- Total revenue of $47.6 million, up 19% year-over-year
- GAAP operating income of $1.3 million; non-GAAP operating income of $6.7 million
- GAAP EPS of $0.04; non-GAAP EPS of $0.16, up 23% year-over-year
- Adjusted EBITDA of $7.3 million, representing an adjusted EBITDA margin of 15.2%
ORANGE, Conn.–(BUSINESS WIRE)– Tangoe, Inc. (NASDAQ: TNGO), a leading global provider ofCommunications Lifecycle Management (CLM) software and related services, today announced financial results for its third quarter ended September 30, 2013.
“We are pleased with our execution during the third quarter and the ongoing high level of customer demand. The combination of these factors led to strong quarterly customer additions, as well as significant success in expanding our relationships with global customers, as Tangoe continues to expand its global market leadership,” stated Al Subbloie, president and CEO of Tangoe. “Looking forward, we continue to be optimistic about the company’s future, which is supported by our initial guidance of strong revenue growth and profitability for the full year 2014.”
Third Quarter 2013 Financial Highlights
- Revenue: Total revenue for the third quarter was $47.6 million, an increase of 19% on a year-over-year basis. Recurring technology and services revenue was $42.6 million, an increase of 18% on a year-over-year basis. Strategic consulting, software licenses and other services revenue contributed the remaining $5.0 million of total revenue for the third quarter of 2013.
- Operating Income: GAAP operating income for the third quarter was $1.3 million, compared to GAAP operating income of $0.9 million for the third quarter of 2012. Non-GAAP operating income for the third quarter was $6.7 million, compared to $5.5 million for the third quarter of 2012.
- Net Income: GAAP net income for the third quarter was $1.6 million, compared to $0.6 million of net income for the same period last year. GAAP diluted income per share for the third quarter was $0.04, based on 40.9 million weighted-average diluted shares outstanding, compared to income per share of $0.01, based on 41.0 million weighted-average diluted shares outstanding, for the same period last year.Non-GAAP net income for the third quarter was $6.7 million, up 24% compared to $5.4 million for the third quarter of 2012. Non-GAAP diluted net income per share for the third quarter was $0.16 based on 40.9 million weighted-average diluted shares outstanding compared to $0.13 per share based on 41.0 million weighted-average diluted shares outstanding for the same period last year.
- Adjusted EBITDA: Adjusted EBITDA for the third quarter was $7.3 million, an increase of 21% compared to $6.0 million for the third quarter of 2012. Adjusted EBITDA margin was 15.2% for the third quarter of 2013, an increase compared to a 15.0% margin for the same period last year.
- Cash and Cash Flow: As of September 30, 2013, Tangoe had cash and cash equivalents of $42.3 million, a decrease of $1.8 million from the end of the prior quarter due primarily to the payment during the quarter of deferred purchase price obligations for acquisitions, which was partially offset by the proceeds from the exercise of stock options and the generation of unlevered free cash flow.The company generated $5.9 million in net cash from operations for the third quarter of 2013, compared to $6.0 million during the third quarter of 2012. The company generated $5.1 million in unlevered free cash flow for the quarter, compared to $5.4 million during the third quarter of 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.”
As of November 5, 2013, Tangoe is providing guidance for its fourth quarter and full year 2013. In addition, the company is establishing its initial guidance for the full year 2014.
- Fourth Quarter 2013 Guidance: Total revenue is expected to be in the range of $49.9 million to $50.4 million. Adjusted EBITDA is expected to be in the range of $8.4 million to $8.6 million. Non-GAAP net income per share is expected to be approximately $0.18 based on approximately 41.3 million weighted-average diluted shares outstanding.
- Full Year 2013 Guidance: Total revenue is expected to be in the range of $188.8 million to $189.3 million. Adjusted EBITDA is expected to be in the range of $29.7 million to $29.9 million. Non-GAAP net income per share is expected to be approximately $0.65 based on approximately 40.7 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.
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 third quarter 2013 and business outlook. To access this call, dial 800.829.9048 (United States), or 913.312.0968 (international), with conference ID #2300601. A live webcast of the conference call will be accessible from the investor relations page of Tangoe’s website at https://investor.www.tangoe.com, and a recording will be archived and accessible at https://investor.www.tangoe.com/events.cfm. A recording of this conference call will also be available through November 19, 2013, by dialing 877.870.5176 (United States), or 858.384.5517 (international). The recording access code is #2300601.
Tangoe (NASDAQ:TNGO) is a leading global provider of Communications Lifecycle Management (CLM) software and services to a wide range of global enterprises. CLM encompasses the entire lifecycle of an enterprise’s communications assets and services, including planning and sourcing, procurement and provisioning, inventory and usage management, mobile device management, real time telecommunications expense management, invoice processing, expense allocation and accounting, forward and reverse logistics and asset decommissioning and disposal. Tangoe’s Communications Management Platform (CMP) is an on-demand suite of software designed to manage and optimize the complex processes and expenses associated with this lifecycle for both fixed and mobile communications assets and services. Tangoe’s customers can also manage their communications assets and services by engaging Tangoe’s client service group.
Additional information about Tangoe can be found at tangoe2016.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 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 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.
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,” “would,” “target” 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 August 9, 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.