Halogen Announces Third Quarter 2015 Results

November 5, 2015


Delivers total revenue growth of 15%, including 17% recurring revenue growth

OTTAWA, Nov. 5, 2015 /CNW/ – Halogen Software Inc. (“Halogen” or the “Company”) (TSX: HGN), a leading provider of cloud-based talent management solutions, today announced its financial results for the three months ended September 30, 2015. All figures are stated in United States dollars unless otherwise noted.

Third Quarter 2015 Financial and Operational Highlights

  • Recurring revenue increased 17% from Q3 2014 to $14.9 million, representing 90% of total revenue in the quarter.
  • Total revenue increased 15% from Q3 2014 to a record $16.6 million.
  • Deferred revenue rose 17% year-over-year to $33.3 million.
  • Net customer adds included a broad set of verticals and geographies, including names such as LEAP Legal Software Pty. Limited, Piller’s Fine Foods, FAMA Holdings Company Ltd., Emirates Post Group, World First UK Ltd, Florida Hospital Wesley Chapel, St. Clair, Hope Hospice, and Community Services Inc.
  • Dollar retention continued to be more than 100%.
  • Total cash and investments of $39.7 million at September 30, 2015 compared to $44.2 million at December 31, 2014.
  • Continued a Normal Course Issuer Bid to purchase up to a maximum of 600,000 common shares. In the third quarter the Company purchased and cancelled 50,600 shares for approximately $0.4 million resulting in a total of 120,643 shares for approximately $0.9 million as of September 30, 2015.

“Our third quarter results were in line with our expectations, and reflect continued solid demand for our differentiated talent management solutions that are ideal for mid-enterprise customers”, said Les Rechan, Halogen’s CEO. “There is a tremendous market opportunity for SaaS-based talent management solutions, and we will continue to adjust our go-to-market strategies and respective investments to capitalize on this largely untapped market. Looking forward, we are making incremental progress, but we still have opportunities to increase our level of execution, productivity and growth. I am confident in our future success given our best-in-class portfolio of solutions and strong track-record of delivering value to our customers.”

Financial Review

Halogen’s recurring revenue in the third quarter of 2015 was $14.9 million, a 17% increase over Q3 2014. Total revenue increased 15% over Q3 2014 to $16.6 million, driven by growth in the Company’s customer base, as well as the sale of additional seats and modules to existing customers. In the third quarter of 2015, approximately 79% of revenue was generated from customers located in the United States (79% in Q3 2014), 10% in Canada (10% in Q3 2014) and 11% in international markets (11% in Q3 2014).

Gross margin was $12.2 million, or 74% of total revenue, in the third quarter of 2015, compared to $9.9 million, or 69% of total revenue, in Q3 2014.

Net loss was $3.8 million in the third quarter of 2015 as compared to a loss of $5.0 million in Q3 2014. Adjusted EBITDA2 was $(0.6) million in Q3 2015 compared to $(2.6) million in Q3 2014; Adjusted EBITDA per share was $(0.03) per share in Q3 2015, compared to $(0.12) per share in Q3 2014.

Total cash and investments was $39.7 million at September 30, 2015 compared to $44.2 million at December 31, 2014. Deferred revenue was $33.3 million at quarter-end, compared to $28.5 million at September 30, 2014 and $32.8 million at December 31, 2014.

Fourth Quarter and Full Year 2015 Financial Guidance

For the fourth quarter of 2015, the Company is expecting:

  • Recurring revenue in the range of $15.4 to $15.6 million
  • Total revenue in the range of $16.9 to $17.1 million

For the full year 2015, the Company is expecting:

  • Recurring revenue in the range of $59.3 to $59.5 million
  • Total revenue in the range of $65.4 to $65.6 million

Third quarter 2015 Financial Statements and Management’s Discussion and Analysis
Halogen’s Management’s Discussion and Analysis and Condensed Consolidated Interim Financial Statements for the three and nine month periods ended September 30, 2015 will be available on SEDAR (www.sedar.com) and on the Halogen website at http://ir.halogensoftware.com.


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