REDWOOD SHORES, CA — (Marketwired) — 02/18/15 — (NASDAQ: IPAS), the world–s largest commercial Wi-Fi network, today announced financial results for the fourth quarter and year ended December 31, 2014.
Open Mobile revenue for the fourth quarter of 2014 was $15.2 million compared with $14.6 million in the third quarter of 2014 and $13.0 million in the fourth quarter of 2013. This marked our fifteenth sequential quarter of OM revenue growth.
Total revenue in the fourth quarter of 2014 was $17.2 million compared with $17.3 million in the third quarter of 2014 and $18.0 million in the fourth quarter of 2013.
GAAP net loss from continuing operations for the fourth quarter of 2014 was $2.4 million, compared with $3.1 million for the third quarter of 2014 and $5.1 million for the fourth quarter of 2013.
GAAP total net loss for the fourth quarter of 2014 was $3.9 million compared with GAAP total net loss of $4.4 million in the third quarter of 2014 and GAAP total net loss of $4.5 million in the fourth quarter of 2013.
Adjusted EBITDA loss for the fourth quarter of 2014 was $2.3 million compared with $3.1 million in the third quarter of 2014 and $3.6 million in the fourth quarter of 2013. Adjusted EBITDA for prior periods has been recast to exclude net income and related adjustments for discontinued operations. See reconciliation and definition of our non-GAAP Adjusted EBITDA financial measure below.
Exited 2014 with Legacy iPC revenue representing only approximately 10% of total revenue for the fourth quarter of 2014.
“We entered 2014 singularly focused on developing our three core strategic assets; our Open Mobile Platform, or OM, that enables users to keep their smart devices seamlessly connected; our authentication fabric which knits a cadre of incompatible suppliers into a ubiquitous Wi-Fi global coverage map; and our growing footprint of hotspots allowing users to get and stay connected around the world. In short, we had a solid year of accomplishments on these fronts,” said Evan Kaplan, president and chief executive officer of iPass. “We divested our Unity managed network services business allowing us to focus wholly on our OM growth. Year over year we grew our average monthly OM network users by 37%, OM network revenue by 30%, OMX revenue by 29%, and our footprint now exceeds 18 million hotspots. We look to increase penetration in existing customers in 2015 with a studied and directed game plan, leveraging our industry leading Wi-Fi business intelligence. And now that we have branched out beyond the traditional carrier customers in our OMX product, we are excited about the opportunities with OMX partners such as Microsoft and HP to finally unlock the consumer market for Wi-Fi.”
Grew OM Wi-Fi network users by 8% from the third quarter of 2014 and by 25% from the fourth quarter of 2013.
Grew OM active platform users by 6% from the third quarter of 2014 and by 31% from the fourth quarter of 2013.
Announced a long term strategic deal with Microsoft to expand our OMX relationship and provide Wi-Fi access for a variety of their product and service offerings.
Our global network grew by 20% over last quarter, representing over 18 million hotspots in 120 countries at year end.
Released updates to the OM client to streamline the user experience, including Android 3.0 and IOS 3.5 since last quarter.
Added new logos, including Regus, Uber, General Electric, and Facebook since last quarter.
For the first quarter of 2015 ending March 31, 2015, iPass anticipates total revenue from continuing operations and adjusted EBITDA income (loss) to be in the following ranges:
iPass will host a live conference call today at 2:00 PM Pacific Time (5:00 PM Eastern Time).
The conference call will be accessible by telephone, toll-free at 888-539-3686 or direct dial at 719-325-2436 with a participant confirmation code of 2850015. The conference call will also be available live via webcast on the company–s web site at . The webcast will be available for replay until iPass reports its first quarter 2015 results.
The dial-in number for a telephone replay of the conference call is 888-203-1112 and 719-457-0820 and will be available until February 27, 2015. The confirmation code for the replay is 2850015.
The statements in this press release that iPass looks to increase penetration in existing enterprise customers in 2015 with a studied and directed game plan, leveraging its industry leading Wi-Fi business intelligence, regarding its growing Wi-Fi footprint, and iPass– projections of its first quarter 2015 financial results under the caption “Q1 2015 Guidance,” are forward-looking statements. Actual results may differ materially from the expectations contained in these statements due to a number of risks and uncertainties, including the following: the risk that the “End of Life” of iPass– legacy Mobile Office product may negatively impact customer retention and mobility revenues more than iPass expects; the risk that the Open Mobile platform and Open Mobile Exchange will not continue to achieve the market acceptance iPass expects; the risk of material reductions in iPass customers– existing minimum commitments more than iPass currently expects; the risk that iPass does not accurately predict usage for its Enterprise Flat Rate price plan which could result in iPass expenses exceeding revenues for these plans; the risk that iPass customers do not widely deploy iPass Open Mobile on smartphones, tablets and other mobile handheld devices at the rate iPass expects; the risk that demand for Mobility Services does not grow as iPass expects; the risk that strong competition in the market for Mobility Services could reduce demand for iPass– services; and the risk that a meaningful portion of iPass business is international, which subjects iPass to additional risks such as currency fluctuations. Detailed information about these and other risk factors that could potentially affect iPass– business, financial condition and results of operations are included in iPass– Annual Report on Form 10-K filed with the SEC on March 11, 2014, and available at the SEC–s Web site at and the company–s website at . iPass undertakes no responsibility to update the information in this press release if any forward-looking statement later turns out to be an inaccurate prediction of the actual results.
In addition, investors and others should note that iPass announces material financial information to its investors using its investor relations website, SEC filings, press releases, public conference calls and webcasts. iPass also uses social media to communicate with its customers and the public about iPass, its products and services and other matters relating to its business and market. It is possible that the information iPass posts on social media could be deemed to be material information. Therefore, iPass encourages investors, the media, and others interested in iPass to review the information it posts on U.S. social media channels including the iPass Twitter Feed, the iPass LinkedIn Feed, the iPass Google+ Feed, the iPass Facebook Page, the iPass Blog, the iPass Instagram account, the iPass Pinterest account and Evan Kaplan–s Twitter Feed. These social media channels may be updated from time to time.
This press release also contains financial measures that are not calculated in accordance with U.S. generally accepted accounting principles (GAAP). iPass considers Adjusted EBITDA as a supplemental measure of the company–s performance that is not required by, nor presented in accordance with GAAP.
The company defines Adjusted EBITDA as net income (loss) before interest, income taxes, depreciation and amortization, stock-based compensation expense, restructuring charges, net income (loss) from discontinued operations, collection of previously written off bad debt expense from bankruptcy proceeding, and other non-operating income. The company believes Adjusted EBITDA provides a meaningful comparison between its core operating results, on a consistent basis, over different periods of time. Accordingly, management uses this financial measure for evaluating and making operating decisions and for purposes of comparison with its strategic plan, operating budgets and allocation of resources.
Furthermore, iPass believes the use of Adjusted EBITDA is useful to investors:
1) To provide an additional analytical tool for understanding the company–s financial performance by excluding the impact of items which may obscure trends in the core operating performance of the business;
2) To provide consistency and enhance investors– ability to compare the company–s performance across financial reporting periods; and
3) To facilitate comparisons to the operating results of other companies in the company–s industry, which may use similar financial measures to supplement their GAAP results.
Adjusted EBITDA should not be considered in isolation, or construed as an alternative to net income, or any other performance measure derived in accordance with GAAP, or as an alternative to cash flow from operating activities or as a measure of the company–s liquidity. In addition, other companies may calculate Adjusted EBITDA differently than iPass does, which would limit its usefulness in comparing iPass– financial results with those of such other companies.
iPass enables business travelers to stay connected by providing them with cost-effective and convenient global Wi-Fi access across smartphones, tablets and laptops. Founded in 1996, iPass (NASDAQ: IPAS) is the world–s largest commercial , covering over 120 countries and territories and selling to over 700 large corporations, telecom service providers and other strategic partners around the world. Through its cloud-based delivery model, iPass connects business travelers to over 18 million Wi-Fi hotspots in airports, airplanes, hotels and public areas. With the growing need for fast, high bandwidth connectivity, iPass lets business travelers stay close to what matters most while on the road including access to video, unified communications, web conferencing and other cloud based apps.
NOTE: iPass® is a registered trademark of iPass Inc. Open Mobile, OME, Open Mobile Express, Open Mobile Exchange and OMX are trademarks of iPass Inc. Wi-Fi® is a registered trademark of the Wi-Fi Alliance. Other company names, logos and product or service names mentioned herein are the trademarks owned by their respective owners.
iPass tracks two key metrics that summarize the number of active users of iPass OME services. Each metric below is calculated as AMMU, defined as the average number of active users per month, during a given quarter, for which a fee was billed by iPass for either Wi-Fi or Platform services.
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