Bazaarvoice, Inc.
Bazaarvoice Inc (Form: 8-K, Received: 02/28/2017 19:46:20)
 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

 

FORM 8‑K
 

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)

February 28, 2017

 

BAZAARVOICE, INC.
(Exact name of registrant as specified in its charter)
 

Delaware
 
001-35433
 
20-2908277
(State or other jurisdiction of incorporation)
 
(Commission File Number)
 
(IRS Employer
Identification No.)

10901 South Stonelake Blvd.
Austin, Texas, 78759-5749
(Address of principal executive offices, including zip code)

(512) 551-6000
(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 





Item 2.02    Results of Operations and Financial Condition.

On February 28, 2017 , Bazaarvoice, Inc. issued a press release reporting its results of operations for the quarter ended January 31, 2017 . A copy of the press release is furnished herewith as Exhibit 99.1.


Item 9.01    Financial Statements and Exhibits.

(d) Exhibits.

Exhibit   No.
 
Description
 
 
 
99.1
 
Bazaarvoice, Inc. Press Release dated February 28, 2017.

The information furnished in this Current Report under Item 2.02 and Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities of Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.





SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
 
BAZAARVOICE, INC.
 
 
 
 
 
 
By:
/s/ Kin Gill
 
 
 
Kin Gill
Chief Legal Officer, General Counsel and Secretary
 

Date: February 28, 2017





EXHIBIT INDEX

Exhibit No.      Description

99.1
 
Bazaarvoice, Inc. Press Release dated February 28, 2017



Exhibit 99.1

Bazaarvoice, Inc. Announces its Financial Results for the Third Fiscal Quarter of 2017
Third fiscal quarter highlights include:
 
Delivered Q 3 revenue of  $50.5 million , up 1% from the same period a year ago
Achieved Q 3 advertising revenue of $3.2 million, up 37% from the same period a year ago
Improved GAAP net loss to $2.7 million from a loss of $3.1 million in the same period a year ago
Increased Adjusted EBITDA to $5.3 million from $5.0 million in the same period a year ago
AUSTIN, Texas, February 28, 2017 (GLOBE NEWSWIRE) — Bazaarvoice, Inc. (Nasdaq:BV) reported its financial results for the third fiscal quarter ended January 31, 2017 .
“I am pleased with the overall progress we are making to transform the business, highlighted by continued improvement in our SaaS client and dollar retention, as well as 37% year over year advertising revenue growth in the third quarter," said Gene Austin, chief executive officer and president. “We are in the early stages of leveraging our three strategic assets including our CGC expertise, our growing network and our unique shopper data, and are excited that our revenue growth rates should increase next fiscal year."
Third Fiscal Quarter of 2017 Financial Details
Revenue:  Bazaarvoice reported revenue of  $50.5 million  for the third fiscal quarter of 2017 , up 1% from the third fiscal quarter of 2016 , which consisted of SaaS revenue of $47.3 million and net advertising revenue of $3.2 million.
GAAP net loss and net loss per share: GAAP net loss was  $2.7 million , compared to a GAAP net loss of  $3.1 million  for the third fiscal quarter of 2016 . GAAP net loss per share was  $0.03  based upon weighted average shares outstanding of 83.3 million , compared to a GAAP net loss per share of $0.04  for the third fiscal quarter of 2016 based upon weighted average shares outstanding of 81.1 million .
Adjusted EBITDA: Adjusted EBITDA for the third fiscal quarter of 2017 was $5.3 million compared to $5.0 million  for the third fiscal quarter of 2016 . During the first quarter of fiscal 2017 we updated our definition of Adjusted EBITDA to enhance comparability between ourselves and our peers. For a reconciliation of Adjusted EBITDA as previously defined to Adjusted EBITDA under our updated definition refer to Note 6 of the “Selected Quarterly Financial and Operational Metrics” table contained herein.
Non-GAAP net income and earnings per share: Non-GAAP net income was  $1.8 million , compared to non-GAAP net income of  $1.5 million  for the third fiscal quarter of 2016 . Non-GAAP earnings per share was  $0.02 based upon weighted average shares outstanding of 83.3 million , compared to non-GAAP earnings per share of  $0.02  for the third fiscal quarter of 2016 based upon weighted average shares outstanding of 81.1 million .
Quarterly Conference Call
Bazaarvoice will host a conference call today at 4:30 p.m. Eastern Time to review the Company’s financial results for the third fiscal quarter of 2017 . To access this call, dial (877) 407-3982 from the United States or (201) 493-6780 internationally. A live webcast of the conference call can be accessed from the investor relations page of Bazaarvoice’s company website at investors.bazaarvoice.com. Following the completion of the call, a recorded replay will be available on the Company’s website, and a telephone replay will be available through March 14, 2017 by dialing (844) 512-2921 from the United States or (412) 317-6671 internationally with recording access code 13654335.
About Bazaarvoice
Bazaarvoice helps brands and retailers find and reach consumers, and win them with the content they trust. Each month in the Bazaarvoice Network, more than one-half billion consumers view and share authentic consumer-generated content (CGC), including ratings and reviews as well as curated visual content, across 5,000 brand and retail websites. This visibility into shopper




behavior allows Bazaarvoice to capture unique first-party data and insights that fuel our targeted advertising and personalization solutions.
Founded in 2005, Bazaarvoice is headquartered in Austin, Texas with offices across North America and Europe. For more information, visit www.bazaarvoice.com.
Non-GAAP Financial Measures
During the first quarter of fiscal 2017 we updated our definition of Adjusted EBITDA to enhance comparability between ourselves and our peers. We define Adjusted EBITDA as GAAP net loss adjusted for stock-based expense, contingent consideration related to acquisitions, depreciation and amortization (including amortization of capitalized internal-use software development costs), restructuring charges, integration and other costs related to acquisitions, other non-business costs and benefits, income tax expense and other (income) expense, net.  Our previous definition of Adjusted EBITDA excluded amortization of capitalized internal-use software development costs from adjusted depreciation and amortization and included capitalized stock-based compensation in stock-based expense. For a reconciliation of Adjusted EBITDA as previously defined to Adjusted EBITDA under our updated definition refer to Note 6 of the “Selected Quarterly Financial and Operational Metrics” table contained herein.
Adjusted EBITDA discussed in this press release is defined as our GAAP net loss adjusted for stock-based expense, contingent consideration related to acquisitions, depreciation and amortization (including amortization of capitalized internal-use software development costs), integration and other costs related to acquisitions, other non-business costs and benefits, income tax expense and other (income) expense, net. GAAP net loss is the most comparable GAAP measure to Adjusted EBITDA.  

Non-GAAP net loss, which is used to calculate non-GAAP net loss per share, is defined as our GAAP net loss, adjusted to exclude stock-based expense, contingent consideration related to acquisitions, amortization of acquired intangible assets, integration and other costs related to acquisitions, and other non-business costs and benefits along with the associated income tax effect of these adjustments.
Management presents these non-GAAP financial measures because it considers them to be important supplemental measures of core operating performance. Management uses the non-GAAP financial measures for planning purposes, including analysis of the Company’s operating performance against prior periods and the effectiveness of our business strategies, the preparation of operating budgets and to determine appropriate levels of operating and capital investments, as well as in communications with our board of directors concerning our financial performance. Management also believes that the non-GAAP financial measures provide additional insight for securities analysts and investors in evaluating the Company’s financial and operational performance without regard to items that can vary substantially from company to company depending upon their financing, capital structures, and the method by which assets were acquired. However, these non-GAAP financial measures have limitations as an analytical tool, and you should not consider them in isolation or as a substitute for analysis of our results of operations as reported under GAAP. Furthermore, these non-GAAP financial measures may not be comparable to similarly titled measures of other organizations because other organizations may not calculate these non-GAAP financial measures in the same manner. We intend to provide these non-GAAP financial measures as part of our future financial results discussions; therefore, the inclusion of these non-GAAP financial measures will provide consistency in our financial reporting. A reconciliation of these non-GAAP measures to GAAP is provided in the accompanying tables.




Forward-looking Statements
This press release contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, included in this press release regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans, and objectives of management are forward-looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “will,” “would,” “target” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements include, among other things, statements about driving future improvements in profitability, monetizing the Bazaarvoice network and driving revenue growth over the long term and other statements about management’s beliefs, intentions or goals. We may not actually achieve the expectations disclosed in the forward-looking statements, and you should not place undue reliance on our forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results or events to differ materially from the expectations disclosed in the forward-looking statements, including, but not limited to, our expectations regarding our revenue, expenses, sales and operations; changes in accounting standards; our ability to realize efficiencies and to execute on our strategic initiatives; our limited operating history; our ability to operate in a new and unproven market; our ability to effectively manage growth; our ability to develop and launch new products; risks associated with the uncertainty of market acceptance of our new products; our ability to retain our existing customers and satisfy their obligations and needs and upsell to existing clients; our ability to attract and retain employees; our ability to maintain pricing for our products and services; our ability to manage expansion into new vertical industries; our ability to reduce our cost structure and improve operating efficiencies;  and the effects of increased competition and commoditization of products we offer, including pricing pressure, reduced profitability or loss of market share; risks and challenges associated with international sales; our ability to successfully identify, manage and integrate potential acquisitions; the impact of the Department of Justice stipulation regarding PowerReviews on our business; and other risks and potential factors that could affect our business and financial results identified in our Form 10-K for the fiscal year ended April 30, 2016 as filed with the Securities and Exchange Commission on June 20, 2016. Additional information will also be set forth in our future quarterly reports on Form 10-Q, annual reports on Form 10-K and other filings that we make with the Securities and Exchange Commission. We do not intend and undertake no duty to release publicly any updates or revisions to any forward-looking statements contained herein.

Investor Relations Contact:
Linda Wells
Bazaarvoice, Inc.
415-872-3612
linda.wells@bazaarvoice.com

Media Contact:
Andy North
Bazaarvoice, Inc.
512-551-6502
andy.north@bazaarvoice.com




Bazaarvoice, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
 
January 31,
2017
 
April 30,
2016
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
38,287

 
$
43,963

Short-term investments
45,207

 
50,682

Accounts receivable, net
51,624

 
39,597

Prepaid expenses and other current assets
9,567

 
8,415

Total current assets
144,685

 
142,657

Property, equipment and capitalized internal-use software development costs, net
29,160

 
31,649

Goodwill
139,155

 
139,155

Acquired intangible assets, net
8,190

 
9,607

Other non-current assets
4,003

 
5,214

Total assets
$
325,193

 
$
328,282

Liabilities and stockholders’ equity
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
4,775

 
$
6,110

Accrued expenses and other current liabilities
18,314

 
23,167

Revolving line of credit
37,000

 

Deferred revenue
71,163

 
62,735

Total current liabilities
131,252

 
92,012

Long-term liabilities:
 
 
 
Revolving line of credit

 
42,000

Deferred revenue less current portion
2,500

 
2,481

Other liabilities, long-term
6,726

 
7,255

Total liabilities
140,478

 
143,748

Commitments and contingencies

 

Stockholders’ equity:
 
 
 
Common stock
8

 
8

Additional paid-in capital
450,418

 
437,239

Accumulated other comprehensive loss
(1,909
)
 
(878
)
Accumulated deficit
(263,802
)
 
(251,835
)
Total stockholders’ equity
184,715

 
184,534

Total liabilities and stockholders’ equity
$
325,193

 
$
328,282





Bazaarvoice, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except net loss per share data)
(unaudited)

 
Three Months Ended January 31,
 
Nine Months Ended January 31,
 
2017
 
2016
 
2017
 
2016
Revenue
$
50,525

 
$
50,255

 
$
151,026

 
$
149,057

Cost of revenue
19,196

 
18,920

 
56,807

 
57,614

Gross profit
31,329

 
31,335

 
94,219

 
91,443

Operating expenses:
 
 
 
 
 
 
 
Sales and marketing
16,322

 
16,113

 
47,445

 
51,781

Research and development
9,588

 
10,199

 
30,620

 
31,086

General and administrative
7,299

 
6,940

 
23,609

 
22,821

Restructuring charges

 

 
1,094

 

Acquisition-related and other
84

 
332

 
380

 
1,258

Amortization of acquired intangible assets
309

 
309

 
928

 
928

Total operating expenses
33,602

 
33,893

 
104,076

 
107,874

Operating loss
(2,273
)
 
(2,558
)
 
(9,857
)
 
(16,431
)
Other income (expense), net:
 
 
 
 
 
 
 
Interest income
150

 
124

 
445

 
275

Interest expense
(450
)
 
(596
)
 
(1,398
)
 
(1,628
)
Other expense
(32
)
 
(247
)
 
(807
)
 
(553
)
Total other expense, net
(332
)
 
(719
)
 
(1,760
)
 
(1,906
)
Loss before income taxes
(2,605
)
 
(3,277
)
 
(11,617
)
 
(18,337
)
Income tax expense (benefit)
123

 
(163
)
 
350

 
(127
)
Net loss
$
(2,728
)
 
$
(3,114
)
 
$
(11,967
)
 
$
(18,210
)
Net loss per share, basic and diluted
$
(0.03
)
 
$
(0.04
)
 
$
(0.14
)
 
$
(0.23
)
Basic and diluted weighted average number of shares outstanding
83,348

 
81,096

 
82,830

 
80,649





Bazaarvoice, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
 
Three Months Ended January 31,
 
Nine Months Ended January 31,
 
2017
 
2016
 
2017
 
2016
Operating activities:
 
 
 
 
 
 
 
Net loss
$
(2,728
)
 
$
(3,114
)
 
$
(11,967
)
 
$
(18,210
)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
 
 
 
 
 
 
 
Depreciation and amortization expense
3,513

 
3,509

 
10,623

 
10,487

Stock-based expense
3,989

 
3,762

 
12,172

 
11,484

Bad debt recovery

 
(326
)
 
(243
)
 
(265
)
Amortization of deferred financing costs
58

 
58

 
176

 
176

Loss on sublease

 

 
501

 

Other non-cash expense
(45
)
 
37

 
(172
)
 
82

Changes in operating assets and liabilities:
 
 
 
 
 
 
 
Accounts receivable
(14,129
)
 
(1,227
)
 
(11,784
)
 
10,715

Prepaid expenses and other current assets
(301
)
 
(1,456
)
 
(815
)
 
(479
)
Other non-current assets
(96
)
 
(38
)
 
862

 
(968
)
Accounts payable
1,091

 
(352
)
 
(1,313
)
 
1,797

Accrued expenses and other current liabilities
(856
)
 
870

 
(5,425
)
 
(5,138
)
Deferred revenue
8,535

 
4,075

 
8,447

 
225

Other liabilities, long-term
(156
)
 
2,079

 
(468
)
 
5,039

Net cash provided by (used in) operating activities
(1,125
)
 
7,877

 
594

 
14,945

Investing activities:
 
 
 
 
 
 
 
Proceeds from sale of discontinued operations

 

 

 
4,501

Purchases of property, equipment and capitalized internal-use software development costs
(2,115
)
 
(9,203
)
 
(6,988
)
 
(19,422
)
Purchases of short-term investments
(21,855
)
 
(13,612
)
 
(36,895
)
 
(53,467
)
Proceeds from maturities of short-term investments
18,260

 
14,500

 
42,140

 
55,017

Net cash used in investing activities
(5,710
)
 
(8,315
)
 
(1,743
)
 
(13,371
)
Financing activities:
 
 
 
 
 
 
 
Proceeds from employee stock compensation plans
573

 
664

 
1,297

 
2,777

Payments on revolving line of credit

 

 
(5,000
)
 

Net cash provided by (used in) financing activities
573

 
664

 
(3,703
)
 
2,777

Effect of exchange rate fluctuations on cash and cash equivalents
122

 
(354
)
 
(824
)
 
(448
)
Net change in cash and cash equivalents
(6,140
)
 
(128
)
 
(5,676
)
 
3,903

Cash and cash equivalents at beginning of period
44,427

 
58,072

 
43,963

 
54,041

Cash and cash equivalents at end of period
$
38,287

 
$
57,944

 
$
38,287

 
$
57,944

Supplemental disclosure of non-cash investing and financing activities:
 
 
 
 
 
 
 
Purchase of fixed assets recorded in accounts payable
$

 
$
318

 
$

 
$
318

Asset retirement obligation costs incurred
$

 
$
100

 
$

 
$
100

Capitalized stock-based compensation
$
119

 
$
130

 
$
365

 
$
366





Bazaarvoice, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(in thousands, except net loss per share data)
(unaudited)
 
Three Months Ended January 31,
 
Nine Months Ended January 31,
 
2017
 
2016
 
2017
 
2016
Non-GAAP net income (loss) per share:
 
 
 
 
 
 
 
GAAP net loss
$
(2,728
)
 
$
(3,114
)
 
$
(11,967
)
 
$
(18,210
)
Stock-based expense (1)
3,989

 
3,762

 
12,172

 
11,484

Restructuring charges (3)

 

 
1,094

 

Amortization of acquired intangible assets
473

 
473

 
1,418

 
1,418

Acquisition-related and other expense
84

 
332

 
380

 
1,258

Other stock-related benefit (4)

 

 
(25
)
 

Non-GAAP net income (loss)
$
1,818

 
$
1,453

 
$
3,072

 
$
(4,050
)
GAAP basic and diluted shares
83,348

 
81,096

 
82,830

 
80,649

Non-GAAP basic and diluted net income (loss) per share
$
0.02

 
$
0.02

 
$
0.04

 
$
(0.05
)
Adjusted EBITDA:
 
 
 
 
 
 
 
GAAP net loss
$
(2,728
)
 
$
(3,114
)
 
$
(11,967
)
 
$
(18,210
)
Stock-based expense (1)
3,989

 
3,762

 
12,172

 
11,484

Depreciation and amortization (2)
3,513

 
3,512

 
10,623

 
10,490

Restructuring charges (3)

 

 
1,094

 

Acquisition-related and other expense
84

 
332

 
380

 
1,258

Other stock-related benefit (4)

 

 
(25
)
 

Income tax expense (benefit)
123

 
(163
)
 
350

 
(127
)
Total other expense, net
332

 
719

 
1,760

 
1,906

Adjusted EBITDA
$
5,313

 
$
5,048

 
$
14,387

 
$
6,801

(1)
During the first quarter of fiscal 2017 we updated our calculation of Adjusted EBITDA. As a result of this update prior period stock compensation amounts have been updated to conform to the current presentation. Under the new definition of Adjusted EBITDA the capitalized portion of stock-based compensation related to the capitalization of internal-use software is excluded from stock-based expense.
Stock-based expense includes the following:
 
 
 
 
 
 
 
Cost of revenue
$
475

 
$
585

 
$
1,305

 
$
1,664

Sales and marketing
850

 
686

 
2,273

 
2,413

Research and development
867

 
786

 
2,827

 
2,227

General and administrative
1,797

 
1,705

 
5,767

 
5,180

Stock-based expense
$
3,989

 
$
3,762

 
$
12,172

 
$
11,484


(2)
During the first quarter of fiscal 2017 we updated our calculation of Adjusted EBITDA. As a result of this update prior period depreciation and amortization amounts have been updated to conform to the current presentation. Our new definition of Adjusted EBITDA includes amortization of capitalized internal-use software development costs in depreciation and amortization.
Depreciation and amortization includes the following:
 
 
 
 
 
 
 
Cost of revenue
$
2,601

 
$
2,559

 
$
7,793

 
$
7,597

Sales and marketing
183

 
210

 
568

 
756

Research and development
194

 
228

 
629

 
612

General and administrative
226

 
206

 
705

 
597

Amortization of acquired intangible assets
309

 
309

 
928

 
928

Depreciation and amortization
$
3,513

 
$
3,512

 
$
10,623

 
$
10,490






(3)
In February 2016, the Company made the decision to suspend sales of its BV Local product, reduce its cost structure to improve operating efficiencies and align resources with its growth strategies. Costs associated with these restructuring activities include workforce reductions charges, and facilities charges related to the loss recorded on the sub-lease of excess office space at the Company's headquarters.

(4)
Other stock-related benefit represents estimated liabilities for taxes and related items in connection with the treatment of certain equity grants. Since the estimated liability directly relates to equity grants and as stock-based expenses are consistently excluded from the non-GAAP financial measures, the Company excluded these estimated liabilities. During the nine months ended January 31, 2017, the Company recorded a benefit of $0.5 million due to a reduction in previously recorded estimated tax liabilities that have exceeded the statute of limitations. This benefit was partially offset by a $0.5 million liability related to estimated employer contributions the Company expects to make on behalf of its employees related to 401(k) deferrals on employee stock-based compensation.




Bazaarvoice, Inc.
Selected Quarterly Financial and Operational Metrics
(in thousands, except active clients and full-time employees data)
(unaudited)
 
Three Months Ended
 
Apr 30,
 
Jul 31,
 
Oct 31,
 
Jan 31,
 
Apr 30,
 
Jul 31,
 
Oct 31,
 
Jan 31,
 
2015
 
2015
 
2015
 
2016
 
2016
 
2016
 
2016
 
2017
Revenue (1)
$
48,317

 
$
48,876

 
$
49,926

 
$
50,255

 
$
50,709

 
$
50,093

 
$
50,408

 
$
50,525

Cost of revenue
18,148

 
19,548

 
19,146

 
18,920

 
19,253

 
18,756

 
18,855

 
19,196

Gross profit
30,169

 
29,328

 
30,780

 
31,335

 
31,456

 
31,337

 
31,553

 
31,329

Operating expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sales and marketing
20,427

 
19,166

 
16,502

 
16,113

 
18,027

 
15,304

 
15,819

 
16,322

Research and development
9,880

 
10,533

 
10,354

 
10,199

 
10,391

 
11,073

 
9,959

 
9,588

General and administrative
7,582

 
8,238

 
7,643

 
6,940

 
7,577

 
8,259

 
8,051

 
7,299

Restructuring charges

 

 

 

 
1,575

 
327

 
767

 

Acquisition-related and other expense
815

 
702

 
224

 
332

 
157

 
176

 
120

 
84

Amortization of acquired intangible assets
309

 
309

 
310

 
309

 
309

 
309

 
310

 
309

Total operating expenses
39,013

 
38,948

 
35,033

 
33,893

 
38,036

 
35,448

 
35,026

 
33,602

Operating loss
(8,844
)
 
(9,620
)
 
(4,253
)
 
(2,558
)
 
(6,580
)
 
(4,111
)
 
(3,473
)
 
(2,273
)
Total other expense, net
(521
)
 
(712
)
 
(475
)
 
(719
)
 
(384
)
 
(859
)
 
(569
)
 
(332
)
Loss before income taxes
(9,365
)
 
(10,332
)
 
(4,728
)
 
(3,277
)
 
(6,964
)
 
(4,970
)
 
(4,042
)
 
(2,605
)
Income tax expense (benefit)
(540
)
 
(88
)
 
124

 
(163
)
 
165

 
135

 
92

 
123

Net loss
$
(8,825
)
 
$
(10,244
)
 
$
(4,852
)
 
$
(3,114
)
 
$
(7,129
)
 
$
(5,105
)
 
$
(4,134
)
 
$
(2,728
)
Stock-based expense (2)
$
3,020

 
$
3,935

 
$
3,787

 
$
3,762

 
$
3,602

 
$
3,944

 
$
4,239

 
$
3,989

Depreciation and amortization (3)
3,284

 
3,644

 
3,334

 
3,512

 
3,549

 
3,578

 
3,532

 
3,513

Restructuring charges (4)

 

 

 

 
1,575

 
327

 
767

 

Acquisition-related and other expense
815

 
702

 
224

 
332

 
157

 
176

 
120

 
84

Other stock-related benefit (5)

 

 

 

 

 

 
(25
)
 

Income tax expense (benefit)
(540
)
 
(88
)
 
124

 
(163
)
 
165

 
135

 
92

 
123

Total other expense, net
521

 
712

 
475

 
719

 
384

 
859

 
569

 
332

Adjusted EBITDA (6)
$
(1,725
)
 
$
(1,339
)
 
$
3,092

 
$
5,048

 
$
2,303

 
$
3,914

 
$
5,160

 
$
5,313

Number of active clients (at period end) (7)
1,331

 
1,337

 
1,360

 
1,383

 
1,399

 
1,397

 
1,412

 
1,456

Full-time employees (at period end)
826

 
834

 
855

 
817

 
756

 
766

 
775

 
777

(1)
Revenue includes the following:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SaaS
$
46,173

 
$
46,830

 
$
47,671

 
$
47,884

 
$
49,108

 
$
47,799

 
$
48,121

 
$
47,266

Advertising
2,144

 
2,046

 
2,255

 
2,371

 
1,601

 
2,294

 
2,287

 
3,259

Revenue
$
48,317

 
$
48,876

 
$
49,926

 
$
50,255

 
$
50,709

 
$
50,093

 
$
50,408

 
$
50,525












(2)
During the first quarter of fiscal 2017 we updated our calculation of Adjusted EBITDA. As a result of this update prior period stock compensation amounts have been updated to conform to the current presentation. Under the new definition of Adjusted EBITDA the capitalized portion of stock-based compensation related to the capitalization of internal-use software is excluded from stock-based expense.
 
Three Months Ended
 
Apr 30,
 
Jul 31,
 
Oct 31,
 
Jan 31,
 
Apr 30,
 
Jul 31,
 
Oct 31,
 
Jan 31,
 
2015
 
2015
 
2015
 
2016
 
2016
 
2016
 
2016
 
2017
Stock-based expense includes the following:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost of revenue
$
294

 
$
472

 
$
607

 
$
585

 
$
503

 
$
344

 
$
486

 
$
475

Sales and marketing
950

 
1,084

 
643

 
686

 
543

 
580

 
843

 
850

Research and development
614

 
643

 
798

 
786

 
769

 
1,053

 
907

 
867

General and administrative
1,162

 
1,736

 
1,739

 
1,705

 
1,787

 
1,967

 
2,003

 
1,797

Stock-based expense
$
3,020

 
$
3,935

 
$
3,787

 
$
3,762

 
$
3,602

 
$
3,944

 
$
4,239

 
$
3,989


(3)
During the first quarter of fiscal 2017 we updated our calculation of Adjusted EBITDA. As a result of this update prior period depreciation and amortization amounts have been updated to conform to the current presentation. Our new definition of Adjusted EBITDA includes amortization of capitalized internal-use software development costs in depreciation and amortization.
Depreciation and amortization includes the following:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost of revenue
$
2,340

 
$
2,558

 
$
2,480

 
$
2,559

 
$
2,593

 
$
2,592

 
$
2,600

 
$
2,601

Sales and marketing
220

 
349

 
197

 
210

 
201

 
196

 
189

 
183

Research and development
181

 
209

 
175

 
228

 
227

 
231

 
204

 
194

General and administrative
234

 
220

 
171

 
206

 
219

 
250

 
229

 
226

Amortization of acquired intangible assets
309

 
308

 
311

 
309

 
309

 
309

 
310

 
309

Depreciation and amortization
$
3,284

 
$
3,644

 
$
3,334

 
$
3,512

 
$
3,549

 
$
3,578

 
$
3,532

 
$
3,513


(4) In February 2016, the Company made the decision to suspend sales of its BV Local product, reduce its cost structure to improve operating efficiencies and align resources with its growth strategies. Costs associated with these restructuring activities include workforce reductions charges, and facilities charges related to the loss recorded on the sub-lease of excess office space at the Company's headquarters.

(5)
Other stock-related benefit represents estimated liabilities for taxes and related items in connection with the treatment of certain equity grants. Since the estimated liability directly relates to equity grants and as stock-based expenses are consistently excluded from the non-GAAP financial measures, the Company excluded these estimated liabilities. During the three months ended October 31, 2016, the Company recorded a benefit of $0.5 million due to a reduction in previously recorded estimated tax liabilities that have exceeded the statute of limitations. This benefit was partially offset by a $0.5 million liability related to estimated employer contributions the Company expects to make on behalf of its employees related to 401(k) deferrals on employee stock-based compensation.





(6)
During the first quarter of fiscal 2017 we updated our calculation of Adjusted EBITDA. As a result of this update prior period depreciation and amortization amounts have been updated to conform to the current presentation. Our new definition of Adjusted EBITDA includes amortization of capitalized internal-use software development costs in depreciation and amortization and excludes capitalized stock-based compensation related to internal-use software from stock-based expense. The following table presents a reconciliation of Adjusted EBITDA as previously defined to Adjusted EBITDA under the updated definition:
 
Three Months Ended
 
Apr 30,
 
Jul 31,
 
Oct 31,
 
Jan 31,
 
Apr 30,
 
Jul 31,
 
Oct 31,
 
Jan 31,
 
2015
 
2015
 
2015
 
2016
 
2016
 
2016
 
2016
 
2017
Adjusted EBITDA, previous definition
$
(3,567
)
 
$
(3,269
)
 
$
1,135

 
$
3,075

 
$
277

 
$
1,874

 
$
3,114

 
$
3,259

Add: Amortization of capitalized internal-use software development costs
1,935

 
2,044

 
2,079

 
2,103

 
2,148

 
2,162

 
2,170

 
2,173

Less: Capitalized portion of stock-based compensation
(93
)
 
(114
)
 
(122
)
 
(130
)
 
(122
)
 
(122
)
 
(124
)
 
(119
)
Adjusted EBITDA, current definition
$
(1,725
)
 
$
(1,339
)
 
$
3,092

 
$
5,048

 
$
2,303

 
$
3,914

 
$
5,160

 
$
5,313


(7)
Beginning as of our first fiscal quarter of 2016, we define an active client as an organization for which we have a contract and the client is launched as of the last day of the quarter, and we count organizations that are closely related as one client, even if they have signed separate contractual agreements. 
All periods prior to the first fiscal quarter of 2016 discussed in this press release or presented in the accompanying financial tables have been revised to conform to this definition of an active client.