Jive Software
Nov 5, 2012

Jive Software Announces Third Quarter 2012 Financial Results

PALO ALTO, Calif., Nov. 5, 2012 (GLOBE NEWSWIRE) -- Jive Software, Inc. (Nasdaq:JIVE), today announced financial results for its third quarter ended September 30, 2012.

"The combination of multi-year, multi-million dollar deals and new customer wins contributed to strong year-over-year quarterly billings growth of 47% and product revenue growth of 48% for the third quarter," stated Tony Zingale, Chairman & CEO of Jive. "Jive's success is being fueled by our highly differentiated track record of delivering tangible business value with hundreds of the largest global organizations. Our value proposition is reinforced by our growing list of blue chip customers, significant expansions of existing deployments and record number of seven figure customer commitments."   

Zingale added, "We continue to enhance our industry leading social business platform and ecosystem, through the release of feature-packed Jive 6, the recently announced partnership with Box and todays announced acquisitions of Meetings.io and Producteev. As global organizations increasingly turn to social business to change how they get work done, Jive is increasingly recognized as the de facto standard in the social business market."

Third Quarter 2012 Financial Highlights

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."

Third Quarter and Recent Business Highlights

Financial Outlook: As of November 5, 2012, Jive's guidance for its fourth quarter 2012, and updated its guidance for the full year 2012, are 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 third quarter 2012, in addition to discussing the Company's outlook for the fourth quarter 2012 and updated guidance for the full year 2012. To access this call, dial (800) 390-5202 (domestic) or (719) 325-2243 (international) with conference ID #7774291. 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 November 19, 2012, by dialing (877) 870-5176 (domestic) or (858) 384-5517 (international). The replay passcode is 7774291.

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 or upsell rates and the impact these rates may have on our future revenues; risks related to the pending closing of our acquisition of Producteev, 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)
         
   For the Three Months Ended   For the Nine Months Ended 
   September 30,   September 30, 
  2012 2011 2012 2011
         
Revenues:        
Product $ 25,861 $ 17,493  $ 71,436  $ 46,092
Professional services  3,012  3,326  9,705  8,679
Total revenues  28,873  20,819  81,141  54,771
         
Cost of revenues:        
Product  7,788  6,147  21,745  15,208
Professional services  3,474  3,095  11,055  9,146
Total cost of revenues  11,262  9,242  32,800  24,354
Gross profit  17,611  11,577  48,341  30,417
         
Operating expenses:        
Research and development   9,845  7,537  27,327  23,320
Sales and marketing   14,800  12,297  40,737  31,757
General and administrative  4,127  3,901  11,680  9,120
Total operating expenses  28,772  23,735  79,744  64,197
         
Loss from operations  (11,161)  (12,158)  (31,403)  (33,780)
         
Other income (expense), net:        
Interest income  56  10  116  37
Interest expense  (93)  (569)  (325)  (924)
Change in fair value of warrant liability  --   5,150  --   (7,185)
Other, net  42  44  (4)  4
Total other income (expense), net  5  4,635  (213)  (8,068)
         
Loss before provision (benefit) for income taxes $ (11,156)  $ (7,523)  $ (31,616)  $ (41,848)
Provision (benefit) for income taxes  132  57  246  (3,710)
Net loss  $ (11,288)  $ (7,580)  $ (31,862)  $ (38,138)
         
Basic and diluted net loss per share  (0.18)  (0.31)  (0.51)  (1.61)
         
Shares used in basic and diluted per share calculations  62,921  24,836  62,100  23,741
         
JIVE SOFTWARE, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
     
   September 30,   December 31, 
  2012 2011
     
Assets    
Current Assets:    
Cash and cash equivalents $ 57,472 $ 180,649
Short-term marketable securities  83,995  -- 
Accounts receivable, net of allowances  35,875  31,999
Prepaid expenses and other current assets  6,827  4,503
Total current assets  184,169  217,151
     
Marketable securities, noncurrent  35,404  -- 
Property and equipment, net of accumulated depreciation  16,150  12,639
Goodwill  17,265  17,265
Intangible assets, net of accumulated amortization  8,518  11,141
Other assets   234  146
Total assets $ 261,740  $ 258,342
     
Liabilities and Stockholders' Equity    
Current liabilities:    
Accounts payable $ 7,175 $ 4,566
Accrued payroll and related liabilities  5,653  6,629
Other accrued liabilities  4,534  5,124
Deferred revenue, current  74,425  62,329
Term debt, current  2,400  2,946
Total current liabilities  94,187  81,594
     
Deferred revenue, less current portion  23,129  15,497
Term debt, less current portion  9,000  10,192
Other long-term liabilities  547  340
Total liabilities  126,863  107,623
     
Commitments and contingencies    
     
Stockholders' Equity:    
Common stock  7  7
Less treasury stock at cost  (3,352)  (3,352)
Additional paid-in capital  274,780  258,779
Accumulated deficit  (136,587)  (104,725)
Accumulated other comprehensive income  29  10
Total stockholders' equity  134,877  150,719
Total liabilities and stockholders' equity $ 261,740 $ 258,342
     
JIVE SOFTWARE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
     
   Three Months Ended   Nine Months Ended 
   September 30,   September 30, 
  2012 2011 2012 2011
         
Cash flows from operating activities:        
Net loss  $ (11,288)  $ (7,580) $ (31,862) $ (38,138)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:        
Depreciation and amortization  2,567  2,088  7,170  5,107
Stock-based compensation  5,028  4,129  12,277  7,524
Loss from change in fair value of warrant liability  --   (5,150)  --   7,185
Change in deferred taxes  --   --   --   (3,851)
(Increase) decrease, net of acquisitions, in:         
Accounts receivable, net  (6,856)  (7,787)  (3,876)  (4,436)
Prepaid expenses and other assets  (1,916)  (755)  (2,292)  (573)
Increase (decrease), net of acquisitions, in:          
Accounts payable  3,956  1,315  4,122  3,270
Accrued payroll and related liabilities  (190)  636  (976)  1,136
Other accrued liabilities  180  584  56  1,557
Deferred revenue  10,072  5,660  19,728  14,084
Other long-term liabilities  3  17  405  64
Net cash provided by (used in) operating activities  1,556  (6,843)  4,752  (7,071)
         
Cash flows from investing activities:        
Payments for purchase of property and equipment  (3,476)  (1,829)  (9,389)  (5,837)
Purchases of marketable securities  (53,551)  --   (119,399)  -- 
Acquisitions, net of cash acquired  --   --   --   (22,892)
Net cash used in investing activities  (57,027)  (1,829)  (128,788)  (28,729)
         
Cash flows from financing activities:        
Proceeds from exercise of stock options, including tax withholding   2,855  (2,045)  3,724  2,007
Proceeds from issuance of preferred stock, net  --   40,000  --   40,000
Payments for stock issuance costs  --   (564)  (1,014)  (564)
Proceeds from revolving credit facility, net  --   --   --   515
Proceeds from term loans  --   --   --   24,203
Repayments of term loans  (600)  (750)  (1,850)  (1,104)
Net cash provided by financing activities  2,255  36,641  860  65,057
         
Net increase (decrease) in cash and cash equivalents  (53,216)  27,969  (123,176)  29,257
Effect of exchange rate changes  2  --   (1)  -- 
Cash and cash equivalents, beginning of period  110,686  44,636  180,649  43,348
Cash and cash equivalents, end of period $ 57,472 $ 72,605 $ 57,472 $ 72,605
         
JIVE SOFTWARE, INC.
RECONCILIATION OF NON-GAAP INFORMATION
(In thousands, except per share data)
(Unaudited)
         
   Three Months Ended September 30,   Nine Months Ended September 30, 
  2012 2011 2012 2011
         
Gross profit, as reported  $ 17,611 $ 11,577 $ 48,341 $ 30,417
Add back:        
Stock-based compensation  627  155  1,413  311
Amortization related to acquisitions  614  634  1,859  1,074
Gross profit, non-GAAP  $ 18,852 $ 12,366 $ 51,613 $ 31,802
Gross margin, non-GAAP 65% 59% 64% 58%
         
   Three Months Ended September 30,   Nine Months Ended September 30, 
  2012 2011 2012 2011
         
Research and development, as reported $ 9,845 $ 7,537 $ 27,327 $ 23,320
less:        
Stock-based compensation  1,705  806  4,185  1,764
Amortization related to acquisitions  --   --   --   1,031
Non-recurring acquisition expense  --   --   --   333
Research and development, non-GAAP $ 8,140 $ 6,731 $ 23,142 $ 20,192
As percentage of total revenues, non-GAAP 28% 32% 29% 37%
         
   Three Months Ended September 30,   Nine Months Ended September 30, 
  2012 2011 2012 2011
         
Sales and marketing, as reported $ 14,800 $ 12,297 $ 40,737 $ 31,757
less:        
Stock-based compensation  1,436  1,988  2,890  3,234
Sales and marketing, non-GAAP $ 13,364 $ 10,309 $ 37,847 $ 28,523
As percentage of total revenues, non-GAAP 46% 50% 47% 52%
         
   Three Months Ended September 30,   Nine Months Ended September 30, 
  2012 2011 2012 2011
         
General and administrative, as reported $ 4,127 $ 3,901 $ 11,680 $ 9,120
less:        
Stock-based compensation  1,260  1,180  3,789  2,215
General and administrative, non-GAAP $ 2,867 $ 2,721 $ 7,891  $ 6,905
As percentage of total revenues, non-GAAP 10% 13% 10% 13%
         
   Three Months Ended September 30,   Nine Months Ended September 30, 
  2012 2011 2012 2011
         
Loss from operations, as reported $ (11,161) $ (12,158) $ (31,403) $ (33,780)
Add back:        
Stock-based compensation  5,028  4,129  12,277  7,524
Amortization related to acquisitions  614  634  1,859  2,105
Non-recurring acquisition expense  --   --   --   333
Loss from operations, non-GAAP $ (5,519) $ (7,395) $ (17,267) $ (23,818)
         
         
   Three Months Ended September 30,   Nine Months Ended September 30, 
  2012 2011 2012 2011
         
Loss before provision for (benefit from) income taxes, as reported $ (11,156) $ (7,523) $ (31,616) $ (41,848)
Add back:        
Stock-based compensation  5,028  4,129  12,277  7,524
Amortization related to acquisitions  614  634  1,859  2,105
Non-recurring acquisition expense  --   --   --   333
Change in fair value of warrant liability  --   (5,150)  --   7,185
Loss before provision for (benefit from) income taxes, non-GAAP $ (5,514) $ (7,910) $ (17,480) $ (24,701)
         
   Three Months Ended September 30,   Nine Months Ended September 30, 
  2012 2011 2012 2011
         
Net loss, as reported $ (11,288) $ (7,580) $ (31,862) $ (38,138)
Add back:        
Stock-based compensation  5,028  4,129  12,277  7,524
Amortization related to acquisitions  614  634  1,859  2,105
Non-recurring acquisition expense  --   --   --   333
Change in fair value of warrant liability  --   (5,150)  --   7,185
Tax benefit related to acquisition of OffiSync  --   --   --   (3,851)
Net loss, non-GAAP $ (5,646) $ (7,967) $ (17,726) $ (24,842)
         
   Three Months Ended September 30,   Nine Months Ended September 30, 
  2012 2011 2012 2011
         
Basic and diluted net loss per share, as reported $ (0.18) $ (0.31) $ (0.51) $ (1.61)
Add back:        
Stock-based compensation  0.08  0.17  0.20  0.32
Amortization related to acquisitions  0.01  0.03  0.03  0.09
Non-recurring acquisition expense  --   --   --   0.01
Change in fair value of warrant liability  --   (0.21)  --   0.30
Tax benefit related to acquisition of OffiSync  --   --   --   (0.16)
Basic and diluted net loss per share, non-GAAP $ (0.09) $ (0.32) $ (0.29) $ (1.05)
         
   Three Months Ended September 30,   Nine Months Ended September 30, 
  2012 2011 2012 2011
         
Total revenues $ 28,873 $ 20,819 $ 81,141 $ 54,771
Deferred revenue, end of period  97,554  64,304  97,554  64,304
Less: Deferred revenue, beginning of period  (87,482)  (58,644)  (77,826)  (50,195)
Billings $ 38,945 $ 26,479 $ 100,869 $ 68,880
CONTACT: Investor Contact:

         Brian Denyeau

         ICR

         646-277-1251

         brian.denyeau@icrinc.com

         

         Media Contact:

         Amanda Pires

         (650) 465-1215

         Amanda.pires@jivesoftware.com