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09.02.2017 22:15:00

Apptio Announces Results for the Fiscal Fourth Quarter and Full Year of 2016

BELLEVUE, Wash., Feb. 9, 2017 /PRNewswire/ -- Apptio, Inc. (NASDAQ:APTI), the leading provider of cloud-based Technology Business Management (TBM) software, today announced results for the fiscal fourth quarter and full year ended December 31, 2016.

"Our fourth quarter was highlighted by record revenue and the continued strength of our subscription revenue, which grew by 30% in 2016," said Sunny Gupta, co-founder and CEO, Apptio. "Cloud adoption and IT transformation continue to be catalysts and we believe the market is hearing our message regarding the power of TBM."

Fourth Quarter Financial Summary

  • Subscription revenue was $35.1 million, an increase of 29% from the fourth quarter of 2015, and comprised 79% of total revenue. Services revenue was $9.3 million, an increase of 19% from the fourth quarter of 2015.  Total revenue was $44.3 million, an increase of 27% from the fourth quarter of 2015.
  • GAAP gross margin grew to 68% as compared to 65% in the fourth quarter of 2015.  Non-GAAP gross margin grew to 69%, as compared to 66% in the fourth quarter of 2015.
  • GAAP operating loss was $7.4 million, an improvement from an operating loss of $12.5 million in the fourth quarter of 2015. Non-GAAP operating loss was $3.8 million, compared to a Non-GAAP operating loss of $10.6 million in the fourth quarter of 2015. 
  • GAAP net loss per basic and diluted share was $0.21 based on 38.3 million weighted average shares outstanding, compared to a GAAP net loss per basic and diluted share of $0.99 based on 12.9 million weighted average shares outstanding in the fourth quarter of 2015.
  • Non-GAAP net loss per basic and diluted share was $0.11 based on 38.3 million weighted average shares outstanding, compared to a non-GAAP net loss per basic and diluted share of $0.84 based on 12.9 million weighted average shares outstanding in the fourth quarter of 2015.
  • For the three months ended December 31, 2016, net cash used in operating activities was $1.5 million as compared to $1.8 million in the comparable period last year.  Free cash flow was negative $3.3 million, as compared to negative $2.8 million in the three months ended December 31, 2015.
  • Cash, cash equivalents and marketable securities were approximately $117.2 million as of December 31, 2016.

Fiscal Year 2016 Financial Summary

  • Subscription revenue was $130.1 million, an increase of 30% from fiscal year 2015, and comprised 81% of total revenue. Services revenue was $30.5 million, an increase of 4% from fiscal year 2015.  Total revenues were $160.6 million, an increase of 24% from fiscal year 2015.
  • GAAP gross margin grew to 66% as compared to 62% in fiscal year 2015.  Non-GAAP gross margin grew to 67%, as compared to 63% in fiscal year 2015.
  • GAAP operating loss was $28.2 million, an improvement from an operating loss of $39.6 million in fiscal year 2015. Non-GAAP operating loss was $17.7 million, compared to a Non-GAAP operating loss of $31.8 million in fiscal year 2015. 
  • GAAP net loss per basic and diluted share was $1.61 based on 19.6 million weighted average shares outstanding, compared to a GAAP net loss per basic and diluted share of $3.24 based on 12.7 million weighted average shares outstanding in fiscal year 2015.
  • Non-GAAP net loss per basic and diluted share was $1.08 based on 19.6 million weighted average shares outstanding, compared to a non-GAAP net loss per basic and diluted share of $2.62 based on 12.7 million weighted average shares outstanding in fiscal year 2015.
  • For the twelve months ended December 31, 2016, net cash used in operating activities was $3.7 million as compared to $10.6 million in the comparable period last year.  Free cash flow was negative $9.1 million, as compared to negative $18.2 million in the twelve months ended December 31, 2015.

Recent Business Highlights

  • Completed the TBM Conference with more than 1,000 attendees helping to build momentum heading into 2017.
  • Issued two releases to enhance the capabilities of Apptio's IT Planning Foundation application:
    • Project Financial Planning to enable IT to manage the full lifecycle of project costs.
    • Services Demand Planning to allow IT to create demand-driven budgets for cloud and on premise services.

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 first quarter ending March 31, 2017 and for the full year 2017 as follows:

First quarter of 2017:

  • Total revenue is expected to be in the range of $42.0 to $42.5 million
  • Non-GAAP operating loss between $4.0 and $4.5 million

Full year 2017:

  • Total revenue is expected to be in the range of $178.0 and $181.0 million
  • Non-GAAP operating loss between $15.0 and $18.0 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: 50994115), or if outside North America, by dialing 574-990-1011 (passcode: 50994115). 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 CIO's business management system. We build advanced data and analytics applications that help IT leaders make informed decisions about their technology investments, capitalize on the cloud transformation and drive innovation within their organizations. We call it Technology Business Management. Our applications help companies align technology spending to business outcomes and automate IT processes like cost transparency, benchmarking, charge-back and planning. Hundreds of customers, including more than 40 percent of the Fortune 100, use Apptio as their business system of record for 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 first 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 Form 10-Q filed with the SEC on November 4, 2016.  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, 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.

Consolidated Statements of Operations

(In thousands, except per share amounts)

(Unaudited)










Three Months Ended



Year Ended




December 31,



December 31,




2016



2015



2016



2015






Revenue

















Subscription


$

35,066



$

27,088



$

130,061



$

99,924


Professional services



9,254




7,754




30,508




29,327


  Total revenue



44,320




34,842




160,569




129,251


Cost of revenue

















Subscription



7,338




6,142




27,298




23,457


Professional services



7,082




6,000




26,862




25,720


  Total cost of revenue



14,420




12,142




54,160




49,177


  Gross profit



29,900




22,700




106,409




80,074


Operating expenses

















Research and development



9,403




7,951




35,475




30,553


Sales and marketing



21,600




22,208




75,856




71,337


General and administrative



6,260




5,042




23,229




17,763


  Total operating expenses



37,263




35,201




134,560




119,653


  Loss from operations



(7,363)




(12,501)




(28,151)




(39,579)


Other income (expense)

















Interest income (expense) and other, net



213




(19)




(1,533)




(18)


Foreign exchange loss



(643)




(343)




(1,417)




(1,301)


  Loss before provision for income taxes



(7,793)




(12,863)




(31,101)




(40,898)


(Provision) benefit for income taxes



(124)




127




(452)




(109)


   Net loss


$

(7,917)



$

(12,736)



$

(31,553)



$

(41,007)


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


$

(0.21)



$

(0.99)



$

(1.61)



$

(3.24)


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



38,323




12,882




19,595




12,653



















 

Apptio, Inc.

Consolidated Balance Sheets

(In thousands)

(Unaudited)




December 31,




2016



2015


Assets









Current assets









Cash and cash equivalents


$

42,007



$

17,256


Short-term investments



36,741




6,260


Accounts receivable, net of allowance for doubtful accounts of $569 and $289



58,140




52,887


Prepaid expenses and other current assets



5,440




3,990


Total current assets



142,328




80,393


Long-term assets









Property and equipment, net



12,827




13,487


Long-term investments



38,446




--


Restricted cash



--




2,500


Deferred initial public offering costs



--




1,973


Other long-term assets



734




798


Total assets


$

194,335



$

99,151


Liabilities, Convertible Preferred Stock and Stockholders' Equity (Deficit)









Current liabilities









Accounts payable


$

3,574



$

3,462


Accrued payroll and other expenses



14,073




14,732


Deferred revenue



97,438




82,422


Deferred rent



799




613


Capital leases



43




42


Total current liabilities



115,927




101,271


Long-term liabilities









Deferred revenue, net of current portion



2,254




803


Deferred rent, net of current portion



4,360




4,810


Capital leases, net of current portion



51




95


Preferred stock warrant liability



--




414


Asset retirement obligation



175




210


Total liabilities



122,767




107,603











Convertible preferred stock



--




133,809











Stockholders' equity (deficit)









Class A and Class B Common stock



4




1


Additional paid-in capital



271,982




26,509


Accumulated other comprehensive loss



(94)




--


Accumulated deficit



(200,324)




(168,771)


Total stockholders' equity (deficit)



71,568




(142,261)


Total liabilities, convertible preferred stock and stockholders' equity (deficit)


$

194,335



$

99,151











 

Apptio, Inc.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)










Three Months Ended



Year Ended




December 31,



December 31,




2016



2015



2016



2015


Cash flows from operating activities

















Net loss


$

(7,917)



$

(12,736)



$

(31,553)



$

(41,007)


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

















  Depreciation and amortization



1,501




1,570




5,988




6,486


  Amortization of premiums on investments



18




20




38




87


  Loss (gain) on disposal of property and equipment



(1)




3




25




(9)


  Stock-based compensation



3,557




1,938




10,459




7,815


  Accretion of capitalized loan fees



9




23




136




62


  Loss on extinguishment of debt



--




--




722




--


  Remeasurement of preferred stock warrant liability



--




--




202




57


  Change in operating assets and liabilities

















Accounts receivable



(15,555)




(20,882)




(5,253)




(6,193)


Prepaid expenses and other assets



(1,032)




1,197




(1,692)




(970)


Accounts payable



(1,371)




(146)




277




666


Accrued expenses



2,838




4,294




396




2,095


Deferred revenue



15,931




22,895




16,466




19,936


Deferred rent



557




(7)




136




384


Net cash used in operating activities



(1,465)




(1,831)




(3,653)




(10,591)


Cash flows from investing activities

















  Purchases of property and equipment



(1,884)




(1,007)




(5,402)




(7,643)


  Proceeds from maturities of investments



--




3,530




6,245




16,839


  Purchases of investments



(64,477)




(698)




(75,303)




(2,715)


  (Payment) return of security deposits



(141)




20




(184)




177


Net cash (used in) provided by investing activities



(66,502)




1,845




(74,644)




6,658


Cash flows from financing activities

















  Proceeds from initial public offering, net of underwriting discounts



--




--




102,672




--


  Payment of initial public offering costs



(1,788)




(674)




(2,362)




(1,092)


  Proceeds from long-term debt



--




--




20,000




--


  Principal payments on long-term debt



--




--




(20,000)




--


  Payment of debt prepayment fees



--




--




(200)




--


  Proceeds from exercise of common stock options



333




335




1,333




2,670


  Principal payments on capital lease obligations



(10)




(9)




(43)




(45)


  Payment of capitalized loan fees



--




--




(248)




(78)


Net cash (used in) provided by financing activities



(1,465)




(348)




101,152




1,455


  Foreign currency effect on cash, cash equivalents and restricted cash



(273)




40




(604)




(37)


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



(69,705)




(294)




22,251




(2,515)


Cash, cash equivalents and restricted cash

















  Beginning of period



111,712




20,050




19,756




22,271


  End of period


$

42,007



$

19,756



$

42,007



$

19,756


Supplemental disclosures

















  Cash paid for interest


$

1



$

5



$

771



$

13


  Purchases under capital lease obligations



--




--




--




102


  Property and equipment additions in accounts payable and accrued expenses



639




234




639




234


  Leasehold improvements paid directly by lessor



--




--




356




--


  Non-cash warrants issued as debt issuance costs



--




--




285




90


  Initial public offering costs in accounts payable and accrued expenses



244




881




244




881


  Non-cash preferred stock warrant exercise



--




--




616




--


 

Apptio, Inc.

Results of Operations GAAP to Non-GAAP Reconciliation

(In thousands, except per share data)

(Unaudited)








Three Months Ended



Year Ended



December 31,



December 31,



2016



2015



2016



2015


 Revenue
















 Subscription

$

35,066



$

27,088



$

130,061



$

99,924


 Professional services


9,254




7,754




30,508




29,327


   Total revenue


44,320




34,842




160,569




129,251


















 Cost of revenue reconciliation:
















 GAAP Subscription


7,338




6,142




27,298




23,457


 Non-GAAP adjustment:
















   Stock-based compensation


(327)




(141)




(891)




(482)


  Non-GAAP subscription cost of revenue


7,011




6,001




26,407




22,975


















 GAAP Professional services


7,082




6,000




26,862




25,720


 Non-GAAP adjustment:
















   Stock-based compensation


(263)




(164)




(820)




(738)


  Non-GAAP professional services cost of revenue

$

6,819



$

5,836



$

26,042



$

24,982


















 Gross profit and gross margin reconciliation:
















 GAAP Subscription gross profit

$

27,728



$

20,946



$

102,763



$

76,467


 Non-GAAP adjustment:
















   Stock-based compensation


327




141




891




482


  Non-GAAP Subscription gross profit


28,055




21,087




103,654




76,949


 GAAP Subscription gross margin


79.1

%



77.3

%



79.0

%



76.5

%

 Non-GAAP Subscription gross margin


80.0

%



77.8

%



79.7

%



77.0

%

















 GAAP Professional services gross profit


2,172




1,754




3,646




3,607


 Non-GAAP adjustment:
















   Stock-based compensation


263




164




820




738


  Non-GAAP Professional services gross profit


2,435




1,918




4,466




4,345


 GAAP Professional services gross margin


23.5

%



22.6

%



12.0

%



12.3

%

 Non-GAAP Professional services gross margin


26.3

%



24.7

%



14.6

%



14.8

%

















 GAAP gross profit


29,900




22,700




106,409




80,074


 Non-GAAP adjustment:
















   Stock-based compensation


590




305




1,711




1,220


  Non-GAAP gross profit

$

30,490



$

23,005



$

108,120



$

81,294


 GAAP  gross margin


67.5

%



65.2

%



66.3

%



62.0

%

 Non-GAAP gross margin


68.8

%



66.0

%



67.3

%



62.9

%

















 Operating expenses reconciliation:
















 GAAP Research and development

$

9,403



$

7,951



$

35,475



$

30,553


 Non-GAAP adjustment:
















   Stock-based compensation


(1,012)




(546)




(2,977)




(2,283)


  Non-GAAP research and development


8,391




7,405




32,498




28,270


  As a % of total revenue, non-GAAP


18.9

%



21.3

%



20.2

%



21.9

%

















 GAAP Sales and marketing


21,600




22,208




75,856




71,337


 Non-GAAP adjustment:
















   Stock-based compensation


(956)




(644)




(3,132)




(2,477)


  Non-GAAP sales and marketing


20,644




21,564




72,724




68,860


  As a % of total revenue, non-GAAP


46.6

%



61.9

%



45.3

%



53.3

%

















 GAAP General and administrative


6,260




5,042




23,229




17,763


 Non-GAAP adjustment:
















   Stock-based compensation


(999)




(443)




(2,639)




(1,835)


  Non-GAAP General and administrative


5,261




4,599




20,590




15,928


  As a % of total revenue, non-GAAP


11.9

%



13.2

%



12.8

%



12.3

%

















Loss from operations reconciliation:
















 GAAP loss from operations


(7,363)




(12,501)




(28,151)




(39,579)


 Non-GAAP adjustment:
















   Stock-based compensation


3,557




1,938




10,459




7,815


  Non-GAAP loss from operations

$

(3,806)



$

(10,563)



$

(17,692)



$

(31,764)


 Loss from operations as a percentage of revenue:
















 GAAP loss from operations


(16.6%)




(35.9%)




(17.5%)




(30.6%)


 Non-GAAP loss from operations


(8.6%)




(30.3%)




(11.0%)




(24.6%)


















 Net loss reconciliation:
















 GAAP

$

(7,917)



$

(12,736)



$

(31,553)



$

(41,007)


 Non-GAAP adjustment:
















   Stock-based compensation


3,557




1,938




10,459




7,815


  Non-GAAP Net loss

$

(4,360)



$

(10,798)



$

(21,094)



$

(33,192)


















 Basic and diluted net loss per share reconciliation:
















 GAAP

$

(0.21)



$

(0.99)



$

(1.61)



$

(3.24)


 Non-GAAP

$

(0.11)



$

(0.84)



$

(1.08)



$

(2.62)


















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


 

38,323




 

12,882




 

19,595




 

12,653


















 

Apptio, Inc.

Free Cash Flow Non-GAAP Reconciliation

(In thousands)

(Unaudited)










Three Months Ended



Year Ended




December 31,



December 31,




2016



2015



2016



2015






 Net cash used in operating activities


$

(1,465)



$

(1,831)



$

(3,653)



$

(10,591)


 Less: purchases of property and equipment



(1,884)




(1,007)




(5,402)




(7,643)


 Free cash flow


$

(3,349)



$

(2,838)



$

(9,055)



$

(18,234)



















 

© 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
ir@apptio.com

Media Contact:
Sarah Vreugdenhil
(425) 279-6097 
pr@apptio.com

 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/apptio-announces-results-for-the-fiscal-fourth-quarter-and-full-year-of-2016-300405250.html

SOURCE Apptio

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