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LogMeIn Announces Second Quarter 2020 Results

Jul 29, 2020

BOSTON, July 29, 2020 (GLOBE NEWSWIRE) -- LogMeIn, Inc. (NASDAQ: LOGM), a leading provider of cloud-based connectivity, today announced its results for the second quarter ended June 30, 2020.

Second quarter 2020 financial highlights include:

  • Revenue was $350.7 million, up 12% compared with the second quarter of 2019
  • GAAP net income was $19.0 million or $0.39 per diluted share and non-GAAP net income was $75.9 million or $1.54 per diluted share
  • EBITDA was $101.6 million or 29.0% of revenue and Adjusted EBITDA was $119.3 million or 34.0% of revenue
  • Cash flow from operations was $80.7 million or 23.0% of revenue and adjusted free cash flow was $88.6 million or 25.3% of revenue
  • Total deferred revenue was $458.4 million, up $7.1 million from the first quarter of 2020

Update on the Merger 
In December 2019, LogMeIn announced that it had reached a definitive agreement to be acquired by affiliates of Francisco Partners and Evergreen Coast Capital Corp., the private equity affiliate of Elliott Management Corporation. On March 12, 2020, LogMeIn’s stockholders voted to adopt the merger agreement at a special stockholders meeting. In July 2020, the parties received the final regulatory approvals required to complete the transaction and now anticipate the merger to close later in the third quarter of 2020, following the completion of Francisco Partners’ and Evergreen Coast Capital Corp.’s debt marketing periods, and subject to the satisfaction or waiver of any remaining customary closing conditions.

Conference Call and Financial Outlook 
LogMeIn will not be holding a conference call or providing a financial outlook due to the Company’s pending transaction with affiliates of Francisco Partners and Evergreen Coast Capital Corp.

Where to Find Additional Business and Financial Information 
Additional information regarding the Company’s second quarter results, financial condition and operations can be found in the Company’s Quarterly Report on Form 10-Q, which will be filed with the SEC after the market closes on July 29, 2020.  A copy of the Company’s Quarterly Report on Form 10-Q will be available on the SEC’s website, http://www.sec.gov, and the Company’s investor relations website at https://investor.logmeininc.com/about-us/investors/financials/sec-filings/default.aspx

Non-GAAP Financial Measures 
This press release contains non-GAAP financial measures including non-GAAP revenue, EBITDA, EBITDA margin, adjusted EBITDA, adjusted EBITDA margin, non-GAAP operating income, non-GAAP income before provision for income taxes, non-GAAP provision for income taxes, non-GAAP net income, non-GAAP net income per diluted share, adjusted cash flow from operations, and adjusted free cash flow.

  • Non-GAAP revenue excludes the impact of the fair value acquisition accounting adjustment on acquired deferred revenue. 
  • EBITDA is GAAP net income (loss) excluding interest, income taxes, other (expense) income, net, and depreciation and amortization expense. 
  • EBITDA margin is calculated by dividing EBITDA by revenue. 
  • Adjusted EBITDA is EBITDA excluding the impact of the fair value acquisition accounting adjustment on acquired deferred revenue, acquisition-related costs, merger-related costs, stock-based compensation expense, restructuring charges, and litigation-related expense. 
  • Adjusted EBITDA margin is calculated by dividing adjusted EBITDA by non-GAAP revenue, or GAAP revenue if not different. 
  • Non-GAAP operating income excludes the impact of the fair value acquisition accounting adjustment on acquired deferred revenue, acquisition related costs and amortization, merger-related costs, stock-based compensation expense, restructuring charges, and litigation-related expense.
  • Non-GAAP provision for income taxes excludes the tax impact of the fair value acquisition accounting adjustment on acquired deferred revenue, acquisition-related costs and amortization, merger-related costs, stock-based compensation expense, restructuring charges, litigation-related expense, and discrete integration related tax impacts.
  • Non-GAAP net income and non-GAAP net income per diluted share reflects the adjustments noted in non-GAAP operating income and non-GAAP provision for income taxes above.
  • Adjusted cash flow from operations excludes acquisition retention-based bonus, litigation, restructuring, acquisition-related payments, merger-related payments and transaction and transition-related tax payments.
  • Adjusted free cash flow is adjusted cash flow from operations excluding purchases of property and equipment and intangible asset additions.

The exclusion of certain expenses in the calculation of non-GAAP financial measures should not be construed as an inference that these costs are unusual or infrequent. We anticipate excluding these expenses in the future presentation of our non-GAAP financial measures. The Company believes that these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to the Company's financial condition and results of operations. The Company's management uses these non-GAAP measures to compare the Company's performance to that of prior periods and uses these measures in financial reports prepared for management and the Company's board of directors. The Company believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing the Company's financial measures with other software-as-a-service companies, many of which present similar non-GAAP financial measures to investors. The Company does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant elements that are required by GAAP to be recorded in the Company's financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by management in determining these non-GAAP financial measures. In order to compensate for these limitations, management of the Company presents its non-GAAP financial measures in connection with its GAAP results. The Company urges investors to review the reconciliation of its non-GAAP financial measures to the comparable GAAP financial measures, which it includes in press releases announcing quarterly financial results, and not to rely on any single financial measure to evaluate the Company's business. Reconciliation tables of the most comparable GAAP financial measures to the non-GAAP measures used in this press release are included in this release.

About LogMeIn, Inc.
LogMeIn, Inc.’s (Nasdaq:LOGM) category-defining products unlock the potential of the modern workforce by making it possible for millions of people and businesses around the globe to do their best work, whenever, however, and most importantly, wherever. A pioneer in remote work technology and a driving force behind today’s work-from-anywhere movement, LogMeIn has become one of the world’s largest SaaS companies with tens of millions of active users, more than 3,500 global employees, over $1.2 billion in annual revenue and more than 2 million customers worldwide who use its software as an essential part of their daily lives. The company is headquartered in Boston, Massachusetts with additional locations in North America, South America, Europe, Asia and Australia. LogMeIn is a registered trademark of LogMeIn, Inc. in the US and other countries around the world.

Contact Information:
Investors
Rob Bradley
LogMeIn, Inc.
781-897-1301
rbradley@LogMeIn.com 

Press
Craig VerColen
LogMeIn, Inc.
781-897-0696 
Press@LogMeIn.com

LogMeIn, Inc.
Condensed Consolidated Balance Sheets (unaudited)
(In thousands)
         
    December 31,   June 30,
      2019       2020  
         
ASSETS
Current assets:        
  Cash and cash equivalents   $     128,005      $     249,464   
  Accounts receivable, net        107,595          108,959   
  Prepaid expenses and other current assets       89,351          103,585   
  Total current assets       324,951          462,008   
Property and equipment, net       99,157          97,911   
Operating lease assets       99,026          94,539   
Restricted cash       1,883          1,796   
Intangibles, net       840,427          736,107   
Goodwill       2,414,287          2,414,229   
Other assets       68,272          85,203   
Deferred tax assets       7,994          9,090   
  Total assets   $     3,855,997      $     3,900,883   
         
LIABILITIES AND EQUITY
Current liabilities:        
  Accounts payable   $     52,104      $     43,965   
  Current operating lease liabilities       18,470          19,346   
  Accrued liabilities       161,996          151,198   
  Deferred revenue, current portion       390,087          448,755   
  Total current liabilities       622,657          663,264   
Long-term debt       200,000          200,000   
Deferred revenue, net of current portion       18,076          9,616   
Deferred tax liabilities       170,482          151,684   
Non-current operating lease liabilities       88,674          84,768   
Other long-term liabilities       15,400          20,394   
  Total liabilities       1,115,289          1,129,726   
Equity:        
  Common stock       573          577   
  Additional paid-in capital       3,369,893          3,393,750   
  Retained earnings       4,931          12,687   
  Accumulated other comprehensive income (loss)       684          (484 )
  Treasury stock       (635,373 )       (635,373 )
  Total equity       2,740,708          2,771,157   
Total liabilities and equity   $     3,855,997      $     3,900,883   
         


LogMeIn, Inc.        
Condensed Consolidated Statements of Operations (unaudited)        
(In thousands, except per share data)        
                 
    Three Months Ended June 30,   Six Months Ended June 30,
      2019       2020       2019       2020  
                 
Revenue   $ 313,064     $ 350,727     $ 620,764     $ 673,110  
Cost of revenue     80,767       93,497       158,455       178,375  
Gross profit     232,297       257,230       462,309       494,735  
Operating expenses:                
Research and development     40,379       37,170       81,096       77,049  
Sales and marketing     120,825       121,521       235,459       247,731  
General and administrative     34,539       30,291       68,425       63,990  
Restructuring charge     956       3,032       9,430       21,573  
Amortization of acquired intangibles     39,390       33,287       78,889       66,615  
Total operating expenses     236,089       225,301       473,299       476,958  
Income (loss) from operations     (3,792 )     31,929       (10,990 )     17,777  
Interest income     415       225       1,076       492  
Interest expense     (2,126 )     (1,132 )     (4,269 )     (2,812 )
Other income (expense), net     (107 )     (374 )     (367 )     65  
Income (loss) before income taxes     (5,610 )     30,648       (14,550 )     15,522  
(Provision for) benefit from income taxes     (912 )     (11,607 )     (1,011 )     (7,766 )
Net income (loss)   $ (6,522 )   $ 19,041     $ (15,561 )   $ 7,756  
                 
Net income (loss) per share:                
Basic   $ (0.13 )   $ 0.39     $ (0.31 )   $ 0.16  
Diluted   $ (0.13 )   $ 0.39     $ (0.31 )   $ 0.16  
Weighted average shares outstanding:                
Basic     49,768       48,887       50,201       48,744  
Diluted     49,768       49,186       50,201       49,189  


LogMeIn, Inc.      
Calculation of Non-GAAP Revenue (unaudited)      
                   
      Three Months Ended June 30,   Six Months Ended June 30,
        2019       2020       2019       2020  
           
      (in thousands)   (in thousands)
GAAP Revenue   $ 313,064     $ 350,727     $ 620,764     $ 673,110  
  Add Back:                
  Effect of acquisition accounting on fair value of acquired deferred revenue     330       -       748       -  
Non-GAAP Revenue   $ 313,394     $ 350,727     $ 621,512     $ 673,110  
                   
Calculation of Non-GAAP Operating Income, Non-GAAP Net Income and Non-GAAP Net Income per Diluted Share (unaudited)      
                   
      Three Months Ended June 30,   Six Months Ended June 30,
        2019       2020       2019       2020  
           
      (In thousands, except per share data)   (In thousands, except per share data)
GAAP Net income (loss) from operations   $ (3,792 )   $ 31,929     $ (10,990 )   $ 17,777  
  Add Back:                
  Effect of acquisition accounting on fair value of acquired deferred revenue     330       -       748       -  
  Stock-based compensation expense     18,203       13,432       33,234       30,293  
  Acquisition related costs     2,947       168       6,871       2,631  
  Merger related costs     -       355       -       2,608  
  Restructuring charge     956       3,032       9,430       21,573  
  Litigation related expenses     530       786       693       1,706  
  Amortization of acquired intangibles     60,428       52,619       120,897       105,305  
Non-GAAP Operating income     79,602       102,321       160,883       181,893  
  Interest and other expense, net     (1,818 )     (1,281 )     (3,560 )     (2,255 )
Non-GAAP Income before income taxes     77,784       101,040       157,323       179,638  
  Non-GAAP Provision for income taxes     (19,173 )     (25,182 )     (38,859 )     (44,603 )
Non-GAAP Net income   $ 58,611     $ 75,858     $ 118,464     $ 135,035  
                   
Non-GAAP net income per diluted share   $ 1.17     $ 1.54     $ 2.34     $ 2.75  
Diluted weighted average shares outstanding used in computing per share amounts     50,027       49,186       50,587       49,189  
                   
Calculation of EBITDA and Adjusted EBITDA (unaudited)      
                   
      Three Months Ended June 30,   Six Months Ended June 30,
        2019       2020       2019       2020  
           
      (in thousands)   (in thousands)
GAAP Net income (loss)   $ (6,522 )   $ 19,041     $ (15,561 )   $ 7,756  
  Add Back:                
  Interest and other expense, net     1,818       1,281       3,560       2,255  
  Income tax provision (benefit)     912       11,607       1,011       7,766  
  Amortization of acquired intangibles     60,428       52,619       120,897       105,305  
  Depreciation and amortization expense     15,961       17,009       31,436       33,568  
EBITDA     72,597       101,557       141,343       156,650  
  Add Back:                
  Effect of acquisition accounting on fair value of acquired deferred revenue     330       -       748       -  
  Stock-based compensation expense     18,203       13,432       33,234       30,293  
  Acquisition related costs     2,947       168       6,871       2,631  
  Merger related costs     -       355       -       2,608  
  Restructuring charge     956       3,032       9,430       21,573  
  Litigation related expenses     530       786       693       1,706  
Adjusted EBITDA   $ 95,563     $ 119,330     $ 192,319     $ 215,461  
  EBITDA Margin     23.2 %     29.0 %     22.8 %     23.3 %
  Adjusted EBITDA Margin     30.5 %     34.0 %     30.9 %     32.0 %
                   
Calculation of Adjusted Cash Flows from Operations and Adjusted Free Cash Flow (unaudited)      
                   
      Three Months Ended June 30,   Six Months Ended June 30,
        2019       2020       2019       2020  
           
      (in thousands)   (in thousands)
GAAP Cash flows from operations   $ 83,717     $ 80,656     $ 203,367     $ 168,655  
  Add Back:                
  Litigation related payments     5       1,229       19       1,794  
  Acquisition retention-based bonus payments     3,763       9,343       5,226       12,629  
  Restructuring payments     5,155       13,901       7,049       17,543  
  Merger related payments     -       1,860       -       12,666  
  Acquisition related payments     1,065       59       1,879       562  
Adjusted cash flows from operations     93,705       107,048       217,540       213,849  
  Purchases of property and equipment     (9,894 )     (9,703 )     (22,081 )     (18,104 )
  Intangible asset additions     (9,830 )     (8,759 )     (18,745 )     (19,078 )
Adjusted Free Cash Flow   $ 73,981     $ 88,586     $ 176,714     $ 176,667  
  GAAP Cash flows from operations as a % of Non-GAAP Revenue     26.7 %     23.0 %     32.7 %     25.1 %
  Adjusted Cash flows from operations as a % of Non-GAAP Revenue     29.9 %     30.5 %     35.0 %     31.8 %
  Adjusted Free Cash Flow as a % of Non-GAAP Revenue     23.6 %     25.3 %     28.4 %     26.2 %
                   
Stock-Based Compensation Expense (unaudited)      
                   
      Three Months Ended June 30,   Six Months Ended June 30,
        2019       2020       2019       2020  
           
      (in thousands)   (in thousands)
Cost of revenue   $ 1,301     $ 1,232     $ 2,281     $ 2,490  
Research and development     3,914       3,737       7,989       8,393  
Sales and marketing     5,216       4,660       8,994       9,133  
General and administrative     7,772       3,803       13,970       10,277  
Total stock based-compensation   $ 18,203     $ 13,432     $ 33,234     $ 30,293  
                   


    LogMeIn, Inc.      
    Condensed Consolidated Statements of Cash Flows (unaudited)      
    (In thousands)      
                     
        Three Months Ended June 30,   Six Months Ended June 30,
          2019       2020       2019       2020  
Cash flows from operating activities                
Net income (loss)   $ (6,522 )   $ 19,041     $ (15,561 )   $ 7,756  
Adjustments to reconcile net income (loss) to net cash                
provided by operating activities:                
Stock-based compensation     18,203       13,432       33,234       30,293  
Depreciation and amortization     76,389       69,628       152,333       138,873  
Benefit from deferred income taxes     (11,135 )     (10,161 )     (22,786 )     (19,942 )
Other, net     794       838       1,131       1,359  
Changes in assets and liabilities, excluding effect of acquisitions:                
Accounts receivable     (1,914 )     (2,135 )     4,110       (3,121 )
Prepaid expenses and other current assets     1,894       1,321       4,777       (15,226 )
Other assets     (6,872 )     (12,777 )     (13,546 )     (17,039 )
Accounts payable     6,163       (713 )     15,507       (9,318 )
Accrued liabilities     (3,124 )     (6,111 )     16,226       (2,508 )
Deferred revenue     6,430       4,129       30,250       52,655  
Other long-term liabilities     3,411       4,164       (2,308 )     4,873  
Net cash provided by operating activities     83,717       80,656       203,367       168,655  
Cash flows from investing activities                
Purchases of property and equipment     (9,894 )     (9,703 )     (22,081 )     (18,104 )
Intangible asset additions     (9,830 )     (8,759 )     (18,745 )     (19,078 )
Acquisition of businesses, net of cash acquired     -       -       (22,463 )     -  
Net cash provided by (used in) investing activities     (19,724 )     (18,462 )     (63,289 )     (37,182 )
Cash flows from financing activities                
Proceeds from issuance of common stock upon option exercises and employee stock purchase plan     41       6,771       82       6,856  
Payments of withholding taxes in connection with restricted stock unit vesting     (9,888 )     (11,351 )     (17,676 )     (13,288 )
Payment of contingent consideration     (1,857 )     -       (1,857 )     (1,294 )
Dividends paid on common stock     (16,182 )     -       (32,699 )     -  
Purchase of treasury stock     (70,164 )     -       (124,232 )     -  
Net cash provided by (used in) financing activities     (98,050 )     (4,580 )     (176,382 )     (7,726 )
Effect of exchange rate changes on cash, cash equivalents and restricted cash     593       2,288       (792 )     (2,375 )
Net increase (decrease) in cash, cash equivalents and restricted cash     (33,464 )     59,902       (37,096 )     121,372  
Cash, cash equivalents and restricted cash, beginning of period     146,860       191,358       150,492       129,888  
Cash, cash equivalents and restricted cash, end of period   $ 113,396     $ 251,260     $ 113,396     $ 251,260  
                     

7304.jpg

Source: LogMeIn, Inc.

NASDAQ:LOGM
Price 85.90 +0.01 +0.01% Volume: 98,217 Aug 10, 2020 PM ET Pricing delayed 20 minutes> More

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Investor Contact

Rob Bradley
Vice President of Investor Relations
Phone: (781) 897-1301

InvestorRelations@LogMeIn.com

Disclaimer

You are now leaving LogMeIn's website and are being directed to a website that is operated and maintained by a third party (an "External Site"). LogMeIn does not control the External Site and is not responsible for the data, content or availability of the External Site. This link to the External Site is provided for convenience purposes only. We make no representation or warranty regarding the accuracy of the information contained in the External Sites. We suggest that you always verify the information obtained from linked websites before acting upon this information. Also, please be aware that the security and privacy policies on this External Site may be different than LogMeIn’s policies, so we encourage you to read any third party privacy and security policies closely.

LogMeIn’s filings with the U.S. Securities and Exchange Commission, or SEC, including LogMeIn’s annual reports on Form 10-K which include our audited financial statements, are available on LogMeIn’s Investor Relations website at https://investor.logmeininc.com/about-us/investors/financials/sec-filings/default.aspx free of charge. The data and other content contained on the External Site are not meant, and should not be used, as a substitute for information contained in LogMeIn’s filings with the SEC or disclosed through other channels used by LogMeIn to comply with its disclosure obligations under Regulation FD. The reports contained on the External Site may contain forward-looking information about LogMeIn’s future financial performance and results. Please note that the information presented on the External Site is deemed representative at the time of its original release and that changes in historical information may occur. LogMeIn undertakes no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee these results. We caution you to consider the risk factors described in our SEC filings, which could cause actual results to differ materially from the forward-looking statements disclosed on the External Site.

Non-GAAP Information

The External Site may contain certain non-GAAP and pro forma non-GAAP financial measures, in addition to financial measures determined in accordance with GAAP. “GAAP” refers to generally accepted accounting principles in the United States. The non-GAAP financial measures contained on the External Sites are not prepared in accordance with GAAP and may not be comparable to non-GAAP financial measures used by other companies. The non-GAAP information should be considered in addition to, but not as a substitute for or superior to, other measures of financial performance prepared in accordance with GAAP. LogMeIn urges investors to review the reconciliation of its non-GAAP financial measures to the comparable GAAP financial measures, which it includes in press releases announcing its quarterly financial results, and not to rely on any single financial measure to evaluate the Company's business. Reconciliation tables of the most comparable GAAP financial measures to the non-GAAP measures are included in LogMeIn’s quarterly press releases, which can be found in the Financials section of LogMeIn’s investor relations website under “Quarterly Results.”

By clicking “Accept”, you acknowledge that you have read and understand the information set forth above and agree that you will not misrepresent any calculation derived from the data or other content contained on the External Site as LogMeIn’s or otherwise.