Onvia Reports Third Quarter 2016 Results - 03.11.16 - News

SEATTLE, Nov. 3, 2016

Q3 2016 Financial Highlights

Subscription revenue up 6% to $5.8 million compared to Q3 2015
Total revenue increased 5% to $6.2 million compared to Q3 2015
Strategic Account Annual Contract Value (ACV) increased 6% to $18.2 million vs. Q3 2015
Annual Contract Value per Client (ACVC) up 10% to $7,824 vs. $7,116 in Q3 2015
Adjusted EBITDA of $281,000 in Q3 2016 compared to $581,000 in Q3 2015 *
Net Loss of $492,000 in Q3 2016 vs. net income of $9,000 in Q3 2015

* Adjusted EBITDA is a non-GAAP Financial measure, see "Use of Non-GAAP Financial Information" below.

Q3 2016 Operational Performance Summary

Q3 16

Q2 16

Change %

ARIVA.DE Börsen-Geflüster

Kurse

Onvia

-

0,00%

Q3 15

Change %

Annual Contract Value (ACV) (in millions)

Strategic Accounts

$ 18.2

$ 17.5

4%

$ 17.1

6%

Small Business (legacy accounts)

4.7

0%

5.1

-8%

Total ACV

$ 22.9

$ 22.2

3%

$ 22.2

3%

Client Count

Strategic Accounts

1,400

1,350

4%

1,330

5%

Small Business (legacy accounts)

1,520

1,560

-3%

1,770

-14%

Total Clients

2,920

2,910

0%

3,100

-6%

Annual Contract Value per Client (ACVC)

Strategic Accounts

$ 12,947

$ 12,915

0%

$ 12,781

1%

Small Business (legacy accounts)

$ 3,071

$ 2,989

3%

$ 2,868

7%

Total ACVC

$ 7,824

$ 7,590

3%

$ 7,116

10%

Content Licenses (in millions)

$ 1.4

0%

$ 1.5

-7%

For more information about ACV, ACVC, Strategic Accounts and Small Business (legacy accounts), see "Key Metric Definitions" below.

Management Discussion
Throughout 2016 we have made significant investments in product, sales leadership and marketing leadership to drive revenue growth and create leverage from our business model. These investments are beginning to improve results. In the third quarter of 2016, new client sales increased 70% over last year and ACV increased 3%, or over $700,000 compared to the second quarter of 2016, our largest quarterly increase in the last eight quarters.

"It is our goal to create the leading network in the Business to Government (B2G) commerce space," stated Onvia's President and CEO, Hank Riner. "There are three key pillars to our strategy. First and foremost, we must meet the needs of our strategic target market, which include both lead generation and business intelligence. Today we provide a leading lead generation service for B2G commerce by providing the greatest line of sight for both current and future opportunities. By early 2018 we intend to supplement our lead platform with actionable business intelligence that will allow government contractors to strategically address the B2G space with clarity, insight and analytics."

Mr. Riner continued, "Second, in order to provide this business intelligence, we need to capture data that is not currently in the public domain. In the second quarter of 2016, we launched Onvia Exchange which allows government procurement professionals to use Onvia intelligence to improve their bidding process in exchange for providing content directly into the Onvia platform that is not easily accessible. As of the third quarter of 2016, over 500 government agencies have joined our Onvia Exchange network and will begin to provide us with additional content in 2017."

"Finally, we will need to accurately and cost effectively curate much higher data volumes as a result of Onvia Exchange. Onvia 7, which was completed this year, automates the data curation process using our proprietary ontologies and business rules and can efficiently scale to handle much higher data volumes. In addition, Onvia 7 provides our existing clients with a much more relevant search experience by uncovering leads that would be difficult to find using keyword searching. As of September 30, 2016, all of our clients have been migrated to the Onvia 7 platform. We would like to thank all of the Onvians for their hard work to make Onvia 7 a reality."

Mr. Riner concluded, "B2G commerce is a huge yet extremely inefficient market. Our investment in proprietary systems and by building relationships with both government contractors and government buyers, it is now possible to build the authoritative B2G intelligence system that can provide much needed clarity into this marketplace."

Third Quarter 2016 Results

Subscription revenue for the quarter ended September 30, 2016 grew 6% to $5.8 million compared to the same period in 2015. Subscription revenue includes revenue earned from our target market of Strategic Accounts, Small Business (legacy accounts) and revenue generated from the eCommerce sales channel. The eCommerce channel, which officially launched in early 2016, is a self-serve solution for small businesses. The growth in subscription revenue is primarily reflective of growth in ACV. ACV is a leading indicator of subscription revenue and excludes subscribers to the self-serve Small Business solution.

ACV for Strategic Accounts grew $1.1 million, or 6%, in the third quarter of 2016 over the same period last year. The growth in ACV primarily reflects improved results in acquisition sales and first year client retention over the past year. Small Business (legacy accounts) represents clients outside of our strategic target market that have been subscribers since before 2011, when we originally transitioned away from the small business market.

For the twelve months ended September 30, 2016, dollar retention was 88%, compared to 86% as of last quarter and 88% in the same period last year. Dollar retention is a measurement of how effectively the Client Success team has retained, achieved price increases and expanded existing subscription contracts. This measurement can fluctuate from period to period due to the mix of first year and tenured clients expiring in each period, as well as the volume of pricing and contract expansions in a particular. For more information about dollar retention, see "Key Metric Definitions" below.

Total revenue for the quarter ended September 30, 2016 was $6.2 million, up by 5% compared to the same period last year. In addition to subscription revenue, total revenue includes content license, management information report and other revenue.

Operating expenses in the third quarter of 2016 increased 17% to $6.0 million from $5.1 million in the same period of 2015. The increase in comparative periods is primarily due to increased payroll-related investments necessary to support sales, marketing and product development operating initiatives, variable compensation costs as a result of increased sales volume and amortization of internal software costs (explained further below). In addition, costs of approximately $156,000 associated with the CEO transition were incurred in the third quarter of 2016. CEO transition and additional executive transition costs are anticipated to continue throughout 2016 and early 2017.

Our current product roadmap is focused on improving client workflows and the usability of our platform. These new enhancements will replace existing processes and features of software assets currently capitalized on our balance sheet. We have determined that the estimated useful lives of the affected capitalized costs must be shortened to coincide with the estimated release of the new enhanced features and functions. We have reduced the estimated useful life of approximately $892,000 in unamortized internal software costs beginning in the third quarter of 2016. During the third quarter of 2016, we recorded $205,000 in additional amortization as a result of this change in accounting estimate, which is expected to continue through the third quarter of 2017.

Adjusted EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization, and non-cash stock-based compensation) for the quarter ended September 30, 2016 decreased to $281,000 from $581,000 in the same period of prior year. For further information about Adjusted EBITDA, see "Use of Non-GAAP Financial Information" below.

Net loss for the third quarter of 2016 was $492,000, or $0.07 cents per diluted share, compared to a net income of $9,000, or $0.00 cents per diluted share, last year.

At September 30, 2016, cash, cash equivalents and available for sale investments increased to $7.6 million compared to $6.8 million at the end of 2015.

Conference Call
Onvia will hold a conference call later today (November 3, 2016) to discuss its results for the third quarter of 2016. Onvia's CEO, Hank Riner, and CFO, Cameron Way, will host the call starting at 4:30 p.m. Eastern Time. A question and answer session will follow management's presentation.

To participate in the call, dial the appropriate number 5-10 minutes prior to the start time, request the Onvia conference call and provide the conference ID:

Date: Thursday, November 3, 2016
Time: 4:30 p.m. Eastern time (1:30 p.m. Pacific time)
Dial-In Number: 1-877-876-9177
International: 1-785-424-1666
Conference ID#: ONVIA

The conference call will be broadcast simultaneously and available for replay via the investor section of Onvia's website at www.onvia.com. If you have any difficulty connecting with the conference call, please contact Cameron Way at 206-373-9034.

A replay of the call will be available after 7:30 p.m. Eastern Time on the same day and until December 3, 2016:

Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay pass-code: 121688

Use of Non-GAAP Financial Information
Adjusted EBITDA is not a financial measure calculated and presented in accordance with U.S. generally accepted accounting principles ("GAAP") and should not be considered as an alternative to net income, operating income or any other financial measures so calculated and presented, nor as an alternative to cash flow from operating activities as a measure of the Company's liquidity. Onvia defines Adjusted EBITDA as net income / (loss) before interest expense and other non-cash financing costs; other income; taxes; depreciation; amortization; and non-cash stock-based compensation. Other companies (including Onvia's competitors) may define Adjusted EBITDA differently. Onvia presents Adjusted EBITDA because it believes Adjusted EBITDA to be an important supplemental measure of performance that is commonly used by securities analysts, investors and other interested parties in the evaluation of companies in similar industries and size. Management also uses this information internally for forecasting and budgeting. It may not be indicative of the historical operating results of Onvia nor is it intended to be predictive of potential future results. Investors should not consider Adjusted EBITDA in isolation or as a substitute for analysis of results as reported under GAAP. See "Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA" below for further information on this non-GAAP measure and for a reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA for the periods indicated.

Onvia, Inc.

Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA

(in thousands)

Mehr Nachrichten zur Onvia Aktie kostenlos abonnieren

E-Mail-Adresse

Benachrichtigungen von ARIVA.DE
(Mit der Bestellung akzeptierst du die Datenschutzhinweise)

Hinweis: ARIVA.DE veröffentlicht in dieser Rubrik Analysen, Kolumnen und Nachrichten aus verschiedenen Quellen. Die ARIVA.DE AG ist nicht verantwortlich für Inhalte, die erkennbar von Dritten in den „News“-Bereich dieser Webseite eingestellt worden sind, und macht sich diese nicht zu Eigen. Diese Inhalte sind insbesondere durch eine entsprechende „von“-Kennzeichnung unterhalb der Artikelüberschrift und/oder durch den Link „Um den vollständigen Artikel zu lesen, klicken Sie bitte hier.“ erkennbar; verantwortlich für diese Inhalte ist allein der genannte Dritte.