MuleSoft Announces Financial Results for the Second Quarter 2017

Thursday, July 27, 2017

Total Revenue of $69.2 Million, Up 57% Year-over-Year

Subscription and Support Revenue of $55.1 Million, Up 54% Year-over-Year

SAN FRANCISCO – July 27, 2017 – MuleSoft, Inc. (NYSE: MULE), provider of the leading platform for building application networks, today announced financial results for its second quarter of fiscal 2017 ended June 30, 2017.

“We delivered strong growth performance in the second quarter and continue to be excited about our market opportunity,” said Greg Schott, chairman and CEO of MuleSoft. “The convergence of major technology forces, such as mobile, cloud, big data, and the Internet of Things, is driving the shift to composability and creating disruption across almost every industry. By making it easy to connect nearly every technology in a standardized way, our customers can speed innovation to deliver differentiated customer experiences, new revenue channels, and entirely new business models.”

Second Quarter 2017 Financial Highlights:

  • Revenue: Total revenue was $69.2 million, an increase of 57% year-over-year. Subscription and support revenue was $55.1 million, an increase of 54% year-over-year. Professional services and other revenue was $14.2 million, an increase of 70% year-over-year.

  • Gross margin: GAAP gross margin was 73.5%, an increase of 40 basis points compared to 73.1% in Q2 2016. Non-GAAP gross margin was 75.1% for Q2 2017, an increase of 160 basis points compared to 73.5% in the year-ago period.

  • Operating loss: GAAP operating loss was $19.0 million, compared to a GAAP operating loss of $11.8 million for Q2 2016. Non-GAAP operating loss for Q2 2017 was $12.1 million, compared to a non-GAAP operating loss of $10.4 million in the year-ago period.

  • Net loss per share: GAAP net loss per share was $0.15 based on 128.8 million weighted average shares outstanding in Q2 2017, compared to GAAP net loss per share of $0.60 based on 20.0 million weighted average shares outstanding in Q2 2016.

Non-GAAP net loss per share was $0.10 based on 128.8 million non-GAAP weighted average shares outstanding in Q2 2017, compared to non-GAAP net loss per share of $0.10 based on 110.3 million non-GAAP weighted average shares outstanding in Q2 2016.

  • Deferred revenue: Total deferred revenue was $144.4 million at the end of Q2 2017, an increase of 50% year- over-year. Short-term deferred revenue was $138.9 million at the end of Q2 2017, an increase of 49% year-over- year.

  • Cash: Cash from operating activities was ($2.0) million, compared to ($6.0) million for Q2 2016. Free cash flow, which is a non-GAAP measure that reflects cash from operating activities less cash used for capital expenditures, was ($3.0) million for Q2 2017, compared to ($6.8) million in the year-ago period.

    Cash, cash equivalents, and investments totaled $337.1 million at the end of Q2 2017.

Other Recent Highlights:

  • Launching Crowd - Next Major Release of Anypoint Platform™: General availability of the newest major release of Anypoint Platform is scheduled for July 29. The Crowd release introduces a set of powerful collaboration capabilities to make creating, discovering, and reusing composable IT assets, such as APIs and best practice templates, both easy and natural for platform users. With the Crowd release, MuleSoft is making its Anypoint Platform more accessible to a broader set of users.

  • Availability of Anypoint Platform on G-Cloud 9: MuleSoft announced that Anypoint Platform is available on the UK government’s latest G-Cloud framework, G-Cloud 9. The framework provides UK public sector organizations with a way to buy cloud-based services as commodities to accelerate cloud adoption in a timely and cost-effective manner. The availability of Anypoint Platform on G-Cloud 9 enables all UK government agencies to easily purchase the product and is a sign of MuleSoft's commitment to enabling digital transformation in the public sector.

  • #1 Top Place to Work in Bay Area: MuleSoft was ranked the #1 Top Workplace for mid-sized companies by the Bay Area News Group, owner of the San Jose Mercury News. It is the fifth consecutive year that MuleSoft has been named a top employer on the list. In addition, MuleSoft was named one of the Best Places to Work for a third time by the San Francisco Business Times and Silicon Valley Business Journal. For both awards, companies were evaluated solely on employee satisfaction surveys, with prestigious honors given to the most outstanding companies.

Financial Outlook:

MuleSoft is providing guidance for its third quarter ending September 30, 2017 as follows:

  • Total revenue between $71 million and $72 million

  • Non-GAAP operating loss between $14 million and $15 million

  • Non-GAAP net loss per share of approximately $0.12

  • Weighted average shares outstanding of approximately 129 million

The company is also updating guidance for the fiscal year 2017 ending December 31, 2017 as follows:

  • Total revenue between $279 million and $281 million

  • Non-GAAP operating loss between $47 million and $49 million

  • Non-GAAP net loss per share between $0.38 and $0.40

  • Non-GAAP weighted average shares outstanding of approximately 126 million

All forward-looking non-GAAP measures exclude estimates for stock-based compensation (“SBC”) expenses. We do not provide reconciliations of our forward-looking non-GAAP financial measures to the corresponding GAAP measures due to the high variability and difficulty in making accurate forecasts and projections with respect to SBC expenses, which is excluded from these non-GAAP measures.  SBC expenses are impacted by future hiring and retention needs, as well as the future fair market value of our common stock, all of which are difficult to predict and subject to change. The actual amounts of the excluded SBC expenses will have a significant impact on our GAAP operating loss and GAAP net income (loss) per share. Accordingly, reconciliations of our forward-looking non-GAAP financial measures to the corresponding GAAP measures are not available.

Conference Call Information:
MuleSoft will host a conference call at 2 p.m. Pacific Time (or 5 p.m. Eastern Time) today, July 27, 2017, to discuss its financial results. A live webcast of the call will be available on the MuleSoft website at investors.mulesoft.com. A live dial-in will be available at (866) 807-9684 for domestic participants and at (412) 317-5415 for international participants.

For more information regarding Outlook and the forward-looking statements contained in the release, please visit our Investor Relations page: https://investors.mulesoft.com/news/2017/07-27-2017-211037015 

About MuleSoft
MuleSoft’s mission is to help organizations change and innovate faster by making it easy to connect the world’s applications,
data and devices. With its API-led approach to connectivity, MuleSoft’s market-leading Anypoint Platform™ is enabling over 1,000 organizations in approximately 60 countries to build application networks. For more information, visit https://www.mulesoft.com.

MuleSoft is a registered trademark of MuleSoft, Inc. All other marks are those of respective owners.