Vocera Announces Third Quarter 2021 Financial Results

Thursday, October 28, 2021

SAN JOSE, Calif.--(BUSINESS WIRE)-- Vocera Communications, Inc. (NYSE: VCRA), a recognized leader in clinical communication and workflow solutions, today reported total revenue of $63.6 million for the third quarter of 2021, an increase of 18% compared to the third quarter of 2020.

“The third quarter was another fantastic quarter for our business with strong growth and customer success,” said Brent Lang, Chairman and CEO of Vocera. “Our market leadership in both the commercial and federal healthcare markets continued with impressive bookings and revenue growth, demonstrating the value of our unique solutions and the strong execution by our team.”

Third quarter of 2021 financial highlights include:

  • Total revenue of $63.6 million, up 18% compared to $53.8 million last year
  • GAAP net income of $2.1 million compared to $4.2 million last year
  • Adjusted EBITDA of $15.3 million compared to $13.5 million last year
  • Deferred revenue and backlog was $252.7 million as of September 30, 2021, an increase of 67% over last year

Third Quarter 2021 Results

(in thousands)

Three months ended September 30,

 

2021

 

2020

 

% change

Product revenue

 

 

 

 

 

Device

$

20,650

 

 

$

17,027

 

 

21.3

%

Software

12,286

 

 

11,483

 

 

7.0

 

Total product

$

32,936

 

 

$

28,510

 

 

15.5

%

 

 

 

 

 

 

Service revenue

 

 

 

 

 

Subscription and support

$

25,069

 

 

$

20,387

 

 

23.0

%

Professional services and training

5,563

 

 

4,918

 

 

13.1

 

Total service

30,632

 

 

25,305

 

 

21.1

%

Total revenue

$

63,568

 

 

$

53,815

 

 

18.1

%

GAAP gross margin for the third quarter of 2021 was 67.6%, compared to 67.5% for the third quarter of 2020.

 

Three months ended September 30,

 

2021

 

2020

Gross margin

 

 

 

Product

74.6

%

 

75.0

%

Service

60.1

 

 

59.1

 

Total gross margin

67.6

%

 

67.5

%

 

 

 

 

Non-GAAP gross margin

 

 

 

Product

78.5

%

 

75.9

%

Service

63.8

 

 

62.7

 

Total non-GAAP gross margin

71.4

%

 

69.7

%

GAAP net income for the third quarter of 2021 was $2.1 million, or $0.06 per share, compared to GAAP net income of $4.2 million, or $0.13 per share for the third quarter of 2020.

 

Three months ended September 30,

(in thousands except per share amounts)

2021

 

2020

Net income

$

2,077

 

 

$

4,161

 

Net income per share

$

0.06

 

 

$

0.13

 

Non-GAAP net income

$

10,829

 

 

$

8,502

 

Non-GAAP diluted net income per share

$

0.28

 

 

$

0.26

 

Adjusted EBITDA

$

15,336

 

 

$

13,498

 

Deferred revenue as of September 30, 2021 was $66.7 million compared to $64.7 million as of December 31, 2020. Cash, cash equivalents and short-term investments were $304.6 million as of September 30, 2021 compared to $230.2 million as of December 31, 2020.

2021 Guidance

The Company has increased its 2021 guidance for revenue, adjusted EBITDA and GAAP loss per share. Revenue is expected to be in a range of $226.0 million and $233.0 million and GAAP loss per share between $(0.48) and $(0.30). The Company expects non-GAAP diluted earnings per share to be between $0.62 and $0.72 and non-GAAP Adjusted EBITDA to be between $35.0 million and $40.0 million.

 

Year ending December 31, 2021

(in millions except per share amounts)

Low

 

High

Revenue

$

226.0

 

 

$

233.0

 

Loss per share

$

(0.48

)

 

$

(0.30

)

Non-GAAP diluted earnings per share

$

0.62

 

 

$

0.72

 

Adjusted EBITDA

$

35.0

 

 

$

40.0

 

Non-GAAP Income Tax Expense

Starting April 1, 2021, the Company changed the calculation of its non-GAAP provision for income taxes in accordance with the SEC guidance of non-GAAP financial measures and has applied such change to all periods presented. The Company’s current and deferred income tax expense is commensurate with the non-GAAP measure of profitability using a non-GAAP tax rate of 20% for the three and nine months ended September 30, 2021 and 2020. The Company uses annual projected tax rate in its computation of the non-GAAP income tax provision, and excludes the direct impact of stock-based compensation, intangible amortization expenses and acquisition related expenses. The projected rate considers other factors such as our current operating structure, existing tax positions in various jurisdictions, and key legislation in major jurisdictions where we operate.

The change will not affect the company’s non-GAAP income before income taxes, actual cash tax payments, or cash flows, but will result in higher non-GAAP provision for income taxes. The Company, however, does not expect to pay substantial taxes on a GAAP basis in the U.S. and certain other foreign jurisdictions for the foreseeable future due to its net operating loss carryforward balances.

Conference Call Information

Vocera Communications will host a conference call at 5 p.m. ET (2 p.m. PT) today, October 28, 2021, to discuss the Company’s results.

A free, live webcast of the conference call will be available on the Investors section of the company’s website at investors.vocera.com.

The call also can be accessed by dialing +1 844-200-6205, or +1 929-526-1599 for international callers, and using the access code 231016.

A replay of the call will be archived after the event at investors.vocera.com.

Forward-Looking Statements

Statements in this press release that are not strictly historical in nature are forward-looking statements within the meaning of the U.S. federal securities laws. These forward-looking statements are based on limited information currently available to us and our management`s expectations, which are inherently subject to change and involve a number of risks and uncertainties.

Actual events or results may differ materially from those in any forward-looking statement due to various factors, including but not limited to, our ability to achieve and maintain profitability; the demand for our various solutions in the healthcare and other markets; our lengthy and unpredictable sales cycle; our ability to offer high-quality services and support for our solutions; our ability to acquire the sole and limited source hardware and software components for our solutions; our ability to obtain the required capacity and product quality from our contract manufacturers; the effects on government and commercial hospital customers of the federal budget and budgetary uncertainty; changes in healthcare insurance coverage and consumers’ utilization of healthcare and hospital services; potential impacts of the COVID-19 pandemic on our operations, changes in regulations in the U.S. and other countries; our ability to achieve anticipated strategic or financial benefits from our acquisitions; our ability to develop and introduce new solutions and features to existing solutions and to manage our growth; the impact of tax law reform on us or our customers; and the other factors described in our most recently filed Quarterly Report on Form 10-Q, as well as our other filings with the Securities and Exchange Commission (SEC). Our filings with the SEC are available on the Investors section of the Company’s web site at www.vocera.com. The financial and other information contained in this press release should be read in conjunction with the financial statements and notes thereto included in our filings with the SEC. Our operating results for any historical period, including the third quarter of 2021, are not necessarily indicative of our operating results for any future periods. This press release speaks only as of its date. We assume no obligation to update the information in this press release, to revise any forward-looking statements, or to update the reasons therefor. Actual events or results could differ materially from those anticipated in forward-looking statements.

Computational Guidance on Earnings Per Share Estimates

Accounting principles require that EPS be computed based on the weighted average shares outstanding (“basic”), and also assuming the issuance of potentially issuable shares (such as those subject to stock options, convertible notes, etc.) if those potentially issuable shares would reduce EPS (“diluted”).

The number of shares related to options and similar instruments included in diluted EPS is based on the “Treasury Stock Method” prescribed in Financial Accounting Standards Board (“FASB”) ASC Topic 260, Earnings Per Share (“FASB ASC Topic 260”). This method assumes a theoretical repurchase of shares using the proceeds of the respective stock option exercise at a price equal to the issuer’s average stock price during the related earnings period. Accordingly, the number of shares includable in the calculation of diluted EPS in respect of stock options and similar instruments is dependent on this average stock price and will increase as the average stock price increases.

Starting January 1, 2021, the number of shares included in the calculation of diluted EPS in respect of convertible senior notes is based on the “If Converted” method prescribed in FASB ASC Topic 260. This method assumes the conversion or exchange of these securities for shares of common stock. In determining if convertible securities are dilutive, the interest savings (net of tax) subsequent to an assumed conversion are added back to net earnings. The shares related to a convertible security are included in diluted EPS only if EPS as otherwise calculated is greater than the interest savings, net of tax, divided by the shares issuable upon exercise or conversion of the instrument. Accordingly, the calculation of diluted EPS for these instruments is dependent on the level of net earnings.

Use of Non-GAAP Financial Information

This press release contains financial measures that are not calculated in accordance with U.S. generally accepted accounting principles (GAAP). Our management evaluates the Company’s results and makes operating decisions using various GAAP and non-GAAP measures. In addition to our GAAP results, we also consider non-GAAP gross margin, non-GAAP gross margin for products and for services, non-GAAP net income/(loss), non-GAAP diluted income/(loss) per share, non-GAAP operating expenses, non-GAAP other expense, net and non-GAAP provision for (benefit from) income taxes. We also present Adjusted EBITDA, a non-GAAP measure that we reconcile to net income/(loss). These non-GAAP measures should not be considered as a substitute for the corresponding financial measure derived in accordance with GAAP. We present the non-GAAP measures because we consider them to be important supplemental information for our investors for analyzing our performance, core operating results and trends. Investors are encouraged to review the reconciliation of non-GAAP financial measures to their most directly comparable GAAP measures included with this press release.

Our non-GAAP gross margins, non-GAAP net income/(loss), non-GAAP diluted income/(loss) per share, non-GAAP operating expenses, non-GAAP other expense, net, non-GAAP provision for (benefit from) income taxes, and Adjusted EBITDA are exclusive of certain items to facilitate management’s review of the comparability of our core operating results on a period-to-period basis because such items are not related to our ongoing core operating results as viewed by management. We define our “core operating results” as those revenues recorded in a particular period and the expenses incurred within that period that directly drive operating income in that period. Management uses these non-GAAP financial measures in making operating decisions because, in addition to meaningful supplemental information regarding operating performance, the measures give us a better understanding of how we should invest in research and development, fund infrastructure growth and evaluate the effectiveness of marketing strategies. In calculating the above non-GAAP results, management specifically adjusted for the following excluded items:

a) Stock-based compensation expense impact. We recognize equity plan-related compensation expenses, which represent the fair value of all share-based payments to employees, including grants of employee stock options and restricted stock units as non-GAAP adjustments in each period.

b) Amortization of acquired intangibles. We acquired certain companies in 2021, 2020, and 2016, and recorded intangible assets related to these acquisitions. The amortization of these acquired intangible assets is excluded from non-GAAP net income because it is not related to ongoing controllable management decisions and because it is non-cash in nature.

c) Acquisition related expenses. In addition to the amortization of acquired intangibles mentioned above, we also adjust for certain acquisition-related expenses that we may incur including (i) professional service fees and (ii) transition costs. Professional service fees include third party costs related to the acquisition, such as due diligence costs, accounting fees, legal fees, valuation services and commissions, if any. Transition costs include retention payments and other transitional employee costs treated as compensation expense as well as the change in the fair value of contingent consideration payments payable to the selling shareholders. We consider such costs and adjustments as highly variable in amount and frequency, being significantly impacted by the timing and size of any acquisitions. By excluding acquisition-related costs and adjustments from our non-GAAP measures, management can better focus on the organic continuing operations of our baseline and acquired businesses.

d) Income tax effects. Starting April 1, 2021, we changed the calculation of our non-GAAP provision for income taxes in accordance with the SEC guidance of non-GAAP financial measures. The Company’s current and deferred income tax expense is commensurate with the non-GAAP measure of profitability using a non-GAAP tax rate of 20% for the three and nine months ended September 30, 2021 and 2020. We use the annual projected tax rate in computation of the non-GAAP income tax provision, and exclude the direct impact of stock-based compensation, intangible amortization expenses and acquisition related expenses. The projected rate considers other factors such as our current operating structure, existing tax positions in various jurisdictions, and key legislation in major jurisdictions where we operate.

Management adjusts for the above items because management believes that, in general, these items possess one or more of the following characteristics: their magnitude and timing are largely outside of the Company’s control; they are unrelated to the ongoing operation of the business in the ordinary course; they are unusual and we do not expect them to occur in the ordinary course of business; or they are non-operational, or non-cash expenses involving stock award grants.

We believe that the presentation of these non-GAAP financial measures is warranted for several reasons:

a) Such non-GAAP financial measures provide an additional analytical tool for understanding our financial performance by excluding the impact of items which may obscure trends in the core operating results of the business;

b) These non-GAAP financial measures facilitate comparisons to the operating results of other companies commonly compared to us, which use similar financial measures to supplement their GAAP results, thus enhancing the perspective of investors who wish to utilize such comparisons in their analysis of our performance; and

c) These non-GAAP financial measures are employed by our management in their own evaluation of performance and are utilized in financial and operational decision-making processes, such as budget planning and forecasting.

Set forth below are additional reasons why share-based compensation expense is excluded from our non-GAAP financial measures:

a) While share-based compensation constitutes one of our ongoing and recurring expenses, it is not an expense that requires cash settlement by us. We therefore exclude these charges for purposes of evaluating core operating results. Thus, our non-GAAP measurements are presented exclusive of stock-based compensation expense to assist management and investors in evaluating our core operating results.

b) We present share-based payment compensation expense in our reconciliation of non-GAAP financial measures on a pre-tax basis because the exact tax differences related to the timing and deductibility of share-based compensation are dependent upon the trading price of our common stock and the timing and exercise by employees of their stock options. As a result of these timing and market uncertainties, the tax effect related to share-based compensation expense would be inconsistent in amount and frequency and is therefore excluded from our non-GAAP results.

As stated above, we present non-GAAP financial measures because we consider them to be important supplemental measures of performance. However, non-GAAP financial measures have limitations as an analytical tool and should not be considered in isolation or as a substitute for our GAAP results. In the future, we expect to incur expenses similar to certain of the non-GAAP adjustments described above and expect to continue reporting non-GAAP financial measures excluding such items. Some of the limitations in relying on non-GAAP financial measures are:

  • Our stock options, restricted stock units, performance based restricted stock units, and stock purchase plans are important components of incentive compensation arrangements and will be reflected as expenses in our GAAP results for the foreseeable future; and
  • Other companies may calculate non-GAAP financial measures differently than us, limiting their usefulness as a comparative measure.

Pursuant to the requirements of SEC Regulation G, a detailed reconciliation between our non-GAAP and GAAP financial results is set forth in the financial tables referred to above, and linked to, this press release. Investors are advised to carefully review and consider this information strictly as a supplement to the GAAP results for the respective periods.

About Vocera:

The mission of Vocera Communications, Inc. is to improve the lives of healthcare professionals, patients, and families. Founded in 2000, Vocera provides clinical communication and workflow solutions that help protect and connect team members, increase operational efficiency, enhance quality of care and safety, and humanize the healthcare experience. More than 2,300 facilities worldwide, including nearly 1,900 hospitals and healthcare facilities, have selected Vocera solutions to enable their workforce to communicate and collaborate with co-workers and engage with patients and families. Mobile workers can choose the right device for their role or task, including smartphones or one of the company’s wearable communication devices, and use voice commands to easily reach people by name, role, or group. The hands-free Vocera Smartbadge was named to TIME’s list of the 100 Best Inventions of 2020. Vocera solutions can integrate with more than 150 clinical and operational systems, including electronic health records, nurse call systems, ventilators, physiological monitors, and more. In addition to healthcare, Vocera solutions are found in aged care facilities, veterinary hospitals, schools, luxury hotels, retail stores, power facilities, and more. Visit www.vocera.com/ to learn more and follow @VoceraComm on Twitter.

Vocera® and the Vocera logo are trademarks of Vocera Communications, Inc. registered in the United States and other jurisdictions. All other trademarks appearing in this release are the property of their respective owners.

Vocera Communications, Inc.

Condensed Consolidated Statements of Operations

(In Thousands, Except Per Share Amounts)

(Unaudited)

 

 

Three months ended September 30,

 

Nine months ended September 30,

 

2021

 

2020

 

2021

 

2020

Revenue

 

 

 

 

 

 

 

Product

$

32,936

 

 

$

28,510

 

 

$

83,888

 

 

$

70,311

 

Service

30,632

 

 

25,305

 

 

84,528

 

 

71,524

 

Total revenue

63,568

 

 

53,815

 

 

168,416

 

 

141,835

 

Cost of revenue

 

 

 

 

 

 

 

Product

8,361

 

 

7,139

 

 

22,858

 

 

21,213

 

Service

12,230

 

 

10,346

 

 

35,440

 

 

30,563

 

Total cost of revenue

20,591

 

 

17,485

 

 

58,298

 

 

51,776

 

Gross profit

42,977

 

 

36,330

 

 

110,118

 

 

90,059

 

Operating expenses

 

 

 

 

 

 

 

Research and development

12,294

 

 

9,559

 

 

34,650

 

 

27,940

 

Sales and marketing

19,132

 

 

15,291

 

 

55,227

 

 

48,252

 

General and administrative

8,162

 

 

7,464

 

 

24,501

 

 

20,778

 

Total operating expenses

39,588

 

 

32,314

 

 

114,378

 

 

96,970

 

Income (loss) from operations

3,389

 

 

4,016

 

 

(4,260

)

 

(6,911

)

Interest income

227

 

 

645

 

 

868

 

 

2,678

 

Interest expense

(812

)

 

(2,368

)

 

(2,383

)

 

(6,950

)

Other (expense) income, net

(549

)

 

264

 

 

(1,551

)

 

(117

)

Income (loss) before income taxes

2,255

 

 

2,557

 

 

(7,326

)

 

(11,300

)

(Provision for) benefit from income taxes

(178

)

 

1,604

 

 

(512

)

 

1,523

 

Net income (loss)

$

2,077

 

 

$

4,161

 

 

$

(7,838

)

 

$

(9,777

)

 

 

 

 

 

 

 

 

Income (loss) per share

 

 

 

 

 

 

 

Basic

$

0.06

 

 

$

0.13

 

 

$

(0.23

)

 

$

(0.30

)

Diluted

$

0.06

 

 

$

0.13

 

 

$

(0.23

)

 

$

(0.30

)

Weighted average shares used to compute net income (loss) per share

 

 

 

 

 

 

 

Basic

34,733

 

 

32,394

 

 

34,108

 

 

32,096

 

Diluted

35,746

 

 

33,019

 

 

34,108

 

 

32,096

 

Vocera Communications, Inc.

Condensed Consolidated Balance Sheets

(In Thousands)

(Unaudited)

 

 

September 30,
2021

 

December 31,
2020

Assets

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

40,602

 

 

$

34,976

 

Short-term investments

263,973

 

 

195,227

 

Accounts receivable, net of allowance

43,802

 

 

45,653

 

Other receivables

6,834

 

 

6,170

 

Inventories

8,074

 

 

10,159

 

Prepaid expenses and other current assets

6,542

 

 

6,317

 

Total current assets

369,827

 

 

298,502

 

Property and equipment, net

6,477

 

 

8,103

 

Intangible assets, net

21,272

 

 

12,788

 

Goodwill

94,833

 

 

69,168

 

Deferred commissions

17,167

 

 

12,293

 

Other long-term assets

7,109

 

 

5,967

 

Total assets

$

516,685

 

 

$

406,821

 

Liabilities and stockholders' equity

 

 

 

Current liabilities

 

 

 

Accounts payable

$

7,493

 

 

$

3,127

 

Accrued payroll and other current liabilities

25,013

 

 

23,195

 

Deferred revenue, current

55,753

 

 

54,785

 

Convertible senior notes, net

40,338

 

 

 

Total current liabilities

128,597

 

 

81,107

 

Deferred revenue, long-term

10,954

 

 

9,948

 

Convertible senior notes, net

218,327

 

 

124,376

 

Other long-term liabilities

6,501

 

 

10,374

 

Total liabilities

364,379

 

 

225,805

 

Stockholders' equity

152,306

 

 

181,016

 

Total liabilities and stockholders’ equity

$

516,685

 

 

$

406,821

 

Vocera Communications, Inc.

Three months ended September 30, 2021

 

 

 

Stock

 

 

 

Acquisition

 

 

 

 

(In thousands)

GAAP

 

compensation

 

Intangible

 

related

 

Total

 

Non-GAAP

 

2021

 

expense (a)

 

amortization (b)

 

expense (c)

 

adjustments

 

2021

Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit (Unaudited)

Revenue

 

 

 

 

 

 

 

 

 

 

 

Product

$

32,936

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

32,936

 

Service

30,632

 

 

 

 

 

 

 

 

 

 

30,632

 

Total revenue

63,568

 

 

 

 

 

 

 

 

 

 

63,568

 

Cost of revenue

 

 

 

 

 

 

 

 

 

 

 

Product

8,361

 

 

235

 

 

1,043

 

 

 

 

1,278

 

 

7,083

 

Service

12,230

 

 

1,176

 

 

 

 

(41)

 

 

1,135

 

 

11,095

 

Total cost of revenue

20,591

 

 

1,411

 

 

1,043

 

 

(41)

 

 

2,413

 

 

18,178

 

Gross profit

$

42,977

 

 

$

1,411

 

 

$

1,043

 

 

$

(41)

 

 

$

2,413

 

 

$

45,390

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock

 

 

 

Acquisition

 

 

 

 

(In thousands)

GAAP

 

compensation

 

Intangible

 

related

 

Total

 

Non-GAAP

 

2021

 

expense (a)

 

amortization (b)

 

expense (c)

 

adjustments

 

2021

Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

$

12,294

 

 

$

1,222

 

 

$

 

 

$

413

 

 

$

1,635

 

 

$

10,659

 

Sales and marketing

19,132

 

 

2,876

 

 

590

 

 

304

 

 

3,770

 

 

15,362

 

General and administrative

8,162

 

 

3,094

 

 

 

 

157

 

 

3,251

 

 

4,911

 

Total operating expenses

$

39,588

 

 

$

7,192

 

 

$

590

 

 

$

874

 

 

$

8,656

 

 

$

30,932

 

(a)

 

This adjustment reflects the accounting impact of non-cash stock-based compensation expense.

(b)

 

This adjustment reflects the accounting impact of acquisitions in 2021, 2020, and 2016 in non-cash expense.

(c)

 

This adjustment reflects the costs associated with acquisitions in 2021 and 2020.

Three months ended September 30, 2020

 

 

 

Stock

 

Intangible

 

Acquisition

 

 

 

 

(In thousands)

GAAP

 

compensation

 

amortization

 

related

 

Total

 

Non-GAAP

 

2020

 

expense (a)

 

(b)

 

expense (c)

 

adjustments

 

2020

Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit (Unaudited)

Revenue

 

 

 

 

 

 

 

 

 

 

 

Product

$

28,510

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

28,510

 

Service

25,305

 

 

 

 

 

 

 

 

 

 

25,305

 

Total revenue

53,815

 

 

 

 

 

 

 

 

 

 

53,815

 

Cost of revenue

 

 

 

 

 

 

 

 

 

 

 

Product

7,139

 

 

147

 

 

114

 

 

 

 

261

 

 

6,878

 

Service

10,346

 

 

895

 

 

 

 

 

 

895

 

 

9,451

 

Total cost of revenue

17,485

 

 

1,042

 

 

114

 

 

 

 

1,156

 

 

16,329

 

Gross profit

$

36,330

 

 

$

1,042

 

 

$

114

 

 

$

 

 

$

1,156

 

 

$

37,486

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock

 

Intangible

 

Acquisition

 

 

 

 

(In thousands)

GAAP

 

compensation

 

amortization

 

related

 

Total

 

Non-GAAP

 

2020

 

expense (a)

 

(b)

 

expense (c)

 

adjustments

 

2020

Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

$

9,559

 

 

$

1,046

 

 

$

 

 

$

222

 

 

$

1,268

 

 

$

8,291

 

Sales and marketing

15,291

 

 

2,037

 

 

375

 

 

148

 

 

2,560

 

 

12,731

 

General and administrative

7,464

 

 

2,554

 

 

40

 

 

485

 

 

3,079

 

 

4,385

 

Total operating expenses

$

32,314

 

 

$

5,637

 

 

$

415

 

 

$

855

 

 

$

6,907

 

 

$

25,407

 

(a)

 

This adjustment reflects the accounting impact of non-cash stock-based compensation expense.

(b)

 

This adjustment reflects the accounting impact of an acquisition in 2016 in non-cash expense.

(c)

 

This adjustment reflects the costs associated with the acquisition in 2020.

Vocera Communications, Inc.

Nine months ended September 30, 2021

 

 

 

Stock

 

Intangible

 

Acquisition

 

 

 

 

(In thousands)

GAAP

 

compensation

 

amortization

 

related

 

Total

 

Non-GAAP

 

2021

 

expense (a)

 

(b)

 

expense (c)

 

adjustments

 

2021

Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit (Unaudited)

Revenue

 

 

 

 

 

 

 

 

 

 

 

Product

$

83,888

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

83,888

 

Service

84,528

 

 

 

 

 

 

 

 

 

 

84,528

 

Total revenue

168,416

 

 

 

 

 

 

 

 

 

 

168,416

 

Cost of revenue

 

 

 

 

 

 

 

 

 

 

 

Product

22,858

 

 

670

 

 

2,068

 

 

 

 

2,738

 

 

20,120

 

Service

35,440

 

 

3,220

 

 

 

 

166

 

 

3,386

 

 

32,054

 

Total cost of revenue

58,298

 

 

3,890

 

 

2,068

 

 

166

 

 

6,124

 

 

52,174

 

Gross profit

$

110,118

 

 

$

3,890

 

 

$

2,068

 

 

$

166

 

 

$

6,124

 

 

$

116,242

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock

 

Intangible

 

Acquisition

 

 

 

 

(In thousands)

GAAP

 

compensation

 

amortization

 

related

 

Total

 

Non-GAAP

 

2021

 

expense (a)

 

(b)

 

expense (c)

 

adjustments

 

2021

Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

$

34,650

 

 

$

3,455

 

 

$

 

 

$

1,093

 

 

$

4,548

 

 

$

30,102

 

Sales and marketing

55,227

 

 

7,633

 

 

1,630

 

 

806

 

 

10,069

 

 

45,158

 

General and administrative

24,501

 

 

7,610

 

 

78

 

 

1,830

 

 

9,518

 

 

14,983

 

Total operating expenses

$

114,378

 

 

$

18,698

 

 

$

1,708

 

 

$

3,729

 

 

$

24,135

 

 

$

90,243

 

(a)

 

This adjustment reflects the accounting impact of non-cash stock-based compensation expense.

(b)

 

This adjustment reflects the accounting impact of acquisitions in 2021, 2020, and 2016 in non-cash expense.

(c)

 

This adjustment reflects the costs associated with the acquisition in 2021 and 2020.

Nine months ended September 30, 2020

 

 

 

Stock

 

Intangible

 

Acquisition

 

 

 

 

(In thousands)

GAAP

 

compensation

 

amortization

 

related

 

Total

 

Non-GAAP

 

2020

 

expense (a)

 

(b)

 

expense (c)

 

adjustments

 

2020

Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit (Unaudited)

Revenue

 

 

 

 

 

 

 

 

 

 

 

Product

$

70,311

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

70,311

 

Service

71,524

 

 

 

 

 

 

 

 

 

 

71,524

 

Total revenue

141,835

 

 

 

 

 

 

 

 

 

 

141,835

 

Cost of revenue

 

 

 

 

 

 

 

 

 

 

 

Product

21,213

 

 

510

 

 

125

 

 

 

 

635

 

 

20,578

 

Service

30,563

 

 

2,619

 

 

 

 

 

 

2,619

 

 

27,944

 

Total cost of revenue

51,776

 

 

3,129

 

 

125

 

 

 

 

3,254

 

 

48,522

 

Gross profit

$

90,059

 

 

$

3,129

 

 

$

125

 

 

$

 

 

$

3,254

 

 

$

93,313

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock

 

Intangible

 

Acquisition

 

 

 

 

(In thousands)

GAAP

 

compensation

 

amortization

 

related

 

Total

 

Non-GAAP

 

2020

 

expense (a)

 

(b)

 

expense (c)

 

adjustments

 

2020

Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

$

27,940

 

 

$

3,035

 

 

$

 

 

$

222

 

 

$

3,257

 

 

$

24,683

 

Sales and marketing

48,252

 

 

5,858

 

 

912

 

 

148

 

 

6,918

 

 

41,334

 

General and administrative

20,778

 

 

6,864

 

 

118

 

 

485

 

 

7,467

 

 

13,311

 

Total operating expenses

$

96,970

 

 

$

15,757

 

 

$

1,030

 

 

$

855

 

 

$

17,642

 

 

$

79,328

 

(a)

 

This adjustment reflects the accounting impact of non-cash stock-based compensation expense.

(b)

 

This adjustment reflects the accounting impact of an acquisition in 2016 in non-cash expense.

(c)

 

This adjustment reflects the costs associated with the acquisition in 2020.

Vocera Communications, Inc.

Non-GAAP Net income and net income per share and Adjusted EBITDA

(In thousands, except per share amounts)

(Unaudited)

 

 

 

 

 

 

Three months ended September 30,

 

Nine months ended September 30,

 

2021

 

2020

 

2021

 

2020

GAAP net income (loss)

$

2,077

 

 

$

4,161

 

 

$

(7,838

)

 

$

(9,777

)

Add back:

 

 

 

 

 

 

 

Stock compensation expense

8,603

 

 

6,679

 

 

22,588

 

 

18,886

 

Acquisition related expenses

833

 

 

855

 

 

3,895

 

 

855

 

Other expense, net (a)

212

 

 

8

 

 

973

 

 

8

 

Release of deferred tax valuation allowance

 

 

(2,056

)

 

 

 

(2,056

)

Interest income

(224

)

 

(638

)

 

(855

)

 

(2,655

)

Interest expense

812

 

 

2,368

 

 

2,383

 

 

6,950

 

Depreciation and amortization expense

2,845

 

 

1,669

 

 

7,432

 

 

4,470

 

Provision for income taxes (b)

178

 

 

452

 

 

512

 

 

533

 

Non-GAAP adjusted EBITDA

$

15,336

 

 

$

13,498

 

 

$

29,090

 

 

$

17,214

 

 

 

 

 

 

 

 

 

GAAP net income (loss)

$

2,077

 

 

$

4,161

 

 

$

(7,838

)

 

$

(9,777

)

Add back:

 

 

 

 

 

 

 

Stock compensation expense

8,603

 

 

6,679

 

 

22,588

 

 

18,886

 

Intangible amortization

1,633

 

 

529

 

 

3,776

 

 

1,155

 

Acquisition related expenses

833

 

 

855

 

 

3,895

 

 

855

 

Other expense, net (a)

212

 

 

8

 

 

973

 

 

8

 

Provision for income taxes (b)

(2,529

)

 

(3,730

)

 

(4,269

)

 

(3,444

)

Non-GAAP net income

$

10,829

 

 

$

8,502

 

 

$

19,125

 

 

$

7,683

 

Add interest expense of convertible senior notes, net of tax

650

 

 

 

 

1,906

 

 

 

Numerator for non-GAAP diluted EPS calculation

$

11,479

 

 

$

8,502

 

 

$

21,031

 

 

$

7,683

 

 

 

 

 

 

 

 

 

Non-GAAP net income per share

 

 

 

 

 

 

 

Basic

$

0.31

 

 

$

0.26

 

 

$

0.56

 

 

$

0.24

 

Diluted

$

0.28

 

 

$

0.26

 

 

$

0.52

 

 

$

0.24

 

 

 

 

 

 

 

 

 

Non-GAAP weighted average shares used to compute net income per share, basic

34,733

 

 

32,394

 

 

34,108

 

 

32,096

 

GAAP weighted average shares used to compute net income per share, diluted

35,746

 

 

33,019

 

 

34,108

 

 

32,096

 

Dilutive effect of convertible senior notes

4,998

 

 

 

 

5,061

 

 

 

Dilutive effect of employee equity incentive plan awards and ESPP

 

 

 

 

1,226

 

 

 

541

 

Non-GAAP weighted average shares used to compute net income per share, diluted

40,744

 

 

33,019

 

 

40,395

 

 

32,637

 

(a) This adjustment reflects the accounting impact of the quarterly valuation reassessment of contingent consideration resulting from the 2020 acquisition of $0.2 million and $(1.1) million for the three and nine months ended September 30, 2021, respectively and the induced conversion expense from repurchasing our 2023 Notes of $2.1 million for the nine months ended September 30, 2021.

(b) Starting April 1, 2021, the Company changed the calculation of its non-GAAP provision for income taxes in accordance with the SEC guidance of non-GAAP financial measures. The Company’s current and deferred income tax expense is commensurate with the non-GAAP measure of profitability using a non-GAAP tax rate of 20% for the three and nine months ended September 30, 2021 and 2020. The Company uses annual projected tax rate in its computation of the non-GAAP income tax provision, and excludes the direct impact of stock-based compensation, intangible amortization expenses and acquisition related expenses.

Vocera Communications, Inc.

Future guidance for operating results

(In millions, except per share amounts)

 

Reconciliation for GAAP to Non-GAAP for net income (loss) and net income (loss) per share

 

 

 

 

 

 

 

 

 

Year ending

December 31, 2021

 

Low

 

High

Revenue

$

226.0

 

 

$

233.0

 

 

 

 

 

GAAP net loss

(16.5

)

 

(10.4

)

Stock compensation expense

32.0

 

 

31.0

 

Intangible amortization expense

5.4

 

 

5.4

 

Acquisition and restructuring expense

4.3

 

 

4.3

 

Other expense

2.0

 

 

2.0

 

Income tax expense

(4.8

)

 

(5.8

)

Total adjustments

38.9

 

 

36.9

 

Non-GAAP net income

$

22.4

 

 

$

26.5

 

Add interest expense of convertible senior notes, net of tax

2.6

 

 

2.6

 

Numerator for non-GAAP EPS calculation

$

25.0

 

 

$

29.1

 

Weighted average shares

 

 

 

Basic

34.3

 

 

34.3

 

Diluted

40.6

 

 

40.6

 

 

 

 

 

GAAP loss per share:

 

 

 

Basic

$

(0.48

)

 

$

(0.30

)

Diluted

$

(0.48

)

 

$

(0.30

)

Non-GAAP net income per share:

 

 

 

Basic

$

0.65

 

 

$

0.77

 

Diluted

$

0.62

 

 

$

0.72

 

 
 

Reconciliation of Non-GAAP net income to adjusted EBITDA

 

 

 

 

Year ending

December 31, 2021

 

Low

 

High

Non-GAAP net income

$

22.4

 

 

$

26.5

 

Interest expense, net

2.1

 

 

2.1

 

Depreciation expense

4.9

 

 

4.9

 

Provision for income taxes

5.6

 

 

6.5

 

Total adjustments

12.6

 

 

13.5

 

Adjusted EBITDA

$

35.0

 

 

$

40.0

 

 

Investors:
Sue Dooley
Vocera Communications, Inc.
408.882.5971
investorrelations@vocera.com

Media:
Shanna Hearon
Vocera Communications, Inc.
669.999.3368
shearon@vocera.com

Source: Vocera Communications, Inc.

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