Cvent Announces First Quarter and Full Year 2014 Financial Results

Full Year 2014 revenue of $111.1 million increases 33% year-over-year

McLean, Va. – Cvent (NYSE:CVT), a leading cloud-based enterprise event management platform, today announced its financial results for the first quarter ended March 31, 2014.

"We had a strong start to 2014," said Reggie Aggarwal, Chief Executive Officer of Cvent. "Revenue in the first quarter increased 29% as compared to the first quarter in the prior year. We continued to see strong momentum for our solutions that automate and improve processes at all stages of the meetings and events lifecycle, serving both meetings and events planners on one side, and hotels and venues on the other. The combination of our first quarter performance and continued business momentum is reflected in our increased guidance. We are pleased to be able to balance strong revenue growth with healthy profitability as we continue to scale our business for the long-term."

First Quarter 2014 Financial Highlights

Revenue

  • Total revenue was $31.4 million, an increase of 29% from the comparable period in 2013.
  • Platform Subscription revenue was $21.7 million, an increase of 27% from the comparable period in 2013.
  • Marketing Solutions revenue was $9.7 million, an increase of 34% from the comparable period in 2013.

Operating Income

  • GAAP operating income was $0.6 million, compared to a GAAP operating loss of $(0.3) million in the comparable period in 2013.
  • Non-GAAP operating income was $1.5 million, consistent with the comparable period in 2013.

Operating Income

  • GAAP operating income was $0.6 million, compared to a GAAP operating loss of $(0.3) million in the comparable period in 2013.
  • Non-GAAP operating income was $1.5 million, consistent with the comparable period in 2013.

Net Income

  • GAAP net income was $1.6 million, compared to net income of $0.3 million for the comparable period in 2013. GAAP net income per diluted share was $0.04, based on 43.2 million weighted average common shares outstanding on a fully diluted basis, compared to GAAP net income per diluted share of $0.01 for the comparable period in 2013, based on 34.6 million weighted average common shares outstanding on a fully diluted basis.
  • Non-GAAP net income was $2.5 million compared to $2.1 million in the comparable period in 2013. Non-GAAP net income per share was $0.06, based on 43.2 million weighted average common shares outstanding on a fully diluted basis, compared to non-GAAP net income per share of $0.06 for the comparable period in 2013, based on 34.6 million weighted average common shares outstanding on a fully diluted basis.

Adjusted EBITDA

  • Adjusted EBITDA was $3.5 million, representing an adjusted EBITDA margin of 11%, compared to $3.2 million and 13% in the comparable period in 2013.

Balance Sheet

  • Cash, cash equivalents and short-term investments at March 31, 2014 totaled $201.7 million.

Recent Business Highlights

  • Attracted new Strategic Meeting Management customers across the Fortune 1000, including Gulfstream, Polycom and Protective Life Corporation, and expanded relationships with customers such as Biogen Idec, Sunovion Pharmaceuticals and National Grid, with many of these clients expanding their subscribed features and functionality across the Cvent platform.
  • Signed new platform subscription customers including Plexus Worldwide, the University of Southern California and Wasserman Media, and renewed or expanded multi-year agreements with diverse customers including Tableau Software, Illumina and Elekta.
  • Expanded our leadership in mobile solutions for meeting and event planners with new customers including the Choice Hotels Owners Council and Hewlett-Packard, and renewed mobile subscriptions at organizations such as Experian, the Institute of Internal Auditors and TESSCO Technologies.
  • Added new marketing solutions with hotel customers internationally, such as TRYP by Wyndham in Europe and Latin America, the Mandarin Oriental Hong Kong and the Oberoi in Dubai; and domestically at hotels such as the Trump Hotel Collection, the Grand Cascades Lodge and Revel Resort in Atlantic City. New marketing solutions customers also included convention and visitors' bureaus around the world representing countries like Switzerland, Mexico and Singapore, as well as cities like Detroit and Fort Collins. We also signed renewal contracts with organizations including Atlantis, Crowne Plaza, and Fairmont Raffles Hotels International, as well as the convention and visitors' bureaus in Houston and New Orleans, with many of these organizations extending their contract for multiple years.
  • Held the Company's first annual Group Business Forum for the hospitality industry, with over 400 executive attendees representing hotels and destinations worldwide. This event provided an opportunity for Thought Leaders to come together to understand industry technology trends and to network with one another.

Business Outlook

Based on information available as of May 14, 2014, Cvent is issuing guidance for the second quarter and full year 2014 as indicated below.

Second Quarter 2014:

  • Total revenue is expected to be in the range of $33.3 million to $33.7 million.
  • GAAP net loss is expected to be in the range of $(2.3) million to $(1.9) million, or $(0.06) to $(0.05) per share, based on 40.7 million basic weighted average common shares outstanding.
  • Non-GAAP net loss is expected to be in the range of $(0.4) million to breakeven, or $(0.01) to breakeven per share, based on 40.7 million basic weighted average common shares outstanding.
  • Adjusted EBITDA is expected to be in the range of $1.6 million to $2.0 million.

Full Year 2014:

  • Total revenue is expected to be in the range of $138.7 million to $140.3 million.
  • GAAP net loss is expected to be in the range of $(7.0) million to $(5.8) million, or $(0.17) to $(0.14) per share, based on 40.8 million basic weighted average common shares outstanding.
  • Non-GAAP net income is expected to be in the range of $0.4 million to $1.6 million, or $0.01 to $0.04 per share, based on 42.7 million diluted weighted average common shares outstanding.
  • Adjusted EBITDA is expected to be in the range of $13.6 million to $14.6 million.

Conference Call Information

What: Cvent First Quarter 2014 Financial Results Conference Call

When: Wednesday, May 14, 2014 

 

Time: 4:30 p.m. ET 

Live Call: (800) 860-2442, domestic

(412) 858-4600, international

Replay: (877) 344-7529, passcode 10039998, domestic

(412) 317-0088, passcode 10045313, international

Webcasthttp://investors.cvent.com (live and replay) 

The webcast will be archived on Cvent's website for a period of three months.

Cvent, Inc.
Consolidated Balance Sheets
(in thousands, except share and per share data)
       
 

December 31,
2013

  

December 31,
2012

   Unaudited   
Assets      
Current assets:      
Cash and cash equivalents  $146,407   $16,850 
Restricted cash   664    455 
Short-term investments   11,359    9,320 
Accounts receivable, net of reserve of $731 and $505 , respectively   32,770    29,081 
Prepaid expense and other current assets   7,936    3,128 
Deferred tax assets   2,681    2,486 
Total current assets   201,817    61,320 
Property and equipment, net   7,898    6,756 
Capitalized software development costs, net   9,264    5,428 
Intangible assets, net   3,123    3,919 
Goodwill   12,611    12,505 
Other assets   1,176    102 
Total assets  $235,889   $90,030  
       


Liabilities and Stockholders' Equity
      
Current liabilities:      
Accounts payable  $4,855   $3,272 
Accrued and other current liabilities   18,252    13,921 
Deferred revenue   65,215    51,554 
Total current liabilities   88,322    68,747 
Deferred tax liabilities, non-current   3,967    2,134 
Other liabilities, non-current   1,407    419 
Total liabilities   93,696    71,300 

Commitments and contingencies

      
Stockholders' equity      
Series A convertible preferred stock, $0.001 par value, 100,000,000 shares authorized at December 31, 2013; and zero and 17,418,807 issued and outstanding at December 31, 2013 and 2012, respectively   -    17 
Common stock, $0.001 par value;1,000,000,000 shares authorized at December 31, 2013; 40,409,791 and 15,901,183 shares issued and 39,889,577 and 15,380,969 outstanding at December 31, 2013 and 2012, respectively   40    16 
Treasury stock   (3,966)    (3,966) 
Additional paid-in capital   169,291    42,409 
Accumulated deficit   (23,172)    (19,746) 
Total stockholders' equity   142,193    18,730  
Total liabilities and stockholders' equity  $235,889    $90,030 
           

 

Cvent, Inc.
Consolidated Statements of Operations
(in thousands, except share and per share data)
             
             
   

Fourth Quarter Ended
December 31,

  

Year Ended
December 31,

             
   2013  2012  2013  2012
   Unaudited     Unaudited   
             
Revenue  $30,684   $23,609  $111,125   $83,474
Cost of revenue1   10,809    5,925   32,397    20,573
             
Gross profit   19,875    17,684   78,728    62,901
Operating expenses:            
Sales and marketing1   13,128    10,125   48,330    35,873
Research and development1   3,111    2,214   11,216    7,605
General and administrative1   4,315    3,566   21,207    11,523
             
Total operating expenses   20,554    15,905   80,753    55,001
             

Income (loss) from operations

   (679)    1,779   (2,025)    7,900
Interest income   338    141   1,015    811
             
Income (loss)from operations before income tax expense   (341)    1,920   (1,010)    8,711
Provision for income taxes (benefit)   280    399   2,416    4,406
             
Net income (loss)  $(621)   $1,521  $(3,426)   $4,305
             
Net income (loss) per common share:            
Basic  $(0.02)   $0.05  $(0.14)   $0.13
Diluted  $(0.02)   $0.04  $(0.14)   $0.12
             
Weighted average common shares outstanding - basic   39,887,467    32,915,267   25,289,788    33,167,358
Weighted average common shares outstanding - diluted   39,887,467    34,622,006   25,289,788    34,790,637
             
1Stock-based compensation expense included in the above:            
Cost of revenue  $294   $176  $1,180   $762
Sales and marketing   354    790   2,446    2,895
Research and development   81    147   634    539
General and administrative   126    276   815    1,010
             
Total  $855   $1,389   $5,075   $5,206
                   
Cvent, Inc.
Consolidated Statements of Cash Flows
(in thousands)
       
   

Year
ended
December 31,
2013

  

Year
ended
December 31,
2012

Cash flows from operating activities:  Unaudited   
Net Income  (3,426)   4,305 
Adjustments to reconcile net income to net cash provided by operating activities      
Depreciation and amortization  7,768   5,446 
Bad debt expense  392   344 
Foreign currency transaction loss  190   - 
Stock-based compensation  5,075   5,206 
Changes in deferred taxes  

893

   434 
Change in operating assets and liabilities  

 

   

 

 
Accounts receivable, net  

(4,515)

   (9,618) 
Prepaid expenses and other assets  (4,808)   (587) 
Accounts payable, accrued and other liabilities  6,826   4,486 
Deferred revenue  13,661   13,565 
   -   - 
Net cash provided by operating activities  22,056   23,581 
       
Cash flows from investing activities:      
Purchase of PP&E  

(11,333)

   (8,118) 
Purchase of Short-term investments  (2,039)   (986) 
Acquisitions, net of cash acquired  (90)   (12,460) 
Restricted cash  (209)   (455) 

Net cash used in investing activities

  (13,671)   (22,019) 
       
Cash flows from financing activities:      
Repurchase of common stock and warrants  (1,275)   (3,950) 
Proceeds from exercise of stock options  506   1,088 
Proceeds from IPO, net of expense  122,131   - 
Net cash provided (used) by financing activities  121,362   (2,862) 
       
Effect of exchange rate changes on cash and cash eq  (190)   - 
       
Net change in cash and cash equivalents  129,557   (1,300) 
       
       
Beginning Cash  16,850   18,150 
Ending Cash  146,407   16,850 
Change in Cash  129,557   (1,300) 
         

For purposes of the diluted weighted average common shares outstanding for the period ended March 31, 2013, all shares of Series A Convertible Preferred Stock have been treated as though they have converted to Common Shares on a 1:1 basis as of the beginning of the period because the Series A Convertible Preferred Stock participate in any net earnings on an equal basis with Common Stock shareholders.

RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES
(in thousands)
(unaudited)
             
   

Fourth Quarter ended December 2013

  

Year ended December 2013

   2013  2012  2013  2012
   (In thousands)
Cost of revenue  $10,809   $5,925   $32,397   $20,573 
Adjustments            
Stock-based compensation expense   (294)    (176)    (1,180)    (762) 
Non-GAAP Cost of Revenue Expenses  $10,515   $5,749   $31,217   $19,811 
             
   

Fourth Quarter ended December 2013

  

Year ended December 2013

   2013  2012  2013  2012
Sales and marketing  $13,128   $10,125   $48,330   $35,873 
Adjustments            
Stock-based compensation expense   (354)    (790)    (2,446)    (2,895) 
Non-GAAP Sales & Marketing Expenses  $12,774   $9,335   $45,884   $32,978 
             
   

Fourth Quarter ended December 2013

  

Year ended December 2013

   2013  2012  2013  2012
   (In thousands)
Research and Development  $3,111   $2,214   $11,216   $7,605 
Adjustments            
Stock-based compensation expense   (81)    (147)    (634)    (539) 
Non-GAAP Research & Development Expenses  $3,030   $2,067   $10,582   $7,066 
             
   

Fourth Quarter ended December 2013

  

Year ended December 2013

   2013  2012  2013  2012
   (In thousands)
General and administrative  $4,315   $3,566   $21,207   $11,523 
Adjustments            
Stock-based compensation expense   (126)    (276)    (815)    (1,010) 
Costs related to acquisitions and dispositions   (384)    (477)    (2,436)    (1,507) 
Foreign currency remeasurement and transaction gains (losses)   256    (185)    (1,796)    (286) 
Non-GAAP General and administrative Expenses  $4,061   $2,628   $16,160   $8,720 
             
   

Fourth Quarter ended December 2013

  

Year ended December 2013

   2013  2012  2013  2012
   (In thousands)
Net income (loss)  $(621)   $1,521   $(3,426)   $4,305 
Adjustments            
Interest income   (338)    (141)    (1,015)    (811) 
Provision for income taxes   280    399    2,416    4,406 
Depreciation and amortization expense   1,986    1,583    7,768    5,446 
Stock-based compensation expense   855    1,389    5,075    5,206 
Foreign currency remeasurement and transaction (gains) losses   (256)    185    1,796    286 
Costs related to acquisitions and dispositions   384    477    2,436    1,507 
Adjusted EBITDA  $2,290   $5,413   $15,050   $20,345 
             
   

 

  

 

   

Fourth Quarter ended December 2013

  

Year ended December 2013

   2013  2012  2013  2012
   (In thousands)
GAAP operating income (loss)  $(679)   $1,779   $(2,025)   $7,900 
Adjustments            
Stock-based compensation expense   855    1,389    5,075    5,206 
Foreign currency remeasurement and transaction (gains) losses   (256)    185    1,796    286 
Costs related to acquisitions and dispositions   384    477    2,436    1,507 
Non-GAAP operating income  $304   $3,830   $7,282   $14,899 
             
   

Fourth Quarter ended December 2013

  

Year ended December 2013

   2013  2012  2013  2012
   (In thousands)
GAAP net income (loss)  $(621)   $1,521   $(3,426)   $4,305 
Adjustments            
Stock-based compensation expense   855    1,389    5,075    5,206 
Foreign currency remeasurement and transaction (gains) losses   (256)    185    1,796    286 
Costs related to acquisitions and dispositions   384    477    2,436    1,507 
Non-GAAP net income  $362   $3,572   $5,881   $11,304 
             

Non-GAAP diluted weighted average common shares outstanding

   39,887,467    

34,622,006

    25,289,788    34,790,637 
Non-GAAP net income per diluted share  $0.01   $0.10   $0.23   $0.32 
             

About Cvent, Inc.

Cvent, Inc. is a leading cloud-based enterprise event management company, with tens of thousands of customers and more than 2,700 employees worldwide. Cvent offers software solutions to event planners for online event registration, venue selection, event management, mobile apps for events, email marketing, and web surveys. Cvent provides hoteliers with an integrated platform, enabling properties to increase group business demand through targeted advertising and improve conversion through proprietary demand management and business intelligence solutions. Cvent solutions optimize the entire event management value chain and have enabled clients around the world to manage hundreds of thousands of meetings and events. For more information, please visit Cvent.com, or connect with us on Facebook, Twitter or LinkedIn.

Non-GAAP Financial Measures

To supplement Cvent's consolidated financial statements, which are prepared and presented in accordance with generally accepted accounting principles in the United States ("GAAP"), Cvent provides investors with certain non-GAAP financial measures, including Non-GAAP operating income, Adjusted EBITDA, Non-GAAP net income (loss) and Non-GAAP net income (loss) 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. Additionally, we have not reconciled the non-GAAP guidance measures disclosed under "Business Outlook" to their corresponding GAAP measures because we do not provide guidance for the various reconciling items such as stock-based compensation, provision for income taxes, depreciation and amortization, costs related to acquisitions (including earn-outs), and foreign currency remeasurement and transactions gains and losses, as certain items that impact these measures are out of our control or cannot be reasonably predicted. Accordingly, reconciliations to the non-GAAP guidance measures is not available without unreasonable effort.

Cvent excludes the following items from these non-GAAP financial measures:

Interest income. Cvent excludes this income primarily because it is not considered a part of ongoing operating results.

Provision (benefit) for income taxes. Cvent excludes this expense (benefit) from its non-GAAP financial measures primarily because it is largely a non-cash 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.

Depreciation and amortization. In accordance with GAAP, operating expenses include amortization of intangible assets such as software development and acquired technology. Cvent excludes these items from its non-GAAP financial measures because they are typically static expenses that Cvent does not consider part of ongoing operating results when assessing the performance of our business, and Cvent believes that doing so facilitates comparisons to its historical operating results and to the results of other companies in our industry, which may have their own unique acquisition histories and varied approaches to capitalization of software development.

Stock-based compensation expense. Cvent's non-GAAP financial measures exclude stock-based compensation, which consists of expenses for stock options and other awards. 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.

Foreign currency losses (gains). Cvent's non-GAAP financial measures exclude these losses (gains) 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 losses (gains) associated with remeasuring our India financial statements, are recognized through our Consolidated Statements of Operations instead of through our Consolidated Balance Sheets, where translation losses (gains) 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 losses (gains) through their Consolidated Balance Sheets.

Costs related to acquisitions and disposition. Cvent's non-GAAP financial measures exclude contingent payments included in compensation expense which relates to the potential cash payment 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 acquisitions and it is not considered part of ongoing operating results when assessing the performance of our business. 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 our future revenues, expenses, net income (loss), and profitability, 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, our ability to renew existing customers and attract new customers; our ability to manage our growth effectively; our ability to correct any weaknesses and deficiencies in our internal control over financial reporting and disclosure controls and procedures; 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 Annual Report on Form 10-K filed on March 21, 2014 and other reports and filings with the Securities and Exchange Commission. 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.