Benefitfocus Announces First Quarter 2015 Financial Results

  • 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.
Conference Call Details:

In conjunction with this announcement, Benefitfocus will host a conference call today, May 6, 2015 at 5:00 p.m. Eastern Time to discuss the company’s financial results. To access this call, dial (855) 233-6991 (domestic) or (317) 586-4497 (international) with conference ID 24785534. A live webcast, as well as the replay, of the conference call will be available on the Investor Relations page of the company’s website at http://investor.benefitfocus.com/. A replay of this conference call can also be accessed by dialing (855) 859-2056 (domestic) or (404) 537-3406 (international) until May 13, 2015.

Please click here to view financial tables.

About Benefitfocus

Benefitfocus, Inc. (NASDAQ: BNFT) is a leading provider of cloud-based benefits software solutions for consumers, employers, insurance carriers and brokers. Benefitfocus has served more than 25 million consumers on its platform that consists of an integrated portfolio of products and services enabling clients to more efficiently shop, enroll, manage and exchange benefits information. With a user-friendly interface and consumer-centric design, the Benefitfocus Platform provides one place for consumers to access all their benefits. Benefitfocus solutions support the administration of all types of benefits including core medical, dental and other voluntary benefits plans as well as wellness programs. For more information, visit https://www.benefitfocus.com.

Non-GAAP Financial Measures

The company uses certain non-GAAP financial measures in this release, including non-GAAP gross profit, loss from operations, net loss, net loss per share, adjusted EBITDA and free cash flow. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position or cash flow, that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP.

Non-GAAP gross profit, loss from operations, net loss and net loss per share exclude stock-based compensation expenses, amortization of acquisition-related intangible assets. We define adjusted EBITDA as net loss before net interest, taxes, and depreciation and amortization expense, adjusted to eliminate stock-based compensation expense and expense related to the impairment of goodwill and intangible assets. We define free cash flow as cash flow from operations less capital expenditures and capitalized software. Please note that other companies might define their non-GAAP financial measures differently than we do. Management presents certain non-GAAP financial measures in this release because it considers them to be important supplemental measures of performance. Management uses these non-GAAP financial measures for planning purposes, including analysis of the company's performance against prior periods, the preparation of operating budgets and to determine appropriate levels of operating and capital investments. Management believes that these non-GAAP financial measures provide additional insight for analysts and investors in evaluating the company's financial and operational performance. Management also intends to provide these non-GAAP financial measures as part of the company’s future earnings discussions and, therefore, the inclusion of the non-GAAP financial measures should provide consistency in the company’s financial reporting. Non-GAAP financial measures have limitations as an analytical tool. Investors are encouraged to review the reconciliation of the non-GAAP measures to their most directly comparable GAAP measures provided in this release, including in the accompanying tables.

Safe Harbor Statement

Except for historical information, all of the statements, expectations, and assumptions contained in this press release are forward-looking statements. Actual results might differ materially from those explicit or implicit in the forward-looking statements. Important factors that could cause actual results to differ materially include: fluctuations in our financial results; general economic risks; the immature and volatile market for our products and services; the need to innovate and provide useful products and services; risks related to changing healthcare and other applicable regulations; our ability to compete effectively; our ability to maintain our culture and recruit and retain qualified personnel; privacy, security and other risks associated with our business; and the other risk factors set forth from time to time in our SEC filings, copies of which are available free of charge within the Investor Relations section of the Benefitfocus website at http://investor.benefitfocus.com/sec.cfm or upon request from our Investor Relations Department. Benefitfocus assumes no obligation and does not intend to update these forward-looking statements, except as required by law.

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