SOURCE: Callidus Software Inc.

Callidus Software Inc.

November 04, 2014 16:05 ET

CallidusCloud Reports Record Q3 Revenue of $35.0 Million; 26% Year-Over-Year Increase in SaaS Revenue

PLEASANTON, CA--(Marketwired - Nov 4, 2014) - Callidus Software Inc. (NASDAQ: CALD), a global leader in cloud-based sales, marketing and learning solutions, today announced financial results for the third quarter ended September 30, 2014.

"I was pleased with our performance in Q3. We reinforced our leadership in the Incentive Compensation space, expanded our market with the acquisition of Clicktools and had record performance across the board," said Leslie Stretch, president and CEO of CallidusCloud. "It is clear to us that the demand for our Lead To Money solutions is larger than we anticipated. As a result, we are increasing our Q4 and 2014 revenue guidance. Looking forward to 2015, we now expect our SaaS revenue to grow at an accelerated rate of 30% off of a higher base."

Financial Highlights for the Third Quarter 2014
Total revenue was $35.0 million for the third quarter, an increase of 14%. Total recurring revenue was $25.5 million, which includes SaaS revenue of $21.6 million and maintenance revenue of $3.9 million. SaaS revenue increased 26% over the same quarter in the prior year. Services and license revenue of $9.5 million, consisting of $8.5 million in services revenue and $1.0 million in license revenue, decreased 1% compared to the same quarter in the prior year. Cash and short-term investments were $40.2 million, a 4% decrease from the prior quarter.

GAAP Performance

  • Recurring revenue gross margin was 65%, unchanged from 65% in the same quarter in the prior year.

  • Operating loss was $4.9 million compared to $125,000 in the same quarter in the prior year.

  • Net loss was $5.2 million, or ($0.11) on a per share basis, compared to a net loss of $1.4 million, or ($0.04) per share, for the same quarter in the prior year.

  • Cash generated from operations was $3.7 million in the current quarter compared to $5.2 million in the same quarter in the prior year.

Non-GAAP Performance
The following non-GAAP measures are described below and reconciled to the corresponding GAAP measures at the end of this release.

  • Recurring revenue gross margin was 73% compared to 69% for the same quarter in the prior year.

  • Operating income was $2.8 million compared to $3.7 million for the same quarter in the prior year.

  • Net income was $2.5 million, or $0.05 per fully diluted share, compared to $3.3 million, or $0.07 per fully diluted share for the same quarter in the prior year.

Business Highlights for the Third Quarter 2014

  • CallidusCloud acquired UK-Based Clicktools adding Enterprise Survey and advanced CRM integration capabilities to the award-winning Lead To Money Suite. Clicktools adds approximately 600 customers and expands CallidusCloud's footprint in EMEA.

  • CallidusCloud turned Lead to Money into Gold at the 2014 International Business Awards and American Business Awards with 30 awards including 'Best New Product, Financial Services', 'Best New Product, Lead Generation' and the prestigious 'Grand Stevie' award for the most successful companies at the 2014 awards programs.

  • CallidusCloud sponsored key industry events including the Salesforce 1 World Tour in Munich, World at Work's Spotlight on Sales Compensation in Chicago, CRM Evolution in New York, Sales Management Association's Sales Productivity Conference in Atlanta, and Boxworks in San Francisco.

  • CallidusCloud further expanded its partner ecosystem with 11 new resellers and alliance partners including Microsoft the worldwide leader in software, services and solutions that help people and businesses realize their full potential and Workday, a leading global provider of Cloud HCM and Financial Management solutions.

  • To celebrate the opening of the Japanese office, CallidusCloud hosted its inaugural C3 APJ customer event, hosting key partners and customers.

Financial Outlook for 2014 -- Fourth Quarter and Full Year
For the fourth quarter of 2014, the Company expects total revenue to be between $35.5 million and $36.5 million. GAAP operating loss is expected to be between $1.1 million and $2.5 million with ($0.03) to ($0.07) GAAP net loss per share. Non-GAAP operating income is expected to be between $2.5 million and $3.5 million with non-GAAP income per diluted share between $0.04 and $0.06.

For the full year of 2014, the Company is raising previous guidance to the range of $134.0 million to $135.0 million. GAAP operating loss is expected to be between $11.2 million and $12.5 million with ($0.18) to ($0.22) GAAP net loss per share. Non-GAAP operating income is expected to be between $8.2 million and $9.2 million with non-GAAP income per diluted share between $0.14 and $0.16.

Preliminary Outlook for 2015
For the full year of 2015, the Company expects total revenue to be between $160.0 to $165.0 million, and is targeting SaaS revenue growth of 30%.

Conference Call
In conjunction with this announcement CallidusCloud will host a conference call at 1:30 p.m. Pacific Daylight Time (PDT) today to discuss the third quarter 2014 results and outlook for the fourth quarter 2014 and full year 2014. The conference call will be available via live webcast at the Investor Relations section of CallidusCloud's website.

Webcast site: http://www.calliduscloud.com/about-us/investor-relations/
Dial-in: 800-299-8538 (International callers: 617-786-2902)
Passcode: 31705874
Replay information: A webcast replay will be available on the Investor Relations section of our website under Calendar of Events.

For more information, please visit: http://www.calliduscloud.com/about-us/investor-relations/

About CallidusCloud
Callidus Software Inc. (NASDAQ: CALD), doing business as CallidusCloud®, is the global leader in cloud based sales, marketing and learning solutions. CallidusCloud enables organizations to accelerate and maximize their lead to money process with a complete suite of solutions that identify the right leads, ensure proper territory and quota distribution, enable sales forces, automate configure price quote, and streamline sales compensation -- driving bigger deals, faster. Over 3,500 leading organizations, across all industries, rely on CallidusCloud to optimize the lead to money process to close more deals for more money in record time.

For more information, please visit www.calliduscloud.com.

Non-GAAP Financial Measures
In this release, CallidusCloud has provided additional financial information that has not been prepared in accordance with GAAP. This information includes non-GAAP gross margin, non-GAAP recurring revenue gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP net income, and non-GAAP net income per diluted share. CallidusCloud uses non-GAAP measures internally in analyzing its financial results and believes that they are useful to investors as a supplement to GAAP measures in evaluating CallidusCloud's operating performance. CallidusCloud believes that the use of these non-GAAP measures provides additional insight for investors to use in evaluation of ongoing operating results and trends and in comparing its financial measures with other companies in CallidusCloud's industry, many of which present non-GAAP financial measures that may resemble our non-GAAP financial measures. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.

Our non-GAAP measures reflect adjustments based on the following items:

Stock-based compensation expenses: We have excluded the effect of stock-based compensation expenses from our non-GAAP gross profit, recurring revenue gross profit, operating expenses, operating income, net income and net income per diluted share. We believe the exclusion of stock-based compensation expenses provides a useful comparison of our operating results to our peers.

Restructuring and other expenses: We have excluded the effect of restructuring and other expenses from our non-GAAP operating expenses, operating income, net income and net income per diluted share. Restructuring and other expenses consist of employee severance, facility exit costs and incremental depreciation expense as a result of the change in the estimated useful life of assets to be abandoned. We feel it is useful to investors to understand the effects of these items on our financial results.

Patent litigation and settlement costs and patent litigation estimates: We have excluded the effect of patent infringement and litigation defense costs, settlement costs and patent litigation estimates from our non-GAAP gross profit, recurring revenue gross profit, operating expenses, operating income, net income and net income per diluted share. We believe patent defense costs and settlement costs and patent litigation estimates are not indicative of our ongoing business operations, and are inconsistent in amount and frequency; as such we exclude patent litigation defense costs during our evaluation of our business performance.

Convertible note interest expense and amortization of convertible note issuance costs: We have excluded the costs of convertible note interest expense, redemption inducement and issuance costs from our non-GAAP net income and net income per diluted share. We believe that these costs are not indicative of our continuing operations or meaningful in evaluating current versus past business results.

Amortization and gain on sale of acquired intangible assets: We have excluded the effect of amortization and gain on sale of acquired intangibles which include developed technology, customer relationships, trade names, domain names, patents and licenses from our non-GAAP gross profit, recurring revenue gross profit, operating expenses, operating income, other income and expense, net income and net income per diluted share. Amortization and gain on sale of acquired intangibles are significantly affected by timing, and as such, can be inconsistent in amount and nature.

Acquisition-Related Costs: We have excluded the costs related to acquisitions from our non-GAAP operating expenses, operating income, net income and net income per diluted share. These costs include legal and transactional costs associated with acquisition activities that we would not have otherwise incurred in the periods presented as part of our continuing operations. We believe the exclusion of acquisition-related costs provides a useful comparison of our operating results to our peers.

Note on Forward-Looking Statements
The forward-looking statements included in this press release, including for example discussion of our commercial prospects, estimates of future revenues, operating income/loss and expenses, earnings per share, stock-based compensation expenses, amortization of acquired intangible assets, restructuring expenses, and patent litigation costs and estimates reflect management's best judgment based on factors currently known and involve risks and uncertainties. These risks and uncertainties include, but are not limited to, potential disruption of customer purchase decisions resulting from global economic conditions, timing and size of orders, relative growth of our recurring revenue, potential decreases in customer spending, uncertainty regarding purchasing trends in the cloud software market, customer cancellations or non-renewal of maintenance contracts or on-demand services, our potential inability to manage effectively any growth we experience, our ability to develop new products and services, increased competition or new entrants in the marketplace, potential impact of acquisitions and investments, changes in staffing levels, and other risks detailed in periodic reports we file with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K which may be obtained by contacting CallidusCloud's Investor Relations department at 415-445-3238, or from the Investor Relations section of CallidusCloud's website (http://www.calliduscloud.com/about-us/investor-relations/). Actual results may differ materially from those presently reported. We assume no obligation to update the information contained in this release.

©2014. Callidus Software Inc. All rights reserved. Callidus, Callidus Software, the Callidus Software logo, CallidusCloud, the CallidusCloud logo, TrueComp Manager, ActekSoft, ACom3, iCentera, Webcom, Litmos, the Litmos logo, LeadFormix, Rapid Intake, 6FigureJobs, Clicktools and LeadRocket are trademarks, service marks, or registered trademarks of Callidus Software Inc. and its affiliates in the United States and other countries. All other brand, service or product names are trademarks or registered trademarks of their respective companies or owners.

   
   
CALLIDUS SOFTWARE INC.  
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  
(In thousands, except for per share data)  
(unaudited)  
                         
    Three Months Ended September 30,     Nine Months Ended September 30,  
    2014     2013     2014     2013  
Revenue:                                
  Recurring   $ 25,547     $ 21,119     $ 71,481     $ 60,359  
  Services and license     9,453       9,559       27,011       21,791  
    Total revenue     35,000       30,678       98,492       82,150  
Cost of revenue:                                
  Recurring     8,916       7,303       23,706       21,687  
  Services and license     6,730       4,475       17,468       14,436  
    Total cost of revenue     15,646       11,778       41,174       36,123  
Gross profit     19,354       18,900       57,318       46,027  
                                 
Operating expenses:                                
  Sales and marketing     11,153       8,981       33,688       24,516  
  Research and development     4,920       4,146       14,838       12,984  
  General and administrative     7,892       5,757       18,113       16,889  
  Restructuring and other     305       141       709       1,699  
    Total operating expenses     24,270       19,025       67,348       56,088  
                                 
Operating loss     (4,916 )     (125 )     (10,030 )     (10,061 )
Interest income (expense) and other income (expense)     (58 )     (831 )     3,519       (2,670 )
                                 
Loss before provision for income taxes     (4,974 )     (956 )     (6,511 )     (12,731 )
Provision for income taxes     261       457       941       1,700  
                                 
Net loss   $ (5,235 )   $ (1,413 )   $ (7,452 )   $ (14,431 )
                                 
Net loss per share                                
  Basic   $ (0.11 )   $ (0.04 )   $ (0.16 )   $ (0.38 )
  Diluted   $ (0.11 )   $ (0.04 )   $ (0.16 )   $ (0.38 )
                                 
Weighted average shares used in computing net loss per share                                
  Basic     48,564       38,648       47,061       37,873  
  Diluted     48,564       38,648       47,061       37,873  
                                 
Includes stock-based compensation, amortization of acquired intangible assets, patent litigation and settlement costs and estimates, interest expense on convertible notes, amortization of convertible note issuance costs, restrucuring and other expenses, acquisition-related costs and gain on sale of domain names and trademarks as follows:  
             
    Three Months Ended September 30,     Nine Months Ended September 30,  
      2014       2013       2014       2013  
Cost of revenues:                                
  Recurring   $ 2,012     $ 755     $ 3,510     $ 2,160  
  Services and license     275       230       771       897  
Operating expenses:                                
  Sales and marketing     1,185       1,003       3,068       2,617  
  Research and development     481       384       1,393       1,317  
  General and administrative     3,470       1,340       6,325       4,811  
  Restructuring and other     305       141       709       1,699  
Interest income and other income (expense)     19       838       (3,508 )     2,512  
    Total   $ 7,747     $ 4,691     $ 12,268     $ 16,013  
                                 
                                 
   
   
CALLIDUS SOFTWARE INC.  
CONSOLIDATED BALANCE SHEETS  
   
(In thousands)  
             
    September 30,     December 31,  
    2014     2013  
ASSETS  
Current assets:                
  Cash and cash equivalents   $ 37,446     $ 28,295  
  Short-term investments     2,774       7,866  
  Accounts receivable, net     32,183       29,216  
  Deferred income taxes     184       -  
  Prepaid and other current assets     8,455       6,232  
    Total current assets     81,042       71,609  
                 
Property and equipment, net     12,723       11,351  
Goodwill     45,684       31,207  
Intangible assets, net     19,157       16,995  
Deferred income taxes, noncurrent     437       405  
Deposits and noncurrent assets     2,512       2,626  
    Total assets   $ 161,555     $ 134,193  
                 
   
LIABILITIES AND STOCKHOLDERS' EQUITY  
Current liabilities:                
  Accounts payable   $ 3,612     $ 2,987  
  Accrued payroll and related expenses     7,275       7,377  
  Accrued expenses     11,785       5,395  
  Deferred income taxes     1,173       1,159  
  Deferred revenue     52,286       46,222  
  Capital lease obligations     1,105       1,308  
    Total current liabilities     77,236       64,448  
                 
Deferred revenue, noncurrent     11,429       10,432  
Deferred income taxes, noncurrent     239       155  
Capital lease obligations, noncurrent     446       987  
Convertible notes     -       14,197  
Revolving line of credit     10,482       -  
Other noncurrent liabilities     3,008       1,921  
    Total liabilities     102,840       92,140  
                 
Stockholders' equity:                
  Common stock     49       45  
  Additional paid-in capital     339,736       315,430  
  Treasury stock     (14,430 )     (14,430 )
  Accumulated other comprehensive income     (31 )     165  
  Accumulated deficit     (266,609 )     (259,157 )
    Total stockholders' equity     58,715       42,053  
    Total liabilities and stockholders' equity   $ 161,555     $ 134,193  
                 
                 
   
   
CALLIDUS SOFTWARE INC.  
CONSOLIDATED STATEMENTS OF CASH FLOWS  
(In thousands)  
   
    Nine Months Ended September 30,  
    2014     2013  
Cash flows from operating activities:                
  Net loss   $ (7,452 )   $ (14,431 )
  Adjustments to reconcile net loss to net cash provided by operating activities:                
    Depreciation expense     3,953       3,278  
    Amortization of intangible assets     3,667       3,621  
    Gain on sale of intangible assets     (3,862 )     -  
    Provision for doubtful accounts     729       846  
    Stock-based compensation     7,916       8,345  
    Release of valuation allowance     (149 )     -  
    Loss on disposal of property and equipment     44       2  
    Amortization of convertible notes issuance cost     58       402  
    Net amortization on investments     21       63  
    Changes in operating assets and liabilities:                
      Accounts receivable     (2,359 )     (1,583 )
      Prepaid and other current assets     (1,997 )     (1,043 )
      Other noncurrent assets     (197 )     (773 )
      Accounts payable     583       (3,250 )
      Accrued expenses     5,471       1,517  
      Accrued payroll and related expenses     (627 )     462  
      Accrued restructuring and other expenses     (98 )     (476 )
      Deferred revenue     4,548       10,461  
      Deferred income taxes     (133 )     185  
Net cash provided by operating activities     10,116       7,626  
                 
Cash flows from investing activities:                
  Purchases of investments     (2,784 )     (5,634 )
  Proceeds from maturities and sale of investments     7,850       9,450  
  Purchases of property and equipment     (5,135 )     (1,714 )
  Purchases of intangible assets     (882 )     (634 )
  Proceeds from sale of intangible assets, net of expenses     4,651       -  
  Acquisitions, net of cash acquired     (15,409 )     -  
Net cash (used in) provided by investing activities     (11,709 )     1,468  
                 
Cash flows from financing activities:                
  Proceeds from issuance of common stock     4,003       5,375  
  Repurchase of common stock from employees for payment                
  of taxes on vesting of restricted stock units     (1,553 )     (818 )
  Proceeds from line of credit     10,482       -  
  Payment of consideration related to acquisitions     (630 )     (3,078 )
  Repayment of debt     (645 )     -  
  Payment of principal under capital leases     (744 )     (1,709 )
Net cash provided by (used in) financing activities     10,913       (230 )
Effect of exchange rates on cash and cash equivalents     (169 )     (72 )
Net increase in cash and cash equivalents     9,151       8,792  
Cash and cash equivalents at beginning of period     28,295       16,400  
Cash and cash equivalents at end of period   $ 37,446     $ 25,192  
                 
                 
   
   
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES  
(In thousands, except for percentages and per share data)  
(unaudited)  
   
    Three months ended     Nine months ended  
    September 30,     September 30,  
    2014     2013     2014     2013  
Non-GAAP gross profit reconciliation                        
                         
Gross profit   $ 19,354     $ 18,900     $ 57,318     $ 46,027  
                                 
  Gross margin     55 %     62 %     58 %     56 %
Add back:                                
  Non-cash stock-based compensation     491       452       1,335       1,472  
  Non-cash amortization of acquired intangible assets     606       533       1,756       1,585  
  Patent litigation estimate     1,190       -       1,190       -  
Non-GAAP gross profit   $ 21,641     $ 19,885     $ 61,599     $ 49,084  
                                 
  Gross margin     62 %     65 %     63 %     60 %
                                 
                                 
Non-GAAP recurring revenue gross profit reconciliation                                
                                 
Recurring revenue gross profit   $ 16,631     $ 13,816     $ 47,775     $ 38,672  
                                 
  Recurring revenue gross margin     65 %     65 %     67 %     64 %
Add back:                                
  Non-cash stock-based compensation     226       234       600       612  
  Non-cash amortization of acquired intangible assets     596       521       1,720       1,548  
  Patent litigation estimate     1,190       -       1,190       -  
Non-GAAP Recurring revenue gross profit   $ 18,643     $ 14,571     $ 51,285     $ 40,832  
                                 
  Recurring revenue gross margin     73 %     69 %     72 %     68 %
                                 
                                 
Non-GAAP operating expense reconciliation:                                
                                 
Operating expenses   $ 24,270     $ 19,025     $ 67,348     $ 56,088  
Subtract:                                
  Non-cash stock-based compensation     (2,501 )     (2,092 )     (6,581 )     (6,873 )
  Non-cash amortization of acquired intangible assets     (317 )     (294 )     (953 )     (870 )
  Patent litigation and settlement costs     (238 )     (341 )     (1,172 )     (1,002 )
  Acquisition-related costs     (259 )     -       (259 )     -  
  Restructuring and other     (305 )     (141 )     (709 )     (1,699 )
  Patent litigation estimate     (1,821 )     -       (1,821 )     -  
Non-GAAP Operating Expenses   $ 18,829     $ 16,157     $ 55,853     $ 45,644  
                                 
                                 
Non-GAAP operating income (loss) reconciliation:                                
                                 
Operating loss   $ (4,916 )   $ (125 )   $ (10,030 )   $ (10,061 )
Add back:                                
  Non-cash stock-based compensation     2,992       2,544       7,916       8,345  
  Non-cash amortization of acquired intangible assets     923       827       2,709       2,455  
  Patent litigation and settlement costs     238       341       1,172       1,002  
  Acquisition-related costs     259       -       259       -  
  Restructuring and other     305       141       709       1,699  
  Patent litigation estimate     3,011       -       3,011       -  
Non-GAAP Operating income   $ 2,812     $ 3,728     $ 5,746     $ 3,440  
                                 
                                 
   
   
CALLIDUS SOFTWARE INC.  
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES  
(In thousands, except for percentages and per share data)  
(unaudited)  
   
    Three months ended     Nine months ended  
    September 30,     September 30,  
    2014     2013     2014     2013  
Non-GAAP net loss reconciliation:                                
                                 
Net loss   $ (5,235 )   $ (1,413 )   $ (7,452 )   $ (14,431 )
Add back:                                
  Non-cash stock-based compensation     2,992       2,544       7,916       8,345  
  Non-cash amortization of acquired intangible assets     923       827       2,709       2,455  
  Patent litigation and settlement costs     238       341       1,172       1,002  
  Acquisition-related costs     278       -       278       -  
  Restructuring and other     305       141       709       1,699  
  Patent litigation estimate     3,011       -       3,011       -  
  Interest expense on convertible notes     -       704       277       2,110  
  Amortization of convertible note issuance cost     -       134       58       402  
  Gain on sale of domain names and trademarks     -       -       (3,862 )     -  
Non-GAAP Net income   $ 2,512     $ 3,278     $ 4,816     $ 1,582  
                                 
Non-GAAP net income (loss) per share reconciliation:                                
                                 
Net loss per basic share   $ (0.11 )   $ (0.04 )   $ (0.16 )   $ (0.38 )
Add back:                                
  Non-cash stock-based compensation     0.06       0.07       0.17       0.22  
  Non-cash amortization of acquired intangible assets     0.02       0.02       0.06       0.06  
  Patent litigation and settlement costs     -       0.01       0.02       0.03  
  Acquisition-related costs     0.01       -       0.01       -  
  Restructuring and other     0.01       -       0.02       0.04  
  Patent litigation estimate     0.06       -       0.06       -  
  Interest expense on convertible notes     -       0.02       0.01       0.06  
  Amorization of convertible note issuance cost     -       -       (0.01 )     0.01  
  Gain on sale of domain names and trademarks     -       -       (0.08 )     -  
  Diluted shares impact on non-GAAP basis     -       (0.01 )     -       (0.01 )
Non-GAAP net income per diluted share   $ 0.05     $ 0.07     $ 0.10     $ 0.03  
                                 
Basic and fully diluted shares reconciliation:                                
                                 
GAAP Basic shares     48,564       38,648       47,061       37,873  
Add back:                                
  Non-GAAP weighted average shares adjustment     1,472       9,383       2,739       9,037  
Shares used in calculation of diluted net income per share -Non-GAAP (a)     50,036       48,031       49,800       46,910  
     
(a)   Shares used in the per share calculation for reconciling items between GAAP and Non-GAAP financial measures.
     

CALLIDUS SOFTWARE INC.
FINANCIAL OUTLOOK
(In thousands)
(unaudited)

The guidance figures provided below and elsewhere in this press release are forward-looking statements, reflect a number of estimates, assumptions and other uncertainties, and are approximate in nature because the Company's future performance is difficult to predict. Such guidance is based on information available on the date of this press release, and the company assumes no obligation to update it.

         
    Three months ended
    December 31, 2014
    GAAP   Non-GAAP
         
Total revenue   $35,500 - $36,500   $35,500 - $36,500
Operating income (a)   ($1,100) - ($2,500)   $2,500 - $3,500
Net income (loss) per diluted share (c)   ($0.03) - ($0.07)   $0.04 - $0.06
         
         
    Twelve months ended
    December 31, 2014
    GAAP   Non-GAAP
         
Total revenue   $134,000 - $135,000   $134,000 - $135,000
Operating income (b)   ($11,100) - ($12,500)   $8,200 - $9,200
Net income (loss) per diluted share (c)   ($0.18) - ($0.22)   $0.14 - $0.16
         
(a)   Estimated non-GAAP amounts above for the three months ending December 31, 2014 reflect adjustments that exclude the estimated amortization of acquired intangible assets of approximately $1.2 - $1.3 million, estimated stock-based compensation expense of approximately $3.0 - $3.3 million, and patent litigation costs of approximately $300 - $400 thousand.
     
(b)   Estimated non-GAAP amounts above for the twelve months ending December 31, 2014 reflect adjustments that exclude the estimated amortization of acquired intangible assets of approximately $3.9 - $4.0 million, estimated stock-based compensation expense of approximately $10.9 - $11.2 million, and patent litigation costs of approximately $1.5 - $1.6 million.
     
(c)   Non-GAAP fully diluted share count is between 49.0 million and 50.5 million. GAAP share count is between 47.0 million to 49.0 million.
     
     

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