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Actua Announces Second Quarter 2017 Financial Results

RADNOR, Pa., Aug. 09, 2017 (GLOBE NEWSWIRE) -- Actua Corporation (Nasdaq:ACTA) (“Actua”) today reported its results for the second quarter ended June 30, 2017.

“We are pleased with the results we achieved in the second quarter,” said Walter Buckley, CEO of Actua. “Our performance in the first half of 2017 was in line with our expectations.  We are well-positioned to continue building shareholder value by driving profitable growth at our businesses.”

Revenue was $31.2 million for the second quarter of 2017, up from $26.9 million for the second quarter of 2016.  Net loss attributable to Actua for the second quarter of 2017 was $(6.9) million, or $(0.22) per diluted share, compared to a net loss attributable to Actua of $(12.7) million, or $(0.35) per diluted share, for the comparable prior year quarter.  Non-GAAP net loss for the second quarter of 2017 was $(0.4) million, or $(0.01) per diluted share, as compared to a non-GAAP net loss of $(2.6) million, or $(0.07) per diluted share, for the comparable prior year quarter.  Cash flows from operations was a source of $0.1 million for the second quarter of 2017, compared to a use of $(2.7) million for the second quarter of 2016.

Revenue was $61.7 million for the first half of 2017, up from $52.0 million for the first half of 2016.  Net loss attributable to Actua for the first half of 2017 was $(16.5) million, or $(0.52) per diluted share, compared to a net loss attributable to Actua of $(27.1) million, or $(0.73) per diluted share, for the first half of 2016.  Non-GAAP net loss for the first half of 2017 was $(2.2) million, or $(0.07) per diluted share, compared to a non-GAAP net loss of $(6.0) million, or $(0.16) per diluted share, for the first half of 2016. Cash flows from operations for the first half of 2017 was $(3.0) million, compared to $(6.6) million for the first half of 2016.

During the three months ended June 30, 2017, Actua deployed $13.6 million to repurchase approximately 970,000 shares.  Since July 1, 2017, Actua has deployed an additional $5.3 million to repurchase approximately 380,000 shares, resulting in year-to-date share repurchase totals of $30.3 million and approximately 2,175,000 shares.

2017 Guidance

Actua continues to expect 2017 annual GAAP revenue in the range of between $125 million and $130 million, representing a range of between 14% and 19% growth from 2016.  Actua continues to expect  2017 annual GAAP cash flow from operations in the range of between a use of $(2.0) million and a source of $2.0 million.  Actua continues to expect 2017 annual non-GAAP net income (loss) per share to be in the range of between $(0.10) and $(0.15) per diluted share.

A reconciliation of the non-GAAP financial measures used above with the most comparable GAAP financial measures is included with the financial tables at the end of this release.

Please see Actua’s website at www.actua.com for more information on Actua, its businesses and its second quarter 2017 results.

Actua will host a webcast at 10:00 a.m. ET today to discuss its financial results.  As part of the live webcast for this call, Actua will post a slide presentation to accompany the prepared remarks.  To access the webcast, go to www.actua.com/investors/events-presentations/ and click on the webcast link.  Please log on to the website approximately ten minutes prior to the call to register and download any necessary audio software.  The conference call is also accessible through listen-only mode by dialing 800.708.4540 or 847.619.6397.  The passcode is 45230970.

For those unable to participate in the conference call, a replay will be available from August 9, 2017 at 12:30 p.m. ET until August 16, 2017 at 11:59 p.m. ET.  To access the replay, dial 888.843.7419 or 630.652.3042.  The passcode is 45230970#.  The replay and slide presentation also can be accessed in the investor relations section of the Actua website at www.actua.com/investors/events-presentations/.

About Actua
Actua Corporation (Nasdaq:ACTA), the multi-vertical cloud company, brings the power of the cloud to vertical markets and processes.  Actua is pioneering the second wave of the SaaS revolution - the vertical wave - by growing cloud businesses that are transforming their markets.  With approximately 700 employees delivering unrivaled domain knowledge, agility and responsiveness to our customers, Actua’s rapidly growing vertical cloud businesses are positioned to lead this wave.  For the latest information about Actua and its brands, please go to www.actua.com.

Safe Harbor Statement under Private Securities Litigation Reform Act of 1995

The statements contained in this press release that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  These forward-looking statements involve certain risks and uncertainties, including, but not limited to, risks associated with our ability to compete successfully in highly-competitive, rapidly-developing markets, the valuation of public and private cloud-based businesses by analysts, investors and other market participants, our ability to deploy capital effectively and on acceptable terms, the effect of economic conditions generally, capital spending by our customers, our ability to retain existing customer relationships and revenue streams and secure new ones, developments in the markets in which we operate and our ability to respond to those changes in a timely and effective manner, the availability, performance and security of our cloud-based technology, particularly in light of increased cybersecurity risks and concerns, our ability to retain key personnel, our ability to successfully integrate any acquired business, the impact of any potential acquisitions, dispositions, share repurchases or other strategic transactions, our ability to have continued access to capital and to manage capital resources effectively, and other risks and uncertainties detailed in Actua's filings with the U.S. Securities and Exchange Commission.  These and other factors may cause actual results to differ materially from those projected.


 Actua Corporation 
 Consolidated Statements of Operations 
(In thousands, except per share data) 
(Unaudited) 
            
    Three Months Ended
June 30,
 Six Months Ended
June 30,
 
    2017 2016 2017 2016 
            
Revenue  $31,189  $26,854  $61,696  $52,040  
            
Operating expenses         
 Cost of revenue (a) 7,884  7,288  15,678  14,010  
 Sales and marketing (a) 9,763  10,461  19,670  20,580  
 General and administrative (a) 11,786  11,372  24,718  23,698  
 Research and development (a) 6,911  5,388  13,644  10,695  
 Amortization of intangible assets 4,333  3,626  7,996  7,208  
 Impairment related and other 310  117  670  348  
 Total operating expenses 40,987  38,252  82,376  76,539  
 Operating income (loss) (9,798) (11,398) (20,680) (24,499) 
            
Other income (expense):         
 Other income (loss), net 2,558  (15) 3,425  (105) 
 Interest income 142  39  297  87  
 Interest expense (44) (33) (71) (66) 
            
Income (loss) before income taxes and noncontrolling interests(7,142) (11,407) (17,029) (24,583) 
            
Income tax benefit (expense) (184) (72) (449) (198) 
            
Income (loss) from continuing operations(7,326) (11,479) (17,478) (24,781) 
Income (loss) from discontinued operations, net of tax  (2,079)   (4,160) 
Net income (loss) (7,326) (13,558) (17,478) (28,941) 
 Less: Net income (loss) attributable to the noncontrolling interests(463) (817) (945) (1,869) 
Net income (loss) attributable to Actua $(6,863) $(12,741) $(16,533) $(27,072) 
            
 Amounts attributable to Actua common shareholders:        
Net income (loss) from continuing operations$(6,863) $(10,763) $(16,533) $(23,123) 
Net income (loss) from discontinued operations  (1,978)   (3,949) 
Net income (loss) attributable to Actua common shareholders$(6,863) $(12,741) $(16,533) $(27,072) 
            
 Basic and diluted net income (loss) per share:         
Income (loss) from continuing operations attributable to Actua common shareholders $(0.22) $(0.30) $(0.52) $(0.62) 
Income (loss) from discontinued operations attributable to Actua common shareholders   (0.05)   (0.11) 
Income (loss) attributable to Actua common shareholders $(0.22) $(0.35) $(0.52) $(0.73) 
            
Shares used in computation of basic and diluted net income (loss) per common share attributable to Actua common shareholders 31,267  36,760  31,687  37,027  
            
         
(a) Includes equity-based compensation of:        
 Cost of revenue $35  $22  $137  $54  
 Sales and marketing 100  72  192  160  
 General and administrative 3,552  3,554  7,041  7,977  
 Research and development 165  102  247  216  
    $3,852  $3,750  $7,617  $8,407  


 Actua Corporation
 Condensed Consolidated Balance Sheets
(In thousands)
 
     (Unaudited)    
     June 30,  December 31,  
     2017 2016  
          
 ASSETS       
 Cash and cash equivalents  $68,903  $97,364   
 Restricted cash  1,435  1,648   
 Accounts receivable, net  20,031  21,033   
 Prepaid expenses and other current assets  3,256  3,673   
  Total current assets  93,625  123,718   
 Fixed assets, net  4,884  5,359   
 Goodwill  231,424  231,787   
 Intangible assets, net  64,962  73,406   
 Deferred tax asset  737  762   
 Cost method businesses  17,473  17,250   
 Other assets, net  1,534  1,436   
  Total Assets  $414,639  $453,718   
          
 LIABILITIES AND EQUITY       
 Short-term debt  $1,320  $1,320   
 Accounts payable  12,582  12,269   
 Accrued expenses  9,533  10,149   
 Accrued compensation and benefits  5,948  8,381   
 Deferred revenue  37,603  35,834   
  Total current liabilities  66,986  67,953   
 Deferred rent  4,166  4,165   
 Deferred revenue  933  990   
 Contingent consideration  8,065  7,444   
 Other liabilities  1,532  1,824   
  Total Liabilities  81,682  82,376   
 Redeemable noncontrolling interests  5,927  5,858   
 Total Equity  327,030  365,484   
  Total Liabilities, Redeemable noncontrolling interests and Equity  $414,639  $453,718   
          


 Actua Corporation 
 Consolidated Statements of Cash Flows 
(In thousands) 
(Unaudited) 
  Three Months Ended
June 30,
 Six Months Ended
June 30,
 
  2017 2016 2017 2016 
OPERATING ACTIVITIES - Continuing Operations         
Net income (loss) $(7,326) $(13,558) $(17,478) $(28,941) 
Income (loss) from discontinued operations, net of tax   2,079    4,160  
Adjustments to reconcile net loss to cash used in operating activities:         
Depreciation and amortization 4,925  4,230  9,172  8,331  
Equity-based compensation 3,852  3,750  7,617  8,407  
Impairment related and other 310  179  312  394  
Other (income) loss, net (2,558) 15  (3,425) 105  
Deferred tax asset (35) 57  25  52  
Contingent consideration   16  358  32  
Changes in operating assets and liabilities - net of acquisitions:         
Accounts receivable, net 1,167  (331) 971  (1,091) 
Prepaid expenses and other assets 150  (1,220) 281  (1,857) 
Accounts payable (995) 32  364  (2) 
Accrued expenses (950) (1,699) (473) (639) 
Accrued compensation and benefits 193  583  (2,510) (4,039) 
Deferred revenue 1,322  1,510  1,639  4,633  
Other liabilities 27  1,673  163  3,840  
Cash flows provided by (used in) operating activities 82  (2,684) (2,984) (6,615) 
INVESTING ACTIVITIES - Continuing Operations         
Capital expenditures (582) (702) (765) (1,636) 
Change in restricted cash 211  699  301  551  
Proceeds from sales/distribution of ownership interests 2,694    3,652  46  
Ownership acquisition, net of cash acquired (265) (72) (515) (2,222) 
Cash flows provided by (used in) investing activities 2,058  (75) 2,673  (3,261) 
FINANCING ACTIVITIES - Continuing Operations         
Acquisition of noncontrolling interests in subsidiary equity     (112) (5,578) 
Payments of contingent consideration   (1,464)   (1,464) 
Repayment of capital lease obligations     (8)   
Purchase of treasury stock (13,629) (5,485) (25,088) (9,533) 
Tax withholdings related to equity-based awards (10) (7) (2,896) (1,536) 
Financing activities with discontinued operations, net   496    (2,004) 
Cash flows provided by (used in) financing activities (13,639) (6,460) (28,104) (20,115) 
Effect of exchange rate on cash and cash equivalents (34) (38) (46) (112) 
Net increase (decrease) in cash and cash equivalents from continuing operations (11,533) (9,257) (28,461) (30,103) 
Discontinued Operations         
Cash flows provided by (used in) operating activities   4,211    (4,923) 
Cash flows provided by (used in) investing activities   (368)   (447) 
Cash flows provided by (used in) financing activities   (4,654)   2,384  
Net increase (decrease) in cash and cash equivalents from discontinued operations   (811)   (2,986) 
Cash and cash equivalents at beginning of period - discontinued operations   1,681    3,856  
Less: cash and cash equivalents at end of period - discontinued operations   870    870  
Cash and cash equivalents at beginning of period 80,436  51,611  97,364  72,457  
Cash and cash equivalents at end of period $68,903  $42,354  $68,903  $42,354  


Actua Corporation
Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures
(In thousands, except per share data)
(Unaudited)
        
 20162017 
 Q1Q2Q3Q4Q1Q2 
GAAP net income (loss) attributable to Actua:$(14,331)$(12,741)$(10,074)$107,231 $(9,670)$(6,863) 
Add back:       
Share-based compensation4,657 3,750 3,026 2,625 3,765 3,852  
Amortization of intangibles3,582 3,626 3,524 3,652 3,663 4,333  
Impairment related and other costs125 119 45 456 628 312  
Transaction expenses47 106 630 262 189 88  
Other (income) loss, net90 15 (2,831)(131)(867)(2,558) 
Acquired businesses' deferred revenue476 483 478 539 471 469  
Impact of non-cash income tax (benefit) expense items 88 39 (13,981)19 7  
Loss (income) from discontinued operations2,081 2,079 3,842 (102,019)   
Impact of non-controlling interests (NCI) for discontinued operations(110)(101)(235)(832)   
  Non-GAAP net income (loss)$(3,383)$(2,576)$(1,556)$(2,198)$(1,802)$(360) 
        
        
GAAP net income (loss) per diluted share:$(0.38)$(0.35)$(0.27)$2.94 $(0.30)$(0.22) 
Add back:       
Share-based compensation0.12 0.10 0.08 0.07 0.12 0.13  
Amortization of intangibles0.10 0.10 0.10 0.10 0.11 0.14  
Impairment related and other costs 0.01  0.01 0.02 0.01  
Transaction expenses  0.02 0.01 0.01   
Other (income) loss, net  (0.08) (0.03)(0.08) 
Acquired businesses' deferred revenue0.01 0.01 0.01 0.01 0.01 0.01  
Impact of non-cash income tax (benefit) expense items   (0.38)   
Loss (income) from discontinued operations0.06 0.06 0.10 (2.80)   
Impact of non-controlling interests (NCI) for discontinued operations   (0.02)   
  Non-GAAP net income (loss) per diluted share$(0.09)$(0.07)$(0.04)$(0.06)$(0.06)$(0.01) 
        
Shares used in calculation of GAAP net income (loss) per share attributable to Actua:       
Basic37,293 36,760 36,776 35,865 32,113 31,267  
Diluted37,293 36,760 36,776 36,421 32,113 31,267  
        
Shares used in calculation of non-GAAP net income (loss) per share attributable to Actua:       
Basic37,293 36,760 36,776 35,865 32,113 31,267  
Diluted37,293 36,760 36,776 35,865 32,113 31,267  


Actua Corporation
Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures (Continued)
(In thousands, except per share data)
(Unaudited)
        
 20162017 
 Q1Q2Q3Q4Q1Q2 
GAAP net income (loss) attributable to Actua:$(14,331)$(12,741)$(10,074)$107,231 $(9,670)$(6,863) 
Add back:       
Share-based compensation4,657 3,750 3,026 2,625 3,765 3,852  
Amortization of intangibles3,582 3,626 3,524 3,652 3,663 4,333  
Impairment related and other costs125 119 45 456 628 312  
Transaction expenses47 106 630 262 189 88  
Other (income) loss, net90 15 (2,831)(131)(867)(2,558) 
Acquired businesses' deferred revenue476 483 478 539 471 469  
Impact of non-cash income tax (benefit) expense items 88 39 (13,981)19 7  
Loss (income) from discontinued operations2,081 2,079 3,842 (102,019)   
Impact of non-controlling interests (NCI) for discontinued operations(110)(101)(235)(832)   
Interest expense (income), net(15)45 (4)(162)(128)(98) 
Income tax expense (current/cash only)24 146 (6)480 246 176  
Depreciation515 555 558 569 578 592  
Adjusted EBITDA$(2,859)$(1,830)$(1,008)$(1,311)$(1,106)$310  
        
GAAP Cost of revenue$6,722 $7,288 $7,441 $7,735 $7,794 $7,884  
Share-based compensation32 22 21 32 102 35  
Adjusted Cost of revenue$6,690 $7,266 $7,420 $7,703 $7,692 $7,849  
        
GAAP Sales and marketing$10,119 $10,461 $10,281 $9,946 $9,907 $9,763  
Share-based compensation88 72 73 82 92 100  
Adjusted Sales and marketing$10,031 $10,389 $10,208 $9,864 $9,815 $9,663  
        
GAAP General and administrative$12,326 $11,372 $11,228 $12,010 $12,932 $11,786  
Share-based compensation4,423 3,554 2,827 2,370 3,489 3,552  
Adjusted General and administrative$7,903 $7,818 $8,401 $9,640 $9,443 $8,234  
        
GAAP Research and development$5,307 $5,388 $5,411 $5,536 $6,733 $6,911  
Share-based compensation114 102 105 141 82 165  
Adjusted Research and development$5,193 $5,286 $5,306 $5,395 $6,651 $6,746  
        

About Actua’s Non-GAAP Financial Measures

This release contains non-GAAP financial measures.  The tables above reconcile these non-GAAP financial measures to the most directly comparable GAAP financial measures.

Non-GAAP financial measures should not be considered as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP.  Actua strongly urges investors and potential investors in our securities to review the reconciliation of our non-GAAP financial measures to the comparable GAAP financial measures that are included in this release.

Actua’s management believes that its non-GAAP financial measures provide useful information to investors because they allow investors to view the business through the eyes of management and provide meaningful supplemental information regarding Actua’s operating results, as they exclude amounts that Actua excludes as part of its monitoring of operating results and assessment of the performance of the business.

Actua presents the following non-GAAP financial measures in this release:  (1) non-GAAP net income (loss) (which term may be used interchangeably with adjusted net income (loss) by management during quarterly earnings presentations), (2) non-GAAP net income (loss) per diluted share (which term may be used interchangeably with adjusted net income (loss) per diluted share by management during quarterly earnings presentations), (3) Adjusted EBITDA, (4) Adjusted Cost of revenue, (5) Adjusted Sales and marketing, (6) Adjusted General and administrative and (7) Adjusted Research and development.  Actua excludes items from these non-GAAP financial measures as described below.

Non-GAAP net income (loss) excludes the following items from GAAP net income (loss):

  • Share-based compensation.  Actua excludes share-based compensation expenses and other expenses associated with equity granted to employees and non-employee directors primarily because they are non-cash expenses that Actua does not consider part of ongoing operating results when assessing the performance of its business, and the exclusion of these expenses facilitates the comparison of results over different time periods and the comparison of Actua’s results with results of other companies.

  • Amortization of intangibles.  Actua excludes amortization of acquired intangibles, which consists primarily of customer relationships and technology, because they are expenses that Actua does not consider part of ongoing operating results when assessing the performance of its business, and Actua believes that doing so facilitates comparisons to its historical operating results and to the results of other companies.

  • Impairment related and other costs.  Actua excludes the effect of impairment related and other costs, which primarily include impairment charges, revaluation of contingent consideration, restructuring and severance fees, settlement costs and other one-time costs, because Actua does not consider them part of ongoing operating results when assessing the performance of its business and believes it is useful for investors to understand the effects of these items on Actua’s operations.

  • Transaction expenses.  Actua excludes the effect of acquisition related expenses because Actua does not consider them part of ongoing operating results when assessing the performance of its business and believes it is useful for investors to understand the effects of these items on Actua’s operations.

  • Other income (loss), net.  Actua excludes the effect of other income (loss), net, which primarily includes transaction-driven gains and losses, as well as certain foreign currency impacts, because Actua does not consider them part of ongoing operating results when assessing the performance of its business and believes it is useful for investors to understand the effects of these items on Actua’s operations.

  • Acquired businesses’ deferred revenue.  Actua includes acquired businesses’ previously deferred revenues that are not recognized under GAAP because Actua considers them a part of ongoing operating results when assessing the performance of its business and believes it is useful for investors to understand the effects of these items on its operations.

  • Impact of non-cash income tax benefit items.  Actua excludes the impact of any non-cash income tax benefit items as Actua believes it is useful for investors to understand the effect of this item and does not consider them a part of ongoing operating results when assessing the performance of its business.

  • Loss (income) from discontinued operations.  Actua excludes the loss (income) from discontinued operations as Actua believes it is useful for investors to understand the effect of these items for all periods presented and does not consider them a part of ongoing operating results when assessing the performance of its business.

  • Impact of non-controlling interests (NCI) for discontinued operations.  Actua did not own 100% of the discontinued operations presented.  Therefore, Actua excludes the impact of the NCI on discontinued operations as Actua believes it is useful for investors to understand the effect of this item for all periods presented as compared to what has historically been provided as Actua does not consider them a part of ongoing operating results when assessing the performance of its business.

Non-GAAP net income (loss) per diluted share is calculated as follows:

  • Non-GAAP net income (loss) (as defined above) is the numerator.

  • Shares used in calculation of non-GAAP net income (loss) per diluted share.  For periods where GAAP and non-GAAP net income (loss) are both losses, Actua uses the same number of shares used to calculate GAAP and non-GAAP net loss per share.  For periods where GAAP and non-GAAP net income (loss) are both income, Actua uses the same number of shares used to calculate GAAP and non-GAAP net income per diluted share.  For periods where GAAP net income (loss) is a loss but non-GAAP net income (loss) is income, Actua includes the impact of incremental dilutive securities for the period to determine non-GAAP net income per diluted share.  For periods where GAAP net income (loss) is income but non-GAAP net income (loss) is a loss, Actua excludes the impact of incremental dilutive securities for the period to determine non-GAAP net loss per diluted share.

Adjusted EBITDA excludes the following items from GAAP net income (loss):

  • Share-based compensation.  Actua excludes share-based compensation expenses and other expenses associated with equity granted to employees and non-employee directors primarily because they are non-cash expenses that Actua does not consider part of ongoing operating results when assessing the performance of its business, and the exclusion of these expenses facilitates the comparison of results over different time periods and the comparison of Actua’s results with results of other companies.

  • Amortization of intangibles.  Actua excludes amortization of acquired intangibles, which consists primarily of customer relationships and technology, because they are expenses that Actua does not consider part of ongoing operating results when assessing the performance of its business, and Actua believes that doing so facilitates comparisons to its historical operating results and to the results of other companies.

  • Impairment related and other costs.  Actua excludes the effect of impairment related and other costs, which primarily include impairment charges, restructuring and severance fees, settlement costs and other one-time costs, because Actua does not consider them part of ongoing operating results when assessing the performance of its business and believes it is useful for investors to understand the effects of these items on Actua’s operations.

  • Transaction expenses.  Actua excludes the effect of acquisition related expenses because Actua does not consider them part of ongoing operating results when assessing the performance of its business and believes it is useful for investors to understand the effects of these items on Actua’s operations.

  • Other income (loss), net.  Actua excludes the effect of other income (loss), net, which primarily includes transaction-driven gains and losses and revaluation of contingent consideration, as well as certain foreign currency impacts because Actua does not consider them part of ongoing operating results when assessing the performance of its business and believes it is useful for investors to understand the effects of these items on Actua’s operations.

  • Acquired businesses’ deferred revenue.  Actua includes acquired businesses’ previously deferred revenues that are not recognized under GAAP because Actua considers them a part of ongoing operating results when assessing the performance of its business and believes it is useful for investors to understand the effects of these items on its operations.

  • Impact of non-cash income tax benefit items.  Actua excludes the impact of any non-cash income tax benefit items as Actua believes it is useful for investors to understand the effect of this item and Actua does not consider them a part of ongoing operating results when assessing the performance of its business.

  • Loss (income) from discontinued operations.  Actua excludes the loss (income) from discontinued operations as Actua believes it is useful for investors to understand the effect of these items for all periods presented and does not consider them a part of ongoing operating results when assessing the performance of its business.

  • Impact of non-controlling interests (NCI) for discontinued operations.  Actua did not own 100% of the discontinued operations presented.  Therefore, Actua excludes the impact of the NCI on discontinued operations as Actua believes it is useful for investors to understand the effect of this item for all periods presented as compared to what has historically been provided as Actua does not consider them a part of ongoing operating results when assessing the performance of its business.

  • Interest expense (income), net.  Actua excludes income and expense from interest as Actua believes it is useful for investors to understand the effect of these items for all periods presented and does not consider them a part of ongoing operating results when assessing the performance of its business.

  • Income tax expense (current/cash only).  Actua excludes the impact of any current, cash income tax expense as Actua believes it is useful for investors to understand the effect of this item and does not consider them a part of ongoing operating results when assessing the performance of its business.

  • Depreciation.  Actua excludes depreciation expense as Actua believes it is useful for investors to understand the effect of these items for all periods presented and does not consider them a part of ongoing operating results when assessing the performance of its business.

Adjusted Cost of revenue excludes the following item from GAAP Cost of revenue operating expenses:

  • Share-based compensation. Actua excludes share-based compensation expenses and other expenses associated with equity granted to employees and non-employee directors in the cost of revenue category on Actua's statements of operations primarily because they are non-cash expenses that Actua does not consider part of ongoing operating results when assessing the performance of its business, and the exclusion of these expenses facilitates the comparison of results over different time periods and the comparison of Actua’s results with results of other companies.

Adjusted Sales and marketing excludes the following item from GAAP Sales and marketing operating expenses:

  • Share-based compensation. Actua excludes share-based compensation expenses and other expenses associated with equity granted to employees and non-employee directors in the sales and marketing category on Actua's statements of operations primarily because they are non-cash expenses that Actua does not consider part of ongoing operating results when assessing the performance of its business, and the exclusion of these expenses facilitates the comparison of results over different time periods and the comparison of Actua’s results with results of other companies.

Adjusted General and administrative excludes the following item from GAAP General and administrative operating expenses:

  • Share-based compensation. Actua excludes share-based compensation expenses and other expenses associated with equity granted to employees and non-employee directors in the general and administrative category on Actua's statements of operations primarily because they are non-cash expenses that Actua does not consider part of ongoing operating results when assessing the performance of its business, and the exclusion of these expenses facilitates the comparison of results over different time periods and the comparison of Actua’s results with results of other companies.

Adjusted Research and development excludes the following item from GAAP Research and development operating expenses:

  • Share-based compensation. Actua excludes share-based compensation expenses and other expenses associated with equity granted to employees and non-employee directors in the research and development category on Actua's statements of operations primarily because they are non-cash expenses that Actua does not consider part of ongoing operating results when assessing the performance of its business, and the exclusion of these expenses facilitates the comparison of results over different time periods and the comparison of Actua’s results with results of other companies.

Actua believes that the following considerations apply to the non-GAAP financial measures that it presents:

  • Actua’s management uses non-GAAP net income (loss), non-GAAP net income (loss) per diluted share, adjusted EBITDA, adjusted cost of revenue, adjusted sales and marketing, adjusted general and administrative and adjusted research and development in internal reports used by management in monitoring and making decisions regarding Actua’s business, including in monthly financial reports prepared for management and in periodic reports to Actua’s Board of Directors.

  • An important limitation of Actua’s non-GAAP financial measures is that they include acquired business deferred revenues and exclude expenses, some of which may be significant, that are required by GAAP to be recorded.  In addition, non-GAAP financial measures are subject to inherent limitations because they reflect the exercise of judgments by management about which charges to exclude from the non-GAAP financial measures.

To mitigate the limitations associated with non-GAAP financial measures, Actua reconciles its non-GAAP financial measures to the nearest comparable GAAP financial measures and recommends that investors and potential investors do not give undue weight to its non-GAAP financial measures.

 

Investor inquiries:
Karen Greene
Actua
Investor Relations
610.727.6900
IR@actua.com

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