MobileIron Announces Solid First Quarter 2019 Results

ARR Growth of 18%


Double digit revenue growth for second quarter in a row

MOUNTAIN VIEW, Calif.–(BUSINESS WIRE)–MobileIron (NASDAQ: MOBL), the secure foundation for modern work, today
announced results for its first quarter ended March 31, 2019.


First Quarter 2019 Financial Highlights


Revenue was $48.1 million, up 10% year-over-year.


ARR was $167.2 million, up 18% year-over-year.


Cash generated in operating activities was $7.8 million.


“MobileIron began 2019 with a solid first quarter, delivering revenue
growth of 10% and robust ARR growth of 18%. Our team is executing on our
objective of growing our recurring revenue base through subscription
solutions with our best-in-class cloud products,” said Simon
Biddiscombe, CEO, MobileIron. “As IT departments shift to address the
threats of a Zero Trust world, we believe we are ideally poised to
capitalize on this market. Already possessing the most comprehensive
mobile security suite to address a Zero Trust environment, MobileIron
will continue to deliver a roadmap of innovation to strengthen our
security framework while enhancing the user’s experience. I am confident
that our focus on market-leading innovation and customer satisfaction
will continue to propel us on our upward growth trajectory.”




 


 


 


 


 


 






 


 


 






ARR Composition
















Three Months Ended
















March 31,


(in millions, except percentages)














      2018      








      2019      


Total ARR














$


142.2








$


167.2


Year-over-year percentage increase
















13%


 








18%


Subscription ARR














$


77.6








$


100.4


Year-over-year percentage increase
















17%


 








29%


Perpetual license support ARR














$


64.6








$


66.8


Year-over-year percentage increase
















9%


 








3%




























 


Financial Outlook


The company is providing the following outlook for its second quarter
2019 (ending June 30, 2019):


Revenue is expected to be between $49 million and $52 million, for
growth of 6% to 13% year-over-year.


Non-GAAP gross margin is expected to be approximately 82%.


Non-GAAP operating expenses are expected to be approximately $46
million.


The company is reaffirming the following outlook for 2019 (ending
December 31, 2019):


Revenue is expected to be between $205 million and $215 million, for
growth of 6% to 11%.


We expect ARR to grow by approximately 20% by year end.


We expect to generate non-GAAP operating profit.


First Quarter 2019 Business Highlights


Milestones and Recognition


Recognized as a 2019 Gartner Peer Insights Customers’ Choice for
Unified Endpoint Management Tools, for the second consecutive year.
MobileIron is the only Leader in the Gartner UEM Magic Quadrant to be
recognized with this distinction.


Became the first UEM vendor to receive Common Criteria certification
for MDM Protection Profile Version 3.0, from the US
government-operated National Information Assurance Partnership (NIAP).


Obtained certification from the Service Capability & Performance
Standards for excellence in customer support for the second year in a
row and MobileIron remains the only UEM vendor to receive this
certification for excellence.


Appointed Leslie Stretch to our Board of Directors. Currently Mr.
Stretch is the CEO of the cloud company Medallia. He was previously
the CEO of Callidus, which he transitioned from a perpetual license
business to a cloud and subscription model.


Announced partnership with NetMotion Software to enable secure,
reliable access to mission-critical mobile apps and real-time data for
mobile workforces for MobileIron’s UEM, Core, and Cloud offerings.


Recognized as a Customer Experience Award winner by Info-Tech Research
Group, an IT research and advisory company, for MobileIron’s top
scores in the categories of Fair-Cost to Value (user satisfaction
given software cost) and Net Emotional Footprint (user feeling towards
vendor and product). This report is a detailed analysis of software
vendors in the market and the report’s results are based on end-user
feedback.


Awarded two additional US patents for mobile security, bringing
MobileIron’s total number of awarded patents to 84.


Platform


Announced new capabilities to improve workforce productivity by
strengthening access to corporate applications and services, including
Mobile Application Management (MAM) for unmanaged devices and
Frontline worker enablement, optimized security with mobile threat
detection, and expanded OS compatibility for macOS, Android, and
Windows 10 endpoints.


Released new versions of MobileIron Cloud, Access, Core, AppConnect,
Docs@Work, Derived Credentials (PIV-D), Email+, Tunnel, Sentry, and
Web@Work.


Integrated with Mopria Alliance for Android Enterprise mobile printing.


Integrated with Mobile Box for iOS email and PIM.


EBF published new Microsoft Office AppConfig integrations for Excel,
OneDrive, OneNote, Outlook, PowerPoint, and Word.


MobileIron Access now documented as an authentication provider with
PingFederate delegated-IdP flow.


Announced partnership with IDEMIA for eSIM and connectivity management.


All forward-looking non-GAAP financial measures contained in this
section exclude estimates for stock-based compensation expense,
amortization of intangible assets and restructuring expense. While a
reconciliation of non-GAAP guidance measures to corresponding GAAP
measures is not available on a forward-looking basis, the company has
provided a reconciliation of GAAP to non-GAAP financial measures in the
financial statement tables included in this press release for its first
quarter of 2018 and 2019.


Conference Call and Webcast


MobileIron will report final results for the first quarter and fiscal
year 2019 on Thursday, April 25, 2019 after the close of the market and
host a conference call and live webcast at 1:30 p.m. Pacific Time (4:30
p.m. ET) to discuss the company’s financial results, product
announcements and business highlights. Interested parties may access the
call by dialing 1-866-602-7050 in the U.S. or 1-409-216-6455 from
international locations (passcode 4868103). The live webcast will be
available on the MobileIron Investor Relations website at
A replay will be available through the same link.


Safe Harbor Statement


This press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. Such
statements contain words such as “may,” “will,” “might,” “expect,”
“believe,” “anticipate,” “could,” “would,” “estimate,” “continue,”
“pursue,” or the negative thereof or comparable terminology, and may
include (without limitation) information regarding our expectations,
goals or intentions regarding future performance. Forward-looking
statements in this press release include, but are not limited to,
statements regarding MobileIron’s revenue, operating expenses, cost
structure, GAAP and non-GAAP financial metrics, as well as statements
that we expect to continue to see progress through 2019 on executing on
our objective of growing our recurring revenue base through subscription
solutions with our best in class cloud products, that we believe we are
ideally poised to capitalize on the market of IT departments shifting to
address the threats of a Zero Trust world, that we will continue to
deliver a roadmap of innovation to strengthen our security framework
while enhancing the user’s experience, that our continued focus on
market-leading innovation and customer satisfaction will continue to
propel us on our upward growth trajectory, and all statements under the
heading “Financial Outlook.” Forward-looking statements involve certain
risks and uncertainties, and there are a significant number of factors
that could cause actual results to differ materially from statements
made in this press release, including, but not limited to, our limited
operating history, quarterly fluctuations in our operating results,
one-time expenses, including restructuring charges, seasonality, our
need to develop new solutions and enhancements to compete in rapidly
evolving markets, product defects, strength of our intellectual property
portfolio, litigation, customer adoption, competitive pressures,
billings type mix shift, our ability to scale, our ability to recruit
and retain key personnel, and the quality of our support services.


Additional information on potential factors that could affect
MobileIron’s financial results is included in our SEC filings, including
our reports on Forms 10-K, 10-Q and 8-K and other filings that we make
with the SEC from time to time. All forward-looking statements in this
press release are made as of the date hereof, based on information
available to us as of the date hereof, and MobileIron does not assume
any obligation to update the forward-looking statements provided to
reflect events that occur or circumstances that exist after the date on
which they were made.


Disclosure Information


MobileIron uses the investor relations section on its website as the
means of complying with its disclosure obligations under Regulation FD.
Accordingly, we recommend that investors should monitor MobileIron’s
investor relations website in addition to following MobileIron’s press
releases, SEC filings, and public conference calls and webcasts.


About MobileIron


MobileIron provides the secure foundation for modern work. For more
information, please visit www.mobileiron.com.


“MobileIron” is a registered trademark of MobileIron, Inc. in the United
States and other countries. Trade names, trademarks, and service marks
of other companies that are used in this press release belong to their
respective owners.


Financial Results




 






 






MOBILEIRON, INC.


CONSOLIDATED BALANCE SHEETS


AS OF DECEMBER 31, 2018 AND MARCH 31, 2019


(Amounts in thousands)


(Unaudited)














 






December 31, 2018




March 31, 2019


Assets














Current assets:














Cash and cash equivalents (1)




$


104,613






$


106,447




Short-term investments (1)






1,000








547




Accounts receivable – net






60,994








38,173




Deferred commissions – current






8,265








8,785




Prepaid expenses and other current assets




 


8,367


 




 


11,501


 


Total current assets






183,239








165,453




Property and equipment – net






7,046








6,455




Operating lease right-of-use assets






–








16,328




Deferred commissions – noncurrent






9,066








8,580




Goodwill






5,475








5,475




Other assets




 


5,561


 




 


5,076


 


Total assets




$


210,387


 




$


207,367


 














 


Liabilities and stockholders’ equity














Current liabilities:














Accounts payable




$


2,154






$


2,431




Accrued expenses






27,347








17,838




Lease liabilities – current






–








6,278




Unearned revenue – current






74,177








74,112




Customer arrangements with termination rights




 


19,367


 




 


17,183


 


Total current liabilities






123,045








117,842




Lease liabilities – noncurrent






–








11,802




Unearned revenue – noncurrent






31,660








28,767




Other long-term liabilities




 


1,565


 




 


155


 


Total liabilities




 


156,270


 




 


158,566


 


Stockholders’ equity:














Common stock






11








11




Additional paid-in capital






462,004








477,389




Treasury stock






(3,831


)






(7,432


)


Accumulated deficit




 


(404,067


)




 


(421,167


)


Total stockholders’ equity




 


54,117


 




 


48,801


 














 


Total liabilities and stockholders’ equity




$


210,387


 




$


207,367


 














 


 














(1) Total cash and cash equivalents and short-term investments




$


105,613






$


106,994






 






 






MOBILEIRON, INC.


CONSOLIDATED STATEMENTS OF OPERATIONS


FOR THE THREE MONTHS ENDED MARCH 31, 2018 AND 2019


(Amounts in thousands, except for per share data)


(Unaudited)






Three Months Ended






March 31, 2018




March 31, 2019


Revenue:














Cloud services




$


11,150






$


15,261




License






12,441








11,371




Software support and services




 


20,098


 




 


21,450


 


Total revenue




 


43,689


 




 


48,082


 


Cost of revenue:














Cloud services (1)






2,571








4,710




License (2)






431








554




Software support and services (1)






4,975








5,023




Restructuring expense




 


–


 




 


76


 


Total cost of revenue




 


7,977


 




 


10,363


 


Gross profit




 


35,712


 




 


37,719


 


Operating expenses:














Research and development (1)






21,335








21,829




Sales and marketing (1)






23,681








24,487




General and administrative (1)






7,222








7,919




Restructuring expense




 


–


 




 


539


 


Total operating expenses




 


52,238


 




 


54,774


 


Operating loss




 


(16,526


)




 


(17,055


)


Other income (expense) – net




 


503


 




 


412


 


Loss before income taxes




 


(16,023


)




 


(16,643


)


Income tax expense




 


347


 




 


457


 


Net loss




$


(16,370


)




$


(17,100


)


Net loss per share, basic and diluted




$


(0.17


)




$


(0.16


)


Weighted-average shares used to compute net loss per share, basic
and diluted




 


98,645


 




 


107,352


 














 


 














(1) Includes stock-based compensation expense as follows:














Cost of revenue














License




$


–






$


–




Cloud services






344








612




Software support and services






1,038








929




Research and development






4,767








4,111




Sales and marketing






2,529








2,274




General and administrative




 


2,015


 




 


2,364


 






$


10,693


 




$


10,290


 














 


(2) Includes amortization of intangible assets as follows:














Cost of revenue














Perpetual license




$


100


 




$


–


 






$


100


 




$


–


 




 






 






MOBILEIRON, INC.


CONSOLIDATED STATEMENTS OF CASH FLOWS


FOR THE THREE MONTHS ENDED MARCH 31, 2018 AND 2019


(Amounts in thousands)


(Unaudited)






Three Months Ended






March 31, 2018




March 31, 2019














 


Cash flows from operating activities:














Net loss




$


(16,370


)




$


(17,100


)


Adjustments to reconcile net loss to net cash provided by operating
activities:














Stock-based compensation expense






10,693








10,290




Depreciation






970








932




Amortization of intangible assets






100








–




Accretion of premium on investment securities






(12


)






–




Gain on disposal of fixed assets






41








–




Changes in operating assets and liabilities:














Accounts receivable






14,438








22,821




Deferred commissions






974








(35


)


Other current and noncurrent assets






(656


)






(2,647


)


Accounts payable






3








186




Unearned revenue






3,903








(2,958


)


Customer arrangements with termination rights






(2,360


)






(2,184


)


Accrued expenses and other long-term liabilities




 


(2,544


)




 


(1,489


)


Net cash provided by operating activities




 


9,180


 




 


7,816


 














 


Cash flows from investing activities:














Purchase of property and equipment






(516


)






(177


)


Maturities of investment securities






6,800








1,000




Purchases of investment securities




 


(2,986


)




 


(546


)


Net cash provided by investing activities




 


3,298


 




 


277


 














 


Cash flows from financing activities:














Proceeds from employee stock purchase plan






1,069








953




Taxes paid for net settlement of equity awards






(3,724


)






(4,409


)


Proceeds from exercise of stock options






655








798




Repurchase of common stock




 


–


 




 


(3,601


)


Net cash used in financing activities




 


(2,000


)




 


(6,259


)














 


Net change in cash and cash equivalents






10,478








1,834




Cash and cash equivalents at beginning of period




 


85,833


 




 


104,613


 


Cash and cash equivalents at end of period




$


96,311


 




$


106,447


 














 


Non-GAAP Financial Measures and Reconciliations and Other Metrics


Non-GAAP Financial Measures


To supplement our financial results presented on a U.S. GAAP basis, we
provide investors with certain non-GAAP financial measures, including
non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income
(loss), non-GAAP operating margin, non-GAAP net income (loss), non-GAAP
net income (loss) per share and free cash flow. These non-GAAP financial
measures exclude stock-based compensation, amortization of intangible
assets, and restructuring expense.


Stock-based compensation expenses: In our
non-GAAP financial measures, we have excluded the effect of stock-based
compensation expenses. We exclude stock-based compensation expense
because it is non-cash in nature and excluding this expense provides
meaningful supplemental information regarding our operational
performance. In particular, because of varying available valuation
methodologies, subjective assumptions and the variety of award types
that companies can use under FASB ASC Topic 718, we believe that
providing non-GAAP financial measures that exclude this expense allows
investors the ability to make more meaningful comparisons between
MobileIron operating results and those of other companies. Stock-based
compensation expenses will recur in future periods.


Amortization of intangible assets: In our
non-GAAP financial measures, we have excluded the effect of the
amortization of intangible assets. Amortization of intangible assets can
be significantly affected by the timing and size of our acquisitions.
Beginning our second quarter ended June 30, 2018, we no longer have
amortizing intangible assets.


Restructuring expense: In our non-GAAP
financial measures, we have excluded the effect of severance and other
expenses related to a reduction in our workforce. Restructuring expense
may recur in future years; however, the timing and amounts are difficult
to predict.


Non-GAAP gross profit, non-GAAP gross margin,
non-GAAP operating loss, non-GAAP operating margin, non-GAAP net loss,
and non-GAAP net loss per share: We believe that the exclusion of
stock-based compensation expense, the amortization of intangible assets,
and restructuring expense from various non-GAAP financial metrics such
as gross profit, gross margin, operating income (loss), operating
margin, net income (loss), and net income (loss) per share provides
useful measures for management and investors. Stock-based compensation,
restructuring expense, and the amortization of intangible assets have
been and can continue to be inconsistent in amount from period to
period. We believe the inclusion of these items makes it difficult to
compare periods and understand the growth and performance of our
business. In addition, we evaluate our business performance and
compensate management based in part on these non-GAAP measures. There
are limitations in using non-GAAP financial measures because the
non-GAAP financial measures are not prepared in accordance with GAAP,
may be different from non-GAAP financial measures used by our
competitors and exclude expenses that may have a material impact on our
reported financial results. Further, stock-based compensation expense
has been and will continue to be for the foreseeable future a
significant recurring expense in our business and an important part of
the compensation provided to our employees.


Free cash flow: Our non-GAAP financial
measures also include free cash flow, which we define as cash
provided by (used in) operating activities less the amount of property
and equipment purchased. Management believes that information regarding
free cash flow provides investors with an important perspective on the
cash available to invest in our business and fund ongoing operations.
However, our calculation of free cash flow may not be comparable to
similar measures used by other companies.


We believe these non-GAAP financial measures are helpful in
understanding our past financial performance and our future results. Our
non-GAAP financial measures are not meant to be considered in isolation
or as a substitute for comparable GAAP measures and should be read only
in conjunction with our consolidated financial statements prepared in
accordance with GAAP. Our management regularly uses our supplemental
non-GAAP financial measures internally to understand, manage and
evaluate our business, and make operating decisions. These non-GAAP
measures are among the primary factors management uses in planning for
and forecasting future periods. Compensation of our executives is based
in part on the performance of our business relative to certain of these
non-GAAP measures.


Other Metrics


Annual Recurring Revenue (ARR). Beginning with the fourth quarter
of 2018, we began monitoring a new operating metric, Total ARR, which is
defined as the annualized value of all recurring revenue contracts
active at the end of a reporting period. Total ARR includes the
annualized value of subscriptions (“Subscription ARR”) and the
annualized value of software support contracts related to perpetual
licenses (“Perpetual license support ARR”) active at the end of a
reporting period and does not include revenue reported as perpetual
license or professional services in our consolidated statement of
operations. We are monitoring these metrics because they align with how
our customers are increasingly purchasing our solutions and how we are
managing our business. These ARR measures should be viewed independently
of revenue, unearned revenue, and customer arrangements with termination
rights as ARR is an operating metric and is not intended to be combined
with or replace those items. ARR is not a forecast of future revenue and
can be impacted by contract start and end dates and renewal rates.




 






 






MOBILEIRON, INC.


RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES


(Amounts in thousands, except for per share data and percentages)


(Unaudited)






Three Months Ended






March 31, 2018




March 31, 2019














 


Non-GAAP gross profit reconciliation:














GAAP gross profit




$


35,712






$


37,719




Stock-based compensation expenses






1,382








1,541




Amortization of intangible assets






100








–




Restructuring expense




 


–


 




 


76


 


Non-GAAP gross profit




$


37,194


 




$


39,336


 














 


Non-GAAP gross margin reconciliation:














GAAP gross margin: GAAP gross profit over total revenue






81.7


 %


 




78.4


 %


GAAP to non-GAAP gross margin adjustments




 


3.4


 %


 


 


3.4


 %


Non-GAAP gross margin: Non-GAAP gross profit over total revenue




 


85.1


 %


 


 


81.8


 %














 


Non-GAAP operating loss reconciliation:














GAAP operating loss




$


(16,526


)




$


(17,055


)


Stock-based compensation expenses






10,693








10,290




Amortization of intangible assets






100








–




Restructuring expense




 


–


 




 


615


 


Non-GAAP operating loss




$


(5,733


)




$


(6,150


)














 


Non-GAAP operating margin
reconciliation:














GAAP operating margin: GAAP operating loss over total revenue






(37.8


)%


 




(35.5


)%


GAAP to non-GAAP operating margin adjustments