Subjects: EARNINGS, Conference Call, Webcast
Datto Announces Third Quarter 2021 Financial Results
Datto Holding Corp. (Datto) (NYSE: MSP), the leading global provider of cloud-based software and security solutions purpose-built for delivery by managed service providers (MSPs), today announced its financial results for the third quarter ended September 30, 2021.
"The third quarter was another record quarter for Datto," said Tim Weller, Datto's Chief Executive Officer. "Our revenue growth exceeded 20% for a second consecutive quarter and our subscription revenue growth continued to accelerate. We grew our MSP partners to over 18,200, and ARR per MSP continued to expand. In addition, we launched two significant new products in security and cloud - SaaS Defense, and Datto Continuity for Microsoft Azure - that both meet the critical need of securing digital assets for our MSP partners and their SMB clients. These new products solidify our leading position in providing cyber resilience to our MSP partners, expand our addressable market, and will contribute to our continued growth in years to come. Looking ahead, I'm as optimistic as ever about the large opportunity in front of us to empower our MSP partners to help their SMB clients thrive in an increasingly complex IT world."
Third Quarter 2021 Financial Results
(In Millions) |
|
Q3 2021 |
|
Q3 2020 |
|
Y/Y Change |
|
|
Subscription Revenue(1) |
|
$146.8 |
|
$122.8 |
|
20% |
|
|
Total Revenue(1) |
|
$157.9 |
|
$130.7 |
|
21% |
|
|
ARR(2) |
|
$626.7 |
|
$522.8 |
|
20% |
|
|
Gross Margin |
|
71% |
|
73% |
|
(153 bps) |
|
|
Non-GAAP Gross Margin(3) |
|
73% |
|
74% |
|
(9 bps) |
|
|
Net Income |
|
$13.5 |
|
$19.5 |
|
(31)% |
|
|
Adjusted EBITDA(3) |
|
$43.8 |
|
$45.8 |
|
(4)% |
|
|
Net Cash Provided by Operating Activities |
|
$32.0 |
|
$50.1 |
|
(36)% |
|
|
Free Cash Flow(3) |
|
$20.3 |
|
$43.6 |
|
(53)% |
|
1 |
Subscription and Total Revenues Y/Y percentage change includes benefits from favorable foreign exchange rates of approximately 1.5%. |
|||
2 |
Annual run-rate revenue (ARR) is the annualized value of all subscription agreements as of the end of a period. We calculate ARR by multiplying the monthly run-rate revenue for the last month of a period by 12. |
|||
3 |
A reconciliation of GAAP to non-GAAP financial measures is provided in the financial statement tables included in this press release. An explanation of these measures is also included under the heading "Non-GAAP Financial Measures." |
Recent Highlights
- Ended the quarter with more than 18,200 MSP partners, a net increase of 400 from the previous quarter.
- Expanded the number of MSPs contributing over $100,000 ARR to 1,300, a 24% increase from 1,050 at September 30, 2020.
- Launched Datto Continuity for Microsoft Azure (DCMA). DCMA is a comprehensive Business Continuity and Disaster Recovery (BCDR) solution that protects MSPs and their clients' data in the public cloud in the event of malicious ransomware attacks, security breaches, and vendor outages.
- Launched Datto's SaaS Defense security product. SaaS Defense is an advanced threat protection and spam-filtering solution that provides MSPs with patented technology to proactively detect and prevent malicious malware, phishing, and Business Email Compromise (BEC) attacks that target Microsoft Exchange, OneDrive, SharePoint, and Teams. The product is based on patented technology obtained in Datto's acquisition of Israel-based cyber threat-detection company BitDam earlier this year.
- Hosted DattoCon NOW, Datto's largest event in its history, attracting more than 4,700 virtual attendees from 50 countries. The overarching theme was Security and the event featured keynote addresses and other presentations covering everything from technology trends and new product launches to security best practices. MSPs were able to learn from peers, industry thought leaders like Microsoft, and top vendors from across the channel.
- Achieved notably high marks for the security of Datto RMM in an independent third-party assessment of software applications by Synopsis. The assessment was based on the industry-standard Building Security in Maturity Model (BSIMM). Datto is the only MSP-focused company that participates in the assessment, and Datto RMM is the only channel RMM that has been evaluated under the BSIMM framework. Other participants include enterprises such as Microsoft, Cisco, Verizon, Aetna, Johnson & Johnson, TD Ameritrade, US Bank, Bank of America, and many other large institutions.
Fourth Quarter and Full Year 2021 Financial Outlook
Datto is providing the following guidance for the fourth quarter and full-year 2021:
|
|
Q4 2021 Outlook |
|
FY 2021 Outlook |
||
Revenue |
|
$161 - $163 million |
|
$615 - $617 million |
||
Adjusted EBITDA |
|
$38- $40 million |
|
$174 - $176 million |
Datto Third Quarter 2021 Results Conference Call
When: Wednesday, November 10, 2021
Time: 5:00 pm ET
Conference ID: 8751783
Live Call: 1-888-660-6179 (US/Canada Toll-Free) or 1-929-203-1946 (International)
Replay: 1-800-770-2030 (US/Canada Toll-Free) or 1-647-362-9199 (International)
(The replay will be available approximately two hours after the completion of the live call)
Webcast: https://investors.datto.com
About Datto
As the world's leading provider of cloud-based software and security solutions purpose-built for delivery by managed service providers (MSPs), Datto believes there is no limit to what small and medium businesses (SMBs) can achieve with the right technology.
Datto's proven Unified Continuity, Networking, and Business Management solutions drive cyber resilience, efficiency, and growth for MSPs. Delivered via an integrated platform, Datto's solutions help its global ecosystem of MSP partners serve over one million businesses around the world. From proactive dynamic detection and prevention to fast, flexible recovery from cyber incidents, Datto's solutions defend against costly downtime and data loss in servers, virtual machines, cloud applications, or anywhere data resides.
Since its founding in 2007, Datto has won numerous awards for its product excellence, superior technical support, rapid growth, and for fostering an outstanding workplace. With headquarters in Norwalk, Connecticut, Datto has global offices in Australia, Canada, China, Denmark, Germany, Israel, the Netherlands, Singapore, and the United Kingdom.
Learn more at datto.com.
Forward-Looking Statements
This press release contains forward-looking statements that reflect Datto's current expectations and projections with respect to, among other things, its financial condition, results of operations, plans, objectives, future performance, and business. These statements may be preceded by, followed by or include the words ??anticipate,'' ??estimate,'' ??expect,'' ??project,'' ??plan,'' ??intend,'' ??believe,'' ??may,'' ??will,'' ??should,'' ??can have,'' ??likely'' and the negatives thereof and other words and terms of similar meaning. Further information on potential factors that could affect our results is included in our Annual Report on Form 10-K.
Forward-looking statements include all statements that are not historical facts. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements.
There is no assurance that any forward-looking statements will materialize. You are cautioned not to place undue reliance on forward-looking statements, which reflect expectations only as of this date. Datto undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.
Non-GAAP Financial Measures
In addition to our results determined in accordance with generally accepted accounting principles in the United States ("GAAP"), we believe that the non-GAAP financial measures of Non-GAAP Subscription Cost of Revenue, Non-GAAP Device Cost of Revenue, Non-GAAP Professional Services and Other Cost of Revenue, Non-GAAP Depreciation and Amortization in Cost of Revenue, Non-GAAP Cost of Revenue, Non-GAAP Gross Profit, Non-GAAP Sales and Marketing expense, Non-GAAP Research and Development expense, Non-GAAP General and Administrative expense, Non-GAAP Depreciation and Amortization in Operating Expenses, Non-GAAP Operating Expenses, Non-GAAP Income from Operations, Non-GAAP Net Income and Non-GAAP Net Income Per Share, Adjusted EBITDA, and Free Cash Flow are useful in evaluating our operating performance. Certain of these measures exclude interest and other (income) expense, net, loss on extinguishment of debt, depreciation and amortization, stock-based compensation expense, restructuring expense and transaction related and other expense. In addition, for Non-GAAP Net Income we utilize a non-GAAP tax rate of 25%, which we believe reflects our normalized effective tax rate. We believe that non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance and assists in comparisons with other companies, some of which use similar non-GAAP financial information to supplement their GAAP results. The non-GAAP financial information is presented for supplemental informational purposes only, and should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from similarly-titled non-GAAP measures used by other companies.
Reconciliation tables of the most directly comparable GAAP financial measures to the non-GAAP financial measures used in this press release are included with the financial tables at the end of this press release.
Datto is not providing a quantitative reconciliation of forward-looking guidance of Adjusted EBITDA to its most directly comparable GAAP measure because certain items are out of Datto's control or cannot be reasonably predicted, as the items are uncertain, depend on various factors, and could have a material impact on GAAP reported results for the guidance period. Accordingly, a reconciliation for forward-looking Adjusted EBITDA is not available without unreasonable effort.
For more information about Datto, including supplemental financial information, please visit the investor relations website at investors.datto.com.
DATTO HOLDING CORP. Condensed Consolidated Statements of Operations (in thousands, except share and per share amounts) (unaudited) |
||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
||||||||||||
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
||||||||
Revenue: |
|
|
|
|
|
|
|
|
||||||||
Subscription |
$ |
146,764 |
|
|
$ |
122,753 |
|
|
$ |
424,097 |
|
|
$ |
356,348 |
|
|
Device |
10,242 |
|
|
6,964 |
|
|
27,652 |
|
|
21,098 |
|
|
||||
Professional services and other |
886 |
|
|
950 |
|
|
2,654 |
|
|
2,347 |
|
|
||||
Total revenue |
157,892 |
|
|
130,667 |
|
|
454,403 |
|
|
379,793 |
|
|
||||
Cost of revenue: |
|
|
|
|
|
|
|
|
||||||||
Subscription |
22,776 |
|
|
18,915 |
|
|
65,344 |
|
|
60,786 |
|
|
||||
Device |
12,930 |
|
|
10,089 |
|
|
33,552 |
|
|
26,464 |
|
|
||||
Professional services and other |
1,470 |
|
|
1,332 |
|
|
4,521 |
|
|
4,399 |
|
|
||||
Depreciation and amortization |
8,572 |
|
|
5,526 |
|
|
23,795 |
|
|
15,746 |
|
|
||||
Total cost of revenue |
45,748 |
|
|
35,862 |
|
|
127,212 |
|
|
107,395 |
|
|
||||
Gross profit |
112,144 |
|
|
94,805 |
|
|
327,191 |
|
|
272,398 |
|
|
||||
Operating expenses: |
|
|
|
|
|
|
|
|
||||||||
Sales and marketing |
35,173 |
|
|
24,709 |
|
|
99,234 |
|
|
83,828 |
|
|
||||
Research and development |
26,872 |
|
|
15,257 |
|
|
76,690 |
|
|
48,000 |
|
|
||||
General and administrative |
27,802 |
|
|
17,433 |
|
|
78,908 |
|
|
59,389 |
|
|
||||
Depreciation and amortization |
6,531 |
|
|
6,820 |
|
|
19,554 |
|
|
20,600 |
|
|
||||
Total operating expenses |
96,378 |
|
|
64,219 |
|
|
274,386 |
|
|
211,817 |
|
|
||||
Income from operations |
15,766 |
|
|
30,586 |
|
|
52,805 |
|
|
60,581 |
|
|
||||
Other expense: |
|
|
|
|
|
|
|
|
||||||||
Interest expense |
156 |
|
|
7,065 |
|
|
433 |
|
|
23,590 |
|
|
||||
Other expense (income), net |
338 |
|
|
(987 |
) |
|
224 |
|
|
(1,402 |
) |
|
||||
Total other expense |
494 |
|
|
6,078 |
|
|
657 |
|
|
22,188 |
|
|
||||
Income before income taxes |
15,272 |
|
|
24,508 |
|
|
52,148 |
|
|
38,393 |
|
|
||||
Provision for income taxes |
(1,787 |
) |
|
(4,962 |
) |
|
(6,461 |
) |
|
(8,727 |
) |
|
||||
Net income |
$ |
13,485 |
|
|
$ |
19,546 |
|
|
$ |
45,687 |
|
|
$ |
29,666 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net income per share attributable to common stockholders: |
|
|
|
|
|
|
|
|
||||||||
Basic |
$ |
0.08 |
|
|
$ |
0.14 |
|
|
$ |
0.28 |
|
|
$ |
0.22 |
|
|
Diluted |
$ |
0.08 |
|
|
$ |
0.14 |
|
|
$ |
0.28 |
|
|
$ |
0.22 |
|
|
Weighted-average shares used in computing net income per share: |
|
|
|
|
|
|
|
|
||||||||
Basic |
162,424,260 |
|
|
135,553,097 |
|
|
161,657,479 |
|
|
135,496,696 |
|
|
||||
Diluted |
166,248,941 |
|
|
138,590,770 |
|
|
165,483,710 |
|
|
137,006,921 |
|
|
||||
DATTO HOLDING CORP. Condensed Consolidated Balance Sheets (in thousands) (unaudited) |
||||||||
|
September 30, |
|
December 31, |
|
||||
|
2021 |
|
2020 |
|
||||
ASSETS |
|
|
|
|
||||
Current assets |
|
|
|
|
||||
Cash and cash equivalents |
$ |
205,862 |
|
|
$ |
168,877 |
|
|
Restricted cash |
1,309 |
|
|
1,536 |
|
|
||
Accounts receivable, net |
9,400 |
|
|
13,946 |
|
|
||
Inventory |
31,739 |
|
|
13,811 |
|
|
||
Prepaid expenses and other current assets |
33,640 |
|
|
28,316 |
|
|
||
Total current assets |
281,950 |
|
|
226,486 |
|
|
||
Property and equipment, net |
100,420 |
|
|
91,876 |
|
|
||
Operating lease assets |
30,290 |
|
|
? |
|
|
||
Goodwill |
1,144,496 |
|
|
1,120,954 |
|
|
||
Intangible assets, net |
295,264 |
|
|
287,395 |
|
|
||
Other assets |
82,486 |
|
|
66,560 |
|
|
||
Total assets |
$ |
1,934,906 |
|
|
$ |
1,793,271 |
|
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
||||
Current liabilities |
|
|
|
|
||||
Accounts payable |
$ |
12,549 |
|
|
$ |
7,574 |
|
|
Accrued expenses and other current liabilities |
47,538 |
|
|
39,461 |
|
|
||
Deferred revenue |
21,634 |
|
|
23,763 |
|
|
||
Total current liabilities |
81,721 |
|
|
70,798 |
|
|
||
Deferred revenue, noncurrent |
3,108 |
|
|
3,322 |
|
|
||
Deferred income taxes |
30,476 |
|
|
18,947 |
|
|
||
Operating lease liabilities, noncurrent |
30,849 |
|
|
? |
|
|
||
Other long-term liabilities |
3,537 |
|
|
11,736 |
|
|
||
Total liabilities |
149,691 |
|
|
104,803 |
|
|
||
Commitments and contingencies |
|
|
|
|
||||
STOCKHOLDERS' EQUITY |
|
|
|
|
||||
Common stock |
163 |
|
|
161 |
|
|
||
Additional paid-in capital |
1,807,533 |
|
|
1,755,387 |
|
|
||
Treasury stock |
(3,621 |
) |
|
(3,621 |
) |
|
||
Accumulated deficit |
(19,539 |
) |
|
(65,226 |
) |
|
||
Accumulated other comprehensive income |
679 |
|
|
1,767 |
|
|
||
Total stockholders' equity |
1,785,215 |
|
|
1,688,468 |
|
|
||
Total liabilities and stockholders' equity |
$ |
1,934,906 |
|
|
$ |
1,793,271 |
|
|
DATTO HOLDING CORP. Condensed Consolidated Statements of Cash Flows (in thousands) (unaudited) |
||||||||
|
Nine Months Ended September 30, |
|
||||||
|
2021 |
|
2020 |
|
||||
OPERATING ACTIVITIES |
|
|
|
|
||||
Net income |
$ |
45,687 |
|
|
$ |
29,666 |
|
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
||||
Depreciation |
23,368 |
|
|
19,615 |
|
|
||
Amortization of acquired intangible assets |
19,981 |
|
|
16,731 |
|
|
||
Amortization of debt issuance costs |
255 |
|
|
1,265 |
|
|
||
Reserve for inventory obsolescence |
54 |
|
|
1,508 |
|
|
||
Non-cash operating lease expense |
5,273 |
|
|
? |
|
|
||
Stock-based compensation |
35,355 |
|
|
6,561 |
|
|
||
Provision for bad debt |
2,630 |
|
|
4,793 |
|
|
||
Deferred income taxes |
4,727 |
|
|
7,556 |
|
|
||
Unrealized foreign exchange |
(296 |
) |
|
(647 |
) |
|
||
Changes in operating assets and liabilities: |
|
|
|
|
||||
Accounts receivable |
1,878 |
|
|
(766 |
) |
|
||
Inventory |
(18,043 |
) |
|
(6,337 |
) |
|
||
Prepaid expenses and other current assets |
(5,490 |
) |
|
2,099 |
|
|
||
Other assets |
(16,719 |
) |
|
(8,446 |
) |
|
||
Accounts payable, accrued expenses and other |
2,928 |
|
|
109 |
|
|
||
Deferred revenue |
(2,479 |
) |
|
348 |
|
|
||
Net cash provided by operating activities |
99,109 |
|
|
74,055 |
|
|
||
INVESTING ACTIVITIES |
|
|
|
|
||||
Purchase of property and equipment |
(32,170 |
) |
|
(28,519 |
) |
|
||
Acquisition of business, net of cash acquired |
(45,486 |
) |
|
(4,371 |
) |
|
||
Net cash used in investing activities |
(77,656 |
) |
|
(32,890 |
) |
|
||
FINANCING ACTIVITIES |
|
|
|
|
||||
Proceeds from debt |
? |
|
|
32,100 |
|
|
||
Repayments of debt and capital leases |
(73 |
) |
|
(4,468 |
) |
|
||
Capitalized transaction costs |
(684 |
) |
|
(980 |
) |
|
||
Proceeds from stock option exercises |
16,839 |
|
|
2,500 |
|
|
||
Repurchase of common stock and settlement of stock-based payment awards |
? |
|
|
(53 |
) |
|
||
Net cash provided by financing activities |
16,082 |
|
|
29,099 |
|
|
||
Effect of exchange rate changes on cash and cash equivalents |
(777 |
) |
|
720 |
|
|
||
Net increase in cash and cash equivalents |
36,758 |
|
|
70,984 |
|
|
||
Cash and cash equivalents and restricted cash, beginning of year |
170,413 |
|
|
29,066 |
|
|
||
Cash and cash equivalents and restricted cash, end of period |
$ |
207,171 |
|
|
$ |
100,050 |
|
|
Reconciliation of cash and cash equivalents and restricted cash: |
|
|
|
|
||||
Cash and cash equivalents |
$ |
205,862 |
|
|
$ |
98,614 |
|
|
Restricted cash |
$ |
1,309 |
|
|
$ |
1,436 |
|
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION |
|
|
|
|
||||
Cash paid for income taxes |
$ |
3,533 |
|
|
$ |
151 |
|
|
Cash paid for interest |
$ |
? |
|
|
$ |
22,317 |
|
|
NON-CASH INVESTING AND FINANCING ACTIVITIES |
|
|
|
|
||||
Purchase of property and equipment included in accounts payable |
$ |
251 |
|
|
$ |
40 |
|
|
Unpaid initial public offering costs in total current liabilities |
$ |
? |
|
|
$ |
2,620 |
|
|
DATTO HOLDING CORP. Non-GAAP Condensed Consolidated Statements of Operations (in thousands, except share and per share amounts) (unaudited) |
||||||||||||||||
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
||||||||||||
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
||||||||
Revenue: |
|
|
|
|
|
|
|
|
||||||||
Subscription |
$ |
146,764 |
|
|
$ |
122,753 |
|
|
$ |
424,097 |
|
|
$ |
356,348 |
|
|
Device |
10,242 |
|
|
6,964 |
|
|
27,652 |
|
|
21,098 |
|
|
||||
Professional services and other |
886 |
|
|
950 |
|
|
2,654 |
|
|
2,347 |
|
|
||||
Total revenue |
157,892 |
|
|
130,667 |
|
|
454,403 |
|
|
379,793 |
|
|
||||
Cost of revenue: |
|
|
|
|
|
|
|
|
||||||||
Subscription |
21,724 |
|
|
18,838 |
|
|
62,179 |
|
|
60,206 |
|
|
||||
Device |
12,887 |
|
|
10,089 |
|
|
33,402 |
|
|
26,464 |
|
|
||||
Professional services and other |
1,485 |
|
|
1,332 |
|
|
4,370 |
|
|
4,260 |
|
|
||||
Depreciation and amortization |
5,870 |
|
|
4,351 |
|
|
17,081 |
|
|
12,221 |
|
|
||||
Total cost of revenue |
41,966 |
|
|
34,610 |
|
|
117,032 |
|
|
103,151 |
|
|
||||
Gross profit |
115,926 |
|
|
96,057 |
|
|
337,371 |
|
|
276,642 |
|
|
||||
Operating expenses: |
|
|
|
|
|
|
|
|
||||||||
Sales and marketing |
32,819 |
|
|
24,200 |
|
|
92,743 |
|
|
80,104 |
|
|
||||
Research and development |
21,547 |
|
|
14,763 |
|
|
59,433 |
|
|
45,936 |
|
|
||||
General and administrative |
23,620 |
|
|
15,644 |
|
|
66,630 |
|
|
53,171 |
|
|
||||
Depreciation and amortization |
2,109 |
|
|
2,418 |
|
|
6,287 |
|
|
7,394 |
|
|
||||
Total operating expenses |
80,095 |
|
|
57,025 |
|
|
225,093 |
|
|
186,605 |
|
|
||||
Income from operations |
35,831 |
|
|
39,032 |
|
|
112,278 |
|
|
90,037 |
|
|
||||
Other expense: |
|
|
|
|
|
|
|
|
||||||||
Interest expense |
156 |
|
|
7,065 |
|
|
433 |
|
|
23,590 |
|
|
||||
Other expense (income), net |
338 |
|
|
(987 |
) |
|
224 |
|
|
(1,402 |
) |
|
||||
Total other expense |
494 |
|
|
6,078 |
|
|
657 |
|
|
22,188 |
|
|
||||
Income before income taxes |
35,337 |
|
|
32,954 |
|
|
111,621 |
|
|
67,849 |
|
|
||||
Provision for income taxes |
(8,834 |
) |
|
(8,239 |
) |
|
(27,905 |
) |
|
(16,963 |
) |
|
||||
Net income |
$ |
26,503 |
|
|
$ |
24,715 |
|
|
$ |
83,716 |
|
|
$ |
50,886 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net income per share attributable to common stockholders: |
|
|
|
|
|
|
|
|
||||||||
Basic |
$ |
0.16 |
|
|
$ |
0.18 |
|
|
$ |
0.52 |
|
|
$ |
0.38 |
|
|
Diluted |
$ |
0.16 |
|
|
$ |
0.18 |
|
|
$ |
0.51 |
|
|
$ |
0.37 |
|
|
Weighted-average shares used in computing net income per share: |
|
|
|
|
|
|
|
|
||||||||
Basic |
162,424,260 |
|
|
135,553,097 |
|
|
161,657,479 |
|
|
135,496,696 |
|
|
||||
Diluted |
166,248,941 |
|
|
138,590,770 |
|
|
165,483,710 |
|
|
137,006,921 |
|
|
||||
DATTO HOLDING CORP. GAAP to Non-GAAP Reconciliations and Calculation of Other Key Metrics (in thousands, except percentages and share and per share amounts) (unaudited) |
||||||||||||||||
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
||||||||||||
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
||||||||
Non-GAAP Subscription Cost of Revenue |
|
|
|
|
|
|
|
|
||||||||
GAAP subscription cost of revenue |
$ |
22,776 |
|
|
$ |
18,915 |
|
|
$ |
65,344 |
|
|
$ |
60,786 |
|
|
Stock-based compensation expense |
(1,052 |
) |
|
(77 |
) |
|
(3,165 |
) |
|
(118 |
) |
|
||||
Restructuring expense |
? |
|
|
? |
|
|
? |
|
|
(462 |
) |
|
||||
Non-GAAP subscription cost of revenue |
$ |
21,724 |
|
|
$ |
18,838 |
|
|
$ |
62,179 |
|
|
$ |
60,206 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Non-GAAP Device Cost of Revenue |
|
|
|
|
|
|
|
|
||||||||
GAAP device cost of revenue |
$ |
12,930 |
|
|
$ |
10,089 |
|
|
$ |
33,552 |
|
|
$ |
26,464 |
|
|
Stock-based compensation expense |
(43 |
) |
|
? |
|
|
(150 |
) |
|
? |
|
|
||||
Non-GAAP device gross cost of revenue |
$ |
12,887 |
|
|
$ |
10,089 |
|
|
$ |
33,402 |
|
|
$ |
26,464 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Non-GAAP Professional Services and Other Cost of Revenue |
|
|
|
|
|
|
|
|
||||||||
GAAP professional services and other cost of revenue |
$ |
1,470 |
|
|
$ |
1,332 |
|
|
$ |
4,521 |
|
|
$ |
4,399 |
|
|
Stock-based compensation expense |
15 |
|
|
? |
|
|
(151 |
) |
|
? |
|
|
||||
Restructuring expense |
? |
|
|
? |
|
|
? |
|
|
(139 |
) |
|
||||
Non-GAAP professional services and other cost of revenue |
$ |
1,485 |
|
|
$ |
1,332 |
|
|
$ |
4,370 |
|
|
$ |
4,260 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Non-GAAP Depreciation and Amortization in Cost of Revenue |
|
|
|
|
|
|
|
|
||||||||
GAAP depreciation and amortization in cost of revenue |
$ |
8,572 |
|
|
$ |
5,526 |
|
|
$ |
23,795 |
|
|
$ |
15,746 |
|
|
Amortization of acquired intangible assets |
(2,702 |
) |
|
(1,175 |
) |
|
(6,714 |
) |
|
(3,525 |
) |
|
||||
Non-GAAP depreciation and amortization in cost of revenue |
$ |
5,870 |
|
|
$ |
4,351 |
|
|
$ |
17,081 |
|
|
$ |
12,221 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Non-GAAP Cost of Revenue |
|
|
|
|
|
|
|
|
||||||||
GAAP cost of revenue |
$ |
45,748 |
|
|
$ |
35,862 |
|
|
$ |
127,212 |
|
|
$ |
107,395 |
|
|
Amortization of acquired intangible assets |
(2,702 |
) |
|
(1,175 |
) |
|
(6,714 |
) |
|
(3,525 |
) |
|
||||
Stock-based compensation expense |
(1,080 |
) |
|
(77 |
) |
|
(3,466 |
) |
|
(118 |
) |
|
||||
Restructuring expense |
? |
|
|
? |
|
|
? |
|
|
(601 |
) |
|
||||
Non-GAAP cost of revenue |
$ |
41,966 |
|
|
$ |
34,610 |
|
|
$ |
117,032 |
|
|
$ |
103,151 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Non-GAAP Gross Profit |
|
|
|
|
|
|
|
|
||||||||
GAAP gross profit |
$ |
112,144 |
|
|
$ |
94,805 |
|
|
$ |
327,191 |
|
|
$ |
272,398 |
|
|
Amortization of acquired intangible assets |
2,702 |
|
|
1,175 |
|
|
6,714 |
|
|
3,525 |
|
|
||||
Stock-based compensation expense |
1,080 |
|
|
77 |
|
|
3,466 |
|
|
118 |
|
|
||||
Restructuring expense |
? |
|
|
? |
|
|
? |
|
|
601 |
|
|
||||
Non-GAAP gross profit |
$ |
115,926 |
|
|
$ |
96,057 |
|
|
$ |
337,371 |
|
|
$ |
276,642 |
|
|
Non-GAAP gross margin |
73.4 |
% |
|
73.5 |
% |
|
74.2 |
% |
|
72.8 |
% |
|
||||
DATTO HOLDING CORP. GAAP to Non-GAAP Reconciliations and Calculation of Other Key Metrics (in thousands, except percentages and share and per share amounts) (unaudited) |
||||||||||||||||
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
||||||||||||
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
||||||||
Non-GAAP Sales and Marketing |
|
|
|
|
|
|
|
|
||||||||
GAAP sales and marketing expense |
$ |
35,173 |
|
|
$ |
24,709 |
|
|
$ |
99,234 |
|
|
$ |
83,828 |
|
|
Stock-based compensation expense |
(2,354 |
) |
|
(524 |
) |
|
(6,491 |
) |
|
(1,803 |
) |
|
||||
Restructuring expense |
? |
|
|
15 |
|
|
? |
|
|
(1,921 |
) |
|
||||
Non-GAAP sales and marketing expense |
$ |
32,819 |
|
|
$ |
24,200 |
|
|
$ |
92,743 |
|
|
$ |
80,104 |
|
|
Non-GAAP sales and marketing as a % of revenue |
20.8 |
% |
|
18.5 |
% |
|
20.4 |
% |
|
21.1 |
% |
|
||||
Non-GAAP Research and Development |
|
|
|
|
|
|
|
|
||||||||
GAAP research and development expense |
$ |
26,872 |
|
|
$ |
15,257 |
|
|
$ |
76,690 |
|
|
$ |
48,000 |
|
|
Stock-based compensation expense |
(5,325 |
) |
|
(494 |
) |
|
(17,257 |
) |
|
(1,115 |
) |
|
||||
Restructuring expense |
? |
|
|
? |
|
|
? |
|
|
(949 |
) |
|
||||
Non-GAAP research and development expense |
$ |
21,547 |
|
|
$ |
14,763 |
|
|
$ |
59,433 |
|
|
$ |
45,936 |
|
|
Non-GAAP research and development as a % of revenue |
13.6 |
% |
|
11.3 |
% |
|
13.1 |
% |
|
12.1 |
% |
|
||||
Non-GAAP General and Administrative |
|
|
|
|
|
|
|
|
||||||||
GAAP general and administrative expense |
$ |
27,802 |
|
|
$ |
17,433 |
|
|
$ |
78,908 |
|
|
$ |
59,389 |
|
|
Stock-based compensation expense |
(2,844 |
) |
|
(1,694 |
) |
|
(8,141 |
) |
|
(3,525 |
) |
|
||||
Restructuring expense |
? |
|
|
? |
|
|
? |
|
|
(364 |
) |
|
||||
Transaction related and other expense |
(1,338 |
) |
|
(95 |
) |
|
(4,137 |
) |
|
(2,329 |
) |
|
||||
Non-GAAP general and administrative expense |
$ |
23,620 |
|
|
$ |
15,644 |
|
|
$ |
66,630 |
|
|
$ |
53,171 |
|
|
Non-GAAP general and administrative as a % of revenue |
15.0 |
% |
|
12.0 |
% |
|
14.7 |
% |
|
14.0 |
% |
|
||||
Non-GAAP Depreciation and Amortization in Operating Expenses |
|
|
|
|
|
|
|
|
||||||||
GAAP depreciation and amortization in operating expenses |
$ |
6,531 |
|
|
$ |
6,820 |
|
|
$ |
19,554 |
|
|
$ |
20,600 |
|
|
Amortization of acquired intangible assets |
(4,422 |
) |
|
(4,402 |
) |
|
(13,267 |
) |
|
(13,206 |
) |
|
||||
Non-GAAP depreciation and amortization in operating expense |
$ |
2,109 |
|
|
$ |
2,418 |
|
|
$ |
6,287 |
|
|
$ |
7,394 |
|
|
Non-GAAP depreciation and amortization in operating expense as a % of revenue |
1.3 |
% |
|
1.9 |
% |
|
1.4 |
% |
|
1.9 |
% |
|
||||
Non-GAAP Operating Expenses |
|
|
|
|
|
|
|
|
||||||||
GAAP operating expenses |
$ |
96,378 |
|
|
$ |
64,219 |
|
|
$ |
274,386 |
|
|
$ |
211,817 |
|
|
Amortization of acquired intangible assets |
(4,422 |
) |
|
(4,402 |
) |
|
(13,267 |
) |
|
(13,206 |
) |
|
||||
Stock-based compensation expense |
(10,523 |
) |
|
(2,712 |
) |
|
(31,889 |
) |
|
(6,443 |
) |
|
||||
Restructuring expense |
? |
|
|
15 |
|
|
? |
|
|
(3,234 |
) |
|
||||
Transaction related and other expense |
(1,338 |
) |
|
(95 |
) |
|
(4,137 |
) |
|
(2,329 |
) |
|
||||
Non-GAAP operating expenses |
$ |
80,095 |
|
|
$ |
57,025 |
|
|
$ |
225,093 |
|
|
$ |
186,605 |
|
|
Non-GAAP operating expenses as a % of revenue |
50.7 |
% |
|
43.6 |
% |
|
49.5 |
% |
|
49.1 |
% |
|
||||
Non-GAAP Income From Operations |
|
|
|
|
|
|
|
|
||||||||
GAAP income from operations |
$ |
15,766 |
|
|
$ |
30,586 |
|
|
$ |
52,805 |
|
|
$ |
60,581 |
|
|
Amortization of acquired intangible assets |
7,124 |
|
|
5,577 |
|
|
19,981 |
|
|
16,731 |
|
|
||||
Stock-based compensation expense |
11,603 |
|
|
2,789 |
|
|
35,355 |
|
|
6,561 |
|
|
||||
Restructuring expense |
? |
|
|
(15 |
) |
|
? |
|
|
3,835 |
|
|
||||
Transaction related and other expense |
1,338 |
|
|
95 |
|
|
4,137 |
|
|
2,329 |
|
|
||||
Non-GAAP income from operations |
$ |
35,831 |
|
|
$ |
39,032 |
|
|
$ |
112,278 |
|
|
$ |
90,037 |
|
|
Non-GAAP operating margin |
22.7 |
% |
|
29.9 |
% |
|
24.7 |
% |
|
23.7 |
% |
|
||||
DATTO HOLDING CORP. GAAP to Non-GAAP Reconciliations and Calculation of Other Key Metrics (in thousands, except percentages and share and per share amounts) (unaudited) |
||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
||||||||||||
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
||||||||
Non-GAAP Net Income and Net Income Per Share |
|
|
|
|
|
|
|
|
||||||||
GAAP net income |
$ |
13,485 |
|
|
$ |
19,546 |
|
|
$ |
45,687 |
|
|
$ |
29,666 |
|
|
GAAP provision for income taxes |
1,787 |
|
|
4,962 |
|
|
6,461 |
|
|
8,727 |
|
|
||||
GAAP income before income taxes |
15,272 |
|
|
24,508 |
|
|
52,148 |
|
|
38,393 |
|
|
||||
Amortization of acquired intangible assets |
7,124 |
|
|
5,577 |
|
|
19,981 |
|
|
16,731 |
|
|
||||
Stock-based compensation expense |
11,603 |
|
|
2,789 |
|
|
35,355 |
|
|
6,561 |
|
|
||||
Restructuring expense |
? |
|
|
(15 |
) |
|
? |
|
|
3,835 |
|
|
||||
Transaction related and other expense |
1,338 |
|
|
95 |
|
|
4,137 |
|
|
2,329 |
|
|
||||
Non-GAAP provision for income taxes |
(8,834 |
) |
|
(8,239 |
) |
|
(27,905 |
) |
|
(16,963 |
) |
|
||||
Non-GAAP net income |
$ |
26,503 |
|
|
$ |
24,715 |
|
|
$ |
83,716 |
|
|
$ |
50,886 |
|
|
Non-GAAP net income per share attributable to common shareholders: |
|
|
|
|
|
|
|
|
||||||||
Basic |
$ |
0.16 |
|
|
$ |
0.18 |
|
|
$ |
0.52 |
|
|
$ |
0.38 |
|
|
Diluted |
$ |
0.16 |
|
|
$ |
0.18 |
|
|
$ |
0.51 |
|
|
$ |
0.37 |
|
|
Weighted-Average Shares used in computing Non-GAAP Net Income per Share: |
|
|
|
|
|
|
|
|
||||||||
Non-GAAP weighted-average shares used in computing net income per share, basic |
162,424,260 |
|
|
135,553,097 |
|
|
161,657,479 |
|
|
135,496,696 |
|
|
||||
Non-GAAP weighted-average shares used in computing net income per share, diluted |
166,248,941 |
|
|
138,590,770 |
|
|
165,483,710 |
|
|
137,006,921 |
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Adjusted EBITDA |
|
|
|
|
|
|
|
|
||||||||
GAAP net income |
$ |
13,485 |
|
|
$ |
19,546 |
|
|
$ |
45,687 |
|
|
$ |
29,666 |
|
|
Interest and other expense, net |
494 |
|
|
6,078 |
|
|
657 |
|
|
22,188 |
|
|
||||
Depreciation and amortization |
15,103 |
|
|
12,346 |
|
|
43,349 |
|
|
36,346 |
|
|
||||
Provision for income tax |
1,787 |
|
|
4,962 |
|
|
6,461 |
|
|
8,727 |
|
|
||||
Stock-based compensation expense |
11,603 |
|
|
2,789 |
|
|
35,355 |
|
|
6,561 |
|
|
||||
Restructuring expense |
? |
|
|
(15 |
) |
|
? |
|
|
3,835 |
|
|
||||
Transaction related and other expense |
1,338 |
|
|
95 |
|
|
4,137 |
|
|
2,329 |
|
|
||||
Adjusted EBITDA |
$ |
43,810 |
|
|
$ |
45,801 |
|
|
$ |
135,646 |
|
|
$ |
109,652 |
|
|
Adjusted EBITDA margin |
27.7 |
% |
|
35.1 |
% |
|
29.9 |
% |
|
28.9 |
% |
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Free Cash Flow |
|
|
|
|
|
|
|
|
||||||||
GAAP net cash provided by operating activities |
$ |
32,012 |
|
|
$ |
50,080 |
|
|
$ |
99,109 |
|
|
$ |
74,055 |
|
|
Less: Purchases of property and equipment |
(11,732 |
) |
|
(6,519 |
) |
|
(32,170 |
) |
|
(28,519 |
) |
|
||||
Free cash flow |
$ |
20,280 |
|
|
$ |
43,561 |
|
|
$ |
66,939 |
|
|
$ |
45,536 |
|
|
MSP-F
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