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Mimecast Announces Fourth Quarter and Full Year 2016 Financial Results
Fourth Quarter Highlights
WATERTOWN, Mass., May 16, 2016 (GLOBE NEWSWIRE) -- Mimecast Limited (NASDAQ:MIME), a leading email and data security company, today announced financial results for the fourth quarter and full year ended March 31, 2016.
"We are very pleased with our fourth quarter. It's a strong ending to another record year for the company," stated Peter Bauer, CEO of Mimecast. "We achieved better than expected results in revenue, new customer acquisition and revenue retention. We benefited from increased demand for our advanced email security offerings as organizations continue to grapple with business email compromises, spear phishing and advanced persistent threats. Customers are drawn to us because we provide a fast and simple way to achieve greater cyber resiliency. Our single integrated suite of cloud services, all built on Mime | OS, our SaaS operating system, helps customers to secure themselves in an increasingly complex cloud and hybrid IT world."
"Mimecast continues to perform across our key metrics and has delivered strong growth in the quarter and the year." said Peter Campbell, CFO of Mimecast. "We are particularly pleased with the fact that for the fiscal year our constant currency revenue growth was 30% and revenue retention grew to 109% while at the same time we generated positive adjusted EBITDA of $15.8 million."
Reconciliations of the non-GAAP financial measures provided in this press release to their most directly comparable GAAP financial measures are provided in the financial tables included at the end of this press release. An explanation of these measures and how they are calculated are also included below under the heading "Non-GAAP Financial Measures."
Mimecast is providing guidance for the first quarter and full year 2017
For the first quarter of 2017, we expect constant currency revenue growth to be between 24% and 26% and revenue to be between $39.5 million to $39.9 million. Exchange rates in certain currencies we operate in have weakened in the period due to the strengthening of the US dollar compared to the same period in the prior year. Fluctuations in these rates have impacted our revenue guidance by $1.8 million. Approximately $1.0 million of this impact relates to the translation of South African Rand based revenue and the remainder relates to British Pound based revenue. We believe that constant currency revenue growth is a useful way to measure the underlying strength of our business as it excludes these short term fluctuations. Adjusted EBITDA is expected to be in the range of $0.3 million to $1.4 million.
For the full year 2017, we expect constant currency revenue growth to be between 22% and 26% and revenue to be between $170.2 million to $175.9 million. Foreign exchange rate fluctuations are impacting this guidance by $3.2 million of which $1.0 million relates to the South African Rand and $2.2 Million relates to the British Pound.
Mimecast will host a conference call to discuss these financial results for investors and analysts at 5:00 pm EDT (UTC-04:00) on May 16, 2016. To access the conference call, dial (844) 815-2878 for the U.S. and Canada and (615) 800-6885 for international callers and enter conference ID . The call will also be webcast live on the investor relations section of the Company's website at http://investors.mimecast.com . An audio replay of the call will be available two hours after the live call ends by dialing (855) 859-2056 for U.S. and Canada or (404) 537-3406 for international callers, and entering passcode . In addition, an archive of the webcast will be available on the investor relations section of the company's website at http://investors.mimecast.com .
Mimecast Limited (NASDAQ:MIME) makes business email and data safer for more than 18,000 customers and millions of employees worldwide. Founded in 2003, the Company's next-generation cloud-based security, archiving and continuity services protect email, and deliver comprehensive email risk management in a single, fully-integrated subscription service. Mimecast reduces email risk and the complexity and cost of managing the array of point solutions traditionally used to protect email and its data. For customers that have migrated to cloud services like Microsoft® Office 365(TM), Mimecast mitigates single vendor exposure by strengthening security coverage, combating downtime and improving archiving.
This press release contains forward-looking statements, including, but not limited to, the guidance provided under the heading "Business Outlook" above. Statements regarding the value and effectiveness of Mimecast's products, the introduction of product enhancements or additional products and Mimecast's growth, expansion and market leadership, that involve risks, uncertainties, assumptions and other factors which, if they do not materialize or prove correct, could cause Mimecast's results to differ materially from those expressed or implied by such forward-looking statements. All statements, other than statements of historical fact, are statements that could be deemed forward-looking statements, including statements containing the words "predicts," "plan," "expects," "anticipates," "believes," "goal," "target," "estimate," "potential," "may," "might," "could," "see," "seek," "forecast," and similar words. Mimecast intends all such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 21E of the Exchange Act and the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projected in such statements due to various factors, including but not limited to: risks and uncertainties inherent in Mimecast's business; Mimecast's ability to attract new customers and retain existing customers; Mimecast's ability to effectively sell, service and support its products; Mimecast's ability to adapt to changing licensing and go to market business models; Mimecast's ability to manage its international operations; Mimecast's ability to compete effectively; Mimecast's ability to develop and introduce new products and add-ons or enhancements to existing products; Mimecast's ability to continue to promote and maintain its brand in a cost-effective manner; Mimecast's ability to manage growth; Mimecast's ability to attract and retain key personnel; currency fluctuations that affect Mimecast's revenues and costs; the scope and validity of intellectual property rights applicable to Mimecast's products; adverse economic conditions in general and adverse economic conditions specifically affecting the markets in which Mimecast's operates; and other risks more fully described in Mimecast's publicly available filings with the Securities and Exchange Commission. Any statements regarding Mimecast's products are intended to outline its general product direction and should not be relied on in making a purchase decision, as the development, release, and timing of any features and functionality remains at Mimecast's sole discretion. Mimecast's anticipates that subsequent events and developments will cause its views to change. Mimecast's undertakes no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Past performance is not necessarily indicative of future results. The forward-looking statements included in this press release represent Mimecast's views as of the date of this press release.
We have provided in this release financial information that has not been prepared in accordance with GAAP. We use these non-GAAP financial measures internally in analyzing our financial results and believe they are useful to investors, as a supplement to GAAP measures, in evaluating our ongoing operational performance. We believe that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial results with other companies in our industry, many of which present similar non-GAAP financial measures to investors.
Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures provided in the financial statement tables included below in this press release
We believe revenue constant currency growth rate is a key indicator of our operating results. We calculate revenue constant currency growth rate by translating revenue from entities reporting in foreign currencies into U.S. dollars using the comparable foreign currency exchange rates from the prior fiscal period. To determine projected revenue growth rates on a constant currency basis for first quarter and full year 2017, expected revenue from entities reporting in foreign currencies was translated into U.S. dollars using the comparable prior year period's monthly average foreign currency exchange rates.
. We believe that Adjusted EBITDA and Adjusted EBITDA margin are key indicators of our operating results. We define Adjusted EBITDA as net (loss) income, adjusted to exclude: depreciation and amortization, share-based compensation expense, restructuring expense, interest income and interest expense, the provision for income taxes and foreign currency exchange (expense) income predominantly related to the elimination of intercompany balances. We define Adjusted EBITDA margin as Adjusted EBITDA over revenue in the period.
We define non-GAAP net (loss) income as net (loss) income less share-based compensation expense. We consider this non-GAAP financial measure to be a useful metric for management and investors because it excludes the effect of share-based compensation expense so that our management and investors can compare our recurring core business net results over multiple periods. There are a number of limitations related to the use of non-GAAP net (loss) income versus net (loss) income calculated in accordance with GAAP. For example, as noted above, non-GAAP net (loss) income excludes share-based compensation expense. In addition, the components of the costs that we exclude in our calculation of non-GAAP net (loss) income may differ from the components that our peer companies exclude when they report their non-GAAP results of operations. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP net (loss) income and evaluating non-GAAP net (loss) income together with net (loss) income calculated in accordance with GAAP.
. We define free cash flow as net cash provided by operating activities minus capital expenditures. We consider free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that, after the acquisition of property and equipment, can be used for strategic opportunities, including investing in our business, and strengthening the balance sheet. Analysis of free cash flow facilitates management's comparisons of our operating results to competitors' operating results. A limitation of using free cash flow versus the GAAP measure of net cash provided by operating activities as a means for evaluating our company is that free cash flow does not represent the total increase or decrease in the cash balance from operations for the period because it excludes cash used for capital expenditures during the period. Management compensates for this limitation by providing information about our capital expenditures on the face of the cash flow statement and in the "Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources" section of our reports filed with the SEC.
In addition to traditional financial metrics, such as revenue and revenue growth trends, we monitor several other non-GAAP financial measures and non-financial metrics to help us evaluate growth trends, establish budgets, measure the effectiveness of our sales and marketing efforts and assess operational efficiencies. The key performance indicators that we monitor are as follows:
(1) Adjusted EBITDA and revenue constant currency growth rates are non-GAAP measures. For a reconciliation of Adjusted EBITDA and revenue constant currency growth rates to the nearest comparable GAAP measures, see "Reconciliation of Non-GAAP Financial Measures" below.
(2) We calculate our revenue retention rate by annualizing constant currency revenue recorded on the last day of the measurement period for only those customers in place throughout the entire measurement period. We include add-on, or upsell, revenue from additional employees and services purchased by existing customers. We divide the result by revenue on a constant currency basis on the first day of the measurement period for all customers in place at the beginning of the measurement period. The measurement period is the trailing twelve months. The revenue on a constant currency basis is based on the average exchange rates in effect during the respective period.
(3) Reflects the customer count on the last day of the period rounded up to the nearest hundred customers. We define a customer as an entity with an active subscription contract as of the measurement date. A customer is typically a parent company or, in a few cases, a significant subsidiary that works with us directly.
Media Contact:
Stuart Handley / Mimecast Limited /
(+44) 207 847 8700 / press@mimecast.com
Investor Contact:
Robert Sanders / Mimecast Limited /
(+1) 617-393-7074 / investors@mimecast.com
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