Perficient Reports Second Quarter 2022 Results

~ Q2 Revenues Up 21%; Company Reaffirms Full Year GAAP and Adjusted Earnings Per Share Guidance ~

ST. LOUIS--()--Perficient, Inc. (Nasdaq: PRFT) (“Perficient”), the leading global digital consultancy transforming the world’s largest enterprises and biggest brands, today reported its financial results for the quarter ended June 30, 2022.

Financial Highlights

For the quarter ended June 30, 2022:

  • Revenues increased 21% to $222.7 million from $184.1 million in the second quarter of 2021;
  • Net income increased 68% to $27.8 million from $16.6 million in the second quarter of 2021, primarily as a result of higher revenues and lower selling, general and administrative expense as a percentage of revenue;
  • GAAP earnings per share results on a fully diluted basis increased 57% to $0.77 from $0.49 in the second quarter of 2021, primarily as a result of the increase in net income;
  • Adjusted earnings per share results (a non-GAAP measure; see attached schedule, which reconciles to GAAP earnings per share) on a fully diluted basis increased 26% to $1.06 from $0.84 in the second quarter of 2021; and
  • Adjusted EBITDA (a non-GAAP measure; see attached schedule, which reconciles to GAAP net income) increased 31% to $51.2 million from $39.0 million in the second quarter of 2021.

Profitability and revenue growth were strong during the second quarter,” said Jeffrey Davis, chairman and CEO. “Demand for our digital transformation services continues to accelerate and bookings remain robust as the value-based pivot to Perficient continues. A key and ongoing catalyst to our success is the expanding contributions coming from our fully-integrated offshore and nearshore delivery teams, where revenue grew 44% organically and 93% overall.”

Other Highlights

Among other recent achievements, Perficient:

  • Expanded its presence in India by adding four new global delivery locations and expanding an existing location to further accommodate ongoing growth and meet client demand;
  • Was named in the “The Forrester Wave™: Modern Application Development Services, Q3 2022” report as a Strong Performer, earning top scores in Talent Management, AI and Data, Design, Quality and Productivity, and Partner Ecosystem;
  • Received the 2022 Sitecore Global Partner Award for Sales Excellence, recognizing overall superior commitment to selling with Sitecore;
  • Achieved the Acquia Marketing Cloud Practice Certification for demonstrating the highest levels of competency across Acquia's Marketing Cloud technologies; and
  • Received 2022 best workplace distinctions in St. Louis, Chicago, Denver, Minneapolis, and Southern California.

Business Outlook

The following statements are based on current expectations. These statements are forward-looking and actual results may differ materially. See “Safe Harbor Statement” below.

Perficient expects its third quarter 2022 revenue to be in the range of $227 million to $233 million. Third quarter GAAP earnings per share is expected to be in the range of $0.75 to $0.78. Third quarter adjusted earnings per share (a non-GAAP measure; see attached schedule which reconciles to GAAP earnings per share guidance) is expected to be in the range of $1.08 to $1.12.

Perficient is updating its full year 2022 revenue guidance to a range of $907 million to $923 million, reaffirming its 2022 GAAP earnings per share guidance range of $3.08 to $3.19 and reaffirming its 2022 adjusted earnings per share (a non-GAAP measure; see attached schedule which reconciles to GAAP earnings per share guidance) guidance range of $4.24 to $4.36.

Conference Call Details

Perficient will host a conference call regarding second quarter financial results today, August 4, 2022, at 11 a.m. Eastern.

Analysts and investors who wish to ask questions during the Q&A session can register for the call on https://register.vevent.com/register/BIc35dd6f136e0409b9a98d3ce1b165b68. Registrants will receive confirmation with dial-in details.

A live webcast of the event can be accessed on https://perficient.gcs-web.com/events/event-details/q2-2022-perficient-earnings-conference-call. A replay of the webcast will be available on https://perficient.gcs-web.com/ starting approximately two hours after the event and will be archived on the site for one year.

About Perficient

Perficient is the leading global digital consultancy. We imagine, create, engineer, and run digital transformation solutions that help our clients exceed customers’ expectations, outpace competition, and grow their business. With unparalleled strategy, creative, and technology capabilities, we bring big thinking and innovative ideas, along with a practical approach to help the world’s largest enterprises and biggest brands succeed. Traded on the Nasdaq Global Select Market, Perficient is a member of the Russell 2000 index and the S&P SmallCap 600 index. For more information, visit www.perficient.com.

Safe Harbor Statement

Some of the statements contained in this news release that are not purely historical statements discuss future expectations or state other forward-looking information related to financial results and business outlook for 2022. Those statements are subject to known and unknown risks, uncertainties, and other factors that could cause the actual results to differ materially from those contemplated by the statements. The forward-looking information is based on management’s current intent, belief, expectations, estimates, and projections regarding our company and our industry. You should be aware that those statements only reflect our predictions. Actual events or results may differ substantially. Important factors that could cause our actual results to be materially different from the forward-looking statements include (but are not limited to) those disclosed under the heading “Risk Factors” in our most recently filed annual report on Form 10-K and other securities filings, and the following, many of which are, or may be, amplified by the novel coronavirus (COVID-19) pandemic:

(1)

the possibility that our actual results do not meet the projections and guidance contained in this news release;

(2)

the impact of the general economy and economic and political uncertainty on our business;

(3)

the impact of the COVID-19 pandemic on our business;

(4)

risks associated with potential changes to federal, state, local and foreign laws, regulations, and policies;

(5)

risks associated with the operation of our business generally, including:

 

a. client demand for our services and solutions;

 

b. effectively competing in a highly competitive market;

 

c. risks from international operations including fluctuations in exchange rates;

 

d. adapting to changes in technologies and offerings;

 

e. obtaining favorable pricing to reflect services provided;

 

f. risk of loss of one or more significant software vendors;

 

g. maintaining a balance of our supply of skills and resources with client demand;

 

h. changes to immigration policies;

 

i. protecting our clients’ and our data and information;

 

j. changes to tax levels, audits, investigations, tax laws or their interpretation;

 

k. making appropriate estimates and assumptions in connection with preparing our consolidated financial statements; and

 

l. maintaining effective internal controls;

(6)

risks associated with managing growth organically and through acquisitions;

(7)

risks associated with servicing our debt, the potential impact on the value of our common stock from the conditional conversion features of our debt and the associated convertible note hedge transactions;

(8)

legal liabilities, including intellectual property protection and infringement or the disclosure of personally identifiable information; and

(9)

the risks detailed from time to time within our filings with the Securities and Exchange Commission.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. This cautionary statement is provided pursuant to Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. The forward-looking statements in this release are made only as of the date hereof and we undertake no obligation to update publicly any forward-looking statement for any reason, even if new information becomes available or other events occur in the future.

Perficient, Inc.

Unaudited Consolidated Statements of Operations

(in thousands, except per share information)

 

 

Three Months Ended
June 30,

 

Six Months Ended

June 30,

 

2022

 

2021

 

2022

 

2021

 

Revenues

 

 

 

 

 

 

 

Services excluding reimbursable expenses

$

219,835

 

 

$

181,213

 

 

$

439,310

 

 

$

347,689

 

Reimbursable expenses

 

2,428

 

 

 

2,562

 

 

 

4,387

 

 

 

4,816

 

 

Total services

 

222,263

 

 

 

183,775

 

 

 

443,697

 

 

 

352,505

 

 

Software and hardware

 

475

 

 

 

361

 

 

 

1,152

 

 

 

972

 

 

Total revenues

 

222,738

 

 

 

184,136

 

 

 

444,849

 

 

 

353,477

 

 

 

 

 

 

 

 

 

 

Cost of revenues (exclusive of depreciation and amortization, shown separately below)

 

 

 

 

 

 

 

Cost of services

 

134,356

 

 

 

110,942

 

 

 

270,446

 

 

 

214,903

 

 

Stock compensation

 

2,406

 

 

 

2,238

 

 

 

4,834

 

 

 

4,339

 

 

Total cost of revenues

 

136,762

 

 

 

113,180

 

 

 

275,280

 

 

 

219,242

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

37,150

 

 

 

34,146

 

 

 

75,926

 

 

 

64,935

 

 

Stock compensation

 

3,710

 

 

 

3,278

 

 

 

7,185

 

 

 

6,468

 

 

Total selling, general and administrative

 

40,860

 

 

 

37,424

 

 

 

83,111

 

 

 

71,403

 

 

 

 

 

 

 

 

 

 

Depreciation

 

2,005

 

 

 

1,615

 

 

 

3,878

 

 

 

3,075

 

 

Amortization

 

5,998

 

 

 

6,333

 

 

 

11,977

 

 

 

13,385

 

 

Acquisition costs

 

61

 

 

 

 

 

 

360

 

 

 

68

 

 

Adjustment to fair value of contingent consideration

 

(2,487

)

 

 

(510

)

 

 

(3,466

)

 

 

4

 

 

Income from operations

 

39,539

 

 

 

26,094

 

 

 

73,709

 

 

 

46,300

 

 

 

 

 

 

 

 

 

 

Net interest expense

 

805

 

 

 

3,367

 

 

 

1,692

 

 

 

6,663

 

 

Net other expense

 

153

 

 

 

9

 

 

 

386

 

 

 

131

 

 

Income before income taxes

 

38,581

 

 

 

22,718

 

 

 

71,631

 

 

 

39,506

 

 

Provision for income taxes

 

10,799

 

 

 

6,145

 

 

 

16,713

 

 

 

9,340

 

 

 

 

 

 

 

 

 

 

Net income

$

27,782

 

 

$

16,573

 

 

$

54,918

 

 

$

30,166

 

 

 

 

 

 

 

 

 

 

Basic net income per share

$

0.82

 

 

$

0.52

 

 

$

1.62

 

 

$

0.95

 

 

Diluted net income per share

$

0.77

 

 

$

0.49

 

 

$

1.52

 

 

$

0.90

 

 

Shares used in computing basic net income per share

 

33,914

 

 

 

31,922

 

 

 

33,879

 

 

 

31,893

 

 

Shares used in computing diluted net income per share

 

36,785

 

 

 

33,867

 

 

 

36,812

 

 

 

33,500

 

 

 

 

 

 

 

 

 

 

Net income used in computing diluted net income per share

$

28,332

 

 

$

16,573

 

 

$

56,088

 

 

$

30,166

 

 

Perficient, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

 

 

 

June 30, 2022
(unaudited)

 

December 31, 2021

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

38,868

 

 

$

24,410

 

Accounts receivable, net

 

 

196,620

 

 

 

177,602

 

Prepaid expenses

 

 

7,020

 

 

 

5,400

 

Other current assets

 

 

8,825

 

 

 

7,296

 

Total current assets

 

 

251,333

 

 

 

214,708

 

Property and equipment, net

 

 

20,192

 

 

 

14,747

 

Operating lease right-of-use assets

 

 

32,170

 

 

 

33,353

 

Goodwill

 

 

512,716

 

 

 

515,229

 

Intangible assets, net

 

 

69,211

 

 

 

81,277

 

Other non-current assets

 

 

41,321

 

 

 

23,258

 

Total assets

 

$

926,943

 

 

$

882,572

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

20,588

 

 

$

26,074

 

Other current liabilities

 

 

73,484

 

 

 

93,877

 

Total current liabilities

 

 

94,072

 

 

 

119,951

 

Long-term debt, net

 

 

393,478

 

 

 

326,126

 

Operating lease liabilities

 

 

22,900

 

 

 

23,898

 

Other non-current liabilities

 

 

49,762

 

 

 

47,832

 

Total liabilities

 

 

560,212

 

 

 

517,807

 

Stockholders' equity:

 

 

 

 

Preferred stock

 

 

 

 

 

 

Common stock

 

 

53

 

 

 

53

 

Additional paid-in capital

 

 

383,987

 

 

 

423,235

 

Accumulated other comprehensive loss

 

 

(8,861

)

 

 

(5,843

)

Treasury stock

 

 

(337,237

)

 

 

(324,412

)

Retained earnings

 

 

328,789

 

 

 

271,732

 

Total stockholders' equity

 

 

366,731

 

 

 

364,765

 

Total liabilities and stockholders' equity

 

$

926,943

 

 

$

882,572

 

About Non-GAAP Financial Information

This news release includes non-GAAP financial measures. For a description of these non-GAAP financial measures, including the reasons management uses each measure, and reconciliations of these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with Generally Accepted Accounting Principles (“GAAP”), please see the section entitled “About Non-GAAP Financial Measures” and the accompanying tables entitled “Reconciliation of GAAP to Non-GAAP Measures.”

About Non-GAAP Financial Measures

Perficient provides non-GAAP financial measures for adjusted EBITDA (earnings before interest, income taxes, depreciation, amortization, stock compensation, acquisition costs and adjustment to fair value of contingent consideration), adjusted net income, and adjusted earnings per share data as supplemental information regarding Perficient’s business performance. Perficient believes that these non-GAAP financial measures are useful to investors because they provide investors with a better understanding of Perficient’s past financial performance and future results. Perficient’s management uses these non-GAAP financial measures when it internally evaluates the performance of Perficient’s business and makes operating decisions, including internal operating budgeting, performance measurement, and the calculation of bonuses and discretionary compensation. Management excludes stock-based compensation related to restricted stock awards, the amortization of intangible assets, amortization of debt discounts and issuance costs related to convertible senior notes, acquisition costs, adjustments to the fair value of contingent consideration, net other income and expense, the impact of other infrequent or unusual transactions, and income tax effects of the foregoing, when making operational decisions.

Perficient believes that providing the non-GAAP financial measures to its investors is useful because it allows investors to evaluate Perficient’s performance using the same methodology and information used by Perficient’s management. Specifically, adjusted net income is used by management primarily to review business performance and determine performance-based incentive compensation for executives and other employees. Management uses adjusted EBITDA to measure operating profitability, evaluate trends, and make strategic business decisions.

Non-GAAP financial measures are subject to inherent limitations because they do not include all of the expenses included under GAAP and because they involve the exercise of discretionary judgment as to which charges are excluded from the non-GAAP financial measure. However, Perficient’s management compensates for these limitations by providing the relevant disclosure of the items excluded in the calculation of adjusted EBITDA, adjusted net income, and adjusted earnings per share. In addition, some items that are excluded from adjusted net income and adjusted earnings per share can have a material impact on cash. Management compensates for these limitations by evaluating the non-GAAP measure together with the most directly comparable GAAP measure. Perficient has historically provided non-GAAP financial measures to the investment community as a supplement to its GAAP results to enable investors to evaluate Perficient’s business performance in the way that management does. Perficient’s definition may be different from similar non-GAAP financial measures used by other companies and/or analysts.

The non-GAAP adjustments, and the basis for excluding them, are outlined below:

Amortization

Perficient has incurred expense on amortization of intangible assets primarily related to various acquisitions. Management excludes these items for the purposes of calculating adjusted EBITDA, adjusted net income, and adjusted earnings per share. Perficient believes that eliminating this expense from its non-GAAP financial measures is useful to investors because the amortization of intangible assets can be inconsistent in amount and frequency, and is significantly impacted by the timing and magnitude of Perficient’s acquisition transactions, which also vary substantially in frequency from period to period.

Acquisition Costs

Perficient incurs transaction costs related to merger and acquisition-related activities which are expensed in its GAAP financial statements. Management excludes these items for the purposes of calculating adjusted EBITDA, adjusted net income, and adjusted earnings per share. Perficient believes that excluding these expenses from its non-GAAP financial measures is useful to investors because these are expenses associated with each transaction and are inconsistent in amount and frequency causing comparison of current and historical financial results to be difficult.

Adjustment to Fair Value of Contingent Consideration

Perficient is required to remeasure its contingent consideration liability related to acquisitions each reporting period until the contingency is settled. Any changes in fair value are recognized in earnings. Management excludes these items for the purposes of calculating adjusted EBITDA, adjusted net income, and adjusted earnings per share. Perficient believes that excluding these adjustments from its non-GAAP financial measures is useful to investors because they are related to acquisitions and are inconsistent in amount and frequency from period to period.

Amortization of Debt Discount and Debt Issuance Costs

On November 9, 2021, Perficient issued $380.0 million aggregate principal amount of 0.125% Convertible Senior Notes due 2026, on August 14, 2020, Perficient issued $230.0 million aggregate principal amount of 1.250% Convertible Senior Notes due 2025, and on September 11, 2018, Perficient issued $143.8 million aggregate principal amount of 2.375% Convertible Senior Notes due 2023 (the “2026 Notes,” “2025 Notes,” and “2023 Notes,” respectively, and together, the “Notes”) in private placements to qualified institutional purchasers. In accordance with accounting for debt with conversions and other options, Perficient bifurcated the principal amount of the Notes into liability and equity components. The resulting debt discounts were amortized to interest expense over the period from the issuance dates through the respective contractual maturity dates. Upon adoption of Accounting Standards Update (“ASU”) No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) on January 1, 2022, Perficient no longer records amortization of debt discount as a result of accounting for the convertible debt instrument as a single liability measured at its amortized cost. Issuance costs attributable to the Notes, in addition to issuance costs related to Perficient’s credit agreement, are being amortized to interest expense over their respective terms. Perficient believes that excluding these non-cash expenses from its non-GAAP financial measures is useful to investors because the expenses are not reflective of the company’s business performance.

Foreign Exchange Loss (Gain)

Non-operating foreign currency exchange gains and losses, inclusive of gains and losses on related foreign exchange forward contracts not designated as hedging instruments for accounting purposes, are reported in net other expense (income) in our consolidated statements of operations. As our operations expand into countries outside of the United States, and in particular as a result of our 2021 acquisition of Izmul S.A. and its subsidiaries (“Overactive”), based in Argentina, Chile, Colombia, Puerto Rico, and Uruguay, and our 2020 acquisition of Productora de Software S.A.S., based in Colombia, foreign exchange gains and losses have and will become increasingly material. Perficient believes that excluding these gains and losses from its non-GAAP financial measures is useful to investors because foreign exchange gains and losses will vary as the underlying currencies fluctuate, which makes it difficult to compare current and historical results.

Stock Compensation

Perficient incurs stock-based compensation expense under Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation - Stock Compensation. Perficient excludes stock-based compensation expense and the related tax effects for the purposes of calculating adjusted EBITDA, adjusted net income, and adjusted earnings per share because stock-based compensation is a non-cash expense, which Perficient believes is not reflective of its business performance. The nature of stock-based compensation expense also makes it very difficult to estimate prospectively, since the expense will vary with changes in the stock price and market conditions at the time of new grants, varying valuation methodologies, subjective assumptions, and different award types, making the comparison of current results with forward-looking guidance potentially difficult for investors to interpret. The tax effects of stock-based compensation expense may also vary significantly from period to period, without any change in underlying operational performance, thereby obscuring the underlying profitability of operations relative to prior periods. Perficient believes that non-GAAP measures of profitability, which exclude stock-based compensation, are widely used by analysts and investors.

Dilution Offset from Convertible Note Hedge Transactions

It is Perficient’s current intent to settle conversions of the Notes through combination settlement, which involves repayment of the principal portion in cash and any excess of the conversion value over the principal amount in shares of our common stock. Perficient excludes the shares that are issuable upon conversions of the Notes because Perficient expects that the dilution from such shares will be offset by the convertible note hedge transactions entered into in November 2021, August 2020, and September 2018 in connection with the issuance of the Notes.

Perficient, Inc.
Reconciliation of GAAP to Non-GAAP Measures
(unaudited)
(in thousands, except per share data)

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

2022

 

2021

 

2022

 

2021

GAAP Net Income

$

27,782

 

 

$

16,573

 

 

$

54,918

 

 

$

30,166

 

Adjustments:

 

 

 

 

 

 

 

Provision for income taxes

 

10,799

 

 

 

6,145

 

 

 

16,713

 

 

 

9,340

 

Amortization

 

5,998

 

 

 

6,333

 

 

 

11,977

 

 

 

13,385

 

Acquisition costs

 

61

 

 

 

 

 

 

360

 

 

 

68

 

Adjustment to fair value of contingent consideration

 

(2,487

)

 

 

(510

)

 

 

(3,466

)

 

 

4

 

Amortization of debt discount and issuance costs

 

608

 

 

 

2,562

 

 

 

1,215

 

 

 

5,090

 

Foreign exchange loss

 

158

 

 

 

8

 

 

 

373

 

 

 

136

 

Stock compensation

 

6,116

 

 

 

5,516

 

 

 

12,019

 

 

 

10,807

 

Adjusted Net Income Before Tax

 

49,035

 

 

 

36,627

 

 

 

94,109

 

 

 

68,996

 

Adjusted income tax (1)

 

12,700

 

 

 

9,230

 

 

 

24,186

 

 

 

17,318

 

Adjusted Net Income

$

36,335

 

 

$

27,397

 

 

$

69,923

 

 

$

51,678

 

 

 

 

 

 

 

 

 

GAAP Earnings Per Share (diluted)

$

0.77

 

 

$

0.49

 

 

$

1.52

 

 

$

0.90

 

Adjusted Earnings Per Share (diluted)

$

1.06

 

 

$

0.84

 

 

$

2.03

 

 

$

1.58

 

 

 

 

 

 

 

 

 

Shares used in computing GAAP Earnings Per Share (diluted)

 

36,785

 

 

 

33,867

 

 

 

36,812

 

 

 

33,500

 

Dilution offset from convertible note hedge transactions

 

(2,431

)

 

 

(1,251

)

 

 

(2,431

)

 

 

(894

)

Shares used in computing Adjusted Earnings Per Share (diluted)

 

34,354

 

 

 

32,616

 

 

 

34,381

 

 

 

32,606

 

 

 

 

 

 

 

 

 

Net income used in computing GAAP Earnings Per Share (diluted)

$

28,332

 

 

$

16,573

 

 

$

56,088

 

 

$

30,166

 

(1)

The estimated adjusted effective tax rate of 25.9% and 25.2% for the three months ended June 30, 2022 and 2021, respectively, and 25.7% and 25.1% for the six months ended June 30, 2022 and 2021, respectively, has been used to calculate the provision for income taxes for non-GAAP purposes.

Perficient, Inc.
Reconciliation of GAAP to Non-GAAP Measures
(unaudited)
(in thousands)

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

2022

 

2021

 

2022

 

2021

GAAP Net Income

$

27,782

 

 

$

16,573

 

 

$

54,918

 

 

$

30,166

 

Adjustments:

 

 

 

 

 

 

 

Provision for income taxes

 

10,799

 

 

 

6,145

 

 

 

16,713

 

 

 

9,340

 

Net interest expense

 

805

 

 

 

3,367

 

 

 

1,692

 

 

 

6,663

 

Net other expense

 

153

 

 

 

9

 

 

 

386

 

 

 

131

 

Depreciation

 

2,005

 

 

 

1,615

 

 

 

3,878

 

 

 

3,075

 

Amortization

 

5,998

 

 

 

6,333

 

 

 

11,977

 

 

 

13,385

 

Acquisition costs

 

61

 

 

 

 

 

 

360

 

 

 

68

 

Adjustment to fair value of contingent consideration

 

(2,487

)

 

 

(510

)

 

 

(3,466

)

 

 

4

 

Stock compensation

 

6,116

 

 

 

5,516

 

 

 

12,019

 

 

 

10,807

 

Adjusted EBITDA (1)

$

51,232

 

 

$

39,048

 

 

$

98,477

 

 

$

73,639

 

(1)

Adjusted EBITDA is a non-GAAP performance measure and is not intended to be a performance measure that should be regarded as an alternative to or more meaningful than either GAAP operating income or GAAP net income. Adjusted EBITDA measures presented may not be comparable to similarly titled measures presented by other companies.

Perficient, Inc.

Reconciliation of GAAP to Non-GAAP Measures

(unaudited)

 

 

Q3 2022

 

Full Year 2022

 

Low end of
adjusted goal

 

High end of
adjusted goal

 

Low end of
adjusted goal

 

High end of
adjusted goal

GAAP EPS

$ 0.75

 

$ 0.78

 

$ 3.08

 

$ 3.19

Non-GAAP adjustment (1):

 

 

 

 

 

 

 

Non-GAAP reconciling items

0.40

 

0.40

 

1.56

 

1.57

Tax effect of reconciling items

(0.07)

 

(0.06)

 

(0.40)

 

(0.40)

Adjusted EPS

$ 1.08

 

$ 1.12

 

$ 4.24

 

$ 4.36

(1)

Non-GAAP adjustment represents the impact of amortization expense, stock compensation, amortization of debt issuance costs, foreign exchange gains and losses, acquisition costs, and adjustments to fair value of contingent consideration, net of the tax effect of these adjustments, divided by adjusted fully diluted shares. Upon adoption of ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) on January 1, 2022, Perficient no longer records amortization of debt discount as a result of accounting for the convertible debt instrument as a single liability measured at its amortized cost. Perficient currently expects its Q3 2022 and full year 2022 GAAP effective income tax rate to be approximately 28% and 25%, respectively. Perficient’s estimates of GAAP and adjusted fully diluted shares for 2022 are included in the following table. These estimates could be affected by share repurchases, shares issued in conjunction with future acquisitions, changes in share price and the potential impact from the conditional conversion features of our debt.

(in millions)

Q3 2022 (2)

 

Full Year 2022 (2)

GAAP Fully Diluted Shares (3)

36.7

 

 

36.8

 

Non-GAAP adjustment (4):

 

 

 

Dilution offset from convertible note hedge transactions

(2.4

)

 

(2.4

)

Adjusted Fully Diluted Shares

34.3

 

 

34.4

 

(2)

The calculation of fully diluted shares assumes an average share price of $99 per share for the three months ending September 30, 2022, and $101 per share for the twelve months ending December 31, 2022, provided, however, that Perficient makes no prediction as to what its actual stock price will be for such period or any other period.

(3)

Upon adoption of ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) on January 1, 2022, Perficient prospectively utilizes the if-converted method to calculate the impact of convertible instruments on GAAP diluted earnings per share.

(4)

Non-GAAP adjustment represents the exclusion of shares that are issuable upon conversion of our convertible notes due to the expectation that shares relating to the principal amount of our convertible notes will be paid in cash and any excess will be offset by the convertible note hedge transactions entered into in August 2020 and November 2021.

 

Contacts

Bill Davis, Perficient, 314-529-3555
bill.davis@perficient.com

Contacts

Bill Davis, Perficient, 314-529-3555
bill.davis@perficient.com