$
(249
)
 
$
1,391

 
$
(8,573
)
 
$
(11,271
)
 
 
 
 
 
 
 
 
Net income (loss) per share
 
 
 
 
 
 
 
     Basic
$
(0.01
)
 
$
0.05

 
$
(0.29
)
 
$
(0.40
)
     Diluted
$
(0.01
)
 
$
0.05

 
$
(0.29
)
 
$
(0.40
)
Weighted average shares used to compute net income (loss) per share
 
 
 
 
 
 
 
     Basic
30,230

 
29,130

 
29,861

 
28,439

     Diluted
30,230

 
30,473

 
29,861

 
28,439







Vocera Communications, Inc.
Condensed Consolidated Balance Sheets
(In Thousands)
(Unaudited)
 
September 30,
2018
 
December 31,
2017
Assets
 
 
 
Current assets
 
 
 
Cash and cash equivalents
$
32,971

 
$
28,726

Short-term investments
181,982

 
52,507

Accounts receivable, net of allowance
36,982

 
35,105

Other receivables
2,289

 
1,331

Inventories
3,678

 
2,815

Prepaid expenses and other current assets
4,513

 
3,957

Total current assets
262,415

 
124,441

Property and equipment, net
7,058

 
5,751

Intangible assets, net
10,234

 
13,567

Goodwill
49,246

 
49,246

Deferred commissions
9,475

 
10,301

Other long-term assets
1,718

 
1,667

Total assets
$
340,146

 
$
204,973

Liabilities and stockholders' equity
 
 
 
Current liabilities
 
 
 
Accounts payable
$
3,154

 
$
2,678

Accrued payroll and other current liabilities
13,458

 
14,689

Deferred revenue, current
41,410

 
40,734

Total current liabilities
58,022

 
58,101

Deferred revenue, long-term
12,898

 
14,417

Convertible senior notes, net
108,942

 

Other long-term liabilities
2,907

 
4,455

Total liabilities
182,769

 
76,973

Stockholders' equity
157,377

 
128,000

Total liabilities and stockholders’ equity
$
340,146

 
$
204,973








Vocera Communications, Inc.
Three months ended September 30, 2018
 
 
 
 
Stock
 
Intangible
 
Acquisition
 
 
 
 
(In thousands)
GAAP
 
compensation
 
amortization
 
related
 
Total
 
Non-GAAP
 
2018
 
expense (a)
 
(b)
 
expense (c)
 
adjustments
 
2018
Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit (Unaudited)
Revenue
 
 
 
 
 
 
 
 
 
 
 
Product
$
27,341

 
$

 
$

 
$

 
$

 
$
27,341

Service
20,481

 

 

 

 

 
20,481

Total revenue
47,822

 

 

 

 

 
47,822

Cost of revenue
 
 
 
 
 
 
 
 
 
 
 
Product
6,819

 
128

 
622

 

 
750

 
6,069

Service
9,865

 
795

 

 
60

 
855

 
9,010

Total cost of revenue
16,684

 
923

 
622

 
60

 
1,605

 
15,079

Gross profit
$
31,138

 
$
923

 
$
622

 
$
60

 
$
1,605

 
$
32,743

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stock
 
Intangible
 
Acquisition
 
 
 
 
(In thousands)
GAAP
 
compensation
 
amortization
 
related
 
Total
 
Non-GAAP
 
2018
 
expense (a)
 
(b)
 
expense (c)
 
adjustments
 
2018
Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
Research and development
$
7,993

 
$
802

 
$

 
$

 
$
802

 
$
7,191

Sales and marketing
15,654

 
1,755

 
377

 

 
2,132

 
13,522

General and administrative
6,438

 
2,014

 
39

 
60

 
2,113

 
4,325

Total operating expenses
$
30,085

 
$
4,571

 
$
416

 
$
60

 
$
5,047

 
$
25,038


(a) This adjustment reflects the accounting impact of non-cash stock-based compensation expense.
(b) This adjustment reflects the accounting impact of acquisitions in 2010, 2014 and 2016 in non-cash expense.
(c) This adjustment reflects the costs associated with the acquisition in 2016.






Three months ended September 30, 2017
 
 
 
Stock
 
Intangible
 
Acquisition
 
 
 
 
(In thousands)
GAAP
 
compensation
 
amortization
 
related
 
Total
 
Non-GAAP
 
2017
 
expense (a)
 
(b)
 
expense (c)
 
adjustments
 
2017
Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit (Unaudited)
Revenue
 
 
 
 
 
 
 
 
 
 
 
Product
$
26,018

 
$

 
$

 
$

 
$

 
$
26,018

Service
19,567

 

 

 

 

 
19,567

Total revenue
45,585

 

 

 

 

 
45,585

Cost of revenue
 
 
 
 
 
 
 
 
 
 
 
Product
7,208

 
118

 
729

 

 
847

 
6,361

Service
9,241

 
631

 

 
60

 
691

 
8,550

Total cost of revenue
16,449

 
749

 
729

 
60

 
1,538

 
14,911

Gross profit
$
29,136

 
$
749

 
$
729

 
$
60

 
$
1,538

 
$
30,674

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stock
 
Intangible
 
Acquisition
 
 
 
 
(In thousands)
GAAP
 
compensation
 
amortization
 
related
 
Total
 
Non-GAAP
 
2017
 
expense (a)
 
(b)
 
expense (c)
 
adjustments
 
2017
Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
Research and development
$
6,644

 
$
507

 
$

 
$

 
$
507

 
$
6,137

Sales and marketing
14,840

 
1,653

 
385

 

 
2,038

 
12,802

General and administrative
6,088

 
1,809

 
55

 
227

 
2,091

 
3,997

Total operating expenses
$
27,572

 
$
3,969

 
$
440

 
$
227

 
$
4,636

 
$
22,936

(a) This adjustment reflects the accounting impact of non-cash stock-based compensation expense.
(b) This adjustment reflects the accounting impact of acquisitions in 2010 and 2014 in non-cash expense.
(c) This adjustment reflects the costs associated with the acquisition in 2016.






Vocera Communications, Inc.
Nine months ended September 30, 2018
 
 
 
Stock
 
Intangible
 
Acquisition
 
 
 
 
(In thousands)
GAAP
 
compensation
 
amortization
 
related
 
Total
 
Non-GAAP
 
2018
 
expense (a)
 
(b)
 
expense (c)
 
adjustments
 
2018
Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit (Unaudited)
Revenue
 
 
 
 
 
 
 
 
 
 
 
Product
$
70,252

 
$

 
$

 
$

 
$

 
$
70,252

Service
60,498

 

 

 

 

 
60,498

Total revenue
130,750

 

 

 

 

 
130,750

Cost of revenue
 
 
 
 
 
 
 
 
 
 
 
Product
19,847

 
368

 
2,076

 

 
2,444

 
17,403

Service
30,213

 
2,268

 

 
180

 
2,448

 
27,765

Total cost of revenue
50,060

 
2,636

 
2,076

 
180

 
4,892

 
45,168

Gross profit
$
80,690

 
$
2,636

 
$
2,076

 
$
180

 
$
4,892

 
$
85,582

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stock
 
Intangible
 
Acquisition
 
 
 
 
(In thousands)
GAAP
 
compensation
 
amortization
 
related
 
Total
 
Non-GAAP
 
2018
 
expense (a)
 
(b)
 
expense (c)
 
adjustments
 
2018
Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
Research and development
$
22,630

 
$
2,164

 
$

 
 
 
$
2,164

 
$
20,466

Sales and marketing
45,942

 
4,906

 
1,133

 

 
6,039

 
39,903

General and administrative
18,973

 
5,771

 
123

 
90

 
5,984

 
12,989

Total operating expenses
$
87,545

 
$
12,841

 
$
1,256

 
$
90

 
$
14,187

 
$
73,358

(a)This adjustment reflects the accounting impact of non-cash stock-based compensation expense.
(b)
This adjustment reflects the accounting impact of acquisitions in 2010, 2014 and 2016 in non-cash expense.
(c)This adjustment reflects the costs associated with the acquisition in 2016.






Nine months ended September 30, 2017
 
 
 
Stock
 
Intangible
 
Acquisition
 
 
 
 
(In thousands)
GAAP
 
compensation
 
amortization
 
related
 
Total
 
Non-GAAP
 
2017
 
expense (a)
 
(b)
 
expense (c)
 
adjustments
 
2017
Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit (Unaudited)
Revenue
 
 
 
 
 
 
 
 
 
 
 
Product
$
67,062

 
$

 
$

 
$

 
$

 
$
67,062

Service
54,807

 

 

 

 

 
54,807

Total revenue
121,869

 

 

 

 

 
121,869

Cost of revenue
 
 
 
 
 
 
 
 
 
 
 
Product
20,424

 
309

 
2,222

 

 
2,531

 
17,893

Service
28,358

 
1,808

 

 
229

 
2,037

 
26,321

Total cost of revenue
48,782

 
2,117

 
2,222

 
229

 
4,568

 
44,214

Gross profit
$
73,087

 
$
2,117

 
$
2,222

 
$
229

 
$
4,568

 
$
77,655

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
Research and development
$
20,944

 
$
1,542

 
$

 
$
47

 
$
1,589

 
$
19,355

Sales and marketing
45,008

 
4,697

 
1,154

 
15

 
5,866

 
39,142

General and administrative
17,767

 
4,848

 
166

 
718

 
5,732

 
12,035

Total operating expenses
$
83,719

 
$
11,087

 
$
1,320

 
$
780

 
$
13,187

 
$
70,532


(a)This adjustment reflects the accounting impact of non-cash stock-based compensation expense.
(b)
This adjustment reflects the accounting impact of acquisitions in 2010, 2014 and 2016 in non-cash expense.
(c)
This adjustment reflects the costs associated with the acquisition in 2016.






Vocera Communications, Inc.
Non-GAAP Net income and net income per share and Adjusted EBITDA
(In thousands, except per share amounts)
(Unaudited)
 
 
 
 
 
 
 
 
 
Three months ended September 30,
 
Nine months ended September 30,
 
2018
 
2017
 
2018
 
2017
GAAP net income (loss)
$
(249
)
 
$
1,391

 
$
(8,573
)
 
$
(11,271
)
Add back:
 
 
 
 
 
 
 
Stock compensation expense
5,494

 
4,718

 
15,477

 
13,204

Acquisition related expenses
120

 
287

 
270

 
1,009

Interest income
(1,094
)
 
(162
)
 
(1,797
)
 
(371
)
Interest expense
2,106



1,008,000

3,103



Depreciation and amortization expense
1,892

 
1,964

 
5,668

 
5,755

Provision for (benefit from) income taxes
148

 
309

 
(495
)
 
1,050

Non-GAAP adjusted EBITDA
$
8,417

 
$
8,507

 
$
13,653

 
$
9,376

 
 
 
 
 
 
 
 
GAAP net income (loss)
$
(249
)
 
$
1,391

 
$
(8,573
)
 
$
(11,271
)
Add back:
 
 
 
 
 
 
 
Stock compensation expense
5,494

 
4,718

 
15,477

 
13,204

Intangible amortization
1,038

 
1,169

 
3,332

 
3,542

Acquisition related expenses
120

 
287

 
270

 
1,009

Non-GAAP net income
$
6,403

 
$
7,565

 
$
10,506

 
$
6,484

Non-GAAP net income per share
 
 
 
 
 
 
 
     Basic
$
0.21

 
$
0.26

 
$
0.35

 
$
0.23

     Diluted
$
0.20

 
$
0.25

 
$
0.33

 
$
0.22

Weighted average shares used to compute non-GAAP net income per share
 
 
 
 
 
 
 
     Basic
30,230

 
29,130

 
29,861

 
28,439

     Diluted
32,109

 
30,473

 
31,371

 
30,102







Vocera Communications, Inc.
Future guidance for operating results
(In millions, except per share amounts)
 
Reconciliation for GAAP to Non-GAAP for net income (loss) and net income (loss) per share
 
 
 
Three months ended December 31, 2018
 
Year ended December 31, 2018
 
Low
 
High
 
Low
 
High
Revenue
$
46.3

 
$
51.3

 
$
177.0

 
$
182.0

GAAP net loss
(5.0
)
 
(0.5
)
 
(13.6
)
 
(9.1
)
Stock compensation expense
6.0

 
5.5

 
21.5

 
21.0

Intangible amortization expense
1.4

 
1.4

 
4.7

 
4.7

Acquisition and restructuring expense
0.2

 
0.2

 
0.5

 
0.5

Total adjustments
7.6

 
7.1

 
26.7

 
26.2

Non-GAAP net income
$
2.6

 
$
6.6

 
$
13.1

 
$
17.1

Weighted average shares (in thousands)
 
 
 
 
 
 
 
Basic
30,580

 
30,580

 
30,060

 
30,060

    Diluted
32,580

 
32,580

 
31,814

 
31,814

 
 
 
 
 
 
 
 
GAAP net loss per share, basic and diluted
$
(0.16
)
 
$
(0.02
)
 
$
(0.45
)
 
$
(0.30
)
 
 
 
 
 
 
 
 
Non-GAAP net income per share :
 
 
 
 
 
 
 
Basic
$
0.09

 
$
0.22


$
0.44


$
0.57

Diluted
$
0.08

 
$
0.20


$
0.41


$
0.54




Reconciliation of Non-GAAP net income (loss) to adjusted EBITDA
 
 
 
 
 
Three months ended December 31, 2018
 
Year ended December 31, 2018
 
Low
 
High
 
Low
 
High
Non-GAAP net income
$
2.6

 
$
6.6

 
$
13.1

 
$
17.1

Interest expense, net
1.3

 
1.3

 
2.6

 
2.6

Depreciation expense
1.2

 
1.2

 
3.5

 
3.5

Provision for income taxes
0.3

 
0.3

 
(0.3
)
 
(0.3
)
Total adjustments
2.7

 
2.7

 
5.9

 
5.9

Adjusted EBITDA
$
5.3

 
$
9.3

 
$
19.0

 
$
23.0


* Amounts may not recompute due to rounding.
































Vocera Communications, Inc.
Condensed Consolidated Statements of Operations and Condensed Consolidated Balance Sheets Adjusted for the Adoption of The New Revenue Standard (ASC 606) on a Fully Retrospective Basis






Vocera Communications, Inc.
Condensed Consolidated Statements of Operations Adjusted for the Adoption of the New Revenue Standard
(In Thousands, Except Per Share Amounts)
(Unaudited)
 
As Adjusted
 
As Reported
 
Change
Year Ended December 31,
2017
2016
 
2017
2016
 
2017
2016
Revenue
 
 
 
 
 
 
 
 
Product revenue
 
 
 
 
 
 
 
 
Devices
$
61,746

$
50,614

 
$
60,869

$
50,061

 
$
877

$
553

Software
29,839

23,621

 
27,996

20,606

 
1,843

3,015

Total product
91,585

74,235

 
88,865

70,667

 
2,720

3,568

Service revenue
 
 
 
 
 
 
 
 
Maintenance and support
52,342

43,408

 
52,542

43,438

 
(200
)
(30
)
Professional services and training
22,062

14,383

 
21,141

13,591

 
921

792

Total service
74,404

57,791

 
73,683

57,029

 
721

762

Total revenue
165,989

132,026

 
162,548

127,696

 
3,441

4,330

Cost of revenue
 
 
 
 
 
 
 
 
Product
27,244

22,788

 
27,244

22,788

 


Service
37,683

26,287

 
37,683

26,287

 


Total cost of revenue
64,927

49,075

 
64,927

49,075

 


Gross profit
101,062

82,951

 
97,621

78,621

 
3,441

4,330

Operating expenses
 
 
 
 
 
 
 
 
Research and development
27,685

18,266

 
27,685

18,266

 


Sales and marketing
60,107

51,274

 
59,986

52,811

 
121

(1,537
)
General and administrative
23,970

24,499

 
23,970

24,499

 


Total operating expenses
111,762

94,039

 
111,641

95,576

 
121

(1,537
)
Income (loss) from operations
(10,700
)
(11,088
)
 
(14,020
)
(16,955
)
 
3,320

5,867

Interest income
604

684

 
604

684

 


Other income (expense), net
(42
)
(467
)
 
(42
)
(467
)
 


Income (loss) before income taxes
(10,138
)
(10,871
)
 
(13,458
)
(16,738
)
 
3,320

5,867

Provision for income taxes
(759
)
(529
)
 
(759
)
(529
)
 


Net income (loss)
$
(10,897
)
$
(11,400
)
 
$
(14,217
)
$
(17,267
)
 
$
3,320

$
5,867

 
 
 
 
 
 
 
 
 
Net income (loss) per share
 
 
 
 
 
 
 
 
     Basic and diluted
$
(0.38
)
$
(0.42
)
 
$
(0.50
)
$
(0.64
)
 
$
0.12

$
0.21

Weighted average shares used to compute net income (loss) per share
 
 
 
 
 
 
 
 
     Basic and diluted
28,655

26,859

 
28,655

26,859

 
28,655

26,859








Vocera Communications, Inc.
Condensed Consolidated Statements of Operations Adjusted for the Adoption of the New Revenue Standard
 
Q1 2017
 
Q2 2017
 
Q3 2017
 
Q4 2017
(In Thousands, Except Per Share Amounts, Unaudited)
As Adjusted
As Reported
Change
 
As Adjusted
As Reported
Change
 
As Adjusted
As Reported
Change
 
As Adjusted
As Reported
Change
Revenue
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Product revenue
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Devices
$
14,058

$
14,121

$
(63
)
 
$
14,990

$
14,837

$
153

 
$
16,524

$
16,084

$
440

 
$
16,174

$
15,827

$
347

Software
5,994

5,912

82

 
6,002

5,821

181

 
9,494

7,165

2,329

 
8,349

9,098

(749
)
Total product
20,052

20,033

19

 
20,992

20,658

334

 
26,018

23,249

2,769

 
24,523

24,925

(402
)
Service revenue

 

 

 

 

 

 

 

Maintenance and support
12,000

11,852

148

 
12,670

12,583

87

 
13,837

13,746

91

 
13,835

14,361

(526
)
Professional services and training
4,574

4,410

164

 
5,996

5,209

787

 
5,730

5,305

425

 
5,762

6,217

(455
)
Total service
16,574

16,262

312

 
18,666

17,792

874

 
19,567

19,051

516

 
19,597

20,578

(981
)
Total revenue
36,626

36,295

331

 
39,658

38,450

1,208

 
45,585

42,300

3,285

 
44,120

45,503

(1,383
)
Cost of revenue

 

 

 

 

 

 

 

Product
6,409

6,409


 
6,807

6,807


 
7,208

7,208


 
6,820

6,820


Service
9,155

9,155


 
9,962

9,962


 
9,241

9,241


 
9,325

9,325


Total cost of revenue
15,564

15,564


 
16,769

16,769


 
16,449

16,449


 
16,145

16,145


Gross profit
21,062

20,731

331

 
22,889

21,681

1,208

 
29,136

25,851

3,285

 
27,975

29,358

(1,383
)
Operating expenses

 

 

 

 

 

 

 

Research and development
6,929

6,929


 
7,371

7,371


 
6,644

6,644


 
6,741

6,741


Sales and marketing
14,922

14,581

341

 
15,246

15,377

(131
)
 
14,840

15,831

(991
)
 
15,099

14,197

902

General and administrative
5,695

5,695


 
5,984

5,984


 
6,088

6,088


 
6,203

6,203


Total operating expenses
27,546

27,205

341

 
28,601

28,732

(131
)
 
27,572

28,563

(991
)
 
28,043

27,141

902

Income (loss) from operations
(6,484
)
(6,474
)
(10
)
 
(5,712
)
(7,051
)
1,339

 
1,564

(2,712
)
4,276

 
(68
)
2,217

(2,285
)
Interest income
105

105


 
128

128


 
177

177


 
194

194


Other income (expense), net
109

109


 
(67
)
(67
)

 
(41
)
(41
)

 
(43
)
(43
)

Income (loss) before income taxes
(6,270
)
(6,260
)
(10
)
 
(5,651
)
(6,990
)
1,339

 
1,700

(2,576
)
4,276

 
83

2,368

(2,285
)
Provision for income taxes
(380
)
(380
)

 
(361
)
(361
)

 
(309
)
(309
)

 
291

291


Net income (loss)
$
(6,650
)
$
(6,640
)
$
(10
)
 
$
(6,012
)
$
(7,351
)
$
1,339

 
$
1,391

$
(2,885
)
$
4,276

 
$
374

$
2,659

$
(2,285
)
 



 



 

 

 

 

Net income (loss) per share



 



 

 

 

 

     Basic
$
(0.24
)
$
(0.24
)
$

 
$
(0.21
)
$
(0.26
)
$
0.05

 
$
0.05

$
(0.10
)
$
0.15

 
$
0.01

$
0.09

$
(0.08
)
     Diluted
$
(0.24
)
$
(0.24
)
$

 
$
(0.21
)
$
(0.26
)
$
0.05

 
$
0.05

$
(0.10
)
$
0.14

 
$
0.01

$
0.09

$
(0.07
)
Weighted average shares used to compute net income (loss) per share



 

 

 

 

 

 

     Basic
27,751

27,751

27,751

 
28,422

28,422

28,422

 
29,130

29,130

29,130

 
29,317

29,317

29,317

     Diluted
27,751

27,751

27,751

 
28,422

28,422

28,422

 
30,473

29,130

30,473

 
30,704

30,704

30,704






Vocera Communications, Inc.
Condensed Consolidated Balance Sheets Adjusted for the Adoption of the New Revenue Standard
(In Thousands, Unaudited)
 
As Adjusted
 
As Reported
 
Change
As of December 31,