Xactly Reports Fourth Quarter and Full Year Fiscal 2016 Financial Results
SAN JOSE, Calif.--(BUSINESS WIRE)-- Xactly, a leading provider of cloud-based incentive solutions, today announced its financial results for the fourth quarter and fiscal year 2016 ended January 31, 2016.
“Our strong fourth quarter results capped an excellent year for Xactly,” said Christopher W. Cabrera, founder and CEO of Xactly Corporation. “Our total revenue and subscription revenue growth accelerated during the year, demonstrating our ongoing business momentum and the value of our product offerings. As a recognized leader in the industry, our robust, pure-play, cloud-based product offerings backed by ten years of compensation data are increasingly differentiating us as companies look to use incentive compensation as a strategic lever to drive their growth. We look forward to continuing to deliver value to our customers and extending our market leadership.”
“While posting strong fourth quarter results, we continued to deliver on our strategy of driving solid top-line growth while making progress on the path to profitability. Our expectation remains that we will achieve our goal of positive cash flow from operations in Q4 of fiscal 2017,” said Joseph Consul, CFO of Xactly Corporation.
Fourth Quarter Fiscal 2016 Financial Highlights
- Total revenue was $20.7 million, an increase of 30% from the fourth quarter of fiscal year 2015 total revenue of $15.9 million. Subscription revenue was $16.3 million, an increase of 29% from the fourth quarter of fiscal 2015 subscription revenue of $12.6 million.
- GAAP net loss for the fourth quarter of fiscal 2016 was $(5.9) million compared to $(4.8) million in the fourth quarter of fiscal 2015.
- Non-GAAP net loss for the fourth quarter of fiscal 2016 was $(4.5) million compared to a non-GAAP net loss of $(4.4) million for the fourth quarter of fiscal 2015.
- Adjusted EBITDA for the fourth quarter of fiscal 2016 was a loss of $(3.4) million, or 16% of revenue, compared to a loss of $(2.4) million, or 15% of revenue, for the fourth quarter of fiscal 2015.
Full Year Fiscal 2016 Financial Highlights
- Total revenue was $76.0 million, an increase of 24% from fiscal year 2015 total revenue of $61.1 million. Subscription revenue was $59.2 million, an increase of 25% from fiscal 2015 subscription revenue of $47.3 million.
- GAAP net loss for fiscal 2016 was $(24.7) million compared to $(18.5) million in fiscal 2015.
- Non-GAAP net loss for fiscal 2016 was $(19.8) million compared to a non-GAAP net loss of $(16.5) million for fiscal 2015.
- Adjusted EBITDA for fiscal 2016 was a loss of $(12.7) million, or 17% of revenue, compared to a loss of $(11.1) million, or 18% of revenue, for fiscal 2015.
Recent Business Highlights
- Posted third consecutive quarter of accelerated revenue growth since the initial public offering on June 26, 2015.
- Ended the year with 266,000 subscribers, a 37% increase over last year.
- Ended the year with 870 customers, a 20% increase over fiscal 2015, with key enterprise wins in the Retail, Financial Services, Software and Technology, Business Services and High Tech Manufacturing vertical markets.
- Reduced net cash used in operations by 44% in fiscal 2016 compared to fiscal 2015.
- Positioned in the Leaders quadrant1 in all three Sales Performance Management reports published by Gartner.
- Earned the Gold Stevie Award for Sales and Customer Service, and a 2016 CRM Market Winner by CRM Magazine, leading in every category.
- Experienced solid expansion in the number of modules customers are purchasing. On average, new enterprise customers in the quarter purchased five products from the suite, compared to an overall average of four products in the year-ago period.
- In the fourth quarter, over twenty percent of all new enterprise customers included our latest module, Xactly Insights™, on their initial order.
Business Outlook
For the first quarter of fiscal 2017, Xactly expects to report:
- Revenue in the range of $21.8 to $22.2 million
- GAAP net loss in the range of $(6.1) to $(5.7) million, or $(0.21) to $(0.19) per share
- Non-GAAP net loss in the range of $(4.6) to $(4.2) million, or $(0.16) to $(0.14) per share
For the full year of fiscal 2017, Xactly expects to report:
- Revenue in the range of $94.0 to $95.5 million
- GAAP net loss in the range of $(26.0) to $(24.5) million, or $(0.86) to $(0.81) per share
- Non-GAAP net loss in the range of $(18.8) to $(17.3) million, or $(0.62) to $(0.57) per share
Conference Call Details:
Xactly will discuss its quarterly results today via teleconference at 1:30 p.m. PT (4:30 p.m. ET). Investors may listen to the live conference call (ID 7212479) by dialing 888-287-5563 or 719-325-2393 at 4:30 p.m. Eastern Time on March 3, 2016. An audio replay of the call will be available through 4:30 p.m. Eastern Time on March 17, 2016 by dialing 888-203-1112 or 719-457-0820 and entering access code 7212479.
Non-GAAP Financial Measures
To supplement its financial statements, Xactly also provides investors with certain non-GAAP financial measures. We believe that these non-GAAP measures are useful as a supplement in evaluating our ongoing operational performance and enhancing an overall understanding of our past financial performance. The non-GAAP financial measures included in this press release should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with U.S. GAAP, and the non-GAAP financial measures that we use may differ from those of other companies in our industry. A reconciliation between each non-GAAP financial measure and its nearest GAAP equivalent and related explanations are included below. We believe that supplementing GAAP disclosure with non-GAAP disclosure that excludes items that are not directly related to performance in any particular period provides management and investors with a more complete view of Xactly’s operational performance. Various items are excluded from such non-GAAP financial measures in part because the decisions which gave rise to the excluded items were not made to increase revenue in a particular period, but were made for Xactly’s long-term benefit over multiple periods.
Non-GAAP net loss and non-GAAP net loss per share. We believe non-GAAP net loss and non-GAAP net loss per share may prove useful to investors who wish to consider the impact of certain non-cash or non-recurring items, such as certain one-time charges, on Xactly’s operating performance. We compensate for the inherent limitations associated with using non-GAAP net loss and non-GAAP net loss per share through disclosure of these limitations, presentation of our financial statements in accordance with U.S. GAAP and reconciliation of these non-GAAP financial measures to the most directly comparable U.S. GAAP measures, net loss and net loss per share. We calculate non-GAAP net loss (and non-GAAP net loss per share) as net loss (and net loss per share) before (i) stock-based compensation, (ii) increase or decrease in expenses related to the change in fair value of convertible preferred stock warrant liabilities, (iii) amortization of intangible assets, and (iv) any applicable, non-recurring or unusual charges as we may determine from time to time.
Adjusted EBITDA. We believe that Adjusted EBITDA helps illustrate underlying trends in our business that could otherwise be masked by the effect of the income or expenses that we exclude from Adjusted EBITDA. Furthermore, we use this measure to establish budgets and operational goals for managing our business and evaluating our performance. We also believe that Adjusted EBITDA provides an additional tool for investors to use in comparing our recurring core business operating results over multiple periods with other companies in our industry. We compensate for the inherent limitations associated with using Adjusted EBITDA through disclosure of these limitations, presentation of our financial statements in accordance with U.S. GAAP and reconciliation of Adjusted EBITDA to the most directly comparable U.S. GAAP measure, net loss. We calculate Adjusted EBITDA as net loss before (i) other income (expense), net, which includes interest expense, the change in fair value of convertible preferred stock warrant liabilities and other income and expense, (ii) income tax expense, (iii) depreciation and amortization of property and equipment, (iv) amortization of intangible assets, (v) amortization of debt issuance costs, (vi) stock-based compensation and (vii) any applicable, non-recurring or unusual charges as we may determine from time to time.
Forward-Looking Statements
All statements in this press release that are not historical are forward-looking statements, including, among other things, projected GAAP and non-GAAP financial operating results for the first quarter and full year of fiscal 2017, such as revenue, net loss, net loss per share, non-GAAP net loss and non-GAAP net loss per share, and our expectation regarding our ability to achieve positive cash flow from operations in the future, and other information about future events and trends that we believe may affect our business, financial condition, operating results and growth prospects, within the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties, changes in circumstances and other factors that are, in some cases, beyond Xactly’s control and could cause actual results to differ materially from the information expressed or implied by forward-looking statements made in this press release. Factors that could materially affect actual results can be found in Xactly’s most recent filings with the Securities and Exchange Commission, including Xactly’s most recent reports on Forms 8-K and 10-Q, and include those listed under the caption “Risk Factors.” Xactly undertakes no obligation to revise or update information in this press release to reflect events or circumstances in the future, even if new information becomes available.
About Xactly
Xactly is a leading provider of enterprise-class, cloud-based, incentive compensation solutions for employee and sales performance management. We address a critical business need: To incentivize employees and align their behaviors with company goals. Our products allow organizations to make more strategic decisions, increase employee performance, improve margins, and mitigate risk. Our core values are key to our success, and each day we’re committed to upholding them by delivering the best we can to our customers.
©2016 Xactly Corporation. All rights reserved. Xactly, the Xactly logo, Xactly Insights and “Inspire Performance” are registered trademarks or trademarks of Xactly Corporation in the United States and/or other countries. All other trademarks are the property of their respective owners.
1 Gartner “Magic Quadrant for Sales Performance Management” by Tad Travis. January 21, 2016.
About the Magic Quadrant
Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner's research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.
Xactly Corporation
Condensed Consolidated Balance Sheets
(in thousands, except par value and share amounts)
(Unaudited)
January 31, 2016January 31, 2015
Assets
Current assets:
Cash and cash equivalents$48,027$19,325
Restricted cash, short term286102
Accounts receivable, net20,27817,172
Prepaid expenses and other current assets3,2193,875
Total current assets71,81040,474
Property and equipment, net8,4105,070
Goodwill6,3846,384
Other long-term assets280767
Total assets$86,884$52,695
Liabilities and shareholders’ deficit
Current liabilities:
Accounts payable$2,362$1,891
Accrued expenses9,5127,166
Debt, current portion8,9816,369
Deferred revenue, current portion41,18331,839
Total current liabilities62,03847,265
Debt, less current portion6,82620,546
Other long-term liabilities4,2572,107
Preferred stock warrant liabilities—5,885
Deferred revenue, less current portion3,3272,304
Total liabilities76,44878,107
Commitments and contingencies
Stockholders’ equity (deficit):
Convertible preferred stock, $0.001 par value; no shares and 79,000,000 shares authorized as of January 31, 2016 and 2015, respectively; no shares and 17,871,971 shares issued and outstanding as of January 31, 2016 and 2015, respectively; aggregate liquidation preference of $0 and $102,463 as of January 31, 2016 and 2015, respectively—83,018
Preferred stock, $0.001 par value; 20,000,000 shares and no shares authorized as of January 31, 2016 and 2015, respectively; no shares issued or outstanding as of January 31, 2016 and 2015——
Common stock $0.001 par value; 1,000,000,000 and 120,000,000 shares authorized as of January 31, 2016 and 2015, respectively; 29,542,537 and 2,881,951 shares issued and outstanding as of January 31, 2016 and 2015, respectively303
Additional paid-in capital151,0647,422
Accumulated other comprehensive loss(180)(96)
Accumulated deficit(140,478)(115,759)
Total shareholders' equity (deficit)10,436(25,412)
Total liabilities and shareholders' equity (deficit)$86,884$52,695
Xactly Corporation
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)
Three months endedTwelve months ended
January 31,January 31,
2016201520162015
Revenue:
Subscription services$16,306$12,644$59,211$47,309
Professional services4,3963,24116,76313,802
Total revenue20,70215,88575,97461,111
Cost of revenue:
Subscription services4,0313,01415,72211,717
Professional services4,3793,17115,68013,325
Total cost of revenue8,4106,18531,40225,042
Gross profit12,2929,70044,57236,069
Operating expenses:
Research and development4,1593,16115,65011,867
Sales and marketing9,7507,08534,83628,877
General and administrative4,0492,81114,50210,087
Amortization of intangibles—164—707
Total operating expenses17,95813,22164,98851,538
Operating loss(5,666)(3,521)(20,416)(15,469)
Other income (expense):
Interest expense(153)(1,282)(6,021)(3,087)
Loss on extinguishment of debt——(1,524)—
Decrease in fair value of preferred stock warrant liabilities—1403,542309
Other income (expense), net44(15)(1)(20)
Total other income (expense)(109)(1,157)(4,004)(2,798)
Loss before income taxes(5,775)(4,678)(24,420)(18,267)
Income tax expense118158299265
Net loss$(5,893)$(4,836)$(24,719)$(18,532)
Net loss per share attributable to common stockholders:
Basic and diluted$(0.20)$(1.69)$(1.33)$(6.69)
Weighted-average number of shares used in computing net loss per share attributable to common stockholders:
Basic and diluted29,3122,85418,5452,769
Xactly Corporation
Condensed Consolidated Statement of Cash Flows
(in thousands)
(Unaudited)
Twelve months ended January 31,
20162015
Cash flows from operating activities:
Net loss$(24,719)$(18,532)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization3,1331,972
Amortization of intangible assets—707
Loss on extinguishment of debt1,524—
Amortization of debt issuance costs3,512771
Stock-based compensation3,8571,658
Donation of common stock to XactlyOne Foundation498—
Income from change in fair value of warrant liabilities(3,542)(309)
Loss from disposal on fixed assets24521
Facility exit costs693—
Changes in operating assets and liabilities:
Accounts receivable(3,106)(2,657)
Prepaid expenses and other current assets(926)(536)
Other long-term assets—107
Accounts payable31078
Accrued expenses1,964845
Deferred revenue10,3674,612
Other long-term liabilities(174)(125)
Net cash used in operating activities(6,364)(11,388)
Cash flows from investing activities:
Purchases of property and equipment(4,298)(3,115)
Restricted cash—(129)
Net cash used in investing activities(4,298)(3,244)
Cash flows from financing activities:
Proceeds from line of credit—5,010
Proceeds from principal on term debt, net of issuance costs9,9379,795
Payments of principal on term debt(26,033)—
Proceeds from exercise of warrants to acquire convertible preferred stock, net of issuance costs3725
Proceeds from issuance of convertible preferred stock, net of issuance costs—8,362
Proceeds from exercise of stock options938348
Principal payments under capital lease obligations(3)(465)
Tax payments related to the exercise of stock options(1,570)—
Payment of deferred initial public offering costs(2,732)(1,566)
Proceeds from initial public offering58,844—
Net cash provided by financing activities39,41821,509
Effect of exchange rate changes on cash and cash equivalents(54)(4)
Net increase in cash and cash equivalents28,7026,873
Cash and cash equivalents at beginning of period19,32512,452
Cash and cash equivalents at end of period$48,027$19,325
Reconciliation of GAAP Net Loss to Adjusted EBITDA
(in thousands)
(Unaudited)
Three months endedTwelve months ended
January 31,January 31,
2016201520162015
Net loss$(5,893)$(4,836)$(24,719)$(18,532)
Non-GAAP adjustments:
Interest expense1531,2826,0213,087
Income tax expense118158299265
Depreciation and amortization8555163,1331,972
Amortization of intangible assets—164—707
Loss on extinguishment of debt——1,524—
Stock-based compensation1,4104443,8571,658
Decrease in fair value of preferred stock warrant liabilities—(140)(3,542)(309)
Other income (expense), net(44)15120
Loss on disposal of fixed assets——245—
Donation of common stock to XactlyOne Foundation——498—
Adjusted EBITDA$(3,401)$(2,397)$(12,683)$(11,132)
Stock-based compensation
(in thousands)
(Unaudited)
Three months endedTwelve months ended
January 31,January 31,
2016201520162015
Stock-based compensation:
Cost of subscription services15768456237
Cost of professional services1911845461
Research and development35082898272
Sales and marketing34272893312
General and administrative3702041,156776
Total stock-based compensation$1,410$444$3,857$1,658
Reconciliation of GAAP Net Loss to Non-GAAP Net Loss
(in thousands, except per share data)
(Unaudited)
Three months endedTwelve months ended
January 31,January 31,
2016201520162015
GAAP net loss$(5,893)$(4,836)$(24,719)$(18,532)
Non-GAAP adjustments:
Amortization of intangible assets—164—707
Stock-based compensation1,4104443,8571,658
Decrease in fair value of preferred stock warrant liabilities—(140)(3,542)(309)
Donation of common stock to XactlyOne Foundation——498—
Non-cash debt issuance costs——4,088—
Non-GAAP net loss$(4,483)$(4,368)$(19,818)$(16,476)
Non-GAAP net loss per share:
Basic and diluted$(0.15)$(1.53)$(1.07)$(5.95)
Shares used in computing non-GAAP net loss per share:
Basic and diluted29,3122,85418,5452,769
Reconciliation of GAAP Net Loss to Non-GAAP Net Loss - GUIDANCE
(in thousands, except per share data)
(Unaudited)
Three months ending
April 30, 2016
LowHigh
GAAP net loss$(6,100)$(5,700)
Non-GAAP adjustments:
Stock-based compensation1,5001,500
Non-GAAP net loss$(4,600)$(4,200)
GAAP net loss per share, basic and diluted$(0.21)$(0.19)
Non-GAAP net loss per share, basic and diluted$(0.16)$(0.14)
Shares used in computing GAAP and non-GAAP net loss per share:
Basic and diluted29,50029,500
Reconciliation of GAAP Net Loss to Non-GAAP Net Loss - GUIDANCE
(in thousands, except per share data)
(Unaudited)
Fiscal Year Ending
January 31, 2017
LowHigh
GAAP net loss$ (26,000)$ (24,500)
Non-GAAP adjustments:
Stock-based compensation7,2007,200
Non-GAAP net loss$ (18,800)$ (17,300)
GAAP net loss per share, basic and diluted$ (0.86)$ (0.81)
Non-GAAP net loss per share, basic and diluted$ (0.62)$ (0.57)
Shares used in computing GAAP and non-GAAP net loss per share:
Basic and diluted30,10030,100
Source: Xactly Corporation
Xactly Corporation
Joseph Consul, 408-477-3338
Chief Financial Officer
ir@xactlycorp.com
or
Investor Relations
The Blueshirt Group
Lisa Laukkanen, 415-217-4967
lisa@blueshirtgroup.com
Nicole Gunderson, 415-489-2196
nicole@blueshirtgroup.com