Recorded the 46th consecutive quarter of
sequential growth in revenue and cumulative ending members
Cumulative ending members of approximately 4.4
million, up 8% year-over-year
Average revenue per member for the quarter
increased 3% to $12.25
LifeLock, Inc. (NYSE: LOCK), an industry leader in identity
theft protection, today announced financial results for the third
quarter ended September 30, 2016.
Third Quarter 2016 Financial Highlights:
- Revenue: Total revenue was
$170.3 million for the third quarter of 2016, up 12% from $152.0
million for the third quarter of 2015. Consumer revenue was $161.7
million for the third quarter of 2016, up 12% from $144.6 million
for the third quarter of 2015. Enterprise revenue was $8.6 million
for the third quarter of 2016, up 18% from $7.3 million for the
third quarter of 2015.
- Net Income: Net income was $14.4
million for the third quarter of 2016, compared with net loss of
$65.1 million for the third quarter of 2015. The net loss for the
quarter ended September 30, 2015 included the accrual of $96
million for the settlement with the FTC and related litigation. Net
income per diluted share was $0.15 for the third quarter of 2016
based on 97.3 million weighted-average shares outstanding, compared
with net loss per diluted share of $0.68 for the third quarter of
2015 based on 95.3 million weighted-average shares
outstanding.
- Adjusted Net Income*: Adjusted
net income was $33.5 million for the third quarter of 2016,
compared with adjusted net income of $27.6 million for the third
quarter of 2015. Adjusted net income per diluted share* was $0.34
for the third quarter of 2016 based on 97.3 million
weighted-average shares outstanding, compared with adjusted net
income per diluted share of $0.28 for the third quarter of 2015
based on 99.5 million weighted-average shares outstanding.
- Adjusted EBITDA*: Adjusted
EBITDA was $36.5 million for the third quarter of 2016, compared
with $29.8 million for the third quarter of 2015.
- Cash Flow: Cash flow from
operations was $5.6 million for the third quarter of 2016, leading
to free cash flow* of $22.9 million after taking into consideration
$2.0 million of capital expenditures, and $18.6 million of payments
for previously accrued legal settlements and $0.6 million of
payments for expenses incurred in connection with the FTC
litigation. This compares with cash flow from operations of $20.8
million and free cash flow* of $18.4 million, after taking into
consideration $4.1 million of capital expenditures and $1.6 million
of payments for expenses incurred in connection with the FTC
litigation for the third quarter of 2015.
- Balance Sheet: Total cash and
marketable securities at the end of the third quarter of 2016 was
$166.1 million, up from $155.9 million at the end of the second
quarter of 2016.
* 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,
“LifeLock delivered solid financial results in our third quarter
with strong annual retention rates, continued adoption of our
premium products and strength in our enterprise business."
Schneider continued: “We also reached a number of important
strategic milestones that provide the foundation for continued and
meaningful product differentiation including the completion of our
flexible and extensible Identity Theft Protection or ITPS platform,
the launch of our new LifeLock mobile app and our IDENTITY mobile
app that helps consumers simplify the management of their digital
identity."
Third Quarter 2016 & Recent Business Highlights:
- Recorded the 46th consecutive quarter
of sequential growth in revenue and cumulative ending members.
- Announced new partnership agreement
with a leading wireless carrier.
- ID Analytics announced the launch of
the Online Lending Network, a new consortium expected to enhance
responsible lending, help protect consumers and businesses, and
address credit and fraud risks.
- Added approximately 254,000 gross new
members in the third quarter of 2016 and ended the quarter with
approximately 4.4 million members.
- Increased monthly average revenue per
member to $12.25 for the third quarter of 2016 from $11.91 for the
third quarter of 2015.
- We will be hosting an Investor and
Analyst Day on February 23, 2017 in Menlo Park, CA.
Guidance:
As of November 1, 2016, we are initiating guidance for our
fourth quarter of 2016 as well as updating guidance for the full
year 2016.
- Fourth Quarter 2016 Guidance:
Total revenue is expected to be in the range of $172 million to
$174 million. Adjusted net income per diluted share is expected to
be in the range of $0.40 to $0.42 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 $42
million to $44 million.
- Full Year 2016 Guidance: Total
revenue is expected to be in the range of $666 million to $668
million. Adjusted net income per diluted share is expected to be in
the range of $0.76 to $0.78 based on approximately 98 million fully
diluted weighted-average shares outstanding and a cash tax rate of
3%. Adjusted EBITDA is expected to be in the range of $86 million
to $88 million. Free cash flow is expected to be in the range of
$83 million to $88 million.
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 stock-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 these items that impact net
income (loss) are out of our control and/or cannot be predicted
with reasonable certainty, we are unable to provide such guidance.
Accordingly, reconciliation of these non-GAAP measures to net
income (loss) is not available without unreasonable effort. For a
reconciliation of these historical non-GAAP financial measures to
net income (loss), which provides information about the historical
significance of the reconciling items, see the reconciliation
tables included in this press release.
Conference Call Details:
- What: LifeLock third quarter
2016 financial results.
- When: Tuesday, November 1,
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 13644513 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 13644513.
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, adjusted net
income per diluted share and adjusted EBITDA for the fourth quarter
of 2016 and for fiscal year 2016, and free cash flow for fiscal
year 2016. 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 litigation outcome; 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, stock-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, stock-based compensation, interest expense, interest
income, other income (expense), income tax (benefit) expense, and
acquisition related expenses. For the three and nine-months ended
September 30, 2016 and 2015, we have also excluded from
adjusted net income, adjusted net income per diluted share and
adjusted EBITDA expenses related to the FTC litigation and the
impact of a legal reserve for the settlement of a derivative
lawsuit. We believe that the exclusion of certain items of income
and expense from net income (loss) in calculating adjusted net
income, adjusted net income per diluted share and adjusted EBITDA
is useful because the amount of such income or expense may not
directly correlate to the underlying operational performance of our
business and/or such income and expense can vary significantly
between periods.
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 three- and
nine-months ended September 30, 2016 and 2015, we have added
back to net cash provided by operating activities cash paid for
expenses and legal settlements 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. For the three and nine-months
ended September 30, 2016 and 2015, we have added back legal
settlements and expenses related to the FTC litigation because the
amount of such cash flow may not directly correlate to the
underlying operational performance of our business and can vary
significantly between periods. 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, excluding expenses related to the FTC litigation
and eventual settlement, 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 and facilitates
period-to-period comparisons of operations.
Although adjusted net income, adjusted net income per diluted
share, 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. Further, these
non-GAAP financial measures are not based on any standardized
methodology prescribed by GAAP and are not necessarily comparable
to similarly-titled measures presented by other companies.
For a reconciliation of these historical non-GAAP financial
measures to net income (loss), which provides information about the
historical significance of the reconciling items, 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 EndedSeptember
30,
Nine Months Ended September 30, 2016
2015 2016 2015 Revenue: Consumer
revenue $ 161,671 $ 144,648 $ 470,260 $ 411,178 Enterprise revenue
8,623 7,304 23,746 20,139 Total revenue
170,294 151,952 494,006 431,317 Cost of services 34,782
33,988 118,410 103,470 Gross profit 135,512
117,964 375,596 327,847 Costs and expenses: Sales and marketing
68,416 62,850 240,492 209,470 Technology and development 20,379
19,396 61,509 52,928 General and administrative 21,882 120,984
73,700 160,815 Amortization of acquired intangible assets 1,982
2,084 8,344 6,251 Total costs and
expenses 112,659 205,314 384,045 429,464
Income (loss) from operations 22,853 (87,350 ) (8,449 )
(101,617 ) Other income (expense): Interest expense (111 ) (89 )
(403 ) (265 ) Interest income 272 219 875 498 Other (85 ) —
(214 ) (183 ) Total other income 76 130 258 50
Income (loss) before provision for income taxes 22,929
(87,220 ) (8,191 ) (101,567 ) Income tax (benefit) expense 8,527
(22,075 ) (3,801 ) (27,784 ) Net income (loss) $ 14,402
$ (65,145 ) $ (4,390 ) $ (73,783 ) Net income (loss) per
share attributable to common stockholders: Basic $ 0.16 $ (0.68 ) $
(0.05 ) $ (0.78 ) Diluted $ 0.15 $ (0.68 ) $ (0.05 ) $ (0.78 )
Weighted-average common shares outstanding
used in computing netincome (loss) per share attributable to common
stockholders:
Basic 92,034 95,340 93,052 94,660 Diluted 97,321 95,340 93,052
94,660
LifeLock, Inc.
Condensed Consolidated Balance
Sheets
(in thousands)
(Unaudited)
September 30, December
31, 2016 2015 Assets Current assets: Cash
and cash equivalents $ 34,806 $ 50,239 Marketable securities
131,298 196,474 Trade and other receivables, net 17,080 13,974
Prepaid expenses and other current assets 9,168 12,303
Total current assets 192,352 272,990 Property and equipment,
net 44,665 30,485 Goodwill 172,087 172,087 Intangible assets, net
21,830 30,174 Deferred tax assets, net - non-current 81,164 77,363
Other non-current assets 13,627 9,710 Total assets $
525,725 $ 592,809
Liabilities and stockholders'
equity Current liabilities: Accounts payable $ 8,645 $ 24,747
Accrued expenses and other liabilities 57,362 76,226 Deferred
revenue 189,034 166,403 Total current liabilities
255,041 267,376 Other non-current liabilities 20,113 7,367
Total liabilities 275,154 274,743 Commitments and
contingencies Stockholders' equity: Common stock 101 96 Treasury
stock (74,974 ) — Additional paid-in capital 544,009 532,388
Accumulated other comprehensive loss (118 ) (361 ) Accumulated
deficit (218,447 ) (214,057 ) Total stockholders' equity 250,571
318,066 Total liabilities and stockholders' equity $
525,725 $ 592,809
LifeLock, Inc.
Condensed Consolidated Statements of
Cash Flows
(in thousands)
(Unaudited)
Nine Months Ended September
30, 2016 2015 Operating activities
Net loss $ (4,390 ) $ (73,783 ) Adjustments to reconcile net loss
to net cash provided by operating activities: Depreciation and
amortization 17,082 13,292 Stock-based compensation 25,509 20,287
Provision for doubtful accounts 352 150 Amortization of premiums on
marketable securities 1,521 2,310 Deferred income tax benefit
(3,801 ) (27,784 ) Other 343 250 Change in operating assets and
liabilities: Trade and other receivables (3,956 ) (3,469 ) Prepaid
expenses and other current assets 3,136 (1,022 ) Other non-current
assets 167 357 Accounts payable (14,622 ) 1,548 Accrued expenses
and other liabilities (18,120 ) 117,693 Deferred revenue 22,631
25,629 Other non-current liabilities 408 265 Net cash
provided by operating activities 26,260 75,723
Investing
activities Acquisition of businesses, net of cash acquired —
(12,797 ) Acquisition of property and equipment, including
capitalization of internal use software (11,299 ) (9,057 )
Purchases of marketable securities (83,896 ) (191,846 ) Sale and
maturities of marketable securities 148,298 122,936 Premiums paid
for company-owned life insurance policies (4,337 ) (4,337 ) Net
cash provided by (used in) investing activities 48,766 (95,101 )
Financing activities Proceeds from stock-based compensation
plans 15,780 10,144 Purchases of Company stock (100,000 ) —
Payments for employee tax withholdings related to restricted stock
units and awards (6,239 ) (1,793 ) Net cash provided by (used in)
financing activities (90,459 ) 8,351 Net decrease in cash
and cash equivalents (15,433 ) (11,027 ) Cash and cash equivalents
at beginning of period 50,239 146,569 Cash and cash
equivalents at end of period $ 34,806 $ 135,542
Stock-Based Compensation
(in thousands)
(Unaudited)
Three Months EndedSeptember
30,
Nine Months Ended September 30, 2016
2015 2016 2015 Costs of services $ 486
$ 449 $ 1,445 $ 1,286 Sales and marketing 1,672 1,238 4,793 3,385
Technology and development 2,574 2,514 7,893 6,226 General and
administrative 3,880 3,662 11,378 9,390 Total
stock-based compensation expense $ 8,612 $ 7,863 $
25,509 $ 20,287
Key Financial and Operating
Metrics
(in thousands except percentages and
per member data)
(Unaudited)
Three Months EndedSeptember
30,
Nine Months Ended September 30, 2016
2015 2016 2015 Revenue: Consumer
revenue $ 161,671 $ 144,648 $ 470,260 $ 411,178 Enterprise revenue
8,623 7,304 23,746 20,139 Total revenue
$ 170,294 $ 151,952 $ 494,006 $ 431,317 Adjusted net income $
33,549 $ 27,579 $ 35,060 $ 32,323 Adjusted EBITDA $ 36,548 $ 29,797
$ 43,540 $ 39,314 Free cash flow $ 22,927 $ 18,378 $ 41,097 $
68,302 Cumulative ending members 4,414 4,080 4,414 4,080 Gross new
members 254 251 903 989 Member retention rate 85.5 % 86.6 % 85.5 %
86.6 % Average cost of acquisition per member $ 255 $ 237 $ 255 $
202 Monthly average revenue per member $ 12.25 $ 11.91 $ 12.05 $
11.68 Enterprise transactions 103,240 74,280 272,504 208,324
Reconciliation of GAAP to Non-GAAP
Results
(in thousands, except per share
amounts)
(Unaudited)
Three Months EndedSeptember
30,
Nine Months Ended September 30, 2016
2015 2016 2015 Reconciliation of
Gross Profit to Adjusted Gross Profit Gross profit $ 135,512 $
117,964 $ 375,596 $ 327,847 Stock-based compensation 486 449
1,445 1,286 Adjusted gross profit $ 135,998
$ 118,413 $ 377,041 $ 329,133
Reconciliation of Sales and Marketing
Expenses to Adjusted Salesand Marketing Expenses
Sales and marketing expenses $ 68,416 $ 62,850 $ 240,492 $ 209,470
Stock-based compensation (1,672 ) (1,238 ) (4,793 ) (3,385 )
Adjusted sales and marketing expenses $ 66,744 $ 61,612
$ 235,699 $ 206,085
Reconciliation of Technology and
Development Expenses to AdjustedTechnology and Development
Expenses
Technology and development expenses $ 20,379 $ 19,396 $ 61,509 $
52,928 Stock-based compensation (2,574 ) (2,514 ) (7,893 ) (6,226 )
Acquisition related expenses — (2,970 ) — (2,970 )
Adjusted technology and development expenses $ 17,805 $
13,912 $ 53,616 $ 43,732
Reconciliation of General and
Administrative Expenses to AdjustedGeneral and
Administrative Expenses
General and administrative expenses $ 21,882 $ 120,984 $ 73,700 $
160,815 Stock-based compensation (3,880 ) (3,662 ) (11,378 ) (9,390
) Legal reserves and settlements — (96,000 ) (6,000 ) (98,500 )
Expenses related to the FTC litigation (26 ) (5,733 ) (3,398 )
(5,733 ) Acquisition related expenses — (149 ) —
(149 ) Adjusted general and administrative expenses $ 17,976
$ 15,440 $ 52,924 $ 47,043
Reconciliation of Income (Loss) from
Operations to AdjustedIncome from Operations
Income (loss) from operations $ 22,853 $ (87,350 ) $ (8,449 ) $
(101,617 ) Stock-based compensation 8,612 7,863 25,509 20,287
Amortization of acquired intangible assets 1,982 2,084 8,344 6,251
Legal reserves and settlements — 96,000 6,000 98,500 Expenses
related to the FTC litigation 26 5,733 3,398 5,733 Acquisition
related expenses — 3,119 — 3,119
Adjusted income from operations $ 33,473 $ 27,449 $
34,802 $ 32,273
Reconciliation of Net Income
(Loss) to Adjusted Net Income Net income (loss) $ 14,402 $
(65,145 ) $ (4,390 ) $ (73,783 ) Stock-based compensation 8,612
7,863 25,509 20,287 Amortization of acquired intangible assets
1,982 2,084 8,344 6,251 Legal reserves and settlements — 96,000
6,000 98,500 Expenses related to the FTC litigation 26 5,733 3,398
5,733 Acquisition related expenses — 3,119 — 3,119 Deferred income
tax (benefit) expense 8,527 (22,075 ) (3,801 ) (27,784 )
Adjusted net income $ 33,549 $ 27,579 $ 35,060
$ 32,323
Three Months EndedSeptember
30,
Nine Months Ended September 30, 2016
2015 2016 2015 Reconciliation
of Diluted Shares to Adjusted Diluted Shares Diluted shares
97,321 95,340 93,052 94,660 Dilutive securities excluded due to net
loss — 4,186 4,252 5,143 Adjusted
diluted shares 97,321 99,526 97,304 99,803
Reconciliation of Net Income (Loss) per
Diluted Share to AdjustedNet Income per Diluted
Share
Net income (loss) per diluted share $ 0.15 $ (0.68 ) $ (0.05 ) $
(0.78 ) Adjustments to net income (loss) 0.19 0.93 0.41 1.06
Adjustments to diluted shares — 0.03 — 0.04
Adjusted net income per diluted share $ 0.34 $ 0.28
$ 0.36 $ 0.32
Reconciliation of Net Income
(Loss) to Adjusted EBITDA Net income (loss) $ 14,402 $ (65,145
) $ (4,390 ) $ (73,783 ) Depreciation and amortization 5,057 4,432
17,082 13,292 Stock-based compensation 8,612 7,863 25,509 20,287
Interest expense 111 89 403 265 Interest income (272 ) (219 ) (875
) (498 ) Other 85 — 214 183 Income tax (benefit) expense 8,527
(22,075 ) (3,801 ) (27,784 ) Legal reserves and settlements —
96,000 6,000 98,500 Expenses related to the FTC litigation 26 5,733
3,398 5,733 Acquisition related expenses — 3,119 —
3,119 Adjusted EBITDA $ 36,548 $ 29,797
$ 43,540 $ 39,314
Reconciliation of Net Cash Provided by
Operating Activities to FreeCash Flow
Net cash provided by operating activities $ 5,626 $ 20,826 $ 26,260
$ 75,723 Acquisitions of property and equipment (1,962 ) (4,084 )
(11,299 ) (9,057 ) Legal settlements paid 18,642 — 21,142 —
Expenses paid for the FTC litigation 621 1,636 4,994
1,636 Free cash flow $ 22,927 $ 18,378
$ 41,097 $ 68,302
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161101006560/en/
LifeLock, Inc.Media Contact:Jeff Davis,
415-767-7788Media@lifelock.comorInvestor Relations
Contact:Jamison Manwaring, 480-457-5000VP, Investor
RelationsInvestor.relations@lifelock.com
Lifelock, Inc. (delisted) (NYSE:LOCK)
Historical Stock Chart
Von Jul 2024 bis Jul 2024
Lifelock, Inc. (delisted) (NYSE:LOCK)
Historical Stock Chart
Von Jul 2023 bis Jul 2024