Vocera Announces Third Quarter Revenue of $47.8 million

Thursday, October 25, 2018
SAN JOSE, Calif.

SAN JOSE, Calif.--(BUSINESS WIRE)--Vocera Communications, Inc. (NYSE: VCRA), a recognized leader in clinical communication and workflow solutions, today reported total revenue of $47.8 million for the third quarter of 2018, compared to revenue of $45.6 million in the third quarter of 2017.

“We had a great third quarter. Our success was broad based, with all market segments of our business performing well,” said Brent Lang, President and Chief Executive Officer of Vocera. “Several large customer wins validated our leadership position, and our solution continues to succeed against competitors. Cross-selling is gaining traction as customers seek a unified solution for their communication needs.”

Third quarter of 2018 financial highlights include:

  • Total revenue of $47.8 million, up 5% year-over-year
  • GAAP net loss per share of $(0.01); non-GAAP net income per share of $0.20
  • GAAP net loss of $(0.2) million; Adjusted EBITDA of $8.4 million
  • Deferred revenue and backlog of $117.2 million as of September 30, 2018
  • Cash, cash equivalents and short-term investments of $215.0 million as of September 30, 2018

Third Quarter 2018 Results

Total revenue for the third quarter of 2018 was $47.8 million, up 5% compared to last year. Keep in mind, and as previously disclosed, the recasting of our historical financials under ASC 606 raised revenue for the third quarter 2017 the most of all affected quarters, thereby lowering our third quarter year over year growth rate.

 
(in thousands) Three months ended September 30,
2018   2017   % change
Product revenue
Device $ 17,031 $ 16,524 3.1 %
Software 10,310   9,494   8.6
Total product $ 27,341 $ 26,018 5.1 %
 
Service revenue
Maintenance and support $ 16,023 $ 13,837 15.8 %
Professional services and training 4,458   5,730   (22.2 )
Total service 20,481   19,567   4.7
Total revenue $ 47,822   $ 45,585   4.9 %
 

GAAP gross margin for the third quarter of 2018 was 65.1%, compared to 63.9% in the third quarter of 2017.

 
Three months ended September 30,
2018   2017
Gross margin
Product 75.1 % 72.3 %
Service 51.8 52.8
Total gross margin 65.1 % 63.9 %
 
Non-GAAP gross margin
Product 77.8 % 75.6 %
Service 56.0 56.3
Total non-GAAP gross margin 68.5 % 67.3 %
 

GAAP net loss for the third quarter of 2018 was $(0.2) million, or $(0.01) per share, compared to GAAP net income of $1.4 million, or $0.05 per share in the third quarter of 2017.

 
Three months ended September 30,
(in thousands except per share amounts) 2018   2017
Net income (loss) $ (249 ) $ 1,391
Net income (loss) per share $ (0.01 ) $ 0.05
Non-GAAP net income $ 6,403 $ 7,565
Non-GAAP net income per share $ 0.20 $ 0.25
Adjusted EBITDA $ 8,417 $ 8,507
 

Deferred revenue at September 30, 2018, was $54.3 million compared to $55.2 million at December 31, 2017. Cash equivalents and short-term investments were $215.0 million at September 30, 2018 and $81.2 million at December 31, 2017.

Full Year and Fourth Quarter 2018 Guidance

For the full-year 2018, the Company expects revenue between $177.0 million and $182.0 million and a GAAP loss per share between $(0.45) and $(0.30). The Company expects non-GAAP net income per share to be between $0.41 and $0.54 and non-GAAP Adjusted EBITDA to be between $19.0 million and $23.0 million.

For the fourth quarter of 2018, the Company expects revenue between $46.3 million and $51.3 million and a GAAP loss per share between $(0.16) and $(0.02). The Company expects non-GAAP net income per share to be between $0.08 and $0.20 and non-GAAP Adjusted EBITDA to be between $5.3 million and $9.3 million.

Net income and earnings per share guidance for both the full-year and the fourth quarter of 2018 reflect the impact of the convertible senior notes.

   
(in millions except per share amounts) Q4’18 FY’18
Low   High Low   High
Revenue $ 46.3 $ 51.3 $ 177.0 $ 182.0
Loss per share $ (0.16 ) $ (0.02 ) $ (0.45 ) $ (0.30 )
Diluted non-GAAP net income per share $ 0.08 $ 0.20 $ 0.41 $ 0.54
Adjusted EBITDA $ 5.3 $ 9.3 $ 19.0 $ 23.0
 

Certain amounts in our release may not re-compute due to rounding. A reconciliation of non-GAAP to GAAP financial measures, and fourth quarter and full-year guidance, are included in the financial schedules. The Company’s re-cast financial statements for 2017 and 2016 are included in the Company’s accompanying financial schedules.

Conference Call Information

Vocera Communications will host a conference call at 5 p.m. ET (2 p.m. PT) today, October 25, 2018, to discuss the Company’s results.

Investors may access a free, live webcast of the call through the Investors section of the Company’s website at investors.vocera.com.

The call also can be accessed by dialing 833-238-7944, or 647-689-4192 for international callers, and using the access code 6891797.

A webcast replay of the call will be archived 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, including our expected operating results for the fourth quarter and full year 2018. 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, changes in regulations in the U.S. and other countries; 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; 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 achieve anticipated strategic or financial benefits from our acquisitions; our ability to acquire the sole and limited source hardware and software components of our solutions; our ability to obtain the required capacity and product quality from our contract manufacturer; 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 2018, 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 actual events or results could differ materially from those anticipated in forward-looking statements.

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 income/(loss) per diluted share and non-GAAP operating expenses. 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 earnings/(loss) per diluted share, non-GAAP operating expenses, 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 2010, 2014 and 2016, and booked 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, transitional employee costs and earn-out payments (including amounts relating to the distribution of purchase consideration among the selling equity holders) treated as compensation expense. 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) Restructuring costs. We exclude restructuring costs from non-GAAP measures because we do not regard these limited-term or one-time costs as reflective of normal costs we incur to operate our business. These are defined in U.S. GAAP to include one-time employee termination benefits, contract termination costs, and other associated costs, with respect to exit or disposal activities.

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 is largely outside of Vocera’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:

1) 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;

2) 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

3) 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:

i) 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.

ii) 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, 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 simplify and improve the lives of healthcare professionals and patients, while enabling hospitals to enhance quality of care and operational efficiency. In 2000, when the company was founded, we began to forever change the way care teams communicate. Today, Vocera continues to offer the leading platform for clinical communication and workflow. More than 1,700 facilities worldwide, including nearly 1,500 hospitals and healthcare facilities, have selected our solutions for team members to text securely using smartphones or make calls with our hands-free, wearable Vocera Badge. Interoperability between Vocera and more than 140 clinical and operational systems helps reduce alarm fatigue, speed up staff response times, and improve patient care, safety and experience. In addition to healthcare, Vocera is at home in luxury hotels, aged care facilities, nuclear facilities, libraries, retail stores and more. Vocera makes a difference in any industry where workers are on the move and need to connect instantly with team members and access resources or information quickly. In 2017, Vocera made the list of Forbes 100 Most Trustworthy Companies in America.

Learn more at www.vocera.com , and follow @VoceraComm on Twitter.

The Vocera logo is a trademark of Vocera Communications, Inc. Vocera® is a trademark 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,
    2018   2017   2018   2017
Revenue    
Product $ 27,341 $ 26,018 $ 70,252 $ 67,062
Service 20,481   19,567   60,498   54,807  
Total revenue 47,822   45,585   130,750   121,869  
Cost of revenue
Product 6,819 7,208 19,847 20,424
Service 9,865   9,241   30,213   28,358  

Total cost of revenue

16,684   16,449   50,060   48,782  
Gross profit 31,138   29,136   80,690   73,087  
Operating expenses
Research and development 7,993 6,644 22,630 20,944
Sales and marketing 15,654 14,840 45,942 45,008
General and administrative 6,438   6,088   18,973   17,767  
Total operating expenses 30,085   27,572   87,545   83,719  
Income (loss) from operations 1,053 1,564 (6,855 ) (10,632 )
Interest income 1,110 177 1,855 410
Interest expense (2,106 ) (3,103 )
Other income (expense), net (158 ) (41 ) (965 ) 1  
Income (loss) before income taxes (101 ) 1,700 (9,068 ) (10,221 )
Benefit from (provision for) income taxes (148 ) (309 ) 495   (1,050 )
Net income (loss) $ (249 ) $ 1,391   $ (8,573 ) $ (11,271 )
 
Net income (loss) per share
Basic $ (0.01 ) $ 0.05   $ (0.29 ) $ (0.40 )
Diluted $ (0.01 ) $ 0.05   $ (0.29 ) $ (0.40 )
Weighted average shares used to compute net income (loss) per share
Basic 30,230   29,130   29,861   28,439  
Diluted 30,230   30,473   29,861   28,439  
 
   

Vocera Communications, Inc.

Condensed Consolidated Balance Sheets

(In Thousands)

(Unaudited)

 
    September 30,
2018
  December 31,
2017
Assets
Current assets
Cash and cash equivalents $ 32,971 $ 28,726
Short-term investments 181,982 52,507
Accounts receivable, net of allowance 36,982 35,105
Other receivables 2,289 1,331
Inventories 3,678 2,815
Prepaid expenses and other current assets 4,513   3,957
Total current assets 262,415 124,441
Property and equipment, net 7,058 5,751
Intangible assets, net 10,234 13,567
Goodwill 49,246 49,246
Deferred commissions 9,475 10,301
Other long-term assets 1,718   1,667
Total assets $ 340,146   $ 204,973
Liabilities and stockholders' equity
Current liabilities
Accounts payable $ 3,154 $ 2,678
Accrued payroll and other current liabilities 13,458 14,689
Deferred revenue, current 41,410   40,734
Total current liabilities 58,022 58,101
Deferred revenue, long-term 12,898 14,417
Convertible senior notes, net 108,942
Other long-term liabilities 2,907   4,455
Total liabilities 182,769 76,973
Stockholders' equity 157,377   128,000
Total liabilities and stockholders’ equity $ 340,146   $ 204,973
 
 
Vocera Communications, Inc.
Three months ended September 30, 2018
 
    Stock   Intangible   Acquisition    
(In thousands) GAAP compensation amortization related Total Non-GAAP
2018 expense (a) (b) expense (c) adjustments 2018
Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit (Unaudited)
Revenue
Product $ 27,341 $ $ $ $ $ 27,341
Service 20,481           20,481

Total revenue

47,822           47,822
Cost of revenue
Product 6,819 128 622 750 6,069
Service 9,865   795     60   855   9,010
Total cost of revenue 16,684   923   622   60   1,605   15,079
Gross profit $ 31,138   $ 923   $ 622   $ 60   $ 1,605   $ 32,743
                     
Stock Intangible Acquisition
(In thousands) GAAP compensation amortization related Total Non-GAAP
2018 expense (a) (b) expense (c) adjustments 2018
Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses (Unaudited)
 
Research and development $ 7,993 $ 802 $ $ $ 802 $ 7,191
Sales and marketing 15,654 1,755 377 2,132 13,522
General and administrative 6,438   2,014   39   60   2,113   4,325
Total operating expenses $ 30,085   $ 4,571   $ 416   $ 60   $ 5,047   $ 25,038

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

(b) This adjustment reflects the accounting impact of acquisitions in 2010, 2014 and 2016 in non-cash expense.

(c) This adjustment reflects the costs associated with the acquisition in 2016.

 
Three months ended September 30, 2017
    Stock   Intangible   Acquisition    
(In thousands) GAAP compensation amortization related Total Non-GAAP
2017 expense (a) (b) expense (c) adjustments 2017
Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit (Unaudited)
Revenue
Product $ 26,018 $ $ $ $ $ 26,018
Service 19,567           19,567
Total revenue 45,585           45,585
Cost of revenue
Product 7,208 118 729 847 6,361
Service 9,241   631     60   691   8,550
Total cost of revenue 16,449   749   729   60   1,538   14,911
Gross profit $ 29,136   $ 749   $ 729   $ 60   $ 1,538   $ 30,674
                     
Stock Intangible Acquisition
(In thousands) GAAP compensation amortization related Total Non-GAAP
2017 expense (a) (b) expense (c) adjustments 2017
Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses (Unaudited)
 
Research and development $ 6,644 $ 507 $ $ $ 507 $ 6,137
Sales and marketing 14,840 1,653 385 2,038 12,802
General and administrative 6,088   1,809   55   227   2,091   3,997
Total operating expenses $ 27,572   $ 3,969   $ 440   $ 227   $ 4,636   $ 22,936

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

(b) This adjustment reflects the accounting impact of acquisitions in 2010 and 2014 in non-cash expense.

(c) This adjustment reflects the costs associated with the acquisition in 2016.

 
Vocera Communications, Inc.
Nine months ended September 30, 2018
    Stock   Intangible   Acquisition    
(In thousands) GAAP compensation amortization related Total Non-GAAP
2018 expense (a) (b) expense (c) adjustments 2018
Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit (Unaudited)
Revenue
Product $ 70,252 $ $ $ $ $ 70,252
Service 60,498           60,498
Total revenue 130,750           130,750
Cost of revenue
Product 19,847 368 2,076 2,444 17,403
Service 30,213   2,268     180   2,448   27,765
Total cost of revenue 50,060   2,636   2,076   180   4,892   45,168
Gross profit $ 80,690   $ 2,636   $ 2,076   $ 180   $ 4,892   $ 85,582
                     
Stock Intangible Acquisition
(In thousands) GAAP compensation amortization related Total Non-GAAP
2018 expense (a) (b) expense (c) adjustments 2018
Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses (Unaudited)
 
Research and development $ 22,630 $ 2,164 $ $ 2,164 $ 20,466
Sales and marketing 45,942 4,906 1,133 6,039 39,903
General and administrative 18,973   5,771   123   90   5,984   12,989
Total operating expenses $ 87,545   $ 12,841   $ 1,256   $ 90   $ 14,187   $ 73,358

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

(b) This adjustment reflects the accounting impact of acquisitions in 2010, 2014 and 2016 in non-cash expense.

(c) This adjustment reflects the costs associated with the acquisition in 2016.

 
Nine months ended September 30, 2017
    Stock   Intangible   Acquisition    
(In thousands) GAAP compensation amortization related Total Non-GAAP
2017 expense (a) (b) expense (c) adjustments 2017
Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit (Unaudited)
Revenue
Product $ 67,062 $ $ $ $ $ 67,062
Service 54,807           54,807
Total revenue 121,869           121,869
Cost of revenue
Product 20,424 309 2,222 2,531 17,893
Service 28,358   1,808     229   2,037   26,321
Total cost of revenue 48,782   2,117   2,222   229   4,568   44,214
Gross profit $ 73,087   $ 2,117   $ 2,222   $ 229   $ 4,568   $ 77,655
 
 
Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses (Unaudited)
 
Research and development $ 20,944 $ 1,542 $ $ 47 $ 1,589 $ 19,355
Sales and marketing 45,008 4,697 1,154 15 5,866 39,142
General and administrative 17,767   4,848   166   718   5,732   12,035
Total operating expenses $ 83,719   $ 11,087   $ 1,320   $ 780   $ 13,187   $ 70,532

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

(b) This adjustment reflects the accounting impact of acquisitions in 2010, 2014 and 2016 in non-cash expense.

(c) This adjustment reflects the costs associated with the acquisition in 2016.

 
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,
2018 2017 2018 2017
GAAP net income (loss) $ (249 ) $ 1,391 $ (8,573 ) $ (11,271 )
Add back:
Stock compensation expense 5,494 4,718 15,477 13,204
Acquisition related expenses 120 287 270 1,009
Interest income (1,094 ) (162 ) (1,797 ) (371 )
Interest expense 2,106

3,103

Depreciation and amortization expense 1,892 1,964 5,668 5,755
Provision for (benefit from) income taxes   148     309     (495 )   1,050  
Non-GAAP adjusted EBITDA $ 8,417   $ 8,507   $ 13,653   $ 9,376  
 
GAAP net income (loss) $ (249 ) $ 1,391 $ (8,573 ) $ (11,271 )
Add back:
Stock compensation expense 5,494 4,718 15,477 13,204
Intangible amortization 1,038 1,169 3,332 3,542
Acquisition related expenses   120     287     270     1,009  
Non-GAAP net income $ 6,403   $ 7,565   $ 10,506   $ 6,484  
Non-GAAP net income per share
Basic $ 0.21 $ 0.26 $ 0.35 $ 0.23
Diluted $ 0.20 $ 0.25 $ 0.33 $ 0.22
Weighted average shares used to compute non-GAAP net income per share
Basic 30,230 29,130 29,861 28,439
Diluted 32,109 30,473 31,371 30,102
 
 
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  
 

Three months ended
December 31, 2018

 

Year ended
December 31, 2018

Low   High Low High
Revenue $ 46.3 $ 51.3 $ 177.0 $ 182.0
GAAP net loss (5.0 ) (0.5 ) (13.6 ) (9.1 )
Stock compensation expense 6.0 5.5 21.5 21.0
Intangible amortization expense 1.4 1.4 4.7 4.7
Acquisition and restructuring expense 0.2   0.2   0.5   0.5  
Total adjustments 7.6   7.1   26.7   26.2  
Non-GAAP net income $ 2.6   $ 6.6   $ 13.1   $ 17.1  
Weighted average shares (in thousands)
Basic 30,580 30,580 30,060 30,060
Diluted 32,580 32,580 31,814 31,814
 
GAAP net loss per share, basic and diluted $ (0.16 ) $ (0.02 ) $ (0.45 ) $ (0.30 )
 
Non-GAAP net income per share :
Basic $ 0.09 $ 0.22 $ 0.44 $ 0.57
Diluted $ 0.08 $ 0.20 $ 0.41 $ 0.54
 
   
Reconciliation of Non-GAAP net income (loss) to adjusted EBITDA
 

Three months ended
December 31, 2018

Year ended
December 31, 2018

Low   High Low High
Non-GAAP net income $ 2.6   $ 6.6   $ 13.1   $ 17.1  
Interest expense, net 1.3 1.3 2.6 2.6
Depreciation expense 1.2 1.2 3.5 3.5
Provision for income taxes 0.3   0.3   (0.3 ) (0.3 )
Total adjustments 2.7   2.7   5.9   5.9  
Adjusted EBITDA $ 5.3   $ 9.3   $ 19.0   $ 23.0  

* Amounts may not recompute due to rounding.

 
 

Vocera Communications, Inc.

Condensed Consolidated Statements of Operations and Condensed Consolidated Balance Sheets Adjusted for the

Adoption of The New Revenue Standard (ASC 606) on a Fully Retrospective Basis

 
     

Vocera Communications, Inc.

Condensed Consolidated Statements of Operations Adjusted for the Adoption of the New Revenue Standard

(In Thousands, Except Per Share Amounts)

(Unaudited)

 
As Adjusted As Reported Change
Year Ended December 31, 2017   2016 2017   2016 2017   2016
Revenue
Product revenue
Devices $ 61,746 $ 50,614 $ 60,869 $ 50,061 $ 877 $ 553
Software 29,839     23,621   27,996     20,606   1,843     3,015  
Total product 91,585     74,235   88,865     70,667   2,720     3,568  
Service revenue
Maintenance and support 52,342 43,408 52,542 43,438 (200 ) (30 )
Professional services and training 22,062     14,383   21,141     13,591   921     792  
Total service 74,404     57,791   73,683     57,029   721     762  
Total revenue 165,989     132,026   162,548     127,696   3,441     4,330  
Cost of revenue
Product 27,244 22,788 27,244 22,788
Service 37,683     26,287   37,683     26,287        
Total cost of revenue 64,927     49,075   64,927     49,075        
Gross profit 101,062     82,951   97,621     78,621   3,441     4,330  
Operating expenses
Research and development 27,685 18,266 27,685 18,266
Sales and marketing 60,107 51,274 59,986 52,811 121 (1,537 )
General and administrative 23,970     24,499   23,970     24,499        
Total operating expenses 111,762     94,039   111,641     95,576   121     (1,537 )
Income (loss) from operations (10,700 ) (11,088 ) (14,020 ) (16,955 ) 3,320 5,867
Interest income 604 684 604 684
Other income (expense), net (42 )   (467 ) (42 )   (467 )      
Income (loss) before income taxes (10,138 ) (10,871 ) (13,458 ) (16,738 ) 3,320 5,867
Provision for income taxes (759 )   (529 ) (759 )   (529 )      
Net income (loss) $ (10,897 )   $ (11,400 ) $ (14,217 )   $ (17,267 ) $ 3,320     $ 5,867  
 
Net income (loss) per share
Basic and diluted $ (0.38 ) $ (0.42 ) $ (0.50 ) $ (0.64 ) $ 0.12 $ 0.21
Weighted average shares used to compute net income (loss) per share
Basic and diluted 28,655     26,859   28,655     26,859   28,655     26,859  
 
       

Vocera Communications, Inc.

Condensed Consolidated Statements of Operations Adjusted for the Adoption of the New Revenue Standard

 
Q1 2017 Q2 2017 Q3 2017 Q4 2017
(In Thousands, Except Per Share Amounts, Unaudited)

As
Adjusted

 

As
Reported

  Change

As
Adjusted

 

As
Reported

  Change

As
Adjusted

 

As
Reported

  Change

As
Adjusted

 

As
Reported

  Change
Revenue                
Product revenue
Devices $ 14,058 $ 14,121 $ (63 ) $ 14,990 $ 14,837 $ 153 $ 16,524 $ 16,084 $ 440 $ 16,174 $ 15,827 $ 347
Software 5,994     5,912     82   6,002     5,821   181   9,494     7,165     2,329   8,349     9,098     (749 )
Total product 20,052     20,033     19   20,992     20,658   334   26,018     23,249     2,769   24,523     24,925     (402 )
Service revenue
Maintenance and support 12,000 11,852 148 12,670 12,583 87 13,837 13,746 91 13,835 14,361 (526 )
Professional services and training 4,574     4,410     164   5,996     5,209     787   5,730     5,305     425   5,762     6,217     (455 )
Total service 16,574     16,262     312   18,666     17,792     874   19,567     19,051     516   19,597     20,578     (981 )
Total revenue 36,626     36,295     331   39,658     38,450     1,208   45,585     42,300     3,285   44,120     45,503     (1,383 )
Cost of revenue
Product 6,409 6,409 6,807 6,807 7,208 7,208 6,820 6,820
Service 9,155     9,155       9,962     9,962       9,241     9,241       9,325     9,325      
Total cost of revenue 15,564     15,564       16,769     16,769       16,449     16,449       16,145     16,145      
Gross profit 21,062     20,731     331   22,889     21,681     1,208   29,136     25,851     3,285   27,975     29,358     (1,383 )
Operating expenses
Research and development 6,929 6,929 7,371 7,371 6,644 6,644 6,741 6,741
Sales and marketing 14,922 14,581 341 15,246 15,377 (131 ) 14,840 15,831 (991 ) 15,099 14,197 902
General and administrative 5,695     5,695       5,984     5,984       6,088     6,088       6,203     6,203      
Total operating expenses 27,546     27,205     341   28,601     28,732     (131 ) 27,572     28,563     (991 ) 28,043     27,141     902  
Income (loss) from operations (6,484 ) (6,474 ) (10 ) (5,712 ) (7,051 ) 1,339 1,564 (2,712 ) 4,276 (68 ) 2,217 (2,285 )
Interest income 105 105 128 128 177 177 194 194
Other income (expense), net 109     109       (67 )   (67 )     (41 )   (41 )     (43 )   (43 )    
Income (loss) before income taxes (6,270 ) (6,260 ) (10 ) (5,651 ) (6,990 ) 1,339 1,700 (2,576 ) 4,276 83 2,368 (2,285 )
Provision for income taxes (380 )   (380 )     (361 )   (361 )     (309 )   (309 )     291     291      
Net income (loss) $ (6,650 )   $ (6,640 )   $ (10 ) $ (6,012 )   $ (7,351 )   $ 1,339   $ 1,391     $ (2,885 )   $ 4,276   $ 374     $ 2,659     $ (2,285 )
 
Net income (loss) per share
Basic $ (0.24 ) $ (0.24 ) $ $ (0.21 ) $ (0.26 ) $ 0.05 $ 0.05 $ (0.10 ) $ 0.15 $ 0.01 $ 0.09 $ (0.08 )
Diluted $ (0.24 ) $ (0.24 ) $ $ (0.21 ) $ (0.26 ) $ 0.05 $ 0.05 $ (0.10 ) $ 0.14 $ 0.01 $ 0.09 $ (0.07 )
Weighted average shares used to compute net income (loss) per share
Basic 27,751     27,751     27,751   28,422     28,422     28,422   29,130     29,130     29,130   29,317     29,317     29,317  
Diluted 27,751     27,751     27,751   28,422     28,422     28,422   30,473     29,130     30,473   30,704     30,704     30,704  
 
     

Vocera Communications, Inc.

Condensed Consolidated Balance Sheets Adjusted for the Adoption of the New Revenue Standard

(In Thousands, Unaudited)

 
As Adjusted As Reported Change
As of December 31,   2017   2016 2017   2016 2017   2016
Assets      
Current assets
Cash and cash equivalents $ 28,726 $ 35,033 $ 28,726 $ 35,033 $ $
Short-term investments 52,507 39,033 52,507 39,033
Accounts receivable, net 35,105 24,142 35,105 24,142
Other receivables 1,331 1,211 1,170 1,211 161
Inventories 2,815 4,556 2,815 4,556
Prepaid expenses and other current assets 3,957     3,364   3,957     3,364        
Total current assets 124,441 107,339 124,280 107,339 161
Property and equipment, net 5,751 5,894 5,751 5,894
Intangible assets, net 13,567 18,200 13,567 18,200
Goodwill 49,246 49,246 49,246 49,246
Deferred commissions 10,301 10,422 10,301 10,422
Other long-term assets 1,667     1,394   1,667     1,394        
Total assets $ 204,973     $ 192,495   $ 194,511     $ 182,073   $ 10,462     $ 10,422  
Liabilities and stockholders' equity
Current liabilities
Accounts payable $ 2,678 $ 3,231 $ 2,678 $ 3,231 $ $
Accrued payroll and other current liabilities 14,689 15,896 14,689 15,896
Deferred revenue, current 40,734     38,194   47,276     43,845   (6,542 )   (5,651 )
Total current liabilities 58,101 57,321 64,643 62,972 (6,542 ) (5,651 )
Deferred revenue, long-term 14,417 11,523 16,438 11,155 (2,021 ) 368
Other long-term liabilities 4,455     4,505     4,455     4,505          
Total liabilities 76,973 73,349 85,536 78,632 (8,563 ) (5,283 )
Total stockholders’ equity 128,000     119,146   108,975     103,441   19,025     15,705  
Total liabilities and stockholders’ equity $ 204,973     $ 192,495   $ 194,511     $ 182,073   $ 10,462     $ 10,422  
 
   

Vocera Communications, Inc.

Non-GAAP Net Income (Loss) and Net Income (Loss) Per Share and Adjusted EBITDA Adjusted for the Adoption of the New Revenue Standard

(In Thousands, Except Per Share Amounts)

(Unaudited)

 
Year Ended December 31, 2017 Year Ended December 31, 2016
   

As
Adjusted

 

As
Reported

  Change

As
Adjusted

 

As
Reported

  Change
GAAP net income (loss) $ (10,897 )   $ (14,217 )   $ 3,320 $ (11,400 )   $ (17,267 )   $ 5,867
Add back:
Stock compensation expense 18,196 18,196 12,035 12,035
Acquisition related expenses 1,269 1,269 5,822 5,822
Interest income (549 ) (549 ) (627 ) (627 )
Depreciation and amortization expense 7,643 7,643 3,770 3,770
Provision for income taxes 759     759       529     529    
Non-GAAP adjusted EBITDA $ 16,421     $ 13,101     $ 3,320   $ 10,129     $ 4,262     $ 5,867
 
GAAP net income (loss) $ (10,897 ) $ (14,217 ) $ 3,320 $ (11,400 ) $ (17,267 ) $ 5,867
Add back:
Stock compensation expense 18,196 18,196 12,035 12,035
Intangible amortization 4,633 4,633 1,375 1,375
Acquisition related expenses 1,269     1,269       5,822     5,822    
Non-GAAP net income $ 13,201     $ 9,881     $ 3,320   $ 7,832     $ 1,965     $ 5,867
Net income per share
Basic $ 0.46 $ 0.33 $ 0.12 $ 0.29 $ 0.07 $ 0.22
Diluted $ 0.44 $ 0.33 $ 0.11 $ 0.28 $ 0.07 $ 0.21
Weighted average shares used to compute net income per share
Basic 28,655 28,655 28,655 26,859 26,859 26,859
Diluted 30,268 30,268 30,268 28,126 28,126 28,126
 
       

Vocera Communications, Inc.

Non-GAAP Net Income (Loss) and Net Income (Loss) Per Share and Adjusted EBITDA Adjusted for the Adoption of the New Revenue Standard

(In Thousands, Except Per Share Amounts)

(Unaudited)

 
Q1 2017 Q2 2017 Q3 2017 Q4 2017
   

As
Adjusted

 

As
Reported

  Change

As
Adjusted

 

As
Reported

  Change

As
Adjusted

 

As
Reported

  Change

As
Adjusted

 

As
Reported

  Change
GAAP net income (loss) $ (6,650 )   $ (6,640 )   $ (10 ) $ (6,012 )   $ (7,351 )   $ 1,339 $ 1,391   $ (2,885 )   $ 4,276 $ 374   $ (4,770 )   $ (2,285 )
Add back:
Stock compensation expense 3,583 3,583 4,903 4,903 4,718 4,718 4,992 4,992
Acquisition related expenses 410 410 312 312 287 287 260 260
Interest income (92 ) (92 ) (117 ) (117 ) (162 ) (162 ) (178 ) (178 )
Depreciation and amortization expense 1,804 1,804 1,987 1,987 1,964 1,964 1,888 1,888
Provision for income taxes 380     380       361     361       309     309       (291 )   (291 )    
Non-GAAP adjusted EBITDA $ (565 )   $ (555 )   $ (10 ) $ 1,434     $ 95     $ 1,339   $ 8,507     $ 4,231     $ 4,276   $ 7,045     $ 9,330     $ (2,285 )
 
GAAP net income (loss) $ (6,650 ) $ (6,640 ) $ (10 ) $ (6,012 ) $ (7,351 ) $ 1,339 $ 1,391 $ (2,885 ) $ 4,276 $ 374 $ 2,659 $ (2,285 )
Add back:
Stock compensation expense 3,583 3,583 4,903 4,903 4,718 4,718 4,992 4,992
Intangible amortization 1,132 1,132 1,241 1,241 1,169 1,169 1,091 1,091
Acquisition related expenses 410     410       312     312       287     287       260     260      
Non-GAAP net income $ (1,525 )   $ (1,515 )   $ (10 ) $ 444     $ (895 )   $ 1,339   $ 7,565     $ 3,289     $ 4,276   $ 6,717     $ 9,002     $ (2,285 )
Net income per share
Basic $ (0.05 ) $ (0.05 ) $ $ 0.02 $ (0.03 ) $ 0.05 $ 0.26 $ 0.11 $ 0.15 $ 0.23 $ 0.31 $ (0.08 )
Diluted $ (0.05 ) $ (0.05 ) $ $ 0.01 $ (0.03 ) $ 0.04 $ 0.25 $ 0.11 $ 0.14 $ 0.22 $ 0.29 $ (0.07 )
Weighted average shares used to compute net income per share
Basic 27,751 27,751 27,751 28,422 28,422 28,422 29,130 29,130 29,130 29,317 30,230 29,317
Diluted 27,751 27,751 27,751 29,806 28,422 29,806 30,473 30,473 30,473 30,704 30,704 30,704

Vocera Communications, Inc.
Investors:
Sue Dooley, 408-882-5971
investorrelations@vocera.com
or
Media:
Amendola Communications
Philip Anast, 312-576-6990
panast@acmarketingpr.com

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