BroadSoft Reports Third Quarter 2015 Financial Results

ID: 1396787
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(businesspress24) - GAITHERSBURG, MD -- (Marketwired) -- 11/04/15 -- BroadSoft, Inc. (NASDAQ: BSFT), a leading global provider of Internet protocol-based, or IP-based, communications services to the telecommunications industry, today announced financial results for the quarter ended September 30, 2015.

Total revenue increased 26% year-over-year to $69.1 million

GAAP gross profit equaled 67% of total revenue; non-GAAP gross profit equaled 74% of total revenue

GAAP loss from operations totaled $(1.1) million or 2% of revenue; non-GAAP income from operations totaled $11.6 million or 17% of revenue

GAAP basic and diluted net loss per share equaled $(0.16) per common share; non-GAAP diluted earnings per share equaled $0.36 per common share

Total revenue rose to $69.1 million in the third quarter of 2015, an increase of 26% compared to $54.6 million in the third quarter of 2014.

Net loss for the third quarter of 2015 was $(4.8) million, or $(0.16) per basic and diluted common share, compared to net loss of $(2.3) million, or $(0.08) per basic and diluted common share in the third quarter of 2014.

On a non-GAAP basis, net income in the third quarter of 2015 was $10.9 million, or $0.36 per diluted common share, compared to non-GAAP net income of $10.1 million, or $0.34 per diluted common share, in the third quarter of 2014. A reconciliation of non-GAAP and GAAP results is included in the financial tables below.

Total revenue rose to $189.3 million for the first nine months of 2015, an increase of 25% compared to $151.0 million for the first nine months of 2014.

Net loss for the first nine months of 2015 was $(14.9) million, or $(0.51) per basic and diluted common share, compared to a net loss of $(8.1) million, or $(0.28) per basic and diluted common share for the first nine months of 2014.

On a non-GAAP basis, net income for the first nine months of 2015 was $27.9 million, or $0.92 per diluted common share, compared to non-GAAP net income of $21.1 million, or $0.71 per diluted common share, for the first nine months of 2014. A reconciliation of non-GAAP and GAAP results is included in the financial tables below.

"Last week, we held our 13th annual BroadSoft Connections users conference. This year''s event was both our biggest and best yet," said Michael Tessler, president and chief executive officer, BroadSoft. "Our theme this year was ''Define the Future.'' We saw genuine excitement amongst our customer base and industry analysts in response to our vision of our Unified Communications product future."

"We are very pleased with our third quarter results. We delivered over 25% year-over-year revenue and billings growth," said Jim Tholen, chief financial officer, BroadSoft. "From a customer adoption perspective, we had our best ever hosted UC sell-through in the quarter and surpassed a milestone of 12 million active end-users. We look forward to continuing this momentum as we close out the year."

For the fourth quarter of 2015, BroadSoft anticipates revenue of $78 to $84 million. The Company also expects to achieve earnings on a non-GAAP basis of $0.58 to $0.74 per diluted common share. For the full year 2015, BroadSoft now expects revenue in the range of $267 million to $273 million and non-GAAP EPS in the range of $1.50 to $1.66.

BroadSoft will discuss its third quarter 2015 results and its business outlook today via teleconference at 8:30 a.m. Eastern Time. To participate in the teleconference, callers can dial the toll free number 1-877-312-5517 (U.S. callers only) or 1-760-666-3772 (from outside the U.S.). The conference call can also be heard live via audio webcast at . To help ensure the conference begins on time, please dial in or connect via the web five minutes prior to the scheduled start time.

For those unable to participate in the live call, a recording will be available shortly after the conclusion of the call at and will remain available until immediately prior to our next earnings call.

BroadSoft has provided in this release, and will provide on this morning''s teleconference, financial information that has not been prepared in accordance with generally accepted accounting principles, or GAAP. BroadSoft uses these non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, as a supplement to GAAP measures, in evaluating BroadSoft''s ongoing operational performance. BroadSoft''s management regularly uses these non-GAAP financial measures to understand and manage its business and believes these non-GAAP financial measures provide meaningful supplemental information regarding the Company''s performance by excluding certain non-cash expenses, and may include additional adjustments for items that are infrequent in nature. BroadSoft believes the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing its financial results with other companies in BroadSoft''s industry, many of which present similar non-GAAP financial measures to investors. A reconciliation of the non-GAAP financial measures included in this release and to be discussed on this morning''s teleconference to the most directly comparable GAAP financial measures is set forth below.

Non-GAAP cost of revenue, license software cost of revenue, subscription and maintenance cost of revenue and professional services and other cost of revenue. We define non-GAAP cost of revenue as a cost of revenue less stock-based compensation expense and amortization expense for acquired intangible assets. We consider non-GAAP cost of revenue to be a useful metric for management and our investors because it excludes the effect of certain non-cash expenses so management and investors can compare our cost of revenue over multiple periods.

Non-GAAP gross profit, license software gross profit, subscription and maintenance support gross profit and professional services and other gross profit. We define non-GAAP gross profit as gross profit plus stock-based compensation expense and amortization expense for acquired intangible assets. We consider non-GAAP gross profit to be a useful metric for management and our investors because it excludes the effect of certain non-cash expenses so management and investors can compare our sales margins over multiple periods.

Non-GAAP income from operations. We define non-GAAP operating income as income from operations plus stock-based compensation expense and amortization expense for acquired intangible assets. We consider non-GAAP operating income to be a useful metric for management and investors because it excludes the effect of certain non-cash expenses so management and investors can compare our core business operating results over multiple periods.

Non-GAAP operating expenses, sales and marketing expense, research and development expense and general and administrative expense. We define non-GAAP operating expenses as operating expense plus stock-based compensation expense allocated to sales and marketing, research and development and general and administrative expenses. Similarly, we define non-GAAP sales and marketing, research and development and general and administrative expenses as the relevant GAAP measure plus stock-based compensation expense allocated to the particular expense item.

Non-GAAP net income and net income per share. We define non-GAAP net income as net income plus stock-based compensation expense, amortization expense for acquired intangible assets, non-cash interest expense on our convertible senior notes, foreign currency transaction gains and losses, loss on repurchase of our convertible senior notes and non-cash tax expense included in the GAAP tax provision. We define non-GAAP income per share as non-GAAP net income divided by the weighted average shares outstanding.

Billings. BroadSoft defines billings as revenue plus the net change in our deferred revenue balance for a particular period. BroadSoft believes that billings are a key measure of our business activity.

With respect to our expectations under "Guidance" above, and regarding certain of the projections discussed on this morning''s teleconference, reconciliation of both non-GAAP earnings per share guidance, and of projections regarding non-GAAP cost of sales and non-GAAP operating expenses for the remainder of 2015, to the closest corresponding GAAP measures is not available without unreasonable efforts on a forward-looking basis due to the high variability, complexity and low visibility with respect to the charges excluded from these non-GAAP measures, in particular, the measures and effects of non-cash income taxes, which are extremely difficult to project as a result of our tax status in a number of foreign jurisdictions, and stock-based compensation expense specific to equity compensation awards that are directly impacted by unpredictable fluctuations in our stock price. We expect the variability of the above charges to have a significant, and potentially unpredictable, impact on our future GAAP financial results.

The presentation of non-GAAP net income, non-GAAP net income per share, non-GAAP gross margin, non-GAAP income from operations, billings and other non-GAAP financial measures in this release and on this morning''s teleconference is not meant to be a substitute for "net income," "net income per share," "gross margin," "income from operations" or other financial measures presented in accordance with GAAP, but rather should be evaluated in conjunction with such data. BroadSoft''s definition of "non-GAAP net income," "non-GAAP net income per share," "non-GAAP gross margin," "non-GAAP income from operations," "billings" and other non-GAAP financial measures may differ from similarly titled non-GAAP measures used by other companies and may differ from period to period. In reporting non-GAAP measures in the future, management may make other adjustments for expenses and gains it does not consider reflective of core operating performance in a particular period and may modify "non-GAAP net income," "non-GAAP net income per share," "non-GAAP gross margin," "non-GAAP income from operations," "billings" and such other non-GAAP measures by excluding these expenses and gains.

This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by their use of terms and phrases such as "anticipate," "expect," "will," "believe," "continue" and other similar terms and phrases, and such forward-looking statements include, but are not limited to, the statements regarding the Company''s future financial performance set forth under the heading "Guidance." The outcome of the events described in these forward-looking statements is subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from the results anticipated by these forward-looking statements, including, but not limited to: the Company''s ability to expand its BroadCloud offering geographically and increase the associated recurring service revenue; the Company''s dependence on the success of BroadWorks and on its service provider customers to sell services using its applications; the Company''s dependence in large part on service providers'' continued deployment of, and investment in, their IP-based networks; claims that the Company infringes the intellectual property rights of others; the Company''s ability to integrate and achieve the expected benefits from its recent acquisitions, including mPortal Inc.; and the Company''s ability to expand its product offerings, as well as those factors contained in the "Risk Factors" sections of the Company''s Form 10-K for the year ended December 31, 2014 filed with the SEC on February 25, 2015, and in the Company''s other filings with the SEC. All information in this release is as of November 4, 2015. Except as required by law, the Company undertakes no obligation to update publicly any forward-looking statement made herein for any reason to conform the statement to actual results or changes in the Company''s expectations.

BroadSoft is the leading provider of software and services that enable mobile, fixed-line and cable service providers to offer Unified Communications over their Internet Protocol networks. The Company''s core communications platform enables the delivery of a range of enterprise and consumer calling, messaging and collaboration communication services, including private branch exchanges, video calling, text messaging and converged mobile and fixed-line services.

The financial statements set forth below are not the complete set of the Company''s financial statements for the quarter and the year and are presented below without footnotes. Readers are encouraged to obtain and carefully review BroadSoft''s Quarterly Report on Form 10-Q for the quarter ended September 30, 2015, including all financial statements contained therein and the footnotes thereto, once the report is filed with the SEC. Once filed with the SEC, the Form 10-Q may be retrieved from the SEC''s website at or from BroadSoft''s website at .

* For the three months ended September 30, 2015 and the nine months ended September 30, 2015 and 2014, the non-GAAP net income per diluted common share calculation included the dilutive effect of stock-based awards on the weighted average diluted common shares outstanding (such stock-based awards were not reflected in the corresponding GAAP diluted share calculations, as their effect would have been anti-dilutive as a result of the net losses for these periods). Total diluted weighted average common shares outstanding used for calculating non-GAAP net income per diluted common share were 30,538 thousand and 29,852 thousand for the three months ended September 30, 2015 and 2014 and 30,352 thousand and 29,865 thousand for the nine months ended September 30, 2015 and 2014, respectively.

BSFT-F



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Date: 11/04/2015 - 06:30
Language: English
News-ID 1396787
Character count: 4254
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Firma: BroadSoft, Inc.
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