SAN FRANCISCO--(BUSINESS WIRE)--Pivotal Software, Inc. (NYSE: PVTL), a leading cloud-native platform provider, today reported results for the fourth quarter and full fiscal year 2019 ended February 1, 2019.
“Pivotal delivered a strong fourth quarter, wrapping up a successful initial year as a public company. Our unique combination of software and services is attracting new customers, and driving many of our existing customers to grow their investments with us,” said Rob Mee, CEO of Pivotal Software. “We are still in the early stages of this high-growth market. To capitalize on the digital transformation opportunity, we will continue to fuel innovation by investing in R&D, and at the same time, continue our relentless focus on satisfying customers as they move more mission-critical apps to our multi-cloud platform.”
Fourth Quarter Fiscal 2019 Financial Results
Revenue: Subscription revenue was $112.5 million, an increase of 50% year over year. Total revenue was $169.2 million, an increase of 27% year over year.
Operating Loss: GAAP operating loss was $42.0 million, or 25% of total revenue, compared to a loss of $45.2 million in Q4 of last year. Non-GAAP operating loss was $20.8 million, or 12% of total revenue, compared to a loss of $34.0 million in Q4 of last year.
Net Loss: GAAP net loss was $38.9 million, compared to a loss of $37.2 million in Q4 of last year. GAAP net loss per share was $0.15, compared to a loss of $0.54 in Q4 of last year. Non-GAAP net loss was $17.7 million, compared to a loss of $26.1 million in Q4 of last year. Non-GAAP net loss per share was $0.07, compared to a loss of $0.12 in Q4 of last year.
Cash Flow: Operating cash flow was $8.0 million compared to negative operating cash flow of $15.7 million in Q4 of last year.
Cash and cash equivalents were $701.7 million as of February 1, 2019.
Full Year Fiscal 2019 Financial Results
Revenue: Subscription revenue was $400.9 million, an increase of 55% year over year. Total revenue was $657.5 million, an increase of 29% year over year.
Operating Loss: GAAP operating loss was $146.8 million, or 22% of total revenue, compared to a loss of $168.3 million in FY18. Non-GAAP operating loss was $71.3 million, or 11% of total revenue, compared to a loss of $128.5 million in FY18.
Net Loss: GAAP net loss was $141.9 million, compared to a loss of $163.5 million in FY18. GAAP net loss per share was $0.64, compared to a loss of $2.38 in FY18. Non-GAAP net loss was $69.6 million, compared to a loss of $123.7 million in FY18. Non-GAAP net loss per share was $0.28, compared to a loss of $0.57 in FY18.
Cash Flow: Operating cash flow was negative $5.4 million compared to operating cash flow of negative $116.5 million for FY18.
Recent Business Highlights
- Subscription customers grew 18% year over year to 377 in Q4
- Dollar-based net expansion rate was 149%
-
Released new features to Pivotal Cloud Foundry to help enterprises
achieve meaningful business outcomes through the continuous delivery
of high-quality software and simplified operations including:
- Pivotal Application Service 2.4 added several new capabilities, including rolling application deployments to give developers more control over how application code is deployed
- Pivotal Container Service 1.3 delivered the latest stable release of Kubernetes, production support for running on Microsoft Azure, and improvements to networking and availability
- The alpha version of Pivotal Function Service offered customers Kubernetes-based, multi-cloud, event-driven functions
- Named one of CRN’s 20 Coolest Cloud Platform Vendors of the 2019
Financial Outlook
For the first quarter of fiscal 2020, Pivotal currently expects:
- Subscription revenue of $124.5 to $125.5 million
- Total revenue of $183 to $185 million
- Non-GAAP loss from operations of $13.5 to $12.5 million
- Non-GAAP net loss per share of 6¢ to 5¢, assuming weighted average shares outstanding of approximately 267 million
For the full fiscal year 2020, Pivotal currently expects:
- Subscription revenue of $542 to $547 million
- Total revenue of $798 to $806 million
- Non-GAAP loss from operations of $38 to $36 million
- Non-GAAP net loss per share of 15¢ to 13¢, assuming weighted average shares outstanding of approximately 272 million
Pivotal has not reconciled these forward-looking non-GAAP measures to comparable forward-looking GAAP measures because of the potential variability and uncertainty of incurring these costs and expenses in the future. Accordingly, a reconciliation is not available without unreasonable effort.
Conference Call and Webcast Information
Pivotal will host a conference call at 2:00pm PDT (5:00pm EDT) today to discuss our financial results. A live audio webcast of the conference call will be accessible on Pivotal’s investor relations web page at https://pivotal.io/investors. A replay of the webcast will be available following the conference call.
About Pivotal
Pivotal combines our cloud-native platform, developer tools, and unique methodology to help the world’s largest companies transform the way they build and run their most important applications. Our technology is used by Global 2000 companies to achieve strategic advantages in software development and IT operations. Learn more at pivotal.io.
Non-GAAP Financial Measures
Reconciliations of non-GAAP financial measures to the most directly comparable financial results as determined in accordance with GAAP are included at the end of this press release following the accompanying financial data. For a description of these non-GAAP financial measures, including the reasons management uses each measure, please see the section of the tables titled "About Non-GAAP Financial Measures."
Key Metric Definitions
Subscription Customers: Pivotal defines the number of subscription customers as the organizations that have a subscription contract for Pivotal’s software resulting in at least $50,000 of annual revenue in that period.
Dollar-Based Net Expansion Rate: Pivotal’s dollar-based net expansion rate compares its subscription revenue from a common group of customers across comparable periods. Pivotal calculates its dollar-based net expansion rate for all periods on a trailing four-quarter basis.
Forward-Looking Statements
This press release contains statements relating to Pivotal’s expectations, projections, beliefs, and prospects (including statements regarding fueling innovation by investing in R&D and Pivotal’s financial outlook), which are "forward-looking statements” within the meaning of the federal securities laws and by their nature are uncertain. Words such as "believe," "may," "will," "estimate," "continue," "anticipate," "intend," "expect," "plans," and similar expressions are intended to identify forward-looking statements. Such forward-looking statements are not guarantees of future performance, and you are cautioned not to place undue reliance on these forward-looking statements. Actual results could differ materially from those projected in the forward-looking statements as a result of many factors, including but not limited to: (i) Pivotal’s limited operating history as an independent company, which makes it difficult to evaluate Pivotal’s prospects; (ii) the substantial losses Pivotal has incurred and the risks of not being able to generate sufficient revenue to achieve and sustain profitability; (iii) Pivotal’s future success depending in large part on the growth of Pivotal’s target markets; (iv) Pivotal’s future growth depending largely on Pivotal Cloud Foundry and Pivotal’s platform-related services; (v) Pivotal’s subscription revenue growth rate not being indicative of Pivotal’s future performance or ability to grow; (vi) Pivotal’s business and prospects being harmed if customers do not renew their subscriptions or expand their use of Pivotal’s platform; (vii) any failure by Pivotal to compete effectively; (viii) Pivotal’s long and unpredictable sales cycles that vary seasonally and which can cause significant variation in the number and size of transactions that can close in a particular quarter; (ix) Pivotal’s lack of control of and inability to predict the future course of open-source technologies, including those used in Pivotal Cloud Foundry; and (x) any security or privacy breaches. All information set forth in this release is current as of the date of this release. These forward-looking statements are based on current expectations and are subject to uncertainties, risks, assumptions, and changes in condition, significance, value and effect as well as other risks disclosed previously and from time to time in documents filed by us with the U.S. Securities and Exchange Commission (SEC). Additional information will be made available in Pivotal’s annual report on Form 10-K and other future reports that Pivotal may file with the SEC, which could cause actual results to vary from expectations. Pivotal disclaims any obligation to, and does not currently intend to, update any such forward-looking statements, whether written or oral, that may be made from time to time except as required by law.
| Pivotal Software, Inc. | |||||||||||||||||
| Condensed Consolidated Statements of Operations | |||||||||||||||||
| (in thousands, except per share amounts); (unaudited) | |||||||||||||||||
| Three Months Ended | Fiscal Year Ended | ||||||||||||||||
| February 1, | February 2, | February 1, | February 2, | ||||||||||||||
| 2019 | 2018 | 2019 | 2018 | ||||||||||||||
| Revenue: | |||||||||||||||||
| Subscription | $ | 112,476 | $ | 74,979 | $ | 400,866 | $ | 259,018 | |||||||||
| Services | 56,732 | 58,265 | 256,628 | 250,418 | |||||||||||||
| Total revenue | 169,208 | 133,244 | 657,494 | 509,436 | |||||||||||||
| Cost of revenue: | |||||||||||||||||
| Subscription | 8,095 | 7,729 | 32,142 | 30,472 | |||||||||||||
| Services | 51,103 | 49,786 | 208,573 | 197,922 | |||||||||||||
| Total cost of revenue | 59,198 | 57,515 | 240,715 | 228,394 | |||||||||||||
| Gross profit | 110,010 | 75,729 | 416,779 | 281,042 | |||||||||||||
| Operating expenses: | |||||||||||||||||
| Sales and marketing | 76,077 | 61,860 | 286,385 | 221,187 | |||||||||||||
| Research and development | 53,097 | 41,036 | 196,406 | 160,947 | |||||||||||||
| General and administrative | 22,823 | 18,022 | 80,802 | 67,204 | |||||||||||||
| Total operating expenses | 151,997 | 120,918 | 563,593 | 449,338 | |||||||||||||
| Loss from operations | (41,987 | ) | (45,189 | ) | (146,814 | ) | (168,296 | ) | |||||||||
| Other income (expense), net | 3,074 | 1,615 | 5,486 | 2,145 | |||||||||||||
|
Loss before provision for (benefit from) income taxes |
(38,913 | ) | (43,574 | ) | (141,328 | ) | (166,151 | ) | |||||||||
| Provision for (benefit from) income taxes | 21 | (6,255 | ) | 570 | (2,637 | ) | |||||||||||
| Net loss | (38,934 | ) | (37,319 | ) | (141,898 | ) | (163,514 | ) | |||||||||
| Less: Net loss (income) attributable to non-controlling interest | 3 | 83 | (5 | ) | (1 | ) | |||||||||||
| Net loss attributable to Pivotal | $ | (38,931 | ) | $ | (37,236 | ) | $ | (141,903 | ) | $ | (163,515 | ) | |||||
| Net loss per share attributable to common stockholders, basic and diluted | $ | (0.15 | ) | $ | (0.54 | ) | $ | (0.64 | ) | $ | (2.38 | ) | |||||
|
Weighted average shares outstanding used in computing net loss per share attributable to common stockholders, basic and diluted |
263,381 | 69,260 | 221,149 | 68,574 | |||||||||||||
| Pivotal Software, Inc. | ||||||||
| Condensed Consolidated Balance Sheets | ||||||||
| (in thousands); (unaudited) | ||||||||
| February 1, | February 2, | |||||||
| 2019 | 2018 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 701,733 | $ | 73,012 | ||||
|
Accounts receivable, less allowance for doubtful accounts of $4,266 and $3,264 as of February 1, 2019 and February 2, 2018, respectively |
308,492 | 210,677 | ||||||
| Due from Parent | 951 | 31,096 | ||||||
| Deferred sales commissions, current | 39,572 | 38,937 | ||||||
| Other assets, current | 16,738 | 13,012 | ||||||
| Total current assets | 1,067,486 | 366,734 | ||||||
| Property, plant and equipment, net | 27,879 | 31,985 | ||||||
| Intangible assets, net | 18,680 | 26,651 | ||||||
| Goodwill | 696,226 | 696,226 | ||||||
| Deferred income taxes | 258 | 463 | ||||||
| Deferred sales commissions, noncurrent | 35,522 | 24,890 | ||||||
| Other assets, noncurrent | 4,417 | 6,448 | ||||||
| Total assets | $ | 1,850,468 | $ | 1,153,397 | ||||
| Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 18,421 | $ | 17,214 | ||||
| Due to Parent | 20,241 | 15,451 | ||||||
| Accrued expenses | 64,723 | 64,251 | ||||||
| Income taxes payable | 1,232 | 1,748 | ||||||
| Deferred revenue, current | 376,985 | 260,341 | ||||||
| Other liabilities, current | 4,373 | 1,109 | ||||||
| Total current liabilities | 485,975 | 360,114 | ||||||
| Deferred revenue, noncurrent | 89,603 | 57,126 | ||||||
| Deferred income taxes | — | 427 | ||||||
| Debt, noncurrent | — | 20,000 | ||||||
| Other liabilities, noncurrent | 9,412 | 7,931 | ||||||
| Total liabilities | 584,990 | 445,598 | ||||||
| Redeemable convertible preferred stock | — | 1,248,327 | ||||||
| Stockholders’ equity (deficit): | ||||||||
| Class A common stock | 901 | 43 | ||||||
| Class B common stock | 1,755 | 650 | ||||||
| Additional paid-in capital | 2,540,921 | 595,113 | ||||||
| Accumulated deficit | (1,284,503 | ) | (1,142,600 | ) | ||||
| Accumulated other comprehensive income | 5,687 | 5,554 | ||||||
| Total Pivotal stockholders’ equity (deficit) | 1,264,761 | (541,240 | ) | |||||
| Non-controlling interest | 717 | 712 | ||||||
| Total stockholders’ equity (deficit) | 1,265,478 | (540,528 | ) | |||||
| Total liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit) | $ | 1,850,468 | $ | 1,153,397 | ||||
| Pivotal Software, Inc. | |||||||||||||||||
| Condensed Consolidated Statements of Cash Flows | |||||||||||||||||
| (in thousands); (unaudited) | |||||||||||||||||
| Three Months Ended | Fiscal Year Ended | ||||||||||||||||
| February 1, | February 2, | February 1, | February 2, | ||||||||||||||
| 2019 | 2018 | 2019 | 2018 | ||||||||||||||
| Cash flows from operating activities: | |||||||||||||||||
| Net loss | $ | (38,934 | ) | $ | (37,319 | ) | $ | (141,898 | ) | $ | (163,514 | ) | |||||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||||||||||||||
| Depreciation and amortization | 4,334 | 5,505 | 18,158 | 22,237 | |||||||||||||
| Stock-based compensation expense | 19,800 | 8,695 | 69,033 | 28,629 | |||||||||||||
| Provision for doubtful accounts | (257 | ) | 529 | 2,104 | 609 | ||||||||||||
| Deferred income taxes | (3 | ) | (7,284 | ) | (150 | ) | (6,969 | ) | |||||||||
| Gain on sale of investment | - | - | (3,234 | ) | - | ||||||||||||
| Other | (21 | ) | 328 | 1,470 | 1,178 | ||||||||||||
| Changes in assets and liabilities: | |||||||||||||||||
| Accounts receivable | (143,755 | ) | (80,338 | ) | (99,860 | ) | (66,136 | ) | |||||||||
| Due from Parent | 508 | (438 | ) | 545 | (1,096 | ) | |||||||||||
| Deferred sales commissions | (17,965 | ) | (14,166 | ) | (11,268 | ) | (10,360 | ) | |||||||||
| Other assets | 192 | 2,989 | (2,566 | ) | 2,647 | ||||||||||||
| Accounts payable | 3,398 | (1,305 | ) | 1,357 | 12,636 | ||||||||||||
| Due to Parent | 9,247 | (960 | ) | 5,910 | (34,984 | ) | |||||||||||
| Deferred revenue | 159,533 | 89,960 | 149,344 | 74,360 | |||||||||||||
| Accrued expenses | 17,654 | 17,539 | 1,468 | 21,549 | |||||||||||||
| Other liabilities | (5,738 | ) | 542 | 4,232 | 2,723 | ||||||||||||
| Net cash provided by (used in) operating activities | 7,993 | (15,723 | ) | (5,355 | ) | (116,491 | ) | ||||||||||
| Cash flows from investing activities: | |||||||||||||||||
| Additions to property, plant and equipment | (2,482 | ) | (1,828 | ) | (9,411 | ) | (12,877 | ) | |||||||||
| Proceeds from sale of investment | - | - | 3,234 | - | |||||||||||||
| Net cash used in investing activities | (2,482 | ) | (1,828 | ) | (6,177 | ) | (12,877 | ) | |||||||||
| Cash flows from financing activities: | |||||||||||||||||
| Proceeds from the initial public offering, net of issuance costs paid | (253 | ) | - | 544,421 | - | ||||||||||||
| Proceeds from the issuance of common stock | 19,584 | 3,207 | 61,436 | 9,757 | |||||||||||||
| Proceeds from employee stock plans | 9,371 | - | 9,371 | - | |||||||||||||
| Contribution from Dell | 3,009 | 17,074 | 44,286 | 42,874 | |||||||||||||
| Borrowings on credit facility, net of debt issuance costs | - | 19,670 | 15,000 | 18,815 | |||||||||||||
| Repayments on credit facility | - | - | (35,000 | ) | - | ||||||||||||
| Net cash provided by financing activities | 31,711 | 39,951 | 639,514 | 71,446 | |||||||||||||
| Effect of exchange rate changes on cash and cash equivalents | (293 | ) | (1,617 | ) | 739 | (2,939 | ) | ||||||||||
| Net increase (decrease) in cash and cash equivalents | 36,929 | 20,783 | 628,721 | (60,861 | ) | ||||||||||||
| Cash and cash equivalents at beginning of period | 664,804 | 52,229 | 73,012 | 133,873 | |||||||||||||
| Cash and cash equivalents at end of period | $ | 701,733 | $ | 73,012 | $ | 701,733 | $ | 73,012 | |||||||||
| Pivotal Software, Inc. | |||||||||||||||||||||||||
| GAAP to Non-GAAP Reconciliation | |||||||||||||||||||||||||
| (in thousands, except percentages and per share amounts); (unaudited) | |||||||||||||||||||||||||
| Three Months Ended February 1, 2019 | |||||||||||||||||||||||||
| GAAP |
Stock-based |
Amortization of |
Gain on sale of |
Non-GAAP |
|||||||||||||||||||||
| Cost of subscription revenue | $ | 8,095 | $ | (427 | ) | $ | (234 | ) | $ | - | $ | 7,434 | |||||||||||||
| Subscription gross margin | 92.8 | % | 0.4 | % | 0.2 | % | - | % | 93.4 | % | |||||||||||||||
| Cost of services revenue | 51,103 | (4,237 | ) | - | - | 46,866 | |||||||||||||||||||
| Services gross margin | 9.9 | % | 7.5 | % | - | % | - | % | 17.4 | % | |||||||||||||||
| Gross profit | 110,010 | 4,664 | 234 | - | 114,908 | ||||||||||||||||||||
| Gross margin | 65.0 | % | 2.8 | % | 0.1 | % | - | % | 67.9 | % | |||||||||||||||
| Sales and marketing | 76,077 | (5,969 | ) | (832 | ) | - | 69,276 | ||||||||||||||||||
| Research and development | 53,097 | (5,726 | ) | - | - | 47,371 | |||||||||||||||||||
| General and administrative | 22,823 | (3,441 | ) | (371 | ) | - | 19,011 | ||||||||||||||||||
| Total operating expenses | 151,997 | (15,136 | ) | (1,203 | ) | - | 135,658 | ||||||||||||||||||
| Loss from operations | (41,987 | ) | 19,800 | 1,437 | - | (20,750 | ) | ||||||||||||||||||
| Operating margin | (24.8 | %) | 11.7 | % | 0.8 | % | - | % | (12.3 | %) | |||||||||||||||
| Other income (expense), net | 3,074 | - | - | 3,074 | |||||||||||||||||||||
| Net loss attributable to Pivotal | $ | (38,931 | ) | $ | 19,800 | $ | 1,437 | $ | - | $ | (17,694 | ) | |||||||||||||
| Net loss per share, basic and diluted (1) | $ | (0.15 | ) | $ | (0.07 | ) | |||||||||||||||||||
| (1) GAAP and Non-GAAP net loss per common share calculated based upon 263,381 basic and diluted weighted average shares outstanding of common stock. | |||||||||||||||||||||||||
| Three Months Ended February 2, 2018 | |||||||||||||||||||||||||
| GAAP |
Stock-based |
Amortization of |
Gain on sale of |
Non-GAAP | |||||||||||||||||||||
| Cost of subscription revenue | $ | 7,729 | $ | (178 | ) | $ | (977 | ) | $ | - | $ | 6,574 | |||||||||||||
| Subscription gross margin | 89.7 | % | 0.2 | % | 1.3 | % | - | % | 91.2 | % | |||||||||||||||
| Cost of services revenue | 49,786 | (1,988 | ) | - | - | 47,798 | |||||||||||||||||||
| Services gross margin | 14.6 | % | 3.4 | % | - | % | - | % | 18.0 | % | |||||||||||||||
| Gross profit | 75,729 | 2,166 | 977 | - | 78,872 | ||||||||||||||||||||
| Gross margin | 56.8 | % | 1.6 | % | 0.7 | % | - | % | 59.2 | % | |||||||||||||||
| Sales and marketing | 61,860 | (2,693 | ) | (1,110 | ) | - | 58,057 | ||||||||||||||||||
| Research and development | 41,036 | (2,394 | ) | - | - | 38,642 | |||||||||||||||||||
| General and administrative | 18,022 | (1,442 | ) | (368 | ) | - | 16,212 | ||||||||||||||||||
| Total operating expenses | 120,918 | (6,529 | ) | (1,478 | ) | - | 112,911 | ||||||||||||||||||
| Loss from operations | (45,189 | ) | 8,695 | 2,455 | - | (34,039 | ) | ||||||||||||||||||
| Operating margin | (33.9 | %) | 6.5 | % | 1.8 | % | - | % | (25.5 | %) | |||||||||||||||
| Other income (expense), net | 1,615 | - | - | - | 1,615 | ||||||||||||||||||||
| Net loss attributable to Pivotal | $ | (37,236 | ) | $ | 8,695 | $ | 2,455 | $ | - | $ | (26,086 | ) | |||||||||||||
| Net loss per share, basic and diluted (1) | $ | (0.54 | ) | $ | (0.12 | ) | |||||||||||||||||||
| (1) GAAP net loss per common share calculated based upon 69,260 basic and diluted weighted average shares outstanding of common stock. Non-GAAP net loss per common share calculated based upon 217,139 basic and diluted weighted average shares outstanding of common stock. | |||||||||||||||||||||||||
| Fiscal Year Ended February 1, 2019 | |||||||||||||||||||||||||
| GAAP |
Stock-based |
Amortization of |
Gain on sale of |
Non-GAAP | |||||||||||||||||||||
| Cost of subscription revenue | $ | 32,142 | $ | (1,469 | ) | $ | (1,439 | ) | $ | - | $ | 29,234 | |||||||||||||
| Subscription gross margin | 92.0 | % | 0.4 | % | 0.4 | % | - | % | 92.7 | % | |||||||||||||||
| Cost of services revenue | 208,573 | (14,962 | ) | - | - | 193,611 | |||||||||||||||||||
| Services gross margin | 18.7 | % | 5.8 | % | - | % | - | % | 24.6 | % | |||||||||||||||
| Gross profit | 416,779 | 16,431 | 1,439 | - | 434,649 | ||||||||||||||||||||
| Gross margin | 63.4 | % | 2.5 | % | 0.2 | % | - | % | 66.1 | % | |||||||||||||||
| Sales and marketing | 286,385 | (21,082 | ) | (3,557 | ) | - | 261,746 | ||||||||||||||||||
| Research and development | 196,406 | (19,497 | ) | - | - | 176,909 | |||||||||||||||||||
| General and administrative | 80,802 | (12,023 | ) | (1,521 | ) | - | 67,258 | ||||||||||||||||||
| Total operating expenses | 563,593 | (52,602 | ) | (5,078 | ) | - | 505,913 | ||||||||||||||||||
| Loss from operations | (146,814 | ) | 69,033 | 6,517 | - | (71,264 | ) | ||||||||||||||||||
| Operating margin | (22.3 | %) | 10.5 | % | 1.0 | % | - | % | (10.8 | %) | |||||||||||||||
| Other income (expense), net | 5,486 | - | - | (3,234 | ) | 2,252 | |||||||||||||||||||
| Net loss attributable to Pivotal | $ | (141,903 | ) | $ | 69,033 | $ | 6,517 | $ | (3,234 | ) | $ | (69,587 | ) | ||||||||||||
| Net loss per share, basic and diluted (1) | $ | (0.64 | ) | $ | (0.28 | ) | |||||||||||||||||||
| (1) GAAP net loss per common share calculated based upon 221,149 basic and diluted weighted average shares outstanding of common stock. Non-GAAP net loss per common share calculated based upon 250,806 basic and diluted weighted average shares outstanding of common stock. | |||||||||||||||||||||||||
| Fiscal Year Ended February 2, 2018 | |||||||||||||||||||||||||
| GAAP |
Stock-based |
Amortization of |
Gain on sale of |
Non-GAAP |
|||||||||||||||||||||
| Cost of subscription revenue | $ | 30,472 | $ | (520 | ) | $ | (4,913 | ) | $ | - | $ | 25,039 | |||||||||||||
| Subscription gross margin | 88.2 | % | 0.2 | % | 1.9 | % | - | % | 90.3 | % | |||||||||||||||
| Cost of services revenue | 197,922 | (6,548 | ) | - | - | 191,374 | |||||||||||||||||||
| Services gross margin | 21.0 | % | 2.6 | % | - | % | - | % | 23.6 | % | |||||||||||||||
| Gross profit | 281,042 | 7,068 | 4,913 | - | 293,023 | ||||||||||||||||||||
| Gross margin | 55.2 | % | 1.4 | % | 1.0 | % | - | % | 57.5 | % | |||||||||||||||
| Sales and marketing | 221,187 | (8,619 | ) | (4,811 | ) | - | 207,757 | ||||||||||||||||||
| Research and development | 160,947 | (7,833 | ) | - | - | 153,114 | |||||||||||||||||||
| General and administrative | 67,204 | (5,109 | ) | (1,437 | ) | - | 60,658 | ||||||||||||||||||
| Total operating expenses | 449,338 | (21,561 | ) | (6,248 | ) | - | 421,529 | ||||||||||||||||||
| Loss from operations | (168,296 | ) | 28,629 | 11,161 | - | (128,506 | ) | ||||||||||||||||||
| Operating margin | (33.0 | %) | 5.6 | % | 2.2 | % | - | % | (25.2 | %) | |||||||||||||||
| Other income (expense), net | 2,145 | - | - | - | 2,145 | ||||||||||||||||||||
| Net loss attributable to Pivotal | $ | (163,515 | ) | $ | 28,629 | $ | 11,161 | $ | - | $ | (123,725 | ) | |||||||||||||
| Net loss per share, basic and diluted (1) | $ | (2.38 | ) | $ | (0.57 | ) | |||||||||||||||||||
| (1) GAAP net loss per common share calculated based upon 68,574 basic and diluted weighted average shares outstanding of common stock. Non-GAAP net loss per common share calculated based upon 216,453 basic and diluted weighted average shares outstanding of common stock. | |||||||||||||||||||||||||
| Pivotal Software, Inc. | ||||||||||||
| GAAP to Non-GAAP Weighted Average Shares Outstanding Reconciliation | ||||||||||||
| (in thousands); (unaudited) | ||||||||||||
| Three Months Ended | Fiscal Year Ended | |||||||||||
| February 1, | February 2, | February 1, | February 2, | |||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||
| GAAP weighted average shares outstanding, basic and diluted | 263,381 | 69,260 | 221,149 | 68,574 | ||||||||
| Assumed preferred stock conversion | – | 147,879 | 29,657 | 147,879 | ||||||||
| Non-GAAP weighted average shares outstanding, basic and diluted | 263,381 | 217,139 | 250,806 | 216,453 | ||||||||
About Non-GAAP Financial Measures
To supplement Pivotal’s consolidated financial statements, which are prepared and presented in accordance with GAAP, Pivotal provides investors with certain non-GAAP financial measures, including but not limited to: non-GAAP cost of subscription, non-GAAP cost of services, non-GAAP gross profit, non-GAAP gross margin, non-GAAP sales and marketing expense, non-GAAP research and development expense, non-GAAP general and administrative expense, non-GAAP operating loss, non-GAAP operating margin, non-GAAP net loss, non-GAAP net loss per share, and non-GAAP weighted average shares outstanding. Certain of these non-GAAP financial measures exclude stock-based compensation, amortization of acquired intangibles and gain on sale of investment. For more information on the comparable GAAP to non-GAAP financial measures, please see the reconciliation table included with this release.
Management believes non-GAAP information is useful in evaluating the operating results, ongoing operations, and for internal planning and forecasting purposes. Management also believes that non-GAAP financial measures provide consistency and comparability with past financial performance and assist investors with comparing Pivotal to other companies some of which use similar non-GAAP financial measures to supplement their GAAP results. Management believes non-GAAP financial measures are 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 financial measures used by other companies.
Pivotal excludes stock-based compensation because it is non-cash in nature and excludes it in order to facilitate comparisons to other companies’ results. Pivotal excludes amortization of acquired intangibles because it is consistent with how management evaluates operating results and prepares financial plans and forecasts. While the purchase accounting for an acquisition reflects the accounting value assigned to intangible assets, management believes the GAAP impact of acquired intangible assets is not representative of long term operating results. Pivotal excludes gains/losses on sales of strategic investments because management believes these are more reflective of discrete events and less reflective of results in a particular period.
Source: Pivotal Investor Relations
©2019 Pivotal Software, Inc. All rights reserved. Pivotal is a trademark and/or registered trademark of Pivotal Software, Inc. in the United States and/or other countries.
