Livongo Health, Inc. (NASDAQ: LVGO), the leading Applied Health
Signals company empowering people with chronic conditions to live
better and healthier lives, today announced financial results for
its second quarter ended June 30, 2020.
“Livongo entered 2020 with significant momentum
and our strong results continued during the second quarter,” said
Zane Burke, Chief Executive Officer of Livongo. “Innovative
employers and health plans are choosing Livongo due to our leading
Consumer Directed Virtual Care model and our ability to deliver
significant clinical and financial improvements through a
one-to-many approach. As we experience the further adoption of
virtual health and remote monitoring technologies as the new
standard of care, Livongo continues to build on its leadership
position.”
Second Quarter Fiscal 2020 Financial
Highlights:
- Revenue: Total
revenue for the quarter was $91.9 million, up 125% year-over-year,
driven by the continued adoption of our Applied Health Signals
platform. During the second quarter, the company achieved certain
performance milestones and service performance obligations that
resulted in approximately $2.5 million of revenue. Excluding that
non-recurring revenue, second quarter revenue increased 119%
year-over-year.
- Gross Margin: GAAP
gross margin of 76.6% and non-GAAP gross margin of 77.3%.
- Net Loss and Non-GAAP Net
Income: GAAP net loss of $1.6 million, and GAAP net loss
per share attributable to common stockholders of ($0.02) on a
diluted basis; and non-GAAP net income of $12.5 million, and
non-GAAP net income per share attributable to common stockholders
of $0.11 on a diluted basis.
- Adjusted EBITDA:
$13.3 million in the second quarter of 2020.
- Livongo for Diabetes
Members: Over 410,000 as of June 30, 2020, up 113%
year-over-year.
- Livongo Clients:
1,328 Clients as of June 30, 2020, up 75% year-over-year.
- Estimated Value of
Agreements (EVA): $108.7 million, up from $74.2 million in
the second quarter of 2019, representing 46% growth year-over-year.
EVA consists of the estimated value of agreements signed in the
quarter with new Clients or expansions entered into with existing
Clients.
Additional information on Livongo's reported
results is included in the financial tables below.
Updated Conference Call
Information
A conference call with management to discuss
Livongo’s second quarter results will be held today, August 5,
2020, at 7:30 a.m. Eastern Time. All interested parties may
dial 270-215-9499 and reference “Livongo” to listen to the
quarterly conference call. Participants may join the webcast here.
A replay of the call will be available via webcast for on-demand
listening shortly after completion of the call on the Investor
Relations section of the company’s website, www.livongo.com, and
will remain available for approximately 90 days. To assist with the
financial portion of this earnings call supplemental slides can be
found on our investor relations website here.
Non-GAAP Financial Measures and Key
Metrics
Reconciliations of non-GAAP financial measures
to the most directly comparable financial results as determined in
accordance with GAAP are included at the end of this press release
following the accompanying financial data. We believe that these
non-GAAP financial measures, when taken together with the
corresponding GAAP financial measures, provide meaningful
supplemental information regarding our performance by excluding
certain items that may not be indicative of our business, results
of operations, or outlook. However, non-GAAP financial information
is presented for supplemental informational purposes only, has
limitations as an analytical tool and should not be considered in
isolation or as a substitute for financial information presented in
accordance with GAAP. In addition, other companies, including
companies in our industry, may calculate similarly-titled non-GAAP
measures differently or may use other measures to evaluate their
performance, all of which could reduce the usefulness of our
non-GAAP financial measures as tools for comparison. We compensate
for these limitations by analyzing current and future results on a
GAAP basis as well as a non-GAAP basis and by providing specific
information regarding the GAAP items excluded from these non-GAAP
financial measures.
For a description of these non-GAAP financial
measures, including the reasons management uses each measure,
please see the section of the tables titled "About Non-GAAP
Financial Measures."
In addition, we calculate and present certain
key business metrics that we believe are useful in evaluating our
business. For a description of these key metrics, including the
reasons management uses each measure, please see the section of the
tables titled "Key Metrics."
About LivongoLivongo empowers
people with chronic conditions to live better and healthier lives,
beginning with diabetes and now including hypertension, weight
management, diabetes prevention, and behavioral health.
Livongo pioneered the category of Applied Health Signals to offer
Members clinically-based insights that focus on the whole person
and make it easier to stay healthy. Using its AI+AI engine,
Livongo’s team of data scientists aggregate and interpret
substantial amounts of health data and information to create
actionable, personalized and timely health signals delivered to
Livongo Members exactly when and where they need them. The
Livongo approach delivers better clinical and financial outcomes
while creating a different and better experience for people with
chronic conditions. For more information, visit: www.livongo.com or
engage with Livongo on LinkedIn or Twitter.
Forward-Looking StatementsThis
press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended.
Forward-looking statements generally relate to future events or
Livongo’s future financial or operating performance. In some cases,
you can identify forward looking statements because they contain
words such as “may,” “will,” “should,” “expects,” “plans,”
“anticipates,” “going to,” “could,” “intends,” “target,”
“projects,” “contemplates,” “believes,” “estimates,” “predicts,”
“potential” or “continue” or the negative of these words or other
similar terms or expressions that concern Livongo’s expectations,
strategy, priorities, plans or intentions. Forward-looking
statements in this release include, but are not limited to,
statements regarding Livongo’s ability to grow and expand its
platform, number of clients, number of members, and anticipated
enrollment rates, the shift to Consumer Directed Virtual Care and
adoption of virtual health and remote monitoring technologies,
Livongo’s expectations regarding pipeline demand, and Livongo’s
future financial and operating performance. Livongo’s expectations
and beliefs regarding these matters may not materialize, and actual
results in future periods are subject to risks and uncertainties
that could cause actual results to differ materially from those
projected, including risks regarding the merger with Teladoc
Health, Inc., including expected timing, completion and effects of
the merger, Livongo’s ability to retain clients and sell additional
solutions to new and existing clients, Livongo’s ability to attract
and enroll new members, the growth and success of Livongo’s
partners and reseller relationships, Livongo’s ability to estimate
the size of its target market, uncertainty in the healthcare
regulatory environment, the impact of the COVID-19 pandemic on
Livongo’s business and general economic conditions, and Livongo’s
future financial performance, including trends in revenue, costs of
revenue, gross profit or gross margin, operating expenses, paying
clients, and free cash flow. The forward-looking statements
contained in this release are also subject to other risks and
uncertainties, including those more fully described in Livongo’s
filings with the Securities and Exchange Commission, including
Livongo’s Quarterly Report on Form 10-Q for the quarter ended June
30, 2020 that will be filed following this earnings release.
Livongo’s SEC filings are available on the Investor Relations
section of Livongo’s website at ir.livongo.com and on the SEC’s
website at www.sec.gov. The forward-looking statements in this
release are based on information available to Livongo as of the
date hereof, and Livongo disclaims any obligation to update any
forward-looking statements, except as required by law.
Investor Contact:Jason
PlagmanInvestor-relations@livongo.com 785-550-6048
Media Contact:John
HallockPress@livongo.com617-615-7712
LIVONGO HEALTH,
INC.CONDENSED CONSOLIDATED BALANCE
SHEETS(in thousands, except per share
data)(unaudited)
|
|
June 30, 2020 |
|
December 31, 2019 |
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
685,953 |
|
|
$ |
241,738 |
|
Short-term investments |
|
150,000 |
|
|
150,000 |
|
Accounts receivable, net of allowance for doubtful accounts of
$2,774 and $1,245 as of June 30, 2020 and December 31, 2019,
respectively |
|
59,237 |
|
|
40,875 |
|
Inventories |
|
17,616 |
|
|
28,983 |
|
Deferred costs, current |
|
27,137 |
|
|
16,051 |
|
Prepaid expenses and other current assets |
|
11,318 |
|
|
9,860 |
|
Total current assets |
|
951,261 |
|
|
487,507 |
|
Property and equipment,
net |
|
16,209 |
|
|
10,354 |
|
Operating lease right-of-use
assets |
|
16,253 |
|
|
— |
|
Restricted cash,
noncurrent |
|
1,270 |
|
|
1,270 |
|
Goodwill |
|
35,801 |
|
|
35,801 |
|
Intangible assets, net |
|
15,081 |
|
|
16,469 |
|
Deferred costs,
noncurrent |
|
12,843 |
|
|
5,700 |
|
Other noncurrent assets |
|
569 |
|
|
3,460 |
|
TOTAL ASSETS |
|
$ |
1,049,287 |
|
|
$ |
560,561 |
|
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK, AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
|
$ |
6,401 |
|
|
$ |
8,362 |
|
Accrued expenses and other current liabilities |
|
35,684 |
|
|
27,801 |
|
Deferred revenue, current |
|
5,420 |
|
|
3,945 |
|
Advance payments from partner, current |
|
354 |
|
|
1,767 |
|
Total current liabilities |
|
47,859 |
|
|
41,875 |
|
Operating lease liabilities,
noncurrent |
|
15,758 |
|
|
— |
|
Deferred revenue,
noncurrent |
|
1,561 |
|
|
654 |
|
Advance payment from partner,
noncurrent |
|
9,142 |
|
|
7,754 |
|
Convertible senior notes,
net |
|
396,446 |
|
|
— |
|
Other noncurrent
liabilities |
|
397 |
|
|
2,914 |
|
TOTAL LIABILITIES |
|
471,163 |
|
|
53,197 |
|
Commitments and
contingencies |
|
|
|
|
Redeemable convertible
preferred stock, par value of $0.001 per share |
|
— |
|
|
— |
|
Stockholders’ equity: |
|
|
|
|
Preferred stock, par value of $0.001 per share |
|
— |
|
|
— |
|
Common stock, par value of $0.001 per share |
|
100 |
|
|
95 |
|
Additional paid-in capital |
|
749,349 |
|
|
671,467 |
|
Accumulated deficit |
|
(171,325 |
) |
|
(164,198 |
) |
TOTAL STOCKHOLDERS’
EQUITY |
|
578,124 |
|
|
507,364 |
|
TOTAL LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK, AND
STOCKHOLDERS’ EQUITY |
|
$ |
1,049,287 |
|
|
$ |
560,561 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIVONGO HEALTH,
INC.CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(in thousands, except per share
data)(unaudited)
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
|
|
|
|
|
Revenue |
|
$ |
91,923 |
|
|
$ |
40,915 |
|
|
$ |
160,745 |
|
|
$ |
72,982 |
|
Cost of revenue(1)(2) |
|
21,466 |
|
|
11,964 |
|
|
39,572 |
|
|
21,827 |
|
Gross profit |
|
70,457 |
|
|
28,951 |
|
|
121,173 |
|
|
51,155 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
Research and development(1) |
|
15,809 |
|
|
10,291 |
|
|
29,806 |
|
|
19,285 |
|
Sales and marketing(1)(2) |
|
32,881 |
|
|
17,833 |
|
|
60,535 |
|
|
32,476 |
|
General and administrative(1)(3) |
|
22,027 |
|
|
13,702 |
|
|
37,874 |
|
|
27,816 |
|
Change in fair value of contingent consideration |
|
2 |
|
|
282 |
|
|
86 |
|
|
956 |
|
Total operating expenses |
|
70,719 |
|
|
42,108 |
|
|
128,301 |
|
|
80,533 |
|
Loss from operations |
|
(262 |
) |
|
(13,157 |
) |
|
(7,128 |
) |
|
(29,378 |
) |
Interest (expense) income,
net |
|
(1,184 |
) |
|
183 |
|
|
156 |
|
|
641 |
|
Other (expense) income,
net |
|
(36 |
) |
|
2 |
|
|
(62 |
) |
|
6 |
|
Loss before provision for
income taxes |
|
(1,482 |
) |
|
(12,972 |
) |
|
(7,034 |
) |
|
(28,731 |
) |
Provision for (benefit from)
income taxes |
|
72 |
|
|
5 |
|
|
93 |
|
|
(1,383 |
) |
Net loss |
|
$ |
(1,554 |
) |
|
$ |
(12,977 |
) |
|
$ |
(7,127 |
) |
|
$ |
(27,348 |
) |
Accretion of redeemable
convertible preferred stock |
|
— |
|
|
(42 |
) |
|
— |
|
|
(83 |
) |
Net loss attributable to
common stockholders |
|
$ |
(1,554 |
) |
|
$ |
(13,019 |
) |
|
$ |
(7,127 |
) |
|
$ |
(27,431 |
) |
Net loss per share
attributable to common stockholders, basic and diluted |
|
$ |
(0.02 |
) |
|
$ |
(0.69 |
) |
|
$ |
(0.07 |
) |
|
$ |
(1.48 |
) |
Weighted-average shares used
in computing net loss per share attributable to common
stockholders, basic and diluted(4) |
|
97,896 |
|
|
18,916 |
|
|
96,719 |
|
|
18,564 |
|
(1) Includes stock-based
compensation expense as follows:
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
|
|
|
|
|
|
|
Cost of revenue |
|
$ |
118 |
|
|
$ |
6 |
|
|
$ |
210 |
|
|
$ |
12 |
|
Research and development |
|
1,593 |
|
|
491 |
|
|
3,809 |
|
|
852 |
|
Sales and marketing |
|
2,364 |
|
|
41 |
|
|
4,416 |
|
|
260 |
|
General and
administrative |
|
5,800 |
|
|
3,915 |
|
|
9,503 |
|
|
8,839 |
|
Total stock-based compensation expense |
|
$ |
9,875 |
|
|
$ |
4,453 |
|
|
$ |
17,938 |
|
|
$ |
9,963 |
|
(2) Includes amortization of
intangible assets as follows:
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
|
|
|
|
|
|
|
Cost of revenue |
|
$ |
420 |
|
|
$ |
353 |
|
|
$ |
840 |
|
|
$ |
680 |
|
Sales and marketing |
|
272 |
|
|
276 |
|
|
548 |
|
|
513 |
|
Total amortization of intangible assets |
|
$ |
692 |
|
|
$ |
629 |
|
|
$ |
1,388 |
|
|
$ |
1,193 |
|
(3) Includes acquisition-related
expenses as follows:
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
|
General and administrative |
|
$ |
— |
|
|
$ |
18 |
|
|
$ |
— |
|
|
$ |
225 |
|
Total acquisition-related
expenses |
|
$ |
— |
|
|
$ |
18 |
|
|
$ |
— |
|
|
$ |
225 |
|
(4) For the three and six months ended June 30,
2020, the weighted-average shares used in computing net loss per
share attributable to common stockholders, basic and diluted,
include the weighted-average outstanding shares for the following
common stock issued in connection with our IPO in July 2019: (i)
all shares of redeemable convertible preferred stock then
outstanding, totaling 58,615 shares, were automatically
converted into an equivalent number of shares of common stock on
a one-to-one basis and (ii) we sold 14,590 shares of our
common stock at an offering price of $28.00 per share, including
1,903 shares of common stock pursuant to the exercise in full of
the underwriters' option to purchase additional shares.
LIVONGO HEALTH,
INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS(in
thousands)(unaudited)
|
|
Six Months Ended June 30, |
|
|
2020 |
|
2019 |
CASH FLOWS FROM
OPERATING ACTIVITIES |
|
|
|
|
Net loss |
|
$ |
(7,127 |
) |
|
$ |
(27,348 |
) |
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
Depreciation and amortization expense |
|
2,619 |
|
|
1,450 |
|
Amortization of intangible assets |
|
1,388 |
|
|
1,193 |
|
Non-cash operating lease cost |
|
2,199 |
|
|
— |
|
Amortization of debt discount and debt issuance cost |
|
1,922 |
|
|
— |
|
Change in fair value of contingent consideration |
|
86 |
|
|
956 |
|
Allowance for doubtful accounts |
|
1,644 |
|
|
511 |
|
Stock-based compensation expense |
|
17,938 |
|
|
9,963 |
|
Deferred income taxes |
|
— |
|
|
(1,396 |
) |
Changes in operating assets and liabilities, net of impact of
acquisitions: |
|
|
|
|
Accounts receivable, net |
|
(20,006 |
) |
|
(17,637 |
) |
Inventories |
|
11,367 |
|
|
(4,901 |
) |
Deferred costs |
|
(18,035 |
) |
|
(7,781 |
) |
Prepaid expenses and other assets |
|
(667 |
) |
|
(205 |
) |
Accounts payable |
|
(2,626 |
) |
|
2,257 |
|
Accrued expenses and other liabilities |
|
3,399 |
|
|
(48 |
) |
Operating lease liabilities |
|
(83 |
) |
|
— |
|
Deferred revenue |
|
2,382 |
|
|
653 |
|
Advance payments from partner |
|
— |
|
|
2,372 |
|
Net cash used in operating activities |
|
(3,600 |
) |
|
(39,961 |
) |
CASH FLOWS FROM
INVESTING ACTIVITIES |
|
|
|
|
Purchases of property and equipment |
|
(4,476 |
) |
|
(628 |
) |
Capitalized internal-use software costs |
|
(2,780 |
) |
|
(2,378 |
) |
Change in escrow deposit |
|
2,100 |
|
|
1,750 |
|
Investment in certificate of deposit |
|
(50,000 |
) |
|
— |
|
Proceeds from maturity of certificate of deposit |
|
50,000 |
|
|
— |
|
Acquisitions, net of cash acquired |
|
— |
|
|
(27,435 |
) |
Net cash used in investing activities |
|
(5,156 |
) |
|
(28,691 |
) |
CASH FLOWS FROM
FINANCING ACTIVITIES |
|
|
|
|
Proceeds from exercise of
stock options, net of repurchases |
|
3,846 |
|
|
1,443 |
|
Proceeds from issuance of
common stock under employee stock purchase plan |
|
2,154 |
|
|
— |
|
Payment of deferred offering
costs |
|
(286 |
) |
|
(1,559 |
) |
Payment of deferred
acquisition-related contingent consideration |
|
(1,356 |
) |
|
(1,316 |
) |
Proceeds from issuance of
convertible notes, net of transaction costs of $14,775 |
|
535,225 |
|
|
— |
|
Payment of capped calls
related to issuance of convertible senior notes |
|
(69,850 |
) |
|
— |
|
Taxes paid related to net
share settlement of equity awards |
|
(16,762 |
) |
|
— |
|
Net cash provided by (used in) financing activities |
|
452,971 |
|
|
(1,432 |
) |
Net increase (decrease) in
cash, cash equivalents, and restricted cash |
|
444,215 |
|
|
(70,084 |
) |
Cash, cash equivalents, and
restricted cash, beginning of period |
|
243,008 |
|
|
109,107 |
|
Cash, cash equivalents, and
restricted cash, end of period |
|
$ |
687,223 |
|
|
$ |
39,023 |
|
Reconciliation of
cash, cash equivalents, and restricted cash: |
|
|
|
|
Cash and cash equivalents |
|
$ |
685,953 |
|
|
$ |
38,165 |
|
Restricted cash |
|
1,270 |
|
|
858 |
|
Total cash, cash equivalents, and restricted cash, end of
period |
|
$ |
687,223 |
|
|
$ |
39,023 |
|
|
|
|
|
|
|
|
|
|
About Non-GAAP Financial Measures
In addition to our financial results determined
in accordance with U.S. Generally Accepted Accounting Principles
(GAAP), we believe non-GAAP measures are useful in
evaluating our operating performance. In particular, we believe
that the use of non-GAAP net income (loss), adjusted gross profit,
adjusted gross margin, and adjusted EBITDA is helpful to our
investors as they are metrics used by management in assessing the
health of our business and our operating performance. We use
these non-GAAP financial measures to evaluate our ongoing
operations and for internal planning and forecasting purposes. A
reconciliation is provided below for
each non-GAAP financial measure to the most directly
comparable financial measure stated in accordance with GAAP.
Investors are encouraged to review the related GAAP financial
measures and the reconciliation of
these non-GAAP financial measures to their most directly
comparable GAAP financial measures, and not to rely on any single
financial measure to evaluate our business.
Non-GAAP Net Income (Loss)
We define non-GAAP net income (loss) as net loss
less (i) stock-based compensation expense, (ii) amortization of
intangible assets, (iii) employer payroll taxes on stock-based
compensation, (iv) change in fair value of contingent
consideration, (v) non-cash interest expense on our convertible
senior notes, and (vi) tax impact. Prior to the second quarter of
2020, the employer portion of payroll taxes on stock-based
compensation was insignificant and therefore we have not
historically excluded such amounts from non-GAAP net income (loss).
However, because the amount of stock-based compensation expense has
increased in the ordinary course of business, the employer payroll
taxes on our stock-based compensation has also increased and become
more meaningful. We believe that, similar to stock-based
compensation expense, such payroll taxes are unrelated to overall
operating performance and therefore we have determined to exclude
such amounts from non-GAAP net income loss) beginning with the
second quarter of 2020. We are making this update to our
presentation prospectively for the second quarter of 2020 and have
not updated any prior periods because such amounts were
insignificant.
Non-GAAP net income (loss) is used by our
management to understand and evaluate our operating performance and
trends. We believe that non-GAAP net income (loss) is helpful in
providing useful information about our operating results because it
eliminates the effect of items that are unrelated to overall
performance, but non-GAAP net income (loss) is not meant to be
considered in isolation or as a substitute for comparable GAAP
measures and should be read only in conjunction with our
consolidated financial statements prepared in accordance with
GAAP.
LIVONGO HEALTH,
INC.RECONCILIATION OF GAAP TO NON-GAAP
MEASURES(in thousands, except
percentages)(unaudited)
|
|
Three Months Ended June 30, 2020 |
|
|
GAAP |
|
Stock-Based Compensation Expense |
|
Amortization of Intangible Assets |
|
Employer Payroll Taxes on Stock-Based Compensation
(1) |
|
Change in Fair Value of Contingent
Consideration |
|
Non-Cash Interest Expense on Convertible Debt |
|
Tax Impact |
|
Non-GAAP |
Cost of revenue |
|
$ |
21,466 |
|
|
$ |
(118 |
) |
|
$ |
(420 |
) |
|
$ |
(27 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
20,901 |
|
Gross profit |
|
$ |
70,457 |
|
|
$ |
118 |
|
|
$ |
420 |
|
|
$ |
27 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
71,022 |
|
Gross margin |
|
76.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
77.3 |
% |
Research and development |
|
$ |
15,809 |
|
|
$ |
(1,593 |
) |
|
$ |
— |
|
|
$ |
(572 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
13,644 |
|
Sales and marketing |
|
$ |
32,881 |
|
|
$ |
(2,364 |
) |
|
$ |
(272 |
) |
|
$ |
(451 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
29,794 |
|
General and
administrative |
|
$ |
22,027 |
|
|
$ |
(5,800 |
) |
|
$ |
— |
|
|
$ |
(547 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
15,680 |
|
Change in fair value of
contingent consideration |
|
$ |
2 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(2 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Total operating expenses |
|
$ |
70,719 |
|
|
$ |
(9,757 |
) |
|
$ |
(272 |
) |
|
$ |
(1,570 |
) |
|
$ |
(2 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
59,118 |
|
(Loss) income from
operations |
|
$ |
(262 |
) |
|
$ |
9,875 |
|
|
$ |
692 |
|
|
$ |
1,597 |
|
|
$ |
2 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
11,904 |
|
Interest (expense) income,
net |
|
$ |
(1,184 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1,922 |
|
|
$ |
— |
|
|
$ |
738 |
|
Other (expense) income,
net |
|
$ |
(36 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(36 |
) |
Income tax (benefit)
provision |
|
$ |
(1,482 |
) |
|
$ |
9,875 |
|
|
$ |
692 |
|
|
$ |
1,597 |
|
|
$ |
2 |
|
|
$ |
1,922 |
|
|
$ |
— |
|
|
$ |
12,606 |
|
Net (loss) income |
|
$ |
(1,554 |
) |
|
$ |
9,875 |
|
|
$ |
692 |
|
|
$ |
1,597 |
|
|
$ |
2 |
|
|
$ |
1,922 |
|
|
$ |
— |
|
|
$ |
12,534 |
|
Net (loss) income attributable
to common stockholders |
|
$ |
(1,554 |
) |
|
$ |
9,875 |
|
|
$ |
692 |
|
|
$ |
1,597 |
|
|
$ |
2 |
|
|
$ |
1,922 |
|
|
$ |
— |
|
|
$ |
12,534 |
|
Net (loss) income per share
attributable to common stockholders, diluted |
|
$ |
(0.02 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
0.11 |
|
Weighted-average shares used
in computing net income (loss) per share attributable to common
stockholders, diluted |
|
97,896 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
113,916 |
|
(1) As noted above, beginning in the second quarter
of 2020, we made a prospective update to our presentation of
non-GAAP net income to exclude (i.e., add back) the employer
portion of payroll taxes on stock-based compensation. As such, the
non-GAAP net income presented above for the three months ended June
30, 2020 excludes our portion of payroll taxes on stock-based
compensation from the second quarter of 2020. We have not updated
any prior periods.
|
|
Three Months Ended June 30, 2019 |
|
|
GAAP |
|
Stock-Based Compensation Expense |
|
Amortization of Intangible Assets |
|
Acquisition Related Expenses |
|
Change in Fair Value of Contingent
Consideration |
|
Tax Impact |
|
Non-GAAP |
Cost of revenue |
|
$ |
11,964 |
|
|
|
$ |
(6 |
) |
|
$ |
(353 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
11,605 |
|
|
Gross profit |
|
$ |
28,951 |
|
|
|
$ |
6 |
|
|
$ |
353 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
29,310 |
|
|
Gross margin |
|
70.8 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
71.6 |
|
% |
Research and development |
|
$ |
10,291 |
|
|
|
$ |
(491 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
9,800 |
|
|
Sales and marketing |
|
$ |
17,833 |
|
|
|
$ |
(41 |
) |
|
$ |
(276 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
17,516 |
|
|
General and
administrative |
|
$ |
13,702 |
|
|
|
$ |
(3,915 |
) |
|
$ |
— |
|
|
$ |
(18 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
9,769 |
|
|
Change in fair value of
contingent consideration |
|
$ |
282 |
|
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(282 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
Total operating expenses |
|
$ |
42,108 |
|
|
|
$ |
(4,447 |
) |
|
$ |
(276 |
) |
|
$ |
(18 |
) |
|
$ |
(282 |
) |
|
$ |
— |
|
|
$ |
37,085 |
|
|
(Loss) income from
operations |
|
$ |
(13,157 |
) |
|
|
$ |
4,453 |
|
|
$ |
629 |
|
|
$ |
18 |
|
|
$ |
282 |
|
|
$ |
— |
|
|
$ |
(7,775 |
) |
|
Interest income, net |
|
$ |
183 |
|
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
183 |
|
|
Other income, net |
|
$ |
2 |
|
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
2 |
|
|
(Loss) income before provision
for income taxes |
|
$ |
(12,972 |
) |
|
|
$ |
4,453 |
|
|
$ |
629 |
|
|
$ |
18 |
|
|
$ |
282 |
|
|
$ |
— |
|
|
$ |
(7,590 |
) |
|
Income tax provision |
|
$ |
5 |
|
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
5 |
|
|
Net (loss) |
|
$ |
(12,977 |
) |
|
|
$ |
4,453 |
|
|
$ |
629 |
|
|
$ |
18 |
|
|
$ |
282 |
|
|
$ |
— |
|
|
$ |
(7,595 |
) |
|
Accretion of redeemable
convertible preferred stock |
|
$ |
(42 |
) |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(42 |
) |
|
Net (loss) attributable to
common stockholders |
|
$ |
(13,019 |
) |
|
|
$ |
4,453 |
|
|
$ |
629 |
|
|
$ |
18 |
|
|
$ |
282 |
|
|
$ |
— |
|
|
$ |
(7,637 |
) |
|
Net (loss) per share
attributable to common stockholders, diluted |
|
$ |
(0.69 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(0.40 |
) |
|
Weighted-average shares used
in computing net loss per share attributable to common
stockholders, diluted |
|
18,916 |
|
|
|
|
|
|
|
|
|
|
|
|
|
18,916 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2020 |
|
|
GAAP |
|
Stock-Based Compensation Expense |
|
Amortization of Intangible Assets |
|
Employer Payroll Taxes on Stock Based Compensation
(1) |
|
Change in Fair Value of Contingent
Consideration |
|
Non-Cash Interest Expense on Convertible Debt |
|
Tax Impact |
|
Non-GAAP |
Cost of revenue |
|
$ |
39,572 |
|
|
$ |
(210 |
) |
|
$ |
(840 |
) |
|
$ |
(27 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
38,495 |
|
Gross profit |
|
$ |
121,173 |
|
|
$ |
210 |
|
|
$ |
840 |
|
|
$ |
27 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
122,250 |
|
Gross margin |
|
75.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
76.1 |
% |
Research and development |
|
$ |
29,806 |
|
|
$ |
(3,809 |
) |
|
$ |
— |
|
|
$ |
(725 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
25,272 |
|
Sales and marketing |
|
$ |
60,535 |
|
|
$ |
(4,416 |
) |
|
$ |
(548 |
) |
|
$ |
(618 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
54,953 |
|
General and
administrative |
|
$ |
37,874 |
|
|
$ |
(9,503 |
) |
|
$ |
— |
|
|
$ |
(827 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
27,544 |
|
Change in fair value of
contingent consideration |
|
$ |
86 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(86 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Total operating expenses |
|
$ |
128,301 |
|
|
$ |
(17,728 |
) |
|
$ |
(548 |
) |
|
$ |
(2,170 |
) |
|
$ |
(86 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
107,769 |
|
(Loss) income from
operations |
|
$ |
(7,128 |
) |
|
$ |
17,938 |
|
|
$ |
1,388 |
|
|
$ |
2,197 |
|
|
$ |
86 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
14,481 |
|
Interest income, net |
|
$ |
156 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1,922 |
|
|
$ |
— |
|
|
$ |
2,078 |
|
Other (expense), net |
|
$ |
(62 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(62 |
) |
(Loss) income before provision
for income taxes |
|
$ |
(7,034 |
) |
|
$ |
17,938 |
|
|
$ |
1,388 |
|
|
$ |
2,197 |
|
|
$ |
86 |
|
|
$ |
1,922 |
|
|
$ |
— |
|
|
$ |
16,497 |
|
Income tax provision |
|
$ |
93 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
93 |
|
Net (loss) income |
|
$ |
(7,127 |
) |
|
$ |
17,938 |
|
|
$ |
1,388 |
|
|
$ |
2,197 |
|
|
$ |
86 |
|
|
$ |
1,922 |
|
|
$ |
— |
|
|
$ |
16,404 |
|
Net (loss) income attributable
to common stockholders |
|
$ |
(7,127 |
) |
|
$ |
17,938 |
|
|
$ |
1,388 |
|
|
$ |
2,197 |
|
|
$ |
86 |
|
|
$ |
1,922 |
|
|
$ |
— |
|
|
$ |
16,404 |
|
Net (loss) income per share
attributable to common stockholders, diluted |
|
$ |
(0.07 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
0.14 |
|
Weighted-average shares used
in computing net loss per share attributable to common
stockholders, diluted |
|
96,719 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
113,334 |
|
(1) As noted above, beginning in the second quarter
of 2020, we made a prospective update to our presentation of
non-GAAP net income to exclude (i.e., add back) the employer
portion of payroll taxes on stock-based compensation. As such, the
non-GAAP net income presented above for the six months ended June
30, 2020 excludes our portion of payroll taxes on stock-based
compensation from the second quarter of 2020. We have not updated
any prior periods. The employer portion of payroll taxes on
stock-based compensation was $1,555 for the three months ended
March 31, 2020; as such, non-GAAP net income would have been
$17,959, and non-GAAP diluted net income per share attributable to
common stockholders would have been $0.16, for the six months ended
June 30, 2020 had this update been made on a retroactive basis back
to the first quarter of 2020.
|
|
Six Months Ended June 30, 2019 |
|
|
GAAP |
|
Stock-Based Compensation Expense |
|
Amortization of Intangible Assets |
|
Acquisition Related Expenses |
|
Change in Fair Value of Contingent
Consideration |
|
Tax Impact |
|
Non-GAAP |
Cost of revenue |
|
$ |
21,827 |
|
|
|
$ |
(12 |
) |
|
$ |
(680 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
21,135 |
|
|
Gross profit |
|
$ |
51,155 |
|
|
|
$ |
12 |
|
|
$ |
680 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
51,847 |
|
|
Gross margin |
|
70.1 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
71.0 |
|
% |
Research and development |
|
$ |
19,285 |
|
|
|
$ |
(852 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
18,433 |
|
|
Sales and marketing |
|
$ |
32,476 |
|
|
|
$ |
(260 |
) |
|
$ |
(513 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
31,703 |
|
|
General and
administrative |
|
$ |
27,816 |
|
|
|
$ |
(8,839 |
) |
|
$ |
— |
|
|
$ |
(225 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
18,752 |
|
|
Change in fair value of
contingent consideration |
|
$ |
956 |
|
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(956 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
Total operating expenses |
|
$ |
80,533 |
|
|
|
$ |
(9,951 |
) |
|
$ |
(513 |
) |
|
$ |
(225 |
) |
|
$ |
(956 |
) |
|
$ |
— |
|
|
$ |
68,888 |
|
|
(Loss) from operations |
|
$ |
(29,378 |
) |
|
|
$ |
9,963 |
|
|
$ |
1,193 |
|
|
$ |
225 |
|
|
$ |
956 |
|
|
$ |
— |
|
|
$ |
(17,041 |
) |
|
Interest income, net |
|
$ |
641 |
|
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
641 |
|
|
Other income, net |
|
$ |
6 |
|
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
6 |
|
|
(Loss) income before provision
for income taxes |
|
$ |
(28,731 |
) |
|
|
$ |
9,963 |
|
|
$ |
1,193 |
|
|
$ |
225 |
|
|
$ |
956 |
|
|
$ |
— |
|
|
$ |
(16,394 |
) |
|
Income tax (benefit)
provision |
|
$ |
(1,383 |
) |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1,396 |
|
|
$ |
13 |
|
|
Net (loss) |
|
$ |
(27,348 |
) |
|
|
$ |
9,963 |
|
|
$ |
1,193 |
|
|
$ |
225 |
|
|
$ |
956 |
|
|
$ |
(1,396 |
) |
|
$ |
(16,407 |
) |
|
Accretion of redeemable
convertible preferred stock |
|
$ |
(83 |
) |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(83 |
) |
|
Net (loss) attributable to
common stockholders |
|
$ |
(27,431 |
) |
|
|
$ |
9,963 |
|
|
$ |
1,193 |
|
|
$ |
225 |
|
|
$ |
956 |
|
|
$ |
(1,396 |
) |
|
$ |
(16,490 |
) |
|
Net (loss) per share
attributable to common stockholders, diluted |
|
$ |
(1.48 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(0.89 |
) |
|
Weighted-average shares used
in computing net loss per share attributable to common
stockholders, diluted |
|
18,564 |
|
|
|
|
|
|
|
|
|
|
|
|
|
18,564 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Gross Profit and Adjusted Gross
Margin
Adjusted gross profit and adjusted gross margin
are key performance measures that our management uses to assess our
overall performance. We define adjusted gross profit as GAAP gross
profit, excluding (i) stock-based compensation expense, (ii)
amortization of intangible assets, and (iii) employer payroll taxes
on stock-based compensation. Prior to the second quarter of 2020,
the employer portion of payroll taxes on stock-based compensation
was insignificant and therefore we have not historically excluded
such amounts from adjusted gross profit and adjusted gross margin.
However, because the amount of stock-based compensation expense has
increased in the ordinary course of business, the employer payroll
taxes on our stock-based compensation has also increased and become
more meaningful. We believe that, similar to stock-based
compensation expense, such payroll taxes are unrelated to overall
operating performance and therefore we have determined to exclude
such amounts from adjusted gross profit and adjusted gross margin
beginning with the second quarter of 2020. We are making this
update to our presentation prospectively for the second quarter of
2020 and have not updated any prior periods because such amounts
were insignificant.
We define adjusted gross margin as our adjusted
gross profit divided by our revenue. We believe adjusted gross
profit and adjusted gross margin provide our management and
investors consistency and comparability with our past financial
performance and facilitate period-to-period comparisons of
operations, as these metrics eliminate the effects of the
above-referenced items as factors unrelated to overall operating
performance. The following table presents a reconciliation of
adjusted gross profit from the most comparable GAAP measure, gross
profit, for the periods presented:
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
(dollars in thousands) |
Gross profit |
|
$ |
70,457 |
|
|
$ |
28,951 |
|
|
$ |
121,173 |
|
|
$ |
51,155 |
|
Add: |
|
|
|
|
|
|
|
|
Stock-based compensation expense |
|
118 |
|
|
6 |
|
|
210 |
|
|
12 |
|
Amortization of intangible assets |
|
420 |
|
|
353 |
|
|
840 |
|
|
680 |
|
Employer payroll tax on stock-based compensation(1) |
|
27 |
|
|
— |
|
|
27 |
|
|
— |
|
Adjusted gross profit |
|
$ |
71,022 |
|
|
$ |
29,310 |
|
|
$ |
122,250 |
|
|
$ |
51,847 |
|
Adjusted gross margin (as a
percentage of revenue) |
|
77.3 |
% |
|
71.6 |
% |
|
76.1 |
% |
|
71.0 |
% |
(1) As noted above, beginning in the second
quarter of 2020, we made a prospective update to our presentation
of adjusted gross profit and adjusted gross margin to exclude
(i.e., add back) the employer portion of payroll taxes on
stock-based compensation. As such, the adjusted gross profit and
adjusted gross margin presented above for the three and six months
ended June 30, 2020 excludes our portion of payroll taxes on
stock-based compensation from the second quarter of 2020 recorded
as a component of cost of revenue. We have not updated any prior
periods. The employer portion of payroll taxes on stock-based
compensation was $23 for the three months ended March 31, 2020; as
such, adjusted gross profit would have been $122,273, and adjusted
gross margin (as a percentage of revenue) would have been 76.1%,
for the six months ended June 30, 2020 had this update been made on
a retroactive basis back to the first quarter of 2020.
Adjusted EBITDA
Adjusted EBITDA is a key performance measure
that our management uses to assess our operating performance.
Because adjusted EBITDA facilitates internal comparisons of our
historical operating performance on a more consistent basis, we use
this measure for business planning purposes and in evaluating
acquisition opportunities.
We calculate adjusted EBITDA as net loss
adjusted to exclude (i) depreciation and amortization,
(ii) amortization of intangible assets, (iii) stock-based
compensation expense, (iv) employer payroll taxes on stock-based
compensation, (v) acquisition-related expenses, (vi) change in
fair value of contingent consideration, (vii) other income, net,
and (viii) provision for (benefit from) income taxes. Prior to the
second quarter of 2020, the employer portion of payroll taxes on
stock-based compensation was insignificant and therefore we have
not historically excluded such amounts from adjusted EBITDA.
However, because the amount of stock-based compensation expense has
increased in the ordinary course of business, the employer payroll
taxes on our stock-based compensation has also increased and become
more meaningful. We believe that, similar to stock-based
compensation expense, such payroll taxes are unrelated to overall
operating performance and therefore we have determined to exclude
such amounts from adjusted EBITDA beginning with the second quarter
of 2020. We are making this update to our presentation
prospectively for the second quarter of 2020 and have not updated
any prior periods because such amounts were insignificant.
The following table presents a reconciliation of
adjusted EBITDA from the most comparable GAAP measure, net loss,
for the periods presented:
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
(in thousands) |
Net (loss) |
|
$ |
(1,554 |
) |
|
$ |
(12,977 |
) |
|
$ |
(7,127 |
) |
|
$ |
(27,348 |
) |
Add: |
|
|
|
|
|
|
|
|
Depreciation and
amortization(1) |
|
1,439 |
|
|
754 |
|
|
2,619 |
|
|
1,450 |
|
Amortization of intangible
assets |
|
692 |
|
|
629 |
|
|
1,388 |
|
|
1,193 |
|
Stock-based compensation
expense |
|
9,875 |
|
|
4,453 |
|
|
17,938 |
|
|
9,963 |
|
Employer payroll tax on
stock-based compensation(2) |
|
1,597 |
|
|
— |
|
|
2,197 |
|
|
— |
|
Acquisition-related
expenses(3) |
|
— |
|
|
18 |
|
|
— |
|
|
225 |
|
Change in fair value of
contingent consideration |
|
2 |
|
|
282 |
|
|
86 |
|
|
956 |
|
Other income (expense),
net(4) |
|
1,220 |
|
|
(185 |
) |
|
(94 |
) |
|
(647 |
) |
Provision for (benefit from)
income taxes |
|
72 |
|
|
5 |
|
|
93 |
|
|
(1,383 |
) |
Adjusted EBITDA |
|
$ |
13,343 |
|
|
$ |
(7,021 |
) |
|
$ |
17,100 |
|
|
$ |
(15,591 |
) |
______________(1) Depreciation and amortization
includes depreciation of property and equipment, amortization of
debt discount, and amortization of capitalized internal-use
software costs.(2) As noted above, beginning in the
second quarter of 2020, we made a prospective update to our
presentation of adjusted EBITDA to exclude (i.e., add back) the
employer portion of payroll taxes on stock-based compensation. As
such, the adjusted EBITDA presented above for the three and six
months ended June 30, 2020 excludes our portion of payroll taxes on
stock-based compensation from the second quarter of 2020. We have
not updated any prior periods. The adjusted EBITDA presented above
for the six months ended June 30, 2020 also excludes the employer
portion of payroll taxes paid in connection with the stock releases
upon the expiration of the lock-up agreement related to our IPO
because such payroll taxes were a one-time occurrence in the three
months ended March 31, 2020. The employer portion of payroll taxes
on stock-based compensation was $1,555 for the three months ended
March 31, 2020; as such, adjusted EBITDA would have been $18,655
for the six months ended June 30, 2020 had this update been made on
a retroactive basis back to the first quarter of 2020.(3)
Acquisition-related expenses consist primarily of transaction
and transition related fees and expenses, including legal,
accounting, and other professional fees.(4) Other
income (expense), net includes interest (expense) income, and other
(expense) income.
Some of the limitations of adjusted EBITDA
include (i) adjusted EBITDA does not properly reflect capital
commitments to be paid in the future, and (ii) although
depreciation and amortization are non-cash charges, the
underlying assets may need to be replaced and adjusted EBITDA does
not reflect these capital expenditures. Our adjusted EBITDA may not
be comparable to similarly titled measures of other companies
because they may not calculate adjusted EBITDA in the same manner
as we calculate the measure, limiting its usefulness as a
comparative measure. In evaluating adjusted EBITDA, you should be
aware that in the future we will incur expenses similar to the
adjustments in this presentation. Our presentation of adjusted
EBITDA should not be construed as an inference that our future
results will be unaffected by these expenses or any unusual or
non-recurring items. When evaluating our performance, you should
consider adjusted EBITDA alongside other financial performance
measures, including our net loss and other GAAP results.
Key Metrics
We monitor the following key metrics to help us
evaluate our business, identify trends affecting our business,
formulate business plans and make strategic decisions. We believe
the following metrics are useful in evaluating our business.
Our key metrics are as follows:
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
(dollars in thousands) |
Clients(1) |
|
1,328 |
|
|
758 |
|
|
1,328 |
|
|
758 |
|
Enrolled Diabetes Members |
|
410,270 |
|
|
192,934 |
|
|
410,270 |
|
|
192,934 |
|
Estimated Value of Agreements(2) |
|
$ |
108,705 |
|
|
$ |
74,234 |
|
|
$ |
197,713 |
|
|
$ |
122,297 |
|
(1) First quarter and first half of
2019 has been updated to conform to current methodology as
described further below.(2) Previously referred to
as total contract value
Clients. We define our clients
as business entities that have at least one active paid contract
with us at the end of a particular period. Entities that access our
platform through our channel partners, such as PBMs and resellers,
are counted as individual clients. Historically, we have treated
our partnerships with health plans as a single client, though
multiple employers may contract for our services through a single
health plan, because of the relatively small number of employers
who enrolled under those plans. Because of the increase in the
number of employers who are enrolling through health plans instead
of other channels, beginning with the first quarter of 2020 we
believe that it is more appropriate to treat health plans in the
same manner as we treat our channel partners, such as PBMs and
resellers, and include entities who enroll in our platform through
a health plan as separate clients. The historical information
presented has been revised to include such entities as individual
clients. We do not count our channel partners, such as PBMs, health
plans, or resellers as clients, unless they also separately have
active paid contracts for our solutions. If business units or
subsidiaries of the same entity enter into separate agreements with
us, they are counted as separate clients. However, entities that
have purchased multiple solutions through different contracts are
treated as a single client.
Enrolled Diabetes Members. We
believe our ability to grow the number of enrolled diabetes members
is an indicator of penetration of our flagship solution, Livongo
for Diabetes. We define our enrolled diabetes members as all
individuals that are enrolled in Livongo for Diabetes at the end of
a given period. This number excludes: (i) employees or
dependents of a client that has ceased using our solution,
(ii) employees who no longer have an employment relationship
with an active client, and their dependents, and
(iii) employees and dependents who have not been active on or
used our solution for a period of time as specified in the
applicable client’s agreement, which is typically between four and
six months.
Estimated Value of Agreements
(EVA). This represents the estimated value of agreements,
signed in the relevant period and was previously referred to as the
Total Contract Value, or TCV, in certain of Livongo's previous
filings with the Securities and Exchange Commission. Estimated
Value of Agreements includes agreements entered into with new
clients or expansions entered into with existing clients. Estimated
Value of Agreements is helpful in evaluating our business because
it provides some visibility into future revenue. Our new client
subscriptions typically have a term of one to three years, and we
generally invoice our clients in monthly installments at the end of
each month in the subscription period based on the number of
members in such month who were active on or used our solution
within a certain period of time, as specified in the applicable
client’s agreement. We define Estimated Value of Agreements as
contractually committed orders to be invoiced under agreements
initially entered into during the relevant period. Agreements are
only counted in Estimated Value of Agreements in the period in
which they are entered into, and for purposes of this calculation,
we assume an average member enrollment rate. Our estimates include
assumptions regarding the total recruitable individuals at a
client, commencement of enrollment period, enrollment method,
starting enrollment rates, monthly increases to enrollment rates
over time, contract length, and client size and industry. Estimates
also assume the agreement will not be terminated early and will be
serviced for the full term, there are no changes to the total
recruitable individuals at a client during the relevant period, and
no changes to the per participant per month fee during the relevant
period. Until such time as these amounts are invoiced, which occurs
at the end of each month of service, they are not recorded in
revenue, deferred revenue, or elsewhere in our consolidated
financial statements.
Livongo Health (NASDAQ:LVGO)
Gráfico Histórico do Ativo
De Mai 2024 até Jun 2024
Livongo Health (NASDAQ:LVGO)
Gráfico Histórico do Ativo
De Jun 2023 até Jun 2024