What happened

Shares of MobileIron (NASDAQ:MOBL) were falling today after the mobile security specialist posted disappointing results in its fourth-quarter earnings report as headwinds in Europe continued to present challenges. As a result, the stock was down 9.7% at 3:18 p.m. EDT.

So what

Overall revenue was flat in the quarter at $54.1 million, which was short of estimates at $55 million. There were other signs that the company continues to grow, however, as annual recurring revenue increased 10% to $179.5 million, and full-year revenue was up 6% to $205.2 million.

A woman holding her smartphone above a computer

Image source: Getty Images.

On the bottom line, adjusted earnings per share increased from $0.01 in the quarter a year ago to $0.03, which beat estimates at $0.01.

CEO Simon Biddiscombe looked forward, saying, "Despite continued headwinds in Europe, I am pleased that the team delivered on our revenue and ARR guidance. As we move into 2020, MobileIron will complete its transition to a subscription-led business. By the middle of this year we will only sell our new seats in subscription form and stop selling perpetual licenses."

The transition to a subscription model has been a popular move for cloud software  providers, so it's not surprising to see MobileIron going in that direction.

Now what

Looking ahead, the company expects a revenue decline of 5% to flat for 2020 as it shifts to the subscription model, which was worse than the analyst consensus for an increase. However, it sees annual recurring revenue growth of 12%-16%, as the subscription model sometimes leads to uneven revenue recognition. I'd expect MobileIron's numbers to look better once the transition is complete.