First Quarter Total Revenue of $204.5
Million
Total Revenue Growth of 33% From First Quarter
2021
Avalara, Inc. (NYSE: AVLR), a leading provider of tax compliance
automation for businesses of all sizes, today announced financial
results for its first quarter ended March 31, 2022.
“We started 2022 with another strong quarter, exceeding our
guidance and achieving topline revenue growth of 33%
year-over-year,” said Scott McFarlane, Avalara co-founder and chief
executive officer. “Mounting complexity in today’s digital-first
world is pushing global demand for compliance automation. We
continue to execute our strategy to build the global cloud
compliance platform to achieve our vision of being part of every
transaction in the world.”
First Quarter 2022 Financial Results
- Revenue: Total revenue was $204.5 million in the first
quarter of 2022, up 33% from $153.6 million in the first quarter of
2021. Subscription and returns revenue was $186.9 million, up 34%
from $139.3 million in the same period last year. Professional
services revenue was $17.7 million, up 24% from $14.3 million in
the same period last year.
- Gross Profit: GAAP gross profit was $144.4 million in
the first quarter of 2022, representing a 71% gross margin,
compared to a GAAP gross profit of $109.1 million and a 71% gross
margin in the first quarter of 2021. Non-GAAP gross profit was
$150.8 million, representing a 74% non-GAAP gross margin, compared
to a non-GAAP gross profit of $113.2 million and a 74% non-GAAP
gross margin in the first quarter of 2021.
- Operating Loss: GAAP operating loss was $35.1 million in
the first quarter of 2022, compared to a GAAP operating loss of
$25.5 million in the first quarter of 2021. Non-GAAP operating
income was $4.7 million in the first quarter of 2022, compared to
non-GAAP operating loss of $2.2 million in the first quarter of
2021.
- Net Loss: GAAP net loss was $32.6 million in the first
quarter of 2022, compared to a GAAP net loss of $30.1 million in
the first quarter of 2021. Non-GAAP net income was $7.2 million in
the first quarter of 2022, compared to non-GAAP net loss of $6.8
million in the first quarter of 2021.
- Net Loss per Share: GAAP basic and diluted net loss per
share was $0.37 based on 87.5 million weighted-average shares
outstanding in the first quarter of 2022, compared to a GAAP basic
and diluted net loss per share of $0.35 based on 85.4 million
weighted-average shares outstanding in the first quarter of 2021.
Non-GAAP diluted net income per share was $0.08 based on 88.9
million diluted weighted-average shares outstanding in the first
quarter of 2022, compared to a non-GAAP diluted net loss per share
of $0.08 based on 85.4 million weighted-average shares outstanding
in the first quarter of 2021.
- Deferred Revenue: Total deferred revenue was $303.6
million at March 31, 2022, up from $283.0 million at December 31,
2021. The current portion of deferred revenue was $302.5 million at
March 31, 2022, up from $280.8 million at December 31, 2021.
- Cash: Net cash used in operating activities was $23.1
million in the first quarter of 2022, compared to $28.2 million in
the first quarter of 2021. Free cash flow was negative $31.1
million in the first quarter of 2022, compared to negative $31.9
million in the first quarter of 2021. Cash and cash equivalents
totaled $1.5 billion at March 31, 2022, compared to $1.5 billion at
December 31, 2021.
- Calculated Billings: Calculated billings were $219.2
million in the first quarter of 2022, compared to calculated
billings of $171.8 million in the first quarter of 2021.
Reconciliations of GAAP to non-GAAP financial measures have been
provided in the tables included in this release.
First Quarter 2022 and Recent Operating Highlights
- Key Metrics: We ended the first quarter of 2022 with
approximately 19,160 core customers, up from approximately 18,270
core customers at the end of the previous quarter and approximately
15,730 in the first quarter of 2021, representing a 22% increase
year-over-year. Our net revenue retention rate was 115% in the
first quarter of 2022 and has averaged 116% over the last four
quarters.
First Quarter 2022 and Recent Product
Highlights
- We announced the release of 20 newly certified integrations
with accounting, ERP, ecommerce, point-of-sale, mobile commerce,
and CRM software applications. Avalara has been a partner-centric
company since its founding in 2004, with a concerted focus on
integrating with technology solutions already in use by existing
and future customers. Avalara certified integration partners have
met criteria developed by Avalara for performance and reliability.
Certified integrations are built to ensure customers enjoy a fast,
reliable, and easy process for embedding Avalara’s automated tax
management into existing systems. Additionally, these integrations
enable customers of Avalara partner solutions to benefit from
Avalara’s real-time calculation of applicable taxes for billing
line items. Avalara software reduces the tedium and complexity of
determining taxes for millions of products and services across the
U.S., Canada, Europe, and other international jurisdictions, giving
customers more time to focus on driving their own business
success.
- We announced a new low-code studio to help developers easily
build integrations between Avalara’s compliance platform and
business applications, and two new APIs for sales tax returns and
e-invoicing. Embedding compliance functions using APIs allows
Avalara partners to serve their customers more holistically within
the software they already use. Avalara is expanding opportunities
for partners to build compliance integrations and experiences. To
offer flexibility and control to developers, Avalara is pursuing a
headless compliance approach that decouples the front-end
presentation layer of a compliance experience from the back-end
compliance functionality. With new and future APIs for compliance,
software developers can more quickly and easily build complete
compliance workflows into business applications.
Financial Outlook
For the second quarter of 2022, the Company currently
expects:
- Total revenue between $208.0 and $210.0 million.
- Non-GAAP operating loss between $6.0 and $8.0 million.
For the full year 2022, the Company currently expects:
- Total revenue between $867.0 and $871.0 million.
- Non-GAAP operating loss between $6.0 and $8.0 million.
Conference Call Information
Avalara will host a conference call at 2:00 p.m. Pacific Time
(or 5:00 p.m. Eastern Time) today, May 5, 2022, to discuss its
financial results and business highlights. The conference call can
be accessed by dialing (888) 660-6196 from the United States or
(929) 203-1824 internationally with Conference ID 5816067. A live
webcast of the call will also be available on the Avalara investor
relations website at investor.avalara.com.
A telephone replay of the conference call will be available
until 8:59 p.m. Pacific Time on Thursday, May 12, 2022, and a
webcast replay will also be archived at investor.avalara.com. The
telephone replay will be available by dialing (800) 770-2030 from
the United States or (647) 362-9199 internationally with Conference
ID 5816067.
About Avalara, Inc.
Avalara helps businesses of all sizes get tax compliance right.
In partnership with leading ERP, accounting, ecommerce, and other
financial management system providers, Avalara delivers cloud-based
compliance solutions for various transaction taxes, including sales
and use, VAT, GST, excise, communications, lodging, and other
indirect tax types. Headquartered in Seattle, Avalara has offices
across the U.S. and around the world in Brazil, Europe, and India.
More information at www.avalara.com.
Forward-Looking Statements
This press release and the accompanying conference call contain
forward-looking statements including, among others, statements
about our financial outlook for the second quarter and full year
2022, and expected growth opportunities. In some cases you can
identify forward-looking statements because they contain words such
as “anticipate,” “believe,” “continue,” “could,” “estimate,”
“expect,” “intend,” “may,” “might,” “likely,” “plan,” “potential,”
“predict,” “project,” “seek,” “should,” “target,” “will,” “would,”
or similar expressions and the negatives of those terms.
These forward-looking statements involve risks, uncertainties,
and assumptions that could cause actual performance or results to
differ materially from those expressed or suggested by the
forward-looking statements. If any of these risks or uncertainties
materialize, or if any of our assumptions prove incorrect, our
actual results could differ materially from the results expressed
or implied by these forward-looking statements. These risks and
uncertainties include risks associated with: our ability to sustain
our revenue growth rate, to achieve or maintain profitability, and
to effectively manage our anticipated growth; our ability to
attract new customers on a cost-effective basis and the extent to
which existing customers renew and upgrade their subscriptions; the
timing of our introduction of new solutions or updates to existing
solutions; our ability to successfully diversify our solutions by
developing or introducing new solutions or acquiring and
integrating additional businesses, products, services, or content;
our ability to maintain and expand our strategic relationships with
third parties; our ability to deliver our solutions to customers
without disruption or delay; our exposure to liability from errors,
delays, fraud, or system failures, which may not be covered by
insurance; our ability to expand our international reach; and the
risks described in the other filings we make with the Securities
and Exchange Commission from time to time, including the risks
described under the heading “Risk Factors” in our amended Annual
Report on Form 10-K/A for the year ended December 31, 2021, and
which should be read in conjunction with our financial results and
forward-looking statements. All forward-looking statements in this
press release are based on information available to us as of the
date hereof, and we do not assume any obligation to update the
forward-looking statements provided to reflect events that occur or
circumstances that exist after the date on which they were made,
except as required by law.
Use of Non-GAAP Financial Measures
In addition to our results determined in accordance with GAAP,
we have disclosed non-GAAP cost of revenue, non-GAAP gross profit,
non-GAAP gross margin, non-GAAP research and development expense,
non-GAAP sales and marketing expense, non-GAAP general and
administrative expense, non-GAAP operating income (loss), non-GAAP
net income (loss), non-GAAP basic net income (loss) per share,
non-GAAP diluted net income (loss) per share, free cash flow, and
calculated billings, which are all non-GAAP financial measures. We
have provided tabular reconciliations of each non-GAAP financial
measure to its most directly comparable GAAP financial measure at
the end of this release.
- We calculate non-GAAP cost of revenue, non-GAAP research and
development expense, non-GAAP sales and marketing expense, and
non-GAAP general and administrative expense as GAAP cost of
revenue, GAAP research and development expense, GAAP sales and
marketing expense, and GAAP general and administrative expense,
respectively, before stock-based compensation expense and the
amortization of acquired intangible assets included in each of the
expense categories.
- We calculate non-GAAP gross profit as GAAP gross profit before
stock-based compensation expense and the amortization of acquired
intangibles included in cost of revenue. We calculate non-GAAP
gross margin as GAAP gross margin before the impact of stock-based
compensation expense and the amortization of acquired intangibles
included in cost of revenue as a percentage of revenue.
- We calculate non-GAAP operating income (loss) as GAAP operating
loss before stock-based compensation expense, amortization of
acquired intangibles, and goodwill impairments. We calculate
non-GAAP net income (loss) as GAAP net loss before stock-based
compensation expense, amortization of acquired intangibles, and
goodwill impairments.
- We calculate non-GAAP basic net income (loss) per share as
non-GAAP net income (loss) divided by weighted average shares
outstanding.
- We calculate non-GAAP diluted net income (loss) per share as
non-GAAP net income (loss) divided by diluted weighted average
shares outstanding. Diluted weighted average shares outstanding
includes weighted average shares outstanding plus the dilutive
effect, if any, of outstanding common stock equivalents.
- We define free cash flow as net cash provided by operating
activities less cash used for the purchases of property and
equipment and capitalized software development costs.
- We define calculated billings as total revenue plus the changes
in deferred revenue and contract liabilities in the period,
excluding the acquisition date impact of deferred revenue and
contract liabilities assumed in a business combination. Because we
generally recognize subscription revenue ratably over the
subscription term, calculated billings can be used to measure our
subscription sales activity for a particular period, to compare
subscription sales activity across particular periods, and as a
potential indicator of future subscription revenue, the actual
timing of which will be affected by several factors, including
subscription start date and duration.
Management uses these non-GAAP financial measures to understand
and compare operating results across accounting periods, for
internal budgeting and forecasting purposes, and to evaluate
financial performance and liquidity. We believe that non-GAAP
financial measures provide useful information to investors and
others in understanding and evaluating our results, prospects, and
liquidity period-over-period without the impact of certain items
that do not directly correlate to our performance and that may vary
significantly from period to period for reasons unrelated to our
operating performance, as well as when comparing our financial
results to those of other companies.
The company has not reconciled its expectations of non-GAAP
financial measures to the corresponding GAAP measures primarily
because stock-based compensation expense cannot be reasonably
calculated or predicted at this time. Accordingly, a reconciliation
is not available without unreasonable effort.
Our definitions of these non-GAAP financial measures may differ
from the definitions used by other companies and therefore
comparability may be limited. In addition, other companies may not
publish these or similar metrics. Thus, our non-GAAP financial
measures should be considered in addition to, not as a substitute
for, or in isolation from, measures prepared in accordance with
GAAP. We encourage investors and others to review our financial
information in its entirety, not to rely on any single financial
measure and to view non-GAAP financial measures in conjunction with
the related GAAP financial measure.
Definitions of Key Business Metrics
We also use the key business metrics of core customers and net
revenue retention rate.
Core Customers
We believe our core customer count is a key indicator of our
market penetration, growth, and potential future revenue. We use
core customers as a metric to focus our customer count reporting on
our primary target market segment. We define a core customer
as:
- a unique account identifier in our primary U.S. billing systems
(multiple companies or divisions within a single consolidated
enterprise that each have a separate unique account identifier are
each treated as separate customers);
- that is active as of the measurement date; and
- for which we have recognized, as of the measurement date,
greater than $3,000 in total revenue during the previous 12
months.
Currently, our core customer count includes only customers with
unique account identifiers in our primary U.S. billing systems and
does not include customers that subscribe to our solutions through
our international subsidiaries and certain legacy and acquired
billing systems that have not yet been integrated into our primary
U.S. billing systems (e.g., recent acquisitions and our lodging tax
compliance solution). As we increase our international operations
and sales in future periods, we may add customers billed from our
international subsidiaries to the core customer metric.
We also have a substantial number of customers of various sizes
that do not meet the revenue threshold to be considered a core
customer. Many of these customers are in the emerging and small
business segment of the marketplace, which represents strategic
value and a growth opportunity for us. Customers who do not meet
the revenue threshold to be considered a core customer provide us
with market share and awareness, and we anticipate that some may
grow into core customers. In addition, we have numerous
enterprise-level customers that only utilize our services for small
segments of their business, providing opportunities over time for
us to extend our relationship and make them core customers.
In addition to customers with whom we have a direct
relationship, some of our customers are business application
publishers (including ecommerce platforms) that include automated
tax determination powered by Avalara. While those platform
providers may be core customers to Avalara, their end-user
customers generally are not.
Net Revenue Retention Rate
We believe that our net revenue retention rate provides insight
into our ability to retain and grow revenue from our customers, as
well as their potential long-term value to us. We also believe it
reflects the stability of our revenue base, which is one of our
core competitive strengths. We calculate our net revenue retention
rate by dividing (a) total subscription and returns revenue in the
current quarter from any billing accounts that generated revenue
during the corresponding quarter of the prior year by (b) total
subscription and returns revenue in such corresponding quarter from
those same billing accounts. This calculation includes changes
during the period for such billing accounts, such as additional
solutions purchased, changes in pricing and transaction volume, and
terminations, but does not reflect revenue for new billing accounts
added during the one-year period.
Our net revenue retention rate includes only customers with
unique account identifiers in our primary U.S. billing systems and
does not include customers who subscribe to our solutions through
our international subsidiaries or certain legacy and acquired
billing systems that have not been integrated into our primary U.S.
billing systems.
Reported Consolidated Results
AVALARA, INC. UNAUDITED CONSOLIDATED STATEMENTS OF
OPERATIONS (in thousands, except per share amounts)
For the Three Months Ended
March 31,
2022
2021 (1)
Revenue:
Subscription and returns
$
186,866
$
139,318
Professional services
17,664
14,283
Total revenue
204,530
153,601
Cost of revenue:
Subscription and returns
50,077
38,033
Professional services
10,049
6,463
Total cost of revenue (2)
60,126
44,496
Gross profit
144,404
109,105
Operating expenses:
Research and development (2)
50,852
39,274
Sales and marketing (2)
86,447
64,093
General and administrative (2)
42,194
31,199
Total operating expenses
179,493
134,566
Operating loss
(35,089
)
(25,461
)
Other income (expense):
Fair value changes in earnout
liabilities
4,001
(1,350
)
Interest income
186
24
Interest expense
(1,496
)
—
Other income (expense), net
126
(924
)
Total other income (expense), net
2,817
(2,250
)
Loss before income taxes
(32,272
)
(27,711
)
Provision for income taxes
(285
)
(2,357
)
Net loss
$
(32,557
)
$
(30,068
)
Net loss per share attributable to common
shareholders, basic and diluted
$
(0.37
)
$
(0.35
)
Weighted average shares of common stock
outstanding, basic and diluted
87,463
85,436
For the Three Months Ended
March 31,
(2) The stock-based compensation expense
included above was as follows:
2022
2021 (1)
Cost of revenue
$
3,759
$
2,032
Research and development
9,463
5,404
Sales and marketing
6,711
4,055
General and administrative
12,717
7,366
Total stock-based compensation
$
32,650
$
18,857
The amortization of acquired intangibles
included above was as follows:
Cost of revenue
$
2,645
$
2,020
Research and development
—
—
Sales and marketing
3,606
1,540
General and administrative
854
861
Total amortization of acquired
intangibles
$
7,105
$
4,421
(1) Prior year amounts have been
adjusted to reflect the correction of an immaterial error related
to stock-based compensation expense, which are further described in
the Company’s 2021 Form 10-K/A.
AVALARA, INC. UNAUDITED CONSOLIDATED BALANCE
SHEETS (in thousands)
March 31,
December 31,
2022
2021 (1)
Assets
Current assets:
Cash and cash equivalents
$
1,481,853
$
1,514,064
Restricted cash
37,700
37,700
Trade accounts receivable—net of allowance
for doubtful accounts
113,469
114,248
Deferred commissions
17,296
16,364
Prepaid expenses and other current
assets
39,314
29,267
Total current assets before customer fund
assets
1,689,632
1,711,643
Funds held from customers
64,359
62,509
Receivable from customers—net of allowance
for doubtful accounts
1,579
1,472
Total current assets
1,755,570
1,775,624
Noncurrent assets:
Deferred commissions
53,471
52,155
Operating lease right-of-use
assets—net
43,225
44,385
Property and equipment—net
49,368
46,464
Intangible assets—net
89,775
96,818
Goodwill
671,431
672,381
Other noncurrent assets
10,827
10,704
Total assets
$
2,673,667
$
2,698,531
Liabilities and shareholders'
equity
Current liabilities:
Trade payables
$
18,211
$
16,683
Accrued expenses
69,102
109,792
Deferred revenue
302,496
280,816
Accrued purchase price related to
acquisitions
52,683
51,476
Accrued earnout liabilities
37,390
33,151
Operating lease liabilities
11,847
11,453
Total current liabilities before customer
fund obligations
491,729
503,371
Customer fund obligations
66,368
64,302
Total current liabilities
558,097
567,673
Noncurrent liabilities:
Convertible senior notes—net
962,144
961,259
Deferred revenue
1,114
2,139
Accrued purchase price related to
acquisitions
6,715
7,988
Accrued earnout liabilities
59,706
81,485
Operating lease liabilities
43,549
45,614
Deferred tax liability
5,383
5,158
Other noncurrent liabilities
751
761
Total liabilities
1,637,459
1,672,077
Commitments and contingencies
Shareholders' equity:
Preferred stock
—
—
Common stock
9
9
Additional paid-in capital
1,776,400
1,732,742
Accumulated other comprehensive loss
(4,775
)
(3,428
)
Accumulated deficit
(735,426
)
(702,869
)
Total shareholders’ equity
1,036,208
1,026,454
Total liabilities and shareholders'
equity
$
2,673,667
$
2,698,531
(1) Prior year amounts have been adjusted
to reflect the correction of an immaterial error related to
stock-based compensation expense, which are further described in
the Company’s 2021 Form 10-K/A.
AVALARA, INC. UNAUDITED CONSOLIDATED STATEMENTS OF
CASH FLOWS (in thousands)
For the Three Months Ended
March 31,
2022
2021 (1)
Cash flows from operating
activities:
Net loss
$
(32,557
)
$
(30,068
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Stock-based compensation
32,650
18,857
Depreciation and amortization
11,132
7,071
Amortization of debt issuance costs
885
—
Impairment of capitalized cloud computing
costs
—
345
Deferred income tax expense
225
2,028
Non-cash operating lease costs
2,523
2,175
Fair value changes in earnout
liabilities
(4,001
)
1,350
Non-cash bad debt expense
521
582
Other
(16
)
(389
)
Changes in operating assets and
liabilities:
Trade accounts receivable
326
(14,695
)
Prepaid expenses and other current
assets
(9,946
)
(9,186
)
Deferred commissions
(2,248
)
(2,360
)
Other noncurrent assets
(123
)
541
Trade payables
2,338
(1,895
)
Accrued expenses
(42,371
)
(15,634
)
Deferred revenue
20,655
15,841
Operating lease liabilities
(3,059
)
(2,810
)
Net cash used in operating activities
(23,066
)
(28,247
)
Cash flows from investing
activities:
Purchase of property and equipment
(2,148
)
(1,366
)
Capitalized software development costs
(5,905
)
(2,311
)
Cash paid for acquisitions of businesses,
net of cash and restricted cash equivalents acquired
—
(2,167
)
Net cash used in investing activities
(8,053
)
(5,844
)
Cash flows from financing
activities:
Proceeds from exercise of stock
options
2,281
5,529
Proceeds from purchases of stock under
employee stock purchase plan
8,006
7,088
Acquisition-related post-closing
payments
—
(1,971
)
Payments related to business combination
earnouts
(10,770
)
—
Payments related to asset acquisition
earnouts
(593
)
(690
)
Payments on financed asset purchases
(61
)
—
Net increase in customer fund
obligations
2,066
3,598
Net cash provided by financing
activities
929
13,554
Foreign currency effect
(160
)
6
Net change in cash, cash equivalents,
restricted cash, and restricted cash equivalents
(30,350
)
(20,531
)
Cash, cash equivalents, restricted cash,
and restricted cash equivalents—Beginning of period
1,613,903
761,844
Cash, cash equivalents, restricted cash,
and restricted cash equivalents—End of period
$
1,583,553
$
741,313
Reconciliation of cash, cash equivalents,
restricted cash, and restricted cash equivalents to the
Consolidated Balance Sheets, end of period:
Cash and cash equivalents
$
1,481,853
$
638,794
Restricted cash
37,700
68,886
Restricted cash equivalents—funds held
from customers
64,000
33,633
Total cash, cash equivalents, restricted
cash, and restricted cash equivalents, end of period
$
1,583,553
$
741,313
(1) Prior year amounts have been adjusted
to reflect the correction of an immaterial error related to
stock-based compensation expense, which are further described in
the Company’s Form 2021 10-K/A.
AVALARA, INC. UNAUDITED PRESENTATION AND
RECONCILIATION TO NON-GAAP FINANCIAL MEASURES (in thousands,
except per share amounts)
The following schedules reflect our non-GAAP financial measures
and reconcile our non-GAAP financial measures to the related GAAP
financial measures:
Summary of Non-GAAP Financial Measures:
For the Three Months Ended
March 31,
2022
2021
Non-GAAP cost of revenue
$
53,722
$
40,444
Non-GAAP gross profit
$
150,808
$
113,157
Non-GAAP gross margin
74
%
74
%
Non-GAAP research and development
expense
$
41,389
$
33,870
Non-GAAP sales and marketing expense
$
76,130
$
58,498
Non-GAAP general and administrative
expense
$
28,623
$
22,972
Non-GAAP operating income (loss)
$
4,666
$
(2,183
)
Non-GAAP net income (loss)
$
7,198
$
(6,790
)
Non-GAAP basic net income (loss) per
share
$
0.08
$
(0.08
)
Non-GAAP diluted net income (loss) per
share
$
0.08
$
(0.08
)
Free cash flow
$
(31,119
)
$
(31,924
)
Reconciliation of Non-GAAP Financial Measures:
For the Three Months Ended
March 31,
2022
2021 (1)
Reconciliation of Non-GAAP Cost of
Revenue:
Cost of revenue
$
60,126
$
44,496
Stock-based compensation expense
(3,759
)
(2,032
)
Amortization of acquired intangibles
(2,645
)
(2,020
)
Non-GAAP Cost of Revenue
$
53,722
$
40,444
Reconciliation of Non-GAAP Gross
Profit:
Gross Profit
$
144,404
$
109,105
Stock-based compensation expense
3,759
2,032
Amortization of acquired intangibles
2,645
2,020
Non-GAAP Gross Profit
$
150,808
$
113,157
Reconciliation of Non-GAAP Gross
Margin:
Gross margin
71
%
71
%
Stock-based compensation expense as a
percentage of revenue
2
%
1
%
Amortization of acquired intangibles as a
percentage of revenue
1
%
1
%
Non-GAAP Gross Margin
74
%
74
%
Reconciliation of Non-GAAP Research and
Development Expense:
Research and development
$
50,852
$
39,274
Stock-based compensation expense
(9,463
)
(5,404
)
Amortization of acquired intangibles
—
—
Non-GAAP Research and Development
Expense
$
41,389
$
33,870
Reconciliation of Non-GAAP Sales and
Marketing Expense:
Sales and marketing
$
86,447
$
64,093
Stock-based compensation expense
(6,711
)
(4,055
)
Amortization of acquired intangibles
(3,606
)
(1,540
)
Non-GAAP Sales and Marketing
Expense
$
76,130
$
58,498
Reconciliation of Non-GAAP General and
Administrative Expense:
General and administrative
$
42,194
$
31,199
Stock-based compensation expense
(12,717
)
(7,366
)
Amortization of acquired intangibles
(854
)
(861
)
Non-GAAP General and Administrative
Expense
$
28,623
$
22,972
(1) Prior year amounts have been adjusted
to reflect the correction of an immaterial error related to
stock-based compensation expense, which are further described in
the Company’s 2021 Form 10-K/A.
For the Three Months Ended
March 31,
2022
2021 (1)
Reconciliation of Non-GAAP Operating
Income (Loss):
Operating loss
$
(35,089
)
$
(25,461
)
Stock-based compensation expense
32,650
18,857
Amortization of acquired intangibles
7,105
4,421
Non-GAAP Operating Income
(Loss)
$
4,666
$
(2,183
)
Reconciliation of Non-GAAP Net Income
(Loss):
Net loss
$
(32,557
)
$
(30,068
)
Stock-based compensation expense
32,650
18,857
Amortization of acquired intangibles
7,105
4,421
Non-GAAP Net Income (Loss)
$
7,198
$
(6,790
)
Reconciliation of Non-GAAP Basic Net
Income (Loss) Per Share:
Net loss per share
$
(0.37
)
$
(0.35
)
Stock-based compensation expense per
share
0.37
0.22
Amortization of acquired intangibles per
share
0.08
0.05
Non-GAAP Basic Net Income (Loss) Per
Share
$
0.08
$
(0.08
)
Reconciliation of Non-GAAP Diluted Net
Income (Loss) Per Share:
Net loss per diluted share
$
(0.37
)
$
(0.35
)
Stock-based compensation expense per
share
0.37
0.22
Amortization of acquired intangibles per
share
0.08
0.05
Non-GAAP Diluted Net Income (Loss) Per
Share (2)
$
0.08
$
(0.08
)
Shares used in computing non-GAAP diluted
net income (loss) per share
88,944
85,436
(2) Non-GAAP diluted net income per share
for the three months ended March 31, 2022, was calculated using the
diluted share count which includes approximately 1.5 million
dilutive shares related to employee stock options. For the three
months ended March 31, 2021, all common stock equivalents have been
excluded from the diluted share count as their effect is
antidilutive.
Free Cash Flow:
Net cash used in operating activities
$
(23,066
)
$
(28,247
)
Less: Purchases of property and
equipment
(2,148
)
(1,366
)
Less: Capitalized software development
costs
(5,905
)
(2,311
)
Free Cash Flow
$
(31,119
)
$
(31,924
)
(1) Prior year amounts have been adjusted
to reflect the correction of an immaterial error related to
stock-based compensation expense, which are further described in
the Company’s 2021 Form 10-K/A.
AVALARA, INC. UNAUDITED PRESENTATION OF CALCULATED
BILLINGS AND RECONCILIATION TO REVENUE
Three Months Ended
Mar 31,
2022
Dec 31,
2021 (1)
Sep 30,
2021 (1)
Jun 30,
2021 (1)
Mar 31,
2021
Dec 31,
2020 (1)
Sep 30,
2020
Jun 30,
2020
Total revenue
$
204,530
$
195,142
$
181,167
$
169,067
$
153,601
$
144,760
$
127,879
$
116,487
Add:
Deferred revenue (end of period)
303,610
282,955
257,883
239,395
225,531
209,690
180,640
167,719
Contract liabilities (end of period)
897
6,918
8,597
11,406
12,466
10,134
7,673
6,195
Less:
Deferred revenue (beginning of period)
(282,955
)
(257,883
)
(239,395
)
(225,531
)
(209,690
)
(180,640
)
(167,719
)
(165,369
)
Contract liabilities (beginning of
period)
(6,918
)
(8,597
)
(11,406
)
(12,466
)
(10,134
)
(7,673
)
(6,195
)
(6,330
)
Deferred revenue and contract liabilities
assumed in business combinations
—
(747
)
(430
)
(886
)
—
(9,194
)
—
—
Calculated billings
$
219,164
$
217,788
$
196,416
$
180,985
$
171,774
$
167,077
$
142,278
$
118,702
(1) These quarters include reconciling
adjustments to exclude the acquisition-date fair value of deferred
revenue assumed in business combinations.
AVALARA, INC. UNAUDITED PRESENTATION OF KEY BUSINESS
METRICS
Mar 31,
2022
Dec 31,
2021
Sep 30,
2021
Jun 30,
2021
Mar 31,
2021
Dec 31,
2020
Sep 30,
2020
Jun 30,
2020
Number of core customers (as of end of
period)
19,160
18,270
17,400
16,570
15,730
15,020
14,300
13,640
Net revenue retention rate
115
%
116
%
116
%
116
%
113
%
115
%
116
%
114
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220504006339/en/
Investor Jennifer Gianola Avalara
jennifer.gianola@avalara.com 650-499-9837
Media Tommy Morgan Avalara media@avalara.com
540-448-7551
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