Xoom Reports Third Quarter 2015 Results

  • Third Quarter Revenue of $42.4 Million, increase of 8% from Q3 2014
  • Third Quarter Gross Sending Volume of $1.9 Billion, increase of 12% from Q3 2014
  • 1,473,859 Active Customers, increase of 21% from Q3 2014

SAN FRANCISCO--()--Xoom Corporation (NASDAQ:XOOM), a leading digital money transfer provider, today announced financial results for the third quarter of 2015.

  • Revenue for the third quarter was $42.4 million, an increase of 8% from the third quarter of 2014.
  • Gross profit for the third quarter was $27.9 million, a decrease of 1% from the third quarter of 2014.
  • GAAP net loss for the third quarter was $16.0 million, or a loss of $0.41 per diluted share, compared to net income of $0.4 million, or $0.01 per diluted share, for the third quarter of 2014.
  • Adjusted EBITDA for the third quarter was $(1.3) million, compared to $5.0 million for the third quarter of 2014.
  • Non-GAAP net loss per diluted share for the third quarter was $0.07, compared to net income per diluted share of $0.08 for the third quarter of 2014.
  • Cash, cash equivalents, disbursement prefunding and short-term investments were $207.0 million as of September 30, 2015, compared to $250.2 million as of December 31, 2014.
  • There was no outstanding amount due under the line of credit as of September 30, 2015. Outstanding amount due under the line of credit was $28.0 million as of December 31, 2014.

Operating Metrics

  • Gross sending volume for the quarter was $1.9 billion, an increase of 12% from the third quarter of 2014.
  • Transactions for the quarter were 4,260,359, representing growth of 33% from the third quarter of 2014.
  • Active customers for the quarter were 1,473,859, representing growth of 21% from the third quarter of 2014.
  • Gross additional customers for the quarter were 186,268, an increase of 57% from the third quarter of 2014.

Highlights and Strategic Announcements

During the quarter, Xoom launched the following new initiatives to enhance its customer experience and expand its reach in new markets:

  • Expansion into Singapore, which enables our customers to deposit funds into bank accounts via their U.S. bank accounts, credit cards or debit cards.
  • Launched Vietnamese-language desktop and mobile sites to support our Vietnamese business.

On July 1, 2015, Xoom entered into a definitive agreement (the “Merger Agreement”) under which PayPal, Inc. will acquire Xoom for $25 per share in cash (the “Merger”). The Merger was unanimously approved by the Boards of Directors of both companies, as well as the Board of Directors of eBay Inc., PayPal, Inc.'s parent company on the date of the agreement. The Merger is conditioned upon, among other things, the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”). The waiting period under the HSR Act expired on August 14, 2015. The Company’s stockholders approved the adoption of the Merger Agreement at a special meeting of stockholders held on September 4, 2015. The Merger remains subject to the satisfaction or waiver of customary closing conditions and the receipt of certain regulatory consents relating to Xoom's money transmitter licenses.

Business Outlook

In connection with the pending Merger, Xoom will no longer provide details regarding its business outlook for future periods. The Company will not host a conference call to review its third quarter 2015 financial results.

About Xoom

Xoom is a leading digital money transfer provider that enables consumers to send money, pay bills and send prepaid mobile phone reloads for family and friends around the world in a secure, fast and cost-effective way, using their mobile phone, tablet or computer. During the 12 months ended September 30, 2015, Xoom’s 1.5 million active customers sent approximately $7.1 billion with Xoom. The company is headquartered in San Francisco and can be found online at www.xoom.com.

Non-GAAP Financial Measures

Xoom’s stated results include certain non-GAAP financial measures, including Adjusted EBITDA, non-GAAP net income and non-GAAP net income per diluted share. Adjusted EBITDA excludes (benefit) provision for income taxes, interest expense, interest income, amortization of acquired intangible asset, depreciation and other amortization expense, expenses related to stock-based compensation and Merger-related cost. Depreciation and other amortization expense includes impairment charges and loss on disposal of long-lived assets. Costs incurred in connection with the Merger are unique costs incurred out of the normal course of business and have therefore been excluded from Adjusted EBITDA and non-GAAP net income to reflect normalized business performance. Non-GAAP net income and non-GAAP net income per diluted share exclude expenses related to stock-based compensation, amortization of acquired intangible asset and Merger-related cost. Adjusted EBITDA, non-GAAP net income and non-GAAP net income per diluted share exclude these expenses as they are often excluded by other companies to help investors understand the operational performance of their business, and in the case of stock-based compensation, can be difficult to predict. Xoom believes these adjustments provide useful comparative information to investors.

Xoom considers these non-GAAP financial measures to be important because they provide useful measures of its operating performance and are used by its management for that purpose. In addition, investors often use measures such as these to evaluate the operating performance of a company. Non-GAAP results are presented for supplemental informational purposes only for understanding Xoom’s operating results. The non-GAAP results should not be considered a substitute for financial information presented in accordance with generally accepted accounting principles, and may be different from non-GAAP measures used by other companies.

(Xoom-f)

     

XOOM CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands, except share and per share data)

 
September 30, December 31,
2015   2014  

(unaudited)

(derived from
audited financial
statements)

Assets
Current assets:
Cash and cash equivalents $ 64,826 $ 67,216
Disbursement prefunding 54,559 71,167
Short-term investments 87,615 111,777
Customer funds receivable 24,632 18,590
Prepaid expenses and other current assets   7,757     5,417  
Total current assets 239,389 274,167
Non-current assets:
Property, equipment and software, net 16,785 15,670
Goodwill 9,032 9,032
Intangibles, net 4,500 5,129
Restricted cash 13,754 10,971
Other assets   1,106     755  
Total assets $ 284,566   $ 315,724  
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses $ 15,965 $ 14,533
Customer liabilities 12,338 11,540
Line of credit       28,000  
Total current liabilities 28,303 54,073
Non-current liabilities:
Other non-current liabilities   6,169     5,885  
Total liabilities 34,472 59,958
Commitments and Contingencies
Stockholders’ equity:
Common stock, $0.0001 par value, 500,000,000 shares authorized; issued and outstanding 39,554,634 and 38,592,808 shares at September 30, 2015 and December 31, 2014, respectively 4 4
Additional paid-in capital 353,060 339,169
Accumulated other comprehensive loss (6 ) (55 )
Accumulated deficit   (102,964 )   (83,352 )
Total stockholders’ equity   250,094     255,766  
Total liabilities and stockholders’ equity $ 284,566   $ 315,724  
 
           

XOOM CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
(In thousands, except per share data)

 
Three Months Ended Nine Months Ended
September 30, September 30,
2015   2014   2015   2014  
(unaudited) (unaudited)
Revenue $ 42,431 $ 39,416 $ 133,176 $ 115,198
Cost of revenue   14,554     11,121     39,936     33,676  
Gross profit   27,877     28,295     93,240     81,522  
Marketing 9,977 7,193 30,426 23,331
Technology and development 11,758 10,018 34,978 26,669
Customer service and operations 5,021 4,403 14,428 12,748
General and administrative   16,639     5,741     31,769     15,716  
Total operating expense   43,395     27,355     111,601     78,464  
Income (loss) from operations   (15,518 )   940     (18,361 )   3,058  
Other income (expense):
Interest expense (370 ) (351 ) (1,064 ) (1,023 )
Interest income 83 59 231 204
Other income (expense)   (165 )   (220 )     (295 )     (30 )
Income (loss) before income taxes (15,970 ) 428 (19,489 ) 2,209
Provision for income taxes   43     30     123     61  
Net income (loss) $ (16,013 ) $ 398   $ (19,612 ) $ 2,148  
Net income (loss) per share:
Basic $ (0.41 ) $ 0.01 $ (0.50 ) $ 0.06
Diluted $ (0.41 ) $ 0.01 $ (0.50 ) $ 0.05
Weighted-average shares used to compute net income (loss) per share:
Basic 39,448 38,347 39,147 38,085
Diluted 39,448 41,765 39,147 41,701
 
           

XOOM CORPORATION AND SUBSIDIARIES
Key Metrics

 
Three Months Ended Nine Months Ended
September 30, September 30,
2015   2014 2015 2014
(unaudited) (unaudited)
Other Financial and Operational Data:
Gross Sending Volume (in thousands) $ 1,930,646 $ 1,718,499 $ 5,329,627 $ 5,100,532
Transactions 4,260,359 3,197,129 11,692,900 9,285,967
Active Customers 1,473,859 1,221,733 1,473,859 1,221,733
Gross Additional Customers 186,268 118,964 500,190 409,334
Cost Per Acquisition of a Gross Additional Customer $ 43 $ 44 $ 48 $ 45
Adjusted EBITDA (in thousands) $ (1,285 ) $ 4,955 $ 6,356 $ 13,546
 
           

XOOM CORPORATION AND SUBSIDIARIES
Reconciliation of GAAP to Non-GAAP Operating Results

 
Three Months Ended Nine Months Ended
September 30, September 30,
2015   2014   2015   2014  
(In thousands, except per share data)
(unaudited)
Non-GAAP net income:
GAAP net income (loss) $ (16,013 ) $ 398 $ (19,612 ) $ 2,148
Add back: stock-based compensation 3,546 2,619 10,031 6,876
Add back: amortization of acquired intangible asset 204 204 611 611
Add back: Merger-related cost   9,416         10,731      
Non-GAAP net income (loss) $ (2,847 ) $ 3,221   $ 1,761   $ 9,635  
 
Non-GAAP net income (loss) per diluted share $ (0.07 ) $ 0.08 $ 0.04 $ 0.23
 
Non-GAAP diluted shares 39,448 41,765 41,816 41,701
 
Reconciliation of Adjusted EBITDA:
Net income (loss) $ (16,013 ) $ 398 $ (19,612 ) $ 2,148
Provision for income taxes 43 30 123 61
Interest expense 370 351 1,064 1,023
Interest income (83 ) (59 ) (231 ) (204 )
Amortization of acquired intangible asset 204 204 611 611
Depreciation and other amortization expense 1,232 1,412 3,639 3,031
Stock-based compensation 3,546 2,619 10,031 6,876
Merger-related cost   9,416         10,731      
Adjusted EBITDA $ (1,285 ) $ 4,955   $ 6,356   $ 13,546  
 

Contacts

Xoom Corporation
Sharrifah Al-Salem, CFA, 415-660-1256
Director of Investor Relations
IR@xoom.com

Contacts

Xoom Corporation
Sharrifah Al-Salem, CFA, 415-660-1256
Director of Investor Relations
IR@xoom.com