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Absolute Reports Fiscal 2018 Second Quarter Financial Results - Q2 Revenue Up 3% to $23.2 Million USD
Thursday, February 15, 2018Company Profile | Follow Company
Operating Margins Expand as Enterprise Segment ACV Base Increases 12% Year-Over-Year
Vancouver, BC, February 15, 2018--(T-Net)--Absolute (TSX: ABT), an endpoint visibility and control company, today announced financial results for the three and six months ended December 31, 2017. All dollar figures are unaudited and stated in U.S. dollars, unless otherwise indicated.
"Our Q2 results reflected sustained growth in enterprise demand, along with expanded operating margins, demonstrating that our investments in product development and our market focus are generating meaningful results," said Errol Olsen, Chief Financial Officer at Absolute. "We are very pleased by the strong reception to the Absolute 7 platform, which contributed to upgrades and expansion in existing customer accounts, as well as growing interest from prospective buyers."
"The opportunity to tackle one of the biggest challenges in enterprise security - the dark endpoint - is where Absolute truly stands apart," said Steve Munford, Interim Chief Executive Officer at Absolute. "By combining Absolute's compelling endpoint visibility and control platform, a robust partner ecosystem and an experienced leadership team, the Company is extremely well-positioned as a leader and visionary in the endpoint security market. The quick response to help our customers understand and address the vulnerabilities posed by Spectre and Meltdown is a perfect example of the power of Absolute's technology and the expertise of our team."
Key Financial Metrics
Products and Organizational Developments
Summary of Key Financial Metrics
Corporate Outlook
The Company is updating its outlook for F2018:
Quarterly Dividend
On January 19, 2018, the Company declared a quarterly dividend of CAD$0.08 per share on its common shares, payable in cash on February 23, 2018 to shareholders of record at the close of business on February 2, 2018.
Quarterly Filings
Management's Discussion and Analysis ("MD&A") and Interim Condensed Consolidated Financial Statements and the notes thereto for the fiscal quarter and year to date period ended December 31, 2017 can be obtained today from Absolute's corporate website at www.absolute.com. The documents will also be available at www.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 December 31, 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:
Commercial ACV Base, Net ACV Retention, and ACV from New Customers
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 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.
Adjusted EBITDA
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.
Adjusted Operating Expenses
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 December 31, 2017 MD&A.
About Absolute
Absolute set the new standard for endpoint visibility and control with self-healing endpoint security and always-connected IT asset management to protect devices, data, applications and users — on and off the network. Bridging the gap between security and IT operations, only Absolute gives enterprises visibility they can act on to protect every endpoint, remediate vulnerabilities, 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 15,000 customers worldwide.
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 and six months ended December 31, 2017 and 2016
(Expressed in United States dollars) (Unaudited)
ABSOLUTE SOFTWARE CORPORATION
Condensed Consolidated Statement of Changes in Shareholders' Deficiency
(Expressed in United States dollars) (Unaudited)
ABSOLUTE SOFTWARE CORPORATION
Condensed Consolidated Statements of Cash Flows
Three and six months ended December 31, 2017 and 2016
(Expressed in United States dollars) (Unaudited)
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.
©2018 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.
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