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Vocera Announces First Quarter 2021 Financial Results

Vocera Communications, Inc. (NYSE: VCRA), a recognized leader in clinical communication and workflow solutions, today reported total revenue of $48.7 million for the first quarter of 2021, an increase of 20% compared to the first quarter of 2020.

“Our first quarter provided a strong start to the year, including large, strategic wins and great progress in our international markets,” said Brent Lang, Chairman and CEO of Vocera. “The strength of our business was broad-based, and we have become the new, high priority standard for communications in healthcare.”

First quarter of 2021 financial highlights include:

  • Total revenue of $48.7 million, up 20% compared to $40.7 million last year
  • GAAP net loss of $(7.6) million compared to $(10.5) million last year
  • Non-GAAP net income of $3.3 million compared to a Non-GAAP net loss of $(4.3) million last year
  • Adjusted EBITDA of $5.2 million compared to $(2.0) million last year
  • Deferred revenue and backlog combined of $169.3 million as of March 31, 2021, an increase of 35% over last year

First Quarter 2021 Results

Total revenue for the first quarter of 2021 was $48.7 million, an increase of 20% compared to last year.

(in thousands)

Three months ended March 31,

 

2021

 

2020

 

% change

Product revenue

 

 

 

 

 

Device

$

15,273

 

 

$

13,903

 

 

9.9

%

Software

7,335

 

 

3,947

 

 

85.8

 

Total product

$

22,608

 

 

$

17,850

 

 

26.7

%

 

 

 

 

 

 

Service revenue

 

 

 

 

 

Subscription and support

$

20,959

 

 

$

18,069

 

 

16.0

%

Professional services and training

5,101

 

 

4,754

 

 

7.3

 

Total service

26,060

 

 

22,823

 

 

14.2

%

Total revenue

$

48,668

 

 

$

40,673

 

 

19.7

%

GAAP gross margin for the first quarter of 2021 was 63.5%, compared to 58.5% in the first quarter of 2020.

 

Three months ended March 31,

 

2021

 

2020

Gross margin

 

 

 

Product

69.2

%

 

64.3

%

Service

58.5

 

 

53.9

 

Total gross margin

63.5

%

 

58.5

%

 

 

 

 

Non-GAAP gross margin

 

 

 

Product

71.4

%

 

65.3

%

Service

61.9

 

 

57.4

 

Total non-GAAP gross margin

66.3

%

 

60.9

%

GAAP net loss for the first quarter of 2021 was $(7.6) million, or $(0.23) per share, compared to GAAP net loss of $(10.5) million, or $(0.33) per share in the first quarter of 2020.

 

Three months ended March 31,

(in thousands except per share amounts)

2021

 

2020

Net income (loss)

$

(7,633

)

 

$

(10,470

)

Net income (loss) per share

$

(0.23

)

 

$

(0.33

)

Non-GAAP net income (loss)

$

3,339

 

 

$

(4,310

)

Non-GAAP diluted net income (loss) per share

$

0.09

 

 

$

(0.14

)

Adjusted EBITDA

$

5,196

 

 

$

(2,010

)

Deferred revenue as of March 31, 2021 was $60.1 million compared to $64.7 million as of December 31, 2020. Cash, cash equivalents and short-term investments were $315.1 million as of March 31, 2021 compared to $230.2 million as of December 31, 2020.

2021 Guidance

The Company expects revenue between $218.0 million and $228.0 million and a GAAP loss per share between $(0.82) and $(0.65). The Company expects non-GAAP diluted earnings per share to be between $0.47 and $0.59 and non-GAAP Adjusted EBITDA to be between $26.0 million and $31.0 million.

 

FY’21

(in millions except per share amounts)

Low

 

High

Revenue

$

218.0

 

 

$

228.0

 

Loss per share

$

(0.82

)

 

$

(0.65

)

Non-GAAP diluted earnings per share

$

0.47

 

 

$

0.59

 

Adjusted EBITDA

$

26.0

 

 

$

31.0

 

Conference Call Information

Vocera Communications will host a conference call at 5 p.m. ET (2 p.m. PT) today, April 29, 2021, to discuss the Company’s results.

A free, live webcast of the conference call will be available on the Investors section of the company’s website at investors.vocera.com.

The call also can be accessed by dialing 833-968-2210, or +1 778-560-2808 for international callers, and using the access code 5177063.

A replay of the call will be archived after the event at investors.vocera.com.

Forward-Looking Statements

Statements in this press release that are not strictly historical in nature are forward-looking statements within the meaning of the U.S. federal securities laws. These forward-looking statements are based on limited information currently available to us and our management`s expectations, which are inherently subject to change and involve a number of risks and uncertainties.

Actual events or results may differ materially from those in any forward-looking statement due to various factors, including but not limited to, potential impacts of the COVID-19 pandemic on our operations, changes in regulations in the U.S. and other countries; the effects on government and commercial hospital customers of the federal budget and budgetary uncertainty; changes in healthcare insurance coverage and consumers’ utilization of healthcare and hospital services; our ability to achieve and maintain profitability; the demand for our various solutions in the healthcare and other markets; our lengthy and unpredictable sales cycle; our ability to offer high-quality services and support for our solutions; our ability to achieve anticipated strategic or financial benefits from our acquisitions; our ability to acquire the sole and limited source hardware and software components of our solutions; our ability to obtain the required capacity and product quality from our contract manufacturers; our ability to develop and introduce new solutions and features to existing solutions and to manage our growth; the impact of tax law reform on us or our customers; and the other factors described in our most recently filed Quarterly Report on Form 10-Q, as well as our other filings with the Securities and Exchange Commission (SEC). Our filings with the SEC are available on the Investors section of the Company’s web site at www.vocera.com. The financial and other information contained in this press release should be read in conjunction with the financial statements and notes thereto included in our filings with the SEC. Our operating results for any historical period, including the first quarter of 2021, are not necessarily indicative of our operating results for any future periods. This press release speaks only as of its date. We assume no obligation to update the information in this press release, to revise any forward-looking statements, or to update the reasons actual events or results could differ materially from those anticipated in forward-looking statements.

Use of Non-GAAP Financial Information

This press release contains financial measures that are not calculated in accordance with U.S. generally accepted accounting principles (GAAP). Our management evaluates the Company’s results and makes operating decisions using various GAAP and non-GAAP measures. In addition to our GAAP results, we also consider non-GAAP gross margin, non-GAAP gross margin for products and for services, non-GAAP net income/(loss), non-GAAP diluted income/(loss) per share, non-GAAP operating expenses, non-GAAP other expense, net and non-GAAP benefit from (provision for) income taxes. We also present Adjusted EBITDA, a non-GAAP measure that we reconcile to net income/(loss). These non-GAAP measures should not be considered as a substitute for the corresponding financial measure derived in accordance with GAAP. We present the non-GAAP measures because we consider them to be important supplemental information for our investors for analyzing our performance, core operating results and trends. Investors are encouraged to review the reconciliation of non-GAAP financial measures to their most directly comparable GAAP measures included with this press release.

Our non-GAAP gross margins, non-GAAP net income/(loss), non-GAAP diluted income/(loss) per share, non-GAAP operating expenses, non-GAAP other expense, net, non-GAAP benefit from (provision for) income taxes, and Adjusted EBITDA are exclusive of certain items to facilitate management’s review of the comparability of our core operating results on a period-to-period basis because such items are not related to our ongoing core operating results as viewed by management. We define our “core operating results” as those revenues recorded in a particular period and the expenses incurred within that period that directly drive operating income in that period. Management uses these non-GAAP financial measures in making operating decisions because, in addition to meaningful supplemental information regarding operating performance, the measures give us a better understanding of how we should invest in research and development, fund infrastructure growth and evaluate the effectiveness of marketing strategies. In calculating the above non-GAAP results, management specifically adjusted for the following excluded items:

a) Stock-based compensation expense impact. We recognize equity plan-related compensation expenses, which represent the fair value of all share-based payments to employees, including grants of employee stock options and restricted stock units as non-GAAP adjustments in each period.

b) Amortization of acquired intangibles. We acquired certain companies in 2020, 2016, and 2014, and booked intangible assets related to these acquisitions. The amortization of these acquired intangible assets is excluded from non-GAAP net income because it is not related to ongoing controllable management decisions and because it is non-cash in nature.

c) Acquisition related expenses. In addition to the amortization of acquired intangibles mentioned above, we also adjust for certain acquisition-related expenses that we may incur including (i) professional service fees, (ii) transition costs and (iii) non-cash tax adjustments. Professional service fees include third party costs related to the acquisition, such as due diligence costs, accounting fees, legal fees, valuation services and commissions, if any. Transition costs include retention payments and other transitional employee costs treated as compensation expense as well as the change in the fair value of contingent consideration payments payable to the selling shareholders. Non-cash tax adjustments includes the benefit received from releasing deferred tax assets reserves that were available to offset tax liabilities acquired through acquisition. We consider such costs and adjustments as highly variable in amount and frequency, being significantly impacted by the timing and size of any acquisitions. By excluding acquisition-related costs and adjustments from our non-GAAP measures, management can better focus on the organic continuing operations of our baseline and acquired businesses.

Management adjusts for the above items because management believes that, in general, these items possess one or more of the following characteristics: their magnitude and timing are largely outside of Vocera’s control; they are unrelated to the ongoing operation of the business in the ordinary course; they are unusual and we do not expect them to occur in the ordinary course of business; or they are non-operational, or non-cash expenses involving stock award grants.

We believe that the presentation of these non-GAAP financial measures is warranted for several reasons:

a) Such non-GAAP financial measures provide an additional analytical tool for understanding our financial performance by excluding the impact of items which may obscure trends in the core operating results of the business;

b) These non-GAAP financial measures facilitate comparisons to the operating results of other companies commonly compared to us, which use similar financial measures to supplement their GAAP results, thus enhancing the perspective of investors who wish to utilize such comparisons in their analysis of our performance; and

c) These non-GAAP financial measures are employed by our management in their own evaluation of performance and are utilized in financial and operational decision-making processes, such as budget planning and forecasting.

Set forth below are additional reasons why share-based compensation expense is excluded from our non-GAAP financial measures:

a) While share-based compensation constitutes one of our ongoing and recurring expenses, it is not an expense that requires cash settlement by us. We therefore exclude these charges for purposes of evaluating core operating results. Thus, our non-GAAP measurements are presented exclusive of stock-based compensation expense to assist management and investors in evaluating our core operating results.

b) We present share-based payment compensation expense in our reconciliation of non-GAAP financial measures on a pre-tax basis because the exact tax differences related to the timing and deductibility of share-based compensation are dependent upon the trading price of our common stock and the timing and exercise by employees of their stock options. As a result of these timing and market uncertainties, the tax effect related to share-based compensation expense would be inconsistent in amount and frequency and is therefore excluded from our non-GAAP results.

As stated above, we present non-GAAP financial measures because we consider them to be important supplemental measures of performance. However, non-GAAP financial measures have limitations as an analytical tool and should not be considered in isolation or as a substitute for our GAAP results. In the future, we expect to incur expenses similar to certain of the non-GAAP adjustments described above and expect to continue reporting non-GAAP financial measures excluding such items. Some of the limitations in relying on non-GAAP financial measures are:

  • Our stock options, restricted stock units, performance based restricted stock units, and stock purchase plans are important components of incentive compensation arrangements and will be reflected as expenses in our GAAP results for the foreseeable future; and
  • Other companies may calculate non-GAAP financial measures differently than us, limiting their usefulness as a comparative measure.

Pursuant to the requirements of SEC Regulation G, a detailed reconciliation between our non-GAAP and GAAP financial results is set forth in the financial tables referred to above, and linked to, this press release. Investors are advised to carefully review and consider this information strictly as a supplement to the GAAP results for the respective periods.

About Vocera:

The mission of Vocera Communications, Inc. is to improve the lives of healthcare professionals, patients, and families. Founded in 2000, Vocera provides solutions that help protect and connect team members, simplify workflows, increase efficiency, enhance quality of care and safety, and humanize the healthcare experience. More than 2,300 facilities worldwide, including nearly 1,900 hospitals and healthcare facilities, have selected Vocera solutions to enable their workforce to communicate and collaborate with co-workers and engage with patients and families. Mobile workers can choose the right device for their role or task, including smartphones or one of the company’s wearable communication devices, and use voice commands to easily reach people by name, role, or group. The hands-free Vocera Smartbadge was named to TIME’s list of the 100 Best Inventions of 2020. The Vocera Platform can integrate with more than 150 clinical and operational systems, including electronic health records, nurse call systems, ventilators, physiological monitors, and more. In addition to healthcare, Vocera solutions are found in aged care facilities, veterinary hospitals, schools, luxury hotels, retail stores, power facilities, and more. Visit www.vocera.com to learn more, and follow @VoceraComm on Twitter.

Vocera® and the Vocera logo are trademarks of Vocera Communications, Inc. registered in the United States and other jurisdictions. All other trademarks appearing in this release are the property of their respective owners.

Vocera Communications, Inc.

Condensed Consolidated Statements of Operations

(In Thousands, Except Per Share Amounts)

(Unaudited)

 

Three months ended March 31,

 

2021

 

2020

Revenue

 

 

 

Product

$

22,608

 

 

$

17,850

 

Service

26,060

 

 

22,823

 

Total revenue

48,668

 

 

40,673

 

Cost of revenue

 

 

 

Product

6,956

 

 

6,364

 

Service

10,827

 

 

10,523

 

Total cost of revenue

17,783

 

 

16,887

 

Gross profit

30,885

 

 

23,786

 

Operating expenses

 

 

 

Research and development

10,350

 

 

9,032

 

Sales and marketing

17,670

 

 

16,963

 

General and administrative

7,275

 

 

6,391

 

Total operating expenses

35,295

 

 

32,386

 

Loss from operations

(4,410

)

 

(8,600

)

Interest income

346

 

 

1,120

 

Interest expense

(777

)

 

(2,274

)

Other expense, net

(2,546

)

 

(591

)

Loss before income taxes

(7,387

)

 

(10,345

)

Provision for income taxes

(246

)

 

(125

)

Net loss

$

(7,633

)

 

$

(10,470

)

 

 

 

 

Loss per share

 

 

 

Basic

$

(0.23

)

 

$

(0.33

)

Diluted

$

(0.23

)

 

$

(0.33

)

Weighted average shares used to compute net loss per share

 

 

 

Basic

33,087

 

 

31,738

 

Diluted

33,087

 

 

31,738

 

Vocera Communications, Inc.

Condensed Consolidated Balance Sheets

(In Thousands)

(Unaudited)

 

 

March 31,

2021

 

December 31,

2020

Assets

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

105,257

 

 

$

34,976

 

Short-term investments

209,861

 

 

195,227

 

Accounts receivable, net of allowance

32,718

 

 

45,653

 

Other receivables

5,552

 

 

6,170

 

Inventories

10,432

 

 

10,159

 

Prepaid expenses and other current assets

6,925

 

 

6,317

 

Total current assets

370,745

 

 

298,502

 

Property and equipment, net

7,395

 

 

8,103

 

Intangible assets, net

11,957

 

 

12,788

 

Goodwill

69,168

 

 

69,168

 

Deferred commissions

12,713

 

 

12,293

 

Other long-term assets

5,890

 

 

5,967

 

Total assets

$

477,868

 

 

$

406,821

 

Liabilities and stockholders' equity

 

 

 

Current liabilities

 

 

 

Accounts payable

$

3,774

 

 

$

3,127

 

Accrued payroll and other current liabilities

22,000

 

 

23,195

 

Deferred revenue, current

50,882

 

 

54,785

 

Total current liabilities

76,656

 

 

81,107

 

Deferred revenue, long-term

9,254

 

 

9,948

 

Convertible senior notes, net

234,135

 

 

124,376

 

Other long-term liabilities

10,795

 

 

10,374

 

Total liabilities

330,840

 

 

225,805

 

Stockholders' equity

147,028

 

 

181,016

 

Total liabilities and stockholders’ equity

$

477,868

 

 

$

406,821

 

Vocera Communications, Inc.

Three months ended March 31, 2021

 

 

 

 

Stock

 

 

 

Acquisition

 

 

 

 

(In thousands)

GAAP

 

compensation

 

Intangible

 

related

 

Total

 

Non-GAAP

 

2021

 

expense (a)

 

amortization (b)

 

expense (c)

 

adjustments

 

2021

Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit (Unaudited)

Revenue

 

 

 

 

 

 

 

 

 

 

 

Product

$

22,608

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

22,608

 

Service

26,060

 

 

 

 

 

 

 

 

 

 

26,060

 

Total revenue

48,668

 

 

 

 

 

 

 

 

 

 

48,668

 

Cost of revenue

 

 

 

 

 

 

 

 

 

 

 

Product

6,956

 

 

192

 

 

303

 

 

 

 

495

 

 

6,461

 

Service

10,827

 

 

892

 

 

 

 

 

 

892

 

 

9,935

 

Total cost of revenue

17,783

 

 

1,084

 

 

303

 

 

 

 

1,387

 

 

16,396

 

Gross profit

$

30,885

 

 

$

1,084

 

 

$

303

 

 

$

 

 

$

1,387

 

 

$

32,272

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock

 

 

 

Acquisition

 

 

 

 

(In thousands)

GAAP

 

compensation

 

Intangible

 

related

 

Total

 

Non-GAAP

 

2021

 

expense (a)

 

amortization (b)

 

expense (c)

 

adjustments

 

2021

Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

$

10,350

 

 

$

1,000

 

 

$

 

 

$

445

 

 

$

1,445

 

 

$

8,905

 

Sales and marketing

17,670

 

 

2,325

 

 

489

 

 

296

 

 

3,110

 

 

14,560

 

General and administrative

7,275

 

 

2,453

 

 

39

 

 

105

 

 

2,597

 

 

4,678

 

Total operating expenses

$

35,295

 

 

$

5,778

 

 

$

528

 

 

$

846

 

 

$

7,152

 

 

$

28,143

 

(a)

This adjustment reflects the accounting impact of non-cash stock-based compensation expense.

(b)

This adjustment reflects the accounting impact of acquisitions in 2020, 2016, and 2014 in non-cash expense.

(c)

This adjustment reflects the costs associated with acquisitions in 2020 and 2021.

Three months ended March 31, 2020

 

 

 

Stock

 

Intangible

 

 

 

 

(In thousands)

GAAP

 

compensation

 

amortization

 

Total

 

Non-GAAP

 

2020

 

expense (a)

 

(b)

 

adjustments

 

2020

Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit (Unaudited)

Revenue

 

 

 

 

 

 

 

 

 

Product

$

17,850

 

 

$

 

 

$

 

 

$

 

 

$

17,850

 

Service

22,823

 

 

 

 

 

 

 

 

22,823

 

Total revenue

40,673

 

 

 

 

 

 

 

 

40,673

 

Cost of revenue

 

 

 

 

 

 

 

 

 

Product

6,364

 

 

162

 

 

11

 

 

173

 

 

6,191

 

Service

10,523

 

 

811

 

 

 

 

811

 

 

9,712

 

Total cost of revenue

16,887

 

 

973

 

 

11

 

 

984

 

 

15,903

 

Gross profit

$

23,786

 

 

$

973

 

 

$

11

 

 

$

984

 

 

$

24,770

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock

 

Intangible

 

 

 

 

(In thousands)

GAAP

 

compensation

 

amortization

 

Total

 

Non-GAAP

 

2020

 

expense (a)

 

(b)

 

adjustments

 

2020

Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses (Unaudited)

 

 

 

 

 

 

 

 

 

 

Research and development

$

9,032

 

 

$

966

 

 

$

 

 

$

966

 

 

$

8,066

 

Sales and marketing

16,963

 

 

1,860

 

 

269

 

 

2,129

 

 

14,834

 

General and administrative

6,391

 

 

2,042

 

 

39

 

 

2,081

 

 

4,310

 

Total operating expenses

$

32,386

 

 

$

4,868

 

 

$

308

 

 

$

5,176

 

 

$

27,210

 

(a)

This adjustment reflects the accounting impact of non-cash stock-based compensation expense.

(b)

This adjustment reflects the accounting impact of acquisitions in 2016 and 2014 in non-cash expense.

Vocera Communications, Inc.

Non-GAAP Net income and net income per share and Adjusted EBITDA

(In thousands, except per share amounts)

(Unaudited)

 

 

Three months ended March 31,

 

2021

 

2020

GAAP net loss

$

(7,633

)

 

$

(10,470

)

Add back:

 

 

 

Stock compensation expense

6,862

 

 

5,841

 

Acquisition related expenses

846

 

 

 

Other expense, net (a)

2,433

 

 

 

Interest income

(341

)

 

(1,113

)

Interest expense

777

 

 

2,274

 

Depreciation and amortization expense

2,006

 

 

1,333

 

Provision for income taxes

246

 

 

125

 

Non-GAAP adjusted EBITDA

$

5,196

 

 

$

(2,010

)

 

 

 

 

GAAP net loss

$

(7,633

)

 

$

(10,470

)

Add back:

 

 

 

Stock compensation expense

6,862

 

 

5,841

 

Intangible amortization

831

 

 

319

 

Acquisition related expenses

846

 

 

 

Other expense, net (a)

2,433

 

 

 

Non-GAAP net income (loss)

$

3,339

 

 

$

(4,310

)

Non-GAAP net income (loss) per share

 

 

 

Basic

$

0.10

 

 

$

(0.14

)

Diluted

$

0.09

 

 

$

(0.14

)

Weighted average shares used to compute non-GAAP net income (loss) per share

 

 

 

Basic

33,087

 

 

31,738

 

Diluted

38,726

 

 

31,738

 

(a) This adjustment reflects the accounting impact of the quarterly valuation reassessment of contingent consideration resulting from the 2020 acquisition of $373k and the induced conversion expense from repurchasing our 2023 Notes of $2,059k.

Vocera Communications, Inc.

Future guidance for operating results

(In millions, except per share amounts)

 

Reconciliation for GAAP to Non-GAAP for net income (loss) and net income (loss) per share

 

 

Year ended

December 31, 2021

 

Low

 

High

Revenue

$

218.0

 

 

$

228.0

 

GAAP net loss

(28.3

)

 

(22.3

)

Stock compensation expense

32.0

 

 

31.0

 

Intangible amortization expense

5.3

 

 

5.3

 

Acquisition and restructuring expense

10.0

 

 

10.0

 

Benefit from Income Tax

(0.3

)

 

(0.3

)

Total adjustments

47.0

 

 

46.0

 

Non-GAAP net income

$

18.8

 

 

$

23.8

 

Weighted average shares (in thousands)

 

 

 

Basic

34.3

 

 

34.3

 

Diluted - GAAP

34.3

 

 

34.3

 

Diluted

40.3

 

 

40.3

 

 

 

 

 

GAAP loss per share:

 

 

 

Basic

$

(0.82

)

 

$

(0.65

)

Diluted

$

(0.82

)

 

$

(0.65

)

Non-GAAP net income per share:

 

 

 

Basic

$

0.55

 

 

$

0.69

 

Diluted

$

0.47

 

 

$

0.59

 

 

Reconciliation of Non-GAAP net income to adjusted EBITDA

 

 

Year ended

December 31, 2021

 

Low

 

High

Non-GAAP net income

$

18.8

 

 

$

23.8

 

Interest expense, net

1.0

 

 

1.0

 

Depreciation expense

5.3

 

 

5.3

 

Provision for income taxes

1.0

 

 

1.0

 

Total adjustments

7.3

 

 

7.3

 

Adjusted EBITDA

$

26.0

 

 

$

31.0

 

* Amounts may not recompute due to rounding.

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