iPass Reports Third Quarter 2004 Results
Mobile Automation and Safe3w Acquisitions Bolster Policy Orchestration Initiative
iPass Inc. (NASDAQ: IPAS) today announced financial results for the third quarter ending September 30, 2004. iPass is a leading provider of services and software that allow an enterprise's mobile workers to connect easily and securely to their corporate networks.
Revenues for the third quarter ended September 30, 2004 were $41.9 million, compared to revenues of $35.0 million for the same period last year and $40.4 million for the quarter ended June 30, 2004.
"We are pleased that we made significant progress in several key areas during the September quarter, namely Policy Orchestration, broadband and customer signings," said Ken Denman, iPass Chairman and CEO. "We have taken steps to bolster our Policy Orchestration capabilities through our acquisition of Safe3w and agreement to acquire Mobile Automation, and through our expanded partnership with Sygate Technologies. These agreements will enhance our ability to create gap-free protection and policy enforcement for our enterprise customers through value added security services." "In addition, we have continued to make good progress in broadband and are particularly encouraged by achieving strong positive growth in quarterly broadband revenues. Lastly, we added many new enterprise customers during the quarter including 13 new Forbes Global 2000 customers bringing our total to 237 of these large, global enterprises as customers."
GAAP Results: Operating income for the third quarter 2004 was $8.0 million, compared to operating income of $6.2 million for the same period last year. Net income, calculated on the basis of generally accepted accounting principles (GAAP), for the third quarter 2004 was $5.2 million, or $0.08 per diluted share, based on 65.5 million fully diluted shares outstanding, compared with $4.5 million, or $0.07 per diluted share, based on 64.5 million fully diluted shares outstanding, for the third quarter 2003.
Non-GAAP Results: The following numbers are non-GAAP financial measures and exclude non-cash amortization of stock-based compensation and amortization of intangibles. Investors are encouraged to refer to the table that reconciles the iPass' GAAP results to its non-GAAP results at the end of this press release. Non-GAAP net income for the third quarter 2004 was $5.7 million, or $0.09 per diluted share, based on 65.5 million fully diluted shares outstanding, compared with $5.5 million, or $0.09 per diluted share, based on 64.5 million fully diluted shares outstanding, for the same period last year.
Business Highlights
Business highlights include:
The Company entered into three agreements that will allow it to enhance the capabilities of its Policy Orchestration platform: the acquisition of Safe3w, the agreement to acquire Mobile Automation, and the deepening of its technology partnership with Sygate. In September, iPass acquired Safe3w, a privately held Woodbury, NY company, that has developed an innovative, patented dynamic device "fingerprinting" technology. When integrated into the iPass connectivity platform, this technology will help ensure that only trusted computers—those devices that are identified and known to the IT department, and protected against identity theft, intrusion, viruses and worms—have access to corporate networks. Earlier today, iPass agreed to acquire Mobile Automation, a company that is a leader in mobile device patch management. Its products help IT managers better protect remote and mobile computers by efficiently and reliably assessing these "at-risk" PCs and updating their security software and operating system (OS) patches in compliance with corporate policies. While Mobile Automation solutions can update both local and remote computers, it has specifically optimized its technology for the more challenging mobile environment. iPass intends to sell Mobile Automation's existing product portfolio, as well as create new services by integrating its capabilities into the iPass Policy Orchestration framework. In September, the Company entered into an agreement to further integrate Sygate Secure Enterprise with the iPass connectivity service platform to both create the ability to isolate the mobile device before assessing it, as well as linking endpoint policy compliance with network access enforcement. iPass also made significant progress in the government space: iPass announced that it has been awarded a blanket purchase agreement by the Department of Defense (DoD). Under the terms of the agreement, any organization within the DoD, federal, intelligence or civilian, can purchase the iPass solution under the blanket purchase agreement. The Company also signed three additional government agencies as customers during the quarter. iPass entered into a partnership with one of the world's leading defense manufacturing and service companies to offer iPass Corporate Access to this organization's government clients. Finally, iPass made significant strides in its broadband initiative: iPass surpassed 13,500 broadband access points in 43 countries, including 11,800 active Wi-Fi hotspots and Ethernet service in the rooms of over 1,800 hotels. The Company entered into an agreement with Connexion by Boeing, a business unit of the Boeing Company, to deliver iPass enterprise customers secure in-flight Wi-Fi Internet connectivity. Through the agreement, iPass users will have access to the Connexion by Boeing mobile Internet service through the iPass Global Broadband Roaming network. The Company signed a roaming contract with NTT DoCoMo, which will allow subscribers of NTT DoCoMo's public Wi-Fi service to use iPass Wi-Fi hotspots when they are abroad in 33 countries. iPass entered into an agreement with CIBERNET Corporation, a leading mobile transaction management and financial settlement company, to deliver a complete end-to-end solution for Wi-Fi roaming. This partnership opens up opportunities to sell services to carriers, mobile operators and wireless ISPs who need to quickly build Wi-Fi offerings based on multiple roaming relationships The Company ended the third quarter with $162 million in cash, cash equivalents and short-term investments and no debt. The Company's third quarter cash balance is net of the $8.5 million of cash used for the Safe3w acquisition and remained relatively consistent with the second quarter balance due principally to strong positive cash flow from operations. Non-Financial Metrics
The Company reported that there were 526,000 distinct end users of its services in the month of September 2004 compared with 415,000 in September 2003, and 528,000 in June 2004. The Company reported that there were 20.6 million user sessions for the September 2004 quarter compared with 18.0 million in September 2003 quarter and 20.9 million in June 2004 quarter. The Company added 13 new Forbes Global 2000 customers during the third quarter bringing its total to 237. Company Projections The following statements are based on information available to iPass today, and the Company does not assume any duty to update these numbers at any time during the quarter or thereafter. These statements are forward-looking and actual results may differ materially. These projections do not include the impact from any charges related to the acquisition of Mobile Automation.
For the quarter ended December 31, 2004, the Company projects revenue growth of approximately two to four percent over the September quarter and fully diluted GAAP earnings per share to be approximately $0.06. Fully diluted non-GAAP earnings per share, for the same period, are projected to be approximately $0.07. The difference between projected fully diluted GAAP earnings per share and projected non-GAAP earnings per share of $0.01 is based on expected amortization of stock-based compensation of $460,000, as well as the expected amortization of intangibles related to the Safe3w acquisition of $120,000 for the fourth quarter of 2004, which, when divided by an expected 66.0 million fully diluted shares outstanding, results in the $0.01 difference.
Conference Call The Company will host a public conference call today to discuss this announcement at 5:30 p.m. Eastern Time (2:30 p.m. Pacific Time). This call is being Webcast by CCBN and can be accessed at http://investor.ipass.com/.... The Webcast will be available until the Company's next earnings call.
A taped replay of this call will be available for two weeks following the call. The dial-in numbers for the replay are 888.286.8010 (U.S. and Canada) and 617.801.6888 (International). The ID number for the call is: 15295377. The Webcast is also being distributed over CCBN's Investor Distribution Network to both institutional and individual investors. Individual investors can listen to the call through CCBN's individual investor center at www.fulldisclosure.com or by visiting any of the investor sites in CCBN's Individual Investor Network. Institutional investors can access the call via CCBN's password-protected event management site, StreetEvents (www.streetevents.com).
Mobile Automation and Safe3w Acquisitions Bolster Policy Orchestration Initiative
iPass Inc. (NASDAQ: IPAS) today announced financial results for the third quarter ending September 30, 2004. iPass is a leading provider of services and software that allow an enterprise's mobile workers to connect easily and securely to their corporate networks.
Revenues for the third quarter ended September 30, 2004 were $41.9 million, compared to revenues of $35.0 million for the same period last year and $40.4 million for the quarter ended June 30, 2004.
"We are pleased that we made significant progress in several key areas during the September quarter, namely Policy Orchestration, broadband and customer signings," said Ken Denman, iPass Chairman and CEO. "We have taken steps to bolster our Policy Orchestration capabilities through our acquisition of Safe3w and agreement to acquire Mobile Automation, and through our expanded partnership with Sygate Technologies. These agreements will enhance our ability to create gap-free protection and policy enforcement for our enterprise customers through value added security services." "In addition, we have continued to make good progress in broadband and are particularly encouraged by achieving strong positive growth in quarterly broadband revenues. Lastly, we added many new enterprise customers during the quarter including 13 new Forbes Global 2000 customers bringing our total to 237 of these large, global enterprises as customers."
GAAP Results: Operating income for the third quarter 2004 was $8.0 million, compared to operating income of $6.2 million for the same period last year. Net income, calculated on the basis of generally accepted accounting principles (GAAP), for the third quarter 2004 was $5.2 million, or $0.08 per diluted share, based on 65.5 million fully diluted shares outstanding, compared with $4.5 million, or $0.07 per diluted share, based on 64.5 million fully diluted shares outstanding, for the third quarter 2003.
Non-GAAP Results: The following numbers are non-GAAP financial measures and exclude non-cash amortization of stock-based compensation and amortization of intangibles. Investors are encouraged to refer to the table that reconciles the iPass' GAAP results to its non-GAAP results at the end of this press release. Non-GAAP net income for the third quarter 2004 was $5.7 million, or $0.09 per diluted share, based on 65.5 million fully diluted shares outstanding, compared with $5.5 million, or $0.09 per diluted share, based on 64.5 million fully diluted shares outstanding, for the same period last year.
Business Highlights
Business highlights include:
The Company entered into three agreements that will allow it to enhance the capabilities of its Policy Orchestration platform: the acquisition of Safe3w, the agreement to acquire Mobile Automation, and the deepening of its technology partnership with Sygate. In September, iPass acquired Safe3w, a privately held Woodbury, NY company, that has developed an innovative, patented dynamic device "fingerprinting" technology. When integrated into the iPass connectivity platform, this technology will help ensure that only trusted computers—those devices that are identified and known to the IT department, and protected against identity theft, intrusion, viruses and worms—have access to corporate networks. Earlier today, iPass agreed to acquire Mobile Automation, a company that is a leader in mobile device patch management. Its products help IT managers better protect remote and mobile computers by efficiently and reliably assessing these "at-risk" PCs and updating their security software and operating system (OS) patches in compliance with corporate policies. While Mobile Automation solutions can update both local and remote computers, it has specifically optimized its technology for the more challenging mobile environment. iPass intends to sell Mobile Automation's existing product portfolio, as well as create new services by integrating its capabilities into the iPass Policy Orchestration framework. In September, the Company entered into an agreement to further integrate Sygate Secure Enterprise with the iPass connectivity service platform to both create the ability to isolate the mobile device before assessing it, as well as linking endpoint policy compliance with network access enforcement. iPass also made significant progress in the government space: iPass announced that it has been awarded a blanket purchase agreement by the Department of Defense (DoD). Under the terms of the agreement, any organization within the DoD, federal, intelligence or civilian, can purchase the iPass solution under the blanket purchase agreement. The Company also signed three additional government agencies as customers during the quarter. iPass entered into a partnership with one of the world's leading defense manufacturing and service companies to offer iPass Corporate Access to this organization's government clients. Finally, iPass made significant strides in its broadband initiative: iPass surpassed 13,500 broadband access points in 43 countries, including 11,800 active Wi-Fi hotspots and Ethernet service in the rooms of over 1,800 hotels. The Company entered into an agreement with Connexion by Boeing, a business unit of the Boeing Company, to deliver iPass enterprise customers secure in-flight Wi-Fi Internet connectivity. Through the agreement, iPass users will have access to the Connexion by Boeing mobile Internet service through the iPass Global Broadband Roaming network. The Company signed a roaming contract with NTT DoCoMo, which will allow subscribers of NTT DoCoMo's public Wi-Fi service to use iPass Wi-Fi hotspots when they are abroad in 33 countries. iPass entered into an agreement with CIBERNET Corporation, a leading mobile transaction management and financial settlement company, to deliver a complete end-to-end solution for Wi-Fi roaming. This partnership opens up opportunities to sell services to carriers, mobile operators and wireless ISPs who need to quickly build Wi-Fi offerings based on multiple roaming relationships The Company ended the third quarter with $162 million in cash, cash equivalents and short-term investments and no debt. The Company's third quarter cash balance is net of the $8.5 million of cash used for the Safe3w acquisition and remained relatively consistent with the second quarter balance due principally to strong positive cash flow from operations. Non-Financial Metrics
The Company reported that there were 526,000 distinct end users of its services in the month of September 2004 compared with 415,000 in September 2003, and 528,000 in June 2004. The Company reported that there were 20.6 million user sessions for the September 2004 quarter compared with 18.0 million in September 2003 quarter and 20.9 million in June 2004 quarter. The Company added 13 new Forbes Global 2000 customers during the third quarter bringing its total to 237. Company Projections The following statements are based on information available to iPass today, and the Company does not assume any duty to update these numbers at any time during the quarter or thereafter. These statements are forward-looking and actual results may differ materially. These projections do not include the impact from any charges related to the acquisition of Mobile Automation.
For the quarter ended December 31, 2004, the Company projects revenue growth of approximately two to four percent over the September quarter and fully diluted GAAP earnings per share to be approximately $0.06. Fully diluted non-GAAP earnings per share, for the same period, are projected to be approximately $0.07. The difference between projected fully diluted GAAP earnings per share and projected non-GAAP earnings per share of $0.01 is based on expected amortization of stock-based compensation of $460,000, as well as the expected amortization of intangibles related to the Safe3w acquisition of $120,000 for the fourth quarter of 2004, which, when divided by an expected 66.0 million fully diluted shares outstanding, results in the $0.01 difference.
Conference Call The Company will host a public conference call today to discuss this announcement at 5:30 p.m. Eastern Time (2:30 p.m. Pacific Time). This call is being Webcast by CCBN and can be accessed at http://investor.ipass.com/.... The Webcast will be available until the Company's next earnings call.
A taped replay of this call will be available for two weeks following the call. The dial-in numbers for the replay are 888.286.8010 (U.S. and Canada) and 617.801.6888 (International). The ID number for the call is: 15295377. The Webcast is also being distributed over CCBN's Investor Distribution Network to both institutional and individual investors. Individual investors can listen to the call through CCBN's individual investor center at www.fulldisclosure.com or by visiting any of the investor sites in CCBN's Individual Investor Network. Institutional investors can access the call via CCBN's password-protected event management site, StreetEvents (www.streetevents.com).
