Recorded the 44th consecutive quarter of
sequential growth in revenue and cumulative ending members
Cumulative ending members of approximately 4.3
million, up 11% year-over-year
Acquired 4.4 million shares through previously
announced share repurchase program
LifeLock, Inc. (NYSE: LOCK), an industry leader in identity
theft protection, today announced financial results for the first
quarter ended March 31, 2016.
First Quarter 2016 Financial Highlights:
- Revenue: Total revenue was
$159.3 million for the first quarter of 2016, up 18% from $134.4
million for the first quarter of 2015. Consumer revenue was $151.9
million for the first quarter of 2016, up 19% from $128.2 million
for the first quarter of 2015. Enterprise revenue was $7.3 million
for the first quarter of 2016, up 18% from $6.2 million for the
first quarter of 2015.
- Net Loss: Net loss was $11.7
million for the first quarter of 2016, compared with net loss of
$9.2 million for the first quarter of 2015. Net loss per diluted
share was $0.12 for the first quarter of 2016 based on 94.7 million
weighted-average shares outstanding, compared with net loss per
diluted share of $0.10 for the first quarter of 2015 based on 94.0
million weighted-average shares outstanding.
- Adjusted Net Loss*: Adjusted net
loss was $5.5 million for the first quarter of 2016, compared with
adjusted net loss of $5.2 million for the first quarter of 2015.
Adjusted net loss per diluted share was $0.06 for the first quarter
of 2016 based on 94.7 million weighted-average shares outstanding,
compared with adjusted net loss per diluted share of $0.06 for the
first quarter of 2015 based on 94.0 million weighted-average shares
outstanding.
- Adjusted EBITDA*: Adjusted
EBITDA was $(3.0) million for the first quarter of 2016, compared
with $(3.0) million for the first quarter of 2015.
- Cash Flow: Cash flow from
operations was $10.9 million for the first quarter of 2016, leading
to free cash flow* of $10.6 million after taking into consideration
$4.8 million of capital expenditures and $2.0 million of payments
for expenses incurred in connection with the FTC litigation. This
compares with cash flow from operations of $20.5 million and free
cash flow of $17.7 million, after taking into consideration $2.8
million of capital expenditures for the first quarter of 2015.
- Balance Sheet: Total cash and
marketable securities at the end of the first quarter of 2016 was
$201.8 million, down from $246.7 million at the end of the fourth
quarter of 2015, primarily as a result of the $51.9 million paid in
the purchase of Company stock in connection with the previously
announced $100 million share repurchase plan.
* 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".
Chief Executive Officer and President Hilary Schneider said,
“We're pleased with our results for the first quarter, driven by
strength in direct to consumer efforts and within our enterprise
business, which posted the highest growth rates since we acquired
ID Analytics in 2012." Continued Schneider, “We continue to make
progress on key objectives including enhancing our position as the
leader in identity theft protection, delivering innovative new
products, reinforcing best in class policies and practices, and
executing at the highest standards.”
First Quarter 2016 & Recent Business Highlights:
- Appointed Doug Jeffries as Chief
Administrative Officer. Mr. Jeffries will succeed Chris Power as
the Chief Financial Officer following the release of the second
quarter of fiscal 2016 financial results.
- Recorded the 44th consecutive quarter
of sequential growth in revenue and cumulative ending members.
- Added approximately 345,000 gross new
members in the first quarter of 2016 and ended the quarter with
approximately 4.3 million members.
- Increased monthly average revenue per
member to $11.90 for the first quarter of 2016 from $11.38 for the
first quarter of 2015.
- Acquired 4.4 million shares for $51.9
million in connection with the previously announced $100 million
share repurchase program.
Guidance:
As of April 27, 2016, we are initiating guidance for our
second quarter of 2016 as well as updating guidance for the full
year 2016.
- Second Quarter 2016 Guidance:
Total revenue is expected to be in the range of $162 million to
$164 million. Adjusted net income per diluted share is expected to
be in the range of $0.03 to $0.04 based on approximately 98 million
fully diluted weighted-average shares outstanding. Adjusted EBITDA
is expected to be in the range of $5 million to $6 million. We will
continue to migrate credit services for all premium members to a
new data platform during the second quarter of 2016. With the
continued migration, certain costs will be incurred in the second
quarter of 2016 that in the past were recognized throughout the
year. As a result, we will be incurring approximately $6 million of
expense in the second quarter of 2016 which previously would have
been incurred throughout the remainder of 2016. In future years,
this will be an annual recurring event and will result in elevated
cost of services during the second quarter and comparatively lower
levels in the other quarters.
- Full Year 2016 Guidance: Total
revenue is expected to be in the range of $662 million to $670
million. Adjusted net income per diluted share is expected to be in
the range of $0.73 to $0.77 based on approximately 99 million fully
diluted weighted-average shares outstanding and a cash tax rate of
3%. Adjusted EBITDA is expected to be in the range of $84 million
to $88 million. Free cash flow is expected to be in the range of
$93 million to $98 million.
Conference Call Details:
- What: LifeLock first quarter
2016 financial results.
- When: Wednesday, April 27,
2016 at 2PM PT (5PM ET).
- Dial in: To access the call in
the United States, please dial (877) 407-3982, and for
international callers dial (201) 493-6780. Callers may provide
confirmation number 13634083 to access the call more quickly, and
are encouraged to dial into the call 10 to 15 minutes prior to the
start to prevent any delay in joining.
- Webcast:
http://investor.lifelock.com/ (live and replay)
- Replay: A replay of the call
will be available via telephone for seven days, beginning two hours
after the call. To listen to the telephone replay in the United
States, please dial (877) 870-5176, and for international callers
dial (858) 384-5517 and enter access code 13634083.
About LifeLock
LifeLock, Inc. (NYSE:LOCK) is a leading provider of proactive
identity theft protection services for consumers and consumer risk
management services for enterprises. LifeLock’s threat detection,
proactive identity alerts, and comprehensive remediation services
help provide peace of mind for consumers amid the growing threat of
identity theft. Leveraging unique data, science and patented
technology from ID Analytics, LLC, a wholly owned subsidiary,
LifeLock offers identity theft protection that goes significantly
beyond credit monitoring. As part of its commitment to help fight
identity theft, LifeLock works to train law enforcement and
partners with a variety of non-profit organizations to help
consumers establish positive habits to combat this threat.
Forward-Looking Statements
This press release contains “forward-looking” statements, as
that term is defined under the federal securities laws, including
statements regarding our expected total revenue, profitability,
long-term growth prospects, business performance expectations,
succession plan, adjusted net income per diluted share, adjusted
EBITDA, free cash flow for the second quarter of 2016 and for
fiscal year 2016, and the final resolution of the FTC and consumer
class action matters, along with a potential settlement with
certain states' attorneys general for related claims. These
forward-looking statements are based on our current assumptions,
expectations, and beliefs and are subject to substantial risks,
uncertainties, assumptions, and changes in circumstances that may
cause our actual results, performance, or achievements to differ
materially from those expressed or implied in any forward-looking
statement.
The risks and uncertainties referred to above include, but are
not limited to, risks associated with our ability to maintain
profitability on an annual basis; our ability to protect our
customers’ confidential information; our ability to maintain and
enhance our brand recognition and reputation; the competitive
nature of the industries in which we conduct our business; our
ability to retain our existing customers and attract new customers;
our ability to improve our services and develop and introduce new
services with broad appeal; our ability to maintain existing and
secure new relationships with strategic partners; regulatory
compliance; and other “Risk Factors” set forth in our most recent
SEC filings.
Further information on these and other factors that could affect
our financial results and the forward-looking statements in this
press release is included in our SEC filings, including our Annual
Report on Form 10-K for the year ended December 31, 2015,
particularly under the captions “Risk Factors” and “Management’s
Discussion and Analysis of Financial Condition and Results of
Operations” and our Forms 10-Q. Copies of these documents are
available on our Investor Relations website at
http://investor.lifelock.com/ or the SEC's website at
www.sec.gov.
We assume no obligation and do not intend to update these
forward-looking statements, except as required by law.
Non-GAAP Financial Measures
Our reported results include certain non-GAAP financial
measures, including adjusted net income, adjusted net income per
diluted share, adjusted EBITDA, and free cash flow. We calculate
adjusted net income as net income (loss) excluding amortization of
acquired intangible assets, share-based compensation, income tax
benefits and expenses resulting from changes in our deferred tax
assets, and acquisition related expenses. We calculate adjusted net
income per diluted share by dividing our adjusted net income by the
weighted-average diluted shares outstanding. We calculate adjusted
EBITDA as net income (loss) excluding depreciation and
amortization, share-based compensation, interest expense, interest
income, other income (expense), income tax (benefit) expense, and
acquisition related expenses. For the first quarter ended
March 31, 2016, we have also excluded from adjusted net income
and adjusted EBITDA expenses related to the FTC litigation. We
define free cash flow as net cash provided by operating activities
less net cash used in investing activities for acquisitions of
property and equipment. For the first quarter ended March 31,
2016, we have added back to net cash provided by operating
activities cash paid for expenses related to the FTC
litigation.
We have included adjusted net income, adjusted net income per
diluted share, and adjusted EBITDA in this press release because
they are key measures used by us to understand and evaluate our
core operating performance and trends, to prepare and approve our
annual budget, and to develop short- and long-term operational
plans. In particular, the exclusion of certain expenses in
calculating adjusted net income and adjusted EBITDA can provide a
useful measure for period-to-period comparisons of our core
business. Additionally, adjusted EBITDA is a key financial measure
used in determining management’s incentive compensation.
We have included free cash flow in this press release because we
believe it typically presents a more conservative measure of cash
flow as purchases of property and equipment are necessary
components of ongoing operations. We believe that this non-GAAP
financial measure is useful in evaluating our business because free
cash flow reflects the cash surplus available to fund the expansion
of our business after payment of capital expenditures relating to
the necessary components of ongoing operations. We also believe
that the use of free cash flow provides consistency and
comparability with our past financial performance, facilitates
period-to-period comparisons of operations, and also facilitates
comparisons with other companies, many of which use similar
non-GAAP financial measures to supplement their GAAP results.
Although adjusted net income, adjusted EBITDA, and free cash
flow are frequently used by investors in their evaluations of
companies, these non-GAAP financial measures have limitations as
analytical tools and should not be considered in isolation or as a
substitute for financial information presented in accordance with
GAAP. Because of these limitations, these non-GAAP financial
measures should be considered alongside other financial performance
measures.
We have not reconciled adjusted net income per diluted share
guidance to net income (loss) per diluted share guidance or
adjusted EBITDA guidance to net income (loss) guidance because we
do not provide guidance for share-based compensation expense,
provision for income taxes, interest income, interest expense,
other income and expenses, depreciation expense, amortization of
intangible assets, acquisition expenses, legal reserves and
settlements, or income tax (benefit) expense, which are reconciling
items between net income (loss) and adjusted net income and net
income (loss) and adjusted EBITDA. As items that impact net income
(loss) are out of our control and/or cannot be reasonably
predicted, we are unable to provide such guidance. Accordingly,
reconciliation to net income (loss) is not available without
unreasonable effort. For a reconciliation of historical non-GAAP
financial measures to the nearest comparable GAAP measures, see the
reconciliation tables included in this press release.
LifeLock, Inc.Condensed
Consolidated Statements of Operations(in thousands, except
per share amounts)(Unaudited)
Three Months EndedMarch
31,
2016
2015
Revenue: Consumer revenue $ 151,930 $ 128,201 Enterprise revenue
7,339 6,207 Total revenue 159,269
134,408 Cost of services 39,986 34,556
Gross profit 119,283 99,852 Costs and expenses: Sales and marketing
90,444 77,079 Technology and development 21,222 16,866 General and
administrative 24,222 18,955 Amortization of acquired intangible
assets 3,042 2,084 Total costs and
expenses 138,930 114,984 Loss from
operations (19,647 ) (15,132 ) Other income (expense): Interest
expense (111 ) (89 ) Interest income 299 117 Other (5 )
(80 ) Total other income (expense) 183
(52 ) Loss before provision for income taxes (19,464 ) (15,184 )
Income tax benefit (7,795 ) (6,026 ) Net loss $
(11,669 ) $ (9,158 ) Net loss attributable per share to common
stockholders: Basic and diluted $ (0.12 ) $ (0.10 )
Weighted-average common shares outstanding: Basic and diluted
94,749 94,033
LifeLock, Inc.Condensed
Consolidated Balance Sheets(in
thousands)(Unaudited)
March 31,2016 December
31,2015 Assets Current assets: Cash and cash
equivalents $ 44,907 $ 50,239 Marketable securities 156,878 196,474
Trade and other receivables, net 13,005 13,974 Prepaid expenses and
other current assets 13,663 12,303
Total current assets 228,453 272,990 Property and equipment, net
31,531 30,485 Goodwill 172,087 172,087 Intangible assets, net
27,132 30,174 Deferred tax assets, net - non-current 85,157 77,363
Other non-current assets 9,639 9,710
Total assets $ 553,999 $ 592,809
Liabilities and
stockholders' equity Current liabilities: Accounts payable $
11,212 $ 24,747 Accrued expenses and other liabilities 84,593
76,226 Deferred revenue 185,605 166,403
Total current liabilities 281,410 267,376 Other non-current
liabilities 7,613 7,367 Total
liabilities 289,023 274,743 Commitments and contingencies
Stockholders' equity: Common stock 98 96 Treasury stock (38,048 ) —
Additional paid-in capital 528,742 532,388 Accumulated other
comprehensive loss (91 ) (361 ) Accumulated deficit (225,725
) (214,057 ) Total stockholders' equity 264,976
318,066 Total liabilities and stockholders'
equity $ 553,999 $ 592,809
LifeLock, Inc.Condensed
Consolidated Statements of Cash Flows(in
thousands)(Unaudited)
Three Months EndedMarch
31,
2016
2015
Operating activities Net loss $ (11,669 ) $ (9,158 )
Adjustments to reconcile net loss to net cash provided by operating
activities: Depreciation and amortization 5,778 4,295 Share-based
compensation 8,652 5,370 Provision for doubtful accounts 197 52
Amortization of premiums on marketable securities 635 670 Deferred
income tax benefit (7,795 ) (6,026 ) Other 46 82 Change in
operating assets and liabilities: Trade and other receivables 467
(295 ) Prepaid expenses and other current assets (1,360 ) (4,319 )
Other non-current assets 27 (44 ) Accounts payable (12,293 ) 2,563
Accrued expenses and other liabilities 8,731 4,556 Deferred revenue
19,203 22,777 Other non-current liabilities 246
7 Net cash provided by operating activities 10,865
20,530
Investing activities Acquisition of property and
equipment, including capitalization of internal use software (4,830
) (2,816 ) Purchases of marketable securities (25,521 ) (39,379 )
Sale and maturities of marketable securities 65,071
33,438 Net cash provided by (used in) investing
activities 34,720 (8,757 )
Financing activities Proceeds
from share-based compensation plans 1,956 1,773 Purchases of
Company stock (51,923 ) — Payments for employee tax withholdings
related to restricted stock units and awards (950 )
(230 ) Net cash provided by (used in) financing activities
(50,917 ) 1,543 Net increase (decrease) in cash and
cash equivalents (5,332 ) 13,316 Cash and cash equivalents at
beginning of period 50,239 146,569 Cash
and cash equivalents at end of period $ 44,907 $ 159,885
Share-Based Compensation(in
thousands)(Unaudited)
Three Months EndedMarch
31,
2016 2015 Costs of services $ 497 $ 372 Sales
and marketing 1,618 932 Technology and development 2,793 1,709
General and administrative 3,744 2,357 Total
share-based compensation expense $ 8,652 $ 5,370
Key Financial and Operating
Metrics(in thousands except percentages and per member
data)(Unaudited)
Three Months EndedMarch
31,
2016
2015
Revenue: Consumer revenue $ 151,930 $ 128,201 Enterprise revenue
7,339 6,207 Total revenue $ 159,269 $
134,408 Adjusted net loss $ (5,508 ) $ (5,230 ) Adjusted EBITDA $
(2,955 ) $ (2,967 ) Free cash flow $ 10,576 $ 17,714 Cumulative
ending members 4,323 3,888 Gross new members 345 421 Member
retention rate 85.8 % 87.8 % Average cost of acquisition per member
$ 252 $ 176 Monthly average revenue per member $ 11.90 $ 11.38
Enterprise transactions 76,080 61,535
Reconciliation of GAAP to Adjusted
Results(in thousands, except per share
amounts)(Unaudited)
Three Months EndedMarch
31,
2016
2015
Reconciliation of Gross Profit to Adjusted Gross Profit
Gross profit $ 119,283 $ 99,852 Share-based compensation 497
372 Adjusted gross profit $ 119,780 $
100,224
Reconciliation of Sales and Marketing Expenses to
Adjusted Sales and Marketing Expenses Sales and marketing
expenses $ 90,444 $ 77,079 Share-based compensation (1,618 )
(932 ) Adjusted sales and marketing expenses $ 88,826
$ 76,147
Reconciliation of Technology and Development
Expenses to Adjusted Technology and Development Expenses
Technology and development expenses $ 21,222 $ 16,866 Share-based
compensation (2,793 ) (1,709 ) Adjusted technology
and development expenses $ 18,429 $ 15,157
Reconciliation of General and Administrative Expenses to
Adjusted General and Administrative Expenses General and
administrative expenses $ 24,222 $ 18,955 Share-based compensation
(3,744 ) (2,357 ) Legal reserves and settlements — (2,500 )
Expenses related to the FTC litigation (2,262 ) —
Adjusted general and administrative expenses $ 18,216
$ 14,098
Reconciliation of Loss from Operations to
Adjusted Loss from Operations Loss from operations $ (19,647 )
$ (15,132 ) Share-based compensation 8,652 5,370 Amortization of
acquired intangible assets 3,042 2,084 Legal reserves and
settlements — 2,500 Expenses related to the FTC litigation
2,262 — Adjusted loss from operations $ (5,691
) $ (5,178 )
Reconciliation of Net Loss to Adjusted Net Loss
Net loss $ (11,669 ) $ (9,158 ) Amortization of acquired intangible
assets 3,042 2,084 Share-based compensation 8,652 5,370 Deferred
income tax benefit (7,795 ) (6,026 ) Legal reserves and settlements
— 2,500 Expenses related to the FTC litigation 2,262
— Adjusted net loss $ (5,508 ) $ (5,230 )
Three Months Ended March 31, 2016
2015 Reconciliation of Net Loss per Diluted Share
to Adjusted Net Loss per Diluted Share Net loss per diluted
share $ (0.12 ) $ (0.10 ) Adjustments to net loss 0.06
0.04 Adjusted net loss per diluted share $
(0.06 ) $ (0.06 )
Reconciliation of Net Loss to Adjusted
EBITDA Net loss $ (11,669 ) $ (9,158 ) Depreciation and
amortization 5,778 4,295 Share-based compensation 8,652 5,370
Interest expense 111 89 Interest income (299 ) (117 ) Other 5 80
Income tax benefit (7,795 ) (6,026 ) Legal reserves and settlements
— 2,500 Expenses related to the FTC litigation 2,262
— Adjusted EBITDA $ (2,955 ) $ (2,967 )
Reconciliation of Net Cash Provided by Operating Activities to
Free Cash Flow Net cash provided by operating activities $
10,865 $ 20,530 Acquisitions of property and equipment (4,830 )
(2,816 ) Legal settlements 2,500 — Expenses related to the FTC
litigation 2,041 — Free cash flow $
10,576 $ 17,714
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160427006657/en/
LifeLock, Inc.Media Contact:Kelley Bonsall,
480-457-2170Media@lifelock.comorInvestor Relations
Contact:Jamison Manwaring, 480-457-5000VP, Investor
RelationsInvestor.relations@lifelock.com
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