A data analytics dashboard for a manufacturing operation. Source: Qlik
Qlik Technologies (QLIK +0.00%) reported its fourth quarter and full-year 2015 earnings after the market close on Thursday. For the quarter, the data analytics software company achieved solid year-over-year total and licensing revenue growth of 22% and 21%, respectively, on a constant-currency basis. Adjusted earnings per share decreased 3%.
However, Qlik stock closed down over 9% on Friday in response, as earnings and 2016 guidance were weaker than analysts expected. Even then, the sell-off was nothing like the massacre that industry darling and former high-flyer Tableau Software (DATA +0.00%) suffered last Friday. The company's stock plunged about 50% after it reported lighter-than-expected fourth quarter results and 2016 guidance. Tableau's valuation had been sky-high -- and is still quite high -- and the market is unforgiving of such companies failing to deliver results that indicate they deserve their lofty share price.
Qlik results: the key quarterly numbers
|
Metric |
Q4 2015 |
Q4 2014 |
YoY Growth |
|---|---|---|---|
|
Revenue |
$205.5 million |
$182.8 million |
12% [22% on constant-currency basis] |
|
GAAP Income From Operations |
$30.4 million |
$30.3 million |
0.3% |
|
Non-GAAP Income From Operations |
$44.3 million |
$42.1 million |
5.2% |
|
GAAP Earnings Per Share |
$0.24 |
$0.28 |
(14.3)% |
|
Non-GAAP Earnings Per Share |
$0.31 |
$0.32 |
(3.1)% |
Source: Qlik
Long-term investors shouldn't get too hung up on analyst estimates, but these expectations help explain market reactions. With that said, Qlik's revenue of $205.5 million fell a bit below the $208.13 million consensus. The company's adjusted earnings per share of $0.31 considerably missed the consensus of $0.38.
More importantly, the company missed its own earnings guidance and came in right at the low end of its range. It had expected to earn non-GAAP, or adjusted, earnings per share in the range of $0.36 to $0.39 on revenue of $206 million to $211 million.
As for full-year results:
- Revenue was $612.7 million, an increase of 10% from 2014, or 23% if we exclude the negative foreign currency effects due to the strength of the U.S. dollar.
- Non-GAAP net income was $21.2 million, which translates to $0.23 per share, compared to net income of $21.7 million and earnings of $0.24 per share in 2014.
What happened with Qlik this quarter?
- Licensing revenue increased 12% year over year, or 21% in constant currency, to $126.1 million.
- The company's pipeline, as reflected by its licensing activity, looks solid. Qlik completed 255 deals with license and first-year maintenance of more than $100,000 in the quarter. Of those, 89 deals brought in more than $250,000, and 13 deals brought in more than $1 million. This compares to the 238 deals for more than $100,000, including 71 for more than $250,000, and 9 for more than $1 million in the prior-year period.
- It generated 73% of license and first-year maintenance billings from existing customers, compared to 63% in the prior-year period. This likely reflects customer satisfaction. Another plus -- it's usually less costly for companies to sell to existing customers than to win new ones.
- Geographical revenue performance on a constant-currency basis was as follows: The Americas increased 28% over the prior-year period; Europe increased 22%; and rest of the world rose 4%, reflecting continued weakness in the Asia Pacific economies.
- For the sixth consecutive year, Qlik was positioned in the Leaders Quadrant of Gartner's Business Intelligence and Analytics Platforms Magic Quadrant report, which was recently issued. Gartner stated that "compared with its chief competitors, Qlik scores significantly higher on complexity of analysis -- which we attribute to its stronger ability to support multiple data sources, a robust calculation engine and associative filtering and search."
What management had to say
CEO Lars Björk shared the positive news in the press release:
2015 was an exciting year for Qlik as we achieved 21% constant currency license revenue growth, an 800 basis points improvement versus 2014, driven by the strength of Qlik Sense and our platform approach. In the fourth quarter, our strong results in the Americas and Europe offset continued weakness in Asia Pacific, which enabled us to exceed our fourth quarter constant currency revenue guidance.
And CFO Tim MacCarrick described primarily where the company fell short of its own expectations:
Our reported fourth quarter total revenue of $205.5 million was negatively affected by approximately $4 million due to the relative strengthening of the U.S. dollar since we last provided guidance in October 2015. In addition, our non-GAAP operating profit was below our expectations primarily due to variable cost increases driven by our revenue, channel, and geographic mix in the fourth quarter. Despite these impacts, we modestly expanded non-GAAP operating margins in 2015 and plan to drive further operating margin improvement in 2016.
Looking forward
Qlik expects first quarter 2016 revenue in the range of $132 million to $136 million, representing growth of 10% to 13% on a reported basis, or 12% to 15% on a constant-currency basis. It projects an adjusted earnings loss of between $0.14 and $0.12 per share, compared to a $0.09 per share loss in the year-ago period.
For full-year 2016, the company expects revenue in the $695 million to $705 million range, equating to growth of 13% to 15%, or 15% to 17% on a constant-currency basis. Qlik is projecting adjusted earnings of $0.41 to $0.44 per share, representing a jump of 78% to 91% over the $0.23 per share it earned in 2015.
