Benefitfocus Announces First Quarter 2015 Financial Results

May 6, 2015

Benefitfocus Logo

  • Total revenue of $42.7 million grew 39% year-over-year
  • Employer revenue of $20.9 million grew 57% year-over-year

Charleston, S.C. – May 6, 2015 – Benefitfocus, Inc. (NASDAQ: BNFT), a leading provider of cloud-based benefits software solutions, today announced its first quarter 2015 financial results.

“Benefitfocus delivered a strong start to 2015 with first quarter financial results that exceeded the high end of our guidance on both the top and bottom line,” said Shawn Jenkins, Chief Executive Officer of Benefitfocus. “There is tremendous activity across the benefits industry and we are delivering on a number of initiatives that position the company well to become an increasingly strategic partner for customers.”

Jenkins added, “During the quarter we achieved a significant milestone with the introduction of several new product offerings for the employer market, representing our initial land and expand opportunity in this fast growing market. We are pleased with initial customer reaction to these new solutions and believe they provide an additional opportunity for Benefitfocus to continue generating strong growth and improving profitability.”

First Quarter 2015 Financial Highlights

Revenue

  • Total revenue was $42.7 million, an increase of 39% compared to the first quarter of 2014.
  • Software revenue was $37.8 million, an increase of 32% compared to the first quarter of 2014.
  • Professional services revenue was $4.9 million, an increase of 125% compared to the first quarter of 2014.
  • Employer revenue was $20.9 million, an increase of 57% compared to the first quarter of 2014.
  • Insurance carrier revenue was $21.8 million, an increase of 25% compared to the first quarter of 2014.

Non-GAAP Net Loss and Adjusted EBITDA

  • Non-GAAP net loss was ($12.7) million, compared to a net loss of ($11.8) million in the first quarter of 2014. Non-GAAP net loss per diluted share was ($0.48), based on 26.7 million basic and diluted weighted average common shares outstanding, compared to ($0.48) for the first quarter of 2014, based on 24.5 million basic and diluted weighted average common shares outstanding.
  • Adjusted EBITDA was ($7.8) million, compared to ($8.8) million in the first quarter of 2014. See important disclosures about non-GAAP measures, and a reconciliation of them to GAAP, below.

Balance Sheet and Cash Flow

  • Cash, cash equivalents and marketable securities at March 31, 2015 totaled $107.4 million, compared to $56.2 million at the end of the fourth quarter of 2014.

First Quarter and Recent Business Highlights

  • Ended the quarter with 568 large employer customers, up from 418 at the end of the year ago period and 553 at the end of the fourth quarter of 2014, and 52 insurance carrier customers, up from 43 at the end of the year ago period and 43 at the end of the fourth quarter of 2014.
  • New employer customer relationships added during the quarter including Arizona Chemical Company, Chicago Mercantile Exchange, Giant Eagle, Facchina Group of Companies, Hoss’s Steak & Sea House, McCarthy Holdings and the H. Lee Moffitt Cancer Center and Research Institute, among others.
  • Launched BENEFITFOCUS® Core & Advanced Analytics, which provides administrators with valuable insight into program performance and costs by aggregating complex data from disparate sources into a single, intelligent platform.
  • Hosted our annual One Place user conference in Orlando, Florida, which brought together more than 700 customers, partners and Benefitfocus associates. Highlights of this year’s One Place included the introduction of several new products for the employer market, including BenefitStore®, eBilling and payment, and Benefit Service Center
  • Promoted Ray August from chief operating officer to president and chief operating officer of Benefitfocus. Shawn Jenkins will continue to serve as the chief executive officer and will dedicate his focus on product innovation and the long-range strategy of the company.
  • Announced the signing of a reseller agreement with SAP (NYSE: SAP). Through this agreement, SAP will resell BENEFITFOCUS® Marketplace as the SAP® U.S. Benefits Management application by Benefitfocus.

Business Outlook

  • Based on information available as of May 6, 2015, Benefitfocus is providing guidance for the second quarter and updating full year 2015 as indicated below.

Second Quarter 2015:

  • Total revenue is expected to be in the range of $41.8 million to $42.3 million.
  • Non-GAAP net loss is expected to be in the range of ($16.8) million to ($16.3) million, or ($0.59) to ($0.57) per share, based on 28.5 million basic and diluted weighted average common shares outstanding.
  • Adjusted EBITDA is expected to be in the range of ($11.7) million to ($11.2) million.

Full Year 2015:

  • Total revenue is expected to be in the range of $172.0 million to $175.0 million.
  • Non-GAAP net loss is expected to be in the range of ($62.0) million to ($59.0) million, or ($2.21) to ($2.10) per share, based on 28.1 million basic and diluted weighted average common shares outstanding.
  • Adjusted EBITDA is expected to be in the range of ($38.0) million to ($35.0) million.

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