SOURCE: iPass, Inc.

November 30, 2006 19:29 ET

iPass Discusses Management Incentives at Analyst Day

REDWOOD SHORES, CA -- (MARKET WIRE) -- November 30, 2006 -- iPass, Inc. (NASDAQ: IPAS), a global provider of services that unify enterprise mobility management, summarized key disclosures it made today during its Analyst Day event held today, November 30, 2006.

The company disclosed that the vesting of management's 2007 restricted share grants will be conditioned upon the achievement of certain 2008 financial performance metrics, namely, that a portion of the grants will vest upon the achievement of annual operating margins of 11% for 2008, a portion upon the achievement of quarterly operating margins of 15% in the fourth quarter of 2008, and a portion upon the achievement of the previously announced metric of 2008 revenues of $200 million from Broadband, Software and Service Fees. These metrics should not be construed as a company projection or guidance, and exclude amortization of intangibles, FAS 123R Stock Compensation expenses and restructuring charges.

"As we migrate toward broadband and software revenues, we are also progressing toward a new business model that positions us to deliver compelling margins and profitable growth," said Ken Denman, chairman and CEO of iPass. "Just a few years ago we were a one product company, heavily reliant on dial-up connections. Our new business model is driven by multiple products and technologies that enable user productivity and management control as enterprise mobility becomes more important and complex.

"With a loyal and growing base of enterprise customers -- attracted by our ability to act as their strategic partner to deliver workforce mobility through our multi-product platform and leading global network -- we are seeking to further monetize the value of our scalable business," added Denman. "As we work to re-accelerate our revenue growth, our business model calls for rising margins, as a result of both growing broadband profitability and near 100 percent margins for software and service fees. Our new model is focused on broadening our value to customers, enabling us to continue our record of minimal customer churn and to endeavor to generate revenue from all users of our software."

Denman reiterated that the company remains on track to exit 2006 with half its revenues from broadband, software and service fees.

An audio replay of the event, including slides, will be available within 24 hours after the event at http://investor.ipass.com and will be available for six months following the event.

Cautionary Statements

The statements in this press release that iPass' new business model positions it to deliver compelling margins and profitable growth, and that its business model calls for rising margins as a result of both growing broadband profitability and high-margin software and service fees, are forward-looking statements. Actual results may differ materially from the expectations contained in these statements due to a number of risks and uncertainties, including: the rate of decline in use of narrowband/dial technology as a means of enterprise connectivity may be faster than iPass predicts; the risk that iPass will not be able to generate broadband revenues in the manner expected due to adoption of its broadband services being slower than expected; iPass may not be able to fully realize the benefits it expects from its acquisition of GoRemote due to a variety of factors, including unexpected difficulties in completing the integration of the operations of GoRemote into iPass' operations; volatility in the telecommunications and technology industries, which may make it difficult for iPass to expand its services; rapidly emerging changes in the nature of markets served by iPass, which may not be compatible with iPass' services; increased competition, which may cause pricing pressure on the fees iPass charges; iPass could unexpectedly lose current integrated broadband access points if one or more current broadband access point providers perceive iPass' services to be competing with the provider's services in a manner that renders the relationship with iPass detrimental to the provider; iPass may not be able to establish additional relationships with broadband access point providers, including providers of 2.5G/3G Mobile Data, at the level iPass expects if it is unable to negotiate such relationships on terms acceptable to both iPass and the providers on the timeframe iPass currently expects for any number of reasons, including perceived competition with the providers; if bookings or sales are greater than iPass expects, then resulting sales commissions and/or other sales related expenses could cause iPass' non-stock compensation expenses to be greater than currently expected; and iPass may not be able to generate revenue from new services if market acceptance of those new services is not as iPass expects. In addition, the statement regarding the vesting of the 2007 management restricted stock grants is a forward-looking statement based upon the current intention of the company's compensation committee to make such grants; however, the compensation committee is not obligated to do so, and may determine, based upon all of the considerations at the time of making the 2007 restricted stock grants, that different vesting metrics are appropriate, in which case some or all of the currently contemplated performance metrics may not be used as vesting criteria. Detailed information about other risks facing iPass are included in iPass' Quarterly Report on Form 10-Q under the caption "Factors Affecting Operating Results," in Item 2 of that report, filed with the Securities and Exchange Commission (the "SEC") on November 9, 2006 and available at the SEC's Web site at www.sec.gov. iPass undertakes no responsibility to update the information in this press release if any forward-looking statement later turns out to be inaccurate.

About iPass

iPass helps enterprises unify the management of remote and mobile connectivity and devices. With iPass software and services, customers can create easy-to-use broadband solutions for their mobile workers, home offices, and branch and retail locations, complete with device management, security validation, and unified billing. iPass offerings are powered by its leading global virtual network, on-demand management platform, and award-winning client software. The iPass global virtual network unifies hundreds of wireless, broadband and dial-up providers in over 160 countries. Hundreds of Global 2000 companies rely on iPass services, including General Motors, Nokia, and Reuters. Founded in 1996, iPass is headquartered in Redwood Shores, Calif., with offices throughout North America, Europe and Asia. For more information, visit www.ipass.com.

NOTE: iPass® is a registered trademark of iPass, Inc.

Contact Information

  • CONTACT:
    Investor Relations
    Tim Shanahan
    650-232-4260
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