RealPage Reports First Quarter 2020 Financial Results
RealPage, Inc. (NASDAQ:RP), a leading global provider of software and data analytics to the real estate industry, today announced financial results for the first quarter ended March 31, 2020.
First Quarter 2020 Financial Highlights
GAAP total revenue of $276.7 million, an increase of 18% year-over-year; Net income of $5.6 million, or $0.06 in net income per diluted share, a year-over-year decrease of 50%; Adjusted EBITDA of $71.5 million, an increase of 10% year-over-year; and Non-GAAP net income of $40.3 million, or $0.43 in non-GAAP net income per diluted share, a year-over-year increase of 7% and 8%, respectively.Comments on the News
“In the face of COVID-19 headwinds that began to impact our business in March, we are reporting solid first quarter results that include revenue growth of 18% and, excluding changes in restricted cash relating to accounting treatment changes, operating cash flow growth of 22%, both compared to the prior year period,” said Steve Winn, Chairman and CEO of RealPage. “While our range of financial expectations for 2020 includes anticipated headwinds related to lower leasing velocity and delayed new client projects, we remain focused on leading the industry through the storm, including rapidly delivering innovative solutions to optimize rental housing operations such as those that facilitate virtual leasing, living and payments.”
“We are reducing our full year revenue growth outlook by 300 to 500 basis points and our adjusted EBITDA margin guidance by 150 basis points,” said Tom Ernst, CFO and Treasurer of RealPage. “This reduction is driven by lower expectations for bookings in the first half, and slower leasing velocity. While we intend to adjust variable costs due to lower revenue and the realization of some productivity improvements, we do not expect to reduce product development or sales & marketing spend given our view that clients will have an increased need for products and services that help them accelerate their transition to more virtual operations.”
2020 Financial Outlook
RealPage management expects to achieve the following results during the second quarter ending June 30, 2020:
GAAP total revenue is expected to be in the range of $276 million to $280 million; GAAP net income per diluted share is expected to be in the range of $0.00 to $0.05; Non-GAAP total revenue is expected to be in the range of $276 million to $280 million; Adjusted EBITDA is expected to be in the range of $66 million to $70 million; Non-GAAP net income per diluted share is expected to be in the range of $0.38 to $0.42; Non-GAAP diluted weighted average shares outstanding are expected to be approximately 94.7 million.RealPage management expects to achieve the following results during the calendar year ending December 31, 2020:
GAAP total revenue is expected to be in the range of $1,114 million to $1,154 million; GAAP net income per diluted share is expected to be in the range of $0.22 to $0.33; Non-GAAP total revenue is expected to be in the range of $1,115 million to $1,155 million; Adjusted EBITDA is expected to be in the range of $290 million to $300 million; Non-GAAP net income per diluted share is expected to be in the range of $1.74 to $1.84; Non-GAAP diluted weighted average shares outstanding are expected to be approximately 94.4 million.Conference Call Information; Presentation Slides
The Company will host a conference call at 5:00 p.m. EDT today to discuss its financial results. Participants are encouraged to listen to the presentation via a live web broadcast and to view the company’s presentation slides at https://78449.themediaframe.com/dataconf/productusers/rlpg/mediaframe/37741/indexl.html. In addition, a live dial-in is available domestically at 877-407-9128 and internationally at 201-493-6752. A replay will be available at 877-660-6853 or 201-612-7415.
About RealPage
RealPage provides a technology platform that enables real estate owners and managers to change how people experience and use rental space. Clients use the platform to gain transparency in asset performance, leverage data insights and monetize space to create incremental yields. Founded in 1998 and headquartered in Richardson, Texas, RealPage currently serves over 18 million units worldwide from offices in North America, Europe and Asia. For more information about RealPage, please visit https://www.RealPage.com.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains “forward-looking” statements relating to RealPage, Inc.’s strategy, goals, future focus areas, and expected, possible or assumed future results, including its financial outlook for the second quarter ending June 30, 2020 and calendar year ending December 31, 2020, and that the range of financial expectations for 2020 includes anticipated headwinds related to lower leasing velocity and delayed new client projects; our focus on leading the industry through the storm, including rapidly delivering innovative solutions to optimize rental housing operations such as those that facilitate virtual leasing, living and payments; the impact on our financial outlook due to lower expectations for bookings in the first half, slower leasing velocity, and the intent to adjust variable costs due to lower revenue and the realization of some productivity improvements, but not product development or sales and marketing spend given our view that clients will have an increased need for products and services that help them accelerate their transition to more virtual operations. These forward-looking statements are based on management's beliefs and assumptions and on information currently available to management. Forward-looking statements include all statements that are not historical facts and may be identified by terms such as “expects,” “believes,” “plans,” or similar expressions and the negatives of those terms. These forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements, expressed or implied by the forward-looking statements, including the uncertainty associated with the potential impacts of the COVID-19 pandemic on our business, financial condition, and results of operations. The Company may be required to revise its results contained herein upon finalizing its review of quarterly and full-year results and completion of the annual audit, which could cause or contribute to such differences. Additional factors that could cause or contribute to such differences include, but are not limited to, the following: (a) the possibility that general economic conditions, including leasing velocity or other uncertainty, and conditions and uncertainty caused by the COVID-19 pandemic, could cause information technology spending, particularly in the rental housing industry, to be reduced or purchasing decisions to be delayed; (b) an increase in insurance claims; (c) an increase in client cancellations; (d) the inability to increase sales to existing clients and to attract new clients; (e) RealPage’s failure to integrate recent or future acquired businesses successfully or to achieve expected synergies, including the recently completed acquisitions of Modern Message, Buildium, Investor Management Services, Simple Bills, Hipercept, and Lease Term Solutions; (f) the timing and success of new product introductions by RealPage or its competitors; (g) changes in RealPage’s pricing policies or those of its competitors; (h) legal or regulatory proceedings; (i) the inability to achieve revenue growth or to enable margin expansion; (j) changes in RealPage’s estimates with respect to its long-term corporate tax rate or any other impact from the Tax Cuts and Jobs Act;; and (k) such other risks and uncertainties described more fully in documents filed with or furnished to the Securities and Exchange Commission (“SEC”) by RealPage, including its Annual Report on Form 10-K previously filed with the SEC on March 2, 2020. All information provided in this release is as of the date hereof and RealPage undertakes no duty to update this information except as required by law.
Explanation of Non-GAAP Financial Measures
The company reports its financial results in accordance with accounting principles generally accepted in the United States of America, or GAAP. However, the company believes that, in order to properly understand its short-term and long-term financial, operational and strategic trends, it may be helpful for investors to exclude certain non-cash or non-recurring items when used as a supplement to financial performance measures in accordance with GAAP. These items result from facts and circumstances that vary in both frequency and impact on continuing operations. The company also uses results of operations excluding such items to evaluate the operating performance of RealPage and compare it against prior periods, make operating decisions, determine executive compensation, and serve as a basis for long-term strategic planning. These non-GAAP financial measures provide the company with additional means to understand and evaluate the operating results and trends in its ongoing business by eliminating certain non-cash expenses and other items that RealPage believes might otherwise make comparisons of its ongoing business with prior periods more difficult, obscure trends in ongoing operations, reduce management’s ability to make useful forecasts, or obscure the ability to evaluate the effectiveness of certain business strategies and management incentive structures. In addition, the company also believes that investors and financial analysts find this information to be helpful in analyzing the company’s financial and operational performance and comparing this performance to the company’s peers and competitors.
The company defines “Non-GAAP Total Revenue” as total revenue plus acquisition-related deferred revenue. The company believes it is useful to include deferred revenue written down for GAAP purposes under purchase accounting rules in order to appropriately measure the underlying performance of its business operations in the period of activity and associated expense. Further, the company believes this measure is useful to investors as a way to evaluate the company’s ongoing performance because it provides a more accurate depiction of revenue arising from our strategic acquisitions.
The company defines “Adjusted Gross Profit” as gross profit, plus (1) acquisition-related deferred revenue, (2) depreciation, (3) amortization of product technologies, (4) organizational realignment costs and (5) stock-based expense. The company believes that investors and financial analysts find this non-GAAP financial measure to be useful in analyzing the company’s financial and operational performance, comparing this performance to the company’s peers and competitors, and understanding the company’s ability to generate income from ongoing business operations.
The company defines “Adjusted EBITDA” as net income, plus (1) acquisition-related deferred revenue, (2) depreciation, asset impairment, and loss on disposal of assets, (3) amortization of product technologies and intangible assets, (4) change in fair value of equity investment, (5) acquisition-related expense, (6) organizational realignment costs, (7) regulatory and legal matters, (8) stock-based expense, (9) interest expense, net, and (10) income tax (benefit) expense. The company believes that investors and financial analysts find this non-GAAP financial measure to be useful in analyzing the company’s financial and operational performance, comparing this performance to the company’s peers and competitors, and understanding the company’s ability to generate income from ongoing business operations.
The company defines “Non-GAAP Product Development Expense” as product development expense, excluding organizational realignment costs and stock-based expense. The company believes that investors and financial analysts find this non-GAAP financial measure to be useful in analyzing the company’s financial and operational performance, comparing this performance to the company’s peers and competitors, and understanding the company’s ongoing expenditures related to product innovation.
The company defines “Non-GAAP Sales and Marketing Expense” as sales and marketing expense, excluding organizational realignment costs and stock-based expense. The company believes that investors and financial analysts find this non-GAAP financial measure to be useful in analyzing the company’s financial and operational performance, comparing this performance to the company’s peers and competitors, and understanding the company’s ongoing expenditures related to its sales and marketing strategies.
The company defines “Non-GAAP General and Administrative Expense” as general and administrative expense, excluding (1) organizational realignment costs, (2) asset impairment and loss on disposal of assets, (3) acquisition-related expense, (4) regulatory and legal matters, and (5) stock-based expense. The company believes that investors and financial analysts find this non-GAAP financial measure to be useful in analyzing the company’s financial and operational performance, comparing this performance to the company’s peers and competitors, and understanding the company’s underlying expense structure to support corporate activities and processes.
The company defines “Non-GAAP Operating Expense” as operating expense, excluding (1) organizational realignment costs, (2) asset impairment and loss on disposal of assets, (3) amortization of intangible assets, (4) acquisition-related expense, (5) regulatory and legal matters, and (6) stock-based expense. The company believes that investors and financial analysts find this non-GAAP financial measure to be useful in analyzing the company’s financial and operational performance, comparing this performance to the company’s peers and competitors, and understanding the company’s underlying expense structure to support ongoing operations.
The company defines “Non-GAAP Operating Income” as operating income, plus (1) acquisition-related deferred revenue, (2) asset impairment and loss on disposal of assets, (3) amortization of product technologies and intangible assets, (4) acquisition-related expense, (5) organizational realignment costs, (6) regulatory and legal matters, and (7) stock-based expense. The company believes that investors and financial analysts find this non-GAAP financial measure to be useful in analyzing the company’s financial and operational performance, comparing this performance to the company’s peers and competitors, and understanding the company’s ability to generate income from ongoing business operations.
The company defines “Non-GAAP Net Income” as net income, plus (1) income tax (benefit) expense, (2) acquisition-related deferred revenue, (3) asset impairment and loss on disposal of assets, (4) amortization of product technologies and intangible assets, (5) change in fair value of equity investment, (6) acquisition-related expense, (7) organizational realignment costs, (8) regulatory and legal matters, (9) amortization of convertible note discount, and (10) stock-based expense, less (11) provision for income tax expense based on an assumed rate in order to approximate the company’s long-term effective corporate tax rate.
The company defines “Non-GAAP Net Income per Diluted Share” as Non-GAAP Net Income divided by Non-GAAP Diluted Weighted Average Shares Outstanding. The company believes that investors and financial analysts find this non-GAAP financial measure to be useful in analyzing the company’s financial and operational performance, comparing this performance to the company’s peers and competitors, and understanding the company’s ability to generate income from ongoing business operations.
The company defines "Non-GAAP Diluted Weighted Average Shares Outstanding" as diluted weighted average shares outstanding excluding the impact of shares that are issuable upon conversions of our convertible notes. It is the current intent of the company to settle conversions of the convertible notes through combination settlement, which involves repayment of the principal portion in cash and any excess of the conversion value over the principal amount in shares of our common stock. We exclude these shares that are issuable upon conversions of our convertible notes because we expect that the dilution from such shares will be offset by the convertible note hedge transactions entered into in May 2017 in connection with the issuance of the convertible notes.
The company defines “Non-GAAP On Demand Revenue” as total on demand revenue plus acquisition-related deferred revenue. The company believes it is useful to include deferred revenue written down for GAAP purposes under purchase accounting rules in order to appropriately measure the underlying performance of the company’s business operations in the period of activity and associated expense. Further, the company believes that investors and financial analysts find this measure to be useful in evaluating the company’s ongoing performance because it provides a more accurate depiction of on demand revenue arising from our strategic acquisitions.
The company defines “Ending On Demand Units” as the number of rental housing units managed by our clients with one or more of our on demand software solutions at the end of the period. We use ending on demand units to measure the success of our strategy of increasing the number of rental housing units managed with our on demand software solutions. Property unit counts are provided to us by our customers as new sales orders are processed. Property unit counts may be adjusted periodically as information related to our clients’ properties is updated or supplemented, which could result in adjustments to the number of units previously reported.
The company defines “Average On Demand Units” as the average of the beginning and ending on demand units for each quarter in the period presented. The company’s management monitors this metric to measure its success in increasing the number of on demand software solutions utilized by our clients to manage their rental housing units, our overall revenue, and profitability.
The company defines “ACV,” or Annual Client Value, as management’s estimate of the annual value of the company’s on demand revenue contracts at a point in time. The company’s management monitors this metric to measure its success in increasing the number of on demand units, and the amount of software solutions utilized by its clients to manage their rental housing units.
The company defines “RPU,” or Revenue Per Unit, as ACV divided by ending on demand units. The company monitors this metric to measure its success in increasing the penetration of on demand software solutions utilized by its clients to manage their rental housing units.
The company excludes or adjusts each of the items identified below from the applicable non-GAAP financial measure referenced above for the reasons set forth with respect to each excluded item:
March 31,
December 31,
2020
2019
Assets Current assets: Cash and cash equivalents
$
184,309
$
197,154
Restricted cash
241,310
243,323
Accounts receivable, less allowances of $10,622 and $10,271 at March 31, 2020 and December 31, 2019, respectively
131,613
143,127
Prepaid expenses
26,886
24,539
Other current assets
27,519
27,387
Total current assets
611,637
635,530
Property, equipment, and software, net
165,957
163,282
Right-of-use assets
118,741
121,941
Goodwill
1,663,142
1,611,749
Intangible assets, net
369,942
372,996
Deferred tax assets, net
34,249
33,812
Other assets
28,819
30,507
Total assets
$
2,992,487
$
2,969,817
Liabilities and stockholders’ equity Current liabilities: Accounts payable
$
40,210
$
40,092
Accrued expenses and other current liabilities
87,337
89,038
Current portion of deferred revenue
137,904
134,148
Current portion of term loans
22,500
18,750
Customer deposits held in restricted accounts
241,759
243,316
Total current liabilities
529,710
525,344
Deferred revenue
4,490
4,793
Revolving facility
230,000
230,000
Term loans, net
567,942
575,313
Convertible notes, net
308,389
305,188
Lease liabilities, net of current portion
131,099
133,313
Other long-term liabilities
30,014
22,940
Total liabilities
1,801,644
1,796,891
Stockholders’ equity: Common stock, $0.001 par value: 250,000,000 shares authorized, 96,288,420 and 96,100,296 shares issued and 96,277,515 and 94,744,157 shares outstanding at March 31, 2020 and December 31, 2019, respectively
96
96
Additional paid-in capital
1,199,209
1,222,356
Treasury stock, at cost: 10,905 and 1,356,139 shares at March 31, 2020 and December 31, 2019, respectively
(104
)
(39,483
)
Accumulated deficit
(2,090
)
(7,695
)
Accumulated other comprehensive loss
(6,268
)
(2,348
)
Total stockholders’ equity
1,190,843
1,172,926
Total liabilities and stockholders’ equity
$
2,992,487
$
2,969,817
2020
2019
Revenue: On demand
$
268,471
$
226,519
Professional and other
8,202
7,787
Total revenue
276,673
234,306
Cost of revenue(1)
108,910
90,194
Amortization of product technologies
13,772
9,514
Gross profit
153,991
134,598
Operating expenses: Product development(1)
31,548
29,897
Sales and marketing(1)
54,657
44,823
General and administrative(1)
40,528
28,143
Amortization of intangible assets
11,419
9,836
Total operating expenses
138,152
112,699
Operating income
15,839
21,899
Interest expense and other, net
(12,735
)
(5,980
)
Income before income taxes
3,104
15,919
Income tax (benefit) expense
(2,501
)
4,647
Net income
$
5,605
$
11,272
Net income per share attributable to common stockholders: Basic
$
0.06
$
0.12
Diluted
$
0.06
$
0.12
Weighted average common shares outstanding: Basic
92,654
91,490
Diluted
95,919
95,561
(1) Includes stock-based expense as follows: Three Months Ended March 31,
2020
2019
Cost of revenue
$
2,010
$
1,331
Product development
1,937
2,480
Sales and marketing
5,888
5,350
General and administrative
6,366
5,752
$
16,201
$
14,913
2020
2019
Cash flows from operating activities: Net income
$
5,605
$
11,272
Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization
33,562
27,824
Amortization of debt discount and issuance costs
3,474
3,234
Amortization of right-of-use assets
3,603
3,005
Deferred taxes
(2,992
)
2,550
Stock-based expense
16,201
14,913
Loss on disposal and impairment of other long-lived assets
12
286
Change in fair value of equity investment
-
(2,600
)
Acquisition-related consideration
489
405
Change in customer deposits
(5,007
)
(50,252
)
Other changes in assets and liabilities, net of assets acquired and liabilities assumed in business combinations
6,635
(6,645
)
Net cash provided by operating activities
61,582
3,992
Cash flows from investing activities: Purchases of property, equipment, and software
(13,254
)
(10,873
)
Acquisition of businesses, net of cash and restricted cash acquired
(59,462
)
-
Net cash used in investing activities
(72,716
)
(10,873
)
Cash flows from financing activities: Payments on and proceeds from debt, net
(3,750
)
(4,033
)
Payments on finance lease obligations
(811
)
(769
)
Payments of acquisition-related consideration
(45
)
(11,412
)
Proceeds from exercise of stock options
4,906
1,877
Purchase of treasury stock related to stock-based compensation
(3,493
)
(5,016
)
Other financing activities, net
(26
)
-
Net cash used in financing activities
(3,219
)
(19,353
)
Net decrease in cash, cash equivalents and restricted cash
(14,353
)
(26,234
)
Effect of exchange rate on cash
(505
)
(99
)
Cash, cash equivalents and restricted cash: Beginning of period
440,477
382,758
End of period
$
425,619
$
356,425
While the company believes that these non-GAAP financial measures provide useful supplemental information to investors regarding the underlying performance of our business operations, investors are reminded to consider these non-GAAP measures in addition to, and not as a substitute for, financial performance measures prepared in accordance with GAAP. In addition, it should be noted that these non-GAAP financial measures may be different from non-GAAP measures used by other companies, and the company may utilize other measures to illustrate performance in the future. Non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP. Non-GAAP Total Revenue Set forth below is a presentation of the company’s “Non-GAAP Total Revenue.” Please reference the “Explanation of Non-GAAP Financial Measures” section.
Three Months Ended March 31,
2020
2019
Revenue (GAAP)
$
276,673
$
234,306
Acquisition-related deferred revenue
400
224
Non-GAAP Total Revenue
$
277,073
$
234,530
Adjusted Gross Profit Set forth below is a presentation of the company’s “Adjusted Gross Profit.” Please reference the “Explanation of Non-GAAP Financial Measures” section.
Three Months Ended March 31,
2020
2019
Gross profit (GAAP)
$
153,991
$
134,598
Acquisition-related deferred revenue
400
224
Depreciation
3,780
3,671
Amortization of product technologies
13,772
9,514
Organizational realignment
198
-
Stock-based expense
2,010
1,331
Adjusted Gross Profit
$
174,151
$
149,338
Adjusted EBITDA Set forth below is a presentation of the company’s "Adjusted EBITDA." Please reference the "Explanation of Non-GAAP Financial Measures" section.
Three Months Ended March 31,
2020
2019
Net income (GAAP)
$
5,605
$
11,272
Acquisition-related deferred revenue
400
224
Depreciation, asset impairment, and loss on disposal of assets
8,383
8,760
Amortization of product technologies and intangible assets
25,191
19,350
Change in fair value of equity investment
-
(2,600
)
Acquisition-related expense
3,724
29
Organizational realignment
1,211
-
Regulatory and legal matters
359
-
Stock-based expense
16,201
14,913
Interest expense, net
12,905
8,581
Income tax (benefit) expense
(2,501
)
4,647
Adjusted EBITDA
$
71,478
$
65,176
Three Months Ended March 31,
2020
2019
Product development expense (GAAP)$
31,548
$
29,897
Less: Organizational realignment
233
-
Stock-based expense
1,937
2,480
Non-GAAP Product Development Expense$
29,378
$
27,417
Non-GAAP Sales and Marketing Expense Set forth below is a presentation of the company’s "Non-GAAP Sales and Marketing Expense." Please reference the "Explanation of Non-GAAP Financial Measures" section.Three Months Ended March 31,
2020
2019
Sales and marketing expense (GAAP)$
54,657
$
44,823
Less: Organizational realignment
611
-
Stock-based expense
5,888
5,350
Non-GAAP Sales and Marketing Expense$
48,158
$
39,473
Non-GAAP General and Administrative Expense Set forth below is a presentation of the company’s "Non-GAAP General and Administrative Expense." Please reference the "Explanation of Non-GAAP Financial Measures" section.Three Months Ended March 31,
2020
2019
General and administrative expense (GAAP)$
40,528
$
28,143
Less: Organizational realignment
169
-
Asset impairment and loss on disposal of assets
12
286
Acquisition-related expense
3,724
29
Regulatory and legal matters
359
-
Stock-based expense
6,366
5,752
Non-GAAP General and Administrative Expense$
29,898
$
22,076
Non-GAAP Operating Expense Set forth below is a presentation of the company’s "Non-GAAP Operating Expense." Please reference the "Explanation of Non-GAAP Financial Measures" section.Three Months Ended March 31,
2020
2019
Operating expense (GAAP)$
138,152
$
112,699
Less: Organizational realignment
1,013
-
Asset impairment and loss on disposal of assets
12
286
Amortization of intangible assets
11,419
9,836
Acquisition-related expense
3,724
29
Regulatory and legal matters
359
-
Stock-based expense
14,191
13,582
Non-GAAP Operating Expense$
107,434
$
88,966
Three Months Ended March 31,
2020
2019
Operating income (GAAP)
$
15,839
$
21,899
Acquisition-related deferred revenue
400
224
Asset impairment and loss on disposal of assets
12
286
Amortization of product technologies and intangible assets
25,191
19,350
Acquisition-related expense
3,724
29
Organizational realignment
1,211
-
Regulatory and legal matters
359
-
Stock-based expense
16,201
14,913
Non-GAAP Operating Income
$
62,937
$
56,701
Non-GAAP Net Income Set forth below is a presentation of the company’s "Non-GAAP Net Income" and "Non-GAAP Net Income per Diluted Share." Please reference the "Explanation of Non-GAAP Financial Measures" section.
Three Months Ended March 31,
2020
2019
Net income (GAAP)
$
5,605
$
11,272
Income tax (benefit) expense
(2,501
)
4,647
Income before income taxes
3,104
15,919
Acquisition-related deferred revenue
400
224
Asset impairment and loss on disposal of assets
12
286
Amortization of product technologies and intangible assets
25,191
19,350
Change in fair value of equity investment
-
(2,600
)
Acquisition-related expense
3,724
29
Organizational realignment
1,211
-
Regulatory and legal matters
359
-
Amortization of convertible note discount
2,838
2,676
Stock-based expense
16,201
14,913
Non-GAAP income before income taxes
53,040
50,797
Assumed rate for income tax expense (1)
24.0
%
26.0
%
Assumed provision for non-GAAP income tax expense
12,730
13,207
Non-GAAP Net Income
$
40,310
$
37,590
Net income per diluted share
$
0.06
$
0.12
Non-GAAP Net Income per Diluted Share
$
0.43
$
0.40
Weighted average outstanding shares - basic
92,654
91,490
Non-GAAP Adjusted Diluted Weighted Average Shares Outstanding: Weighted average outstanding shares - diluted
95,919
95,561
Dilution offset from convertible note hedge transactions
(2,170
)
(2,207
)
Non-GAAP Diluted Weighted Average Shares Outstanding (2)
93,749
93,354
Non-GAAP On Demand Revenue Set forth below is a presentation of the company’s "Non-GAAP On Demand Revenue." Please reference the "Explanation of Non-GAAP Financial Measures" section.
Three Months Ended March 31,
2020
2019
On demand revenue (GAAP)
$
268,471
$
226,519
Acquisition-related deferred revenue
400
224
Non-GAAP On Demand Revenue
$
268,871
$
226,743
Three Months Ended March 31,
2020
2019
Ending on demand units
18,949
16,401
Average on demand units
18,712
16,310
ACV
$
1,089,189
$
912,060
RPU
$
57.48
$
55.61
Non-GAAP Total Revenue Guidance Set forth below is a presentation of the company’s "Non-GAAP Total Revenue" guidance for the three months ending June 30, 2020, and the twelve months ending December 31, 2020. Please reference the "Explanation of Non-GAAP Financial Measures" section.
Guidance Range for the Three Months Ending Guidance Range for the Twelve Months Ending June 30, 2020 December 31, 2020 Low (3) High (3) Low (3) High (3) Revenue (GAAP)
$
275,580
$
279,580
$
1,113,720
$
1,153,720
Acquisition-related deferred revenue
420
420
1,280
1,280
Non-GAAP Total Revenue
$
276,000
$
280,000
$
1,115,000
$
1,155,000
Non-GAAP Net Income Guidance Set forth below is a presentation of the company’s "Non-GAAP Net Income" and "Non-GAAP Net Income per Diluted Share" guidance for the three months ending June 30, 2020, and the twelve months ending December 31, 2020. Please reference the "Explanation of Non-GAAP Financial Measures" section.
Guidance Range for the Three Months Ending Guidance Range for the Twelve Months Ending June 30, 2020 December 31, 2020 Low (3) High (3) Low (3) High (3) Non-GAAP Net Income: Net income (GAAP)
$
210
$
4,510
$
21,500
$
31,870
Income tax expense
120
1,220
2,820
6,250
Income before income taxes
330
5,730
24,320
38,120
Acquisition-related deferred revenue
420
420
1,280
1,280
Asset impairment and loss on disposal of assets
-
-
20
20
Amortization of product technologies and intangible assets
25,860
25,660
101,250
100,650
Acquisition-related expense
2,520
2,420
10,780
10,480
Organizational realignment
350
150
1,560
1,360
Regulatory and legal matters
-
-
360
360
Amortization of convertible note discount
2,880
2,880
11,610
11,610
Stock-based expense
15,080
14,880
65,410
64,810
Non-GAAP income before income taxes
47,440
52,140
216,590
228,690
Expected effective tax rate (1)
24.0
%
24.0
%
24.0
%
24.0
%
Assumed provision for income tax expense
11,386
12,514
51,982
54,886
Non-GAAP Net Income
$
36,054
$
39,626
$
164,608
$
173,804
Net income per diluted share
$
-
$
0.05
$
0.22
$
0.33
Non-GAAP Net Income per Diluted Share
$
0.38
$
0.42
$
1.74
$
1.84
Non-GAAP Adjusted Diluted Weighted Average Shares Outstanding: Weighted average outstanding shares - diluted
97,233
97,233
96,889
96,889
Dilution offset from convertible note hedge transactions
(2,569
)
(2,569
)
(2,537
)
(2,537
)
Non-GAAP Diluted Weighted Average Shares Outstanding (2)
94,664
94,664
94,352
94,352
Guidance Range for the
Three Months Ending Guidance Range for the
Twelve Months Ending June 30, 2020 December 31, 2020 Low (3) High (3) Low (3) High (3) Adjusted EBITDA: Net income (GAAP)
$
210
$
4,510
$
21,500
$
31,870
Acquisition-related deferred revenue
420
420
1,280
1,280
Depreciation, asset impairment, and loss on disposal of assets
9,390
9,190
37,060
36,460
Amortization of product technologies and intangible assets
25,860
25,660
101,250
100,650
Acquisition-related expense
2,520
2,420
10,780
10,480
Organizational realignment
350
150
1,560
1,360
Regulatory and legal matters
-
-
360
360
Stock-based expense
15,080
14,880
65,410
64,810
Interest expense, net
12,050
11,550
47,980
46,480
Income tax expense
120
1,220
2,820
6,250
Adjusted EBITDA$
66,000
$
70,000
$
290,000
$
300,000
(1)
For 2020, the Company uses a 24.0% tax rate to approximate the Company's long-term effective corporate tax rate. Please reference the “Explanation of Non-GAAP Financial Measures” section.(2)
It is the current intent of the Company to settle conversions of the Convertible Notes through combination settlement, which involves repayment of the principal portion in cash and any excess of the conversion value over the principal amount in shares of our common stock. We exclude these shares that are issuable upon conversions of our convertible notes because we expect that the dilution from such shares will be offset by the convertible note hedge transactions entered into in May 2017 in connection with the issuance of the convertible notes.(3)
Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. The company may be required to revise its results upon finalizing its review of quarterly and full year results, which could cause or contribute to such differences. All information provided in this release is as of the date hereof and RealPage, Inc. undertakes no duty to update this information except as required by law. See additional discussion under "Cautionary Statement Regarding Forward-Looking Statements" above.
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