CARROLLTON, Texas, May 3, 2012 /PRNewswire/ -- RealPage, Inc. (NASDAQ: RP), a leading provider of on-demand software and software-enabled services to the rental housing industry, today announced financial results for its first quarter ended March 31, 2012.
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"RealPage has started the year strongly as evidenced by our solid first quarter financial performance," says Steve Winn, Chairman and CEO of RealPage. "Non-GAAP total revenue performance was up 29% year over year and Adjusted EBITDA grew 35% over the same period. Our growth in on demand units and revenue per unit resulted in an annual customer value of $286 million, an increase of 34% compared to the prior year quarter. We believe this demonstrates our success in cross selling additional software solutions and services into our installed base and our ability to capture new units effectively across property managers and owners of all sizes."
First Quarter 2012 Financial Highlights
-- Non-GAAP total revenue was $74.5 million, an increase of 29.5% year-over-year; -- Non-GAAP on demand revenue was $70.8 million, an increase of 33.7% year-over-year; -- Adjusted EBITDA was $16.4 million, an increase of 35.4% year-over-year; -- Non-GAAP net income was $7.6 million, or $0.10 per diluted share, a year-over-year increase of 47.8% and 42.9%, respectively; -- GAAP net income was $1.7 million, or $0.02 per diluted share, compared to a GAAP net loss of $0.6 million, or $0.01 per diluted share, in the prior year quarter; and -- Net cash provided by operating activities was $10.9 million, an increase of 17.7% year-over-year.
Financial Outlook
RealPage management expects to achieve the following results during its second quarter ended June 30, 2012:
-- Non-GAAP total revenue is expected to be in the range of $77.5 million to $79.0 million; -- Adjusted EBITDA is expected to be in the range of $16.8 million to $17.3 million; -- Non-GAAP net income is expected to be in the range of $7.9 million to $8.2 million, or $0.11 per diluted share; -- Non-GAAP tax rate of approximately 40.0%; and -- Weighted average shares outstanding of approximately 74.0 million.
RealPage management expects to achieve the following results during its calendar year ended December 31, 2012:
-- Non-GAAP total revenue is expected to be in the range of $321.5 million to $330.0 million; -- Adjusted EBITDA is expected to be in the range of $71.9 million to $75.0 million; -- Non-GAAP net income is expected to be in the range of $34.0 million to $36.0 million, or $0.46 to $0.49 per diluted share; -- Non-GAAP tax rate of approximately 40.0%; and -- Full year weighted average shares outstanding of approximately 74.1 million.
Please note that the above statements are forward looking and that Non-GAAP total revenue includes an adjustment for the effect of deferred revenue from acquired companies that is required to be written down for GAAP purposes under purchase accounting rules. In addition, the above statements also include the impact of acquisitions and exclude any impact resulting from the Yardi Systems litigation. Actual results may differ materially. Please reference the information under the caption "Non-GAAP Financial Measures" as part of this press release.
Conference Call and Webcast
The Company will host a conference call today at 5:00 p.m. EDT to discuss its financial results. Participants are encouraged to listen to the presentation via a live web broadcast at www.realpage.com on the Investor Relations section. In addition, a live dial-in is available domestically at 866-743-9666 and internationally at 760-298-5103. A replay will be available at 855-859-2056 or 404-537-3406, passcode 75552849, until May 13, 2012.
About RealPage
Located in Carrollton, Texas, a suburb of Dallas, RealPage provides on demand (also referred to as "Software-as-a-Service" or "SaaS") products and services to apartment communities and single family rentals across the United States. Its on demand product lines include OneSite® property management systems that automate the leasing, renting, management, and accounting of conventional, affordable, tax credit, student living, senior living and military housing properties; LeaseStar(TM) multichannel managed marketing that enables owners to originate, syndicate, manage and capture leads more effectively and at less overall cost; YieldStar® asset optimization systems that enable owners and managers to optimize rents to achieve the overall highest yield, or combination of rent and occupancy, at each property; Velocity(TM) billing and utility management services that increase collections and reduce delinquencies; LeasingDesk® risk mitigation systems that are designed to reduce a community's exposure to risk and liability; OpsTechnology® spend management systems that help owners manage and control operating expenses; and Compliance Depot(TM) vendor management and qualification services to assist a community in managing its compliance vendor program. Supporting this family of SaaS products is a suite of shared cloud services including electronic payments, document management, decision support and learning. RealPage's MyNewPlace® subsidiary is one of the largest lead generation apartment and home rental websites, offering apartment owners and managers qualified, prospective residents through subscription, pay-per-lead and LeaseMatch pay-per-lease programs. Through its Propertyware subsidiary, RealPage also provides software and services to single-family rentals and low density, centrally-managed multifamily housing. For more information, call 1-87-REALPAGE or visit www.realpage.com.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains "forward-looking" statements relating to RealPage, Inc.'s expected, possible or assumed future results of operations, growth, expenditures, tax rates, outstanding shares and potential benefits of completed acquisitions. These forward-looking statements are based on management's beliefs and assumptions and on information currently available to management. Forward-looking statements include all statements that are not historical facts and may be identified by terms such as "expects," "believes," "plans" or similar expressions and the negatives of those terms. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, the following: (a) the possibility that general economic conditions or uncertainty cause information technology spending, particularly in the rental housing industry, to be reduced or purchasing decisions to be delayed; (b) an increase in customer cancellations; (c) the inability to increase sales to existing customers and to attract new customers; (d) RealPage, Inc.'s failure to integrate acquired businesses and any future acquisitions successfully; (e) the timing and success of new product introductions by RealPage, Inc. or its competitors; (f) changes in RealPage, Inc.'s pricing policies or those of its competitors; (g) litigation; and (h) such other risk and uncertainties described more fully in documents filed with or furnished to the Securities and Exchange Commission ("SEC"), including RealPage's Annual Report on Form 10-K previously filed with the SEC on February 24, 2012. All information provided in this release is as of the date hereof and RealPage, Inc. undertakes no duty to update this information except as required by law.
Non-GAAP Financial Measures
This press release contains non-GAAP financial measures. These measures differ from GAAP in that they exclude amortization of intangible assets, stock-based compensation expenses, any impact related to the Yardi Systems litigation, acquisition-related deferred revenue adjustments, and acquisition related expenses (including any purchase accounting adjustments). Reconciliation tables comparing GAAP financial measures to non-GAAP financial measures are included at the end of this release.
We define Adjusted EBITDA as net (loss) income plus acquisition-related deferred revenue adjustment, depreciation and asset impairment, amortization of intangible assets, net interest expense, income tax expense (benefit), stock-based compensation expense, any impact related to the Yardi Systems litigation and acquisition-related expense.
We believe that the use of Adjusted EBITDA is useful to investors and other users of our financial statements in evaluating our operating performance because it provides them with an additional tool to compare business performance across companies and across periods. We believe that:
-- Adjusted EBITDA provides investors and other users of our financial information consistency and comparability with our past financial performance, facilitates period-to-period comparisons of operations and facilitates comparisons with our peer companies, many of which use similar non-GAAP financial measures to supplement their GAAP results; and -- it is useful to exclude certain non-cash charges, such as depreciation and asset impairment, amortization of intangible assets and stock-based compensation and non-core operational charges, such as acquisition-related expense and any impact related to the Yardi Systems litigation, from Adjusted EBITDA because the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations and these expenses can vary significantly between periods as a result of new acquisitions, full amortization of previously acquired tangible and intangible assets or the timing of new stock-based awards, as the case may be.
We use Adjusted EBITDA in conjunction with traditional GAAP operating performance measures as part of our overall assessment of our performance, for planning purposes, including the preparation of our annual operating budget, to evaluate the effectiveness of our business strategies and to communicate with our board of directors concerning our financial performance.
We do not place undue reliance on Adjusted EBITDA as our only measure of operating performance. Adjusted EBITDA should not be considered as a substitute for other measures of liquidity or financial performance reported in accordance with GAAP. There are limitations to using non-GAAP financial measures, including that other companies may calculate these measures differently than we do, that they do not reflect our capital expenditures or future requirements for capital expenditures and that they do not reflect changes in, or cash requirements for, our working capital. We compensate for the inherent limitations associated with using Adjusted EBITDA measures through disclosure of these limitations, presentation of our financial statements in accordance with GAAP and reconciliation of Adjusted EBITDA to the most directly comparable GAAP measure, net (loss) income.
Condensed Consolidated Statements of Operations For the Three Months Ended March 31, 2012 and 2011 (unaudited, in thousands, except per share data) Three Months Ended March 31, --------- 2012 2011 ---- ---- Revenue: On demand $70,718 $52,937 On premise 1,416 1,645 Professional and other 2,283 2,966 ----- ----- Total revenue 74,417 57,548 Cost of revenue(1) 30,613 24,683 ------ ------ Gross profit 43,804 32,865 Operating expense: Product development(1) 11,313 10,316 Sales and marketing(1) 16,806 12,794 General and administrative(1) 12,303 9,776 ------ ----- Total operating expense 40,422 32,886 ------ ------ Operating income (loss) 3,382 (21) Interest expense and other, net (636) (1,166) ------ Income (loss) before income taxes 2,746 (1,187) Income tax expense (benefit) 1,026 (539) ----- ---- Net income (loss) $1,720 $(648) ====== ===== Net income (loss) per share Basic $0.02 $(0.01) Diluted $0.02 $(0.01) Weighted average shares used in computing net income (loss) per share Basic 70,590 66,800 Diluted 73,170 66,800 (1) Includes stock- based compensation Three Months Ended expense as follows: March 31, --------- 2012 2011 ---- ---- Cost of revenue $689 $298 Product development 1,062 980 Sales and marketing 737 2,733 General and administrative 1,500 842 $3,988 $4,853 ====== ======
Condensed Consolidated Balance Sheets At March 31, 2012 and December 31, 2011 (unaudited, in thousands, except share data) March 31, December 31, 2012 2011 ---- ---- Assets Current assets: Cash and cash equivalents $49,575 $51,273 Restricted cash 22,557 19,098 Accounts receivable, less allowance for doubtful accounts of $1,192 and $979 at March 31, 2012 and December 31, 2011, respectively 42,648 43,883 Deferred tax asset, net of valuation allowance 225 272 Other current assets 10,069 10,232 ------ ------ Total current assets 125,074 124,758 Property, equipment and software, net 28,224 27,974 Goodwill 131,901 129,292 Identified intangible assets, net 110,507 112,308 Deferred tax asset, net of valuation allowance 2,008 2,539 Other assets 4,439 3,194 ----- ----- Total assets $402,153 $400,065 ======== ======== Liabilities and stockholders' equity Current liabilities: Accounts payable $8,043 $12,218 Accrued expenses and other current liabilities 29,029 25,816 Current portion of deferred revenue 55,075 57,325 Customer deposits held in restricted accounts 22,478 19,017 ------ ------ Total current liabilities 114,625 114,376 Deferred revenue 9,579 8,693 Revolving credit facility 45,000 50,312 Other long-term liabilities 3,649 3,803 ----- ----- Total liabilities 172,853 177,184 Stockholders' equity: Preferred stock, $0.001 par value, 10,000,000 shares authorized and zero shares March 31, 2012 and December 31, 2011, respectively - - Common stock, $0.001 par value per share: 125,000,000 shares authorized, 73,916,813 and 73,115,779 shares issued and 73,433,527 and 72,701,571 shares outstanding at March 31, 2012 and December 31, 2011, respectively 74 73 Additional paid- in capital 322,712 316,964 Treasury stock, at cost: 483,286 and 414,208 shares at (4,184) (3,138) March 31, 2012 and December 31, 2011, respectively Accumulated deficit (89,241) (90,961) Accumulated other comprehensive loss (61) (57) --- --- Total stockholders' equity 229,300 222,881 ------- ------- Total liabilities and stockholders' equity $402,153 $400,065 ======== ========
Condensed Consolidated Statements of Cash Flows For the Three Months Ended March 31, 2012 and 2011 (unaudited, in thousands) Three Months Ended March 31, --------- 2012 2011 ---- ---- Cash flows from operating activities: Net income (loss) $1,720 $(648) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 7,878 6,773 Deferred tax expense (benefit) 578 (778) Stock-based compensation 3,988 4,853 Loss on disposal of assets 178 397 Acquisition- related contingent consideration 430 62 Changes in assets and liabilities, net of assets acquired and liabilities assumed in business combinations: (3,870) (1,398) ------ ------ Net cash provided by operating activities 10,902 9,261 Cash flows from investing activities: Purchases of property, equipment and software (3,560) (1,954) Acquisition of businesses, net of cash acquired (4,303) (184) Intangible asset purchase (75) - ---- Net cash used by investing activities (7,938) (2,138) ------ ------ Cash flows from financing activities: Stock issuance costs from public offerings $ - $(775) Payments on and proceeds from debt, net (5,373) (2,961) Issuance of common stock 1,761 3,044 Purchase of treasury stock (1,046) (186) ------- Net cash used by financing activities (4,658) (878) ------ ---- Net (decrease) increase in cash and cash equivalents (1,694) 6,245 Effect of exchange rate on cash (4) (12) Cash and cash equivalents: Beginning of period 51,273 118,010 ------ End of period $49,575 $124,243 =======
Reconciliation of GAAP to Non-GAAP Measures For the Three Months Ended March 31, 2012 and 2011 (unaudited, in thousands) Three Months Ended March 31, --------- 2012 2011 ---- ---- Revenue: $74,417 $57,548 Acquisition- related deferred revenue adjustment 81 - Non-GAAP revenue $74,498 $57,548 ======= ======= Three Months Ended March 31, --------- 2012 2011 ---- ---- Adjusted gross profit: Gross profit $43,804 $32,865 Acquisition- related deferred revenue adjustment 81 - Depreciation 1,585 1,490 Amortization of intangible assets 2,418 2,176 Stock-based compensation expense 689 298 --- --- Adjusted gross profit $48,577 $36,829 =============== Adjusted gross profit 65.2% 64.0% Three Months Ended March 31, --------- 2012 2011 ---- ---- Adjusted EBITDA: Net income (loss) $1,720 $(648) Acquisition- related deferred revenue adjustment 81 - Depreciation, asset impairment and loss on disposal of asset 3,227 3,124 Amortization of intangible assets 4,829 4,046 Interest expense, net 638 783 Income tax expense (benefit) 1,026 (539) Litigation- related expense 360 320 Stock-based compensation expense 3,988 4,853 Acquisition- related expense 553 186 Adjusted EBITDA $16,422 $12,125 =============== Adjusted EBITDA margin 22.0% 21.1% Three Months Ended March 31, --------- 2012 2011 ---- ---- Non-GAAP total product development: Product Development $11,313 $10,316 Less: Amortization of intangible assets - - Stock-based compensation expense 1,062 980 ----- --- Non-GAAP total product development: $10,251 $9,336 =============== Non-GAAP total product development as % of non-GAAP revenue: 13.8% 16.2%
Reconciliation of GAAP to Non-GAAP Measures For the Three Months Ended March 31, 2012 and 2011 (unaudited, in thousands) Three Months Ended March 31, --------- 2012 2011 ---- ---- Non-GAAP total sales and marketing: Sales and marketing $16,806 $12,794 Less: Amortization of intangible assets 2,411 1,870 Stock-based compensation expense 737 2,733 --- ----- Non-GAAP total sales and marketing: $13,658 $8,191 =============== Non-GAAP total sales and marketing as % of non-GAAP revenue: 18.3% 14.2% Three Months Ended March 31, --------- 2012 2011 ---- ---- Non-GAAP total general and administrative: General and administrative $12,303 $9,776 Less: Acquisition- related expense 553 186 Stock-based compensation expense 1,500 842 Litigation related expense 360 320 Non-GAAP total general and administrative: $9,890 $8,428 =============== Non-GAAP total general and administrative as % of non-GAAP revenue: 13.3% 14.6% Three Months Ended March 31, --------- 2012 2011 ---- ---- Non-GAAP total operating expenses: Operating expenses $40,422 $32,886 Less: Amortization of intangible assets 2,411 1,870 Acquisition-related expense 553 186 Stock-based compensation expense 3,299 4,555 Litigation related expense 360 320 Non-GAAP total operating expenses: $33,799 $25,955 ==================== Non-GAAP total operating expenses as % of non-GAAP revenue: 45.4% 45.1% Three Months Ended March 31, --------- 2012 2011 ---- ---- Non-GAAP operating income: Operating income (loss) $3,382 $(21) Acquisition- related deferred revenue adjustment 81 - Amortization of intangible assets 4,829 4,046 Stock-based compensation expense 3,988 4,853 Acquisition- related expense 553 186 Litigation related expense 360 320 Non-GAAP operating income $13,193 $9,384 ================== Non-GAAP operating margin 17.7% 16.3%
Reconciliation of GAAP to Non-GAAP Measures For the Three Months Ended March 31, 2012 and 2011 (unaudited, in thousands, except per share data) Three Months Ended March 31, --------- 2012 2011 ---- ---- Non-GAAP net income: Net income (loss) $1,720 $(648) Acquisition-related deferred revenue adjustment 81 - Amortization of intangible assets 4,829 4,046 Stock-based compensation expense 3,988 4,853 Acquisition-related expense 553 186 Litigation related expense 360 320 Loss on disposal of assets 178 397 Subtotal of tax deductible items 9,989 9,802 Tax impact of tax deductible items(1) (3,996) (3,921) Tax expense resulting from applying effective tax rate(2) (72) (64) --- --- Non-GAAP net income $7,641 $5,169 Non-GAAP net income per share - diluted $0.10 $0.07 Weighted average shares - diluted 73,170 66,800 Weighted average effect of dilutive securities - 3,811 --- ----- Non-GAAP weighted average shares - diluted 73,170 70,611 (1) Reflects the removal of the tax benefit associated with the amortization of intangible assets, stock-based compensation expense, acquisition- related deferred revenue adjustment and acquisition-related expense. (2) Represents adjusting to a normalized effective tax rate of 40%. Three Months Ended March 31, --------- 2012 2011 ---- ---- Annualized on demand revenue per average on demand unit: On demand revenue $70,718 $52,937 Acquisition-related deferred revenue adjustment 81 - --- --- Non-GAAP on demand revenue $70,799 $52,937 Ending on demand units 7,431 6,159 Average on demand units 7,366 6,113 Annualized on demand revenue per average on demand unit $38.45 $34.64 ====== Annual customer value of on demand revenue(1) $285,722 $213,348 On demand customers 8,039 7,078 (1) This metric represents management's estimate for the current annual run-rate value of on demand customer relationships. This metric is calculated by multiplying ending on demand units times annualized on demand revenue per average non-GAAP on demand unit for the periods presented.
SOURCE RealPage, Inc.