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Section 1: 8-K (REALPAGE, INC. 8-K)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 

FORM 8-K

 
CURRENT REPORT

Pursuant to Section 13 or 15(d)  of
The Securities Exchange Act of 1934

Date of Report  (Date of earliest event reported)
August 2, 2018
 

REALPAGE, INC.
(Exact name of registrant as specified in its charter)


Delaware
001-34846
75-2788861
(State or other jurisdiction of
(Commission
(IRS Employer
incorporation)
File Number)
Identification No.)
 

2201 Lakeside Blvd. 
75082 
Richardson, Texas   
(Address of principal executive offices)  (Zip Code) 

(972) 820-3000
(Registrant telephone number, including area code)


(Former name or former address, if changed since last report)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
 

 
Item 2.02  Results of Operations and Financial Condition. 
 
On August 2, 2018, RealPage, Inc. (the “Company”) issued a press release reporting its financial results for its fiscal quarter ended June 30, 2018. A copy of the press release is furnished herewith as Exhibit 99.1.

 
Item 7.01  Regulation FD Disclosure. 
 
IR Fact Sheet

On August 2, 2018, the Company published an updated IR Fact Sheet on the Investor Relations section of the Company’s website located at http://investor.realpage.com/.  A copy of the IR Fact Sheet is furnished herewith as Exhibit 99.2 and is incorporated herein by reference.

 
Item 9.01  Financial Statements and Exhibits. 
 
(d) Exhibits.
 
Exhibit No.  Description 
   
99.1  RealPage, Inc. Press Release dated August 2, 2018 reporting financial results for its fiscal quarter ended June 30, 2018. 
   
99.2 
 
The information furnished by this Current Report on Form 8-K under Items 2.02 and 7.01 and the Exhibits 99.1 and 99.2 attached hereto shall be deemed furnished and not “filed” for purposes of Section 18 of the Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, and shall not be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
 


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 

    REALPAGE, INC. 
     
     
  By:  /s/ Stephen T. Winn 
    Stephen T. Winn 
    Chief Executive Officer, President and Chairman 
     
     
Date:     August 2, 2018     
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Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit 99.1

RealPage Reports Second Quarter 2018 Financial Results

Exceeds Financial Expectations, Raises Full Year Guidance

RICHARDSON, Texas--(BUSINESS WIRE)--August 2, 2018--RealPage, Inc. (NASDAQ:RP), a leading global provider of software and data analytics to the real estate industry, today announced financial results for the second quarter ended June 30, 2018.

Second Quarter 2018 Financial Highlights

Comments on the News

“Second quarter financial results were strong and underscore continued focus on our ‘North Star’ strategy,” said Steve Winn, Chairman and CEO of RealPage. “We expect to continue to deliver major innovation across all four product families. The pending acquisition of LeaseLabs, the release of unified sign-on and user management capabilities, the release of Kigo Hospitality, and the access to a significant amount of RealPage market and asset level data free of charge, are all derived from an intense focus on innovation. We expect these development initiatives, combined with our M&A program, to drive RealPage towards, and beyond, our 2020 revenue goal of $1 billion.”

“Second quarter financial performance continued to be strong,” said Bryan Hill, CFO and Treasurer of RealPage. “Compared to the prior year second quarter, total revenue accelerated to 34% growth and Adjusted EBITDA margin expanded over 200 basis points. We also remain disciplined with respect to our capital allocation strategy, allocating capital to our pending acquisition of LeaseLabs which we believe will drive compelling returns for shareholders over the long-term. I am proud of the team’s unwavering focus. We are raising our full-year guidance expectations for revenue and profit growth.”


2018 Financial Outlook

As part of its outlook, RealPage includes slightly more than eight months of contribution from its ClickPay acquisition. The company expects the acquisition of LeaseLabs to contribute revenue of approximately $5 million and to contribute immaterially to its 2018 Adjusted EBITDA during the three month period ending December 31, 2018. The completion of the LeaseLabs acquisition remains subject to certain standard conditions, including the completion of regulatory review.

RealPage management expects to achieve the following results during the third quarter ending September 30, 2018:

RealPage management expects to achieve the following results during the calendar year ending December 31, 2018:


Conference Call Information; Presentation Slides

The Company will host a conference call at 5 p.m. ET today to discuss its financial results. Participants are encouraged to listen to the presentation via a live web broadcast and view the earnings presentation at www.realpage.com on the Investor Relations section. In addition, a live dial-in is available domestically at 844-889-4333 and internationally at 412-717-9596. A replay will be available at 877-344-7529 or 412-317-0088, passcode 10122768, until August 9, 2018.

About RealPage

RealPage is a leading global provider of software and data analytics to the real estate industry. Clients use our platform to improve operating performance and increase capital returns. Founded in 1998 and headquartered in Richardson, Texas, RealPage currently serves over 12,400 clients worldwide from offices in North America, Europe and Asia. For more information about the company, visit https://www.realpage.com.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains “forward-looking” statements relating to RealPage, Inc.’s strategy, goals and focus, expected, possible or assumed future results including its financial outlook for the third quarter ending September 30, 2018 and calendar year ending December 31, 2018, that we expect to deliver major innovation across all four product families, that development initiatives, combined with the M&A program, are expected to drive RealPage towards, and beyond, our 2020 revenue goal of $1 billion, that the allocation of capital to acquire LeaseLabs will drive compelling returns for shareholders over the long term, and our expectations regarding the contributions to RealPage revenue and Adjusted EBITDA by LeaseLabs during the fourth quarter of 2018. These forward-looking statements are based on management's beliefs and assumptions and on information currently available to management. Forward-looking statements include all statements that are not historical facts and may be identified by terms such as “expects,” “believes,” “plans,” or similar expressions and the negatives of those terms. Those forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. The company may be required to revise its results contained herein upon finalizing its review of quarterly and full-year results and completion of the annual audit, which could cause or contribute to such differences. Additional factors that could cause or contribute to such differences include, but are not limited to, the following: (a) the possibility that general economic conditions, including leasing velocity or uncertainty, could cause information technology spending, particularly in the rental housing industry, to be reduced or purchasing decisions to be delayed; (b) an increase in insurance claims; (c) an increase in client cancellations; (d) the inability to increase sales to existing clients and to attract new clients; (e) RealPage’s failure to integrate acquired businesses and any recent or future acquisitions successfully or to achieve expected synergies, including the recently completed acquisition of ClickPay and pending acquisition of LeaseLabs; (f) the timing and success of new product introductions by RealPage or its competitors; (g) changes in RealPage’s pricing policies or those of its competitors; (h) legal or regulatory proceedings; (i) the inability to achieve revenue growth or to enable margin expansion; (j) changes in RealPage’s estimates with respect to its long-term corporate tax rate or any other impact from the recently enacted Tax Cuts and Jobs Act; and (k) such other risks and uncertainties described more fully in documents filed with or furnished to the Securities and Exchange Commission (“SEC”) by RealPage, including its Annual Report on Form 10-K previously filed with the SEC on March 1, 2018 and its Quarterly Report on Form 10-Q previously filed with the SEC on May 10, 2018. All information provided in this release is as of the date hereof and RealPage undertakes no duty to update this information except as required by law.


Explanation of Non-GAAP Financial Measures

The company reports its financial results in accordance with accounting principles generally accepted in the United States of America, or GAAP. However, the company believes that, in order to properly understand its short-term and long-term financial, operational and strategic trends, it may be helpful for investors to exclude certain non-cash or non-recurring items when used as a supplement to financial performance measures in accordance with GAAP. These non-cash or non-recurring items result from facts and circumstances that vary in both frequency and impact on continuing operations. The company also uses results of operations excluding such items to evaluate the operating performance of RealPage and compare it against prior periods, make operating decisions, determine executive compensation, and serve as a basis for long-term strategic planning. These non-GAAP financial measures provide the company with additional means to understand and evaluate the operating results and trends in its ongoing business by eliminating certain non-cash expenses and other items that RealPage believes might otherwise make comparisons of its ongoing business with prior periods more difficult, obscure trends in ongoing operations, reduce management’s ability to make useful forecasts, or obscure the ability to evaluate the effectiveness of certain business strategies and management incentive structures. In addition, the company also believes that investors and financial analysts find this information to be helpful in analyzing the company’s financial and operational performance and comparing this performance to the company’s peers and competitors.

The company defines “Non-GAAP Total Revenue” as total revenue plus acquisition-related and other deferred revenue adjustments. The company believes it is useful to include deferred revenue written down for GAAP purposes under purchase accounting rules and revenue deferred due to a lack of historical experience determining the settlement of the contractual obligation in order to appropriately measure the underlying performance of its business operations in the period of activity and associated expense. Further, the company believes this measure is useful to investors as a way to evaluate the company’s ongoing performance because it provides a more accurate depiction of on demand revenue arising from our strategic acquisitions.


The company defines “Adjusted Gross Profit” as gross profit, plus (1) acquisition-related and other deferred revenue adjustments, (2) depreciation, (3) amortization of intangible assets, and (4) stock-based expense. The company believes that investors and financial analysts find these non-GAAP financial measures to be useful in analyzing the company’s financial and operational performance, comparing this performance to the company’s peers and competitors, and understanding the company’s ability to generate income from ongoing business operations.

The company defines “Adjusted EBITDA” as net income (loss), plus (1) acquisition-related and other deferred revenue adjustments, (2) depreciation, asset impairment, and the loss on disposal of assets, (3) amortization of intangible assets, (4) acquisition-related expense, (5) costs related to the Hart-Scott-Rodino review process, (6) interest expense, net, (7) income tax (benefit) expense, and (8) stock-based expense. The company believes that investors and financial analysts find these non-GAAP financial measures to be useful in analyzing the company’s financial and operational performance, comparing this performance to the company’s peers and competitors, and understanding the company’s ability to generate income from ongoing business operations.

The company defines “Non-GAAP Product Development Expense” as product development expense, excluding stock-based expense. The company believes that investors and financial analysts find these non-GAAP financial measures to be useful in analyzing the company’s financial and operational performance, comparing this performance to the company’s peers and competitors, and understanding the company’s ongoing expenditures related to product innovation.

The company defines “Non-GAAP Sales and Marketing Expense” as sales and marketing expense, excluding (1) amortization of intangible assets, and (2) stock-based expense. The company believes that investors and financial analysts find these non-GAAP financial measures to be useful in analyzing the company’s financial and operational performance, comparing this performance to the company’s peers and competitors, and understanding the company’s ongoing expenditures related to its sales and marketing strategies.

The company defines “Non-GAAP General and Administrative Expense” as general and administrative expense, excluding (1) loss on disposal of assets, (2) acquisition-related expense, (3) costs related to the Hart-Scott-Rodino review process, and (4) stock-based expense. The company believes that investors and financial analysts find these non-GAAP financial measures to be useful in analyzing the company’s financial and operational performance, comparing this performance to the company’s peers and competitors, and understanding the company’s underlying expense structure to support corporate activities and processes.


The company defines “Non-GAAP Operating Expense” as operating expense, excluding (1) asset impairment and loss on disposal of assets, (2) amortization of intangible assets, (3) acquisition-related expense, (4) costs related to the Hart-Scott-Rodino review process, and (5) stock-based expense. The company believes that investors and financial analysts find these non-GAAP financial measures to be useful in analyzing the company’s financial and operational performance, comparing this performance to the company’s peers and competitors, and understanding the company’s underlying expense structure to support ongoing operations.

The company defines “Non-GAAP Operating Income” as operating income, plus (1) acquisition-related and other deferred revenue adjustments, (2) asset impairment and loss on disposal of assets, (3) amortization of intangible assets, (4) acquisition-related expense, (5) costs related to the Hart-Scott-Rodino review process, and (6) stock-based expense. The company believes that investors and financial analysts find these non-GAAP financial measures to be useful in analyzing the company’s financial and operational performance, comparing this performance to the company’s peers and competitors, and understanding the company’s ability to generate income from ongoing business operations.

The company defines “Non-GAAP Net Income” as net income (loss), plus (1) income tax (benefit) expense, (2) acquisition-related and other deferred revenue adjustments, (3) asset impairment and loss on disposal of assets, (4) amortization of intangible assets, (5) acquisition-related expense, (6) costs related to the Hart-Scott-Rodino review process, (7) amortization of convertible note discount, (8) stock-based expense, and (9) provision for income tax expense based on an assumed rate in order to approximate the company’s long-term effective corporate tax rate; and the company defines “Non-GAAP Net Income per Diluted Share” as Non-GAAP Net Income divided by Non-GAAP diluted weighted average shares outstanding. The company believes that investors and financial analysts find these non-GAAP financial measures to be useful in analyzing the company’s financial and operational performance, comparing this performance to the company’s peers and competitors, and understanding the company’s ability to generate income from ongoing business operations.

The company defines “Non-GAAP On Demand Revenue” as total on demand revenue plus acquisition-related and other deferred revenue adjustments. The company believes it is useful to include deferred revenue written down for GAAP purposes under purchase accounting rules and revenue deferred due to a lack of historical experience determining the settlement of the contractual obligation in order to appropriately measure the underlying performance of the company’s business operations in the period of activity and associated expense. Further, the company believes that investors and financial analysts find this measure to be useful in evaluating the company’s ongoing performance because it provides a more accurate depiction of on demand revenue arising from our strategic acquisitions.


The company defines “Ending On Demand Units” as the number of rental housing units managed by our clients with one or more of our on demand software solutions at the end of the period. We use ending on demand units to measure the success of our strategy of increasing the number of rental housing units managed with our on demand software solutions. Property unit counts are provided to us by our customers as new sales orders are processed. Property unit counts may be adjusted periodically as information related to our clients’ properties is updated or supplemented, which could result in adjustments to the number of units previously reported.

The company defines “Average On Demand Units” as the average of the beginning and ending on demand units for each quarter in the period presented. The company’s management monitors this metric to measure its success in increasing the number of on demand software solutions utilized by our clients to manage their rental housing units, our overall revenue, and profitability.

The company defines “ACV,” or Annual Client Value, as management’s estimate of the annual value of the company’s on demand revenue contracts. The company’s management monitors this metric to measure its success in increasing the number of on demand units, and the amount of software solutions utilized by its clients to manage their rental housing units.

The company defines “RPU,” or Revenue Per Unit, as ACV divided by ending on demand units. The company monitors this metric to measure its success in increasing the penetration of on demand software solutions utilized by its clients to manage their rental housing units.


The company excludes or adjusts each of the items identified below from the applicable non-GAAP financial measure referenced above for the reasons set forth with respect to each excluded item:


 
Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)
       
 
June 30, December 31,
2018 2017
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 373,174 $ 69,343
Restricted cash 102,518 96,002

Accounts receivable, less allowance for doubtful accounts of $8,442 and $3,951 at June 30, 2018 and December 31, 2017, respectively

112,484 124,505
Prepaid expenses 15,493 12,107
Other current assets   15,812     6,622  
Total current assets 619,481 308,579
Property, equipment, and software, net 145,340 148,428
Goodwill 918,785 751,052
Identified intangible assets, net 276,983 252,337
Deferred tax assets, net 42,607 44,887
Other assets   20,710     11,010  
Total assets $ 2,023,906   $ 1,516,293  
 
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable $ 28,394 $ 26,733
Accrued expenses and other current liabilities 97,484 79,379
Current portion of deferred revenue 111,238 116,622
Current portion of term loans 16,133 14,116
Convertible notes, net 286,908 -
Customer deposits held in restricted accounts   102,512     96,057  
Total current liabilities 642,669 332,907
Deferred revenue 5,181 5,538
Revolving facility - 50,000
Term loans, net 295,382 303,261
Convertible notes, net - 281,199
Other long-term liabilities   41,299     41,513  
Total liabilities 984,531 1,014,418
Stockholders’ equity:

Common stock, $0.001 par value: 250,000,000 and 125,000,000 shares authorized, 96,485,983 and 87,153,085 shares issued and 93,959,957 and 83,180,401 shares outstanding at June 30, 2018 and December 31, 2017, respectively

96 87
Additional paid-in capital 1,159,831 637,851
Treasury stock, at cost: 2,526,026 and 3,972,684 shares at June 30, 2018 and December 31, 2017, respectively (67,360 ) (61,260 )
Accumulated deficit (53,445 ) (75,046 )
Accumulated other comprehensive income   253     243  
Total stockholders’ equity   1,039,375     501,875  
Total liabilities and stockholders’ equity $ 2,023,906   $ 1,516,293  
 
 

 
 
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
               
Three Months Ended Six Months Ended
June 30, June 30,
2018 2017 2018 2017
Revenue:
On demand $ 206,945 $ 154,727 $ 400,245 $ 300,940
Professional and other   9,307     6,579     17,308     13,285  
Total revenue 216,252 161,306 417,553 314,225
Cost of revenue(1)   85,741     67,544     162,401     130,586  
Gross profit   130,511     93,762     255,152     183,639  
Operating expenses:
Product development(1) 30,771 21,290 59,811 41,677
Sales and marketing(1) 54,488 39,235 104,729 74,382
General and administrative(1)   28,444     27,370     55,534     51,621  
Total operating expenses   113,703     87,895     220,074     167,680  
Operating income 16,808 5,867 35,078 15,959
Interest expense and other, net   (8,518 )   (2,786 )   (16,188 )   (3,872 )
Income before income taxes   8,290     3,081     18,890     12,087  
Income tax benefit   (189 )   (3,132 )   (490 )   (2,321 )
Net income $ 8,479   $ 6,213   $ 19,380   $ 14,408  
 
Net income per share attributable to common stockholders:
Basic $ 0.10 $ 0.08 $ 0.23 $ 0.18
Diluted $ 0.09 $ 0.08 $ 0.22 $ 0.18
Weighted average shares used in computing net income per share attributable to common stockholders:
Basic 85,124 79,018 83,156 78,642
Diluted 90,005 81,925 87,332 81,644
                         
 
(1) Includes stock-based expense as follows:
Three Months Ended Six Months Ended
June 30, June 30,
2018 2017 2018 2017
Cost of revenue $ 1,168 $ 1,050 $ 2,003 $ 1,903
Product development 2,645 2,454 4,808 4,333
Sales and marketing 4,470 4,266 8,011 7,394
General and administrative   5,412     6,106     9,191     10,338  
$ 13,695   $ 13,876   $ 24,013   $ 23,968  
 
 

 
 
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
               
Three Months Ended Six Months Ended
June 30, June 30,
2018 2017 2018 2017
Cash flows from operating activities:
Net income $ 8,479 $ 6,213 $ 19,380 $ 14,408
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 25,129 15,093 48,389 29,533
Amortization of debt discount and issuance costs 3,109 1,335 6,121 1,424
Deferred taxes (1,819 ) (3,331 ) (2,973 ) (3,088 )
Stock-based expense 13,695 13,876 24,013 23,968
Loss on disposal and impairment of other long-lived assets 156 63 1,098 87
Acquisition-related consideration 722 903 1,124 1,024
Customer deposits (11,135 ) 2,666 5,142 15,389
Other changes in assets and liabilities, net of assets acquired and liabilities assumed in business combinations   (6,887 )   11,851     (74 )   12,907  
Net cash provided by operating activities   31,449     48,669     102,220     95,652  
 
Cash flows from investing activities:
Purchases of property, equipment, and software (9,833 ) (17,204 ) (22,493 ) (27,129 )
Acquisition of businesses, net of cash and restricted cash acquired (137,475 ) (57,138 ) (137,475 ) (123,241 )
Purchase of other investment   -     -     (1,800 )   -  
Net cash used in investing activities   (147,308 )   (74,342 )   (161,768 )   (150,370 )
 
Cash flows from financing activities:
Payments on and proceeds from debt, net (54,182 ) 303,681 (57,399 ) 302,292
Payments of acquisition-related consideration (6,595 ) (724 ) (7,371 ) (7,185 )
Proceeds from public offering, net of underwriters’ discount and offering costs 441,799 - 441,799 -
Proceeds from exercise of stock options 2,701 5,224 7,739 13,151
Purchase of treasury stock related to stock-based compensation   (6,310 )   (7,432 )   (14,760 )   (11,008 )
Net cash provided by financing activities   377,413     300,749     370,008     297,250  
Net increase in cash, cash equivalents and restricted cash 261,554 275,076 310,460 242,532
Effect of exchange rate on cash 14 48 (113 ) (2 )
 
Cash, cash equivalents and restricted cash:
Beginning of period   214,124     155,946     165,345     188,540  
End of period $ 475,692   $ 431,070   $ 475,692   $ 431,070  
 
 

 
 
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO
COMPARABLE GAAP MEASURES
(unaudited, in thousands, except per share data)
               

The following is a reconciliation of the non-GAAP financial measures used by RealPage to describe its financial results determined in accordance with accounting principles generally accepted in the United States of America ("GAAP"). An explanation of these measures is also included under the heading “Explanation of Non-GAAP Financial Measures.”

 

While the company believes that these non-GAAP financial measures provide useful supplemental information to investors regarding the underlying performance of our business operations, investors are reminded to consider these non-GAAP measures in addition to, and not as a substitute for, financial performance measures prepared in accordance with GAAP. In addition, it should be noted that these non-GAAP financial measures may be different from non-GAAP measures used by other companies, and the company may utilize other measures to illustrate performance in the future. Non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP.

 

Non-GAAP Total Revenue

Set forth below is a presentation of the company’s “Non-GAAP total revenue.” Please reference the “Explanation of Non-GAAP Financial Measures” section.
Three Months Ended Six Months Ended
June 30, June 30,
2018 2017 2018 2017
Revenue (GAAP) $ 216,252 $ 161,306 $ 417,553 $ 314,225
Acquisition-related and other deferred revenue   103     945     416     1,650  
Non-GAAP total revenue $ 216,355   $ 162,251   $ 417,969   $ 315,875  
 

Adjusted Gross Profit

Set forth below is a presentation of the company’s "Adjusted Gross Profit." Please reference the "Explanation of Non-GAAP Financial Measures" section.
Three Months Ended Six Months Ended
June 30, June 30,
2018 2017 2018 2017
Gross profit (GAAP) $ 130,511 $ 93,762 $ 255,152 $ 183,639
Acquisition-related and other deferred revenue 103 945 416 1,650
Depreciation 3,099 3,063 6,033 5,946
Amortization of intangible assets 3,799 3,691 7,622 7,380
Stock-based expense   1,168     1,050     2,003     1,903  
Adjusted gross profit $ 138,680   $ 102,511   $ 271,226   $ 200,518  
 

Adjusted EBITDA

Set forth below is a presentation of the company’s "Adjusted EBITDA." Please reference the "Explanation of Non-GAAP Financial Measures" section.
Three Months Ended Six Months Ended
June 30, June 30,
2018 2017 2018 2017
Net income (GAAP) $ 8,479 $ 6,213 $ 19,380 $ 14,408
Acquisition-related and other deferred revenue 103 945 416 1,650
Depreciation, asset impairment, and loss on disposal of assets 7,662 6,929 15,480 13,604
Amortization of intangible assets 17,623 8,227 34,007 16,016
Acquisition-related expense 1,168 1,354 2,175 2,564
Costs related to the Hart-Scott-Rodino review process - 2,228 - 2,709
Interest expense, net 8,584 2,804 16,305 3,924
Income tax benefit (189 ) (3,132 ) (490 ) (2,321 )
Stock-based expense   13,695     13,876     24,013     23,968  
Adjusted EBITDA $ 57,125   $ 39,444   $ 111,286   $ 76,522  
 

Non-GAAP Product Development Expense

Set forth below is a presentation of the company’s "Non-GAAP Product Development Expense." Please reference the "Explanation of Non-GAAP Financial Measures" section.
Three Months Ended Six Months Ended
June 30, June 30,
2018 2017 2018 2017
Product development expense (GAAP) $ 30,771 $ 21,290 $ 59,811 $ 41,677
Less: Stock-based expense   2,645     2,454     4,808     4,333  
Non-GAAP product development expense $ 28,126   $ 18,836   $ 55,003   $ 37,344  
 
 

 
               

Non-GAAP Sales and Marketing Expense

Set forth below is a presentation of the company’s "Non-GAAP Sales and Marketing Expense." Please reference the "Explanation of Non-GAAP Financial Measures" section.
Three Months Ended Six Months Ended
June 30, June 30,
2018 2017 2018 2017
Sales and marketing expense (GAAP) $ 54,488 $ 39,235 $ 104,729 $ 74,382
Less: Amortization of intangible assets 13,824 4,536 26,385 8,636
Stock-based expense   4,470     4,266     8,011     7,394  
Non-GAAP sales and marketing expense $ 36,194   $ 30,433   $ 70,333   $ 58,352  
 

Non-GAAP General and Administrative Expense

Set forth below is a presentation of the company’s "Non-GAAP General and Administrative Expense." Please reference the "Explanation of Non-GAAP Financial Measures" section.
Three Months Ended Six Months Ended
June 30, June 30,
2018 2017 2018 2017
General and administrative expense (GAAP) $ 28,444 $ 27,370 $ 55,534 $ 51,621
Less: Loss on disposal of assets 156 63 1,098 87
Acquisition-related expense 1,168 1,354 2,175 2,564
Costs related to the Hart-Scott-Rodino review process - 2,228 - 2,709
Stock-based expense   5,412     6,106     9,191     10,338  
Non-GAAP general and administrative expense $ 21,708   $ 17,619   $ 43,070   $ 35,923  
 

Non-GAAP Operating Expense

Set forth below is a presentation of the company’s "Non-GAAP Operating Expense." Please reference the "Explanation of Non-GAAP Financial Measures" section.
Three Months Ended Six Months Ended
June 30, June 30,
2018 2017 2018 2017

Operating expense (GAAP)

$ 113,703 $ 87,895 $ 220,074 $ 167,680
Less: Asset impairment and loss on disposal of assets 156 63 1,098 87
Amortization of intangible assets 13,824 4,536 26,385 8,636
Acquisition-related expense 1,168 1,354 2,175 2,564
Costs related to the Hart-Scott-Rodino review process - 2,228 - 2,709
Stock-based expense   12,527     12,826     22,010     22,065  
Non-GAAP operating expense $ 86,028   $ 66,888   $ 168,406   $ 131,619  
 
 
 

Non-GAAP Operating Income

Set forth below is a presentation of the company’s "Non-GAAP Operating Income." Please reference the "Explanation of Non-GAAP Financial Measures" section.
Three Months Ended Six Months Ended
June 30, June 30,
2018 2017 2018 2017
Operating income (GAAP) $ 16,808 $ 5,867 $ 35,078 $ 15,959
Acquisition-related and other deferred revenue 103 945 416 1,650
Asset impairment and loss on disposal of assets 156 63 1,098 87
Amortization of intangible assets 17,623 8,227 34,007 16,016
Acquisition-related expense 1,168 1,354 2,175 2,564
Costs related to the Hart-Scott-Rodino review process - 2,228 - 2,709
Stock-based expense   13,695     13,876     24,013     23,968  
Non-GAAP operating income $ 49,553   $ 32,560   $ 96,787   $ 62,953  
 

Non-GAAP Net Income

Set forth below is a presentation of the company’s "Non-GAAP Net Income" and "Non-GAAP Net Income per Diluted Share." Please reference the "Explanation of Non-GAAP Financial Measures" section.
Three Months Ended Six Months Ended
June 30, June 30,
2018 2017 2018 2017
Net income (GAAP) $ 8,479 $ 6,213 $ 19,380 $ 14,408
Income tax benefit   (189 )   (3,132 )   (490 )   (2,321 )
Income before income taxes 8,290 3,081 18,890 12,087
 
Acquisition-related and other deferred revenue 103 945 416 1,650
Asset impairment and loss on disposal of assets 156 63 1,098 87
Amortization of intangible assets 17,623 8,227 34,007 16,016
Acquisition-related expense 1,168 1,354 2,175 2,564
Costs related to the Hart-Scott-Rodino review process - 2,228 - 2,709
Amortization of convertible note discount 2,562 1,052 5,086 1,052
Stock-based expense   13,695     13,876     24,013     23,968  
Non-GAAP income before income taxes 43,597 30,826 85,685 60,133
Assumed rate for income tax expense (1) 26.0 % 40.0 % 26.0 % 40.0 %
Assumed provision for non-GAAP income tax expense   11,335     12,330     22,278     24,053  
Non-GAAP net income $ 32,262   $ 18,496   $ 63,407   $ 36,080  
 
Net income per diluted share $ 0.09 $ 0.08 $ 0.22 $ 0.18
Non-GAAP net income per diluted share $ 0.37 $ 0.23 $ 0.74 $ 0.44
 
Weighted average outstanding shares - basic 85,124 79,018 83,156 78,642
Non-GAAP adjusted diluted weighted average shares outstanding:
Weighted average outstanding shares - diluted 90,005 81,925 87,332 81,644
Dilution offset from convertible note hedge transactions   (2,116 )   -     (1,720 )   -  
Non-GAAP diluted weighted average shares outstanding (2)   87,889     81,925     85,612     81,644  
 
 

 
               

Non-GAAP On Demand Revenue

Set forth below is a presentation of the company’s "Non-GAAP On Demand Revenue." Please reference the "Explanation of Non-GAAP Financial Measures" section.
Three Months Ended Six Months Ended
June 30, June 30,
2018 2017 2018 2017
On demand revenue (GAAP) $ 206,945 $ 154,727 $ 400,245 $ 300,940
Acquisition-related and other deferred revenue   103     945     416     1,650  
Non-GAAP on demand revenue $ 207,048   $ 155,672   $ 400,661   $ 302,590  
 
 
 

Ending On Demand Units, Average On Demand Units, RPU, and ACV

Set forth below is a presentation of the company’s "Ending On Demand Units," "Average On Demand Units," "ACV," and "RPU." Please reference the "Explanation of Non-GAAP Financial Measures" section.
Three Months Ended Six Months Ended
June 30, June 30,
2018 2017 2018 2017
Ending on demand units 15,531 11,485 15,531 11,485
Average on demand units 14,352 11,298 13,720 11,174
 
ACV $ 837,897 $ 649,017
RPU $ 53.95 $ 56.51
 

Non-GAAP Total Revenue Guidance

Set forth below is a presentation of the company’s "Non-GAAP total revenue" guidance for the three months ending September 30, 2018, and the twelve months ending December 31, 2018. Please reference the "Explanation of Non-GAAP Financial Measures" section.

Guidance Range for the Three Months
Ending

Guidance Range for the Twelve Months
Ending

September 30, 2018 December 31, 2018
Low (3) High (3) Low (3) High (3)
Revenue (GAAP) $ 219,870 $ 221,920 $ 866,350 $ 872,450
Acquisition-related and other deferred revenue   130     80     650     550  
Non-GAAP total revenue $ 220,000   $ 222,000   $ 867,000   $ 873,000  
 

Non-GAAP Net Income Guidance

Set forth below is a presentation of the company’s "Non-GAAP net income" and "Non-GAAP net income per diluted share" guidance for the three months ending September 30, 2018, and the twelve months ending December 31, 2018. Please reference the "Explanation of Non-GAAP Financial Measures" section.

Guidance Range for the Three Months
Ending

Guidance Range for the Twelve Months
Ending

September 30, 2018 December 31, 2018
Low (3) High (3) Low (3) High (3)
Non-GAAP net income:
Net income (GAAP) $ 6,920 $ 8,760 $ 34,245 $ 38,505
Income tax expense   1,790     2,800     2,980     5,320  
Income before income taxes 8,710 11,560 37,225 43,825
 
Acquisition-related and other deferred revenue 130 80 650 550
Asset impairment and loss on disposal of assets - - 1,100 1,100
Amortization of intangible assets 17,660 17,460 70,200 69,800
Acquisition-related expense 500 200 2,975 2,475
Amortization of convertible note discount 2,600 2,600 10,300 10,300
Stock-based expense   14,200     14,000     52,450     52,050  
Non-GAAP income before income taxes 43,800 45,900 174,900 180,100
Expected effective tax rate (1) 26.0 % 26.0 % 26.0 % 26.0 %
Assumed provision for income tax expense   11,388     11,934     45,474     46,826  
Non-GAAP net income $ 32,412   $ 33,966   $ 129,426   $ 133,274  
 
Net income per diluted share $ 0.07 $ 0.09 $ 0.37 $ 0.42
Non-GAAP net income per diluted share $ 0.34 $ 0.36 $ 1.44 $ 1.48
 
Non-GAAP adjusted diluted weighted average shares outstanding:
Weighted average outstanding shares - diluted 96,575 96,575 92,265 92,265
Dilution offset from convertible note hedge transactions   (2,475 )   (2,475 )   (2,165 )   (2,165 )
Non-GAAP diluted weighted average shares outstanding (2)   94,100     94,100     90,100     90,100  
 
 

 

Adjusted EBITDA Guidance

               
Set forth below is a presentation of the company’s "Adjusted EBITDA" guidance for the three months ending September 30, 2018, and the twelve months ending December 31, 2018. Please reference the "Explanation of Non-GAAP Financial Measures" section.
 

Guidance Range for the
Three Months Ending

Guidance Range for the
Twelve Months Ending

September 30, 2018 December 31, 2018
Low (3) High (3) Low (3) High (3)
Adjusted EBITDA:
Net income (GAAP) $ 6,920 $ 8,760 $ 34,245 $ 38,505
Acquisition-related and other deferred revenue 130 80 650 550
Depreciation, asset impairment, and loss on disposal of assets 7,700 7,500 31,100 30,700
Amortization of intangible assets 17,660 17,460 70,200 69,800
Acquisition-related expense 500 200 2,975 2,475
Interest expense, net 7,600 7,200 31,400 30,600
Income tax expense 1,790 2,800 2,980 5,320
Stock-based expense   14,200   14,000   52,450   52,050
Adjusted EBITDA $ 56,500 $ 58,000 $ 226,000 $ 230,000
                             
 
(1) A 26.0% tax rate is assumed in order to approximate the Company's long-term effective corporate tax rate. Please reference the “Explanation of Non-GAAP Financial Measures” section.
 
(2) It is the current intent of the Company to settle conversions of the Convertible Notes through combination settlement, which involves repayment of the principal portion in cash and any excess of the conversion value over the principal amount in shares of our common stock. We exclude these shares that are issuable upon conversions of our convertible notes because we expect that the dilution from such shares will be offset by the convertible note hedge transactions entered into in May 2017 in connection with the issuance of the convertible notes.
 
(3) Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. The company may be required to revise its results upon finalizing its review of quarterly and full year results, which could cause or contribute to such differences. All information provided in this release is as of the date hereof and RealPage, Inc. undertakes no duty to update this information except as required by law. See additional discussion under "Cautionary Statement Regarding Forward-Looking Statements" above.

CONTACT:
RealPage, Inc.
Investor Relations
Rhett Butler, 972-820-3773
rhett.butler@realpage.com

(Back To Top)

Section 3: EX-99.2 (EXHIBIT 99.2)

Exhibit 99.2
 
 
RealPage, Inc.
 
IR Fact Sheet (as of 08/02/2018)
 
                                                                               
*Please read in conjunction with the Company's 10-Q previously filed with the Securities and Exchange Commission on May 10, 2018 as well as the "Explanation of Non-GAAP Financial Measures" contained within the Company's earnings press release for the quarter ended June 30, 2018.
 
                                                                               
   
FY 2015
     
Q1 2016
     
Q2 2016
     
Q3 2016
     
Q4 2016
   
FY 2016
     
Q1 2017
     
Q2 2017
     
Q3 2017
     
Q4 2017
   
FY 2017
     
Q1 2018
     
Q2 2018
 
Revenue ($000's)
                                                                                                 
Total GAAP Revenue
 
$
468,520
   
$
128,383
   
$
142,719
   
$
147,955
   
$
149,071
   
$
568,128
   
$
152,919
   
$
161,306
   
$
169,058
   
$
187,680
   
$
670,963
   
$
201,301
   
$
216,252
 
Growth %
   
16
%
   
16
%
   
24
%
   
22
%
   
22
%
   
21
%
   
19
%
   
13
%
   
14
%
   
26
%
   
18
%
   
32
%
   
34
%
                                                                                                         
Acquisition-related and other deferred revenue
   
(2,157
)
   
(343
)
   
(258
)
   
(161
)
   
(187
)
   
(949
)
   
705
     
945
     
698
     
710
     
3,058
     
313
     
103
 
Total Non-GAAP Revenue
 
$
466,363
   
$
128,040
   
$
142,461
   
$
147,794
   
$
148,884
   
$
567,179
   
$
153,624
   
$
162,251
   
$
169,756
   
$
188,390
   
$
674,021
   
$
201,614
   
$
216,355
 
Growth %
   
15
%
   
16
%
   
25
%
   
22
%
   
23
%
   
22
%
   
20
%
   
14
%
   
15
%
   
27
%
   
19
%
   
31
%
   
33
%
                                                                                                         
GAAP On Demand Revenue
 
$
450,962
   
$
123,411
   
$
136,610
   
$
140,883
   
$
141,627
   
$
542,531
   
$
146,213
   
$
154,727
   
$
161,578
   
$
180,104
   
$
642,622
   
$
193,300
   
$
206,945
 
Growth %
   
15
%
   
16
%
   
23
%
   
21
%
   
21
%
   
20
%
   
18
%
   
13
%
   
15
%
   
27
%
   
18
%
   
32
%
   
34
%
                                                                                                         
Acquisition-related and other deferred revenue
   
(2,157
)
   
(343
)
   
(258
)
   
(161
)
   
(187
)
   
(949
)
   
705
     
945
     
698
     
710
     
3,058
     
313
     
103
 
Non-GAAP On Demand Revenue
 
$
448,805
   
$
123,068
   
$
136,352
   
$
140,722
   
$
141,440
   
$
541,582
   
$
146,918
   
$
155,672
   
$
162,276
   
$
180,814
   
$
645,680
   
$
193,613
   
$
207,048
 
Growth %
   
15
%
   
16
%
   
24
%
   
21
%
   
21
%
   
21
%
   
19
%
   
14
%
   
15
%
   
28
%
   
19
%
   
32
%
   
33
%
                                                                                                         
Professional and Other
 
$
17,558
   
$
4,972
   
$
6,109
   
$
7,072
   
$
7,444
   
$
25,597
   
$
6,706
   
$
6,579
   
$
7,480
   
$
7,576
   
$
28,341
   
$
8,001
   
$
9,307
 
                                                                                                         
Expenses ($000's)
                                                                                                       
Cost of Revenue
                                                                                                       
GAAP View
 
$
198,613
   
$
54,748
   
$
62,078
   
$
64,111
   
$
61,364
   
$
242,301
   
$
63,042
   
$
67,544
   
$
69,348
   
$
73,513
   
$
273,447
   
$
76,660
   
$
85,741
 
Stock-based expense
   
(4,046
)
   
(751
)
   
(826
)
   
(929
)
   
(804
)
   
(3,310
)
   
(853
)
   
(1,050
)
   
(1,040
)
   
(899
)
   
(3,842
)
   
(835
)
   
(1,168
)
Amortization of intangible assets
   
(14,213
)
   
(4,165
)
   
(4,141
)
   
(4,296
)
   
(4,159
)
   
(16,761
)
   
(3,689
)
   
(3,691
)
   
(3,554
)
   
(4,378
)
   
(15,312
)
   
(3,823
)
   
(3,799
)
Headquarters relocation costs
   
-
     
(584
)
   
(679
)
   
(760
)
   
-
     
(2,023
)
   
-
     
-
     
-
     
-
     
-
     
-
     
-
 
Non-GAAP View
 
$
180,354
   
$
49,248
   
$
56,432
   
$
58,126
   
$
56,401
   
$
220,207
   
$
58,500
   
$
62,803
   
$
64,754
   
$
68,236
   
$
254,293
   
$
72,002
   
$
80,774
 
Depreciation
   
(9,802
)
   
(2,692
)
   
(3,054
)
   
(2,834
)
   
(2,825
)
   
(11,405
)
   
(2,883
)
   
(3,063
)
   
(2,909
)
   
(2,935
)
   
(11,790
)
   
(2,934
)
   
(3,099
)
Adjusted EBITDA View
 
$
170,552
   
$
46,556
   
$
53,378
   
$
55,292
   
$
53,576
   
$
208,802
   
$
55,617
   
$
59,740
   
$
61,845
   
$
65,301
   
$
242,503
   
$
69,068
   
$
77,675
 
                                                                                                         
Product Development
                                                                                                       
GAAP View
 
$
68,799
   
$
17,272
   
$
18,878
   
$
18,743
   
$
18,714
   
$
73,607
   
$
20,387
   
$
21,290
   
$
21,885
   
$
25,890
   
$
89,452
   
$
29,040
   
$
30,771
 
Stock-based expense
   
(8,585
)
   
(1,449
)
   
(1,897
)
   
(1,900
)
   
(1,825
)
   
(7,071
)
   
(1,879
)
   
(2,454
)
   
(2,098
)
   
(1,992
)
   
(8,423
)
   
(2,163
)
   
(2,645
)
Asset impairment and loss on disposal of assets
   
(1,418
)
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
 
Headquarters relocation costs
   
-
     
(154
)
   
(176
)
   
(211
)
   
-
     
(541
)
   
-
     
-
     
-
     
-
     
-
     
-
     
-
 
Non-GAAP View
 
$
58,796
   
$
15,669
   
$
16,805
   
$
16,632
   
$
16,889
   
$
65,995
   
$
18,508
   
$
18,836
   
$
19,787
   
$
23,898
   
$
81,029
   
$
26,877
   
$
28,126
 
Depreciation
   
(5,279
)
   
(1,200
)
   
(1,462
)
   
(1,502
)
   
(1,572
)
   
(5,736
)
   
(1,530
)
   
(1,561
)
   
(1,698
)
   
(1,819
)
   
(6,608
)
   
(1,338
)
   
(1,557
)
Adjusted EBITDA View
 
$
53,517
   
$
14,469
   
$
15,343
   
$
15,130
   
$
15,317
   
$
60,259
   
$
16,978
   
$
17,275
   
$
18,089
   
$
22,079
   
$
74,421
   
$
25,539
   
$
26,569
 
                                                                                                         
Sales & Marketing
                                                                                                       
GAAP View
 
$
123,108
   
$
32,199
   
$
35,129
   
$
33,860
   
$
34,025
   
$
135,213
   
$
35,147
   
$
39,235
   
$
42,583
   
$
48,114
   
$
165,079
   
$
50,241
   
$
54,488
 
Stock-based expense
   
(12,996
)
   
(2,974
)
   
(3,799
)
   
(1,406
)
   
(3,185
)
   
(11,364
)
   
(3,128
)
   
(4,266
)
   
(3,847
)
   
(3,351
)
   
(14,592
)
   
(3,541
)
   
(4,470
)
Amortization of intangible assets
   
(11,164
)
   
(2,946
)
   
(3,596
)
   
(3,551
)
   
(3,414
)
   
(13,507
)
   
(4,100
)
   
(4,536
)
   
(5,781
)
   
(10,189
)
   
(24,606
)
   
(12,561
)
   
(13,824
)
Headquarters relocation costs
   
-
     
(170
)
   
(184
)
   
(220
)
   
-
     
(574
)
   
-
     
-
     
-
     
-
     
-
     
-
     
-
 
Non-GAAP View
 
$
98,948
   
$
26,109
   
$
27,550
   
$
28,683
   
$
27,426
   
$
109,768
   
$
27,919
   
$
30,433
   
$
32,955
   
$
34,574
   
$
125,881
   
$
34,139
   
$
36,194
 
Depreciation
   
(2,170
)
   
(606
)
   
(615
)
   
(593
)
   
(586
)
   
(2,400
)
   
(588
)
   
(663
)
   
(601
)
   
(635
)
   
(2,487
)
   
(1,228
)
   
(1,366
)
Adjusted EBITDA View
 
$
96,778
   
$
25,503
   
$
26,935
   
$
28,090
   
$
26,840
   
$
107,368
   
$
27,331
   
$
29,770
   
$
32,354
   
$
33,939
   
$
123,394
   
$
32,911
   
$
34,828
 
                                                                                                         
General & Administrative
                                                                                                       
GAAP View
 
$
68,814
   
$
18,346
   
$
21,932
   
$
21,677
   
$
23,058
   
$
85,013
   
$
24,251
   
$
27,370
   
$
31,004
   
$
30,350
   
$
112,975
   
$
27,090
   
$
28,444
 
Stock-based expense
   
(12,495
)
   
(3,217
)
   
(4,215
)
   
(4,020
)
   
(3,655
)
   
(15,107
)
   
(4,232
)
   
(6,106
)
   
(4,779
)
   
(3,861
)
   
(18,978
)
   
(3,779
)
   
(5,412
)
Asset impairment and loss on disposal of assets
   
(1,652
)
   
-
     
(85
)
   
(164
)
   
(248
)
   
(497
)
   
(24
)
   
(63
)
   
(385
)
   
(52
)
   
(524
)
   
(942
)
   
(156
)
Acquisition-related income (expense)
   
1,841
     
57
     
9
     
266
     
(695
)
   
(363
)
   
(1,210
)
   
(1,354
)
   
(485
)
   
(2,508
)
   
(5,557
)
   
(1,007
)
   
(1,168
)
Cost related to Hart-Scott-Rodino review process 
     -        -        -        -        -        -        (481      (2,228      (5,993      (2,310      (11,012      -        -  
Headquarters relocation costs
   
-
     
(117
)
   
(135
)
   
(162
)
   
-
     
(414
)
   
-
     
-
     
-
     
-
     
-
     
-
     
-
 
Litigation-related expense
   
(2
)
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
 
Non-GAAP View
 
$
56,506
   
$
15,069
   
$
17,506
   
$
17,597
   
$
18,460
   
$
68,632
   
$
18,304
   
$
17,619
   
$
19,362
   
$
21,619
   
$
76,904
   
$
21,362
   
$
21,708
 
Depreciation
   
(3,263
)
   
(998
)
   
(1,347
)
   
(1,276
)
   
(1,404
)
   
(5,025
)
   
(1,650
)
   
(1,579
)
   
(1,738
)
   
(1,376
)
   
(6,343
)
   
(1,376
)
   
(1,484
)
Other (income) expense
   
82
     
(11
)
   
(16
)
   
(15
)
   
(25
)
   
(67
)
   
(34
)
   
(18
)
   
(136
)
   
(115
)
   
(303
)
   
(51
)
   
(66
)
Adjusted EBITDA View
 
$
53,325
   
$
14,060
   
$
16,143
   
$
16,306
   
$
17,031
   
$
63,540
   
$
16,620
   
$
16,022
   
$
17,488
   
$
20,128
   
$
70,258
   
$
19,935
   
$
20,158
 
                                                                                                         
 
 

 
RealPage, Inc.
 
IR Fact Sheet (as of 08/02/2018)
 
                                                                               
*Please read in conjunction with the Company's 10-K previously filed with the Securities and Exchange Commission on March 1, 2018 as well as the "Explanation of Non-GAAP Financial Measures".
 
                                                                               
   
FY 2015
     
Q1 2016
     
Q2 2016
     
Q3 2016
     
Q4 2016
   
FY 2016
     
Q1 2017
     
Q2 2017
     
Q3 2017
     
Q4 2017
   
FY 2017
     
Q1 2018
     
Q2 2018
 
Profitability ($000's)
                                                                                                 
GAAP Net Income (Loss)
 
$
(9,218
)
 
$
2,996
   
$
2,083
   
$
4,210
   
$
7,361
   
$
16,650
   
$
8,195
   
$
6,213
   
$
6,834
   
$
(20,865
)
 
$
377
   
$
10,901
   
$
8,479
 
Acquisition-related and other deferred revenue
   
(2,157
)
   
(343
)
   
(258
)
   
(161
)
   
(187
)
   
(949
)
   
705
     
945
     
698
     
710
     
3,058
     
313
     
103
 
Depreciation, asset impairment, and loss on disposal of assets
   
44,385
     
5,496
     
6,563
     
7,119
     
6,635
     
25,813
     
6,675
     
6,929
     
7,331
     
6,817
     
27,752
     
7,818
     
7,662
 
Amortization of intangible assets
   
25,377
     
7,111
     
7,737
     
7,847
     
7,573
     
30,268
     
7,789
     
8,227
     
9,335
     
14,567
     
39,918
     
16,384
     
17,623
 
Acquisition-related expense (income)
   
(1,841
)
   
(57
)
   
(9
)
   
(266
)
   
695
     
363
     
1,210
     
1,354
     
485
     
2,508
     
5,557
     
1,007
     
1,168
 
Cost related to Hart-Scott-Rodino review process 
     -       -       -       -       -       -       481       2,228       5,993       2,310       11,012       -       -  
Interest expense, net
   
1,367
     
719
     
1,090
     
1,079
     
937
     
3,825
     
1,120
     
2,804
     
4,813
     
6,335
     
15,072
     
7,721
     
8,584
 
Income tax (benefit) expense
   
(3,846
)
   
2,114
     
1,545
     
3,540
     
3,637
     
10,836
     
811
     
(3,132
)
   
(7,273
)
   
24,458
     
14,864
     
(301
)
   
(189
)
Litigation-related expense
   
2
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
 
Headquarters relocation costs
   
-
     
1,025
     
1,174
     
1,353
     
-
     
3,552
     
-
     
-
     
-
     
-
     
-
     
-
     
-
 
Stock-based expense
   
38,122
     
8,391
     
10,737
     
8,255
     
9,469
     
36,852
     
10,092
     
13,876
     
11,764
     
10,103
     
45,835
     
10,318
     
13,695
 
Adjusted EBITDA
 
$
92,191
   
$
27,452
   
$
30,662
   
$
32,976
   
$
36,120
   
$
127,210
   
$
37,078
   
$
39,444
   
$
39,980
   
$
46,943
   
$
163,445
   
$
54,161
   
$
57,125
 
                                                                                                         
Non-GAAP On Demand Revenue Detail ($000's)
 
Property Management
 
$
137,239
   
$
36,282
   
$
38,467
   
$
39,023
   
$
39,118
   
$
152,890
   
$
40,341
   
$
41,404
   
$
42,175
   
$
43,082
   
$
167,002
   
$
45,319
   
$
46,522
 
% of Total
   
31
%
   
29
%
   
28
%
   
28
%
   
28
%
   
28
%
   
27
%
   
26
%
   
26
%
   
24
%
   
26
%
   
24
%
   
22
%
Y-O-Y growth
   
13
%
   
11
%
   
14
%
   
11
%
   
10
%
   
11
%
   
11
%
   
8
%
   
8
%
   
10
%
   
9
%
   
12
%
   
12
%
                                                                                                         
Resident Services
 
$
146,138
   
$
45,071
   
$
54,613
   
$
58,351
   
$
60,062
   
$
218,097
   
$
60,968
   
$
64,860
   
$
70,527
   
$
75,822
   
$
272,177
   
$
77,175
   
$
85,329
 
% of Total
   
33
%
   
37
%
   
40
%
   
41
%
   
42
%
   
40
%
   
42
%
   
42
%
   
43
%
   
42
%
   
42
%
   
40
%
   
41
%
Y-O-Y growth
   
33
%
   
36
%
   
60
%
   
50
%
   
49
%
   
49
%
   
35
%
   
19
%
   
21
%
   
26
%
   
25
%
   
27
%
   
32
%