Today, LogMeIn announced financial results for the third quarter of 2015. We’re pleased to report another very good quarter with revenue and earnings per share that exceeded the high-end of our guidance. We believe these strong Q3 results and key progress on our strategic growth initiatives have put us in a favorable position to execute on our near and longer-term goals. As a result, we are raising our revenue and earnings guidance. You can get the full release on our investor site, but here are some highlights and color on what was a strong Q3:
Third quarter 2015 financial highlights:
- Revenue was $69.6 million, up 20% compared with the third quarter of 2014
- Adjusted EBITDA was $19.4 million and adjusted EBITDA margin was 27.9%, versus $13.3 million and 22.9% in the third quarter of 2014
- Non-GAAP net income was $11.9 million, or $0.46 per diluted share, as compared to $8.1 million, or $0.32 per diluted share, in the third quarter of 2014
- GAAP net income was $5.6 million, or $0.22 per diluted share, as compared to GAAP net income of $2.3 million, or $0.09 per diluted share, in the third quarter of 2014
- Non-GAAP cash flow from operations was $14.2 million and 20% of revenue in the third quarter of 2015
- Total deferred revenue was $137.0 million, up 33% year-over-year
- The Company closed the quarter with cash, cash equivalents, and short-term investments of $245.7 million
A webcast with more details is also available on the Investor Relations section of the Company’s corporate website at www.LogMeInInc.com (it will be available 3 hours after the completion of the call; approximately 8:30-9 pm ET this evening).
Some color on Q3 2015:
At the start of the year, we declared three key strategic growth initiatives for 2015:
- Expanding join.me’s collaboration opportunity
- Helping IT deliver the security and productivity needed in an app and cloud-centric world
- And delivering offerings that help companies connect, manage, and engage with their customers in the Internet of Things era
We’re happy to report what we believe to be great progress on all three initiatives to complement the continued strong performance of our overall business, today.
Our collaboration business was our fastest growing business in the third quarter. join.me continues to be our fastest growing product and the company’s single biggest driver of growth.
Our IT management business delivered another solid quarter with growth in line with overall company growth. And two weeks ago, we announced the acquisition of LastPass, creating a key extension of our portfolio which we believe will have both a positive effect on our long term growth, while also helping to accelerate our leadership position in the identity and access management market. Just as join.me has been the key growth engine for our collaboration business, we believe LastPass will become a key new growth driver for our IT management business.
Our service cloud business – a highly profitable business with great margins and cash flow — continued to generate revenue growth in the mid-single digit percentage range during the third quarter, consistent with the first half of 2015. Rescue, the largest contributor to our service cloud business, has long been the remote support offering of choice for the world’s best technology companies and market leaders in virtually every segment. This trend and enviable customer list continued to grow in Q3. It was also a very good quarter for BoldChat, with year-over-year percentage revenue growth for this product line above the overall company growth rate. Key wins for BoldChat in the quarter included two of North America’s top telco and internet service providers – one of which was the largest BoldChat deal ever.
The third quarter was also an important one for our Xively Internet of Things business. During the quarter, there were several key events that helped raise the visibility of LogMeIn as a critical player in the IoT – and one distinguished with meaningful early customer traction. And while the IoT is still in its infancy, we believe that our increasing profile, great platform, and early customer traction have put us in a favorable position to capitalize on a large, longer-term opportunity.
New partnerships announced by Salesforce, Splunk and AWS highlighted the important role Xively is playing in today’s IoT ecosystem. At Salesforce’s annual Dreamforce event, Xively customers took center stage at the event’s highly publicized “IoT Zone.” In fact, 6 of the 8 companies included in the Dreamforce IoT customer showcase were joint Xively and Salesforce customers. And earlier this month, those customers, along with 300 c-level executives, press, analysts and partners joined us in Boston for Xperience 2015, our own inaugural IoT event, an event that generated significant media and analyst coverage, as well as a huge amount of buzz on social media.
All in all, it was another strong quarter for LogMeIn. Our core businesses continue to deliver strong top and bottom line results and we believe that our continued progress on our strategic growth initiatives have positioned us favorably for Q4 and beyond.