LEXINGTON, Mass., Feb. 03, 2021 (GLOBE NEWSWIRE) -- Mimecast Limited (NASDAQ: MIME), a leading email and data security company, today announced financial results for the third fiscal quarter ended December 31, 2020.

Overall Highlights

• Total revenue of $129.6 million grew 18% year-over-year on a GAAP basis and 17% in constant currency.
• Solid execution of multi-product strategy drives average services per customer to 3.5 from 3.3 in the same quarter last year.
• Added 500 net new customers. Total customers 39,600 globally.
• Significant wins in enterprise, including 24 six-figure deals.
• Net Revenue retention rate of 104%.
• GAAP gross profit percentage of 76%, Non-GAAP gross profit percentage of 77%.
• GAAP EPS of $0.16 per diluted share, Non-GAAP EPS of $0.33 per diluted share.
• Helene Auriol Potier joined the Board of Directors. Ms. Auriol Potier brings significant expertise and experience to Mimecast’s Board with her prior leadership roles at Orange Business Services, Microsoft, Dell Technologies and Nortel.
• Mimecast strengthens leadership team with the appointment of Shahriar Rafimayeri as Chief Information Officer and Michael Paisley as Chief Security and Resilience Officer.
• Mimecast SecOps 2021|virtual conference exhibits customer benefits of expanded Cyber Alliance API & Tech Partners.
• Awarded as 2021 Top Workplace in USA with additional recognition for Technology Industry leadership and innovation.

Peter Bauer, chief executive officer of Mimecast, said, “We delivered solid growth and profitability this quarter, with key wins in the enterprise space and continued progress against our multi-product strategy. We are delivering increasingly strong cash flow and meaningful margin expansion. We expect continued top-line growth, but delivering growth at our long-term targets will take additional time and investment. We are prioritizing resources to better align with our strategy, including by implementing a reduction in force. We are confident these actions will help power the next evolution of our business.”

Mr. Bauer continued, “We are working quickly and thoughtfully to address our recently disclosed cyber incident, and are proactively prioritizing our customers’ protection and transparency. While our investigation is ongoing, we believe that the steps we have taken as part of our ongoing response have been effective. We will continue to examine and closely monitor our environment, collaborate closely with our customers and take appropriate actions to fortify their protections and strengthen their resilience.”

Financial and Operating Highlights

• Revenue: Revenue for the third quarter of 2021 was $129.6 million, an increase of 18% compared to revenue of $110.2 million in the third quarter of 2020. Revenue on a constant currency basis increased 17% compared to the third quarter of 2020.
• Customers: Added 500 net new customers in the third quarter of 2021, and now serve 39,600 organizations globally.
• Revenue Retention Rate: Revenue retention rate was 104% in the third quarter of 2021.
• Gross Profit Percentage: Gross profit percentage was 76% in the third quarter of 2021, compared to 74% in the third quarter of 2020.
• Non-GAAP Gross Profit Percentage: Non-GAAP gross profit percentage was 77% in the third quarter of 2021, compared to 76% in the third quarter of 2020.
• Net Income: Net income was $10.8 million, or $0.16 per diluted share, based on 66.0 million diluted shares outstanding in the third quarter of 2021, compared to net income of $0.2 million, or $0.00 per diluted share, based on 64.0 million diluted shares outstanding in the third quarter of 2020.
• Non-GAAP Net Income: Non-GAAP net income was $21.5 million, or $0.33 per diluted share, based on 66.0 million diluted shares outstanding in the third quarter of 2021, compared to non-GAAP net income of $8.8 million or $0.14 per diluted share, based on 64.0 million diluted shares outstanding in the third quarter of 2020.
• Adjusted EBITDA: Adjusted EBITDA was $34.6 million in the third quarter of 2021, representing an Adjusted EBITDA margin of 26.7%, up from 18.7% in the third quarter of 2020.
• Operating Cash Flow: Operating cash flow was $35.0 million in the third quarter of 2021, compared to $19.3 million in the third quarter of 2020.
• Free Cash Flow and Cash: Free cash flow was $24.2 million in the third quarter of 2021, compared to $1.9 million in the third quarter of 2020. Cash and cash equivalents as of December 31, 2020 were $270.9 million.

Reconciliations of the non-GAAP financial measures provided in this press release to their most directly comparable GAAP financial measures are provided in the financial tables included at the end of this press release. An explanation of these measures and how they are calculated is also included under the heading “Non-GAAP Financial Measures.”

Restructuring

The Company is also announcing that its Board of Directors approved a restructuring plan designed to align the Company’s resources with its strategy. The restructuring plan, which includes a reduction of the Company’s workforce by approximately 4%, will permit the Company to increase investment in strategic growth areas. The Company currently estimates that it will recognize pre-tax charges to its GAAP financial results of approximately $3.7 million, consisting of severance and other one-time termination benefits, and other restructuring related costs. These charges are primarily cash-based and are expected to be recognized in the fourth quarter of fiscal 2021. The actions associated with the restructuring plan are expected to be completed by the end of the first quarter of fiscal 2022.

Financial Outlook

Mimecast is providing guidance for the fourth quarter 2021, fiscal year 2021 and fiscal year 2022.

Fourth Quarter 2021 Guidance:

• For the fourth quarter of 2021, revenue is expected to be in the range of $130.5 million to $131.5 million and constant currency revenue growth is expected to be in the range of 11% to 12%.
• Adjusted EBITDA for the fourth quarter is expected to be in the range of $28.3 million to $29.3 million.
• Operating cash flow for the fourth quarter is expected to be approximately $28.0 million.
• Free cash flow for the fourth quarter is expected to be approximately $22.0 million.

Our revenue guidance for the fourth quarter is based on exchange rates as of January 26, 2021, and includes an estimated positive impact of $3.8 million resulting from the weakening of the U.S. dollar compared to the prior year.

Fiscal Year 2021 Guidance:

• For the full year 2021, revenue is expected to be in the range of $498.0 million to $499.0 million and constant currency revenue growth is expected to be approximately 17%.
• Foreign exchange rate fluctuations are positively impacting this guidance by an estimated $0.4 million compared to the rates in effect in the prior year.
• Full year 2021 Adjusted EBITDA is expected to be in the range of $122.2 million to $123.2 million.
• Operating cash flow for the full year 2021 is expected to be in the range of $123.0 million to $124.0 million.
• Free cash flow for the full year 2021 is expected to be in the range of $86.0 million to $87.0 million.

Fiscal Year 2022 Guidance:

• For the full year 2022, revenue is expected to be in the range of $558.0 million to $568.0 million and constant currency revenue growth is expected to be in the range of 9% to 11%.
• Foreign exchange rate fluctuations are positively impacting this guidance by an estimated $14 million compared to the rates in effect in the prior year.
• Full year 2022 Adjusted EBITDA is expected to be approximately $146.0 million.
• Operating cash flow for the full year 2022 is expected to be approximately $158.0 million.
• Free cash flow for the full year 2022 is expected to be approximately $121.0 million.

GAAP net income (loss) is the most comparable GAAP measure to Adjusted EBITDA. Adjusted EBITDA differs from GAAP net income (loss) in that it excludes depreciation, amortization, disposals and impairment of long-lived assets, acquisition-related gains and expenses, litigation-related expenses, share-based compensation expense, restructuring expense, interest income and interest expense, the provision for income taxes and foreign exchange income (expense). Mimecast is unable to predict with reasonable certainty the ultimate outcome of these exclusions without unreasonable effort. Therefore, Mimecast has not provided guidance for GAAP net income (loss) or a reconciliation of forward-looking Adjusted EBITDA guidance to GAAP net income (loss).

The financial guidance provided above includes forward-looking statements within the meaning of U.S. securities laws. While the financial guidance considers the anticipated impact of the Company’s recently disclosed security incident and the global COVID-19 pandemic, the future effect of the security incident and the pandemic on Mimecast’s financial results is highly uncertain. Mimecast’s actual results may differ materially. See “Safe Harbor for Forward-Looking Statements” below.

About Mimecast

Mimecast (NASDAQ: MIME) was born in 2003 with a focus on delivering relentless protection. Each day, we take on cyber disruption for our tens of thousands of customers around the globe; always putting them first, and never giving up on tackling their biggest security challenges together. We are the company that built an intentional and scalable design ideology that solves the number one cyberattack vector – email. We continuously invest to thoughtfully integrate brand protection, security awareness training, web security, compliance and other essential capabilities. Mimecast is here to help protect large and small organizations from malicious activity, human error and technology failure; and to lead the movement toward building a more resilient world. www.mimecast.com