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Jive Software Announces First Quarter 2014 Financial Results

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  • 1Q total revenue of $41.0 million, up 21% year-over-year
  • 1Q short-term billings of $42.1 million, up 16% year-over-year

PALO ALTO, Calif., May 6, 2014 (GLOBE NEWSWIRE) -- Jive Software, Inc. (Nasdaq:JIVE), a leader in social business, today announced financial results for its first quarter ended March 31, 2014.

"Jive delivered a strong start to the year with financial results that met or exceeded the high end of our guidance range," stated Tony Zingale, Chairman & CEO of Jive Software. "Customers continue to respond favorably to our more refined go-to-market strategy, which targets the highest areas of value add and ROI for social business platforms - portals, social intranets and external communities."

Zingale added, "We delivered on an important milestone with the recent announcement of our strategic relationship with Cisco that expands our existing go-to-market footprint. Cisco and its channel partners will now resell Jive solutions as a fully integrated component of the Cisco collaboration family. We believe we are executing well against our overall strategy and are increasingly well positioned to deliver accelerating growth in the second half of 2014."

First Quarter 2014 Financial Highlights

  • Revenue: Total revenue for the first quarter was $41.0 million, an increase of 21% on a year-over-year basis. Within total revenue, product revenue was $37.4 million for the first quarter, an increase of 22% on a year-over-year basis. Professional Services revenue for the first quarter was $3.7 million, an increase of 15% on a year-over-year basis.
     
  • Non-GAAP Billings: Short-term billings, which Jive defines as revenue plus the change in short-term deferred revenue, were $42.1 million for the first quarter, an increase of 16% on a year-over-year basis. Total billings, which Jive defines as revenue plus the change in short and long-term deferred revenue, was $39.8 million, an increase of 4% on a year-over-year basis.
     
  • Gross Profit: GAAP gross profit for the first quarter was $25.6 million, compared to $20.8 million for the first quarter of 2013. Non-GAAP gross profit was $27.7 million for the first quarter, representing a year-over-year increase of 26% and a non-GAAP gross margin of 68%, representing a 300 basis point gross margin improvement compared to the first quarter of 2013.
     
  • Loss from Operations: GAAP loss from operations for the first quarter was $17.1 million, compared to a loss of $16.6 million for the first quarter of 2013. Non-GAAP loss from operations was $6.1 million for the first quarter, compared to a loss of $9.6 million for the first quarter of 2013.
     
  • Net Loss: GAAP net loss for the first quarter was $17.3 million, compared to a net loss of $16.6 million for the same period last year. GAAP net loss per share for the first quarter was $0.25 based on 69.3 million weighted-average shares outstanding, compared to a net loss per share of $0.25 based on 65.5 million weighted-average shares outstanding for the same period last year.
     
    Non-GAAP net loss for the first quarter was $6.3 million, compared to a net loss of $9.6 million for the same period last year. Non-GAAP net loss per share for the first quarter was $0.09 based on 69.3 million weighted-average shares outstanding, compared to net a loss per share of $0.15 based on 65.5 million weighted-average shares outstanding for the same period last year.
      
  • Balance Sheet and Cash Flow: As of March 31, 2014, Jive had cash and cash equivalents and marketable securities of $139.3 million, a decrease of $2.4 million from $141.7 million at the end of the fourth quarter.
      
    The company generated $1.9 million in cash from operations and invested $3.6 million in capital expenditures, leading to free cash flow of negative $1.7 million for the first quarter. Free cash flow was $3.0 million for the first quarter of 2013. 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."

First Quarter and Recent Business Highlights

  • Signed new and expanded customer relationships including: ARaymond Network, David Yurman, Esri, FireEye, Globe Telecom, Kimberly Clark, Leidos, MUFG Americas Union Bank, Plex Systems, Sky Deutschland AG, Société Générale, the San Francisco Giants, and Verizon, among others. 
     
  • Announced a relationship with Cisco that combines Jive's industry-leading enterprise collaboration and communication platform with Cisco's real-time technologies like WebEx and Jabber. Cisco and its partner network will now resell Jive solutions as a fully integrated component of the Cisco collaboration family.
     
  • Introduced a new iPad app for Producteev by Jive, which complements the existing offerings for MacOS, iPhone and Android devices. Producteev Pro, a premium version of Producteev which provides deeper integration with Microsoft Outlook, was also made available.

Financial Outlook

As of May 6, 2014, Jive is initiating guidance for its second quarter 2014 and updating guidance for the full year 2014, as follows:

  • Second Quarter 2014 Guidance: Total revenue is expected to be in the range of $41.5 million to $42.5 million. Non-GAAP loss from operations is expected to be in the range of $7.1 million to $8.1 million. Non-GAAP net loss per share is expected to be in the range of $0.10 to $0.12 based on approximately 70.3 million weighted-average diluted shares outstanding.
     
  • Full Year 2014 Guidance: Total revenue is expected to be in the range of $171.0 million to $176.0 million. Non-GAAP loss from operations is expected to be in the range of $26.0 million to $30.0 million. Non-GAAP net loss per share is expected to be in the range of $0.38 to $0.45 based on approximately 70.7 million weighted-average diluted shares outstanding.  Free cash flow is expected to be in the range of negative $15.0 million to negative $20.0 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 net loss per share to GAAP loss from operations and GAAP net 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 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 net 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 first quarter 2014, in addition to discussing the company's outlook for the second quarter and full year 2014.  To access this call, dial (888) 747-4666 (domestic) or (913) 312-1453 (international) with conference ID 6067725. 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 May 13, 2014, by dialing (877) 870-5176 (domestic) or (858) 384-5517 (international). The replay pass code is 6067725.

About Jive Software

Jive (Nasdaq:JIVE) is the communication and collaboration platform for modern, mobile business. Recognized as a leader in social business by the industry's top analyst firms, Jive's cloud-based platform connects employees, customers and partners – transforming the way work gets done and unleashing productivity, creativity and innovation for millions of people in the world's largest businesses.  More information can be found at www.jivesoftware.com or the Jive News Blog here.

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 and amortization of acquisition related intangible assets. Total billings is defined by the Company as revenue plus the change in total deferred revenue. Short-term billings is defined as revenue plus the change in short-term 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 second fiscal quarter of 2014 and the full year of 2014, the future growth of the social business market, and our belief that we are well positioned to build upon our momentum in 2014. 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 benefits of our relationship with Cisco; 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 subscription; 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. 

More information about potential factors that could affect our business and financial results is contained in our prospectus as filed with the Securities and Exchange Commission. Additional information will also be set forth in our quarterly reports on Form 10-Q, annual reports on Form 10-K and other filings that we make with the Securities and Exchange Commission. We do not intend and undertake no duty to release publicly 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)
     
   Three Months Ended
March 31, 
  2014 2013
     
Revenues:    
 Product  $ 37,377  $ 30,663
 Professional services  3,652  3,189
 Total revenues  41,029  33,852
     
Cost of revenues:    
 Product  9,921  9,212
 Professional services  5,534  3,848
 Total cost of revenues  15,455  13,060
Gross profit  25,574  20,792
     
Operating expenses:    
 Research and development   12,897  12,677
 Sales and marketing   23,501  18,864
 General and administrative  6,319  5,866
 Total operating expenses  42,717  37,407
     
Loss from operations  (17,143)  (16,615)
     
Other income (expense), net:    
 Interest income  41  69
 Interest expense  (83)  (75)
 Other, net  (10)  (4)
 Total other income (expense), net  (52)  (10)
     
Loss before provision for (benefit from) income taxes  (17,195)  (16,625)
Provision for (benefit from) income taxes  129  (24)
Net loss  $ (17,324)  $ (16,601)
     
Basic and diluted net loss per share  $ (0.25)  $ (0.25)
     
Shares used in basic and diluted per share calculations  69,330  65,459
     
     
JIVE SOFTWARE, INC.
Consolidated Balance Sheets
(In thousands, except share and per share data)
(Unaudited)
     
  March 31,
2014
December 31,
2013
     
Assets    
Current Assets:    
 Cash and cash equivalents  $ 41,725  $ 38,415
 Short-term marketable securities  71,916  69,809
 Accounts receivable, net of allowances  48,147  58,829
 Prepaid expenses and other current assets  10,480  9,425
 Total current assets  172,268  176,478
     
Marketable securities, noncurrent  25,616  33,443
Property and equipment, net of accumulated depreciation  21,969  21,379
Goodwill  29,753  29,753
Intangible assets, net of accumulated amortization  13,081  14,310
Other assets   563  572
 Total assets  $ 263,250  $ 275,935
     
Liabilities and Stockholders' Equity    
Current Liabilities:    
 Accounts payable  $ 3,531  $ 6,412
 Accrued payroll and related liabilities  7,723  7,469
 Other accrued liabilities  7,075  8,478
 Deferred revenue, current  113,454  112,432
 Term debt, current  2,400  2,400
 Total current liabilities  134,183  137,191
     
Deferred revenue, less current portion  32,696  34,905
Term debt, less current portion  5,400  6,000
Other long-term liabilities  1,007  1,605
 Total liabilities  173,286  179,701
     
Commitments and contingencies    
     
Stockholders' Equity:    
 Common stock  7  7
 Less treasury stock at cost  (3,352)  (3,352)
 Additional paid-in capital  337,885  326,834
 Accumulated deficit  (244,855)  (227,531)
 Accumulated other comprehensive income  279  276
 Total stockholders' equity  89,964  96,234
 Total liabilities and stockholders' equity  $ 263,250  $ 275,935
     
     
JIVE SOFTWARE, INC.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
     
     
   Three Months Ended
March 31, 
   2014   2013 
     
Cash flows from operating activities:    
 Net loss  $ (17,324)  $ (16,601)
 Adjustments to reconcile net loss to net cash provided by operating activities:    
 Depreciation and amortization  3,982  3,257
 Stock-based compensation  9,817  6,139
 Change in deferred taxes  32  -- 
 (Increase) decrease in:    
 Accounts receivable, net  10,682  11,577
 Prepaid expenses and other assets  (1,091)  (404)
 Increase (decrease) in:    
 Accounts payable  (2,461)  (920)
 Accrued payroll and related liabilities  253  (2,258)
 Other accrued liabilities  (761)  687
 Deferred revenue  (1,187)  4,358
 Other long-term liabilities  (53)  (12)
 Net cash provided by operating activities  1,889  5,823
     
Cash flows from investing activities:    
 Payments for purchase of property and equipment  (3,632)  (2,863)
 Purchases of marketable securities  (18,634)  (27,492)
 Sales of marketable securities  3,500  9,653
 Maturities of marketable securities  20,567  21,430
 Net cash provided by investing activities  1,801  728
     
Cash flows from financing activities:    
 Proceeds from exercise of stock options   1,048  3,633
 Taxes paid related to net share settlement of equity awards  (254)  -- 
 Repayments of term loans  (600)  (600)
 Earnout payment for prior acquisition  (576)  -- 
 Net cash provided by (used in) financing activities  (382)  3,033
     
Net increase in cash and cash equivalents  3,308  9,584
Effect of exchange rate changes  2  5
Cash and cash equivalents, beginning of period  38,415  48,955
Cash and cash equivalents, end of period  $ 41,725  $ 58,544
     
JIVE SOFTWARE, INC.
Reconciliation of Non-GAAP Information
(In thousands, except per share data)
(Unaudited)
     
   Three Months Ended March 31, 
  2014 2013
     
Gross profit, as reported  $ 25,574  $ 20,792
Add back:    
 Stock-based compensation  1,170  521
 Amortization related to acquisitions  972  756
Gross profit, non-GAAP  $ 27,716  $ 22,069
Gross margin, non-GAAP 68% 65%
     
   Three Months Ended March 31, 
  2014 2013
     
Research and development, as reported  $ 12,897  $ 12,677
less:    
 Stock-based compensation  2,980  2,232
 Amortization related to acquisitions  127  66
 Research and development, non-GAAP  $ 9,790  $ 10,379
As percentage of total revenues, non-GAAP 24% 31%
     
   Three Months Ended March 31, 
  2014 2013
     
Sales and marketing, as reported  $ 23,501  $ 18,864
less:    
 Stock-based compensation  3,742  2,224
 Amortization related to acquisitions  129  60
 Sales and marketing, non-GAAP  $ 19,630  $ 16,580
As percentage of total revenues, non-GAAP 48% 49%
     
   Three Months Ended March 31, 
  2014 2013
     
General and administrative, as reported  $ 6,319  $ 5,866
less:    
 Stock-based compensation  1,925  1,162
 General and administrative, non-GAAP  $ 4,394  $ 4,704
As percentage of total revenues, non-GAAP 11% 14%
     
   Three Months Ended March 31, 
  2014 2013
     
Loss from operations, as reported  $ (17,143)  $ (16,615)
Add back:    
 Stock-based compensation  9,817  6,139
 Amortization related to acquisitions  1,228  882
Loss from operations, non-GAAP  $ (6,098)  $ (9,594)
     
   Three Months Ended March 31, 
  2014 2013
     
Loss before provision for (benefit from) income taxes, as reported  $ (17,195)  $ (16,625)
Add back:    
 Stock-based compensation  9,817  6,139
 Amortization related to acquisitions  1,228  882
Loss before provision for (benefit from) income taxes, non-GAAP  $ (6,150)  $ (9,604)
     
   Three Months Ended March 31, 
  2014 2013
     
Net loss, as reported  $ (17,324)  $ (16,601)
Add back:    
 Stock-based compensation  9,817  6,139
 Amortization related to acquisitions  1,228  882
Net loss, non-GAAP  $ (6,279)  $ (9,580)
     
   Three Months Ended March 31, 
  2014 2013
     
Basic and diluted net loss per share, as reported  $ (0.25)  $ (0.25)
Add back:    
 Stock-based compensation  0.14  0.09
 Amortization related to acquisitions  0.02  0.01
Basic and diluted net loss per share, non-GAAP  $ (0.09)  $ (0.15)
     
   Three Months Ended March 31, 
  2014 2013
     
Total revenues  $ 41,029  $ 33,852
Deferred revenue, current, end of period  113,454  90,186
Less: Deferred revenue, current, beginning of period  (112,432)  (87,698)
Short-term billings  $ 42,051  $ 36,340
     
   Three Months Ended March 31, 
  2014 2013
     
Total revenues  $ 41,029  $ 33,852
Deferred revenue, end of period  146,150  121,405
Less: Deferred revenue, beginning of period  (147,337)  (117,047)
Total Billings  $ 39,842  $ 38,210
CONTACT: Investor Contact:
         Brian Denyeau
         ICR
         (646) 277-1251
         brian.denyeau@icrinc.com

         Media Contact:
         Samantha Moore
         Jive Software
         (408) 712-0612
         samantha.moore@jivesoftware.com

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