Cvent Announces Second Quarter 2016 Financial Results

Revenue of $59.6 Million Increases 26.0% Year-Over-Year

TYSONS CORNER, Va.--(BUSINESS WIRE)-- Cvent, Inc. (NYSE: CVT), a leading cloud-based enterprise event management company, today announced its financial results for the second quarter ended June 30, 2016.

Reggie Aggarwal, founder and chief executive officer of Cvent, said, “Our second quarter results continued the strong financial start reported for the first quarter, with second quarter revenue up 26.0% from a year ago. Continued momentum was evident across both sides of our business, with the Event Cloud growing by 25.7% and the Hospitality Cloud growing by 26.7%. The excitement about our event management and venue sourcing software solutions was most evident at our annual client conference, Cvent CONNECT, which was held in late June and attended by over 2,800 people. This strong reception reflects the enthusiasm of the industry as we continue delivering innovative solutions to the market.”

Second Quarter 2016 Financial Highlights

Revenue

  • Total revenue was $59.6 million, an increase of 26.0% from the comparable period in 2015.
  • Event Cloud revenue was $41.1 million, an increase of 25.7% from the comparable period in 2015.
  • Hospitality Cloud revenue was $18.5 million, an increase of 26.7% from the comparable period in 2015.

Operating (Loss) Income

  • GAAP operating loss was $(5.1) million, compared to $(5.0) million in the comparable period in 2015.
  • Non-GAAP operating income was $2.6 million, compared to a loss of $(0.1) million in the comparable period in 2015.

Net (Loss) Income

  • GAAP net loss was $(5.7) million, compared to $(5.7) million for the comparable period in 2015. GAAP net loss per share was $(0.13), based on 42.2 million basic and diluted weighted average common shares outstanding, compared to $(0.14) for the comparable period in 2015, based on 41.6 million basic and diluted weighted average common shares outstanding.
  • Non-GAAP net income was $2.0 million, compared to $1.2 million in the comparable period in 2015. Non-GAAP net income per diluted share was $0.05, based on 44.1 million diluted weighted average common shares outstanding, compared to $0.03 for the comparable period in 2015, based on 43.3 million diluted weighted average common shares outstanding.

Adjusted EBITDA

  • Adjusted EBITDA was $9.0 million, representing an adjusted EBITDA margin of 15.1%, compared to $4.6 million, or an adjusted EBITDA margin of 9.7% in the comparable period in 2015.

Recent Business Highlights

  • Organized our largest-ever Cvent CONNECT customer conference with over 2,800 attendees including event planners, hotels, exhibitors, sponsors, media and Cvent employees.
  • Signed new enterprise solutions customers across the US and internationally, including a Forbes Global 50 pharmaceutical company, and a Forbes Global 150 multinational confectionery, food, and beverage conglomerate, as well as expansions or renewals with a Fortune 100 chemical corporation, a Fortune 200 tire manufacturer and a Fortune 50 healthcare company.
  • Attracted new mid-market event management customers including Sub-Zero, Ricoh Europe, and a Forbes Global 100 financial institution, and renewed or expanded agreements with Tableau Software, Primerica, and Agilent Technologies.
  • Experienced continued adoption of mobile app technology with new customers including a Fortune 50 insurance company, a Forbes Global 150 insurance company, and The New York Academy of Sciences. Organizations that renewed or expanded relationships include a Fortune 50 multinational conglomerate, Ericsson, and The Wharton School of the University of Pennsylvania.
  • Added new Hospitality Cloud customers such as Carlson Rezidor Asia Pacific, Lexington Convention and Visitors Bureau, and Secrets Cap Cana Resort, and signed renewals or expansions with customers such as The Roosevelt Hotel, Fontainebleau Miami Beach, and other top hotel chains.
  • On July 12, 2016, 99.9% of the Cvent stockholders that voted approved the proposal to adopt the agreement and plan of merger with affiliates of Vista Equity Partners ("Vista").

Business Outlook

Given Cvent's entry into an agreement and plan of merger with Vista on April 17, 2016, the Company will not provide outlook for its third quarter 2016 financial results. The Company's previously issued financial guidance for full year 2016 should no longer be relied upon.

Conference Call Information

Given Cvent's entry into an agreement and plan of merger with Vista on April 17, 2016, the Company will not be hosting a conference call to discuss its second quarter 2016 financial results.

 

Cvent, Inc.

Consolidated Balance Sheets
(in thousands, except share data)
         
    6/30/2016   12/31/2015
    (Unaudited)    
Assets        
Current assets:        
Cash and cash equivalents   $ 162,858     $ 118,662  
Restricted cash       378  
Short-term investments   13,743     26,799  
Accounts receivable, net of reserve of $281 and $248, respectively   24,536     30,483  
Prepaid expense and other current assets   11,803     17,175  
Total current assets   212,940     193,497  
Property and equipment, net   22,353     24,416  
Capitalized software development costs, net   28,540     24,039  
Intangible assets, net   14,942     17,055  
Goodwill   38,900     38,940  
Other assets, non-current, net   4,835     3,653  
Total assets   $ 322,510     $ 301,600  
Liabilities and Stockholders’ Equity        
Current liabilities:        
Accounts payable   $ 3,827     $ 1,692  
Accrued expenses and other current liabilities   29,868     29,241  
Deferred revenue   89,929     77,524  
Total current liabilities   123,624     108,457  
Deferred tax liabilities, non-current   2,479     2,347  
Deferred rent, non-current   11,167     11,527  
Other liabilities, non-current   7,182     4,988  
Total liabilities   144,452     127,319  
Commitments and contingencies        
Stockholders’ equity        
Preferred stock, $0.001 par value, 100,000,000 shares authorized at June 30, 2016 and December 31, 2015; zero issued and outstanding at June 30, 2016 and December 31, 2015        
Common stock, $0.001 par value; 1,000,000,000 shares authorized at June 30, 2016 and December 31, 2015; 42,870,262 and 42,523,229 shares issued and 42,350,048 and 42,003,015 outstanding at June 30, 2016 and December 31, 2015, respectively   43     43  
Treasury stock   (3,966 )   (3,966 )
Additional paid-in capital, as adjusted (2015)   231,022     219,914  
Accumulated other comprehensive loss   (740 )   (274 )
Accumulated deficit, as adjusted (2015)   (48,301 )   (41,436 )
Total stockholders’ equity   178,058     174,281  
Total liabilities and stockholders’ equity   $ 322,510     $ 301,600  
                 
 
Cvent, Inc.
Consolidated Statements of Operations and Comprehensive Loss
(in thousands, except share and per share data)
(unaudited)
 
    Three Months Ended   Six Months Ended
    June 30,   June 30,
    2016   2015   2016   2015
Revenue   $ 59,619     $ 47,323     $ 111,937     $ 88,429  
Cost of revenue1   16,690     14,332     31,296     28,934  
Gross profit   42,929     32,991     80,641     59,495  
Operating expenses:                
Sales and marketing1   25,795     23,063     44,566     40,803  
Research and development1   11,754     4,879     22,118     9,914  
General and administrative1   9,635     8,551     18,703     16,518  
Intangible asset amortization, excluding cost of revenue   736     519     1,473     812  
Losses (gains) from foreign currency transactions   123     1,018     (91 )   832  
Total operating expenses   48,043     38,030     86,769     68,879  
Loss from operations   (5,114 )   (5,039 )   (6,128 )   (9,384 )
Interest income   406     577     958     1,121  
Other expense               (426 )
Loss before income taxes   (4,708 )   (4,462 )   (5,170 )   (8,689 )
Provision for (benefit from) income taxes   959     1,213     1,695     (662 )
Net loss   $ (5,667 )   $ (5,675 )   $ (6,865 )   $ (8,027 )
Net loss per common share:                
Basic   $ (0.13 )   $ (0.14 )   $ (0.16 )   $ (0.19 )
Diluted   $ (0.13 )   $ (0.14 )   $ (0.16 )   $ (0.19 )
Weighted average common shares outstanding—basic   42,241,947     41,571,379     42,151,737     41,404,698  
Weighted average common shares outstanding—diluted   42,241,947     41,571,379     42,151,737     41,404,698  
Other comprehensive loss:                
Foreign currency translation (loss) gain   (359 )   96     (466 )   51  
Comprehensive loss   $ (6,026 )   $ (5,579 )   $ (7,331 )   $ (7,976 )
                 
1Stock-based compensation expense included in the above:                
Cost of revenue   $ 520     $ 498     $ 973     $ 973  
Sales and marketing   1,717     1,105     2,947     2,135  
Research and development   1,565     729     2,687     1,474  
General and administrative   1,118     417     1,936     973  
Total   $ 4,920     $ 2,749     $ 8,543     $ 5,555  
                                 
 
Cvent, Inc.
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
 
    Six Months Ended June 30,
    2016   2015
Operating activities:        
Net loss   $ (6,865 )   $ (8,027 )
Adjustments to reconcile net loss to net cash provided by operating activities:        
Depreciation and amortization   12,302     8,813  
Loss on asset disposal       436  
Foreign currency transaction gain   23     34  
Stock-based compensation expense   8,543     5,555  
Deferred taxes   170     (2,133 )
Change in operating assets and liabilities:        
Accounts receivable, net   5,693     20,922  
Prepaid expenses and other assets   4,442     (3,453 )
Accounts payable, accrued expenses and other liabilities   5,764     3,414  
Deferred revenue   13,633     (1,024 )
Net cash provided by operating activities   43,705     24,537  
Investing activities:        
Purchase of property and equipment   (2,329 )   (2,223 )
Capitalized software development costs   (11,170 )   (9,817 )
Net maturities (purchases) of short-term investments   13,056     (3,758 )
Acquisition and acquisition-related consideration payments   (1,063 )   (19,331 )
Restricted cash   378      
Net cash used in investing activities   (1,128 )   (35,129 )
Financing activities:        
Proceeds from exercise of stock options   2,565     778  
Excess tax benefits from stock-based compensation       1,978  
Net cash provided by financing activities   2,565     2,756  
Effect of exchange rate changes on cash and cash equivalents   (946 )   66  
Change in cash and cash equivalents   44,196     (7,770 )
Cash and cash equivalents, beginning of period   118,662     144,544  
Cash and cash equivalents, end of period   $ 162,858     $ 136,774  
Supplemental cash flow information:        
Income tax (refund) paid   $ (3,648 )   $ 599  
Supplemental disclosure of noncash investing activities:        
Outstanding payments for purchase of property and equipment in accounts payable at period end   $ 49     $ 704  
                                         

RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES

(in thousands)

(unaudited)

 
 
      Three Months Ended June 30,     Six Months Ended June 30,
      2016     2015     2016     2015
Cost of revenue     $ 16,690       $ 14,332       $ 31,296       $ 28,934  
Adjustments                                        
Stock-based compensation expense       (520 )       (498 )       (973 )       (973 )
Costs related to acquisitions       (77 )       (90 )       (99 )       (90 )
Non-GAAP cost of revenue     $ 16,093       $ 13,744       $ 30,224       $ 27,871  
                                         
      Three Months Ended June 30,     Six Months Ended June 30,
      2016     2015     2016     2015
Sales and marketing     $ 25,795       $ 23,063       $ 44,566       $ 40,803  
Adjustments                                        
Stock-based compensation expense       (1,717 )       (1,105 )       (2,947 )       (2,135 )
Costs related to acquisitions       (439 )       (142 )       (547 )       (142 )
Non-GAAP sales and marketing     $ 23,639       $ 21,816       $ 41,072       $ 38,526  
                                         
      Three Months Ended June 30,     Six Months Ended June 30,
      2016     2015     2016     2015
Research and development     $ 11,754       $ 4,879       $ 22,118       $ 9,914  
Adjustments                                        
Stock-based compensation expense       (1,565 )       (729 )       (2,687 )       (1,474 )
Costs related to acquisitions       (371 )       (76 )       (470 )       (76 )
Non-GAAP research and development     $ 9,818       $ 4,074       $ 18,961       $ 8,364  
                                         
      Three Months Ended June 30,     Six Months Ended June 30,
      2016     2015     2016     2015
General and administrative     $ 9,635       $ 8,551       $ 18,703       $ 16,518  
Adjustments                                        
Stock-based compensation expense       (1,118 )       (417 )       (1,936 )       (973 )
Costs related to pending merger with Vista       (1,309 )               (1,309 )        
Costs related to acquisitions       (459 )       (815 )       (956 )       (1,686 )
Gain on asset disposition                       107          
Non-GAAP general and administrative     $ 6,749       $ 7,319       $ 14,609       $ 13,859  
                                         
 

RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES

(in thousands, except per share amounts and share counts)

(unaudited)

 
 
      Three Months Ended June 30,     Six Months Ended June 30,
      2016     2015     2016     2015
Net loss     $ (5,667 )     $ (5,675 )     $ (6,865 )     $ (8,027 )
Adjustments                                        
Interest income       (406 )       (577 )       (958 )       (1,121 )
Provision for (benefit from) for income taxes       959         1,213         1,695         (662 )
Depreciation and amortization expense       6,404         4,753         12,302         8,813  
Other expense                               426  
Stock-based compensation expense       4,920         2,749         8,543         5,555  
Losses (gains) from foreign currency transactions       123         1,018         (91 )       832  
Costs related to pending merger with Vista       1,309                 1,309          
Costs related to acquisitions       1,346         1,123         2,072         1,994  
Gain on asset disposition                       (107 )        
Adjusted EBITDA     $ 8,988       $ 4,604       $ 17,900       $ 7,810  
                                         
      Three Months Ended June 30,     Six Months Ended June 30,
      2016     2015     2016     2015
GAAP operating loss     $ (5,114 )     $ (5,039 )     $ (6,128 )     $ (9,384 )
Adjustments                                        
Stock-based compensation expense       4,920         2,749         8,543         5,555  
Losses (gains) from foreign currency transactions       123         1,018         (91 )       832  
Costs related to pending merger with Vista       1,309                 1,309          
Costs related to acquisitions       1,346         1,123         2,072         1,994  
Gain on asset disposition                       (107 )        
Non-GAAP operating income (loss)     $ 2,584       $ (149 )     $ 5,598       $ (1,003 )
                                         
      Three Months Ended June 30,     Six Months Ended June 30,
      2016     2015     2016     2015
GAAP net loss     $ (5,667 )     $ (5,675 )     $ (6,865 )     $ (8,027 )
Adjustments                                        
Stock-based compensation expense       4,920         2,749         8,543         5,555  
Losses (gains) from foreign currency transactions       123         1,018         (91 )       832  
Costs related to pending merger with Vista       1,309                 1,309          
Costs related to acquisitions       1,346         1,123         2,072         1,994  
Gain on asset disposition                       (107 )        
Excess tax benefits from stock-based compensation               1,978                 1,978  
Non-GAAP net income     $ 2,031       $ 1,193       $ 4,861       $ 2,332  
Non-GAAP diluted weighted average common shares outstanding       44,103,881         43,342,133         43,766,363         43,295,459  
GAAP diluted weighted average common shares outstanding       42,241,947         41,571,379         42,151,737         41,404,698  
Non-GAAP net income per diluted share     $ 0.05       $ 0.03       $ 0.11       $ 0.05  
GAAP net loss per diluted share     $ (0.13 )     $ (0.14 )     $ (0.16 )     $ (0.19 )
                                         

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About Cvent

Cvent is a leading meetings, events, and hospitality technology provider with 4,800+ employees and ~22,000 customers worldwide as of December 31, 2023. Founded in 1999, the company delivers a comprehensive event marketing and management platform and offers a global marketplace where event professionals collaborate with venues to create engaging, impactful experiences. Cvent is headquartered in Tysons, Virginia, just outside of Washington D.C., and has additional offices around the world to support its growing global customer base. The comprehensive Cvent event marketing and management platform offers software solutions to event organizers and marketers for online event registration, venue selection, event marketing and management, virtual and onsite solutions, and attendee engagement. Cvent’s suite of products automate and simplify the event management lifecycle and maximize the impact of in-person, virtual, and hybrid events. Hotels and venues use Cvent’s supplier and venue solutions to win more group and corporate travel business through Cvent’s sourcing platforms. Cvent solutions optimize the event management value chain and have enabled clients around the world to manage millions of meetings and events. For more information, please visit Cvent.com

Non-GAAP Financial Measures

This press release contains the following non-GAAP financial measures: non-GAAP cost of revenue, non-GAAP sales and marketing expenses, non-GAAP research and development expenses, non-GAAP general and administrative expenses, non-GAAP operating income (loss), Adjusted EBITDA, non-GAAP net income and non-GAAP net income per share.

We believe that these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to Cvent’s financial condition and results of operations. We use these non-GAAP measures for financial, operational and budgetary decision-making purposes, and to compare our performance to that of prior periods for trend analyses. We believe that these non-GAAP financial measures provide useful information regarding past financial performance and future prospects, and permit us to more thoroughly analyze key financial metrics used to make operational decisions. We believe 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 our financial measures with other software companies, many of which present similar non-GAAP financial measures to investors.

We do 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 expenses and income 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 about which expenses and income are excluded or included in determining these non-GAAP financial measures. In order to compensate for these limitations, management presents non-GAAP financial measures in connection with GAAP results. We urge investors to review the reconciliation of our non-GAAP financial measures to the comparable GAAP financial measures, which are included in this press release, and not to rely on any single financial measure to evaluate our business

Cvent excludes one or more of the following items from these non-GAAP financial measures:

Interest income. Cvent excludes this income from certain non-GAAP financial measures primarily because it is not considered a part of ongoing operating results.

Other expense. Cvent excludes this expense from certain non-GAAP financial measures primarily because it is not considered a part of ongoing operating results.

Provision for (benefit from) income taxes. Cvent excludes this expense (benefit) from certain non-GAAP financial measures primarily because of the volatility in the amount of expense (benefit) that Cvent does not consider a meaningful component of our operating results when assessing the performance of our business. The exclusion of this expense (benefit) facilitates the comparison of our business outlooks for future periods with the results from prior periods.

Excess tax benefits from stock-based compensation. For the three and six months ended June 30, 2015, Cvent’s non-GAAP financial measures excluded previously recognized excess tax benefits from stock-based compensation from which Cvent could not benefit from. Excluding these non-cash amounts improves the comparability of the performance of the business across periods, and to the results of other companies in our industry, which may have their own unique histories associated with stock-based compensation.

Depreciation and amortization. In accordance with GAAP, our expenses, including cost of revenue and operating expenses, include depreciation and amortization, which consists of depreciation of property, plant and equipment, amortization of capitalized software development costs and amortization of intangible assets. Cvent excludes these expenses from certain of its non-GAAP financial measures primarily because they are non-cash expenses that are not considered part of ongoing operating results when assessing the performance of our business. Excluding these amounts improves comparability of the performance of the business across periods, and to the results of other companies in our industry, which have their own unique histories associated with depreciation and amortization.

Gain on asset disposition. Cvent’s non-GAAP financial measures exclude gains on asset dispositions. Cvent excludes these expenses from its non-GAAP financial measures primarily because they are non-cash expenses that are not considered part of ongoing operating results when assessing the performance of our business. Excluding these amounts improves comparability of the performance of the business across periods, and to the results of other companies in our industry, which have their own unique histories associated with divested businesses.

Costs related to pending merger with Vista. Cvent’s non-GAAP financial measures exclude expenses incurred in relation to the pending merger with Vista. Cvent excludes these expenses from its non-GAAP financial measures primarily because they are not considered part of ongoing operating results when assessing the performance of our business. Excluding these amounts improves comparability of the performance of the business across periods, and to the results of other companies in our industry.

Stock-based compensation expense. Cvent’s non-GAAP financial measures exclude stock-based compensation, which consists of expenses for stock options and restricted stock units. Cvent excludes these expenses from its non-GAAP financial measures primarily because they are non-cash expenses that are not considered part of ongoing operating results when assessing the performance of our business. Excluding these amounts improves comparability of the performance of the business across periods, and to the results of other companies in our industry, which have their own unique histories associated with stock-based compensation.

Losses (gains) from foreign currency transactions. Cvent’s non-GAAP financial measures exclude these gains and losses primarily because they are non-cash, and are driven primarily by our India operations, which for accounting purposes is not considered a stand-alone entity and are remeasured instead of translated. In accordance with GAAP, the gains and losses associated with remeasuring our India financial statements, are recognized through our Consolidated Statements of Operations and Comprehensive Loss instead of through our Consolidated Balance Sheets, where translation gains and losses from most foreign subsidiaries would be included. Excluding these amounts improves comparability of the performance of the business across periods and to the results of other companies in our industry, which generally recognize similar gains and losses through their Consolidated Balance Sheets.

Costs related to acquisitions. Cvent’s non-GAAP financial measures exclude contingent payments included in compensation expense which relates to the potential cash payment for earnouts to certain employees of acquired companies whose right to receive such payment is forfeited if they terminate their employment prior to the required service period. As the contingent payments are subject to continued employment, GAAP requires that these payments be accounted for as compensation expense and such expense is subject to revaluation. Cvent excludes this item from its non-GAAP financial measures primarily because it is a component of the contractual deal consideration and it is not considered part of ongoing operating results when assessing the performance of our business. Additionally, Cvent’s non-GAAP financial measures exclude costs related to performing due diligence, drafting and negotiating definitive agreements, valuation, earn-out payments, retention payments and severance or other acquisition-related activities. The exclusion of these expenses facilitates the comparison of post-acquisition operating results to the results of other companies in our industry, which have their own unique acquisition histories.

Cautionary Language Concerning Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding the timing of the pending merger with Papay Merger Sub, Inc., an affiliate of Vista Equity Partners; our momentum, progress and market share; statements regarding our preliminary unaudited revenue, net (loss) income and profitability margins for Cvent’s second quarter ended June 30, 2016; and statements regarding our expectations regarding the growth of the meetings and events industry and our market position therein. These forward-looking statements are made as of the date of this press release and were based on current expectations, estimates, forecasts and projections as well as the beliefs and assumptions of management. Words such as “expect,” “anticipate,” “should,” “believe,” “hope,” “target,” “project,” “goals,” “estimate,” “potential,” “predict,” “may,” “will,” “might,” “could,” “intend,” variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond our control. Our actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to, the effect of any material weakness in the design and operating effectiveness of our internal control over financial reporting and ineffective disclosure controls and procedures; our ability to renew existing customers and attract new customers; our ability to manage our growth effectively; our ability to prevent or mitigate any disruption in our service on our websites, mobile applications or in our computer systems; our ability to integrate our acquisitions; our ability to attract, retain and motivate key personnel; and the volatility of quarterly results and expectations. For a detailed discussion of these and other risk factors, please refer to the risks detailed in our filings with the Securities and Exchange Commission, including, without limitation, our most recent Annual Report on Form 10-K and subsequent periodic and current reports. Past performance is not necessarily indicative of future results. We anticipate that subsequent events and developments will cause our views to change. We undertake no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.