BroadSoft Reports Second Quarter 2016 Financial Results

8/1/16

BroadSoft, Inc. (NASDAQ: BSFT), a leading global provider of hosted cloud-based enterprise communications software and services to the telecommunications industry, today announced financial results for the quarter ended June 30, 2016.

Financial Highlights for the Second Quarter of 2016

  • Total revenue increased 27% year-over-year to $81.7 million
  • GAAP gross profit equaled 72% of total revenue; non-GAAP gross profit equaled 77% of total revenue
  • GAAP income from operations totaled $0.6 million; non-GAAP income from operations totaled $15.9 million or 19% of revenue
  • GAAP basic and diluted net loss per share equaled $(0.10) per common share; non-GAAP diluted earnings per share equaled $0.49 per common share

Results for the three months ended June 30, 2016

Total revenue rose to $81.7 million in the second quarter of 2016, an increase of 27% compared to $64.5 million in the second quarter of 2015.

Net loss for the second quarter of 2016 was $(2.9) million, or $(0.10) per basic and diluted common share, compared to net loss of $(5.3) million, or $(0.18) per basic and diluted common share in the second quarter of 2015.

On a non-GAAP basis, net income in the second quarter of 2016 was $15.0 million, or $0.49 per diluted common share, compared to non-GAAP net income of $9.7 million, or $0.32 per diluted common share, in the second quarter of 2015. A reconciliation of non-GAAP and GAAP results is included in the financial tables below.

Results for the six months ended June 30, 2016

Total revenue rose to $154.9 million for the first six months of 2016, an increase of 29% compared to $120.2 million for the first six months of 2015.

Net loss for the first six months of 2016 was $(4.4) million, or $(0.15) per basic and diluted common share, compared to a net loss of $(8.2) million, or $(0.28) per basic and diluted common share for the first six months of 2015.

On a non-GAAP basis, net income for the first six months of 2016 was $26.0 million, or $0.87 per diluted common share, compared to non-GAAP net income of $17.0 million, or $0.57 per diluted common share, for the first six months of 2015. A reconciliation of non-GAAP and GAAP results is included in the financial tables below.

Management Commentary

"In the second quarter, we delivered strong results as we achieved robust double-digit revenue growth," said Michael Tessler, president and chief executive officer, BroadSoft. "We see more and more service provider customers around the world launching and promoting truly converged fixed and mobile unified communications services based on BroadSoft solutions. This is a great validation of our products and vision. We will continue to innovate to remain the industry leader as the business communications market continues to evolve."

Guidance

For the third quarter of 2016, BroadSoft anticipates revenue of $78 to $83 million. The company also expects to achieve earnings on a non-GAAP basis of $0.26 to $0.41 per diluted common share. For the full year 2016, BroadSoft expects revenue in the range of $332 million to $340 million and non-GAAP EPS in the range of $1.95 to $2.15.

A reconciliation of non-GAAP earnings per share guidance, as well as projected non-GAAP cost of sales and operating expenses to be discussed on this morning's teleconference, to the closest corresponding GAAP measures, is not available without unreasonable efforts on a forward-looking basis due to the high variability, complexity and low visibility with respect to the charges excluded from these non-GAAP measures, in particular, the measures and effects of non-cash income taxes and stock-based compensation expense. We expect the variability of the above charges to have a significant, and potentially unpredictable, impact on our future GAAP financial results.

About BroadSoft

BroadSoft is the leading provider of software and services that enable mobile, fixed-line and cable service providers to offer Unified Communications over their Internet Protocol networks. The Company's core communications platform enables the delivery of a range of enterprise and consumer calling, messaging and collaboration communication services, including private branch exchanges, video calling, text messaging and converged mobile and fixed-line services.

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