Mattersight Announces Third Quarter 2015 Results
/EINPresswire.com/ -- CHICAGO, IL -- (Marketwired) -- 11/04/15 -- Mattersight Corporation (NASDAQ: MATR), the pioneer in personality-based software applications, today announced financial results for the third quarter ending September 30, 2015.
"Mattersight's third quarter was marked by continued growth and innovation," said President and CEO Kelly Conway. "Our record revenues were driven by a healthy combination of new logo growth and deeper partnerships with existing clients. Our third quarter results are another data point supporting the emergence of the market for personality-based software applications. We believe we are in the early stages of growth of this large market opportunity."
Third Quarter 2015 Financial Highlights
- Bookings: Annual Contract Value (ACV) bookings for the third quarter were $6.9 million. ACV bookings for the last four quarters were $22.6 million, an 82% year-over-year increase.
- Book of Business: Annualized Book of Business was $53.6 million for the third quarter, up 41% on a year-over-year basis.
- Revenues: Total revenue for the third quarter was a record $10.5 million, representing a 36% increase on a year-over-year basis. Subscription revenue drove $9.3 million of total revenue, a year-over-year increase of 40%.
- Gross Margin: Gross margin was 75.8% in the third quarter and 72.8% for the last four quarters.
-
SaaS Metrics: For the last four quarters, subscription revenue retention was 97%, year-over-year existing net account growth was 127% and the customer acquisition cost (CAC) ratio was 126%.
Third Quarter 2015 Highlights
- Predictive Behavioral Routing drove the addition of two new logo customers, bringing over $50 million in new total account opportunity.
- Expanded the reach and effectiveness of the sales organization with the addition of five quota carriers and a Vice President of Sales Enablement.
- Launched Version 3.1 of Mattersight's flagship Predictive Behavioral Routing algorithm, further refining the solution's ability to facilitate optimal caller/agent pairings.
- Added six new patents, bringing Mattersight's total U.S. patent portfolio to 20 and bolstering the protection of Mattersight's innovative solutions.
Non-GAAP Financial Measures
The Company realized an "Adjusted Earnings(1)" loss of $0.9 million for the third quarter of 2015. Adjusted Earnings is a non-GAAP measure. For a reconciliation of operating loss to Adjusted Earnings, see the accompanying schedule. Mattersight's net loss was $3.9 million in the third quarter of 2015.
Conference Call Information
Mattersight management will host a conference call at 4:30 p.m. ET on Wednesday, November 4, 2015. The conference call and slide presentation will be available at the Investor Relations section of Mattersight's website at http://www.mattersight.com/about-us/investor-relations. To listen to the conference call via telephone, please call 800.952.4789 (domestic) or 404.665.9579 (international), conference ID: 62977611.
For those who cannot access the live broadcast, a replay of the conference call will be available beginning approximately two hours after the live call is completed until December 4, 2015, by dialing 855.859.2056 (domestic) or 404.537.3406 (international), conference ID: 62977611.
Safe Harbor for Forward-Looking Statements
Statements in this press release that are not historical facts are "forward-looking statements" that are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements, which may be identified by use of words such as "plan," "may," "might," "believe," "expect," "intend," "could," "would," "should," and other words and terms of similar meaning, involve risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. In addition to other factors and matters contained or incorporated in this document, important factors that could cause actual results or events to differ materially from those indicated by such forward-looking statements include, among other things, the risks detailed from time to time in Mattersight's SEC filings. You can locate these filings on the Investor Relations page of Mattersight's website, www.mattersight.com. Statements included or incorporated by reference into this press release are based upon information known to Mattersight as of the date of this press release, and the company assumes no obligation to publicly revise or update any forward-looking statement for any reason. In light of Regulation FD, it is our policy not to comment on earnings, financial guidance or operations other than through press releases, publicly announced conference calls, or other means that will constitute public disclosure for purposes of Regulation FD. Mattersight uses its website at www.mattersight.com as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.
About Mattersight
Mattersight's mission is to help brands have more effective and effortless conversations with their customers. Using a suite of innovative personality-based software applications, Mattersight can analyze and predict customer behavior based on the language exchanged during service and sales interactions. This insight can then facilitate real-time connections between customers and the agents best capable of handling their needs. Mattersight's patented stack of SaaS applications has influenced hundreds of millions of shorter, more satisfying customer interactions. Organizations across the Financial Services, Healthcare, Technology and Telco industries rely on Mattersight to drive customer retention, employee engagement and operating efficiency. An independent research study documents the average return on investment for these organizations is 344%. To learn more about how Mattersight can help your company, please visit www.mattersight.com.
(1) Mattersight presents Adjusted Earnings, a non-GAAP measure that represents cash earnings performance, excluding the impact of non-cash expenses and expense reduction activities, because management believes that Adjusted Earnings provide investors with a better understanding of the results of Mattersight's operations. Management believes that Adjusted Earnings reflect Mattersight's resources available to invest in its business and strengthen its balance sheet. In addition, expense reduction activities can vary significantly between periods on the basis of factors that management does not believe reflect current-period operating performance. Although similar adjustments for expense reduction activities may be recorded in future periods, the size and frequency of these adjustments cannot be predicted. The Adjusted Earnings measure should be considered in addition to, not as a substitute for or superior to, operating income, cash flows or other measures of financial performance prepared in accordance with GAAP.
MATTERSIGHT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited and in thousands, except per share data)
For the Three Months For the Nine Months
-------------------- --------------------
Ended Ended
-------------------- --------------------
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2015 2014 2015 2014
--------- --------- --------- ---------
Revenue:
Subscription revenue $ 9,313 $ 6,636 $ 26,519 $ 18,996
Other revenue 1,169 1,044 3,021 3,037
--------- --------- --------- ---------
Total revenue 10,482 7,680 29,540 22,033
Operating expenses:
Cost of Subscription revenue 1,930 1,719 5,853 5,163
Cost of Other revenue 609 680 1,930 1,730
--------- --------- --------- ---------
Total cost of revenue, exclusive
of depreciation and
amortization shown below: 2,539 2,399 7,783 6,893
Research and development 3,397 3,240 10,185 9,613
Sales and marketing 3,773 2,388 10,016 6,693
General and administrative 3,108 2,320 8,811 6,851
Depreciation and amortization 1,236 792 3,347 2,272
--------- --------- --------- ---------
Total operating expenses 14,053 11,139 40,142 32,322
--------- --------- --------- ---------
Operating loss (3,571) (3,459) (10,602) (10,289)
Interest and other expense, net (331) (711) (690) (1,021)
Change in fair value of warrant
liability (22) (5) 3 (91)
--------- --------- --------- ---------
Loss before income taxes (3,924) (4,175) (11,289) (11,401)
Income tax provision (15) (7) (31) (24)
--------- --------- --------- ---------
Net loss (3,939) (4,182) (11,320) (11,425)
Dividends related to Series B
Stock (147) (147) (441) (441)
--------- --------- --------- ---------
Net loss available to Common
Stock holders $ (4,086) $ (4,329) $ (11,761) $ (11,866)
========= ========= ========= =========
Per share of Common Stock:
Basic net loss available to
Common Stock holders $ (0.17) $ (0.21) $ (0.52) $ (0.61)
========= ========= ========= =========
Diluted net loss available to
Common Stock holders $ (0.17) $ (0.21) $ (0.52) $ (0.61)
========= ========= ========= =========
Shares used to calculate basic
net loss per share 24,185 20,790 22,698 19,324
========= ========= ========= =========
Shares used to calculate diluted
net loss per share 24,185 20,790 22,698 19,324
========= ========= ========= =========
Stock-based compensation,
primarily restricted stock, is
included in individual line
items above:
Total cost of revenue $ 63 $ 40 $ 187 $ 142
Research and development 294 376 813 1,127
Sales and marketing 391 252 1,112 663
General and administrative 728 499 2,146 1,472
MATTERSIGHT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(Unaudited and in thousands)
For the Three Months For the Nine Months
-------------------- --------------------
Ended Ended
-------------------- --------------------
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2015 2014 2015 2014
--------- --------- --------- ---------
Net loss $ (3,939) $ (4,182) $ (11,320) $ (11,425)
Other comprehensive loss:
Effect of currency translation (2) 2 -- 5
--------- --------- --------- ---------
Comprehensive net loss $ (3,941) $ (4,180) $ (11,320) $ (11,420)
========= ========= ========= =========
MATTERSIGHT CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited and in thousands, except share and per share data)
September 30, December 31,
2015 2014
------------- -------------
ASSETS:
Current Assets:
Cash and cash equivalents $ 21,120 $ 14,238
Receivables (net of allowances of $19 and
$17, respectively) 3,826 3,460
Prepaid expenses 4,953 4,449
Other current assets 475 236
------------- -------------
Total current assets 30,374 22,383
Equipment and leasehold improvements, net 7,901 4,657
Goodwill 972 972
Intangibles, net 3,399 571
Other long-term assets 2,630 3,495
------------- -------------
Total assets $ 45,276 $ 32,078
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current Liabilities:
Accounts payable $ 1,968 $ 1,183
Accrued compensation and related costs 2,451 2,241
Unearned revenue 8,143 7,859
Capital leases 1,694 1,637
Other current liabilities 1,308 2,549
------------- -------------
Total current liabilities 15,564 15,469
Long-term unearned revenue 1,796 2,532
Long-term capital leases 1,495 1,176
Other long-term liabilities 5,483 282
------------- -------------
Total liabilities 24,338 19,459
------------- -------------
Series B Stock, $0.01 par value; 5,000,000
shares authorized and designated; 1,644,768
and 1,648,185 shares issued and outstanding,
with a liquidation preference of $10,297 and
$9,877 at September 30, 2015 and December 31,
2014, respectively 8,388 8,406
Stockholders' Equity:
Preferred stock, $0.01 par value; 35,000,000
shares authorized; none issued and
outstanding -- --
Common Stock, $0.01 par value; 50,000,000
shares authorized; 27,635,973 and
24,046,977 shares issued and 25,807,547 and
22,324,093 outstanding at September 30,
2015 and December 31, 2014, respectively 276 240
Additional paid-in capital 263,608 243,282
Accumulated deficit (237,724) (226,404)
Treasury stock, at cost, 1,828,426 and
1,722,884 shares at September 30, 2015 and
December 31, 2014, respectively (9,584) (8,879)
Accumulated other comprehensive loss (4,026) (4,026)
------------- -------------
Total stockholders' equity 12,550 4,213
------------- -------------
Total liabilities and stockholders' equity $ 45,276 $ 32,078
============= =============
MATTERSIGHT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited and in thousands)
For the Nine Months Ended
----------------------------
Sept. 30, Sept. 30,
2015 2014
------------- -------------
Cash Flows from Operating Activities:
Net loss $ (11,320) $ (11,425)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 3,347 2,272
Stock-based compensation 4,258 3,404
Change in fair value of warrant liability (3) 91
Changes in assets and liabilities:
Receivables (366) (376)
Prepaid expenses (957) 265
Other assets 727 213
Accounts payable 75 250
Accrued compensation and related costs 210 153
Unearned revenue (452) 1,424
Other liabilities 1,656 188
------------- -------------
Total Adjustments 8,495 7,884
------------- -------------
Net cash used in operating activities (2,825) (3,541)
------------- -------------
Cash Flows from Investing Activities:
Capital expenditures and other (3,654) (647)
Intangible assets (660) (199)
------------- -------------
Net cash used in investing activities (4,314) (846)
------------- -------------
Cash Flows from Financing Activities:
Proceeds from issuance of Common Stock, net 15,942 11,138
Proceeds from line of credit 15,000 7,000
Repayments from line of credit (15,000) (7,000)
Principal payments under capital lease
obligations (1,552) (1,226)
Acquisition of treasury stock (753) (718)
Proceeds from stock compensation and employee
stock purchase plans, net 383 123
------------- -------------
Net cash provided by financing
activities 14,020 9,317
------------- -------------
Effect of exchange rate changes on cash and
cash equivalents 1 (7)
------------- -------------
Increase in cash and cash equivalents 6,882 4,923
Cash and cash equivalents, beginning of period 14,238 13,392
------------- -------------
Cash and cash equivalents, end of period $ 21,120 $ 18,315
============= =============
Non-Cash Investing and Financing Transactions:
Capital lease obligations incurred $ 2,002 $ 1,044
Capital equipment purchased on credit 2,002 1,044
Fair value of warrants classified as
liability -- 326
Fair value of intellectual property purchase
liability 2,123 --
Supplemental Disclosures of Cash Flow
Information:
Interest paid $ 155 $ 211
MATTERSIGHT CORPORATION
CALCULATION OF ADJUSTED EARNINGS MEASURE
(Unaudited and in thousands)
For the Three Months For the Nine Months
-------------------- --------------------
Ended Ended
-------------------- --------------------
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2015 2014 2015 2014
--------- --------- --------- ---------
GAAP -- Operating loss $ (3,571) $ (3,459) $ (10,602) $ (10,289)
Add back (reduce) the effect of:
Stock-based compensation 1,476 1,167 4,258 3,404
Depreciation and amortization 1,236 792 3,347 2,272
--------- --------- --------- ---------
Adjusted earnings measure --
loss $ (859) $ (1,500) $ (2,997) $ (4,613)
========= ========= ========= =========
Contact
Sheau-ming Ross
Chief Financial Officer
312.454.3594
Sheau-ming.Ross@Mattersight.com
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