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8-K - FORM 8-K - YODLEE INCd33955d8k.htm

Exhibit 99.1

Yodlee Announces Second Quarter 2015 Financial Results

 

    Total revenue of $26.0 million grew 22% year-over-year

 

    Subscription revenue of $22.6 million grew 24% year-over-year

 

    Adjusted EBITDA of $1.5 million for the second quarter

Redwood City, CA – August 10, 2015 – Yodlee, Inc. (Nasdaq:YDLE), a leading cloud-based financial platform powering dynamic innovation in digital financial services, today announced its second quarter 2015 results for the period ended June 30, 2015.

Please refer to today’s announcement that the Boards of Directors of Envestnet and Yodlee have unanimously approved a definitive agreement under which Envestnet will acquire all of the shares of Yodlee in a cash and stock transaction valued at $18.88 per share, or approximately $660 million on a fully-diluted equity value basis. As Yodlee has approximately $70 million in cash and cash equivalents, the transaction reflects an enterprise value of approximately $590 million. For more on the agreement visit www.yodlee.com in the Investor Relations section.

“We had another solid quarter with recurring revenue growing at 24% and we posted a small profit. We continue to have strong momentum across all three of our channels including Financial Institutions, Yodlee Interactive and data analytics, adding 2.3 million users in the first six months of the year,” said Anil Arora, Chief Executive Officer of Yodlee. “We were thrilled to announce our agreement to merge with Envestnet as we believe this transaction will transform the financial services industry by bringing two disruptive innovators together. The union of Yodlee and Envestnet will create a company uniquely positioned to improve and simplify the financial lives of billions of consumers and small business owners around the world.”

Given today’s transaction announcement, Yodlee will not be hosting a conference call to discuss our second quarter 2015 results.

Revenue and Users

 

    Total revenue was $26.0 million, an increase of 22% compared to the second quarter of 2014.

 

    Subscription revenue was $22.6 million, an increase of 24% compared to the second quarter of 2014.

 

    Professional services revenue was $3.4 million, up from $3.1 million in the second quarter of 2014.

 

    Average revenue per user for the second quarter is $4.57 including growth in paid users to 20.7 million

Operating Income (Loss)

 

    GAAP operating loss was ($2.4) million, compared to an operating income of $36 thousand in the second quarter of 2014.

 

    Non-GAAP operating income was $0.3 million, compared to an operating income of $0.6 million in the second quarter of 2014.

Net Income (Loss)

 

    GAAP net loss was ($2.7) million, compared to ($0.4) million for the second quarter of 2014. GAAP net loss per share was ($0.09), based on 29.9 million basic weighted average common shares outstanding, compared to a GAAP net loss per share of ($0.05) for the second quarter of 2014, based on 7.6 million basic weighted average common shares outstanding.


    Non-GAAP net income was $26,000, compared to a net income of $0.2 million in the second quarter of 2014. Non-GAAP net income per share was $0.00, based on 34.1 million basic weighted average common shares outstanding. Non-GAAP net income per share was $0.01 for the second quarter of 2014, based on 31.3 million basic weighted average common shares outstanding.

For the second quarter of 2014, the non-GAAP earnings per share calculation assumes conversion of our convertible preferred stock to common stock and sale of our common stock in an IPO at the beginning of the period.

Adjusted EBITDA

 

    Adjusted EBITDA was $1.5 million, compared to $1.4 million in the second quarter of 2014.

Balance Sheet and Cash Flow

 

    Cash and cash equivalents at June 30, 2015 totaled $71.4 million.

 

    Cash flow used in operations was ($2.4) million for second quarter 2015. This compares to cash flow used in operations of ($1.0) million for second quarter 2014.

A reconciliation of GAAP to non-GAAP financial measures has been provided in this press release in the accompanying tables. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”

About Yodlee

Yodlee (Nasdaq: YDLE) is a leading technology and applications platform powering dynamic, cloud-based innovation for digital financial services. More than 850 companies, including 11 of the 20 largest U.S. banks and hundreds of Internet services companies, subscribe to the Yodlee platform to power personalized financial apps and services for millions of consumers. Yodlee solutions help transform the speed and delivery of financial innovation, improve digital customer experiences, and deepen customer engagement.

Yodlee is headquartered in Redwood City, CA with global offices in London and Bangalore. For more information, visit www.yodlee.com.

Non-GAAP Financial Measures

To supplement Yodlee’s financial information presented in accordance with generally accepted accounting principles in the United States, or GAAP, Yodlee considers certain financial measures that are not prepared in accordance with GAAP, including non-GAAP operating income (loss), non-GAAP net income (loss) and adjusted EBITDA.

Yodlee defines non-GAAP operating income (loss) as operating income (loss) before provision for stock-based compensation expense and IP patent litigation costs, Yodlee defines non-GAAP net income (loss) as net income (loss) before provision for stock-based compensation expense and IP patent litigation costs, and Yodlee defines adjusted EBITDA as net income (loss) before provision for (benefit from) income taxes; other (income) expense, net; depreciation and amortization; stock-based compensation expense and IP patent litigation costs.


Yodlee believes that non-GAAP operating income (loss), non-GAAP net income (loss) and adjusted EBITDA, each a non-GAAP financial measure, provide investors and other users of its financial information consistency and comparability with its past financial performance and facilitates period-to-period comparisons of operations. Yodlee believes that these non-GAAP measures are useful in evaluating its operating performance compared to that of other companies in its industry, as these metrics generally eliminate the effects of certain items that may vary for different companies for reasons unrelated to overall operating performance. Yodlee uses non-GAAP operating income (loss), non-GAAP net income (loss) and adjusted EBITDA in conjunction with traditional GAAP measures as part of its overall assessment of its performance, including the preparation of its annual operating budget and quarterly forecasts, to evaluate the effectiveness of its business strategies and to communicate with its board of directors concerning its financial performance.

These non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. These non-GAAP financial measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similarly-titled measures presented by other companies.

Additional Information and Where to Find It

In connection with the proposed merger, Envestnet, Inc. (“Envestnet”) intends to file a registration statement on Form S-4, which will include a preliminary prospectus and related materials to register the shares of Envestnet common stock to be issued in the merger, and Envestnet and Yodlee, Inc. (“Yodlee”) intend to file a joint proxy statement/prospectus and other documents concerning the proposed merger with the U.S. Securities and Exchange Commission (the “SEC”). INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT, THE JOINT PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS TO BE FILED WITH THE SEC CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT ENVESTNET, YODLEE AND THE PROPOSED MERGER. Investors and security holders will be able to obtain free copies of the registration statement and the joint proxy statement/prospectus (when they are available) and any other documents filed by Envestnet and Yodlee with the SEC at the SEC’s website at www.sec.gov. They may also be obtained for free by contacting Envestnet Investor Relations at investor.relations@envestnet.com or by telephone at (312) 827-3940 or by contacting Yodlee Investor Relations at http://ir.yodlee.com/contactus.cfm or by telephone at (650) 980-3600. The content of any website referenced above is not deemed to be incorporated by reference into the registration statement or the joint proxy statement/prospectus.

No Offer or Solicitation

This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval with respect to the proposed merger or otherwise. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

Participants in the Solicitation

Each of Envestnet and Yodlee and their respective executive officers and directors may be deemed to be participants in the solicitation of proxies from their respective stockholders with respect to the transactions contemplated by the merger agreement. Information regarding the persons who may, under the rules of the SEC, be deemed participants in the solicitation of Envestnet or Yodlee security holders in connection with the proposed merger will be set forth in the registration statement and the joint proxy statement/prospectus when filed with the SEC. Information regarding Yodlee’s executive officers and directors is included in Yodlee’s Proxy Statement for its 2015 Annual Meeting of Stockholders, filed with the SEC on April 10, 2015, and information regarding Envestnet’s executive officers and directors is included in Envestnet’s Proxy Statement for its 2015 Annual Meeting of Stockholders, filed with the SEC on April 13, 2015. Copies of the foregoing documents may be obtained as provided above. Certain executive officers and directors of Envestnet and Yodlee have interests in the transaction that may differ from the interests of Envestnet and Yodlee stockholders generally. These interests will be described in the joint proxy statement/prospectus when it becomes available.


Forward Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements generally relate to future events or Yodlee’s future financial or operating performance. Forward-looking statements in this press release include, but are not limited to, Yodlee’s expectations that the combination with Envestnet will transform the financial services industry and that the union will create a company uniquely postioned to improve and simplify financial lives. Yodlee’s expectations and beliefs regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected in the forward looking statements. These risks include the possibility that: Envestnet is not able to successfully integrate the Company’s operations; the desired synergies of the combination are not achieved; Yodlee’s paid user base does not continue to grow; Yodlee is unable to secure new subscriptions and deployments of the Yodlee platform by new customers; existing customers fail to renew subscriptions or do not generate additional paid users and sources of revenue; Yodlee is unable to derive revenue from data analytics, market research services and/or revenue-sharing arrangements with partners who develop premium FinApps; and Yodlee experiences expenses that exceed its expectations. The forward-looking statements contained in this press release are also subject to other risks and uncertainties, including those more fully described under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in Yodlee’s filings with the Securities and Exchange Commission (“SEC”). Yodlee’s SEC filings are available on the Investor Relations section of the Company’s website at http://ir.yodlee.com and on the SEC’s website at www.sec.gov. The forward-looking statements in this press release are based on information available to Yodlee as of the date hereof, and Yodlee disclaims any obligation to update any forward-looking statements, except as required by law.

Media Contact:

David Lee

Chief Marketing Officer

DLee@yodlee.com

1-650-980-3649

Investor Contact:

Sheila B. Ennis

ICR, Inc.

IR@yodlee.com

1-415-430-2073


Yodlee, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

(Unaudited)

 

     Three Months Ended     Six Months Ended  
     June 30,     June 30,  
     2015     2014     2015     2014  

Revenue:

        

Subscription

   $ 22,557      $ 18,172      $ 44,138      $ 34,903   

Professional services and other

     3,398        3,131        6,426        6,163   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenue

     25,955        21,303        50,564        41,066   

Cost of revenue(1):

        

Subscription

     7,611        5,744        14,701        11,399   

Professional services and other

     2,319        2,206        4,670        4,392   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total cost of revenue

     9,930        7,950        19,371        15,791   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     16,025        13,353        31,193        25,275   

Operating expenses(1):

        

Research and development

     7,082        5,351        13,789        10,260   

Sales and marketing

     7,245        5,149        14,206        9,690   

General and administrative

     4,095        2,817        8,035        5,519   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     18,422        13,317        36,030        25,469   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income (loss)

     (2,397     36        (4,837     (194

Other income, net

     202        68        348        87   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) before provision for income taxes

     (2,195     104        (4,489     (107

Provision for income taxes

     491        465        1,098        842   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

   $ (2,686   $ (361   $ (5,587   $ (949
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss per share attributable to common stockholders:

        

Basic and diluted

   $ (0.09   $ (0.05   $ (0.19   $ (0.13
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares used to compute net loss per share attributable to common stockholders—basic and diluted

     29,904        7,560        29,641        7,518   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) Amounts include stock-based compensation expense as follows (in thousands):

 

     Three Months Ended      Six Months Ended  
     June 30,      June 30,  
     2015      2014      2015      2014  

Cost of revenue—subscription

   $ 303       $ 57       $ 589       $ 99   

Cost of revenue—professional services and other

     168         42         278         64   

Research and development

     496         80         871         128   

Sales and marketing

     591         109         1,067         172   

General and administrative

     896         280         1,657         456   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total stock-based compensation expense

   $ 2,454       $ 568       $ 4,462       $ 919   
  

 

 

    

 

 

    

 

 

    

 

 

 


Yodlee, Inc.

Condensed Consolidated Statements of Comprehensive Loss

(in thousands)

(Unaudited)

 

     Three Months Ended     Six Months Ended  
     June 30,     June 30,  
     2015     2014     2015     2014  

Net loss

   $ (2,686   $ (361   $ (5,587   $ (949

Other comprehensive income, net of taxes:

        

Foreign currency translation gain (loss)

     (114     (29     (86     150   

Change in unrealized gain (loss) on foreign currency contracts designated as cash flow hedges

     (73     3        58        403   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total other comprehensive income (loss), net of taxes

     (187     (26     (28     553   
  

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive loss

   $ (2,873   $ (387   $ (5,615   $ (396
  

 

 

   

 

 

   

 

 

   

 

 

 


Yodlee, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except par value)

(Unaudited)

 

     June 30,     December 31,  
     2015     2014  

Assets

    

Current assets:

    

Cash and cash equivalents

     71,432      $ 73,520   

Accounts receivable, net of allowance for doubtful accounts of $18 and $13 as of June 30, 2015 and December 31, 2014, respectively

     15,729        12,229   

Accounts receivable—related parties

     1,571        3,066   

Prepaid expenses and other current assets

     5,642        4,425   
  

 

 

   

 

 

 

Total current assets

     94,374        93,240   

Property and equipment, net

     10,251        9,481   

Restricted cash

     146        146   

Goodwill

     3,068        3,068   

Other assets

     1,615        1,609   
  

 

 

   

 

 

 

Total assets

     109,454      $ 107,544   
  

 

 

   

 

 

 

Liabilities and stockholders’ equity

    

Current liabilities:

    

Accounts payable

     2,929      $ 3,278   

Accrued liabilities

     3,533        2,628   

Accrued compensation

     6,372        8,927   

Deferred revenue, current portion

     8,289        6,959   

Capital lease obligations, current portion

     893        1,153   
  

 

 

   

 

 

 

Total current liabilities

     22,016        22,945   

Deferred revenue, net of current portion

     186        293   

Capital lease obligations, net of current portion

     931        1,243   

Other long-term liabilities

     3,822        2,986   
  

 

 

   

 

 

 

Total liabilities

     26,955        27,467   

Stockholders’ equity:

    

Common stock, $0.001 par value—150,000 shares authorized as of June 30, 2015 and December 31, 2014; 30,311 and 29,264 shares issued and outstanding as of June 30, 2015 and December 31, 2014, respectively

     30        29   

Preferred stock, $0.001 par value—5,000 shares authorized as of June 30, 2015, and December 31, 2014; none issued and outstanding as of June 30, 2015 and December 31, 2014, respectively

     —          —     

Additional paid-in capital

     447,312        439,275   

Accumulated other comprehensive loss

     (2,008     (1,979

Accumulated deficit

     (362,835     (357,248
  

 

 

   

 

 

 

Total stockholders’ equity

     82,499        80,077   
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

     109,454      $ 107,544   
  

 

 

   

 

 

 


Yodlee, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

 

     Six Months Ended  
     June 30,  
     2015     2014  

Cash flows from operating activities

    

Net loss

   $ (5,587   $ (949

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

    

Depreciation and amortization

     2,256        1,570   

Revaluation of warrant liabilities

     —          148   

Stock-based compensation expense

     4,462        919   

Changes in operating assets and liabilities:

    

Accounts receivable, net

     (2,006     (1,694

Prepaid expenses and other assets

     (1,232     (1,658

Accounts payable

     (595     910   

Accrued liabilities and other long term liabilities

     1,729        694   

Accrued compensation

     (2,655     (624

Deferred revenue

     1,223        (305
  

 

 

   

 

 

 

Net cash used in operating activities

     (2,405     (989

Cash flows from investing activities

    

Purchases of property and equipment

     (2,671     (2,525
  

 

 

   

 

 

 

Net cash used in investing activities

     (2,671     (2,525

Cash flows from financing activities

    

Proceeds from bank borrowings

     —          5,600   

Principal payments on bank borrowings

     —          (2,880

Proceeds from issuance of common stock upon exercise of stock options

     4,578        859   

Tax payments related to stock-based award activities

     (875     —     

Principal payments on capital lease obligations

     (572     (517

Equity offering costs

     (143     (946

Repurchase of common stock

     —          (473
  

 

 

   

 

 

 

Net cash provided by financing activities

     2,988        1,643   
  

 

 

   

 

 

 

Net decrease in cash and cash equivalents

     (2,088     (1,871

Cash and cash equivalents—beginning of period

     73,520        8,134   
  

 

 

   

 

 

 

Cash and cash equivalents—end of period

   $ 71,432      $ 6,263   
  

 

 

   

 

 

 

Supplemental disclosures of cash flow information:

    

Cash paid for interest

   $ 66      $ 270   

Cash paid for income taxes

   $ 804      $ 392   

Supplemental disclosures of non-cash investing and financing information:

    

Property and equipment financed through capital lease

   $ —        $ 1,804   

Property and equipment purchased but not paid at period-end

   $ 1,051      $ 768   

Unpaid equity offering costs

   $ —        $ 1,719   


Yodlee, Inc.

Reconciliation of GAAP to Non-GAAP Measures

(in thousands)

(Unaudited)

 

     Three Months Ended     Six Months Ended  
     June 30,     June 30,  
     2015     2014     2015     2014  

GAAP subscription gross profit

   $ 14,946      $ 12,428      $ 29,437      $ 23,504   

Add share-based compensation

     303        57        589        99   
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP subscription gross profit

   $ 15,249      $ 12,485      $ 30,026      $ 23,603   

Non-GAAP subscription gross margin

     68     69     68     68

GAAP subscription gross margin

     66     68     67     67

GAAP professional services and other gross profit

   $ 1,079      $ 925      $ 1,756      $ 1,771   

Add share-based compensation

     168        42        278        64   
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP professional services and other gross profit

   $ 1,247      $ 967      $ 2,034      $ 1,835   

Non-GAAP professional services and other gross margin

     37     31     32     30

GAAP professional services and other gross margin

     32     30     27     29

GAAP gross profit

   $ 16,025      $ 13,353      $ 31,193      $ 25,275   

Add share-based compensation

     471        99        867        163   
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP gross profit

   $ 16,496      $ 13,452      $ 32,060      $ 25,438   

Non-GAAP gross margin

     64     63     63     62

GAAP gross margin

     62     63     62     62

GAAP sales and marketing

   $ 7,245      $ 5,149      $ 14,206      $ 9,690   

Less share-based compensation

     (591     (109     (1,067     (172
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP sales and marketing

   $ 6,654      $ 5,040      $ 13,139      $ 9,518   

Non-GAAP sales and marketing as percentage of revenue

     26     24     26     23

GAAP sales and marketing as percentage of revenue

     28     24     28     24

GAAP research and development

   $ 7,082      $ 5,351      $ 13,789      $ 10,260   

Less share-based compensation

     (496     (80     (871     (128
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP research and development

   $ 6,586      $ 5,271      $ 12,918      $ 10,132   

Non-GAAP research and development as percentage of revenue

     25     25     26     25

GAAP research and development as percentage of revenue

     27     25     27     25

GAAP general and administrative

   $ 4,095      $ 2,817      $ 8,035      $ 5,519   

Less share-based compensation

     (896     (280     (1,657     (456

Less IP patent litigation costs

     (258     —          (258     —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP general and administrative

   $ 2,941      $ 2,537      $ 6,120      $ 5,063   

Non-GAAP general and administrative as percentage of revenue

     11     12     12     12

GAAP general and administrative as percentage of revenue

     16     13     16     13

GAAP operating income (loss)

   $ (2,397   $ 36      $ (4,837   $ (194

Add share-based compensation

   $ 2,454      $ 568      $ 4,462      $ 919   

Add IP patent litigation costs

     258        —          258        —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP operating income (loss)

   $ 315      $ 604      $ (117   $ 725   

Non-GAAP operating margin

     1     3     0     2

GAAP operating margin

     -9     0     -10     0

GAAP net income (loss)

   $ (2,686   $ (361   $ (5,587   $ (949

Add share-based compensation

   $ 2,454      $ 568      $ 4,462      $ 919   

Add IP patent litigation costs

     258        —          258        —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net income (loss)

   $ 26      $ 207      $ (867   $ (30
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net loss per share

   $ 0.00      $ 0.01      $ (0.03   $ (0.00
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares used in computing GAAP loss per share attributable to common stockholders

     29,904        7,560        29,641        7,518   

Additional weighted average shares assuming:

        

Conversion of preferred shares at the beginning of the period

     —          14,445        —          14,445   

Shares issued in the initial public offering at the beginning of the period

     —          6,250        —          6,250   

Shares issued upon the exercise of underwriter’s option to purchase the Company’s common stock at the beginning of the period

     —          761        —          761   

Dilutive impact of stock options

     2,591        1,807        —          —     

Dilutive impact of restricted stock units

     1,621        392        —          —     

Dilutive impact of stock warrants

     —          113        —          —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Shares used in computing non-GAAP loss per share

     34,116        31,328        29,641        28,974   
  

 

 

   

 

 

   

 

 

   

 

 

 


The following table provides a reconciliation of net income (loss) to adjusted EBITDA:

 

     Three Months Ended      Six Months Ended  
     June 30,      June 30,  
     2015      2014      2015      2014  

Net loss

   $ (2,686    $ (361    $ (5,587    $ (949

Provision for income taxes

     491         465         1,098         842   

Other income, net

     (202      (68      (348      (87

Depreciation and amortization

     1,138         806         2,256         1,570   

Stock-based compensation

     2,454         568         4,462         919   

IP patent litigation costs

     258         —           258         —     
  

 

 

    

 

 

    

 

 

    

 

 

 

Adjusted EBITDA

   $ 1,453       $ 1,410       $ 2,139       $ 2,295   
  

 

 

    

 

 

    

 

 

    

 

 

 

In addition to adjusted EBITDA, we regularly review the key metrics set forth below as we evaluate our business.

 

     June 30,  
     2015      2014  

Paid users (in thousands)

     20,658         16,758   

Average revenue per paid user

   $ 4.57       $ 4.53