Xactly Corporation (XTLY) Announces Prelim. Q1 Results

Xactly (NYSE: XTLY), a leading provider of cloud-based incentive solutions, today provided preliminary financial results for the first quarter fiscal 2018 ended April 30, 2017.

For the first quarter fiscal 2018, total revenue is expected to be approximately $24.6 million and subscription revenue is expected to be approximately $19.5 million. Calculated billings are expected to be in the range of $25.3 million to $25.5 million for the quarter. GAAP net loss is expected to be in the range of $(4.6) to $(4.4) million, or $(0.15) to $(0.14) per share. Non-GAAP net loss is expected to be in the range of $(1.9) million to $(1.7) million, or $(0.06) to $(0.05) per share. Adjusted EBITDA loss is expected to be in the range of $(0.6) million to $(0.4) million.

In a separate press release issued today, Xactly announced that it has entered into a definitive agreement to be acquired by affiliates of Vista Equity Partners.

The company will report its fiscal 2018 first quarter results in its Quarterly Report on Form 10-Q. Xactly will not hold a conference call to discuss earnings due to the announced sale of the company.

Non-GAAP Financial Measures

To supplement its financial statements, Xactly also provides investors with certain non-GAAP financial measures. We believe that these non-GAAP measures are useful as a supplement in evaluating our ongoing operational performance and enhancing an overall understanding of our past financial performance. The non-GAAP financial measures included in this press release should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with U.S. GAAP, and the non-GAAP financial measures that we use may differ from those of other companies in our industry. A reconciliation between each non-GAAP financial measure and its nearest GAAP equivalent and related explanations are included below. We believe that supplementing GAAP disclosure with non-GAAP disclosure that excludes items that are not directly related to performance in any particular period provides management and investors with a more complete view of Xactly’s operational performance. Various items are excluded from such non-GAAP financial measures in part because the decisions which gave rise to the excluded items were not made to increase revenue in a particular period, but were made for Xactly’s long-term benefit over multiple periods.

Non-GAAP net loss and non-GAAP net loss per share. We believe non-GAAP net loss and non-GAAP net loss per share may prove useful to investors who wish to consider the impact of certain non-cash or non-recurring items, such as certain one-time charges, on Xactly’s operating performance. We compensate for the inherent limitations associated with using non-GAAP net loss and non-GAAP net loss per share through disclosure of these limitations, presentation of our financial statements in accordance with U.S. GAAP and reconciliation of these non-GAAP financial measures to the most directly comparable U.S. GAAP measures, net loss and net loss per share. We calculate non-GAAP net loss (and non-GAAP net loss per share) as net loss (and net loss per share) before (i) stock-based compensation, (ii) increase or decrease in expenses related to the change in fair value of convertible preferred stock warrant liabilities, (iii) and any applicable, non-recurring or unusual charges as we may determine from time to time.

Adjusted EBITDA. We believe that Adjusted EBITDA helps illustrate underlying trends in our business that could otherwise be masked by the effect of the income or expenses that we exclude from Adjusted EBITDA. Furthermore, we use this measure to establish budgets and operational goals for managing our business and evaluating our performance. We also believe that Adjusted EBITDA provides an additional tool for investors to use in comparing our recurring core business operating results over multiple periods with other companies in our industry. We compensate for the inherent limitations associated with using Adjusted EBITDA through disclosure of these limitations, presentation of our financial statements in accordance with U.S. GAAP and reconciliation of Adjusted EBITDA to the most directly comparable U.S. GAAP measure, net loss. We calculate Adjusted EBITDA as net loss before (i) other income (expense), net, which includes interest expense, the change in fair value of convertible preferred stock warrant liabilities and other income and expense, (ii) income tax expense, (iii) depreciation and amortization of property and equipment, (iv) amortization of debt issuance costs, (v) stock-based compensation and (vi) any applicable, non-recurring or unusual charges as we may determine from time to time.

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