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AVG Technologies: Avg Announces Fourth Quarter And Fiscal-Year 2015 Financial Results

The following excerpt is from the company's SEC filing.

Company Grows Annual Revenues 14 Percent to a Record of $428.3 Million

AMSTERDAM, February 24, 2016 /PRNewswire/ AVG Technologies N.V. (NYSE: AVG), the online security company

for devices, data and people, today reported results for the fourth quarter and fiscal-year ended December 31, 2015.

Fourth Quarter and Fiscal-Year 2015 Highlights

Achieved record quarterly revenue of $109.5 million and record fiscal-year revenue of $428.3 million, reflecting annual growth of 9 and 14 percent, respectively.

Quarterly subscription-based revenue grew 15 percent over the same period of last year, comprising over 81 percent of total revenue. For the full year, subscription-based revenue grew 23 percent to $346.2 million.

ZEN user base grew over 170 percent sequentially to 47 million users.

Achieved 30 percent non-GAAP adjusted operating income margin in the fourth quarter and 29 percent for the full year 2015.

Delivered earnings per share of $0.47 in the fourth quarter and $1.81 for the full year 2015.

Fourth quarter 2015 financial results

Revenue for the fourth quarter of 2015 grew over 9 percent to $109.5 million, compared with $100.2 million in the fourth quarter of 2014.

Non-GAAP adjusted net income for the fourth quarter was $24.9 million, or $0.47 per diluted ordinary share. This compares with non-GAAP adjusted net income of $16.2 million, or $0.31 per diluted ordinary share for the same period of the prior year.

GAAP net income for the fourth quarter was $20.6 million, or $0.38 per diluted ordinary share. This compares with net income of $4.6 million, or $0.08 per diluted ordinary share in the prior years fourth quarter.

Non-GAAP adjusted operating income was $32.5 million, compared with $22.3 million for the fourth quarter of 2014. GAAP operating income was $25.6 million, compared with $10.9 million for the fourth quarter of 2014. Operating cash flow was $30.2 million for the quarter, compared with $35.2 million for the fourth quarter last year. Free cash flow was $25.8 million for the quarter, compared with $27.7 million for the same period in the prior year.

Fiscal year 2015 financial results

Revenue for 2015 was $428.3 million, compared with $374.1 million for the fiscal year 2014, an increase of 14 percent.

Non-GAAP adjusted net income for 2015 was $95.7 million, or $1.81 per diluted ordinary share. This compares with non-GAAP adjusted net income of $100.4 million, or $1.91 per diluted ordinary share for fiscal year 2014.

GAAP net income for fiscal year 2015 was $48.9 million, or $0.89 per diluted ordinary share, based on 52.8 million weighted-average diluted ordinary shares outstanding. This compares with net income of $54.4 million, or $1.02 per diluted ordinary share, based on 52.6 million weighted-average diluted ordinary shares outstanding for fiscal year 2014.

Non-GAAP adjusted operating income was $124.9 million, compared with $120.1 million for fiscal year 2014. GAAP operating income was $74.9 million, compared with $79.3 million for fiscal year 2014.

During 2015, the company repurchased 0.7 million shares at a total cost of $13.6 million under its share repurchase program, which was approved in 2015.

The strong results for the fourth quarter and full-year 2015 provide evidence that the transformation we initiated in 2013 is substantially reducing our dependence on search, while building a diversified and sustainable revenue stream from new and emerging online security markets, said Gary Kovacs, the companys chief executive officer. At that time, search revenue comprised nearly 40 percent of total revenues, compared to 18 percent in 2015, and I am pleased to report that throughout this period weve managed to be at or near our target adjusted operating margin of 30 percent. We have continued to optimize our core consumer businesses for strong cash flow, which has enabled investments in new product development as well as a now proven acquisition strategy. More recently, the user migration to ZEN, our cross-platform, multi-device software, continued to exceed our expectations growing to 47 million, up from 17 million at the end of last quarter. Looking at 2016, we believe ZEN will be a key component of our strategy by ultimately integrating all of our products and services and delivering simple, easy-to-use offerings that protect anyone, anywhere they go online.

Financial Outlook

Based on information available as of February 24, 2016, AVG is providing the following outlook for fiscal year 2016 as follows:

Revenue outlook is reconfirmed to be in the range of $440 million to $460 million.

Non-GAAP adjusted net income is expected to be in the range of $98.5 million to $103.5 million; non-GAAP adjusted net income per diluted ordinary share is expected to be in the range of $1.86 to $1.96.

GAAP net income is expected to be in the range of $43 million to $49 million; GAAP net income per diluted ordinary share is expected to be in the range of $0.81 to $0.93.

AVGs expectation of non-GAAP adjusted net income for fiscal year 2016 excludes share-based compensation expense, acquisition amortization and certain other adjustments, and assumes a normalized tax rate of 12.5%. For the purpose of calculating GAAP net income per diluted ordinary share and non-GAAP adjusted net income per diluted ordinary share, the Company assumes approximately 53 million weighted-average diluted ordinary shares outstanding for the full year.

The financial information presented in this press release is neither audited nor reviewed.

Conference Call Information

AVG will hold its quarterly conference call today at 4:30 p.m. ET/1:30 p.m. PT/ 10:30 PM CET to discuss its fourth quarter and fiscal year ending December 31, 2015 financial results, business highlights and outlook. The conference call may be accessed via webcast at http://investors.avg.com or using the following phone numbers and conference ID: +1 212 444 0895 (USA); +1 514 841 2154 (Canada); +420 225 986 511 (CZ); +44 20 3427 1903 (UK); Conference ID: 8441877.

Live and replay versions of the webcast can be accessed via http://investors.avg.com.

Use of Non-GAAP Financial Information

This press release contains supplemental non-GAAP financial measures that are not calculated in accordance with U.S. GAAP. These non-GAAP measures provide additional information on the performance or liquidity of our business that we believe are useful for investors.

Adjusted net income, free cash flow and their related ratios are non-GAAP measures and should not be considered alternatives to the applicable U.S. GAAP measures. In particular, adjusted net income and free cash flow, and their related ratios, should not be considered as measurements of our financial performance or liquidity under U.S. GAAP, as alternatives to income, operating income or any other performance measures derived in accordance with U.S. GAAP or as alternatives to cash flow from operating activities as a measure of our liquidity.

Adjusted net income and free cash flow are measures of financial performance and liquidity, respectively, and have limitations as analytical tools, and should not be considered in isolation from, or as substitutes for, an analysis of our results of operations, including our operating income and cash flows, as reported under U.S. GAAP. We provide...


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