News

Tangoe, Inc. Announces Fourth Quarter and Full Year 2013 Financial Results

Posted on: February 12, 2014
Release date: 2/12/2014

Full Year Highlights:

  • Total revenue of $188.9 million, up 22% year-over-year
  • GAAP operating income of $5.1 million; non-GAAP operating income of $27.3 million
  • GAAP EPS of $0.12; non-GAAP EPS of $0.65, up 30% year-over-year
  • Adjusted EBITDA of $29.7 million, representing an adjusted EBITDA margin of 15.7% and year-over-year growth of 33%

ORANGE, Conn.–(BUSINESS WIRE)– Tangoe, Inc. (NASDAQ: TNGO), a leading global provider of Connection Lifecycle Management (CLM) software and related services, today announced financial results for its fourth quarter and full year ended December 31, 2013.

“The company’s fourth quarter performance was highlighted by continued strong growth in customer additions and upsells of our integrated offerings into our expanded customer base,” stated Al Subbloie, president and CEO of Tangoe. “During 2013, Tangoe further validated the strength of its strategy as we expanded our scale, customer base, geographic presence and technology leadership. Looking forward, we believe we are well positioned to sustain our momentum and gain market share, which is reflected by our strong 2014 revenue and profitability guidance.”

Fourth Quarter 2013 Financial Highlights

  • Revenue: Total revenue for the fourth quarter was $50.0 million, an increase of 14% on a year-over-year basis. Recurring technology and services revenue was $44.4 million, an increase of 14% on a year-over-year basis. Strategic consulting, software licenses and other services revenue contributed the remaining $5.6 million of total revenue for the fourth quarter of 2013.
  • Operating Income: GAAP operating income for the fourth quarter was $2.0 million, compared to GAAP operating income of $2.3 million for the fourth quarter of 2012. Non-GAAP operating income for the fourth quarter was $7.6 million, compared to $7.0 million for the fourth quarter of 2012.
  • Net Income: GAAP net income for the fourth quarter was $1.7 million, compared to $1.9 million of GAAP net income for the same period last year. GAAP diluted net income per share for the fourth quarter was $0.04, based on 41.3 million weighted-average diluted shares outstanding, compared to income per share of $0.05, based on 40.7 million weighted-average diluted shares outstanding, for the same period last year.Non-GAAP net income for the fourth quarter was $7.3 million, compared to $6.8 million for the fourth quarter of 2012. Non-GAAP diluted net income per share for the fourth quarter was $0.18 based on 41.3 million weighted-average diluted shares outstanding compared to $0.17 per share based on 40.7 million weighted-average diluted shares outstanding for the same period last year.
  • Adjusted EBITDA: Adjusted EBITDA for the fourth quarter was $8.4 million compared to $7.5 million for the fourth quarter of 2012. Adjusted EBITDA margin was 16.8% for the fourth quarter of 2013.
  • Cash and Cash Flow: As of December 31, 2013, Tangoe had cash and cash equivalents of $43.2 million, an increase of $0.9 million from the end of the prior quarter due primarily to the generation of unlevered free cash flow and proceeds from the exercise of stock options during the quarter, which was partially offset by the repurchase of common stock and payment of deferred purchase price obligations for acquisitions.The company generated $4.8 million in net cash from operations for the fourth quarter of 2013, compared to $3.2 million during the fourth quarter of 2012. The company generated $4.0 million in unlevered free cash flow for the quarter, compared to $2.7 million during the fourth quarter of 2012.

Full Year 2013 Financial Highlights

  • Revenue: Total revenue for the full year 2013 was $188.9 million, an increase of 22% on a year-over-year basis. Recurring technology and services revenue was $168.5 million, an increase of 22% on a year-over-year basis. Strategic consulting, software licenses and other services contributed the remaining $20.4 million of total revenue for 2013.
  • Operating Income: GAAP operating income for the full year 2013 was $5.1 million, compared to GAAP operating income of $4.4 million for 2012. Non-GAAP operating income was $27.3 million, representing an increase of 35% compared to $20.3 million for 2012.
  • Net Income: GAAP net income for the full year 2013 was $5.0 million, compared to a $3.0 million for 2012. GAAP diluted net income per share was $0.12 based on 40.5 million weighted-average diluted shares outstanding for the full year 2013, compared to $0.08 based on 39.9 million weighted-average diluted shares outstanding for 2012.Non-GAAP net income for the full year 2013 was $26.3 million, up 33% compared to $19.8 million for 2012. Non-GAAP diluted net income per share for 2013 was $0.65 based on 40.5 million weighted-average diluted shares outstanding, an increase of 30% compared to $0.50 per share based on 39.9 million weighted-average diluted shares outstanding for 2012.
  • Adjusted EBITDA: Adjusted EBITDA for the full year 2013 was $29.7 million, an increase of 33% compared to $22.3 million for 2012. Adjusted EBITDA margin was 15.7% for 2013, an increase compared to a 14.4% margin for 2012.
  • Cash Flow: The Company generated $21.4 million in net cash from operations during the full year 2013, compared to $16.7 million in 2012. The Company generated $18.9 million in unlevered free cash flow for 2013, an increase of 26% compared to $15.0 million for 2012.

A reconciliation of GAAP to non-GAAP financial measures has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”

Financial Outlook

As of February 12, 2014, Tangoe is providing guidance for its first quarter and full year 2014.

  • First Quarter 2014 Guidance: Total revenue is expected to be in the range of $50.7 million to $51.4 million. Adjusted EBITDA is expected to be in the range of $7.6 million to $7.9 million. Non-GAAP net income per share is expected to be approximately $0.17 based on approximately 41.5 million weighted-average diluted shares outstanding.
  • Full Year 2014 Guidance: Total revenue is expected to be in the range of $220.0 million to $224.0 million. Adjusted EBITDA is expected to be in the range of $37.0 million to $39.0 million. Non-GAAP net income per share is expected to be in the range of $0.77 to $0.82 based on approximately 42.0 million weighted-average diluted shares outstanding.

Quarterly Conference Call

Tangoe will host a conference call today at 5:00 p.m. EST to review the company’s financial results for the fourth quarter and full year 2013 and business outlook. To access this call, dial 877.852.6581 (United States), or 719.325.4857 (international), with conference ID #9837067. A live webcast of the conference call will be accessible from the investor relations page of Tangoe’s website at http://investor.tangoe.com, and a recording will be archived and accessible at http://investor.tangoe.com/events.cfm. A recording of this conference call will also be available through February 26, 2014, by dialing 877.870.5176 (United States), or 858.384.5517 (international). The recording access code is #9837067.

About Tangoe

Tangoe (NASDAQ:TNGO) is a leading global provider of Connection Lifecycle Management (CLM) software and services to a wide range of global enterprises and service providers. The company’s Connection Lifecycle Management technology, Matrix, is an on-demand suite of software and services designed to turn on, manage, secure, and support various connections in an enterprise’s communications lifecycle, including mobile, fixed, machine, cloud, social, and IT. Additional information about Tangoe can be found attangoe2016.wpengine.com. Tangoe is a registered trademark of Tangoe, Inc.

Non-GAAP Financial Measures

Adjusted EBITDA discussed in this press release is defined as net income plus interest expense, income tax provision, depreciation and amortization, amortization of marketing agreement intangible assets, stock-based compensation expense and, for 2012 only, other expense, and for 2013 only, restructuring charge; less amortization of leasehold interest, interest income and, for 2013 only, other income. Non-GAAP operating income excludes stock-based compensation expense, amortization of intangible assets and, for 2013 only, restructuring charge. Non-GAAP net income excludes stock-based compensation expense, amortization of intangible assets, amortization of debt discount, and, for 2012 only, other expense, and for 2013 only, restructuring charge and other income. Unlevered free cash flow is defined as net cash provided by operating activities plus net interest payments, less capital expenditures. Management presents these non-GAAP financial measures because it considers them to be important supplemental measures of performance. Management uses the non-GAAP financial measures for planning purposes, including analysis of the company’s performance against prior periods, the preparation of operating budgets and determination of appropriate levels of operating and capital investments. Management also believes that the non-GAAP financial measures provide additional insight for analysts and investors in evaluating the company’s financial and operational performance. However, these non-GAAP financial measures have limitations as an analytical tool and are not intended to be an alternative to financial measures prepared in accordance with GAAP. We intend to provide these non-GAAP financial measures as part of our future earnings discussions and, therefore, the inclusion of these non-GAAP financial measures will provide consistency in our financial reporting. A reconciliation of these non-GAAP measures to GAAP is provided in the accompanying tables.

Forward-Looking Statements

This press release contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, included in this press release regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans and objectives of management are forward-looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “target,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements include, among other things, statements about our estimates regarding future revenue and financial performance. We may not actually achieve the expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the expectations disclosed in the forward-looking statements we make. More information about potential factors that could affect our business and financial results is contained in our Quarterly Report on Form 10-Q as filed with the Securities and Exchange Commission on November 12, 2013. Additional information will also be set forth in our future quarterly reports on Form 10-Q, annual reports on Form 10-K and other filings that we make with the Securities and Exchange Commission. We do not intend, and undertake no duty, to release publicly any updates or revisions to any forward-looking statements contained herein.

$35+
Billion

of spend under
management

10+
Million

devices managed
globally

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