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May 11, 2020, 4:10 p.m. EDT

Mimecast Announces Fourth Quarter and Full Year 2020 Financial Results

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LEXINGTON, May 11, 2020 (GLOBE NEWSWIRE via COMTEX) -- Fourth Quarter Highlights

-- Total revenue of $114.2 million grew 24% year-over-year on a GAAP basis and 26% in constant currency

-- Added 1,200 net new customers. Total customers 38,100 globally

-- Revenue retention rate of 107%

-- GAAP gross profit percentage of 74%, Non-GAAP gross profit percentage of 76%

-- GAAP EPS of $0.04 per diluted share, Non-GAAP EPS of $0.15 per diluted share

Mimecast Limited /zigman2/quotes/202578603/composite MIME +0.39% , a leading email and data security company, today announced financial results for the fourth quarter and full year ended March 31, 2020.

"We are delighted to have added 3,700 net new customers to the Mimecast platform in 2020, including 1,200 in the fourth quarter, as we work to strengthen cyber resilience. This new customer growth combined with high customer retention was central to our fourth quarter overachievement relative to our guidance. We are adapting to the global COVID-19 pandemic, supporting our teams and providing the resources to serve our customers at the highest level," stated Peter Bauer, CEO of Mimecast.

Mimecast's CFO, Rafe Brown, commented, "We recorded another year of record revenue and profitability, improving our bottom line and driving growth."

Fourth Quarter 2020 Financial Highlights

-- Revenue: Revenue for the fourth quarter of 2020 was $114.2 million, an increase of 24% compared to revenue of $92.2 million in the fourth quarter of 2019. Revenue on a constant currency basis increased 26% compared to the fourth quarter of 2019.

-- Customers: Added 1,200 net new customers in the fourth quarter of 2020, and now serve 38,100 organizations globally.

-- Revenue Retention Rate: Revenue retention rate was 107% in the fourth quarter of 2020.

-- Gross Profit Percentage: Gross profit percentage was 74% in the fourth quarter of 2020, compared to 73% in the fourth quarter of 2019.

-- Non-GAAP Gross Profit Percentage: Non-GAAP gross profit percentage was 76% in the fourth quarter of 2020, compared to 74% in the fourth quarter of 2019.

-- Net Income: Net income was $2.5 million, or $0.04 per diluted share, based on 64.4 million diluted shares outstanding, compared to net loss of $1.9 million, or $(0.03) per diluted share, based on 60.7 million diluted shares outstanding in the fourth quarter of 2019.

-- Non-GAAP Net Income: Non-GAAP net income was $9.7 million, or $0.15 per diluted share, based on 64.4 million diluted shares outstanding, compared to non-GAAP net income of $4.6 million or $0.07 per diluted share, based on 63.3 million diluted shares outstanding in the fourth quarter of 2019.

-- Adjusted EBITDA: Adjusted EBITDA was $24.0 million, representing an Adjusted EBITDA margin of 21.0%, up from 17.1% in the fourth quarter of 2019.

-- Operating Cash Flow: Operating cash flow was $25.0 million in the fourth quarter of 2020, compared to $18.3 million in the fourth quarter of 2019.

-- Free Cash Flow and Cash: Free cash flow was $12.1 million in the fourth quarter of 2020, compared to $13.4 million in the fourth quarter of 2019. Cash and cash equivalents as of March 31, 2020 were $174.0 million.

Full Year 2020 Financial Highlights

-- Revenue: Revenue for 2020 was $427.0 million, an increase of 25% compared to $340.4 million of revenue in 2019. Revenue on a constant currency basis increased 28% compared to 2019.

-- Customers: Added 3,700 net new customers in 2020.

-- Revenue Retention Rate: Revenue retention rate was 107% for 2020.

-- Gross Profit Percentage: Gross profit percentage was 74% in 2020, compared to 73% in 2019.

-- Non-GAAP Gross Profit Percentage: Non-GAAP gross profit percentage was 76% in 2020, compared to 74% in 2019.

-- Net Loss: Net loss was $2.2 million, or $(0.04) per diluted share, based on 62.0 million diluted shares outstanding, compared to net loss of $7.0 million, or $(0.12) per diluted share, based on 60.0 million diluted shares outstanding in 2019.

-- Non-GAAP Net Income: Non-GAAP net income was $31.9 million, or $0.50 per diluted share, based on 64.0 million diluted shares outstanding, compared to non-GAAP net income of $16.4 million or $0.26 per diluted share, based on 62.8 million diluted shares outstanding in 2019.

-- Adjusted EBITDA: Adjusted EBITDA was $78.1 million, representing an Adjusted EBITDA margin of 18.3%, up from 15.9% in 2019.

-- Operating Cash Flow: Operating cash flow was $90.5 million for 2020, compared to $66.2 million for 2019.

-- Free Cash Flow: Free cash flow was $37.3 million for 2020, compared to $37.4 million for the full year 2019.

Reconciliations of the non-GAAP financial measures provided in this press release to their most directly comparable GAAP financial measures are provided in the financial tables included at the end of this press release. An explanation of these measures and how they are calculated is also included under the heading "Non-GAAP Financial Measures."

Business Highlights

-- Mimecast Email Security for Microsoft Azure Sentinel, a pre-built open API integration to consolidate logs, threats and audit data in Sentinel, is now live and available for download. This new integration further enhances cyber resilience for joint customers.

-- Tim McCarthy joins Mimecast as SVP of North American Sales. Previously Tim was Vice President, Americas Web Division, at Akamai Technologies.

-- Bradon Rogers joins Mimecast as SVP of Global Sales Engineering. Formerly Bradon held senior leadership roles at Symantec and McAfee and brings over 20 years of experience to Mimecast.

-- Mimecast's Brand Exploit Protect service was popular with customers of all sizes to bolster their cyber resilience. This new service is the cornerstone of our Email Security 3.0, Zone 3 protection that defends against and removes imposter websites that seek to exploit and defraud customer brands.

-- Mimecast's Cyber Resilience Think Tank released a new report on the transformation of the Security Operations Center (SOC) and outlines how technology and automation are interdependent with the human element.

-- Mimecast Targeted Threat Protection added 1,300 new subscriptions in the fourth quarter. In total, 28,200 customers now use the service.

-- Mimecast Web Security added 300 new subscriptions in the fourth quarter. In total 600 customers now use the service.

-- On average, Mimecast customers used 3.3 services in the fourth quarter of 2020. This represents an increase from the average of 3.1 services used by customers in the fourth quarter of 2019.

Business Outlook

Mimecast is providing guidance for the first quarter 2021 and fiscal year 2021.

First Quarter 2021 Guidance:

For the first quarter of 2021, revenue is expected to be in the range of $112.8 million to $113.8 million and constant currency revenue growth is expected to be in the range of 19% to 20%. Adjusted EBITDA for the first quarter is expected to be in the range of $23.5 million to $24.5 million. Our revenue guidance for the first quarter is based on exchange rates as of April 30, 2020, and includes an estimated negative impact of $4.8 million resulting from the strengthening of the U.S. dollar compared to the prior year.

Fiscal Year 2021 Guidance:

For the full year 2021, revenue is expected to be in the range of $475.0 million to $485.0 million and constant currency revenue growth is expected to be in the range of 15% to 17%. Foreign exchange rate fluctuations are negatively impacting this guidance by an estimated $15.5 million compared to the rates in effect in the prior year. On a constant currency basis, we are reducing our full year 2021 revenue guidance by approximately $11 million reflecting the current economic environment. Revenue guidance is also being negatively impacted by approximately $19 million due to foreign exchange resulting in a $30 million reduction to 2021 revenue from prior guidance provided at our investor day in February.

Full year 2021 Adjusted EBITDA is expected to be in the range of $94 million to $96 million. Operating cash flow for the full year 2021 is expected to be in the range of $109 million to $112 million. Free Cash Flow for the full year 2021 is expected to be in the range of $76.0 million to $78.0 million.

GAAP net income (loss) is the most comparable GAAP measure to Adjusted EBITDA. Adjusted EBITDA differs from GAAP net income (loss) in that it excludes depreciation, amortization, disposals and impairment of long-lived assets, acquisition-related gains and expenses, litigation-related expenses, share-based compensation expense, restructuring expense, interest income and interest expense, the provision for income taxes and foreign exchange income (expense). Prior to the adoption of Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842) (ASC 842), on April 1, 2019, Adjusted EBITDA also included rent paid in the period related to locations which had been accounted for as build-to-suit facilities. Mimecast is unable to predict with reasonable certainty the ultimate outcome of these exclusions without unreasonable effort. Therefore, Mimecast has not provided guidance for GAAP net income (loss) or a reconciliation of forward-looking Adjusted EBITDA guidance to GAAP net income (loss).

The financial guidance provided above includes forward-looking statements within the meaning of U.S. securities laws. While the financial guidance considers the anticipated impact of the global COVID-19 pandemic, the societal and economic impact of the pandemic is unprecedented and the future effect of the pandemic on the global economy and Mimecast's financial results is highly uncertain. Mimecast's actual results may differ materially. See "Safe Harbor for Forward-Looking Statements" below.

Conference Call and Webcast Information

Mimecast will host a conference call to discuss these financial results for investors and analysts at 4:30 pm EST (utc-05:00) on May 11, 2020. To access the conference call, dial (844) 402-0879 for the U.S. and Canada and (478) 219-0767 for international callers and enter conference ID# 1087848. The call will also be webcast live on the investor relations section of the Company's website https://investors.mimecast.com . An audio replay of the call will be available two hours after the live call ends by dialing (855) 859-2056 for U.S. and Canada and (404) 537-3406 for international callers and entering conference ID# 1087848. In addition, an archive of the webcast will be available on the investor relations section of the Company's website https://investors.mimecast.com .

About Mimecast

Mimecast is a cybersecurity provider that helps thousands of organizations worldwide make email safer, restore trust and bolster cyber resilience. Mimecast's expanded cloud suite enables organizations to implement a comprehensive cyber resilience strategy. From email and web security, archive and data protection to awareness training, uptime assurance and more, Mimecast helps organizations stand strong in the face of cyberattacks, human error and technical failure. www.mimecast.com

Mimecast and the Mimecast logo are registered trademarks of Mimecast. All other third-party trademarks and logos contained in this press release are the property of their respective owners.

Non-GAAP Financial Measures

We have provided in this press release financial information that has not been prepared in accordance with GAAP. We use these non-GAAP financial measures internally in analyzing our financial results and believe they are useful to investors, as a supplement to GAAP measures, in evaluating our ongoing operational performance. We believe that 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 our financial results with other companies in our industry, many of which present similar non-GAAP financial measures to investors.

Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures provided in the financial statement tables included below in this press release.

Revenue Constant Currency Growth Rate. We believe revenue constant currency growth rate is a key indicator of our operating results. We calculate revenue constant currency growth rate by translating revenue from entities reporting in foreign currencies into U.S. dollars using the comparable foreign currency exchange rates from the prior fiscal period. To determine projected revenue growth rates on a constant currency basis for the first quarter and full year 2021, expected revenue from entities reporting in foreign currencies is translated into U.S. dollars using the comparable prior year period's monthly average foreign currency exchange rates.

Non-GAAP gross profit and Non-GAAP gross profit percentage. We define non-GAAP gross profit as gross profit, adjusted to exclude: share-based compensation expense and amortization of acquired intangible assets. We define non-GAAP gross profit percentage as non-GAAP gross profit divided by GAAP revenue. We consider these non-GAAP financial measures to be useful metrics for management and investors because they exclude the effect of non-cash charges for share-based compensation expense and amortization of acquired intangible assets so that our management and investors can compare our recurring core business net results over multiple periods. There are a number of limitations related to the use of non-GAAP gross profit and non-GAAP gross profit percentage versus gross profit and gross profit percentage calculated in accordance with GAAP. For example, as noted above, non-GAAP gross profit and gross profit percentage excludes share-based compensation expense and amortization of acquired intangible assets. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP gross profit and non-GAAP gross profit percentage and evaluates non-GAAP gross profit and non-GAAP gross profit percentage together with gross profit and gross profit percentage calculated in accordance with GAAP.

Non-GAAP operating expenses and Non-GAAP income from operations. We provide investors with certain non-GAAP financial measures, including non-GAAP research and development expense, non-GAAP sales and marketing expense, non-GAAP general and administrative expense and non-GAAP income from operations (collectively the "non-GAAP operating financial measures"). These non-GAAP operating financial measures exclude the following, as applicable (as reflected in the reconciliation tables that follow): share-based compensation expense, amortization of acquired intangible assets, impairment of long-lived assets, restructuring expense, acquisition-related gains and expenses and litigation-related expenses. We consider these non-GAAP operating financial measures to be useful metrics for management and investors because it excludes the effect of share-based compensation expense and certain "one-time" charges so that our management and investors can compare our recurring core business net results over multiple periods. There are a number of limitations related to the use of these non-GAAP operating financial measures versus the applicable financial measures calculated in accordance with GAAP. For example, as noted above, the non-GAAP operating financial measures exclude share-based compensation expense and certain "one-time" charges. In addition, the components of the costs that we exclude in our calculation of non-GAAP operating financial measures may differ from the components that our peer companies exclude when they report their non-GAAP results of operations. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP operating financial measures and evaluates non-GAAP operating financial measures together with the applicable financial measures calculated in accordance with GAAP.

Non-GAAP net income. We define non-GAAP net income as net income (loss), adjusted to exclude: share-based compensation expense, amortization of acquired intangible assets, impairment of long-lived assets, restructuring expense, acquisition-related gains and expenses, litigation-related expenses and the income tax effect of non-GAAP adjustments. We consider this non-GAAP financial measure to be a useful metric for management and investors because it excludes the effect of share-based compensation expense, certain "one-time" charges and related income tax effects so that our management and investors can compare our recurring core business net results over multiple periods. There are a number of limitations related to the use of non-GAAP net income versus net income (loss) calculated in accordance with GAAP. For example, as noted above, non-GAAP net income excludes share-based compensation expense, certain "one-time" charges and related income tax effects. In addition, the components of the costs that we exclude in our calculation of non-GAAP net income may differ from the components that our peer companies exclude when they report their non-GAAP results of operations. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP net income and evaluating non-GAAP net income together with net income (loss) calculated in accordance with GAAP.

/zigman2/quotes/202578603/composite
US : U.S.: Nasdaq
$ 41.07
+0.16 +0.39%
Volume: 679,460
July 14, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$2.58 billion
Rev. per Employee
$269,786
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