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Absolute Reports Fiscal 2017 Fourth Quarter and Annual Results - Full Year Revenue Increases to $91.2 Million
Friday, September 1, 2017Company Profile | Follow Company
Commercial Recurring Revenue Increases 8% Year-Over-Year
Vancouver, BC, September 1, 2017--(T-Net)--Absolute (TSX: ABT), developers of a solution for endpoint visibility and control, today announced financial results for the three months and fiscal year ended June 30, 2017.
All dollar figures are unaudited and stated in U.S. dollars, unless otherwise indicated.
“Over the course of fiscal 2017, we made significant progress on the execution of our long-term growth and profitability objectives, including the achievement of eight percent commercial recurring revenue growth. We also began to realize the benefits of sustained R&D investments with the introduction of new enterprise-class solutions that address urgent customer demands,” stated Mr. Geoff Haydon, Chief Executive Officer, Absolute.
“The introduction of new capabilities such as always-connected IT asset management, self-healing and mobile endpoint security, and continuous data protection drove customer expansion and the acquisition of prominent new customers. It also led to a significant increase in our pipeline, positioning us for further expected growth and stronger expected cash flow in fiscal 2018.”
Q4-F2017 and Fiscal Year Highlights
Financial
Technology and Product
Operations and Corporate
F2018 Corporate Outlook
For F2018, the Company expects new solution and product releases combined with continued sales productivity improvements to drive growth in revenue and the underlying commercial ACV base. This growth is expected to be driven primarily by the North American enterprise and healthcare verticals, with lower growth rates expected in the education and government verticals.
Revenue
The Company expects total revenue of $96.8 million to $99.2 million, representing 6% to 9% annual revenue growth.
Adjusted EBITDA
The Company expects Adjusted EBITDA margins of 9% to 11%, reflecting margin expansion, which is partially offset by the negative impact of the stronger Canadian dollar on the Company's Canadian-based expenditures.
Cash Flow
The Company expects growth in operating cash flow margins. Cash from operations is expected to be in the range of 13% to 16% of revenue.
Capital expenditures are expected to be between $3.0 million and $3.5 million, relatively consistent with capital expenditures of $3.4 million in F2017.
Quarterly Dividend
On July 20, 2017, Absolute declared a quarterly dividend of CAD$0.08 per share on the Company's common shares. The dividend is payable in cash on August 25, 2017 to shareholders of record at the close of business on August 4, 2017.
Quarterly Filings
Management's discussion and analysis (“MD&A”) and consolidated financial statements and the notes thereto for the fiscal year ended June 30, 2017 can be obtained today from Absolute's corporate website at www.absolute.com. The documents will also be available atwww.sedar.com.
Non-IFRS Measures and Definitions
Throughout this press release, the Company refers to a number of measures which the Company believes are meaningful in the assessment of the Company's performance. All these metrics are non-standard measures under International Financial Reporting Standards (“IFRS”), and are unlikely to be comparable to similarly titled measures reported by other companies. Readers are cautioned that the disclosure of these items is meant to add to, and not replace, the discussion of financial results or cash flows from operations as determined in accordance with IFRS. For a discussion of the purpose of these non-IFRS measures, please refer to the Company's June 30, 2017 MD&A on SEDAR at www.SEDAR.com.
These measures, as well as their method of calculation or reconciliation to IFRS measures, are as follows:
As the majority of the Company's customer contracts are sold under multi-year term licenses, there is a significant lag between the timing of the Billing and the associated revenue recognition. As a result, the Company focuses on the aggregate annualized value of its subscriptions under contract, measured by Annual Contract Value (“ACV”), as an indicator of its future revenues.
Commercial ACV Base measures the amount of recurring annual revenue Absolute will receive from its commercial customers under contract at a point in time, and therefore is an indicator of the Company's future revenue streams. Net ACV Retention measures the percentage increase or decrease in the Commercial ACV Base at the end of a period for the customers that comprised the Commercial ACV Base at the beginning of the same period. This metric provides insight into the effectiveness of Absolute's customer retention and expansion functions. ACV from New Customers measures the addition to the Commercial ACV base from sales to new commercial DDS customers during the quarter.
We believe that increases in the amount of ACV from New Customers, and improvement in the Company's Net ACV Retention, will grow our Commercial ACV Base and, in turn, our future revenues.
Management believes that analyzing operating results exclusive of significant non-cash items or items not controllable in the period provides a useful measure of the Company's performance. The term Adjusted EBITDA refers to earnings before deducting interest and investment gains (losses), income taxes, amortization of acquired intangible assets and property and equipment, foreign exchange gain or loss, share-based compensation, and restructuring and reorganization charges and post-retirement benefits. The items excluded in the determination of Adjusted EBITDA are share-based compensation, amortization of acquired intangibles, amortization of property and equipment, and restructuring and reorganization charges and certain post-retirement benefits.
A number of significant non-cash or non-recurring expenses are reported in the Company's Cost of Revenue and Operating Expenses. Management believes that analyzing these expenses exclusive of these non-cash or non-recurring items provides a useful measure of the cash invested in the operations of its business. The items excluded in the determination of Adjusted Operating Expenses are share-based compensation, amortization of acquired intangible assets, amortization of property and equipment, and restructuring and reorganization charges and certain post-retirement benefits. For a description of the reasons these items are adjusted, please refer to the “Non-IFRS Measures” section of the June 30, 2017 MD&A.
See the “Non-IFRS Measures” section of the June 30, 2017 MD&A for a detailed discussion of why the Company believes Cash from Operating Activities is a meaningful performance metric, and the material impact that Billings has on this measure. Billings are included in deferred revenue (see Note 10 of the Notes to the Consolidated Financial Statements), and result from invoiced sales of the Company's products and services.
About Absolute
Absolute is the new standard for endpoint visibility and control, delivering always-connected IT asset management and self-healing endpoint security to protect devices, data, applications and users — on and off the network. Bridging the gap between IT operations and security, only Absolute gives enterprises visibility they can act on to assess every endpoint, remediate vulnerabilities and at-risk data, and ensure compliance in the face of insider and external threats. Absolute's patented Persistence technology is already embedded in the firmware of more than one billion PC and mobile devices and trusted by over 18,000 customers worldwide.
Forward-Looking Statements
This press release contains forward-looking statements and financial outlook that involve risks and uncertainties. These forward-looking statements and financial outlook relate to, among other things, the expected performance, functionality and availability of our services and products, and other expectations, intentions and plans contained in this press release that are not historical facts. When used in this press release, the words "plan," "expect," "believe," and similar expressions generally identify forward-looking statements.
These statements reflect our current expectations. They are subject to a number of risks and uncertainties, including, but not limited to, changes in technology and general market conditions. In light of the many risks and uncertainties you should understand that we cannot assure you that the forward-looking statements and financial outlook contained in this press release will be realized. Furthermore, the forward-looking statements and financial outlook contained in this press release are made as at the date hereof and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements or financial outlook, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.
©2017 Absolute Software Corporation.
All rights reserved. Absolute and Persistence are registered trademarks of Absolute Software Corporation. For patent information, visit www.absolute.com/patents. The Toronto Stock Exchange has neither approved nor disapproved of the information contained in this news release.
For more information, please contact:
Media and Analyst Relations
Darah Patton, InkHouse
absolute@inkhouse.com or 1 317 695 5630
Investor Relations
Joo-Hun Kim, MKR Group
joohunkim@mkrir.com or 1 212 868 6760
ABSOLUTE SOFTWARE CORPORATION
Consolidated Statements of Financial Position
(Expressed in United States dollars) (Unaudited)
ABSOLUTE SOFTWARE CORPORATION
Consolidated Statements of Operations and Comprehensive (Loss) Income
Three months and year ended June 30, 2017 and 2016
(Expressed in United States dollars) (Unaudited)
ABSOLUTE SOFTWARE CORPORATION
Consolidated Statements of Changes in Shareholders' Deficiency
(Expressed in United States dollars) (Unaudited)
ABSOLUTE SOFTWARE CORPORATION
Consolidated Statements of Cash Flows
Three months and year ended June 30, 2017 and 2016
(Expressed in United States dollars) (Unaudited)
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