Jive Software
Aug 7, 2012

Jive Software Announces Second Quarter 2012 Financial Results

PALO ALTO, Calif., Aug. 7, 2012 (GLOBE NEWSWIRE) -- Jive Software, Inc. (Nasdaq:JIVE), today announced financial results for its second quarter ended June 30, 2012.

"Our momentum continued in the second quarter, contributing to strong growth in both revenue and billings," stated Tony Zingale, Chairman & CEO of Jive. Zingale added, "Customer response related to our next generation social business platform has been extremely positive, and the launch of TryJive has driven an increase in customer adoption, brand awareness and our pipeline of opportunities." 

Second Quarter 2012 Financial Highlights

Non-GAAP net loss for the second quarter was $6.8 million, compared to a net loss of $8.6 million for the same period last year. Non-GAAP net loss per share for the second quarter was $0.11, based on 61.9 million weighted-average shares outstanding, compared to a net loss per share of $0.37, based on 23.5 million weighted-average shares outstanding for the same period last year.

The company generated $1.1 million in cash from operations and invested $2.5 million in capital expenditures, leading to free cash flow of ($1.4) million for the second quarter. Free cash flow was ($1.4) million for the second quarter of 2011. Free cash flow is defined as cash flows provided by operating activities minus cash flows used to purchase capital expenditures.

A reconciliation of GAAP to non-GAAP financial measures has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading "Non-GAAP Financial Measures."

Second Quarter and Recent Business Highlights

Jive has recently accomplished the following business highlights:

Financial Outlook

As of August 7, 2012, Jive initiates guidance for its third quarter 2012, and is reiterating guidance for the full year 2012, as follows:

With respect to the Company's expectations under "Financial Outlook" above, the Company has not reconciled non-GAAP loss from operations or non-GAAP loss per share to GAAP loss from operations and GAAP loss per share because the Company does not provide guidance for stock-based compensation, income taxes or amortization of intangible assets, which are reconciling items between those Non-GAAP and GAAP measures. As items that impact GAAP loss from operations and GAAP loss per share are out of the Company's control and/or cannot be reasonably predicted, the Company is unable to provide such guidance. Accordingly, a reconciliation to GAAP loss from operations and GAAP loss per share is not available without unreasonable effort.

Quarterly Conference Call

Jive will host a conference call today at 2:00 p.m. PT (5:00 p.m. ET) to review the Company's financial results for the second quarter 2012, in addition to discussing the Company's outlook for the third quarter 2012 and guidance for the full year 2012. To access this call, dial (888) 312-3047 (domestic) or (719) 457-2603 (international) with conference ID #7554536. A live webcast of the conference call will be accessible from the Investor Relations section of Jive's website at http://investors.jivesoftware.com/ and a replay will be archived and accessible at: http://investors.jivesoftware.com/events.cfm. A replay of this conference call can also be accessed through August 21, 2012, by dialing (877) 870-5176 (domestic) or (858) 384-5517 (international). The replay passcode is 7554536.

About Jive Software

Jive Software (Nasdaq:JIVE) is a leading global Social Business company. We bring social technology innovations from the consumer world into enterprises securely and at scale, changing the way work gets done. Our platform combines the power of big data, enterprise integrations and social collaboration technologies. Millions of people at the world's largest companies are using Jive-powered communities internally and externally to transform their businesses.

Non-GAAP Financial Measures

The Company uses certain non-GAAP financial measures in this release. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles. 

Non-GAAP gross profit, loss from operations, net loss and net loss per share exclude stock-based compensation expenses, non-recurring expenses related to acquisitions, amortization of acquisition related intangible assets, and changes in fair value of warrant liabilities. Total billings is defined by the Company as revenue plus the change in total deferred revenue. Management presents these non-GAAP financial measures because it considers them to be important supplemental measures of performance. Management uses the non-GAAP financial measures for planning purposes, including analysis of the Company's performance against prior periods, the preparation of operating budgets and to determine appropriate levels of operating and capital investments. Management also believes that the non-GAAP financial measures provide additional insight for analysts and investors in evaluating the Company's financial and operational performance. However, these non-GAAP financial measures have limitations as an analytical tool and are not intended to be an alternative to financial measures prepared in accordance with GAAP. We intend to provide these non-GAAP financial measures as part of our future earnings discussions and, therefore, the inclusion of these non-GAAP financial measures will provide consistency in our financial reporting. A reconciliation of these non-GAAP measures to GAAP is provided in the accompanying tables.

Safe Harbor Statement

"Safe Harbor" statement under Private Securities Litigation Reform Act of 1995: This press release contains forward-looking statements, including statements concerning our financial guidance for the third fiscal quarter of 2012 and the full year of 2012, the future growth of the social business software market, our position to execute on our growth strategy, and our ability to capitalize on our leadership position in the social business market. The achievement of success in the matters covered by such forward-looking statements involves substantial risks, uncertainties and assumptions. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, our results or events could differ materially from the results expressed or implied by the forward-looking statements we make.

The risk and uncertainties referred to above include, but are not limited to, risks associated with our limited operating history; expectations regarding the widespread adoption of social business software by enterprises; uncertainty regarding the market for social business software; changes in the competitive dynamics of our market; our ability to increase and predict new subscription, subscription renewal and renewal billings or upsell rates and the impact these rates may have on our future revenues; our reliance on third-party service providers to host some of our products; the risk that our security measures could be breached and unauthorized access to customer data could be obtained; potential third party intellectual property infringement claims; and the price volatility of our common stock. 

More information about potential factors that could affect our business and financial results is contained in our prospectus as filed with the Securities and Exchange Commission. Additional information will also be set forth in our quarterly reports on Form 10-Q, annual reports on Form 10-K and other filings that we make with the Securities and Exchange Commission. We do not intend and undertake no duty to release publicly any updates or revisions to any forward-looking statements contained herein.

JIVE SOFTWARE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
         
  Three Months Ended June 30,  Six Months Ended June 30, 
 2012201120122011
         
Revenues:        
Product  $ 23,904  $ 15,029  $ 45,575  $ 28,599
Professional services  3,046  2,856  6,693  5,353
Total revenues  26,950  17,885  52,268  33,952
         
Cost of revenues:        
Product  7,135  5,132  13,957  9,061
Professional services  3,792  2,920  7,581  6,051
Total cost of revenues  10,927  8,052  21,538  15,112
Gross profit  16,023  9,833  30,730  18,840
         
Operating expenses:        
Research and development   9,127  7,116  17,482  15,783
Sales and marketing   14,581  10,622  25,937  19,460
General and administrative  3,751  3,429  7,553  5,219
Total operating expenses  27,459  21,167  50,972  40,462
         
Loss from operations  (11,436)  (11,334)  (20,242)  (21,622)
         
Other income (expense), net:        
Interest income  46  12  60  27
Interest expense  (144)  (257)  (232)  (355)
Change in fair value of warrant liability  --   (8,284)  --   (12,335)
Other, net  (1)  (3)  (46)  (40)
Total other income (expense), net  (99)  (8,532)  (218)  (12,703)
         
Loss before provision for (benefit from) income taxes  (11,535)  (19,866)  (20,460)  (34,325)
Provision for (benefit from) income taxes  90  (3,797)  114  (3,767)
Net loss  $ (11,625)  $ (16,069)  $ (20,574)  $ (30,558)
         
Basic and diluted net loss per share   $ (0.19)  $ (0.68)  $ (0.33)  $ (1.32)
         
Shares used in basic and diluted per share calculations  61,924  23,499  61,685  23,170
 
 
JIVE SOFTWARE, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
     
 June 30,
2012
December 31,
2011
     
Assets    
Current Assets:    
Cash and cash equivalents  $ 110,686  $ 180,649
Short-term marketable securities  46,562  -- 
Accounts receivable, net of allowances  29,019  31,999
Prepaid expenses and other current assets  4,872  4,503
Total current assets  191,139  217,151
     
Marketable securities, noncurrent  19,286  -- 
Property and equipment, net of accumulated depreciation  14,405  12,639
Goodwill  17,265  17,265
Intangible assets, net of accumulated amortization  9,382  11,141
Other assets  271  146
Total assets  $ 251,748  $ 258,342
     
Liabilities and Stockholders' Equity    
Current liabilities:    
Accounts payable  $ 3,369  $ 4,566
Accrued payroll and related liabilities  5,843  6,629
Other accrued liabilities  4,239  5,124
Deferred revenue, current  71,462  62,329
Term debt, current  2,400  2,946
Total current liabilities  87,313  81,594
     
Deferred revenue, less current portion  16,020  15,497
Term debt, less current portion  9,600  10,192
Other long-term liabilities  544  340
Total liabilities  113,477  107,623
     
Commitments and contingencies    
     
Stockholders' Equity:    
Common stock  7  7
Less treasury stock at cost  (3,352)  (3,352)
Additional paid-in capital  266,897  258,779
Accumulated deficit  (125,299)  (104,725)
Accumulated other comprehensive income  18  10
Total stockholders' equity  138,271  150,719
Total liabilities and stockholders' equity  $ 251,748  $ 258,342
 
 
JIVE SOFTWARE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
     
  Three Months Ended
June 30, 
 Six Months Ended
June 30, 
 2012201120122011
         
Cash flows from operating activities:        
Net loss  $ (11,625)  $ (16,069)  $ (20,574)  $ (30,558)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:    
Depreciation and amortization  2,385  1,172  4,603  3,019
Stock-based compensation  4,164  2,339  7,249  3,395
Loss from change in fair value of warrant liability  --   8,284  --   12,335
Change in deferred taxes  --   (3,851)  --   (3,851)
(Increase) decrease, net of acquisitions, in:        
Accounts receivable, net  (981)  (2,170)  2,980  3,351
Prepaid expenses and other assets  (764)  448  (376)  182
Increase (decrease), net of acquisitions, in:        
Accounts payable  (1,468)  (160)  166  1,955
Accrued payroll and related liabilities  1,539  1,387  (786)  500
Other accrued liabilities  721  1,942  (124)  973
Deferred revenue  6,772  5,819  9,656  8,424
Other long-term liabilities  401  20  402  47
Net cash provided by (used in) operating activities  1,144  (839)  3,196  (228)
         
Cash flows from investing activities:        
Payments for purchase of property and equipment  (2,512)  (522)  (5,913)  (4,008)
Purchases of marketable securities  (31,497)  --   (65,848)  -- 
Acquisitions, net of cash acquired  --   (22,392)  --   (22,892)
Net cash used in investing activities  (34,009)  (22,914)  (71,761)  (26,900)
         
Cash flows from financing activities:        
Proceeds from exercise of stock options, including tax withholding  557  3,838  869  4,052
Payments of initial public offering expenses  (248)  --   (1,014)  -- 
Proceeds from revolving credit facility, net  --   --   --   515
Proceeds from term loans  --   22,548  --   24,203
Repayments of term loans  (500)  --   (1,250)  (354)
Net cash provided by (used in) financing activities  (191)  26,386  (1,395)  28,416
         
Net increase (decrease) in cash and cash equivalents  (33,056)  2,633  (69,960)  1,288
Effect of exchange rate changes  (7)  --   (3)  -- 
Cash and cash equivalents, beginning of period  143,749  42,003  180,649  43,348
Cash and cash equivalents, end of period  $110,686  $ 44,636  $110,686  $ 44,636
 
 
 
JIVE SOFTWARE, INC.
RECONCILIATION OF NON-GAAP INFORMATION
(In thousands, except per share data)
(Unaudited)
         
         
  Three Months Ended June 30,  Six Months Ended June 30, 
 2012201120122011
Gross profit, as reported  $ 16,023  $ 9,833  $ 30,730  $ 18,840
Add back:        
Stock-based compensation  528  87  786  156
Amortization related to acquisitions  620  374  1,245  440
Gross profit, non-GAAP  $ 17,171  $ 10,294  $ 32,761  $ 19,436
Gross margin, non-GAAP 64% 58% 63% 57%
         
  Three Months Ended June 30,  Six Months Ended June 30, 
 2012201120122011
Research and development, as reported  $ 9,127  $ 7,116  $ 17,482  $ 15,783
less:        
Stock-based compensation  1,533  605  2,480  958
Amortization related to acquisitions  --   --   --   1,031
Non-recurring acquisition expense  --   333  --   333
Research and development, non-GAAP  $ 7,594  $ 6,178  $ 15,002  $ 13,461
As percentage of total revenues, non-GAAP 28% 35% 29% 40%
         
  Three Months Ended June 30,  Six Months Ended June 30, 
 2012201120122011
Sales and marketing, as reported  14,581  10,622  25,937  19,460
less:        
Stock-based compensation  928  937  1,454  1,246
Sales and marketing, non-GAAP  $ 13,653  $ 9,685  $ 24,483  $ 18,214
As percentage of total revenues, non-GAAP 51% 54% 47% 54%
         
  Three Months Ended June 30,  Six Months Ended June 30, 
 2012201120122011
General and administrative, as reported  $ 3,751  $ 3,429  $ 7,553  $ 5,219
less:        
Stock-based compensation  1,175  710  2,529  1,035
General and administrative, non-GAAP  $ 2,576  $ 2,719  $ 5,024  $ 4,184
As percentage of total revenues, non-GAAP 10% 15% 10% 12%
         
  Three Months Ended June 30,  Six Months Ended June 30, 
 2012201120122011
Loss from operations, as reported  $ (11,436)  $ (11,334)  $ (20,242)  $ (21,622)
Add back:        
Stock-based compensation  4,164  2,339  7,249  3,395
Amortization related to acquisitions  620  374  1,245  1,471
Non-recurring acquisition expense  --   333  --   333
Loss from operations, non-GAAP  $ (6,652)  $ (8,288)  $ (11,748)  $ (16,423)
         
  Three Months Ended June 30,  Six Months Ended June 30, 
 2012201120122011
Loss before provision for (benefit from) income taxes, as reported  $ (11,535)  $ (19,866)  $ (20,460)  $ (34,325)
Add back:        
Stock-based compensation  4,164  2,339  7,249  3,395
Amortization related to acquisitions  620  374  1,245  1,471
Non-recurring acquisition expense  --   333  --   333
Change in fair value of warrant liability  --   8,284  --   12,335
Loss before provision for (benefit from) income taxes, non-GAAP  $ (6,751)  $ (8,536)  $ (11,966)  $ (16,791)
         
  Three Months Ended June 30,  Six Months Ended June 30, 
 2012201120122011
Net loss, as reported  $ (11,625)  $ (16,069)  $ (20,574)  $ (30,558)
Add back:        
Stock-based compensation  4,164  2,339  7,249  3,395
Amortization related to acquisitions  620  374  1,245  1,471
Non-recurring acquisition expense  --   333  --   333
Change in fair value of warrant liability  --   8,284  --   12,335
Tax benefit related to acquisition of OffiSync  --   (3,851)  --   (3,851)
Net loss, non-GAAP  $ (6,841)  $ (8,590)  $ (12,080)  $ (16,875)
         
  Three Months Ended June 30,  Six Months Ended June 30, 
 2012201120122011
Basic and diluted net loss per share, as reported  $ (0.19)  $ (0.68)  $ (0.33)  $ (1.32)
Add back:        
Stock-based compensation  0.07  0.10  0.12  0.15
Amortization related to acquisitions  0.01  0.02  0.02  0.06
Non-recurring acquisition expense  --   0.01  --   0.01
Change in fair value of warrant liability  --   0.35  --   0.53
Tax benefit related to acquisition of OffiSync  --   (0.16)  --   (0.17)
Basic and diluted net loss per share, non-GAAP  $ (0.11)  $ (0.37)  $ (0.20)  $ (0.73)
     
  Three Months Ended June 30,  Six Months Ended June 30, 
 2012201120122011
Total revenues  $ 26,950  $ 17,885  $ 52,268  $ 33,952
Deferred revenue, end of period  87,482  58,644  87,482  58,644
Less: Deferred revenue, beginning of period  (80,710)  (52,628)  (77,826)  (50,195)
Billings  $ 33,722  $ 23,901  $ 61,924  $ 42,401
CONTACT: Investor Contact:

         Brian Denyeau

         ICR

         646-277-1251

         brian.denyeau@icrinc.com

         

         Media Contact:

         Kyle Arteaga

         (415) 218-5569

         kyle.arteaga@jivesoftware.com