MicroStrategy Announces Fourth Quarter 2018 Financial Results
Fourth quarter 2018 revenues were
Operating expenses for the fourth quarter of 2018 were
Loss from operations for the fourth quarter of 2018 was
Additionally, non-GAAP income from operations, which excludes share-based compensation expense, was
As of
Conference Call
Recent Business Highlights
MicroStrategy announced the general availability ofMicroStrategy 2019™, the industry’s first and onlyenterprise platform for HyperIntelligence™, transformational mobility, and federated analytics. OnJanuary 7, 2019 , Founder, Chairman of the Board, President & CEOMichael J. Saylor and other members of MicroStrategy’s management team rang the Nasdaq opening bell to celebrate the launch ofMicroStrategy 2019.MicroStrategy 2019 delivers modern analytics on an enterprise platform that can be deployed on-premises or on multiple private and public cloud platforms. It is designed to make every enterprise a more Intelligent Enterprise by delivering:
- HyperIntelligence. This new category of analytics is designed to transform the way people interact with information and find answers by seamlessly delivering intelligence through zero-click experiences. With the HyperCard™ application, users with Google Chrome can hover over highlighted words on websites and other browser-based applications to instantly bring up relevant, contextual insights. With HyperIntelligence, users can also leverage APIs to design and deploy AI applications that deliver zero-click experiences via voice assistants, image recognition software, and GPS applications.
- Transformational mobility. This category of analytical applications is targeted at the increasingly mobile workforce and delivers more ways for organizations to quickly deploy mobile productivity apps for a variety of business functions and roles.Users can build apps using mobile dossiers, no code drag-and-drop, and customized development using XCode or JavaScript.
- Federated analytics. This mainstream category of analytics is targeted at analysts and data scientists, who enable long-term decision making. Whether it’s with dossiers, dashboards, or predictive models, or reporting for project performance, financial statements, or billing,
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Learn more about MicroStrategy 2019 today. MicroStrategy customers on
MicroStrategy announced that its customer Corporación Hijos de Rivera S.L., producer ofEstrella Galicia beer and other leading beverage brands, piloted a new voice-powered business analytics and artificial intelligence (AI) application with Amazon’s customizable virtual assistant, Alexa, to simplify decision-making for its employees. Hijos de Rivera’sEstrella Galicia business created a voice-activated AI application for its users to glean data from itsMicroStrategy analytics platform. By implementing Alexa across the business,Estrella Galicia is driving adoption to more decision makers, who can turn to Alexa for a direct pathway to the data they need. Users can more easily discern opportunities to be explored and make data-driven decisions to accelerate productivity and drive out operational inefficiencies.MicroStrategy released the results of aHarvard Business Review Analytic Services (HBR-AS) study, “An Inflection Point for the Data-Driven Enterprise”, which polled 729 business leaders and personnel across various industries around the world. The HBR-AS study revealed concerning statistics for data-driven transformation, including that nearly one-third (32%) of respondents indicate that their organizations are still operating on static and backward-looking reporting. While 75% say it’s very important to deliver actionable intelligence to employees across the enterprise – the foundation for an Intelligent Enterprise – less than a quarter (24%) indicate their organizations are able to do so. Download An Inflection Point for the Data-Driven Enterprise today to learn more about these findings.MicroStrategy won a NetworkWorld Asia 2018 Readers’ Choice Product Excellence Award in the Data Analytics and Business Intelligence category.MicroStrategy secured the top spot for the only award related to analytics and business intelligence. Readers choseMicroStrategy as the top technology vendor out of 21 business intelligence providers.
MicroStrategy World™ 2019
Non-GAAP Financial Measures
About
This press release may include statements that may constitute “forward-looking statements,” including estimates of future business prospects or financial results and statements containing the words “believe,” “estimate,” “project,” “expect” or similar expressions. Forward-looking statements inherently involve risks and uncertainties that could cause actual results of
MSTR-F
MICROSTRATEGY INCORPORATED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) |
||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
(unaudited) |
(as adjusted, |
(unaudited) |
(as adjusted, |
|||||||||||||
Revenues | ||||||||||||||||
Product licenses | $ | 31,200 | $ | 30,529 | $ | 88,057 | $ | 93,259 | ||||||||
Subscription services | 7,084 | 8,525 | 29,570 | 32,368 | ||||||||||||
Total product licenses and subscription services | 38,284 | 39,054 | 117,627 | 125,627 | ||||||||||||
Product support | 73,662 | 75,025 | 296,216 | 289,184 | ||||||||||||
Other services | 19,971 | 22,302 | 83,795 | 89,032 | ||||||||||||
Total revenues | 131,917 | 136,381 | 497,638 | 503,843 | ||||||||||||
Cost of revenues | ||||||||||||||||
Product licenses | 609 | 1,994 | 4,864 | 7,176 | ||||||||||||
Subscription services | 3,667 | 3,404 | 13,620 | 13,435 | ||||||||||||
Total product licenses and subscription services | 4,276 | 5,398 | 18,484 | 20,611 | ||||||||||||
Product support | 5,557 | 4,387 | 20,242 | 17,481 | ||||||||||||
Other services | 16,052 | 14,968 | 60,773 | 58,557 | ||||||||||||
Total cost of revenues | 25,885 | 24,753 | 99,499 | 96,649 | ||||||||||||
Gross profit | 106,032 | 111,628 | 398,139 | 407,194 | ||||||||||||
Operating expenses | ||||||||||||||||
Sales and marketing | 57,783 | 51,832 | 205,525 | 175,045 | ||||||||||||
Research and development | 28,028 | 21,419 | 102,499 | 78,766 | ||||||||||||
General and administrative | 22,378 | 21,240 | 86,134 | 80,161 | ||||||||||||
Total operating expenses | 108,189 | 94,491 | 394,158 | 333,972 | ||||||||||||
(Loss) income from operations | (2,157 | ) | 17,137 | 3,981 | 73,222 | |||||||||||
Interest income, net | 3,157 | 1,756 | 11,855 | 5,205 | ||||||||||||
Other income (expense), net | 981 | (576 | ) | 4,646 | (6,953 | ) | ||||||||||
Income before income taxes | 1,981 | 18,317 | 20,482 | 71,474 | ||||||||||||
(Benefit from) provision for income taxes | (1,320 | ) | 43,816 | (2,019 | ) | 53,279 | ||||||||||
Net income (loss) | $ | 3,301 | $ | (25,499 | ) | $ | 22,501 | $ | 18,195 | |||||||
Basic earnings (loss) per share (1): | $ | 0.30 | $ | (2.23 | ) | $ | 1.98 | $ | 1.59 | |||||||
Weighted average shares outstanding used in computing basic earnings (loss) per share | 11,129 | 11,447 | 11,375 | 11,444 | ||||||||||||
Diluted earnings (loss) per share (1): | $ | 0.30 | $ | (2.23 | ) | $ | 1.97 | $ | 1.58 | |||||||
Weighted average shares outstanding used in computing diluted earnings (loss) per share | 11,151 | 11,447 | 11,412 | 11,547 |
(1) Basic and fully diluted earnings (loss) per share for class A and class B common stock are the same.
MICROSTRATEGY INCORPORATED CONSOLIDATED BALANCE SHEETS (in thousands, except per share data) |
||||||||
December 31, | December 31, | |||||||
2018 | 2017 | |||||||
(unaudited) |
(as adjusted, |
|||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 109,924 | $ | 420,244 | ||||
Restricted cash | 862 | 938 | ||||||
Short-term investments | 466,186 | 254,927 | ||||||
Accounts receivable, net | 171,359 | 165,364 | ||||||
Prepaid expenses and other current assets | 30,068 | 19,180 | ||||||
Total current assets | 778,399 | 860,653 | ||||||
Property and equipment, net | 51,919 | 53,359 | ||||||
Capitalized software development costs, net | 0 | 2,499 | ||||||
Deposits and other assets | 8,134 | 7,411 | ||||||
Deferred tax assets, net | 17,316 | 9,297 | ||||||
Total Assets | $ | 855,768 | $ | 933,219 | ||||
Liabilities and Stockholders' Equity | ||||||||
Current liabilities | ||||||||
Accounts payable and accrued expenses | $ | 33,684 | $ | 30,711 | ||||
Accrued compensation and employee benefits | 48,045 | 41,498 | ||||||
Deferred revenue and advance payments | 176,540 | 198,734 | ||||||
Total current liabilities | 258,269 | 270,943 | ||||||
Deferred revenue and advance payments | 6,469 | 6,400 | ||||||
Other long-term liabilities | 61,262 | 50,146 | ||||||
Deferred tax liabilities | 37 | 4 | ||||||
Total Liabilities | 326,037 | 327,493 | ||||||
Stockholders' Equity | ||||||||
Preferred stock undesignated, $0.001 par value; 5,000 shares authorized; no shares issued or outstanding | 0 | 0 | ||||||
Class A common stock, $0.001 par value; 330,000 shares authorized; 15,837 shares issued and 8,552 shares outstanding, and 15,817 shares issued and 9,412 shares outstanding, respectively | 16 | 16 | ||||||
Class B convertible common stock, $0.001 par value; 165,000 shares authorized; 2,035 shares issued and outstanding, and 2,035 shares issued and outstanding, respectively | 2 | 2 | ||||||
Additional paid-in capital | 576,957 | 559,918 | ||||||
Treasury stock, at cost; 7,285 shares and 6,405 shares, respectively | (586,161 | ) | (475,184 | ) | ||||
Accumulated other comprehensive loss | (10,217 | ) | (5,659 | ) | ||||
Retained earnings | 549,134 | 526,633 | ||||||
Total Stockholders' Equity | 529,731 | 605,726 | ||||||
Total Liabilities and Stockholders' Equity | $ | 855,768 | $ | 933,219 |
MICROSTRATEGY INCORPORATED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) |
||||||||
Twelve Months Ended | ||||||||
December 31, | ||||||||
2018 | 2017 | |||||||
(unaudited) |
(as adjusted, |
|||||||
Operating activities: | ||||||||
Net income | $ | 22,501 | $ | 18,195 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 3,701 | 15,532 | ||||||
Bad debt expense | 1,912 | 2,269 | ||||||
Net realized loss on short-term investments | 153 | 0 | ||||||
Deferred taxes | (8,274 | ) | (3,605 | ) | ||||
Share-based compensation expense | 14,636 | 14,267 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (8,357 | ) | 15,348 | |||||
Prepaid expenses and other current assets | (6,561 | ) | (4,739 | ) | ||||
Deposits and other assets | (1,201 | ) | 3,029 | |||||
Accounts payable and accrued expenses | 3,378 | (9,093 | ) | |||||
Accrued compensation and employee benefits | 5,116 | (6,209 | ) | |||||
Deferred revenue and advance payments | (22,126 | ) | (589 | ) | ||||
Other long-term liabilities | 5,749 | 33,917 | ||||||
Net cash provided by operating activities | 10,627 | 78,322 | ||||||
Investing activities: | ||||||||
Proceeds from redemption of short-term investments | 491,800 | 390,720 | ||||||
Purchases of property and equipment | (6,846 | ) | (3,982 | ) | ||||
Purchases of short-term investments | (694,018 | ) | (456,468 | ) | ||||
Net cash used in investing activities | (209,064 | ) | (69,730 | ) | ||||
Financing activities: | ||||||||
Proceeds from sale of class A common stock under exercise of employee stock options | 2,471 | 1,677 | ||||||
Purchases of treasury stock | (110,977 | ) | 0 | |||||
Payments on capital lease obligations and other financing arrangements | (9 | ) | (21 | ) | ||||
Net cash (used in) provided by financing activities | (108,515 | ) | 1,656 | |||||
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash | (3,444 | ) | 8,222 | |||||
Net (decrease) increase in cash, cash equivalents, and restricted cash | (310,396 | ) | 18,470 | |||||
Cash, cash equivalents, and restricted cash, beginning of year | 421,182 | 402,712 | ||||||
Cash, cash equivalents, and restricted cash, end of year | $ | 110,786 | $ | 421,182 |
MICROSTRATEGY INCORPORATED REVENUE AND COST OF REVENUE DETAIL (in thousands) |
|||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||
December 31, | December 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(unaudited) |
(as adjusted, |
(unaudited) |
(as adjusted, |
||||||||||||
Revenues | |||||||||||||||
Product licenses and subscription services: | |||||||||||||||
Product licenses | $ | 31,200 | $ | 30,529 | $ | 88,057 | $ | 93,259 | |||||||
Subscription services | 7,084 | 8,525 | 29,570 | 32,368 | |||||||||||
Total product licenses and subscription services | 38,284 | 39,054 | 117,627 | 125,627 | |||||||||||
Product support | 73,662 | 75,025 | 296,216 | 289,184 | |||||||||||
Other services: | |||||||||||||||
Consulting | 17,611 | 20,336 | 74,609 | 79,818 | |||||||||||
Education | 2,360 | 1,966 | 9,186 | 9,214 | |||||||||||
Total other services | 19,971 | 22,302 | 83,795 | 89,032 | |||||||||||
Total revenues | 131,917 | 136,381 | 497,638 | 503,843 | |||||||||||
Cost of revenues | |||||||||||||||
Product licenses and subscription services: | |||||||||||||||
Product licenses | 609 | 1,994 | 4,864 | 7,176 | |||||||||||
Subscription services | 3,667 | 3,404 | 13,620 | 13,435 | |||||||||||
Total product licenses and subscription services | 4,276 | 5,398 | 18,484 | 20,611 | |||||||||||
Product support | 5,557 | 4,387 | 20,242 | 17,481 | |||||||||||
Other services: | |||||||||||||||
Consulting | 13,746 | 13,439 | 53,605 | 52,018 | |||||||||||
Education | 2,306 | 1,529 | 7,168 | 6,539 | |||||||||||
Total other services | 16,052 | 14,968 | 60,773 | 58,557 | |||||||||||
Total cost of revenues | 25,885 | 24,753 | 99,499 | 96,649 | |||||||||||
Gross profit | $ | 106,032 | $ | 111,628 | $ | 398,139 | $ | 407,194 |
MICROSTRATEGY INCORPORATED DEFERRED REVENUE DETAIL (in thousands) |
|||||||
December 31, | December 31, | ||||||
2018 | 2017 | ||||||
(unaudited) |
(as adjusted, |
||||||
Current: | |||||||
Deferred product licenses revenue | $ | 1,768 | $ | 3,760 | |||
Deferred subscription services revenue | 13,508 | 17,324 | |||||
Deferred product support revenue | 152,501 | 168,185 | |||||
Deferred other services revenue | 8,763 | 9,465 | |||||
Total current deferred revenue and advance payments | $ | 176,540 | $ | 198,734 | |||
Non-current: | |||||||
Deferred product licenses revenue | $ | 542 | $ | 820 | |||
Deferred subscription services revenue | 2,384 | 126 | |||||
Deferred product support revenue | 3,091 | 4,826 | |||||
Deferred other services revenue | 452 | 628 | |||||
Total non-current deferred revenue and advance payments | $ | 6,469 | $ | 6,400 | |||
Total current and non-current: | |||||||
Deferred product licenses revenue | $ | 2,310 | $ | 4,580 | |||
Deferred subscription services revenue | 15,892 | 17,450 | |||||
Deferred product support revenue | 155,592 | 173,011 | |||||
Deferred other services revenue | 9,215 | 10,093 | |||||
Total current and non-current deferred revenue and advance payments | $ | 183,009 | $ | 205,134 |
MICROSTRATEGY INCORPORATED RECONCILIATION OF GAAP TO NON-GAAP MEASURES (in thousands, except per share data) |
|||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||
December 31, | December 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||
Reconciliation of non-GAAP income from operations: | |||||||||||||||
(Loss) income from operations | $ | (2,157 | ) | $ | 17,137 | $ | 3,981 | $ | 73,222 | ||||||
Share-based compensation expense | 3,504 | 3,710 | 14,636 | 14,267 | |||||||||||
Non-GAAP income from operations | $ | 1,347 | $ | 20,847 | $ | 18,617 | $ | 87,489 | |||||||
Reconciliation of non-GAAP net income: | |||||||||||||||
Net income (loss) | $ | 3,301 | $ | (25,499 | ) | $ | 22,501 | $ | 18,195 | ||||||
Tax charges and adjustments related to U.S. tax reform | 0 | 44,018 | (3,106 | ) | 44,018 | ||||||||||
Non-GAAP net income | $ | 3,301 | $ | 18,519 | $ | 19,395 | $ | 62,213 | |||||||
Reconciliation of non-GAAP diluted earnings per share: | |||||||||||||||
Diluted earnings (loss) per share | $ | 0.30 | $ | (2.23 | ) | $ | 1.97 | $ | 1.58 | ||||||
Impact of tax charges and adjustments related to U.S. tax reform (per diluted share) | 0.00 | 3.85 | (0.27 | ) | 3.81 | ||||||||||
Non-GAAP diluted earnings per share | $ | 0.30 | $ | 1.62 | $ | 1.70 | $ | 5.39 |
MICROSTRATEGY INCORPORATED WORLDWIDE EMPLOYEE HEADCOUNT |
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December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||||||
2018 | 2018 | 2018 | 2018 | 2017 | |||||||||||||||
Subscription services | 56 | 55 | 54 | 57 | 53 | ||||||||||||||
Product support | 202 | 194 | 184 | 182 | 172 | ||||||||||||||
Consulting | 452 | 458 | 443 | 441 | 441 | ||||||||||||||
Education | 47 | 44 | 39 | 42 | 41 | ||||||||||||||
Sales and marketing | 707 | 699 | 687 | 667 | 652 | ||||||||||||||
Research and development | 716 | 688 | 651 | 604 | 559 | ||||||||||||||
General and administrative | 348 | 326 | 322 | 313 | 298 | ||||||||||||||
Total headcount | 2,528 | 2,464 | 2,380 | 2,306 | 2,216 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20190129005788/en/
Source:
MicroStrategy Incorporated
Investor Relations
Claudia Cahill
ir@microstrategy.com
(703) 848-8600