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Qlik Announces Strong Second Quarter 2015 Financial Results

RADNOR, Pa. — (BUSINESS WIRE) — July 23, 2015 — Qlik (NASDAQ: QLIK), a leader in visual analytics delivering intuitive solutions for self-service data visualization and guided analytics, today announced financial results for the second quarter ended June 30, 2015.

Lars Björk, Chief Executive Officer of Qlik, stated, “This was another great quarter for Qlik. On a constant currency basis, we achieved accelerating license and total revenue growth, driven by increased momentum around Qlik Sense and ongoing healthy demand for QlikView. Our platform strategy is expanding the dialogue with customers and prospects, as they can now leverage best-in-class visualization, governance, security and collaboration, all from one vendor.”

Financial Highlights for the Second Quarter Ended June 30, 2015

Operating Highlights

Business Outlook

Based on information available as of July 23, 2015, Qlik anticipates total revenue growth of 10% to 11% on a reported basis and 21% to 23% on a constant currency basis for the full year 2015. Qlik is issuing guidance for the third quarter and full year 2015 as follows:

                               
in millions, except for per share data        

Guidance Range Q3
2015

       

Year-Over-Year
Projected Revenue
Growth Rate

       

Year-Over-Year Projected
Revenue Growth Rate on a
Constant Currency Basis1

          Low End   High End         Low End   High End         Low End   High End
Total revenue         $ 140.0   $ 144.0         7 %   10 %         18 %   21 %
Non-GAAP income from operations2         $ 1.0   $ 4.0                            
Non-GAAP income per diluted common share2,3         $ 0.01   $ 0.03                            
         

Guidance Range Full
Year 2015

       

Year-Over-Year
Projected Revenue
Growth Rate

       

Year-Over-Year Projected
Revenue Growth Rate on a
Constant Currency Basis1

          Low End   High End         Low End   High End         Low End   High End
Total revenue         $ 610.0   $ 620.0         10 %   11 %         21 %   23 %
Non-GAAP income from operations2         $ 43.0   $ 47.0                            
Non-GAAP income per diluted common share2,3         $ 0.30   $ 0.33                            
 
1 To determine projected revenue growth rates on a constant currency basis for third quarter and full year 2015, expected revenue from entities reporting in foreign currencies was translated into U.S. dollars using the comparable prior year period's monthly average foreign currency exchange rates.
2 Expectations of non-GAAP income from operations and non-GAAP income per diluted common share exclude stock-based compensation expense, employer payroll taxes on stock transactions, contingent consideration adjustments and amortization of intangible assets.
3 Assumes an estimated long-term effective tax rate of 30% and diluted weighted average shares outstanding of approximately 95 million.

Qlik's expectations of total revenue, non-GAAP income from operations and non-GAAP income per diluted common share for the third quarter and full year 2015 assume that foreign currency exchange rates for the third quarter and full year 2015 will approximate current exchange rates. This Business Outlook is directional guidance only as foreign currency exchange rate fluctuations and changes in the mix of domestic and international revenue and expenses can impact our results.

Qlik currently intends to publish, in each quarterly earnings release, certain expectations with respect to future financial performance. Those statements, including the guidance provided above, are forward looking, and actual results may differ materially.

Conference Call and Webcast Information

Qlik will host a conference call on Thursday, July 23, 2015 at 5:00 p.m. Eastern Time (ET) to discuss the company’s second quarter financial results and its business outlook. To access this call, dial (877) 312-5507 (domestic) or (253) 237-1134 (international). The conference ID is 71929684. The presentation will be webcast live and available under the “Events & Presentations” section on Qlik’s investor relations website at http://investor.qlik.com/. Following the conference call, a replay will be available until July 26, 2015 at (855) 859-2056 (domestic) or (404) 537-3406 (international). The replay pass code is 71929684. An archived webcast of this conference call will also be available under the “Events & Presentations” section on Qlik’s investor relations website at http://investor.qlik.com/.

Non-GAAP Financial Measures

To supplement the consolidated financial statements presented in accordance with generally accepted accounting principles in the United States, or GAAP, Qlik uses measures of non-GAAP income (loss) from operations, non-GAAP net income (loss), non-GAAP net income (loss) per basic and diluted common share, non-GAAP revenue and constant currency. A reconciliation of these non-GAAP financial measures to the closest GAAP financial measure is presented in the financial tables below under the headings “Reconciliation of Non-GAAP Measures to GAAP”, “Reconciliation of Non-GAAP Revenue to GAAP Revenue” and “Reconciliation of Year-Over-Year Projected Revenue Growth Rate to Year-Over-Year Projected Revenue Growth Rate on a Constant Currency Basis.” Qlik believes that the non-GAAP financial information provided in this release can assist investors in understanding and assessing Qlik’s on-going core operations and prospects for the future and provides an additional tool for investors to use in comparing Qlik’s financial results with other companies in Qlik’s industry, many of which present similar non-GAAP financial measures to investors. In addition, Qlik believes that these non-GAAP financial measures are useful to investors because they allow for greater transparency into the indicators used by management as a basis for its internal budgeting and operational decision making.

For the three and six months ended June 30, 2015 and 2014, non-GAAP income (loss) from operations is determined by taking GAAP loss from operations and adding back stock-based compensation expense, employer payroll taxes on stock transactions, amortization of intangible assets and contingent consideration adjustments. Non-GAAP net income (loss) is determined by taking GAAP loss before income taxes and adding back stock-based compensation expense, employer payroll taxes on stock transactions, amortization of intangible assets and contingent consideration adjustments and the result is tax affected at an estimated long-term effective tax rate of 30%. Qlik believes that the effective tax rate used in the non-GAAP net income (loss) and related income (loss) per diluted common share calculations are reasonable estimates of the long-term normalized effective tax rate under its global structure. Qlik believes these adjustments provide useful information to both management and investors due to the following factors:

To determine the revenue growth rates on a constant currency basis for the three and six months ended June 30, 2015, revenue from entities reporting in foreign currencies was translated into U.S. dollars using the comparable prior year period’s monthly average foreign currency exchange rates. Qlik reports results in U.S. dollars but does business on a global basis in multiple currencies. Exchange rate fluctuations affect the U.S. dollar value of foreign currency revenue and expenses and may have a significant effect on reported results. The discussion of Qlik’s financial results in this release includes comparisons with the prior year period in constant currency terms. Management believes this information facilitates comparison of underlying results over time.

This press release includes forward-looking non-GAAP financial measures under the heading “Business Outlook”. These non-GAAP financial measures were determined by excluding stock-based compensation expense, employer payroll taxes on stock transactions, amortization of intangible assets and contingent consideration adjustments and assuming an estimated long-term effective tax rate of 30%. We are unable to reconcile this non-GAAP guidance to GAAP because it is difficult to predict the future impact of these adjustments. In addition, these forward-looking non-GAAP financial measures assume that foreign currency exchange rates for the third quarter and full year 2015 will approximate current foreign currency exchange rates. In addition, Qlik’s expectations of year-over-year projected revenue growth rates on a constant currency basis for the third quarter and full year 2015 assume that expected revenue from entities reporting in foreign currencies are translated into U.S. dollars using the comparable prior year period’s monthly average foreign currency exchange rates.

The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant elements that are required by GAAP to be recorded in Qlik’s consolidated financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by management in determining these non-GAAP financial measures. In order to compensate for these limitations, management of Qlik presents its non-GAAP financial measures in connection with its GAAP results. Investors are encouraged to review the reconciliation of our non-GAAP financial measures to their most directly comparable GAAP financial measure. As previously mentioned, a reconciliation of our non-GAAP financial measures to their most directly comparable GAAP measures has been provided below.

About Qlik

Qlik (NASDAQ: QLIK) is a leader in visual analytics. Its portfolio of products meets customers' growing needs from reporting and self-service visual analysis to guided, embedded and custom analytics. Approximately 36,000 customers rely on Qlik solutions to gain meaning out of information from varied sources, exploring the hidden relationships within data that lead to insights that ignite good ideas. Headquartered in Radnor, Pennsylvania, Qlik has offices around the world with more than 1,700 partners covering more than 100 countries.

Safe Harbor for Forward-Looking Statements

This press release contains forward-looking statements, including, but not limited to, the guidance provided under the heading “Business Outlook” above, statements regarding the value and effectiveness of Qlik's products, the introduction of product enhancements or additional products and Qlik's growth, expansion and market leadership, that involve risks, uncertainties, assumptions and other factors which, if they do not materialize or prove correct, could cause Qlik’s results to differ materially from those expressed or implied by such forward-looking statements. All statements, other than statements of historical fact, are statements that could be deemed forward-looking statements, including statements containing the words “predicts,” “plan,” “expects,” “focus,” “anticipates,” “believes,” “goal,” “target,” “estimate,” “potential,” “may,” “will,” “might,” “momentum,” “can,” “could,” “see,” “seek,” “forecast,” and similar words. Qlik intends all such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 21E of the Exchange Act and the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projected in such statements due to various factors, including but not limited to: risks and uncertainties inherent in Qlik’s business; Qlik’s ability to attract new customers and retain existing customers; Qlik’s ability to effectively sell, service and support its products; Qlik’s ability to adapt to changing licensing and go to market business models; Qlik’s ability to manage its international operations; Qlik’s ability to compete effectively; Qlik’s ability to develop and introduce new products and add-ons or enhancements to existing products; Qlik’s ability to continue to promote and maintain its brand in a cost-effective manner; Qlik’s ability to manage growth; Qlik’s ability to attract and retain key personnel; currency fluctuations that affect Qlik’s revenues and costs; Qlik’s ability to successfully integrate acquisitions into its business; the scope and validity of intellectual property rights applicable to Qlik’s products; adverse economic conditions in general and adverse economic conditions specifically affecting the markets in which Qlik operates; and other risks more fully described in Qlik’s publicly available filings with the Securities and Exchange Commission. Past performance is not necessarily indicative of future results. The forward-looking statements included in this press release represent Qlik's views as of the date of this press release. Any statements regarding Qlik’s products are intended to outline its general product direction and should not be relied on in making a purchase decision, as the development, release, and timing of any features and functionality remains at Qlik’s sole discretion. Qlik anticipates that subsequent events and developments will cause its views to change. Qlik undertakes no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These forward-looking statements should not be relied upon as representing Qlik’s views as of any date subsequent to the date of this press release.

© 2015 QlikTech International AB. All rights reserved. Qlik®, Qlik® Sense, QlikView®, QlikTech®, Qlik® Cloud, Qlik® DataMarket, Qlik® Analytics Platform and the QlikTech logos are trademarks of QlikTech International AB which have been registered in multiple countries. Other marks and logos mentioned herein are trademarks or registered trademarks of their respective owners.

 
Qlik Technologies Inc.
Consolidated Statements of Operations
(in thousands, except for share and per share data)
 
        Three Months Ended June 30,     Six Months Ended June 30,
  2015       2014     2015       2014  
(unaudited) (unaudited)
Revenue:
License revenue $ 76,320 $ 66,942 $ 131,127 $ 120,825
Maintenance revenue 55,983 50,889 108,653 96,734
Professional services revenue   13,526     13,787     26,313     25,171  
Total revenue   145,829     131,618     266,093     242,730  
 
Cost of revenue:
License revenue 2,437 1,785 4,409 3,291
Maintenance revenue 2,681 2,768 5,939 5,825
Professional services revenue   17,076     14,256     32,987     27,732  
Total cost of revenue   22,194     18,809     43,335     36,848  
 
Gross profit 123,635 112,809 222,758 205,882
 
Operating expenses:
Sales and marketing 86,792 75,691 163,433 148,454
Research and development 18,793 17,588 36,188 34,634
General and administrative   27,964     26,531     57,138     53,292  
Total operating expenses   133,549     119,810     256,759     236,380  
 
Loss from operations   (9,914 )   (7,001 )   (34,001 )   (30,498 )
 
Other expense, net:
Interest income, net 35 40 65 75
Foreign exchange loss, net   (3,241 )   (51 )   (1,846 )   (414 )
Total other expense, net   (3,206 )   (11 )   (1,781 )   (339 )
 
Loss before income taxes   (13,120 )   (7,012 )   (35,782 )   (30,837 )
 
Benefit (provision) for income taxes   118     (3,194 )   (7,540 )   (5,249 )
 
Net loss $ (13,002 ) $ (10,206 ) $ (43,322 ) $ (36,086 )
 
 
Net loss per common share
Basic and diluted $ (0.14 ) $ (0.11 ) $ (0.47 ) $ (0.40 )
 
Weighted average number of common shares outstanding
Basic and diluted 91,721,926 89,753,523 91,362,617 89,480,446
 

Stock-based compensation expense for the three and six months ended June 30, 2015 and 2014 is included in the
Unaudited Consolidated Statements of Operations as follows (in thousands):

 
Three Months Ended June 30, Six Months Ended June 30,
  2015     2014     2015     2014  
(unaudited) (unaudited)
 
Cost of revenue $ 773 $ 639 $ 1,798 $ 1,195
Sales and marketing 4,757 4,199 9,427 8,306
Research and development 1,034 1,023 1,990 1,834
General and administrative   3,099     2,817     5,845     5,181  
$ 9,663   $ 8,678   $ 19,060   $ 16,516  
 
     
Qlik Technologies Inc.
Reconciliation of non-GAAP Measures to GAAP
(in thousands, except share and per share data)
           
Three Months Ended June 30, Six Months Ended June 30,
  2015       2014     2015       2014  
(unaudited) (unaudited)
Reconciliation of non-GAAP income (loss) from operations:
 
GAAP loss from operations $ (9,914 ) $ (7,001 ) $ (34,001 ) $ (30,498 )
Stock-based compensation expense 9,663 8,678 19,060 16,516
Employer payroll taxes on stock transactions 1,350 191 1,492 554
Amortization of intangible assets 867 739 1,772 1,548
Contingent consideration adjustment   56       -     162       -  
Non-GAAP income (loss) from operations $ 2,022     $ 2,607   $ (11,515 )   $ (11,880 )
 
Non-GAAP income (loss) from operations as a percentage of total revenue 1.4 % 2.0 % -4.3 % -4.9 %
GAAP loss from operations as a percentage of total revenue -6.8 % -5.3 % -12.8 % -12.6 %
 
Reconciliation of non-GAAP net income (loss):
 
GAAP net loss $ (13,002 ) $ (10,206 ) $ (43,322 ) $ (36,086 )
Stock-based compensation expense 9,663 8,678 19,060 16,516
Employer payroll taxes on stock transactions 1,350 191 1,492 554
Amortization of intangible assets 867 739 1,772 1,548
Contingent consideration adjustment 56 - 162 -
Income tax adjustment*   237       2,415     11,529       8,915  
Non-GAAP net income (loss) $ (829 )   $ 1,817   $ (9,307 )   $ (8,553 )
 
Non-GAAP net income (loss) per common share - basic and diluted $ (0.01 )   $ 0.02   $ (0.10 )   $ (0.10 )
GAAP net loss per common share - basic and diluted $ (0.14 )   $ (0.11 ) $ (0.47 )   $ (0.40 )
 
Non-GAAP weighted average number of common shares outstanding - basic   91,721,926       89,753,523     91,362,617       89,480,446  
Non-GAAP weighted average number of common shares outstanding - diluted   91,721,926       90,923,413     91,362,617       89,480,446  
GAAP weighted average number of common shares outstanding - basic and diluted   91,721,926       89,753,523     91,362,617       89,480,446  
 

* Income tax adjustment is used to adjust the GAAP benefit (provision) for income taxes to a non-GAAP benefit (provision) for income taxes utilizing an estimated long-term effective tax rate of 30%.

 
Qlik Technologies Inc.
Reconciliation of non-GAAP Revenue to GAAP Revenue
(in thousands)
                           
Three Months Ended June 30, Six Months Ended June 30,
2015   2014 % change 2015   2014 % change
(unaudited) (unaudited)
Constant currency reconciliation:
Total revenue, as reported $ 145,829 $ 131,618 11 % $ 266,093 $ 242,730 10 %
Estimated impact of foreign currency fluctuations 15 % 14 %
Total revenue constant currency growth rate 26 % 24 %
 
Three Months Ended June 30, Six Months Ended June 30,
2015   2014 % change 2015   2014 % change
(unaudited) (unaudited)
Constant currency reconciliation:
License revenue, as reported $ 76,320 $ 66,942 14 % $ 131,127 $ 120,825 9 %
Estimated impact of foreign currency fluctuations 15 % 14 %
License revenue constant currency growth rate 29 % 23 %
 
Three Months Ended June 30, Six Months Ended June 30,
2015   2014 % change 2015   2014 % change
(unaudited) (unaudited)
Constant currency reconciliation:
Maintenance revenue, as reported $ 55,983 $ 50,889 10 % $ 108,653 $ 96,734 12 %
Estimated impact of foreign currency fluctuations 16 % 16 %
Maintenance revenue constant currency growth rate 26 % 28 %
 
Three Months Ended June 30, Six Months Ended June 30,
2015   2014 % change 2015   2014 % change
(unaudited) (unaudited)
Constant currency reconciliation:
Professional Services revenue, as reported $ 13,526 $ 13,787 -2 % $ 26,313 $ 25,171 5 %
Estimated impact of foreign currency fluctuations 12 % 12 %
Professional services revenue constant currency growth rate 10 % 17 %
 
Three Months Ended June 30, Six Months Ended June 30,
2015   2014 % change 2015   2014 % change
(unaudited) (unaudited)
Constant currency reconciliation:
Americas revenue, as reported $ 54,262 $ 46,632 16 % $ 97,129 $ 83,484 16 %
Estimated impact of foreign currency fluctuations 4 % 4 %
Americas revenue constant currency growth rate 20 % 20 %
 
Three Months Ended June 30, Six Months Ended June 30,
2015   2014 % change 2015   2014 % change
(unaudited) (unaudited)
Constant currency reconciliation:
Europe revenue, as reported $ 74,606 $ 70,356 6 % $ 137,623 $ 133,129 3 %
Estimated impact of foreign currency fluctuations 22 % 22 %
Europe revenue constant currency growth rate 28 % 25 %
 
Three Months Ended June 30, Six Months Ended June 30,
2015   2014 % change 2015   2014 % change
(unaudited) (unaudited)
Constant currency reconciliation:
Rest of World revenue, as reported $ 16,961 $ 14,630 16 % $ 31,341 $ 26,117 20 %
Estimated impact of foreign currency fluctuations 18 % 18 %
Rest of World revenue constant currency growth rate 34 % 38 %
 
           
Qlik Technologies Inc.
Consolidated Balance Sheets
(in thousands)
 
June 30, December 31,
  2015     2014  
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 306,353 $ 244,018
Accounts receivable, net 150,922 203,766
Prepaid expenses and other current assets 16,987 19,901
Deferred income taxes   2,082     2,082  
Total current assets 476,344 469,767
 
Property and equipment, net 28,734 26,455
Intangible assets, net 14,040 21,195
Goodwill 38,569 38,702
Deferred income taxes 2,658 3,015
Deposits and other noncurrent assets   5,165     2,835  
Total assets $ 565,510   $ 561,969  
 
Liabilities and stockholders’ equity
Current liabilities:
Income taxes payable $ - $ 2,139
Accounts payable 6,497 6,887
Deferred revenue 135,813 127,565
Accrued payroll and other related costs 54,127 53,674
Accrued expenses 36,386 40,712
Deferred income taxes   37     37  
Total current liabilities 232,860 231,014
 
Long-term liabilities:
Deferred revenue 6,368 4,564
Deferred income taxes 2,135 3,477
Other long-term liabilities   12,011     14,422  
Total liabilities 253,374 253,477
 
Commitments and contingencies
 
Stockholders’ equity:
Common stock 9 9
Additional paid-in-capital 376,329 327,419
Accumulated deficit (64,916 ) (21,594 )
Accumulated other comprehensive income   714     2,658  
Total stockholders’ equity   312,136     308,492  
Total liabilities and stockholders’ equity $ 565,510   $ 561,969  
 
       

Qlik Technologies Inc.
Consolidated Statements of Cash Flows
(in thousands)

 

Six Months Ended June 30,

  2015         2014  
(unaudited)
Cash flows from operating activities
Net loss $ (43,322 ) $ (36,086 )
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization 6,959 5,136
Stock-based compensation expense 19,060 16,516
Excess tax benefit from stock-based compensation (5,434 ) (4,171 )
Unrealized foreign currency loss, net 7,736 1,198
Other non-cash items (62 ) 432
Changes in assets and liabilities
Accounts receivable 43,640 35,193
Prepaid expenses and other assets 1,155 (131 )
Deferred revenue 15,390 10,937
Accounts payable and other liabilities   4,485     (5,556 )
Net cash provided by operating activities 49,607 23,468
 
Cash flows from investing activities
Acquisitions, net of cash acquired (2,842 ) -
Capital expenditures   (7,834 )   (7,865 )
Net cash used in investing activities (10,676 ) (7,865 )
 
Cash flows from financing activities
Proceeds from exercise of common stock options 24,416 8,115
Excess tax benefit from stock-based compensation   5,434     4,171  
Net cash provided by financing activities 29,850 12,286
Effect of exchange rate on cash and cash equivalents   (6,446 )   (547 )
Net increase in cash and cash equivalents 62,335 27,342
Cash and cash equivalents, beginning of period   244,018     227,693  
Cash and cash equivalents, end of period $ 306,353   $ 255,035  
 
Supplemental cash flow information:
Cash paid during the period for income taxes $ 3,564   $ 3,997  
 
Non-cash investing activities:
Tenant improvement allowance received under operating lease $ -   $ 1,048  
 


Contact:

Qlik
Investor Contact:
Brett Pollack, 646-561-0906
Email Contact
or
Media Contact:
Maria Scurry, 617-658-5317
Email Contact