Le Lézard
Classified in: Science and technology, Business, Covid-19 virus
Subjects: EARNINGS, Conference Call, Webcast

Vocera Announces Second Quarter 2021 Financial Results


Vocera Communications, Inc. (NYSE: VCRA), a recognized leader in clinical communication and workflow solutions, today reported total revenue of $56.2 million for the second quarter of 2021, an increase of 19% compared to the second quarter of 2020.

"We just completed the strongest second quarter in the company's history," said Brent Lang, Chairman and CEO of Vocera. "The strength was broad based across our business, with large hospital system wins driving software growth. We believe our solution is a rising priority for hospitals, and our market leadership position is translating into consistent, excellent performance."

Second quarter of 2021 financial highlights include:

Second Quarter 2021 Results

Total revenue for the second quarter of 2021 was $56.2 million, an increase of 19% compared to last year.

(in thousands)

Three months ended June 30,

 

2021

 

2020

 

% change

Product revenue

 

 

 

 

 

Device

$

16,256

 

 

$

17,100

 

 

(4.9

)

%

Software

12,088

 

 

6,851

 

 

76.4

 

 

Total product

$

28,344

 

 

$

23,951

 

 

18.3

 

%

 

 

 

 

 

 

Service revenue

 

 

 

 

 

Subscription and support

$

22,641

 

 

$

18,994

 

 

19.2

 

%

Professional services and training

5,195

 

 

4,402

 

 

18.0

 

 

Total service

27,836

 

 

23,396

 

 

19.0

 

%

Total revenue

$

56,180

 

 

$

47,347

 

 

18.7

 

%

GAAP gross margin for the second quarter of 2021 was 64.5%, compared to 63.2% in the second quarter of 2020.

 

Three months ended June 30,

 

2021

 

2020

Gross margin

 

 

 

Product

73.4

%

 

67.8

%

Service

55.5

 

 

58.6

 

Total gross margin

64.5

%

 

63.2

%

 

 

 

 

Non-GAAP gross margin

 

 

 

Product

76.8

%

 

68.6

%

Service

60.4

 

 

62.5

 

Total non-GAAP gross margin

68.7

%

 

65.6

%

GAAP net loss for the second quarter of 2021 was $(2.3) million, or $(0.07) per share, compared to GAAP net loss of $(3.5) million, or $(0.11) per share in the second quarter of 2020.

 

Three months ended June 30,

(in thousands except per share amounts)

2021

 

 

2020

 

Net loss

$

(2,282

)

 

 

$

(3,468

)

 

Net loss per share

$

(0.07

)

 

 

$

(0.11

)

 

Non-GAAP net income

$

5,428

 

 

 

$

2,529

 

 

Non-GAAP diluted net income per share

$

0.15

 

 

 

$

0.08

 

 

Adjusted EBITDA

$

8,558

 

 

 

$

5,726

 

 

Deferred revenue as of June 30, 2021 was $62.6 million compared to $64.7 million as of December 31, 2020. Cash, cash equivalents and short-term investments were $291.9 million as of June 30, 2021 compared to $230.2 million as of December 31, 2020.

2021 Guidance

The Company has increased its 2021 guidance for revenue, adjusted EBITDA and GAAP loss per share. Revenue is expected to be in a range of $221.0 million and $231.0 million and GAAP loss per share between $(0.68) and $(0.50). The Company expects non-GAAP diluted earnings per share to be between $0.49 and $0.59 and non-GAAP Adjusted EBITDA to be between $29.0 million and $34.0 million.

 

FY'21

(in millions except per share amounts)

Low

 

High

Revenue

$

221.0

 

 

 

$

231.0

 

 

Loss per share

$

(0.68

)

 

 

$

(0.50

)

 

Non-GAAP diluted earnings per share

$

0.49

 

 

 

$

0.59

 

 

Adjusted EBITDA

$

29.0

 

 

 

$

34.0

 

 

Non-GAAP Income Tax Expense

Starting April 1, 2021, the Company changed the calculation of its non-GAAP provision for income taxes in accordance with the SEC guidance of non-GAAP financial measures and has applied such change to all periods presented. The Company's current and deferred income tax expense is commensurate with the non-GAAP measure of profitability using a non-GAAP tax rate of 20% for the three and six months ended June 30, 2021 and 2020. The Company uses annual projected tax rate in its computation of the non-GAAP income tax provision, and excludes the direct impact of stock-based compensation, intangible amortization expenses and acquisition related expenses. The projected rate considers other factors such as our current operating structure, existing tax positions in various jurisdictions, and key legislation in major jurisdictions where we operate.

The change will not affect the company's non-GAAP income before income taxes, actual cash tax payments, or cash flows, but will result in higher non-GAAP provision for income taxes. The Company, however, does not expect to pay substantial taxes on a GAAP basis in the U.S. and certain other foreign jurisdictions for the foreseeable future due to its net operating loss carryforward balances.

Conference Call Information

Vocera Communications will host a conference call at 5 p.m. ET (2 p.m. PT) today, July 29, 2021, to discuss the Company's results.

A free, live webcast of the conference call will be available on the Investors section of the company's website at investors.vocera.com.

The call also can be accessed by dialing +1 844-200-6205, or +1 646-904-5544 for international callers, and using the access code 421803.

A replay of the call will be archived after the event at investors.vocera.com.

Forward-Looking Statements

Statements in this press release that are not strictly historical in nature are forward-looking statements within the meaning of the U.S. federal securities laws. These forward-looking statements are based on limited information currently available to us and our management's expectations, which are inherently subject to change and involve a number of risks and uncertainties.

Actual events or results may differ materially from those in any forward-looking statement due to various factors, including but not limited to, potential impacts of the COVID-19 pandemic on our operations, changes in regulations in the U.S. and other countries; the effects on government and commercial hospital customers of the federal budget and budgetary uncertainty; changes in healthcare insurance coverage and consumers' utilization of healthcare and hospital services; our ability to achieve and maintain profitability; the demand for our various solutions in the healthcare and other markets; our lengthy and unpredictable sales cycle; our ability to offer high-quality services and support for our solutions; our ability to achieve anticipated strategic or financial benefits from our acquisitions; our ability to acquire the sole and limited source hardware and software components of our solutions; our ability to obtain the required capacity and product quality from our contract manufacturers; our ability to develop and introduce new solutions and features to existing solutions and to manage our growth; the impact of tax law reform on us or our customers; and the other factors described in our most recently filed Quarterly Report on Form 10-Q, as well as our other filings with the Securities and Exchange Commission (SEC). Our filings with the SEC are available on the Investors section of the Company's web site at www.vocera.com. The financial and other information contained in this press release should be read in conjunction with the financial statements and notes thereto included in our filings with the SEC. Our operating results for any historical period, including the second quarter of 2021, are not necessarily indicative of our operating results for any future periods. This press release speaks only as of its date. We assume no obligation to update the information in this press release, to revise any forward-looking statements, or to update the reasons therefor. Actual events or results could differ materially from those anticipated in forward-looking statements.

Computational Guidance on Earnings Per Share Estimates

Accounting principles require that EPS be computed based on the weighted average shares outstanding ("basic"), and also assuming the issuance of potentially issuable shares (such as those subject to stock options, convertible notes, etc.) if those potentially issuable shares would reduce EPS ("diluted").

The number of shares related to options and similar instruments included in diluted EPS is based on the "Treasury Stock Method" prescribed in Financial Accounting Standards Board ("FASB") ASC Topic 260, Earnings Per Share ("FASB ASC Topic 260"). This method assumes a theoretical repurchase of shares using the proceeds of the respective stock option exercise at a price equal to the issuer's average stock price during the related earnings period. Accordingly, the number of shares includable in the calculation of diluted EPS in respect of stock options and similar instruments is dependent on this average stock price and will increase as the average stock price increases.

Starting January 1, 2021, the number of shares includable in the calculation of diluted EPS in respect of convertible senior notes is based on the "If Converted" method prescribed in FASB ASC Topic 260. This method assumes the conversion or exchange of these securities for shares of common stock. In determining if convertible securities are dilutive, the interest savings (net of tax) subsequent to an assumed conversion are added back to net earnings. The shares related to a convertible security are included in diluted EPS only if EPS as otherwise calculated is greater than the interest savings, net of tax, divided by the shares issuable upon exercise or conversion of the instrument. Accordingly, the calculation of diluted EPS for these instruments is dependent on the level of net earnings.

Use of Non-GAAP Financial Information

This press release contains financial measures that are not calculated in accordance with U.S. generally accepted accounting principles (GAAP). Our management evaluates the Company's results and makes operating decisions using various GAAP and non-GAAP measures. In addition to our GAAP results, we also consider non-GAAP gross margin, non-GAAP gross margin for products and for services, non-GAAP net income/(loss), non-GAAP diluted income/(loss) per share, non-GAAP operating expenses, non-GAAP other expense, net and non-GAAP provision for (benefit from) income taxes. We also present Adjusted EBITDA, a non-GAAP measure that we reconcile to net income/(loss). These non-GAAP measures should not be considered as a substitute for the corresponding financial measure derived in accordance with GAAP. We present the non-GAAP measures because we consider them to be important supplemental information for our investors for analyzing our performance, core operating results and trends. Investors are encouraged to review the reconciliation of non-GAAP financial measures to their most directly comparable GAAP measures included with this press release.

Our non-GAAP gross margins, non-GAAP net income/(loss), non-GAAP diluted income/(loss) per share, non-GAAP operating expenses, non-GAAP other expense, net, non-GAAP provision for (benefit from) income taxes, and Adjusted EBITDA are exclusive of certain items to facilitate management's review of the comparability of our core operating results on a period-to-period basis because such items are not related to our ongoing core operating results as viewed by management. We define our "core operating results" as those revenues recorded in a particular period and the expenses incurred within that period that directly drive operating income in that period. Management uses these non-GAAP financial measures in making operating decisions because, in addition to meaningful supplemental information regarding operating performance, the measures give us a better understanding of how we should invest in research and development, fund infrastructure growth and evaluate the effectiveness of marketing strategies. In calculating the above non-GAAP results, management specifically adjusted for the following excluded items:

a) Stock-based compensation expense impact. We recognize equity plan-related compensation expenses, which represent the fair value of all share-based payments to employees, including grants of employee stock options and restricted stock units as non-GAAP adjustments in each period.

b) Amortization of acquired intangibles. We acquired certain companies in 2021, 2020, 2016, and 2014, and booked intangible assets related to these acquisitions. The amortization of these acquired intangible assets is excluded from non-GAAP net income because it is not related to ongoing controllable management decisions and because it is non-cash in nature.

c) Acquisition related expenses. In addition to the amortization of acquired intangibles mentioned above, we also adjust for certain acquisition-related expenses that we may incur including (i) professional service fees and (ii) transition costs. Professional service fees include third party costs related to the acquisition, such as due diligence costs, accounting fees, legal fees, valuation services and commissions, if any. Transition costs include retention payments and other transitional employee costs treated as compensation expense as well as the change in the fair value of contingent consideration payments payable to the selling shareholders. We consider such costs and adjustments as highly variable in amount and frequency, being significantly impacted by the timing and size of any acquisitions. By excluding acquisition-related costs and adjustments from our non-GAAP measures, management can better focus on the organic continuing operations of our baseline and acquired businesses.

d) Income tax effects. Starting April 1, 2021, we changed the calculation of our non-GAAP provision for income taxes in accordance with the SEC guidance of non-GAAP financial measures. The Company's current and deferred income tax expense is commensurate with the non-GAAP measure of profitability using a non-GAAP tax rate of 20% for the three and six months ended June 30, 2021 and 2020. We use the annual projected tax rate in computation of the non-GAAP income tax provision, and exclude the direct impact of stock-based compensation, intangible amortization expenses and acquisition related expenses. The projected rate considers other factors such as our current operating structure, existing tax positions in various jurisdictions, and key legislation in major jurisdictions where we operate.

Management adjusts for the above items because management believes that, in general, these items possess one or more of the following characteristics: their magnitude and timing are largely outside of the Company's control; they are unrelated to the ongoing operation of the business in the ordinary course; they are unusual and we do not expect them to occur in the ordinary course of business; or they are non-operational, or non-cash expenses involving stock award grants.

We believe that the presentation of these non-GAAP financial measures is warranted for several reasons:

a) Such non-GAAP financial measures provide an additional analytical tool for understanding our financial performance by excluding the impact of items which may obscure trends in the core operating results of the business;

b) These non-GAAP financial measures facilitate comparisons to the operating results of other companies commonly compared to us, which use similar financial measures to supplement their GAAP results, thus enhancing the perspective of investors who wish to utilize such comparisons in their analysis of our performance; and

c) These non-GAAP financial measures are employed by our management in their own evaluation of performance and are utilized in financial and operational decision-making processes, such as budget planning and forecasting.

Set forth below are additional reasons why share-based compensation expense is excluded from our non-GAAP financial measures:

a) While share-based compensation constitutes one of our ongoing and recurring expenses, it is not an expense that requires cash settlement by us. We therefore exclude these charges for purposes of evaluating core operating results. Thus, our non-GAAP measurements are presented exclusive of stock-based compensation expense to assist management and investors in evaluating our core operating results.

b) We present share-based payment compensation expense in our reconciliation of non-GAAP financial measures on a pre-tax basis because the exact tax differences related to the timing and deductibility of share-based compensation are dependent upon the trading price of our common stock and the timing and exercise by employees of their stock options. As a result of these timing and market uncertainties, the tax effect related to share-based compensation expense would be inconsistent in amount and frequency and is therefore excluded from our non-GAAP results.

As stated above, we present non-GAAP financial measures because we consider them to be important supplemental measures of performance. However, non-GAAP financial measures have limitations as an analytical tool and should not be considered in isolation or as a substitute for our GAAP results. In the future, we expect to incur expenses similar to certain of the non-GAAP adjustments described above and expect to continue reporting non-GAAP financial measures excluding such items. Some of the limitations in relying on non-GAAP financial measures are:

Pursuant to the requirements of SEC Regulation G, a detailed reconciliation between our non-GAAP and GAAP financial results is set forth in the financial tables referred to above, and linked to, this press release. Investors are advised to carefully review and consider this information strictly as a supplement to the GAAP results for the respective periods.

About Vocera:

The mission of Vocera Communications, Inc. is to improve the lives of healthcare professionals, patients, and families. Founded in 2000, Vocera provides solutions that help protect and connect team members, simplify workflows, increase efficiency, enhance quality of care and safety, and humanize the healthcare experience. More than 2,300 facilities worldwide, including nearly 1,900 hospitals and healthcare facilities, have selected Vocera solutions to enable their workforce to communicate and collaborate with co-workers and engage with patients and families. Mobile workers can choose the right device for their role or task, including smartphones or one of the company's wearable communication devices, and use voice commands to easily reach people by name, role, or group. The hands-free Vocera Smartbadge was named to TIME's list of the 100 Best Inventions of 2020. The Vocera Platform can integrate with more than 150 clinical and operational systems, including electronic health records, nurse call systems, ventilators, physiological monitors, and more. In addition to healthcare, Vocera solutions are found in aged care facilities, veterinary hospitals, schools, luxury hotels, retail stores, power facilities, and more. Visit www.vocera.com to learn more, and follow @VoceraComm on Twitter.

Vocera® and the Vocera logo are trademarks of Vocera Communications, Inc. registered in the United States and other jurisdictions. All other trademarks appearing in this release are the property of their respective owners.

 

Vocera Communications, Inc.

Condensed Consolidated Statements of Operations

(In Thousands, Except Per Share Amounts)

(Unaudited)

 

 

Three months ended June 30,

 

Six months ended June 30,

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Revenue

 

 

 

 

 

 

 

Product

$

28,344

 

 

 

$

23,951

 

 

 

$

50,952

 

 

 

$

41,801

 

 

Service

27,836

 

 

 

23,396

 

 

 

53,896

 

 

 

46,219

 

 

Total revenue

56,180

 

 

 

47,347

 

 

 

104,848

 

 

 

88,020

 

 

Cost of revenue

 

 

 

 

 

 

 

Product

7,541

 

 

 

7,710

 

 

 

14,497

 

 

 

14,074

 

 

Service

12,383

 

 

 

9,694

 

 

 

23,210

 

 

 

20,217

 

 

Total cost of revenue

19,924

 

 

 

17,404

 

 

 

37,707

 

 

 

34,291

 

 

Gross profit

36,256

 

 

 

29,943

 

 

 

67,141

 

 

 

53,729

 

 

Operating expenses

 

 

 

 

 

 

 

Research and development

12,006

 

 

 

9,349

 

 

 

22,356

 

 

 

18,381

 

 

Sales and marketing

18,425

 

 

 

15,998

 

 

 

36,095

 

 

 

32,961

 

 

General and administrative

9,064

 

 

 

6,923

 

 

 

16,339

 

 

 

13,314

 

 

Total operating expenses

39,495

 

 

 

32,270

 

 

 

74,790

 

 

 

64,656

 

 

Loss from operations

(3,239

)

 

 

(2,327

)

 

 

(7,649

)

 

 

(10,927

)

 

Interest income

295

 

 

 

913

 

 

 

641

 

 

 

2,033

 

 

Interest expense

(794

)

 

 

(2,308

)

 

 

(1,571

)

 

 

(4,582

)

 

Other income (expense), net

1,544

 

 

 

210

 

 

 

(1,002

)

 

 

(381

)

 

Loss before income taxes

(2,194

)

 

 

(3,512

)

 

 

(9,581

)

 

 

(13,857

)

 

(Provision for) benefit from income taxes

(88

)

 

 

44

 

 

 

(334

)

 

 

(81

)

 

Net loss

$

(2,282

)

 

 

$

(3,468

)

 

 

$

(9,915

)

 

 

$

(13,938

)

 

 

 

 

 

 

 

 

 

Loss per share

 

 

 

 

 

 

 

Basic

$

(0.07

)

 

 

$

(0.11

)

 

 

$

(0.29

)

 

 

$

(0.44

)

 

Diluted

$

(0.07

)

 

 

$

(0.11

)

 

 

$

(0.29

)

 

 

$

(0.44

)

 

Weighted average shares used to compute net loss per share

 

 

 

 

 

 

 

Basic

34,485

 

 

 

32,152

 

 

 

33,790

 

 

 

31,945

 

 

Diluted

34,485

 

 

 

32,152

 

 

 

33,790

 

 

 

31,945

 

 

 

Vocera Communications, Inc.

Condensed Consolidated Balance Sheets

(In Thousands)

(Unaudited)

 

 

June 30,
2021

 

December 31,
2020

Assets

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

40,480

 

 

$

34,976

 

Short-term investments

251,428

 

 

195,227

 

Accounts receivable, net of allowance

36,596

 

 

45,653

 

Other receivables

6,473

 

 

6,170

 

Inventories

8,602

 

 

10,159

 

Prepaid expenses and other current assets

7,208

 

 

6,317

 

Total current assets

350,787

 

 

298,502

 

Property and equipment, net

6,848

 

 

8,103

 

Intangible assets, net

22,906

 

 

12,788

 

Goodwill

94,846

 

 

69,168

 

Deferred commissions

14,854

 

 

12,293

 

Other long-term assets

7,876

 

 

5,967

 

Total assets

$

498,117

 

 

$

406,821

 

Liabilities and stockholders' equity

 

 

 

Current liabilities

 

 

 

Accounts payable

$

3,219

 

 

$

3,127

 

Accrued payroll and other current liabilities

24,757

 

 

23,195

 

Deferred revenue, current

52,065

 

 

54,785

 

Total current liabilities

80,041

 

 

81,107

 

Deferred revenue, long-term

10,490

 

 

9,948

 

Convertible senior notes, net

258,285

 

 

124,376

 

Other long-term liabilities

7,396

 

 

10,374

 

Total liabilities

356,212

 

 

225,805

 

Stockholders' equity

141,905

 

 

181,016

 

Total liabilities and stockholders' equity

$

498,117

 

 

$

406,821

 

 

Vocera Communications, Inc.

Three months ended June 30, 2021

 

 

 

Stock

 

 

 

Acquisition

 

 

 

 

(In thousands)

GAAP

 

compensation

 

Intangible

 

related

 

Total

 

Non-GAAP

 

2021

 

expense (a)

 

amortization (b)

 

expense (c)

 

adjustments

 

2021

Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit (Unaudited)

Revenue

 

 

 

 

 

 

 

 

 

 

 

Product

$

28,344

 

 

$

?

 

 

$

?

 

 

$

?

 

 

$

?

 

 

$

28,344

 

Service

27,836

 

 

?

 

 

?

 

 

?

 

 

?

 

 

27,836

 

Total revenue

56,180

 

 

?

 

 

?

 

 

?

 

 

?

 

 

56,180

 

Cost of revenue

 

 

 

 

 

 

 

 

 

 

 

Product

7,541

 

 

243

 

 

722

 

 

?

 

 

965

 

 

6,576

 

Service

12,383

 

 

1,152

 

 

?

 

 

207

 

 

1,359

 

 

11,024

 

Total cost of revenue

19,924

 

 

1,395

 

 

722

 

 

207

 

 

2,324

 

 

17,600

 

Gross profit

$

36,256

 

 

$

1,395

 

 

$

722

 

 

$

207

 

 

$

2,324

 

 

$

38,580

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock

 

 

 

Acquisition

 

 

 

 

(In thousands)

GAAP

 

compensation

 

Intangible

 

related

 

Total

 

Non-GAAP

 

2021

 

expense (a)

 

amortization (b)

 

expense (c)

 

adjustments

 

2021

Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

$

12,006

 

 

$

1,233

 

 

$

?

 

 

$

235

 

 

$

1,468

 

 

$

10,538

 

Sales and marketing

18,425

 

 

2,432

 

 

551

 

 

206

 

 

3,189

 

 

15,236

 

General and administrative

9,064

 

 

2,063

 

 

39

 

 

1,568

 

 

3,670

 

 

5,394

 

Total operating expenses

$

39,495

 

 

$

5,728

 

 

$

590

 

 

$

2,009

 

 

$

8,327

 

 

$

31,168

 

(a) This adjustment reflects the accounting impact of non-cash stock-based compensation expense.
(b) This adjustment reflects the accounting impact of acquisitions in 2021, 2020, 2016, and 2014 in non-cash expense.
(c) This adjustment reflects the costs associated with acquisitions in 2021 and 2020.

Three months ended June 30, 2020

 

 

 

Stock

 

Intangible

 

 

 

 

(In thousands)

GAAP

 

compensation

 

amortization

 

Total

 

Non-GAAP

 

2020

 

expense (a)

 

(b)

 

adjustments

 

2020

Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit (Unaudited)

Revenue

 

 

 

 

 

 

 

 

 

Product

$

23,951

 

 

$

?

 

 

$

?

 

 

$

?

 

 

$

23,951

 

Service

23,396

 

 

?

 

 

?

 

 

?

 

 

23,396

 

Total revenue

47,347

 

 

?

 

 

?

 

 

?

 

 

47,347

 

Cost of revenue

 

 

 

 

 

 

 

 

 

Product

7,710

 

 

201

 

 

?

 

 

201

 

 

7,509

 

Service

9,694

 

 

913

 

 

?

 

 

913

 

 

8,781

 

Total cost of revenue

17,404

 

 

1,114

 

 

?

 

 

1,114

 

 

16,290

 

Gross profit

$

29,943

 

 

$

1,114

 

 

$

?

 

 

$

1,114

 

 

$

31,057

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock

 

Intangible

 

 

 

 

(In thousands)

GAAP

 

compensation

 

amortization

 

Total

 

Non-GAAP

 

2020

 

expense (a)

 

(b)

 

adjustments

 

2020

Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses (Unaudited)

 

 

 

 

 

 

 

 

 

 

Research and development

$

9,349

 

 

$

1,023

 

 

$

?

 

 

$

1,023

 

 

$

8,326

 

Sales and marketing

15,998

 

 

1,961

 

 

268

 

 

2,229

 

 

13,769

 

General and administrative

6,923

 

 

2,268

 

 

39

 

 

2,307

 

 

4,616

 

Total operating expenses

$

32,270

 

 

$

5,252

 

 

$

307

 

 

$

5,559

 

 

$

26,711

 

(a) This adjustment reflects the accounting impact of non-cash stock-based compensation expense.
(b) This adjustment reflects the accounting impact of acquisitions in 2016 in non-cash expense.

Vocera Communications, Inc.

Six months ended June 30, 2021

 

 

 

Stock

 

Intangible

 

Acquisition

 

 

 

 

(In thousands)

GAAP

 

compensation

 

amortization

 

related

 

Total

 

Non-GAAP

 

2021

 

expense (a)

 

(b)

 

expense (c)

 

adjustments

 

2021

Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit (Unaudited)

Revenue

 

 

 

 

 

 

 

 

 

 

 

Product

$

50,952

 

 

$

?

 

 

$

?

 

 

$

?

 

 

$

?

 

 

$

50,952

 

Service

53,896

 

 

?

 

 

?

 

 

?

 

 

?

 

 

53,896

 

Total revenue

104,848

 

 

?

 

 

?

 

 

?

 

 

?

 

 

104,848

 

Cost of revenue

 

 

 

 

 

 

 

 

 

 

 

Product

14,497

 

 

435

 

 

1,025

 

 

?

 

 

1,460

 

 

13,037

 

Service

23,210

 

 

2,044

 

 

?

 

 

207

 

 

2,251

 

 

20,959

 

Total cost of revenue

37,707

 

 

2,479

 

 

1,025

 

 

207

 

 

3,711

 

 

33,996

 

Gross profit

$

67,141

 

 

$

2,479

 

 

$

1,025

 

 

$

207

 

 

$

3,711

 

 

$

70,852

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock

 

Intangible

 

Acquisition

 

 

 

 

(In thousands)

GAAP

 

compensation

 

amortization

 

related

 

Total

 

Non-GAAP

 

2021

 

expense (a)

 

(b)

 

expense (c)

 

adjustments

 

2021

Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

$

22,356

 

 

$

2,233

 

 

$

?

 

 

$

680

 

 

$

2,913

 

 

$

19,443

 

Sales and marketing

36,095

 

 

4,757

 

 

1,040

 

 

502

 

 

6,299

 

 

29,796

 

General and administrative

16,339

 

 

4,516

 

 

78

 

 

1,673

 

 

6,267

 

 

10,072

 

Total operating expenses

$

74,790

 

 

$

11,506

 

 

$

1,118

 

 

$

2,855

 

 

$

15,479

 

 

$

59,311

 

(a)

This adjustment reflects the accounting impact of non-cash stock-based compensation expense.

(b)

This adjustment reflects the accounting impact of acquisitions in 2021, 2020, 2016, and 2014 in non-cash expense.

(c)

This adjustment reflects the costs associated with the acquisition in 2021 and 2020.

Six months ended June 30, 2020

 

 

 

Stock

 

Intangible

 

 

 

 

(In thousands)

GAAP

 

compensation

 

amortization

 

Total

 

Non-GAAP

 

2020

 

expense (a)

 

(b)

 

adjustments

 

2020

Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit (Unaudited)

Revenue

 

 

 

 

 

 

 

 

 

Product

$

41,801

 

 

$

?

 

 

$

?

 

 

$

?

 

 

$

41,801

 

Service

46,219

 

 

?

 

 

?

 

 

?

 

 

46,219

 

Total revenue

88,020

 

 

?

 

 

?

 

 

?

 

 

88,020

 

Cost of revenue

 

 

 

 

 

 

 

 

 

Product

14,074

 

 

363

 

 

11

 

 

374

 

 

13,700

 

Service

20,217

 

 

1,724

 

 

?

 

 

1,724

 

 

18,493

 

Total cost of revenue

34,291

 

 

2,087

 

 

11

 

 

2,098

 

 

32,193

 

Gross profit

$

53,729

 

 

$

2,087

 

 

$

11

 

 

$

2,098

 

 

$

55,827

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock

 

Intangible

 

 

 

 

(In thousands)

GAAP

 

compensation

 

amortization

 

Total

 

Non-GAAP

 

2020

 

expense (a)

 

(b)

 

adjustments

 

2020

Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses (Unaudited)

 

 

 

 

 

 

 

 

 

 

Research and development

$

18,381

 

 

$

1,989

 

 

$

?

 

 

$

1,989

 

 

$

16,392

 

Sales and marketing

32,961

 

 

3,821

 

 

537

 

 

4,358

 

 

28,603

 

General and administrative

13,314

 

 

4,310

 

 

78

 

 

4,388

 

 

8,926

 

Total operating expenses

$

64,656

 

 

$

10,120

 

 

$

615

 

 

$

10,735

 

 

$

53,921

 

(a) This adjustment reflects the accounting impact of non-cash stock-based compensation expense.
(b) This adjustment reflects the accounting impact of acquisitions in 2016 and 2014 in non-cash expense.

Vocera Communications, Inc.

Non-GAAP Net income and net income per share and Adjusted EBITDA

(In thousands, except per share amounts)

(Unaudited)

 

 

 

 

 

 

Three months ended June 30,

 

Six months ended June 30,

 

2021

 

 

2020

 

 

2021

 

 

2020

 

GAAP net loss

$

(2,282

)

 

 

$

(3,468

)

 

 

$

(9,915

)

 

 

$

(13,938

)

 

Add back:

 

 

 

 

 

 

 

Stock compensation expense

7,123

 

 

 

6,366

 

 

 

13,985

 

 

 

12,207

 

 

Acquisition related expenses

2,216

 

 

 

?

 

 

 

3,062

 

 

 

?

 

 

Other (income) expense, net (a)

(1,672

)

 

 

?

 

 

 

761

 

 

 

?

 

 

Interest income

(290

)

 

 

(904

)

 

 

(631

)

 

 

(2,017

)

 

Interest expense

794

 

 

 

2,308

 

 

 

1,571

 

 

 

4,582

 

 

Depreciation and amortization expense

2,581

 

 

 

1,468

 

 

 

4,587

 

 

 

2,801

 

 

Provision for (benefit from) income taxes

88

 

 

 

(44

)

 

 

334

 

 

 

81

 

 

Non-GAAP adjusted EBITDA

$

8,558

 

 

 

$

5,726

 

 

 

$

13,754

 

 

 

$

3,716

 

 

 

 

 

 

 

 

 

 

GAAP net loss

$

(2,282

)

 

 

$

(3,468

)

 

 

$

(9,915

)

 

 

$

(13,938

)

 

Add back:

 

 

 

 

 

 

 

Stock compensation expense

7,123

 

 

 

6,366

 

 

 

13,985

 

 

 

12,207

 

 

Intangible amortization

1,312

 

 

 

307

 

 

 

2,143

 

 

 

626

 

 

Acquisition related expenses

2,216

 

 

 

?

 

 

 

3,062

 

 

 

?

 

 

Other (income) expense, net (a)

(1,672

)

 

 

?

 

 

 

761

 

 

 

?

 

 

(Provision for) benefit from income taxes (b)

(1,269

)

 

 

(676

)

 

 

(1,740

)

 

 

286

 

 

Non-GAAP net income (loss)

$

5,428

 

 

 

$

2,529

 

 

 

$

8,296

 

 

 

$

(819

)

 

Add interest expense of convertible senior notes, net of tax

635

 

 

 

?

 

 

 

1,257

 

 

 

?

 

 

Numerator for non-GAAP EPS calculation

$

6,063

 

 

 

$

2,529

 

 

 

$

9,553

 

 

 

$

(819

)

 

 

 

 

 

 

 

 

 

Non-GAAP net income (loss) per share

 

 

 

 

 

 

 

Basic

$

0.18

 

 

 

$

0.08

 

 

 

$

0.28

 

 

 

$

(0.03

)

 

Diluted

$

0.15

 

 

 

$

0.08

 

 

 

$

0.24

 

 

 

$

(0.03

)

 

Weighted average shares used to compute non-GAAP net income (loss) per share

 

 

 

 

 

 

 

Basic

34,485

 

 

 

32,152

 

 

 

33,790

 

 

31,945

 

 

Diluted

40,465

 

 

 

32,430

 

 

 

40,148

 

 

31,945

 

 

(a) This adjustment reflects the accounting impact of the quarterly valuation reassessment of contingent consideration resulting from the 2020 acquisition of $(1.7) million and $(1.3) million for the three and six months ended June 30, 2021, respectively and the induced conversion expense from repurchasing our 2023 Notes of $2.1 million for the six months ended June 30, 2021.
(b) Starting April 1, 2021, the Company changed the calculation of its non-GAAP provision for income taxes in accordance with the SEC guidance of non-GAAP financial measures. The Company's current and deferred income tax expense is commensurate with the non-GAAP measure of profitability using a non-GAAP tax rate of 20% for the three and six months ended June 30, 2021 and 2020. The Company uses annual projected tax rate in its computation of the non-GAAP income tax provision, and excludes the direct impact of stock-based compensation, intangible amortization expenses and acquisition related expenses.

Vocera Communications, Inc.

Future guidance for operating results

(In millions, except per share amounts)

 

Reconciliation for GAAP to Non-GAAP for net income (loss) and net income (loss) per share

 

Year ending

December 31, 2021

 

Low

 

High

Revenue

$

221.0

 

 

 

$

231.0

 

 

GAAP net loss

(23.2

)

 

 

(17.2

)

 

Stock compensation expense

32.0

 

 

 

31.0

 

 

Intangible amortization expense

5.4

 

 

 

5.4

 

 

Acquisition and restructuring expense

4.6

 

 

 

4.6

 

 

Other income

1.9

 

 

 

1.9

 

 

Income tax expense

(3.3

)

 

 

(4.4

)

 

Total adjustments

40.6

 

 

 

38.5

 

 

Non-GAAP net income

$

17.4

 

 

 

$

21.3

 

 

Add interest expense of convertible senior notes, net of tax

2.6

 

 

 

2.6

 

 

Numerator for non-GAAP EPS calculation

$

20.0

 

 

 

$

23.9

 

 

Weighted average shares

 

 

 

Basic - GAAP

34.3

 

 

 

34.3

 

 

Diluted

40.7

 

 

 

40.7

 

 

 

 

 

 

GAAP loss per share:

 

 

 

Basic

$

(0.68

)

 

 

$

(0.50

)

 

Diluted

$

(0.68

)

 

 

$

(0.50

)

 

Non-GAAP net income per share:

 

 

 

Basic

$

0.58

 

 

 

$

0.70

 

 

Diluted

$

0.49

 

 

 

$

0.59

 

 

 

Reconciliation of Non-GAAP net income to adjusted EBITDA

 

 

 

 

Year ending

December 31, 2021

 

Low

 

High

Non-GAAP net income

$

17.4

 

 

$

21.3

 

Interest expense, net

2.0

 

 

2.0

 

Depreciation expense

5.4

 

 

5.3

 

Provision for income taxes

4.2

 

 

5.4

 

Total adjustments

11.6

 

 

12.7

 

Adjusted EBITDA

$

29.0

 

 

$

34.0

 

 


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