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February 2, 2017

Attunity Reports Fourth Quarter and Full Year 2016 Results

BURLINGTON, Mass., Feb. 2 — Attunity Ltd. (ATTU), a leading provider of data integration and Big Data management software solutions, today reported its unaudited financial results for the three-month period and full year ended December 31, 2016.

“The fourth quarter delivered solid financial results, including 22% increase of revenue, compared to the same period in 2015, and positive cash flow. This growth was driven by several new customer engagements closed during the quarter, including two that are valued at more than $1 million each. These agreements represent just a portion of the demand that we believe exists in the market for our data integration solutions supporting customers’ Hadoop and data lake environments,” said Shimon Alon, Chairman and CEO of Attunity.

“In 2016, license revenue contributed from larger customer deals more than tripled to approximately $8 million, compared with $2.5 million for 2015. Being consistently selected by new, large global customers demonstrates our leadership position and growing market share. In addition, we believe these customers represent significant expansion opportunities to further grow future revenues. Considering this trend, we believe our addressable market is larger than a year ago and will only continue to grow, as the need for real-time Big Data analytics continues to play an increasingly important role for our target customers across the globe.”

Recent Operational Highlights

  • Closed several large customer transactions for data lake initiatives including two worth over $1 million each
  • Closed enterprise data replication agreement worth over $1 million to replace incumbent competitive vendor
  • Extended OEM distribution agreement with Microsoft through 2017
  • Introduced new data warehouse automation solution for Amazon Redshift
  • Recognized in CIOReview Magazine’s ’20 Most Promising Data Integration Solution Providers 2016′ List

Financial Highlights for Q4 2016, compared with Q4 2015

  • Total revenue was $15.6 million, compared with $12.8 million
  • Operating expenses were $15.4 million, compared with $12.6 million
  • Non-GAAP operating expenses were $14.0 million, compared with $12.5 million
  • Net loss of $0.2 million, compared with net income of $0.4 million
  • Non-GAAP net income of $1.1 million, compared with non-GAAP net loss of $18,000
  • Generated positive cash flow from operations of $0.3 million, compared with $0.7 million

Financial Highlights for FY 2016, compared with FY 2015

  • Total revenue was $54.5 million, compared with $48.2 million
  • Operating expenses were $65.9 million, compared with $50.7 million
  • Non-GAAP operating expenses were $54.6 million, compared with $45.2 million
  • Net loss of $10.7 million, compared with net loss of $3.6 million
  • Non-GAAP net loss of $2.2 million, compared with non-GAAP net income of $1.4 million
  • Cash used in operations of $0.8 million, compared with positive cash flow of $4.9 million

Big Data Management and Cloud Solutions

Attunity continued to build its market share in 2016, closing several large customer agreements, ranging from over a million dollars to several hundreds of thousands of dollars. These agreements were closed with customers across diverse group of industries and geographies, including a leading global manufacturer, a global multi-billion-dollar insurance company; a global payments processing leader; and a large medical claims processing company. We believe these wins also clearly demonstrate the value that Attunity’s solutions provide to customers.

As an example, during the fourth quarter, Attunity was selected by a leading global manufacturing company due to the Attunity solution’s unique ability to serve as a universal platform for the manufacturer’s broad data ingestion and management needs. The customer’s IT team plans to pull data from thousands of applications across a diverse set of data sources, including Oracle, Teradata and legacy mainframe, into its corporate data lake deployed in a hybrid cloud environment leveraging Hadoop as well as in-memory database technologies. Attunity collaborated with Big Data and Cloud partners, like Hortonworks, Cloudera and MapR, whose technologies were part of the overall solution to the customer. These collaborations, along with the superior integration provided by Attunity’s universal product suite, led to the customer decision to select Attunity.

This manufacturing customer also purchased Attunity’s Visibility solution to improve the cost efficiencies of its data management environment, further benefitting from our expanded product suite.

Another example of Attunity’s success in bringing value to its customers includes a multi-billion-dollar insurance company that selected Attunity Replicate to provide real-time data feeds into its data lake. The customer uses the data lake as a single repository for their enterprise-wide reporting and analytics. They initially evaluated Attunity Replicate Express as a free trial solution. Then the customer selected Attunity Replicate for its high-scale production use. After experiencing how efficient and effective the solution is at ingesting data from various heterogeneous systems into a Hadoop platform, they purchased the Attunity solution, while noting its automation, real-time capabilities and ease of use as key advantages.

It is customer engagements such as these two that are helping Attunity gain recognition across the industry as a leading provider of award-winning data integration and Big Data management software solutions.  The Company’s product suite provides data replication and ingest with real-time change data capture (CDC), data warehouse automation, data usage analytics, data connectivity, cloud data delivery, and test data management.

Attunity is stepping further into the SAP market, the largest in the ERP industry, with the recent launch of Replicate for SAP. This solution offers a unique value to the SAP market and strengthens Attunity’s differentiation with an application-level replication that its traditional competition does not offer. We believe Attunity Replicate for SAP had positive market feedback almost immediately following its market introduction, with the first customer engagement closed in under three months from launch and we are looking forward to ramping up additional customer sales for Replicate for SAP in 2017.

Looking ahead, the cloud continues to provide exciting new growth opportunities as we see enterprises looking to migrate databases to cloud platforms, and leverage the cloud to analyze their data. These needs require an efficient and reliable way to move data from customers’ data centers. We believe that Attunity is well positioned to accommodate this growing need with the Company’s innovative leading global OEMs and partners, such as Amazon Web Services (AWS), Microsoft and Google.

Financial Results for Q4 2016

Total revenue for the fourth quarter of 2016 increased 22% to $15.6 million, compared with $12.8 million for the same period in 2015. This includes license revenue of $8.8 million, which increased 21% compared with $7.2 million for the same period in 2015, and maintenance and service revenue, which grew 22% to $6.8 million, compared with $5.6 million for the same period in 2015.

Operating expenses for the fourth quarter of 2016 increased 22% to $15.4 million, compared with $12.6 million for the same period in 2015.

Non-GAAP operating expenses for the fourth quarter of 2016 increased 12% to $14.0 million, compared with $12.5 million for the fourth quarter of 2015. The Non-GAAP operating expenses in the fourth quarter of 2016 exclude an approximately $1.4 million in expenses and amortization associated with acquisitions and equity-based compensation expenses. This is compared with $2.2 million in adjustments, expenses and amortization associated with acquisitions and equity-based compensation expenses, and a one-time gain of $1.9 million for the previously accrued earn-out payment to former Appfluent shareholders, as a result of Appfluent not meeting estimated earn-out milestones, for the same period in 2015.

Operating income for the fourth quarter of 2016 remained constant at $0.2 million, compared with the same period in 2015.

Non-GAAP operating income was $1.6 million for the fourth quarter of 2016, compared with operating income of $0.5 million for the fourth quarter of 2015. Non-GAAP operating income for the fourth quarter of 2016 excludes a total of $1.4 million in expenses and amortization associated with acquisitions and equity-based compensation expenses. This is compared with $2.3 million in adjustments, expenses and amortization associated with acquisitions and equity-based compensation expenses, and a one-time gain of $1.9 million for the previously accrued earn-out  payment to former Appfluent shareholders, as a result of Appfluent not meeting estimated earn-out milestones, for the same period in 2015.

Net loss for the fourth quarter of 2016 was $0.2 million, or ($0.01) per diluted share, compared with a net income of $0.4 million, or $0.02 per diluted share, in the fourth quarter of 2015

Non-GAAP net income for the fourth quarter of 2016 was $1.1 million, or $0.06 per diluted share, compared with non-GAAP net loss of $18,000, or ($0.00) per diluted share, for the same period in 2015. Non-GAAP net loss for the fourth quarter of 2016 excludes approximately $1.3 million primarily in expenses and amortization associated with acquisitions and equity-based compensation expenses, compared with approximately $1.6 million primarily in adjustments, expenses and amortization associated with acquisitions, equity-based compensation expenses, and non-cash tax benefits, and a one-time gain of $1.9 million for the previously accrued earn-out  payment to former Appfluent shareholders, as a result of Appfluent not meeting estimated earn-out milestones, for the same period in 2015.

Cash and cash equivalents were $9.2 million as of December 31, 2016, compared with $8.9 million as of September 30, 2016. During the fourth quarter of 2016 we generated positive cash flow from operations of $0.3 million, compared with $0.7 million for the same period in 2015.

Shareholders’ equity as of December 31, 2016 increased to $32.6 million, compared with $31.8 million as of September 30, 2016.

Financial Results for Full Year 2016

Total revenue for the full year ended December 31, 2016 increased 13% to $54.5 million, compared with $48.2 million for 2015. This includes an 8% increase in license revenues for 2016 to $28.7 million, compared with $26.6 million for 2015. It also includes maintenance and service revenue, which grew 20% to $25.8 million compared with $21.6 million for 2015.

Operating expenses for 2016 increased 30% to $65.9 million, compared with $50.7 million in 2015. The increase in operating expenses is primarily due to an approximately $4.1 million charge for partial impairment of acquired intangible assets associated with the Appfluent acquisition, a one-time gain of $1.9 million recorded in 2015 for the previously accrued earn-out  payment to former Appfluent shareholders, an increase of $5.7 million in selling and marketing expenses primarily as a result of (i) increased headcount in sales and marketing teams, including new hires of sales engineers to support the sales process of larger scale and enterprise-wide implementations, and (ii) increased commissions due to higher revenues, an increase of $2.2 million in R&D costs primarily due to new hires and salary updates, and an increase of $1.5 million in cost of revenues due to an increase in professional services and support personnel.

Non-GAAP operating expenses for 2016 increased 21% to $54.6 million, compared with $45.2 million for 2015. The Non-GAAP operating expenses for 2016 exclude an approximately a total of $11.2 million in expenses and amortization associated with acquisitions, impairment charges and equity-based compensation expenses, compared with $7.5 million in expenses and amortization associated with acquisitions, equity-based compensation expenses, and a one-time gain of $1.9 million for the previously accrued earn-out payment to former Appfluent shareholders in 2015.

Operating loss for 2016 was $11.4 million, compared with an operating loss of $2.5 million in 2015.

  • The operating expenses in 2016 include an approximately $4.1 million charge for partial impairment of acquired intangible assets associated with the Appfluent acquisition.
  • The operating expenses in 2015 include a one-time gain of $1.9 million for the previously accrued earn-out payment to former Appfluent shareholders.

Non-GAAP operating loss was $0.1 million for 2016, compared with operating income of $3.7 million in 2015. Non-GAAP operating income for 2016 excludes a total of $11.3 million in expenses and amortization associated with acquisitions, impairment charges and equity-based compensation expenses, compared with $8.2 million in expenses and amortization associated with acquisitions, equity-based compensation expenses, and a one-time gain of $1.9 million for the previously accrued earn-out payment to former Appfluent shareholders in 2015.

Net loss for 2016 was $10.7 million, or ($0.64) per diluted share, compared with $3.6 million, or ($0.22) per diluted share, in 2015.

Non-GAAP net loss for 2016 was $2.2 million, or ($0.13) per diluted share, compared with non-GAAP net income of $1.4 million, or 0.09 per diluted share, in 2015. Non-GAAP net income for 2016 excludes a total of $8.5 million in expenses and amortization associated with acquisitions, impairment charge, equity-based compensation expenses and non-cash tax benefits, compared with $7.1 million in expenses and amortization associated with acquisitions, equity-based compensation expenses and non-cash tax benefits, and a one-time gain of $1.9 million for the previously accrued earn-out payment to former Appfluent shareholders in 2015.

Cash and cash equivalents were $9.2 million as of December 31, 2016, compared with $12.5 million as of December 31, 2015. This decrease is mainly attributable to a final earn-out payment of $1.9 million to former Hayes Technology Group shareholders.

Shareholders’ equity as of December 31, 2016 decreased to $32.6 million, compared with $38.3 million as of December 31, 2015.

Outlook for Full Year 2017

The Company expects revenue to increase to between approximately $62 and $65 million for 2017.  Additionally, the Company expects non-GAAP operating margin to range between 5% and 8%.

About Attunity

Attunity is a leading provider of Big Data management software solutions that enable access, management, sharing and distribution of data across heterogeneous enterprise platforms, organizations, and the cloud. Our software solutions include data replication and distribution, test data management, change data capture (CDC), data connectivity,  enterprise file replication (EFR), managed file transfer (MFT), data warehouse automation, data usage analytics, and cloud data delivery.

Source: Attunity

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