Mimecast: Fiscal 1Q18 Financial Results

Mimecast Limited announced financial results for the first quarter ended June 30, 2017.

“Notable in our first quarter was the evolving threat landscape. We responded with Sync and Recover, a service to enable fast recovery in the event omnipresent attackers are successful in penetrating an organization,” stated Peter Bauer, CEO.

CFO Peter Campbell noted: “Continued strong retention and upsell as well as sales to new customers have helped us deliver another strong quarter. We are pleased with our performance to date as we drive both top and bottom line growth.”

First Quarter 2018 Financial Highlights:

• Revenue: GAAP revenue for the first quarter of 2018 was $58.2 million, an increase of 40% compared to $41.5 million of GAAP revenue in the first quarter of 2017. Revenue on a constant currency basis increased 43% compared to the first quarter of 2017.
• Customers: Added 900 net new customers in the first quarter of 2018. Now serving over 27,300 organizations globally.
• Revenue Retention Rate: Revenue retention rate was 111% in the first quarter of 2018, up from 110% in the first quarter of 2017.
• Gross Profit percentage: Gross profit percentage was 74% in the first quarter of 2018, up from 73% in the first quarter of 2017.
• GAAP Net Loss: GAAP net loss was $1.9 million, or $(0.03) per basic and diluted share, based on 56.3 million weighted-average shares outstanding.
• Adjusted EBITDA: Adjusted EBITDA was $5.1 million, representing an Adjusted EBITDA margin of 9% up from 4.5% in the first quarter of 2017.
• Non-GAAP Net Income: Non-GAAP net income was $0.4 million, or $0.01 per share, based on 60.6 million diluted shares outstanding.
• Free Cash Flow and Cash: Generated $3.9 million of free cash flow in the first quarter of 2018. Cash and investments as of June 30, 2017 were $119.2 million.

First Quarter 2018 Business Highlights

• Introduced Sync & Recover for Exchange and Office 365, an add-on to our archiving service that lets customers simplify the recovery of mail server data in the event of loss or corruption. It offers streamlined point-and-click recovery of email, personal folders, calendars and contacts.
• Sales of Targeted Threat Protection increased during the first quarter. More than 11,500 customers now use the service, representing 42% of our customers.
• A total of 24% of customers used Mimecast in conjunction with Microsoft Office 365 during the first quarter compared to 21% in the fourth quarter of 2017. More than 6,500 customers of all sizes have selected the company to enhance their security, archive their data, and to provide uptime assurance for their Office 365 investments.
• CRN Intelligence (a division of CRN UK at Incisive Media) ranked the firm first in Overall Service in Security in their 2017 Vendor Report. The report consisted of two hundred respondents from UK-based VARs, solutions integrators, MSPs, hosting/ cloud specialists and distributors Mimecast North America partnered with Insight to go-to-market with Mimecast’s security, archiving and continuity cloud services. The partnership provides email management in one integrated service.

Second Quarter 2018 Guidance:
Constant currency revenue growth is expected to be in the range of 33% to 34% and revenue of $59.7 million to $60.3 million. This guidance is based on exchange rates as of July 31, 2017 and includes an estimated positive impact of $0.7 million resulting from the weakening of the U.S. dollar compared to the prior year. Adjusted EBITDA for the second quarter is expected to be in the range of $5.0 million to $6.0 million.

Full Year 2018 Guidance:
Revenue is expected to be the range of $246.8 million to $252.1 million or 30% to 33% revenue growth in constant currency. Foreign exchange rate fluctuations are positively impacting this guidance by an estimated $3.0 million. Adjusted EBITDA is expected to be in the range of $20.1 million to $22.1 million.

To read the earnings call transcript