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Jive Software Announces Third Quarter 2013 Financial Results

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3Q Total Revenue of $37.4 Million, Up 29% Year-Over-Year

PALO ALTO, Calif., Oct. 30, 2013 (GLOBE NEWSWIRE) -- Jive Software, Inc. (Nasdaq:JIVE), a leader in social business, today announced financial results for its third quarter ended September 30, 2013.

"Jive reported solid third quarter financial results, which exceeded our guidance from both a revenue and profitability perspective. The progress we made was a result of more focused go-to-market execution and more effective messaging to both business leaders as well as key influencers in the enterprise's IT organizations," stated Tony Zingale, Chairman and CEO of Jive. "We believe that Jive's new Fall Cloud release, introduced last week at JiveWorld13, further reinforces our multi-year technology lead, and combined with our demonstrated customer success, positions Jive well as the industry continues to move to the mainstream."

Third Quarter 2013 Financial Highlights

  • Revenue: Total revenue for the third quarter was $37.4 million, an increase of 29% on a year-over-year basis. Within total revenue, product revenue was $33.5 million for the third quarter, an increase of 29% on a year-over-year basis. Professional Services revenue for the third quarter was $3.9 million, an increase of 30% on a year-over-year basis.
     
  • Non-GAAP Billings: Total billings, which Jive defines as revenue plus the change in total deferred revenue, were $37.0 million for the third quarter, compared to $38.9 million in the third quarter of 2012. Short-term billings, which Jive defines as revenue plus the change in short-term deferred, were $39.2 million for the third quarter, compared to $31.8 million in the third quarter of 2012. 
     
  • Gross Profit: GAAP gross profit for the third quarter was $23.5 million, compared to $17.6 million for the third quarter of 2012. Non-GAAP gross profit was $25.4 million for the third quarter, representing a year-over-year increase of 35%. Non-GAAP gross margin was 68%, representing a 300 basis point expansion compared to the non-GAAP gross margin in the third quarter of 2012.
     
  • Loss from Operations: GAAP loss from operations for the third quarter was $18.5 million,compared to a loss from operations of $11.2 million for the third quarter of 2012. Non-GAAP loss from operations was $7.1 million,compared to a non-GAAP loss from operations of $5.5 million for the third quarter of 2012.
     
  • Net Loss: GAAP net loss for the third quarter was $18.7 million, compared to a net loss of $11.3 million for the third quarter of 2012. GAAP net loss per share for the third quarter was $0.27 based on 68.2 million weighted-average shares outstanding, compared to a loss per share of $0.18 based on 62.9 million weighted-average shares outstanding for the third quarter of 2012.
     
    Non-GAAP net loss for the third quarter was $7.3 million, compared to a non-GAAP net loss of $5.6 million for the third quarter of 2012. Non-GAAP net loss per share for the third quarter was $0.11 based on 68.2 million weighted-average shares outstanding, compared to a non-GAAP net loss per share of $0.09 based on 62.9 million weighted-average shares outstanding for the third quarter of 2012.
     
  • Balance Sheet and Cash Flow: As of September 30, 2013, Jive had cash and cash equivalents and marketable securities of $152.0 million, compared to $160.9 million as of June 30, 2013.
     
    Jive used $4.8 million in cash from operations and invested $4.0 million in capital expenditures, leading to free cash flow of ($8.8) million for the third quarter of 2013. Free cash flow was ($1.9) million for the third quarter of 2012. Free cash flow is defined as cash flows provided by operating activities minus cash flows used to purchase capital expenditures.

A reconciliation of GAAP to non-GAAP financial measures has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading "Non-GAAP Financial Measures."

Third Quarter and Recent Business Highlights

  • Signed new and expanded customer relationships including Cameron International, FICO, FireEye, Gasco, Goldman Sachs, Huntsman, Lahey Health, Okta, RadioShack, SAIC, ServiceNow and a large German automobile manufacturer, among others.
  • Recognized by Gartner, a leading analyst firm, as a leader in its "Social Software in the Workplace" Magic Quadrant report. This is the fifth consecutive year Jive has been a leader in this Magic Quadrant report.
  • Announced the Jive Fall Cloud release, which includes a revamped social directory that helps people find and share expertise, a new social task system, new real-time communications options, and seamless integration with Google Drive and Gmail, among others business applications.  Additionally, Jive introduced Jivex, a new cloud version of its industry-leading external community platform with a mix of popular features such as advanced gamification and deep integration with Facebook and Twitter, which brings social conversations into a central connected hub. 
  • Expanded our global presence in the third quarter, opening offices in Sweden, The Netherlands and Paris and hiring dedicated sales and sales engineering teams at each location. Jive also entered the Japanese market during the third quarter with a customized, local version of the Jive platform and a dedicated sales team in Tokyo.
  • Recently hosted our 5th annual JiveWorld customer conference in Las Vegas, the industry's largest event purely focused on social business. In attendance were more than 1,600 customers and partners, with industry leaders such as Eloqua (Oracle), Fidelity, Hitachi Data Systems, Mylan, Steelcase, Thomson Reuters, T-Mobile, and Northwestern University among others, spoke about the proven business value companies can realize when deploying enterprise social networks and customer communities.
  • Announced Okta Cloud Connect for Jive, which is part of a new partnership between Jive and Okta, a leading cloud-based provider of enterprise-grade identity management services. Okta Cloud Connect for Jive gives people seamless and secure identity management and single sign-on access to any number of business apps in the Jive platform. This is offered at no additional cost to the consumer.

Financial Outlook

As of October 30, 2013, Jive is initiating guidance for its fourth quarter 2013 and updating its guidance for the full year 2013, as follows:

  • Fourth Quarter 2013 Guidance: Total revenue is expected to be in the range of $38.5 million to $39.5 million. Non-GAAP loss from operations is expected to be in the range of $10.5 million to $11.5 million. Non-GAAP loss per share is expected to be in the range of $0.15 to $0.17 based on approximately 69.1 million weighted-average diluted shares outstanding in the fourth quarter of 2013.
  • Full Year 2013 Guidance: Total revenue is expected to be in the range of $145.0 million to $146.0 million. Non-GAAP loss from operations is expected to be in the range of $36.4 million to $37.4 million. Non-GAAP loss per share is expected to be in the range of $0.55 to $0.57 based on approximately 67.6 million weighted-average diluted shares outstanding. Free cash flow is expected to be in the range of negative $17.0 to $19.0 million

With respect to the Company's expectations under "Financial Outlook" above, the Company has not reconciled non-GAAP loss from operations or non-GAAP loss per share to GAAP loss from operations and GAAP loss per share because the Company does not provide guidance for stock-based compensation, income taxes or amortization of intangible assets, which are reconciling items between those Non-GAAP and GAAP measures. As certain items that impact loss from operations and loss per share are out of the Company's control and/or cannot be reasonably predicted, the Company is unable to provide such guidance. Accordingly, a reconciliation to loss from operations and loss per share is not available without unreasonable effort.

Quarterly Conference Call

Jive will host a conference call today at 2:00 p.m. PT (5:00 p.m. ET) to review the Company's financial results for the third quarter 2013, in addition to discussing the Company's outlook for the fourth quarter and full year 2013.  To access this call, dial (888) 670-2256 (domestic) or (913) 312-0728 (international) with conference ID 6675278. A live webcast of the conference call will be accessible from the investor relations section of Jive's website at http://investors.jivesoftware.com/ and a replay will be archived and accessible at: http://investors.jivesoftware.com/events.cfm. A replay of this conference call can also be accessed through November 6, 2013, by dialing (877) 870-5176 (domestic) or (858) 384-5517 (international). The replay pass code is 6675278.

About Jive Software

Jive Software (Nasdaq:JIVE) is a leader in social business. Our cloud-based collaboration platform connects employees, customers and partners together – helping a company increase productivity by as much as 15%* according to research performed by a top three global business consultancy firm. By combining the power of cloud, mobile, big data and proprietary collaboration technologies, Jive is transforming the way work gets done and unleashing productivity, creativity and innovation for millions of people in many of the world's largest companies. For a free trial of Jive's next generation social business platform, please visit Try Jive.

For more information, please visit www.jivesoftware.com or the Jive News Blog here.

* Source: Top three global business consultancy research; November 2012

Non-GAAP Financial Measures

The Company uses certain non-GAAP financial measures in this release. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles. 

Non-GAAP gross profit, loss from operations, net loss and net loss per share exclude stock-based compensation expenses, non-recurring expenses related to acquisitions, tax benefits derived from acquisitions, and amortization of acquisition related intangible assets. Total billings are defined by the Company as revenue plus the change in total deferred revenue. Management presents these non-GAAP financial measures because it considers them to be important supplemental measures of performance. Management uses the non-GAAP financial measures for planning purposes, including analysis of the Company's performance against prior periods, the preparation of operating budgets and to determine appropriate levels of operating and capital investments. Management also believes that the non-GAAP financial measures provide additional insight for analysts and investors in evaluating the Company's financial and operational performance. However, these non-GAAP financial measures have limitations as an analytical tool and are not intended to be an alternative to financial measures prepared in accordance with GAAP. We intend to provide these non-GAAP financial measures as part of our future earnings discussions and, therefore, the inclusion of these non-GAAP financial measures will provide consistency in our financial reporting. A reconciliation of these non-GAAP measures to GAAP is provided in the accompanying tables.

Safe Harbor Statement

"Safe Harbor" statement under Private Securities Litigation Reform Act of 1995: This press release contains forward-looking statements, including statements concerning our financial guidance for the fourth fiscal quarter of 2013 and the full year of 2013, the future growth of the social business market, the shift in customer focus, our ability to achieve our guidance, growth in our sales pipeline, the performance and integration of new product releases, and our ability to capitalize on our leadership position in the social business market. The achievement of success in the matters covered by such forward-looking statements involves substantial risks, uncertainties and assumptions. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, our results or events could differ materially from the results expressed or implied by the forward-looking statements we make.

The risk and uncertainties referred to above include, but are not limited to, risks associated with our limited operating history; expectations regarding the widespread adoption of social business platforms by enterprises; uncertainty regarding the market for social business platforms; changes in the competitive dynamics of our market; our ability to increase and predict new subscriptions; subscription renewal or upsell rates and the impact these rates may have on our future revenues; our reliance on our own controls and third-party service providers to host some of our products; the risk that our security measures could be breached and unauthorized access to customer data could be obtained; potential third party intellectual property infringement claims; and the price volatility of our common stock. 

The forward-looking statements contained in this press release are also subject to other risks and uncertainties, including those more fully described in our filings with the Securities and Exchange Commission, including our Quarterly Report on Form 10-Q for the three months ended June 30, 2013, filed with the Securities and Exchange Commission on July 31, 2013. We do not intend and undertake no duty to publicly release any updates or revisions to any forward-looking statements contained herein.

         
         
JIVE SOFTWARE, INC.
Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
         
   For the Three Months Ended
September 30, 
 For the Nine Months Ended
September 30, 
  2013 2012 2013 2012
         
Revenues:        
 Product  $ 33,456  $ 25,861  $ 95,678  $ 71,436
 Professional services  3,903  3,012  10,775  9,705
 Total revenues  37,359  28,873  106,453  81,141
         
Cost of revenues:        
 Product  9,034  7,788  27,786  21,745
 Professional services  4,851  3,474  12,914  11,055
 Total cost of revenues  13,885  11,262  40,700  32,800
Gross profit  23,474  17,611  65,753  48,341
         
Operating expenses:        
 Research and development   14,957  9,845  41,383  27,327
 Sales and marketing   20,804  14,800  60,148  40,737
 General and administrative  6,202  4,127  18,149  11,680
 Total operating expenses  41,963  28,772  119,680  79,744
         
Loss from operations  (18,489)  (11,161)  (53,927)  (31,403)
         
Other income (expense), net:        
 Interest income  53  56  184  116
 Interest expense  (54)  (93)  (234)  (325)
 Other, net  (186)  42  (295)  (4)
 Total other income (expense), net  (187)  5  (345)  (213)
         
Loss before provision for (benefit from) from income taxes  (18,676)  (11,156)  (54,272)  (31,616)
Provision for (benefit from) for income taxes  29  132  (1,186)  246
Net loss  $ (18,705)  $ (11,288)  $ (53,086)  $ (31,862)
         
Basic and diluted net loss per share  $ (0.27)  $ (0.18)  $ (0.79)  $ (0.51)
         
Shares used in basic and diluted per share calculations  68,167  62,921  66,913  62,100
     
     
JIVE SOFTWARE, INC.
Consolidated Balance Sheets
(In thousands, except share and per share data)
(Unaudited)
     
  September 30,
2013
December 31,
2012
     
Assets    
Current Assets:    
 Cash and cash equivalents  $ 42,606  $ 48,955
 Short-term marketable securities  73,444  96,492
 Accounts receivable, net of allowances  40,037  54,200
 Prepaid expenses and other current assets  10,670  7,864
 Total current assets  166,757  207,511
     
Marketable securities, noncurrent  35,990  22,607
Property and equipment, net of accumulated depreciation  19,978  16,803
Goodwill  29,753  23,435
Intangible assets, net of accumulated amortization  15,536  11,710
Other assets   589  214
 Total assets  $ 268,603  $ 282,280
     
Liabilities and Stockholders' Equity    
Current Liabilities:    
 Accounts payable  $ 10,438  $ 9,557
 Accrued payroll and related liabilities  5,271  7,357
 Other accrued liabilities  6,635  7,123
 Deferred revenue, current  98,602  87,698
 Term debt, current  2,400  2,400
 Total current liabilities  123,346  114,135
     
Deferred revenue, less current portion  29,142  29,349
Term debt, less current portion  6,600  8,400
Other long-term liabilities  1,310  538
 Total liabilities  160,398  152,422
     
Commitments and contingencies    
     
Stockholders' Equity:    
 Common stock  7  7
 Less treasury stock at cost  (3,352)  (3,352)
 Additional paid-in capital  316,554  285,332
 Accumulated deficit  (205,246)  (152,160)
 Accumulated other comprehensive income  242  31
 Total stockholders' equity  108,205  129,858
 Total liabilities and stockholders' equity  $ 268,603  $ 282,280
         
         
JIVE SOFTWARE, INC.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
         
   Three Months Ended
September 30, 
 Nine Months Ended
September 30, 
  2013 2012 2013 2012
         
Cash flows from operating activities:        
 Net loss  $ (18,705)  $ (11,288)  $ (53,086)  $ (31,862)
 Adjustments to reconcile net loss to net cash provided by operating activities:      
 Depreciation and amortization  4,015  2,567  11,802  7,170
 Stock-based compensation  10,119  5,028  24,508  12,277
 Change in deferred taxes  --   --   (1,351)  -- 
 (Increase) decrease, net of acquisitions, in:        
 Accounts receivable, net  2,451  (6,856)  14,163  (3,876)
 Prepaid expenses and other assets  (1,707)  (1,916)  (2,716)  (2,292)
 Increase (decrease), net of acquisitions, in:        
 Accounts payable  22  3,956  (333)  4,122
 Accrued payroll and related liabilities  (16)  (190)  (1,979)  (976)
 Other accrued liabilities  (726)  180  (626)  56
 Deferred revenue  (371)  10,072  10,697  19,728
 Other long-term liabilities  156  3  196  405
 Net cash provided by operating activities  (4,762)  1,556  1,275  4,752
         
Cash flows from investing activities:        
 Payments for purchase of property and equipment  (4,000)  (3,476)  (8,789)  (9,389)
 Purchases of marketable securities  (26,905)  (53,551)  (85,685)  (119,399)
 Sales of marketable securities  5,812  --   29,533  -- 
 Maturities of marketable securities  22,025  --   64,355  -- 
 Acquisitions, net of cash acquired  --   --   (11,047)  -- 
 Net cash used in investing activities  (3,068)  (57,027)  (11,633)  (128,788)
         
Cash flows from financing activities:        
 Proceeds from exercise of stock options  1,250  2,855  6,591  3,724
 Taxes paid related to net share settlement of equity awards  (362)  --   (754)  -- 
 Payments of initial public offering expenses  --     --   (1,014)
 Repayments of term loans  (600)  (600)  (1,800)  (1,850)
 Net cash provided by (used in) financing activities  288  2,255  4,037  860
         
Net increase (decrease) in cash and cash equivalents  (7,542)  (53,216)  (6,321)  (123,176)
Effect of exchange rate changes  (40)  2  (28)  (1)
Cash and cash equivalents, beginning of period  50,188  110,686  48,955  180,649
Cash and cash equivalents, end of period  $ 42,606  $ 57,472  $ 42,606  $ 57,472
         
         
JIVE SOFTWARE, INC.
RECONCILIATION OF NON-GAAP INFORMATION
(In thousands, except per share data)
(Unaudited)
         
   Three Months Ended September 30,   Nine Months Ended September 30, 
  2013 2012 2013 2012
         
Gross profit, as reported  $ 23,474  $ 17,611  $ 65,753  $ 48,341
Add back:        
 Stock-based compensation  991  627  2,289  1,413
 Amortization related to acquisitions  972  614  2,654  1,859
 Non-recurring acquisition expense  --   --   250  -- 
Gross profit, non-GAAP  $ 25,437  $ 18,852  $ 70,946  $ 51,613
Gross margin, non-GAAP 68% 65% 67% 64%
         
   Three Months Ended September 30,   Nine Months Ended September 30, 
  2013 2012 2013 2012
         
Research and development, as reported  $ 14,957  $ 9,845  $ 41,383  $ 27,327
less:        
 Stock-based compensation  4,263  1,705  9,890  4,185
 Amortization related to acquisitions  127  --   303  -- 
 Non-recurring acquisition expense  31  --   50  -- 
 Research and development, non-GAAP  $ 10,536  $ 8,140  $ 31,140  $ 23,142
As percentage of total revenues, non-GAAP 28% 28% 29% 29%
         
   Three Months Ended September 30,   Nine Months Ended September 30, 
  2013 2012 2013 2012
         
Sales and marketing, as reported  $ 20,804  $ 14,800  $ 60,148  $ 40,737
less:        
 Stock-based compensation  2,910  1,436  7,539  2,890
 Amortization related to acquisitions  129  --   304  -- 
 Sales and marketing, non-GAAP  $ 17,765  $ 13,364  $ 52,305  $ 37,847
As percentage of total revenues, non-GAAP 48% 46% 49% 47%
         
   Three Months Ended September 30,   Nine Months Ended September 30, 
  2013 2012 2013 2012
         
General and administrative, as reported  $ 6,202  $ 4,127  $ 18,149  $ 11,680
less:        
 Stock-based compensation  1,955  1,260  4,790  3,789
 General and administrative, non-GAAP  $ 4,247  $ 2,867  $ 13,359  $ 7,891
As percentage of total revenues, non-GAAP 11% 10% 13% 10%
         
   Three Months Ended September 30,   Nine Months Ended September 30, 
  2013 2012 2013 2012
         
Loss from operations, as reported  $ (18,489)  $ (11,161)  $ (53,927)  $ (31,403)
Add back:        
 Stock-based compensation  10,119  5,028  24,508  12,277
 Amortization related to acquisitions  1,228  614  3,261  1,859
 Non-recurring acquisition expense  31  --   300  -- 
Loss from operations, non-GAAP  $ (7,111)  $ (5,519)  $ (25,858)  $ (17,267)
         
         
   Three Months Ended September 30,   Nine Months Ended September 30, 
  2013 2012 2013 2012
         
Loss before provision for (benefit from) income taxes, as reported  $ (18,676)  $ (11,156)  $ (54,272)  $ (31,616)
Add back:        
 Stock-based compensation  10,119  5,028  24,508  12,277
 Amortization related to acquisitions  1,228  614  3,261  1,859
 Non-recurring acquisition expense  31  --   300  -- 
Loss before provision for (benefit from) income taxes, non-GAAP  $ (7,298)  $ (5,514)  $ (26,203)  $ (17,480)
         
   Three Months Ended September 30,   Nine Months Ended September 30, 
  2013 2012 2013 2012
         
Net loss, as reported  $ (18,705)  $ (11,288)  $ (53,086)  $ (31,862)
Add back:        
 Stock-based compensation  10,119  5,028  24,508  12,277
 Amortization related to acquisitions  1,228  614  3,261  1,859
 Non-recurring acquisition expense  31  --   300  -- 
 Tax benefit related to acquisitions  --   --   (1,351)  -- 
Net loss, non-GAAP  $ (7,327)  $ (5,646)  $ (26,368)  $ (17,726)
         
   Three Months Ended September 30,   Nine Months Ended September 30, 
  2013 2012 2013 2012
         
Basic and diluted net loss per share, as reported  $ (0.27)  $ (0.18)  $ (0.79)  $ (0.51)
Add back:        
 Stock-based compensation  0.15  0.08  0.37  0.19
 Amortization related to acquisitions  0.01  0.01  0.04  0.03
 Non-recurring acquisition expense  --   --   --   -- 
 Tax benefit related to acquisitions  --   --   (0.02)  -- 
Basic and diluted net loss per share, non-GAAP  $ (0.11)  $ (0.09)  $ (0.40)  $ (0.29)
         
   Three Months Ended September 30,   Nine Months Ended September 30, 
  2013 2012 2013 2012
         
Total revenues  $ 37,359  $ 28,873  $ 106,453  $ 81,141
Deferred revenue, end of period  127,744  97,554  127,744  97,554
Less: Deferred revenue, beginning of period  (128,115)  (87,482)  (117,047)  (77,826)
Billings  $ 36,988  $ 38,945  $ 117,150  $ 100,869
CONTACT: Investor Contact:
         Brian Denyeau
         ICR
         (646) 277-1251
         brian.denyeau@icrinc.com

         Media Contact:
         Amanda Pires
         (650) 465-1215
         amanda.pires@jivesoftware.com

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