Mimecast Limited (MIME) Tops Q3 EPS by 9c, Revenues Beat; Offers 4Q & FY21 Revenue Guidance Above Consensus, FY22 Revenue Outlook Below Consensus

Mimecast Limited (NASDAQ: MIME) reported Q3 EPS of $0.33, $0.09 better than the analyst estimate of $0.24. Revenue for the quarter came in at $129.6 million versus the consensus estimate of $126.67 million.

Overall Highlights

• Total revenue of $129.6 million grew 18% year-over-year on a GAAP basis and 17% in constant currency.
• Solid execution of multi-product strategy drives average services per customer to 3.5 from 3.3 in the same quarter last year.
• Added 500 net new customers. Total customers 39,600 globally.
• Significant wins in enterprise, including 24 six-figure deals.
• Net Revenue retention rate of 104%.
• GAAP gross profit percentage of 76%, Non-GAAP gross profit percentage of 77%.
• GAAP EPS of $0.16 per diluted share, Non-GAAP EPS of $0.33 per diluted share.
• Helene Auriol Potier joined the Board of Directors. Ms. Auriol Potier brings significant expertise and experience to Mimecast’s Board with her prior leadership roles at Orange Business Services, Microsoft, Dell Technologies and Nortel.
• Mimecast strengthens leadership team with the appointment of Shahriar Rafimayeri as Chief Information Officer and Michael Paisley as Chief Security and Resilience Officer.
• Mimecast SecOps 2021|virtual conference exhibits customer benefits of expanded Cyber Alliance API & Tech Partners.
• Awarded as 2021 Top Workplace in USA with additional recognition for Technology Industry leadership and innovation.

Peter Bauer, chief executive officer of Mimecast, said, “We delivered solid growth and profitability this quarter, with key wins in the enterprise space and continued progress against our multi-product strategy. We are delivering increasingly strong cash flow and meaningful margin expansion. We expect continued top-line growth, but delivering growth at our long-term targets will take additional time and investment. We are prioritizing resources to better align with our strategy, including by implementing a reduction in force. We are confident these actions will help power the next evolution of our business.”

Mr. Bauer continued, “We are working quickly and thoughtfully to address our recently disclosed cyber incident, and are proactively prioritizing our customers’ protection and transparency. While our investigation is ongoing, we believe that the steps we have taken as part of our ongoing response have been effective. We will continue to examine and closely monitor our environment, collaborate closely with our customers and take appropriate actions to fortify their protections and strengthen their resilience.”

GUIDANCE:

Mimecast Limited sees Q4 2021 revenue of $130.5-131.5 million, versus the consensus of $128.12 million.

Mimecast Limited sees FY2021 revenue of $498-499 million, versus the consensus of $492.93 million.

Mimecast Limited sees FY2022 revenue of $558-568 million, versus the consensus of $571.58 million.

Mimecast is providing guidance for the fourth quarter 2021, fiscal year 2021 and fiscal year 2022.

Fourth Quarter 2021 Guidance:

• For the fourth quarter of 2021, revenue is expected to be in the range of $130.5 million to $131.5 million and constant currency revenue growth is expected to be in the range of 11% to 12%.
• Adjusted EBITDA for the fourth quarter is expected to be in the range of $28.3 million to $29.3 million.
• Operating cash flow for the fourth quarter is expected to be approximately $28.0 million.
• Free cash flow for the fourth quarter is expected to be approximately $22.0 million.

Our revenue guidance for the fourth quarter is based on exchange rates as of January 26, 2021, and includes an estimated positive impact of $3.8 million resulting from the weakening of the U.S. dollar compared to the prior year.

Fiscal Year 2021 Guidance:

• For the full year 2021, revenue is expected to be in the range of $498.0 million to $499.0 million and constant currency revenue growth is expected to be approximately 17%.
• Foreign exchange rate fluctuations are positively impacting this guidance by an estimated $0.4 million compared to the rates in effect in the prior year.
• Full year 2021 Adjusted EBITDA is expected to be in the range of $122.2 million to $123.2 million.
• Operating cash flow for the full year 2021 is expected to be in the range of $123.0 million to $124.0 million.
• Free cash flow for the full year 2021 is expected to be in the range of $86.0 million to $87.0 million.

Fiscal Year 2022 Guidance:

• For the full year 2022, revenue is expected to be in the range of $558.0 million to $568.0 million and constant currency revenue growth is expected to be in the range of 9% to 11%.
• Foreign exchange rate fluctuations are positively impacting this guidance by an estimated $14 million compared to the rates in effect in the prior year.
• Full year 2022 Adjusted EBITDA is expected to be approximately $146.0 million.
• Operating cash flow for the full year 2022 is expected to be approximately $158.0 million.
• Free cash flow for the full year 2022 is expected to be approximately $121.0 million.

For earnings history and earnings-related data on Mimecast Limited (MIME) click here.

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