PR Newswire

BELLEVUE, Wash., May 4, 2017 /PRNewswire/ -- Apptio, Inc. (NASDAQ: APTI), the business management system of record for hybrid IT, today announced results for the quarter ended March 31, 2017.

"Our first quarter was highlighted by subscription revenue growth of 20%, as we saw solid demand from both our strategic and enterprise segments," said Sunny Gupta, co-founder and CEO, Apptio. "We are pleased by our free cash flow of over $10 million, our continued innovation, and our high competitive win rates."

 

First Quarter Financial Summary

  • Subscription revenue was $36.2 million, an increase of 20% from the first quarter of 2016, and comprised 82% of total revenue. Services revenue was $7.7 million, an increase of 18% from the first quarter of 2016.  Total revenue was $43.9 million, an increase of 19% from the first quarter of 2016.
  • GAAP gross margin of 64.9% remained in line with the first quarter of 2016 gross margin of 65.8%.  Non-GAAP gross margin of 66.4% remained in line with the first quarter of 2016 non-GAAP gross margin of 66.6%.
  • GAAP operating margin was negative 15.3%, in line with GAAP operating margin of negative 15.3% in the first quarter of 2016. Non-GAAP operating margin improved to negative 7.0%, as compared to non-GAAP operating margin of negative 10.2% in the first quarter of 2016. 
  • GAAP net loss per basic and diluted share was $0.17 based on 38.4 million weighted average shares outstanding, compared to a GAAP net loss per basic and diluted share of $0.45 based on 13.0 million weighted average shares outstanding in the first quarter of 2016.
  • Non-GAAP net loss per basic and diluted share was $0.08 based on 38.4 million weighted average shares outstanding, compared to a non-GAAP net loss per basic and diluted share of $0.31 based on 13.0 million weighted average shares outstanding in the first quarter of 2016.
  • For the three months ended March 31, 2017, net cash provided by operating activities was $11.9 million as compared to $10.0 million in the comparable period last year.  Free cash flow was positive $10.4 million, as compared to positive $9.8 million in the three months ended March 31, 2016.
  • Cash, cash equivalents and marketable securities were approximately $127.7 million as of March 31, 2017.

 

Recent Business Highlights

  • Announced new Interactive Benchmarking product with the ability to customize peer selections and more flexibility to interact with the entire benchmark dataset, including unique anonymized data from Apptio's community of customers.
  • Announced the next generation of our Bill of IT application with the ability to set rates and prices to deliver a configurable email "bill" to the business.

 

Financial Outlook

Apptio provides guidance based on current market conditions and expectations and actual results may differ materially. Please refer to the company's comments below regarding Forward Looking Statements. Apptio is initiating guidance for the second quarter ending June 30, 2017 and for the full year 2017 as follows:

Second quarter of 2017:

  • Total revenue is expected to be in the range of $43.5 to $44.0 million
  • Non-GAAP operating loss between $4.5 and $5.0 million

Full year 2017:

  • Total revenue is expected to be in the range of $179.0 and $182.0 million
  • Non-GAAP operating loss between $15.0 and $17.0 million

All forward-looking non-GAAP financial measures contained in this section titled "Financial Outlook" exclude the effects of stock-based compensation expense.

Conference Call Information

Apptio plans to host a conference call today to discuss the results. The call is scheduled to begin at 2:00 p.m. PT/ 5:00 p.m. ET and can be accessed by dialing 844-233-0116 (passcode: 3151602), or if outside North America, by dialing 574-990-1011 (passcode: 3151602). Individuals may also access the live teleconference from the investor relations section of the Apptio website at investors.apptio.com. A replay will be available following completion of the live broadcast.

About Apptio

Apptio (NASDAQ: APTI) is the business management system of record for hybrid IT. We transform the way IT runs its business and makes decisions. With our cloud-based applications, IT leaders manage, plan and optimize their technology investments across on-premises and cloud. With Apptio, IT leaders become strategic partners to the business by demonstrating the value of IT investments, accelerate innovation and shift their technology investments from running the business to digital innovation. Hundreds of customers, including more than 40 percent of the Fortune 100, choose Apptio as their business system of record for hybrid IT. For more information, please visit www.Apptio.com.

Forward-Looking Statements

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding our strategy, prospects, customer demand, application adoption and our financial outlook for the second quarter of, and full year, 2017. Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. Actual results may differ materially from the results predicted, and reported results should not be considered as an indication of future performance. The potential risks and uncertainties that could cause actual results to differ from the results predicted include, among others, those risks and uncertainties included under the caption "Risk Factors" and elsewhere in our filings with the U.S. Securities and Exchange Commission, including, without limitation, the Annual Report on Form 10-K filed with the SEC on February 17, 2017.  All information provided in this release and in the attachments is as of the date hereof, and we undertake no duty to update this information unless required by law.

Non-GAAP Financial Measures 

To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with Generally Accepted Accounting Principles in the United States of America (GAAP), we use the following non-GAAP financial measures: non-GAAP gross margin, non-GAAP operating loss, non-GAAP net loss per basic and diluted share, and free cash flow. In computing these measures, with the exception of free cash flow, we exclude the effects of stock-based compensation expense. We define free cash flow as net cash used in operating activities, less the purchases of property and equipment. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, and our non-GAAP measures may be different from non-GAAP measures used by other companies.

We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Our management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses and expenditures that may not be indicative of our ongoing core business operating results. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when analyzing historical performance and liquidity and planning, forecasting, and analyzing future periods.

For a reconciliation of these non-GAAP financial measures to GAAP measures, please see the tables captioned "Results of Operations GAAP to Non-GAAP Reconciliation" included at the end of this release. We have not reconciled guidance for non-GAAP metrics to their most directly comparable GAAP measures because such items that impact these measures are not within our control or cannot be reasonably predicted.

 

Apptio, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)

       
   

Three Months Ended

 
   

March 31,

 
   

2017

   

2016

 
       

Revenue

               

Subscription

 

$

36,187

   

$

30,277

 

Professional services

   

7,744

     

6,566

 

Total revenue

   

43,931

     

36,843

 

Cost of revenue

               

Subscription

   

7,850

     

6,480

 

Professional services

   

7,569

     

6,116

 

Total cost of revenue

   

15,419

     

12,596

 

Gross profit

   

28,512

     

24,247

 

Operating expenses

               

Research and development

   

9,658

     

8,431

 

Sales and marketing

   

19,026

     

16,287

 

General and administrative

   

6,534

     

5,180

 

Total operating expenses

   

35,218

     

29,898

 

Loss from operations

   

(6,706)

     

(5,651)

 

Other income (expense)

               

Interest income (expense) and other, net

   

236

     

(57)

 

Foreign exchange loss

   

(52)

     

(112)

 

Loss before provision for income taxes

   

(6,522)

     

(5,820)

 

Provision for income taxes

   

(25)

     

(76)

 

Net loss

 

$

(6,547)

   

$

(5,896)

 

Net loss per share attributable to common stockholders, basic and diluted

 

$

(0.17)

   

$

(0.45)

 

Weighted-average shares used to compute net loss per share attributable to common stockholders, basic and diluted

   

38,407

     

12,996

 
                 

 

Apptio, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)

             
   

March 31,

   

December 31,

 
   

2017

   

2016

 

Assets

               

Current assets

               

Cash and cash equivalents

 

$

37,904

   

$

42,007

 

Short-term investments

   

73,329

     

36,741

 

Accounts receivable, net of allowance for doubtful accounts

               

 of $196 and $122

   

38,573

     

58,587

 

Prepaid expenses and other current assets

   

5,587

     

5,440

 

Total current assets

   

155,393

     

142,775

 

Long-term assets

               

Property and equipment, net of accumulated depreciation

               

of $18,336 and $17,091

   

12,899

     

12,827

 

Long-term investments

   

16,455

     

38,446

 

Other long-term assets

   

730

     

734

 

Total assets

 

$

185,477

   

$

194,782

 

Liabilities, Convertible Preferred Stock and Stockholders' Equity

               

Current liabilities

               

Accounts payable

 

$

5,094

   

$

3,574

 

Accrued payroll and other expenses

   

13,412

     

14,073

 

Deferred revenue

   

90,620

     

97,885

 

Deferred rent

   

819

     

799

 

Capital leases

   

39

     

43

 

Total current liabilities

   

109,984

     

116,374

 

Long-term liabilities

               

Deferred revenue, net of current portion

   

1,949

     

2,254

 

Deferred rent, net of current portion

   

4,142

     

4,360

 

Capital leases, net of current portion

   

44

     

51

 

Asset retirement obligation

   

177

     

175

 

Total liabilities

   

116,296

     

123,214

 
                 

Stockholders' equity

               

Class A and Class B Common stock

   

4

     

4

 

Additional paid-in capital

   

276,165

     

271,982

 

Accumulated other comprehensive loss

   

(117)

     

(94)

 

Accumulated deficit

   

(206,871)

     

(200,324)

 

Total stockholders' equity

   

69,181

     

71,568

 

Total liabilities, convertible preferred stock and stockholders' equity

 

$

185,477

   

$

194,782

 
                 

 

Apptio, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)

       
   

Three Months Ended

 
   

March 31,

 
   

2017

   

2016

 

Cash flows from operating activities

               

Net loss

 

$

(6,547)

   

$

(5,896)

 

Adjustments to reconcile net loss to net cash used in operating activities

               

Depreciation and amortization

   

1,530

     

1,482

 

Amortization of premiums on investments

   

23

     

14

 

(Gain) loss on disposal of property and equipment

   

(7)

     

21

 

Stock-based compensation

   

3,625

     

1,905

 

Accretion of expense on line of credit fees

   

9

     

30

 

Remeasurement of preferred stock warrant liability

   

--

     

(15)

 

Foreign exchange gain

   

(175)

     

--

 

Change in operating assets and liabilities

               

Accounts receivable

   

20,098

     

23,354

 

Prepaid expenses and other assets

   

290

     

(817)

 

Accounts payable

   

1,795

     

445

 

Accrued expenses

   

(958)

     

(5,637)

 

Deferred revenue

   

(7,570)

     

(4,767)

 

Deferred rent

   

(200)

     

(140)

 

Net cash provided by operating activities

   

11,913

     

9,979

 

Cash flows from investing activities

               

Purchases of property and equipment

   

(1,545)

     

(192)

 

Proceeds from sale of equipment

   

9

     

--

 

Proceeds from maturities of investments

   

6,800

     

--

 

Purchases of investments

   

(21,445)

     

--

 

Payment of security deposits

   

(9)

     

(27)

 

Net cash used in investing activities

   

(16,190)

     

(219)

 

Cash flows from financing activities

               

Payment of initial public offering costs

   

(243)

     

(178)

 

Proceeds from long-term debt

   

--

     

10,000

 

Proceeds from exercise of common stock options

   

558

     

387

 

Principal payments on capital lease obligations

   

(11)

     

(9)

 

Net cash  provided by financing activities

   

304

     

10,200

 

Foreign currency effect on cash, cash equivalents and restricted cash

   

(130)

     

7

 

Net (decrease) increase in cash, cash equivalents and restricted cash

   

(4,103)

     

19,967

 

Cash, cash equivalents and restricted cash

               

Beginning of period

   

42,007

     

19,756

 

End of period

 

$

37,904

   

$

39,723

 

 

Apptio, Inc.
Results of Operations GAAP to Non-GAAP Reconciliation
(In thousands, except per share data)
(Unaudited)

     
 

Three Months Ended

 
 

March 31,

 
 

2017

   

2016

 

 Revenue

             

 Subscription

$

36,187

   

$

30,277

 

 Professional services

 

7,744

     

6,566

 

    Total revenue

 

43,931

     

36,843

 
               

 Cost of revenue reconciliation:

             

 GAAP subscription

 

7,850

     

6,480

 

 Non-GAAP adjustment:

             

    Stock-based compensation

 

(358)

     

(141)

 

    Non-GAAP subscription cost of revenue

 

7,492

     

6,339

 
               

 GAAP professional services

 

7,569

     

6,116

 

 Non-GAAP adjustment:

             

    Stock-based compensation

 

(318)

     

(154)

 

    Non-GAAP professional services cost of revenue

$

7,251

   

$

5,962

 
               

 Gross profit and gross margin reconciliation:

             

 GAAP subscription gross profit

$

28,337

   

$

23,797

 

 Non-GAAP adjustment:

             

    Stock-based compensation

 

358

     

141

 

    Non-GAAP subscription gross profit

 

28,695

     

23,938

 

    GAAP subscription gross margin

 

78.3

%

   

78.6

%

    Non-GAAP subscription gross margin

 

79.3

%

   

79.1

%

               

 GAAP professional services gross profit

 

175

     

450

 

 Non-GAAP adjustment:

             

    Stock-based compensation

 

318

     

154

 

    Non-GAAP professional services gross profit

 

493

     

604

 

    GAAP professional services gross margin

 

2.3

%

   

6.9

%

    Non-GAAP professional services gross margin

 

6.4

%

   

9.2

%

               

 GAAP gross profit

 

28,512

     

24,247

 

 Non-GAAP adjustment:

             

    Stock-based compensation

 

676

     

295

 

    Non-GAAP gross profit

$

29,188

   

$

24,542

 

    GAAP gross margin

 

64.9

%

   

65.8

%

    Non-GAAP gross margin

 

66.4

%

   

66.6

%

               

 Operating expenses reconciliation:

             

 GAAP research and development

$

9,658

   

$

8,431

 

 Non-GAAP adjustment:

             

    Stock-based compensation

 

(1,041)

     

(553)

 

    Non-GAAP research and development

 

8,617

     

7,878

 

    As a % of total revenue, non-GAAP

 

19.6

%

   

21.4

%

               

 GAAP sales and marketing

 

19,026

     

16,287

 

 Non-GAAP adjustment:

             

    Stock-based compensation

 

(999)

     

(635)

 

    Non-GAAP sales and marketing

 

18,027

     

15,652

 

    As a % of total revenue, non-GAAP

 

41.0

%

   

42.5

%

               

 GAAP general and administrative

 

6,534

     

5,180

 

 Non-GAAP adjustment:

             

    Stock-based compensation

 

(909)

     

(422)

 

    Non-GAAP general and administrative

 

5,625

     

4,758

 

    As a % of total revenue, non-GAAP

 

12.8

%

   

12.9

%

               

Loss from operations reconciliation:

             

 GAAP loss from operations

 

(6,706)

     

(5,651)

 

 Non-GAAP adjustment:

             

    Stock-based compensation

 

3,625

     

1,905

 

    Non-GAAP loss from operations

$

(3,081)

   

$

(3,746)

 

 Loss from operations as a percentage of revenue:

             

    GAAP loss from operations

 

(15.3%)

     

(15.3%)

 

    Non-GAAP loss from operations

 

(7.0%)

     

(10.2%)

 
               

 Net loss reconciliation:

             

 GAAP

$

(6,547)

   

$

(5,896)

 

 Non-GAAP adjustment:

             

    Stock-based compensation

 

3,625

     

1,905

 

    Non-GAAP net loss

$

(2,922)

   

$

(3,991)

 
               

 Basic and diluted net loss per share

             

 reconciliation:

             

 GAAP

$

(0.17)

   

$

(0.45)

 

 Non-GAAP

$

(0.08)

   

$

(0.31)

 
               

 Shares used to compute basic and diluted GAAP and Non-GAAP net loss per share

             
 

38,407

     

12,996

 
               

 

Apptio, Inc.
Free Cash Flow Non-GAAP Reconciliation
(In thousands)
(Unaudited)

         
   

Three Months Ended

   
   

March 31,

   
   

2017

   

2016

   
     

 Net cash provided by operating activities

 

$

11,913

   

$

9,979

   

 Less: purchases of property and equipment

   

(1,545)

     

(192)

   

 Free cash flow

 

$

10,368

   

$

9,787

   
                   

© 2017 Apptio, Inc. All rights reserved. Apptio and the Apptio logo are registered trademarks of Apptio, Inc. All other brand and product names are trademarks or registered trademarks of their respective holders.

Investor Contact:
Susanna Morgan
(425) 279-6101
[email protected]

Media Contact:
Sarah Vreugdenhil 
(425) 279-6097  
[email protected]