Pivotal Reports Second Quarter Fiscal Year 2019 Financial Results
SAN FRANCISCO--(BUSINESS WIRE)--Sep 12, 2018--Pivotal Software, Inc. (NYSE: PVTL), a leading cloud-native platform provider, today reported results for the fiscal 2019 second quarter ended August 3, 2018.
“Pivotal delivered another strong performance in the second quarter. We remain focused on customer success and winning new customers with our differentiated, multi-cloud platform. Subscription revenue growth of 51% and 30% total revenue growth were driven by customer expansions and new customer wins,” said Rob Mee, CEO of Pivotal Software. “Organizations that work with Pivotal learn to build iteratively, deliver continuously and operate securely and reliably at scale. We’ve shown that Pivotal’s cloud-native platform, developer tools, and unique methodology provide the elements necessary to modernize an enterprise.”
Second Quarter Fiscal Year 2019 Financial Results
Revenue: Subscription revenue was $97.5 million, an increase of 51% year over year. Total revenue was $164.4 million, an increase of 30% year over year.
Operating Loss: GAAP operating loss was $35.4 million, or 22% of total revenue, compared to a loss of $38.2 million in Q2 of last year. Non-GAAP operating loss was $14.6 million, or 9% of total revenue, compared to a loss of $29.9 million year over year.
Net Loss: GAAP net loss was $35.6 million, compared to a loss of $35.4 million year over year. GAAP net loss per share was $0.14, compared to a loss of $0.52 in Q2 of last year. Non-GAAP net loss was $14.8 million, compared to a loss of $27.1 million year over year. Non-GAAP net loss per share was $0.06, compared to a loss of $0.13 in Q2 of last year.
Cash Flow: Operating cash flow for the quarter was $18.4 million compared to negative operating cash flow of $56.5 million in Q2 of last year.
Cash and cash equivalents were $671.7 million as of August 3, 2018.
Recent Business HighlightsSubscriptions customers grew 19% year over year to 354 in Q2 Dollar-based net expansion rate was 150% Released significant updates to Pivotal Cloud Foundry in the quarter including: PAS 2.2 delivered support for deployment on Microsoft Azure Stack along with other enhancements to improve developer productivity and security of the platformPKS 1.1 included new high-availability deployment options and includes the most recent version of Kubernetes open-source Joined Google in launching a new open-source project for serverless functions called Knative. After making significant contributions to Knative, we will use this along with our own project Riff to create Pivotal Functions Service HCL, a global systems integrator, extended its collaboration with Pivotal to build a global network of ‘Cloud Native Labs’ where enterprises will be able to build new and modernize existing applications for deployment to PCF Awarded Microsoft Azure US Consumption 2018 Partner of the Year, for the second consecutive year Winner of the Solstice 2018 Partner of the Year award
For the third quarter of fiscal 2019, Pivotal currently expects:Subscription revenue of $97.5 to $98.5 million Total revenue of $163 to $165 million Non-GAAP loss from operations of $23 to $22 million Non-GAAP net loss per share of 9¢ to 8¢ assuming weighted average shares outstanding of approximately 258 million
For the full fiscal year 2019, Pivotal currently expects:Subscription revenue of $386.5 to $390.5 million Total revenue of $647 to $653 million Non-GAAP loss from operations of $86 to $83 million Non-GAAP net loss per share of 36¢ to 34¢, assuming weighted average shares outstanding of approximately 251 million
Pivotal has not reconciled these forward-looking non-GAAP measures to comparable forward-looking GAAP measures because of the potential variability and uncertainty of incurring these costs and expenses in the future. Accordingly, a reconciliation is not available without unreasonable effort.
Conference Call and Webcast Information
Pivotal will host a conference call at 2:00pm PDT (5:00pm EDT) today to discuss our financial results. A live audio webcast of the conference call will be accessible on Pivotal’s investor relations web page at https://pivotal.io/investors. A replay of the webcast will be available following the conference call.
Pivotal combines our cloud-native platform, developer tools, and unique methodology to help the world’s largest companies transform the way they build and run their most important applications. Our technology is used by Global 2000 companies to achieve strategic advantages in software development and IT operations. Learn more at pivotal.io.
Non-GAAP Financial Measures
Reconciliations of non-GAAP financial measures to the most directly comparable financial results as determined in accordance with GAAP are included at the end of this press release following the accompanying financial data. For a description of these non-GAAP financial measures, including the reasons management uses each measure, please see the section of the tables titled “About Non-GAAP Financial Measures.”
Key Metric Definitions
Subscription Customers: Pivotal defines the number of subscription customers as the organizations that have a subscription contract for Pivotal’s software resulting in at least $50,000 of annual revenue in that period.
Dollar-Based Net Expansion Rate: Pivotal’s dollar-based net expansion rate compares its subscription revenue from a common group of customers across comparable periods. Pivotal calculates its dollar-based net expansion rate for all periods on a trailing four-quarter basis.
This press release contains statements relating to Pivotal’s expectations, projections, beliefs, and prospects (including statements regarding Pivotal’s financial outlook, regarding Pivotal’s collaboration with HCL, and regarding Knative, Riff and Pivotal Function Service), which are “forward-looking statements” within the meaning of the federal securities laws and by their nature are uncertain. Words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “plans,” and similar expressions are intended to identify forward-looking statements. Such forward-looking statements are not guarantees of future performance, and you are cautioned not to place undue reliance on these forward-looking statements. Actual results could differ materially from those projected in the forward-looking statements as a result of many factors, including but not limited to: (i) Pivotal’s limited operating history as an independent company, which makes it difficult to evaluate Pivotal’s prospects; (ii) the substantial losses Pivotal has incurred and the risks of not being able to generate sufficient revenue to achieve and sustain profitability; (iii) Pivotal’s future success depending in large part on the growth of Pivotal’s target markets; (iv) Pivotal’s future growth depending largely on Pivotal Cloud Foundry and Pivotal’s platform-related services; (v) Pivotal’s subscription revenue growth rate not being indicative of Pivotal’s future performance or ability to grow; (vi) Pivotal’s business and prospects being harmed if customers do not renew their subscriptions or expand their use of Pivotal’s platform; (vii) any failure by Pivotal to compete effectively; (viii) Pivotal’s long and unpredictable sales cycles that vary seasonally and which can cause significant variation in the number and size of transactions that can close in a particular quarter; (ix) Pivotal’s lack of control of and inability to predict the future course of open-source technologies, including those used in Pivotal Cloud Foundry; and (x) any security or privacy breaches. All information set forth in this release is current as of the date of this release. These forward-looking statements are based on current expectations and are subject to uncertainties, risks, assumptions, and changes in condition, significance, value and effect as well as other risks disclosed previously and from time to time in documents filed by us with the U.S. Securities and Exchange Commission (SEC), including Pivotal’s prospectus dated April 19, 2018, and filed pursuant to Rule 424(b) under the U.S. Securities Act of 1933, as amended. Additional information will be made available in Pivotal’s quarterly report on Form 10-Q and other future reports that Pivotal may file with the SEC, which could cause actual results to vary from expectations. Pivotal disclaims any obligation to, and does not currently intend to, update any such forward-looking statements, whether written or oral, that may be made from time to time except as required by law.
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