Press Release

Mandiant Reports Financial Results for Second Quarter 2022

Aug 02, 2022
23 mins read

RESTON, Va. – August 2, 2022 Mandiant, Inc. (NASDAQ: MNDT) today announced financial results for the second quarter ended June 30, 2022. Unless otherwise noted, all 2021 results in this release, including the financial tables and reconciliations, reflect only continuing operations.

Second Quarter 2022 Financial Highlights

  • Revenue of $138 million, an increase of 21 percent from the second quarter of 2021
  • Annualized recurring revenue of $306 million, an increase of 25 percent from the end of the second quarter of 20211
  • Deferred revenue of $408 million, an increase of 37 percent from the end of the second quarter of 2021
  • GAAP operating margin of negative 63 percent, compared to GAAP operating margin of negative 74 percent in the second quarter of 2021
  • Non-GAAP operating margin of negative 20 percent, compared to non-GAAP operating margin of negative 26 percent in the second quarter of 20212
  • GAAP net loss per basic share attributable to common stockholders of 41 cents, compared to GAAP net loss per basic share attributable to common stockholders of 44 cents in the second quarter of 2021
  • Non-GAAP net loss per basic share attributable to common stockholders of 13 cents, compared to non-GAAP net loss basic share attributable to common stockholders of 14 cents in the second quarter of 20212

1 Annualized recurring revenue is defined as the annualized run-rate of active term licenses, subscriptions, and support contracts at the end of a reporting period.

2 A reconciliation of GAAP to non-GAAP financial measures is provided in the financial statement tables included in this press release. An explanation of these measures is also included under the heading “Non-GAAP Financial Measures.”

Business Outlook and Conference Call

Given the announcement made on March 8, 2022, regarding the company’s entry into a definitive agreement to be acquired by Google LLC, Mandiant will not be providing financial guidance for the third quarter of 2022 or updated financial guidance for the full-year 2022. The company’s previously issued full-year 2022 financial guidance should no longer be relied upon.

Due to the pending transaction with Google LLC, Mandiant will not host a conference call in conjunction with this release. For further detail and discussion of the company’s financial performance, please refer to Mandiant's upcoming quarterly report on Form 10-Q for the second quarter ended June 30, 2022.

Non-GAAP Financial Measures

In this release, Mandiant has provided financial information that has not been prepared in accordance with generally accepted accounting principles in the United States (GAAP). These non-GAAP financial measures are not based on any standardized methodology and are not necessarily comparable to similar measures used by other companies. The company uses these non-GAAP financial measures internally in analyzing its financial results and believes the use of these non-GAAP financial measures is useful to investors as an additional tool to evaluate ongoing operating results and trends, and in comparing the company's financial results with other companies in its industry, many of which present similar non-GAAP financial measures.

Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable financial information prepared in accordance with GAAP and should be read only in conjunction with the company's consolidated financial statements prepared in accordance with GAAP. A reconciliation of the company's non-GAAP financial measures to their most directly comparable GAAP financial measures has been provided in the financial statement tables included in this press release, and investors are encouraged to review the reconciliation.

Non-GAAP gross margin. Mandiant defines non-GAAP gross margin as total gross profit excluding stock-based compensation expense, amortization of stock-based compensation expense capitalized in software development costs, amortization of intangible assets, and, as applicable, other special or non-recurring items, divided by total revenue.

Non-GAAP operating income (loss) and non-GAAP operating margin. Mandiant defines non-GAAP operating income (loss) as operating income (loss) excluding stock-based compensation expense, amortization of stock-based compensation expense capitalized in software development costs, amortization of intangible assets, acquisition-related expenses, transformation and transition expense, restructuring charges, and other special or non-recurring items. Mandiant defines non-GAAP operating margin as non-GAAP operating income (loss) divided by total revenue.

Non-GAAP net loss attributable to common stockholders. Mandiant defines non-GAAP net loss attributable to common stockholders as net loss excluding stock-based compensation expense, amortization of stock-based compensation expense capitalized in software development costs, amortization of intangible assets, acquisition-related expenses, transformation and transition expense, restructuring charges, non-GAAP adjustments for discontinued operations, non-cash interest expense related to the company’s convertible senior notes, discrete tax provision (benefit), dividends on Series A convertible preferred stock, accretion of Series A convertible preferred stock, and other special or non-recurring items.

Non-GAAP net loss per basic share attributable to common stockholders. Mandiant defines non-GAAP net loss per basic share attributable to common stockholders as non-GAAP net loss attributable to common stockholders divided by weighted average basic shares outstanding, which excludes stock options, restricted stock units, performance stock units, and shares issuable upon conversion of the company's convertible senior notes and Series A convertible preferred shares that are anti-dilutive.

Non-GAAP net loss attributable to common stockholders and non-GAAP net loss per basic share attributable to common stockholders in the second quarter 2022 excluded stock-based compensation expense, amortization of stock-based compensation expense capitalized in software development costs, amortization of intangible assets, acquisition-related expenses, transformation and transition expense, non-cash interest expense related to convertible senior notes issued in June 2015 and the second quarter of 2018, and dividends on Series A convertible preferred stock. Weighted average basic shares outstanding used to calculate non-GAAP net loss per basic share attributable to common stockholders excluded stock options, restricted stock units, performance stock units, and shares issuable upon conversion of the company's convertible senior notes and Series A convertible preferred shares that were anti-dilutive.

Non-GAAP net loss attributable to common stockholders and non-GAAP net loss per basic share attributable to common stockholders in the second quarter 2021 excluded stock-based compensation expense, amortization of stock-based compensation expense capitalized in software development costs, amortization of intangible assets, restructuring charges, non-cash interest expense related to convertible senior notes issued in June 2015 and the second quarter of 2018, dividends on Series A convertible preferred stock, transformation and transition expenses, and non-GAAP adjustments for discontinued operations. Weighted average basic shares outstanding used to calculate non-GAAP net loss per basic share attributable to common stockholders excluded stock options, restricted stock units, performance stock units, and shares issuable upon conversion of the company's convertible senior notes that were anti-dilutive.

Mandiant considers these non-GAAP financial measures to be useful metrics for management and investors because they exclude the effect of stock-based compensation expense, amortization of stock-based compensation expense capitalized in software development costs, amortization of intangible assets, acquisition related expenses, restructuring charges, transformation and transition expense, non-cash interest expense related to convertible senior notes issued in June 2015 and the second quarter of 2018, adjustment to provision from income taxes, dividends on Series A convertible preferred stock, accretion of Series A convertible preferred stock, non-GAAP adjustments for discontinued operations and other non-recurring and discrete items so that management and investors can compare the company's core business operating results over multiple periods.

There are a number of limitations related to the use of these non-GAAP financial measures versus their nearest GAAP equivalents. First, these non-GAAP financial measures exclude stock-based compensation expense. Stock-based compensation is an important part of Mandiant employees' overall compensation and has been, and will continue to be for the foreseeable future, a significant recurring expense in the company's business. Second, the components of the costs that Mandiant excludes in its calculation of these non-GAAP financial measures, including not only stock-based compensation, but also amortization of stock-based compensation expense capitalized in software development costs, non-recurring or non-operating items such as amortization of intangible assets, acquisition related expenses, restructuring charges, non-cash interest expense related to the company’s convertible senior notes, and dividends on Series A convertible preferred stock, may differ from the components excluded by peer companies when they report their non-GAAP results of operations. Mandiant compensates for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP financial measures and evaluating non-GAAP financial measures together with their nearest GAAP equivalents.

About Mandiant, Inc.

Since 2004, Mandiant® has been a trusted partner to security-conscious organizations. Effective security is based on the right combination of expertise, intelligence, and adaptive technology, and the Mandiant Advantage SaaS platform scales decades of frontline experience and industry-leading threat intelligence to deliver a range of dynamic cyber defense solutions. Mandiant’s approach helps organizations develop more effective and efficient cyber security programs and instills confidence in their readiness to defend against and respond to cyber threats.

© 2022 Mandiant, Inc. All rights reserved. Mandiant is a registered trademark of Mandiant, Inc. in the United States and other countries. All other brands, products, or service names are or may be trademarks or service marks of their respective owners.

 

Contacts

Media Inquiries
Media.Relations@mandiant.com

Investor Inquiries
Investor.Relations@mandiant.com

Source: Mandiant

 

 

 

Mandiant, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands)

 

 

June 30, 2022

 

December 31, 2021

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

$

562,212

$

1,154,458

Short-term investments

 

1,074,826

 

1,039,339

Accounts receivable, net

 

113,535

 

146,460

Prepaid expenses and other current assets

 

58,980

 

73,079

Total current assets

 

1,809,553

 

2,413,336

Property and equipment, net

 

56,000

 

46,329

Operating lease right-of-use assets, net

 

27,227

 

25,768

Goodwill

 

1,060,023

 

1,060,023

Intangible assets, net

 

62,224

 

79,511

Deposits and other long-term assets

 

24,225

 

26,220

Total Assets

$

3,039,252

$

3,651,187

 

 

 

 

 

Liabilities, Convertible preferred stock and Stockholders' equity

 

 

 

 

Current Liabilities:

 

 

 

 

Accounts payable

$

29,362

$

32,585

Operating lease liabilities, current

 

14,733

 

13,306

Accrued and other current liabilities

 

80,881

 

105,886

Accrued compensation

 

49,696

 

71,660

Convertible senior notes, current, net

 

-

 

451,030

Deferred revenue, current

 

318,969

 

307,611

Total current liabilities

 

493,641

 

982,078

Convertible senior notes, non-current, net

 

626,735

 

556,240

Deferred revenue, non-current

 

88,944

 

102,717

Operating lease liabilities, non-current

 

51,476

 

52,132

Other long-term liabilities

 

7,557

 

7,376

Total liabilities

 

1,268,353

 

1,700,543

Commitments and contingencies:

 

 

 

 

Series A convertible preferred stock

 

428,894

 

419,404

Stockholders' equity:

 

 

 

 

Common stock

 

23

 

23

Additional paid-in capital

 

3,238,180

 

3,511,444

Treasury stock

 

-

 

(80,000)

Accumulated other comprehensive income

 

(17,946)

 

(2,172)

Accumulated deficit

 

(1,878,252)

 

(1,898,055)

Total stockholders’ equity

 

1,342,005

 

1,531,240

Total Liabilities, Convertible preferred stock and Stockholders' equity

$

3,039,252

$

3,651,187

 

 

 

Mandiant, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in thousands, except per share amounts)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2022

 

2021

 

2022

 

2021

Revenue:

 

 

 

 

 

 

 

Platform, cloud subscription and managed services

$62,056

 

$51,936

 

$119,685

 

$107,935

Professional services

               75,864

 

               61,974

 

             148,379

 

             120,663

Total revenue

             137,920

 

             113,910

 

             268,064

 

             228,598

Cost of revenue: (1)(2)

 

 

 

 

 

 

 

Platform, cloud subscription and managed services

               29,704

 

               28,243

 

               59,825

 

               54,856

Professional services

               45,806

 

               35,282

 

               87,887

 

               67,754

Total cost of revenue

               75,510

 

               63,525

 

             147,712

 

             122,610

Total gross profit

               62,410

 

               50,385

 

             120,352

 

             105,988

Operating expenses:

 

 

 

 

 

 

 

Research and development (1)(3)(10)

               44,394

 

               40,930

 

               88,855

 

               82,835

Sales and marketing (1)(2)

               71,153

 

               63,018

 

             140,562

 

             124,231

General and administrative (1)(4)(10)

               34,428

 

               29,020

 

               66,841

 

               54,371

Restructuring charges (5)

                    —

 

                1,927

 

                1,040

 

                1,927

Total operating expenses

             149,975

 

             134,895

 

             297,298

 

             263,364

Operating loss

             (87,565)

 

             (84,510)

 

            (176,946)

 

            (157,376)

Other expense, net (6)

               (2,351)

 

             (13,868)

 

               (4,195)

 

             (26,277)

Loss before income taxes from continuing operations before income taxes

             (89,916)

 

             (98,378)

 

            (181,141)

 

            (183,653)

Provision for income taxes (7)

                   575

 

                   763

 

                1,364

 

                1,943

Loss from continuing operations

             (90,491)

 

             (99,141)

 

            (182,505)

 

            (185,596)

Net income from discontinued operations, net of income taxes (11)

                    —

 

               34,445

 

                    —

 

               70,254

Net loss

$(90,491)

 

$(64,696)

 

$(182,505)

 

$(115,342)

Dividend on series A convertible preferred stock (8)

               (4,772)

 

               (4,563)

 

               (9,490)

 

               (9,075)

Accretion of series A convertible preferred stock (9)

                    —

 

                    —

 

                    —

 

                   (82)

Net income (loss) attributable to common stockholders

$(95,263)

 

$(69,259)

 

$(191,995)

 

$(124,499)

Net income (loss) per share attributable to common stockholders, basic and diluted:

 

 

 

 

 

 

 

Continuing operations

$(0.41)

 

$(0.44)

 

$(0.83)

 

$(0.83)

Discontinued operations

                    —

 

                  0.15

 

                    —

 

                  0.30

Net loss per share attributable to common stockholders, basic and diluted

$(0.41)

 

$(0.29)

 

$(0.83)

 

$(0.53)

Weighted average shares used in computing net income (loss) per share, basic and diluted

             233,218

 

             237,279

 

             231,909

 

             236,016

 

 

 

 

 

Mandiant, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)

 

Six Months Ended June 30,

 

2022

 

2021

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

Net loss from continuing operations

$(182,505)

 

$(185,596)

Adjustments to reconcile net loss from continuing operations to net cash used in continuing operating activities:

 

 

 

Depreciation and amortization

               33,859

 

             46,648

Stock-based compensation

               80,012

 

             72,143

Non-cash interest expense related to convertible senior notes

                2,007

 

             22,907

Deferred income taxes

                    61

 

                (114)

Loss (gain) on disposal of property and equipment

                   (44)

 

                 113

Other

                   239

 

                 (63)

Changes in operating assets and liabilities, net of assets acquired and liabilities assumed in business acquisitions:

 

 

 

Accounts receivable

               32,806

 

             17,445

Prepaid expenses and other assets

               16,150

 

              6,374

Accounts payable

                9,546

 

              4,211

Accrued liabilities

             (24,498)

 

             (1,540)

Accrued compensation

             (21,964)

 

           (14,231)

Deferred revenue

               (2,415)

 

             13,072

Other long-term liabilities

               (5,128)

 

             (4,915)

Net cash used in operating activities - continuing operations

             (61,874)

 

           (23,546)

Net cash provided by operating activities - discontinued operations

                    —

 

             67,851

Net cash provided by (used in) operating activities

             (61,874)

 

             44,305

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

Purchases of property and equipment and demonstration units

             (16,196)

 

           (13,378)

Purchases of short-term investments

            (569,715)

 

          (512,642)

Proceeds from maturities of short-term investments

             514,681

 

           264,160

Business acquisitions, net of cash acquired

                    —

 

                  50

FireEye Products business sale transaction costs

               (1,057)

 

                  —

Lease deposits

                   785

 

                 674

Net cash used in investing activities - continuing operations

             (71,502)

 

          (261,136)

Net cash used in investing activities - discontinued operations

                    —

 

           (10,107)

Net cash used in investing activities

             (71,502)

 

          (271,243)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

Repurchase of convertible senior notes

            (451,691)

 

                  —

Settlement of share repurchases

             (11,483)

 

           (68,334)

Series A convertible preferred stock issuance costs

                    —

 

                 (82)

Payment related to shares withheld for taxes

               (7,336)

 

             (9,725)

Proceeds from employee stock purchase plan

                9,981

 

             12,335

Proceeds from exercise of equity awards

                1,659

 

              3,600

Net cash used in financing activities

            (458,870)

 

           (62,206)

Net change in cash and cash equivalents

            (592,246)

 

          (289,144)

Cash and cash equivalents, beginning of period

          1,154,458

 

           673,234

Cash and cash equivalents, end of period

$562,212

 

$384,090

 

 

Mandiant, Inc.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(Unaudited, in thousands, except per share amounts)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2022

 

2021

 

2022

 

2021

GAAP operating loss

$(87,565)  

 

$(84,510)  

 

$(176,946)  

 

$(157,376)  

Stock-based compensation expense (1)

            41,702   

 

          38,742   

 

        80,012   

 

        72,143   

Amortization of stock-based compensation capitalized in software development costs (3)

                725   

 

              459   

 

          1,393   

 

            993   

Amortization of intangible assets (2)

             8,594   

 

          10,998   

 

        17,287   

 

        22,108   

Transformation and transition expense (10)

             8,594   

 

           3,190   

 

        14,702   

 

          3,190   

Acquisition related expenses (4)

                500   

 

                —   

 

          1,000   

 

              —   

Restructuring charges (5)

                  —   

 

           1,927   

 

          1,040   

 

          1,927   

Non-GAAP operating income (loss)

$(27,450)  

 

$(29,194)  

 

$(61,512)  

 

$(57,015)  

 

 

 

 

 

 

 

 

GAAP gross margin

45 %

 

44 %

 

45 %

 

46 %

Stock-based compensation expense (1)

9 %

 

9 %

 

8 %

 

8 %

Amortization of intangible assets (2)

5 %

 

6 %

 

5 %

 

6 %

Non-GAAP gross margin

59 %

 

59 %

 

58 %

 

60 %

 

 

 

 

 

 

 

 

GAAP operating margin

(63) %

 

(74) %

 

(66) %

 

(69) %

Stock-based compensation expense (1)

30 %

 

33 %

 

30 %

 

32 %

Amortization of stock-based compensation capitalized in software development costs (3)

1 %

 

— %

 

1 %

 

— %

Amortization of intangible assets (2)

6 %

 

10 %

 

6 %

 

10 %

Transformation and transition expense (10)

6 %

 

3 %

 

5 %

 

1 %

Acquisition related expenses (4)

— %

 

— %

 

— %

 

— %

Restructuring charges (5)

— %

 

2 %

 

— %

 

1 %

Non-GAAP operating margin

(20) %

 

(26) %

 

(24) %

 

(25) %

 

 

 

 

 

 

 

 

GAAP net loss attributable to common stockholders

$(95,263)  

 

$(69,259)  

 

$(191,995)  

 

$(124,499)  

Continuing operations:

 

 

 

 

 

 

 

Stock-based compensation expense (1)

            41,702   

 

          38,742   

 

        80,012   

 

        72,143   

Amortization of stock-based compensation capitalized in software development costs (3)

                725   

 

              459   

 

          1,393   

 

            993   

Amortization of intangible assets (2)

             8,594   

 

          10,998   

 

        17,287   

 

        22,108   

Acquisition related expenses (4)

                500   

 

                —   

 

          1,000   

 

              —   

Restructuring charges (5)

                  —   

 

           1,927   

 

          1,040   

 

          1,927   

Non-cash interest expense related to convertible senior notes (6)

                933   

 

          11,523   

 

          2,007   

 

        22,907   

Adjustment to provision from income taxes (7)

                  —   

 

                —   

 

              —   

 

            200   

Dividend on series A convertible preferred stock (8)

             4,772   

 

           4,563   

 

          9,490   

 

          9,075   

Accretion of series A convertible preferred stock (9)

                  —   

 

                —   

 

              —   

 

              82   

Transformation and transition expense (10)

             8,594   

 

           3,190   

 

        14,702   

 

          3,190   

Discontinued operations:

 

 

 

 

 

 

 

Non-GAAP adjustments for discontinued operations (11)

                  —   

 

          19,980   

 

              —   

 

        36,279   

Non-GAAP net income (loss) attributable to common stockholders

$(29,443)  

 

$22,123   

 

$(65,064)  

 

$44,405   

GAAP net loss per share attributable to common stockholders, basic and diluted

$(0.41)  

 

$(0.29)  

 

$(0.83)  

 

$(0.53)  

Continuing operations:

 

 

 

 

 

 

 

Stock-based compensation expense (1)

               0.18   

 

             0.16   

 

            0.35   

 

           0.32   

Amortization of stock-based compensation capitalized in software development costs (3)

                  —   

 

                —   

 

            0.01   

 

              —   

Amortization of intangible assets (2)

               0.04   

 

             0.05   

 

            0.07   

 

           0.09   

Acquisition related expenses (4)

                  —   

 

                —   

 

              —   

 

              —   

Restructuring charges (5)

                  —   

 

             0.01   

 

              —   

 

           0.01   

Non-cash interest expense related to convertible senior notes (6)

                  —   

 

             0.05   

 

            0.01   

 

           0.10   

Adjustment to provision from income taxes (7)

                  —   

 

                —   

 

              —   

 

              —   

Dividend on series A convertible preferred stock (8)

               0.02   

 

             0.02   

 

            0.04   

 

           0.04   

Accretion of series A convertible preferred stock (9)

                  —   

 

                —   

 

              —   

 

              —   

Transformation and transition expense (10)

               0.04   

 

             0.01   

 

            0.06   

 

           0.01   

Discontinued operations:

 

 

 

 

 

 

 

Non-GAAP adjustments for discontinued operations (11)

                  —   

 

             0.08   

 

              —   

 

           0.15   

Non-GAAP net income (loss) per share attributable to common stockholders, basic and diluted

$(0.13)  

 

$0.09   

 

$(0.29)  

 

$0.19   

Weighted average shares used in per share calculation for GAAP, basic and diluted

          233,218   

 

        237,279   

 

       231,909   

 

      236,016   

GAAP net cash provided by (used in) operating activities

$(38,539)  

 

$(7,974)  

 

$(61,874)  

 

$(23,546)  

Non-GAAP net cash provided by (used in) operating activities

$(38,539)  

 

$(7,974)  

 

$(61,874)  

 

$(23,546)  

Purchase of property and equipment and demonstration units

            (7,194)  

 

          (7,751)  

 

             (16,196)    

 

            (13,378)    

Free cash flow

$(45,733)  

 

$(15,725)  

 

$(78,070)  

 

$(36,924)  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes stock-based compensation expense as follows:

 

 

 

 

 

 

 

Cost of platform, cloud subscription and managed services revenue

$4,006   

 

$3,487   

 

$7,622   

 

$6,301   

Cost of professional services revenue

             7,842   

 

           6,135   

 

        15,181   

 

        11,321   

Research and development expense

             9,520   

 

           9,320   

 

        18,714   

 

        17,743   

Sales and marketing expense

            11,158   

 

          11,539   

 

        21,789   

 

        21,429   

General and administrative expense

             9,176   

 

           8,261   

 

        16,706   

 

        15,349   

Total stock-based compensation expense

$41,702   

 

$38,742   

 

$80,012   

 

$72,143   

 

 

 

 

 

 

 

 

(2) Includes amortization of intangible assets as follows:

 

 

 

 

 

 

 

Cost of platform, cloud subscription and managed services revenue

$6,665   

 

$7,025   

 

$13,429   

 

$14,137   

Sales and marketing expense

             1,929   

 

           3,973   

 

          3,858   

 

          7,971   

Total amortization of intangible assets

$8,594   

 

$10,998   

 

$17,287   

 

$22,108   

 

 

 

 

 

 

 

 

(3) Includes amortization of stock-based compensation capitalized in software development costs as follows:

 

 

 

 

 

 

 

Research and development expense

                725   

 

              459   

 

          1,393   

 

            993   

Total amortization of stock-based compensation capitalized in software development costs

$725   

 

$459   

 

$1,393   

 

$993   

 

 

 

 

 

 

 

 

(4) Includes acquisition related expenses as follows:

 

 

 

 

 

 

 

General and administrative expense

$500   

 

$—   

 

$1,000   

 

$—   

 

 

 

 

 

 

 

 

(5) Includes restructuring charges as follows:

 

 

 

 

 

 

 

Restructuring charges

$—   

 

$1,927   

 

$1,040   

 

$1,927   

 

 

 

 

 

 

 

 

(6) Includes non-cash interest expense related to convertible senior notes as follows:

 

 

 

 

 

 

 

Other income, net

$933   

 

$11,523   

 

$2,007   

 

$22,907   

 

 

 

 

 

 

 

 

(7) Includes income tax effect of non-GAAP adjustments as follows:

 

 

 

 

 

 

 

Adjustment to provision (benefit) from income taxes

$—   

 

$—   

 

$—   

 

$200   

 

 

 

 

 

 

 

 

(8) Dividend on series A convertible preferred stock

$4,772   

 

$4,563   

 

$9,490   

 

$9,075   

 

 

 

 

 

 

 

 

(9) Accretion of series A convertible preferred stock

$—   

 

$—   

 

$—   

 

$82   

 

 

 

 

 

 

 

 

(10) Includes transformation and transition expense as follows:

 

 

 

 

 

 

 

Research and development expense

$1,498   

 

$—   

 

$2,170   

 

$—   

General and administrative expense

             7,096   

 

           3,190   

 

$12,532   

 

$3,190   

Total transformation and transition expense

$8,594   

 

$3,190   

 

$14,702   

 

$3,190   

 

 

 

 

 

 

 

 

(11) Includes non-GAAP adjustments for discontinued operations as follows:

 

 

 

 

 

 

 

Stock-based compensation expense

$—   

 

$13,486   

 

$—   

 

$25,851   

Amortization of intangibles

                  —   

 

              485   

 

              —   

 

          1,221   

Amortization of stock-based compensation capitalized in software development costs

                  —   

 

              543   

 

              —   

 

          1,081   

Divestiture related costs

                  —   

 

           5,466   

 

              —   

 

          8,126   

 

$—   

 

$19,980   

 

$—   

 

$36,279   

           

 

 

 Mandiant, Inc.

SUMMARY OF CONTINUING OPERATIONS, DISCONTINUED OPERATIONS, AND COMBINED OPERATIONS

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(Unaudited, in thousands, except per share amounts)

 

Three Months Ended June 30, 2021

 

Continuing

 

Discontinued

 

Combined

Revenue

$113,910   

 

$134,045   

 

$247,955   

Cost of revenue

       63,525   

 

       28,001   

 

       91,526   

Total gross profit

       50,385   

 

     106,044   

 

     156,429   

 

 

 

 

 

 

Research and development

       40,930   

 

       28,665   

 

       69,595   

Sales and marketing

       63,018   

 

       36,886   

 

       99,904   

General and administrative

       29,020   

 

         5,466   

 

       34,486   

Restructuring charges

         1,927   

 

             —   

 

         1,927   

GAAP operating income (loss)

      (84,510)  

 

       35,027   

 

      (49,483)  

Non-GAAP adjustments

       55,316   

 

       19,980   

 

       75,296   

Non-GAAP operating income (loss)

$(29,194)  

 

$55,007   

 

$25,813   

 

 

 

 

 

 

Other income and expense, provision for income tax & dividends on series A convertible preferred stock

$(19,194)  

 

$(582)  

 

$(19,776)  

Net loss attributable to common stockholders

$(103,704)  

 

$34,445   

 

$(69,259)  

 

 

 

 

 

 

GAAP operating margin

(74) %

 

26 %

 

(20) %

Non-GAAP adjustments related to operating income (loss)

48 %

 

15 %

 

30 %

Non-GAAP operating margin

(26) %

 

41 %

 

10 %

 

 

 

 

 

 

Non-GAAP Adjustments:

 

 

 

 

 

Stock-based compensation expense

$38,742   

 

$13,486   

 

$52,228   

Amortization of intangible assets

       10,998   

 

           485   

 

       11,483   

Amortization of stock-based compensation capitalized in software development costs

           459   

 

           543   

 

         1,002   

Restructuring charges

         1,927   

 

             —   

 

         1,927   

Divestiture related costs

             —   

 

         5,466   

 

         5,466   

Transformation and transition expense

         3,190   

 

             —   

 

         3,190   

Non-GAAP adjustments related to operating income (loss)

$55,316   

 

$19,980   

 

$75,296   

 

 

 

 

 

 

Non-cash interest expense related to convertible senior notes

$11,523   

 

$—   

 

$11,523   

Dividend on series A convertible preferred stock

         4,563   

 

             —   

 

         4,563   

Non-GAAP adjustments below operating income (loss)

$16,086   

 

$—   

 

$16,086   

Total non-GAAP adjustments

$71,402   

 

$19,980   

 

$91,382   

 

 

 

 

 

 

GAAP net income (loss) per share attributable to common stockholders, basic

$(0.44)  

 

$0.15   

 

$(0.29)  

Non-GAAP net income (loss) per share attributable to common stockholders, basic

$(0.14)  

 

$0.23   

 

$0.09   

Weighted average shares used in per share calculation for non-GAAP, basic

     237,279   

 

     237,279   

 

     237,279   

 

 

 

 

Three Months Ended June 30,

 

 

2022

 

2021

Loss from continuing operations

 

$(90,491)

 

$(99,141)

     Dividend on series A convertible preferred stock

 

             (4,772)

 

             (4,563)

Net loss attributable to common stockholders

 

           (95,263)

 

         (103,704)

    Total Non-GAAP Adjustments

 

            65,820

 

            71,402

Non-GAAP net loss  attributable to common stockholders,

 

           (29,443)

 

           (32,302)

Net loss per share attributable to common stockholders, basic and diluted

 

$(0.41)

 

$(0.44)

Non-GAAP net loss per share attributable to common stockholders, basic and diluted

 

$(0.13)

 

$(0.14)

Weighted average shares used in per share calculation for GAAP, basic and diluted

 

           233,218

 

           237,279

Weighted average shares used in per share calculation for Non-GAAP, basic and diluted

 

           233,218

 

           237,279

 

 

 

Mandiant, Inc.

RECONCILIATION OF NON-GAAP BILLINGS TO REVENUE

(Unaudited, in thousands)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2022

 

2021

 

2022

 

2021

Revenue

$137,920

 

$113,910

 

$268,064

 

$228,598

Add: deferred revenue, end of period

         407,913

 

         297,326

 

         407,913

 

         297,326

Less: deferred revenue, beginning of period

        (399,989)

 

        (280,291)

 

        (410,328)

 

        (284,253)

Billings (non-GAAP)

$145,844

 

$130,945

 

$265,649

 

$241,671

 

Mandiant, Inc.

BILLINGS BREAKOUT

(Unaudited, in thousands)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2022

 

2021

 

2022

 

2021

Platform, cloud  subscription and managed services billings

$66,835

 

$60,996

 

$117,048

 

$113,332

Professional services billings

           79,009

 

           69,949

 

         148,601

 

         128,339

Billings (non-GAAP)

$145,844

 

$130,945

 

$265,649

 

$241,671