MicroStrategy Announces Second Quarter 2018 Financial Results
Second quarter 2018 revenues were
Operating expenses for the second quarter of 2018 were
Loss from operations for the second quarter of 2018 was
Non-GAAP income from operations, which excludes share-based compensation
expense, was
As of June 30, 2018,
Conference Call
Recent Business Highlights:
MicroStrategy received the highest product scores for 3 of 5 use cases in the “Critical Capabilities for Analytics and Business Intelligence Platforms” report1 byGartner, Inc. , the leading provider of research and analysis on the global information technology industry. According to the findings, theGartner report has scoredMicroStrategy :- First in Governed Data Discovery, scoring a 4.22 (out of 5)
- First in Agile, Centralized BI Provisioning, scoring a 4.37
- First in Decentralized Analytics, scoring a 4.19
- Second in Extranet Deployment, scoring a 4.16
MicroStrategy introduced three new gateways with itsMicroStrategy 10.11™ release that enableMicroStrategy users to easily visualize, analyze and distribute data using Microsoft Azure. Built in collaboration withMicrosoft , these gateways establish integrations and workflows between theMicroStrategy 10™ platform and Azure data and analytics services. These gateways expand on MicroStrategy’s existing integrations with otherMicrosoft solutions, including Azure IoT, Machine Learning and Power BI.MicroStrategy won a 2018 NetworkWorld Asia Information Management award in the Advanced Analytics Solution category. After a review of numerous analytics vendors in the market,MicroStrategy was selected the winner by a panel of Questex Media editors and regional CIOs, CISOs, IT directors, and data center heads representing organizations across a variety of industries.MicroStrategy , which secured the top spot for the only award related to analytics, was honored at the 7th annual NetworkWorld Asia Information Management Awards inSingapore .MicroStrategy announced that Kasasa, anAustin, Texas -based fintech and martech provider, integratedMicroStrategy 10 into Insight, its BI platform, enabling an even higher performing analytics solution for its customers. In addition,MicroStrategy announced that Vibes, a leading mobile engagement platform for enterprises, integrated theMicroStrategy 10 platform into its new product, Advanced Analytics, a performance management solution.MicroStrategy announced that The University of Auckland’sICT Graduate School and theUniversity of Colorado Denver School of Business are providing its students and faculty with freeMicroStrategy software licenses, technical support and training through theMicroStrategy Academic Program.
1 |
Gartner, Critical Capabilities for Analytics and Business Intelligence Platforms, James Laurence Richardson, Joao Tapadinhas, et al., May 7, 2018. Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner's research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose. | |
Non-GAAP Financial Measure
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“forward-looking statements,” including estimates of future business
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Forward-looking statements inherently involve risks and uncertainties
that could cause actual results of
MSTR-F
MICROSTRATEGY INCORPORATED |
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CONSOLIDATED STATEMENTS OF OPERATIONS |
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(in thousands, except per share data) |
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Three Months Ended | Six Months Ended | ||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||
(unaudited) |
(as adjusted, |
(unaudited) |
(as adjusted, |
||||||||||||||||
Revenues | |||||||||||||||||||
Product licenses | $ | 19,292 | $ | 17,728 | $ | 36,593 | $ | 40,374 | |||||||||||
Subscription services | 7,584 | 8,346 | 15,246 | 16,118 | |||||||||||||||
Total product licenses and subscription services | 26,876 | 26,074 | 51,839 | 56,492 | |||||||||||||||
Product support | 73,676 | 70,766 | 148,091 | 141,278 | |||||||||||||||
Other services | 20,050 | 22,380 | 43,639 | 43,682 | |||||||||||||||
Total revenues | 120,602 | 119,220 | 243,569 | 241,452 | |||||||||||||||
Cost of revenues | |||||||||||||||||||
Product licenses | 1,667 | 1,747 | 3,878 | 3,419 | |||||||||||||||
Subscription services | 3,445 | 3,400 | 6,694 | 6,439 | |||||||||||||||
Total product licenses and subscription services | 5,112 | 5,147 | 10,572 | 9,858 | |||||||||||||||
Product support | 4,810 | 4,542 | 9,606 | 8,876 | |||||||||||||||
Other services | 15,118 | 14,686 | 30,047 | 28,773 | |||||||||||||||
Total cost of revenues | 25,040 | 24,375 | 50,225 | 47,507 | |||||||||||||||
Gross profit | 95,562 | 94,845 | 193,344 | 193,945 | |||||||||||||||
Operating expenses | |||||||||||||||||||
Sales and marketing | 50,978 | 41,626 | 102,313 | 81,208 | |||||||||||||||
Research and development | 25,082 | 19,561 | 48,642 | 37,987 | |||||||||||||||
General and administrative | 21,299 | 19,582 | 43,471 | 39,839 | |||||||||||||||
Total operating expenses | 97,359 | 80,769 | 194,426 | 159,034 | |||||||||||||||
(Loss) income from operations | (1,797 | ) | 14,076 | (1,082 | ) | 34,911 | |||||||||||||
Interest income, net | 3,223 | 1,163 | 5,257 | 2,000 | |||||||||||||||
Other income (expense), net | 4,461 | (2,618 | ) | 2,867 | (4,474 | ) | |||||||||||||
Income before income taxes | 5,887 | 12,621 | 7,042 | 32,437 | |||||||||||||||
Provision for income taxes | 1,059 | 2,668 | 541 | 6,927 | |||||||||||||||
Net income | $ | 4,828 | $ | 9,953 | $ | 6,501 | $ | 25,510 | |||||||||||
Basic earnings per share (1): | $ | 0.42 | $ | 0.87 | $ | 0.57 | $ | 2.23 | |||||||||||
Weighted average shares outstanding used in computing basic earnings per share | 11,459 | 11,444 | 11,453 | 11,441 | |||||||||||||||
Diluted earnings per share (1): | $ | 0.42 | $ | 0.86 | $ | 0.57 | $ | 2.20 | |||||||||||
Weighted average shares outstanding used in computing diluted earnings per share | 11,493 | 11,592 | 11,488 | 11,593 | |||||||||||||||
(1) | Basic and fully diluted earnings per share for class A and class B common stock are the same. | |||
MICROSTRATEGY INCORPORATED |
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CONSOLIDATED BALANCE SHEETS |
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(in thousands, except per share data) |
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June 30, | December 31, | |||||||||
2018 | 2017 | |||||||||
(unaudited) |
(as adjusted, |
|||||||||
Assets | ||||||||||
Current assets | ||||||||||
Cash and cash equivalents | $ | 90,427 | $ | 420,244 | ||||||
Restricted cash | 964 | 938 | ||||||||
Short-term investments | 609,167 | 254,927 | ||||||||
Accounts receivable, net | 125,115 | 165,364 | ||||||||
Prepaid expenses and other current assets | 27,863 | 19,180 | ||||||||
Total current assets | 853,536 | 860,653 | ||||||||
Property and equipment, net | 51,918 | 53,359 | ||||||||
Capitalized software development costs, net | 0 | 2,499 | ||||||||
Deposits and other assets | 7,112 | 7,411 | ||||||||
Deferred tax assets, net | 14,761 | 9,297 | ||||||||
Total Assets | $ | 927,327 | $ | 933,219 | ||||||
Liabilities and Stockholders' Equity | ||||||||||
Current liabilities | ||||||||||
Accounts payable and accrued expenses | $ | 22,670 | $ | 30,711 | ||||||
Accrued compensation and employee benefits | 38,617 | 41,498 | ||||||||
Deferred revenue and advance payments | 175,358 | 198,734 | ||||||||
Total current liabilities | 236,645 | 270,943 | ||||||||
Deferred revenue and advance payments | 5,816 | 6,400 | ||||||||
Other long-term liabilities | 64,503 | 50,146 | ||||||||
Deferred tax liabilities | 4 | 4 | ||||||||
Total Liabilities | 306,968 | 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 9,432 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 | 570,502 | 559,918 | ||||||||
Treasury stock, at cost; 6,405 shares | (475,184 | ) | (475,184 | ) | ||||||
Accumulated other comprehensive loss | (8,111 | ) | (5,659 | ) | ||||||
Retained earnings | 533,134 | 526,633 | ||||||||
Total Stockholders' Equity | 620,359 | 605,726 | ||||||||
Total Liabilities and Stockholders' Equity | $ | 927,327 | $ | 933,219 | ||||||
MICROSTRATEGY INCORPORATED |
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CONSOLIDATED STATEMENTS OF CASH FLOWS |
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(in thousands) |
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Six Months Ended | ||||||||||
June 30, | ||||||||||
2018 | 2017 | |||||||||
(unaudited) |
(as adjusted, |
|||||||||
Operating activities: | ||||||||||
Net income | $ | 6,501 | $ | 25,510 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||
Depreciation and amortization | 3,870 | 8,540 | ||||||||
Bad debt expense | 948 | 1,835 | ||||||||
Deferred taxes | (5,758 | ) | (3,654 | ) | ||||||
Share-based compensation expense | 8,121 | 6,889 | ||||||||
Changes in operating assets and liabilities: | ||||||||||
Accounts receivable | 5,044 | 16,033 | ||||||||
Prepaid expenses and other current assets | 453 | (992 | ) | |||||||
Deposits and other assets | (344 | ) | (275 | ) | ||||||
Accounts payable and accrued expenses | (7,775 | ) | (15,472 | ) | ||||||
Accrued compensation and employee benefits | (3,015 | ) | (10,712 | ) | ||||||
Deferred revenue and advance payments | 10,502 | 11,058 | ||||||||
Other long-term liabilities | 4,780 | (1,647 | ) | |||||||
Net cash provided by operating activities | 23,327 | 37,113 | ||||||||
Investing activities: | ||||||||||
Proceeds from redemption of short-term investments | 245,680 | 151,860 | ||||||||
Purchases of property and equipment | (2,644 | ) | (1,467 | ) | ||||||
Purchases of short-term investments | (596,376 | ) | (216,602 | ) | ||||||
Net cash used in investing activities | (353,340 | ) | (66,209 | ) | ||||||
Financing activities: | ||||||||||
Proceeds from sale of class A common stock under exercise of employee stock options | 2,471 | 1,677 | ||||||||
Payments on capital lease obligations and other financing arrangements | (9 | ) | (12 | ) | ||||||
Net cash provided by financing activities | 2,462 | 1,665 | ||||||||
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash | (2,240 | ) | 5,246 | |||||||
Net decrease in cash, cash equivalents, and restricted cash | (329,791 | ) | (22,185 | ) | ||||||
Cash, cash equivalents, and restricted cash, beginning of period | 421,182 | 402,712 | ||||||||
Cash, cash equivalents, and restricted cash, end of period | $ | 91,391 | $ | 380,527 | ||||||
MICROSTRATEGY INCORPORATED |
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REVENUE AND COST OF REVENUE DETAIL |
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(in thousands) |
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Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||
(unaudited) |
(as adjusted, |
(unaudited) |
(as adjusted, |
||||||||||||||
Revenues | |||||||||||||||||
Product licenses and subscription services: | |||||||||||||||||
Product licenses | $ | 19,292 | $ | 17,728 | $ | 36,593 | $ | 40,374 | |||||||||
Subscription services | 7,584 | 8,346 | 15,246 | 16,118 | |||||||||||||
Total product licenses and subscription services | 26,876 | 26,074 | 51,839 | 56,492 | |||||||||||||
Product support | 73,676 | 70,766 | 148,091 | 141,278 | |||||||||||||
Other services: | |||||||||||||||||
Consulting | 17,710 | 19,791 | 38,997 | 38,837 | |||||||||||||
Education | 2,340 | 2,589 | 4,642 | 4,845 | |||||||||||||
Total other services | 20,050 | 22,380 | 43,639 | 43,682 | |||||||||||||
Total revenues | 120,602 | 119,220 | 243,569 | 241,452 | |||||||||||||
Cost of revenues | |||||||||||||||||
Product licenses and subscription services: | |||||||||||||||||
Product licenses | 1,667 | 1,747 | 3,878 | 3,419 | |||||||||||||
Subscription services | 3,445 | 3,400 | 6,694 | 6,439 | |||||||||||||
Total product licenses and subscription services | 5,112 | 5,147 | 10,572 | 9,858 | |||||||||||||
Product support | 4,810 | 4,542 | 9,606 | 8,876 | |||||||||||||
Other services: | |||||||||||||||||
Consulting | 13,542 | 12,867 | 26,863 | 25,284 | |||||||||||||
Education | 1,576 | 1,819 | 3,184 | 3,489 | |||||||||||||
Total other services | 15,118 | 14,686 | 30,047 | 28,773 | |||||||||||||
Total cost of revenues | 25,040 | 24,375 | 50,225 | 47,507 | |||||||||||||
Gross profit | $ | 95,562 | $ | 94,845 | $ | 193,344 | $ | 193,945 | |||||||||
MICROSTRATEGY INCORPORATED |
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DEFERRED REVENUE DETAIL |
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(in thousands) |
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June 30, | December 31, | June 30, | |||||||||||
2018 | 2017 | 2017 | |||||||||||
(unaudited) |
(as adjusted, |
(as adjusted, |
|||||||||||
Current: | |||||||||||||
Deferred product licenses revenue | $ | 1,819 | $ | 3,760 | $ | 2,320 | |||||||
Deferred subscription services revenue | 13,847 | 17,324 | 17,741 | ||||||||||
Deferred product support revenue | 151,909 | 168,185 | 156,984 | ||||||||||
Deferred other services revenue | 7,783 | 9,465 | 8,681 | ||||||||||
Total current deferred revenue and advance payments | $ | 175,358 | $ | 198,734 | $ | 185,726 | |||||||
Non-current: | |||||||||||||
Deferred product licenses revenue | $ | 794 | $ | 820 | $ | 620 | |||||||
Deferred subscription services revenue | 9 | 126 | 784 | ||||||||||
Deferred product support revenue | 3,950 | 4,826 | 7,211 | ||||||||||
Deferred other services revenue | 1,063 | 628 | 856 | ||||||||||
Total non-current deferred revenue and advance payments | $ | 5,816 | $ | 6,400 | $ | 9,471 | |||||||
Total current and non-current: | |||||||||||||
Deferred product licenses revenue | $ | 2,613 | $ | 4,580 | $ | 2,940 | |||||||
Deferred subscription services revenue | 13,856 | 17,450 | 18,525 | ||||||||||
Deferred product support revenue | 155,859 | 173,011 | 164,195 | ||||||||||
Deferred other services revenue | 8,846 | 10,093 | 9,537 | ||||||||||
Total current and non-current deferred revenue and advance payments | $ | 181,174 | $ | 205,134 | $ | 195,197 | |||||||
MICROSTRATEGY INCORPORATED |
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RECONCILIATION OF GAAP TO NON-GAAP MEASURES |
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(in thousands) |
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Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||
(unaudited) |
(as adjusted, |
(unaudited) |
(as adjusted, |
||||||||||||||
Reconciliation of non-GAAP income from operations: | |||||||||||||||||
(Loss) income from operations | $ | (1,797 | ) | $ | 14,076 | $ | (1,082 | ) | $ | 34,911 | |||||||
Share-based compensation expense | 3,378 | 3,774 | 8,121 | 6,889 | |||||||||||||
Non-GAAP income from operations | $ | 1,581 | $ | 17,850 | $ | 7,039 | $ | 41,800 | |||||||||
MICROSTRATEGY INCORPORATED |
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WORLDWIDE EMPLOYEE HEADCOUNT |
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June 30, | March 31, | December 31, | September 30, | June 30, | |||||||||||||||||
2018 | 2018 | 2017 | 2017 | 2017 | |||||||||||||||||
Subscription services | 54 | 57 | 53 | 50 | 49 | ||||||||||||||||
Product support | 184 | 182 | 172 | 163 | 176 | ||||||||||||||||
Consulting | 443 | 441 | 441 | 447 | 448 | ||||||||||||||||
Education | 39 | 42 | 41 | 41 | 42 | ||||||||||||||||
Sales and marketing | 687 | 667 | 652 | 635 | 642 | ||||||||||||||||
Research and development | 651 | 604 | 559 | 539 | 526 | ||||||||||||||||
General and administrative | 322 | 313 | 298 | 303 | 301 | ||||||||||||||||
Total headcount | 2,380 | 2,306 | 2,216 | 2,178 | 2,184 | ||||||||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20180726005907/en/
Source:
MicroStrategy Incorporated
Investor Relations
Claudia Cahill,
703-848-8600
ir@microstrategy.com