LogMeIn Announces First Quarter 2017 Results

LogMeIn, Inc. (NASDAQ:LOGM), a leading provider of cloud-based connectivity,  announced its results for the first quarter ended March 31, 2017.

First quarter 2017 highlights include:

GAAP revenue was $187.5 million and non-GAAP revenue was $201.1 million  
Net loss was $18.6 million, or $0.43 per diluted share, and non-GAAP net income was $38.1 million, or $0.85 per diluted share
EBITDA was $6.1 million and EBITDA margin was 3.3%, Adjusted EBITDA was $66.0 million and Adjusted EBITDA margin was 32.8%
Cash Flow from Operations was $105.9 million, or 53% of non-GAAP revenue and Adjusted Cash Flow from Operations was $127.0 million, or 63% of non-GAAP revenue
Total deferred revenue was $289.9 million
The Company closed the quarter with cash, cash equivalents and short-term investments of $296.1 million
“We closed our first quarter as a combined company with revenue, adjusted EBITDA, and earnings per share that all exceeded the high-end of our guidance while producing meaningful cash flow,” said Bill Wagner, President and CEO of LogMeIn.  “We are pleased with this strong start to the year and the progress we’ve made integrating two great companies into a new market leader.”

Business Outlook
Based on information available as of May 4, 2017, the Company is issuing guidance for the second quarter 2017 and fiscal year 2017. 

Since the Company’s merger with Citrix Systems, Inc.’s GetGo, Inc. subsidiary (referred to below as “GoTo”) officially closed on January 31, 2017, the Company’s business outlook for fiscal year 2017 excludes GoTo’s January 2017 results.

Second Quarter 2017:  The Company expects second quarter non-GAAP revenue to be in the range of $264 million to $266 million.  The Company expects second quarter GAAP revenue to be in the range of $254 million to $256 million.  Non-GAAP revenue adds back $10 million for the impact of an acquisition accounting adjustment recorded to reduce GoTo’s deferred revenue balance to the fair value of the remaining obligation.

Adjusted EBITDA is expected to be in the range of $87 million to $89 million, or approximately 33% of non-GAAP revenue.  EBITDA is expected to be in the range of $52 million to $54 million, or approximately 21% of GAAP revenue. 

Non-GAAP net income is expected to be in the range of $49 million to $51 million, or $0.92 to $0.94 per diluted share.  Non-GAAP net income adds back the $10 million non-GAAP revenue adjustment described above and excludes an estimated $18 million in stock-based compensation expense, $7 million in acquisition related costs, $49 million of amortization expense of acquired intangible assets and also includes $6 million of amortization expense for GoTo’s internally capitalized software development costs that were adjusted in acquisition accounting to fair value, as well as the income tax effect of the above items and discrete integration related tax items.

Non-GAAP net income for the second quarter assumes an effective tax rate of approximately 30% and non-GAAP net income per diluted share is based on an estimated 54 million fully-diluted weighted average shares outstanding.

Including stock-based compensation expense, acquisition related costs, amortization expense, and excluding the acquisition accounting adjustments to revenue and amortization expense, the Company expects to report a GAAP net income in the range of $1 million to $3 million, or $0.03 to $0.06 per share. 

GAAP net income for the second quarter assumes a tax benefit of approximately $8 million and GAAP net income per share is based on an estimated 54 million fully-diluted weighted average shares outstanding.

Fiscal Year 2017:  The Company expects full year 2017 non-GAAP revenue to be in the range of $1.004 billion to $1.014 billion, which excludes GoTo’s January 2017 revenue of $58 million.  The Company expects full year 2017 GAAP revenue to be in the range of $970 million to $980 million.  Non-GAAP revenue adds back $34 million for the impact of an acquisition accounting adjustment recorded to reduce GoTo’s deferred revenue balance to the fair value of the remaining obligation.

Adjusted EBITDA is expected to be in the range of $343 million to $352 million, or approximately 34% to 35% of non-GAAP revenue.   EBITDA is expected to be in the range of $184 million to $192 million, or approximately 19% to 20% of GAAP revenue. 

Non-GAAP net income is expected to be in the range of $197 million to $203 million, or $3.80 to $3.92 per diluted share.  Non-GAAP net income excludes an estimated $73 million in stock-based compensation expense, $52 million in acquisition related costs, $181 million of amortization expense of acquired intangible assets and also includes $20 million of amortization expense for GoTo’s internally capitalized software development costs that were adjusted in acquisition accounting to fair value, as well as the income tax effect of the above items and discrete integration related tax items.

Non-GAAP net income for the full fiscal year 2017 assumes an effective tax rate of approximately 30% and non-GAAP net income per diluted share is based on an estimated 52 million fully-diluted weighted average shares outstanding.

Including stock-based compensation expense, acquisition related costs, amortization expense, and excluding the acquisition accounting adjustments to revenue and amortization expense, the Company expects to report a GAAP net loss in the range of $8 million to $2 million, or $0.16 to $0.04 net loss per share.

GAAP net loss for the full year assumes a tax benefit of $31 million to $29 million. GAAP net loss per share is based on an estimated 51 million weighted average basic shares outstanding.

Dividend
As previously announced, LogMeIn will pay the first $0.25 per share dividend under its capital return plan on May 26, 2017 to stockholders of record as of May 10, 2017.  LogMeIn currently has approximately 52.6 million shares of common stock outstanding.