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Actua Announces Fourth Quarter And Full-Year 2015 Financial Results

RADNOR, Pa., Feb. 29, 2016 (GLOBE NEWSWIRE) -- Actua Corporation (Nasdaq:ACTA) (“Actua”) today reported its results for the fourth quarter and year ended December 31, 2015.

2015 Highlights

  • Improved operating cash flow, reporting cash flow from operations of a use of $(0.6) million for the year ended December 31, 2015, exceeding our original guidance, which was in the range of a use of between $(6.0) million and $(10.0) million
  • Completed three strategic tuck-in acquisitions, two at GovDelivery and one at VelocityEHS, and expanded the capabilities of our businesses through significant product development and technology enhancements
  • Bolstered the executive teams at our businesses by adding impressive talent in seven key functional roles
  • Achieved 18% organic growth overall

“2015 operating cash flow exceeded our expectation, as operating leverage continued to improve across our businesses,” said Walter Buckley, CEO of Actua. “We accomplished this against a backdrop of continued investment in sales and marketing and product development. Additionally, we are excited about the augmentation of our management teams, a key initiative for us in 2015, as our businesses mature. Given this progress, we believe we are well-positioned to drive continued growth while generating positive operating cash flow in 2016."

Revenue was $35.2 million for the fourth quarter of 2015, up from $26.6 million for the fourth quarter of 2014. Net loss attributable to Actua for the fourth quarter of 2015 was $(52.2) million, or $(1.40) per diluted share, compared to net income attributable to Actua of $10.2 million, or $0.27 per diluted share, for the comparable prior year quarter. During the three months ended December 31, 2015, Actua recorded a $39.7 million impairment charge related to the recoverability of goodwill. This impairment was largely attributable to contracting multiples in the cloud software sector and consequent decline in Actua's stock price in late 2015. The comparable 2014 quarter was positively impacted by gains totaling $25.0 million related primarily to the receipt of escrowed proceeds from prior transactions, other gains and deferred taxes. Non-GAAP net loss for the fourth quarter of 2015 was $(2.9) million, or $(0.08) per share, compared to a non-GAAP net loss of $(1.3) million, or $(0.03) per diluted share, for the comparable prior year quarter. Cash flow from operations was a source of $4.5 million for the fourth quarter of 2015, compared to a source of $4.5 million for the fourth quarter of 2014.

Revenue was $133.4 million for the year ended December 31, 2015, up from $84.8 million for the prior year. Net loss attributable to Actua for the year ended December 31, 2015 was $(96.1) million, or $(2.59) per diluted share, compared to net loss attributable to Actua of $(23.6) million, or $(0.63) per diluted share, for 2014. Net loss for the year ended December 31, 2015 was negatively impacted by a $39.7 million non-cash goodwill impairment charge, while the comparable 2014 quarter was positively impacted by gains totaling $32.2 million related primarily to receipt of escrowed proceeds from prior transactions, other gains and deferred taxes. Non-GAAP net loss for the year ended December 31, 2015 was $(11.6) million, or $(0.32) per share, compared to a non-GAAP net loss of $(13.5) million, or $(0.37) per diluted share, for 2014. Cash flow from operations was a use of $(0.6) million for the year ended December 31, 2015, compared to a use of $(14.2) million for 2014.

2016 Guidance

Actua expects 2016 annual GAAP revenue in the range of between $155 million and $160 million, representing growth in the range of 16% and 20% compared to 2015. We expect positive annual Non-GAAP cash flow from operations in the range of between $3.0 million and $8.0 million. Non-GAAP net income (loss) per share is expected to be in the range of between $(0.35) and $(0.40) per diluted share for 2016, based on assumed diluted shares outstanding of 37.5 million shares for 2016.

"In light of current market conditions we look forward to actively pursuing share repurchases," said R. Kirk Morgan, CFO of Actua. "A strong balance sheet coupled with the expectation of positive operating cash flow for 2016 gives us the confidence that we can capitalize on this opportunity while continuing to drive growth at our companies."

A reconciliation of the non-GAAP financial measures used above with the most comparable GAAP financial measures is included with the financial tables at the end of this release.

Please see Actua’s website at www.actua.com for more information on Actua, its businesses and its fourth quarter and full year 2015 results.

Actua will host a webcast at 5:00 p.m. ET today to discuss its financial results. As part of the live webcast for this call, Actua will post a slide presentation to accompany the prepared remarks. To access the webcast, go to www.actua.com/investors/events-presentations/ and click on the webcast link. Please log on to the website approximately ten minutes prior to the call to register and download and install any necessary audio software. The conference call is also accessible through listen-only mode by dialing 866.317.2576 or 678.509.7521. The Conference ID is 2594667.

For those unable to participate in the conference call, a replay will be available from February 29, 2016 at 8:00 p.m. ET until March 9, 2016 at 11:59 p.m. ET. To access the replay, dial 855.859.2056 or 404.537.3406. The Conference ID is 2594667. The replay and slide presentation also can be accessed in the investor relations section of the Actua website at www.actua.com/investors/events-presentations/.

About Actua
Actua Corporation (NASDAQ:ACTA), the multi-vertical cloud company, brings the power of the cloud to vertical markets and processes. Actua is pioneering the second wave of the SaaS revolution - the vertical wave - by growing cloud businesses that are transforming their markets. With approximately 800 employees delivering unrivaled domain knowledge, agility and responsiveness to our customers, Actua’s rapidly growing vertical cloud businesses are positioned to lead this wave. For the latest information about Actua and its brands, please go to www.actua.com.

Safe Harbor Statement under Private Securities Litigation Reform Act of 1995

The statements contained in this press release that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve certain risks and uncertainties, including, but not limited to, risks associated with our ability to compete successfully in highly-competitive, rapidly-developing markets, the valuation of public and private cloud-based businesses by analysts, investors and other market participants, the effect of economic conditions generally, capital spending by our customers, our ability to retain existing customer relationships and secure new ones, developments in the markets in which we operate and our ability to respond to those changes in a timely and effective manner, the availability, performance and security of our cloud-based technology, particularly in light of increased cybersecurity risks and concerns, our ability to retain key personnel, our ability to deploy capital effectively and on acceptable terms, our ability to successfully integrate any acquired business, the impact of any potential acquisitions, dispositions or other strategic transactions, our ability to have continued access to capital and to manage capital resources effectively, and other risks and uncertainties detailed in Actua's filings with the U.S. Securities and Exchange Commission. Those and other factors may cause actual results to differ materially from those projected.


Actua Corporation
Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2015 2014 2015 2014
Revenue $35,153 $26,624 $133,421 $84,837
Operating Expenses
Cost of revenue (a) 10,087 8,091 39,229 24,420
Sales and marketing (a) 12,070 10,876 48,414 39,710
General and administrative (a) 16,015 15,009 61,857 51,731
Research and development (a) 7,090 4,648 29,168 15,408
Amortization of intangibles 3,801 3,569 15,251 10,532
Impairment related and other 39,978 95 41,238 1,187
Total operating expenses 89,041 42,288 235,157 142,988
Operating income (loss) (53,888) (15,664) (101,736) (58,151)
Other income (expense):
Other income (loss), net 204 4,280 1,692 5,300
Interest income 43 71 131 463
Interest expense (99) (13) (203) (1,613)
Income (loss) before income taxes, equity loss and discontinued operations (53,740) (11,326) (100,116) (54,001)
Income tax benefit (expense) (4) 10,556 (229) 12,931
Equity loss (776)
Income (loss) from continuing operations (53,744) (770) (100,345) (41,846)
Income (loss) from discontinued operations 10,237 14,026
Net income (loss) (53,744) 9,467 (100,345) (27,820)
Less: Net income (loss) attributable to the noncontrolling interest (1,593) (701) (4,265) (4,264)
Net income (loss) attributable to Actua $(52,151) $10,168 $(96,080) $(23,556)
Amounts attributable to Actua common shareholders:
Net income (loss) from continuing operations $(52,151) $(69) $(96,080) $(37,582)
Net income (loss) from discontinued operations 10,237 14,026
Net income (loss) attributable to Actua common shareholders $(52,151) $10,168 $(96,080) $(23,556)
Basic and diluted net income (loss) per share:
Income (loss) from continuing operations attributable to Actua common shareholders $(1.40) $ $(2.59) $(1.01)
Income (loss) from discontinued operations attributable to Actua common shareholders 0.27 0.38
Income (loss) attributable to Actua common shareholders $(1.40) $0.27 $(2.59) $(0.63)
Shares used in computation of basic and diluted net income (loss) per common share attributable to Actua common shareholders 37,190 36,780 37,080 37,130
(a) Includes equity-based compensation of:
Cost of revenue $54 $21 $157 $76
Sales and marketing 118 42 428 160
General and administrative 5,717 6,803 25,967 23,509
Research and development 141 51 482 144
$6,030 $6,917 $27,034 $23,889


Actua Corporation
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
December 31, December 31,
2015 2014
ASSETS
Cash and cash equivalents $76,313 $103,134
Restricted cash 2,206 1,132
Accounts receivable, net 19,902 23,134
Prepaid expenses and other current assets 4,876 3,979
Total current assets 103,297 131,379
Fixed assets, net 8,781 7,947
Goodwill 226,034 265,084
Intangible assets, net 89,395 101,998
Cost and equity method investments 18,146 17,672
Deferred tax asset 2,900 3,180
Other assets, net 1,591 1,652
Total Assets $450,144 $528,912
LIABILITIES AND EQUITY
Current maturities of other long-term debt $1,320 $500
Accounts payable 11,325 12,595
Accrued expenses 10,979 8,306
Accrued compensation and benefits 12,251 9,241
Deferred revenue 40,282 33,238
Total current liabilities 76,157 63,880
Long-term debt
Deferred tax liability 242 266
Deferred revenue 2,038 1,256
Other liabilities 3,230 4,408
Total Liabilities 81,668 69,810
Redeemable noncontrolling interest 10,506 10,346
Total Equity 357,970 448,756
Total Liabilities, Redeemable noncontrolling interest and Equity$450,144 $528,912


Actua Corporation
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2015 2014 2015 2014
Operating Activities - continuing operations
Net income (loss) $(53,744) $9,721 $(100,345) $(27,820)
(Income) loss from discontinued operations, including gain on sale, net of tax (10,237) (14,026)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization 4,880 4,487 19,751 14,069
Equity-based compensation 6,030 6,917 27,034 23,889
Impairment related and other 39,978 41,238 1,092
Other (income) loss (204) (4,280) (1,692) (5,300)
Equity loss 776
Deferred tax asset 135 (4,893) 258 (4,510)
Current income tax benefit related to income from discontinued operations (6,003) 0 (8,934)
Changes in assets and liabilities, net of effect of acquisitions:
Accounts receivable, net 7,715 4,911 3,107 (2,024)
Prepaid expenses and other assets 165 678 (835) 595
Accounts payable (2,455) 273 (1,270) (65)
Accrued expenses 4,278 202 2,560 252
Accrued compensation and benefits 1,571 470 3,010 510
Deferred revenue (1,406) 2,748 7,827 7,765
Other liabilities (2,404) (447) (1,202) (488)
Cash flows provided by (used in) operating activities 4,539 4,547 (559) (14,219)
Investing Activities - continuing operations
Capital expenditures, net (443) (309) (5,530) (3,677)
Change in restricted cash (823) 150 (1,074) 193
Proceeds from sales/distributions of ownership interests 25,187 1,415 33,822
Ownership acquisitions, net of cash acquired (820) (205,468) (3,578) (215,225)
Cash flows provided by (used in) investing activities (2,086) (180,440) (8,767) (184,887)
Financing Activities - continuing operations
Acquisition of noncontrolling interest in subsidiary equity (6,367) (427) (10,319) (878)
Contingent consideration payments (1,870)
Borrowings of long-term debt 820
Repayments of long-term debt and capital lease obligations (24) (12,641)
Purchase of treasury stock (10,745) (1,704) (12,809)
Tax withholdings related to equity-based awards (352) (2,235) (4,277) (5,029)
Cash received for stock options exercised 44 15 94
Other financing activities (1) (9)
Cash flows provided by (used in) financing activities (6,720) (13,363) (17,368) (31,263)
Effect of exchange rate on cash (8) (127)
Discontinued Operations:
Cash flows provided by (used in) operating activities
Cash flows provided by (used in) investing activities (1,153)
Cash flows provided by (used in) financing activities
Net increase(decrease) in cash and cash equivalents from discontinued operations (1,153)
Net increase (decrease) in cash and cash equivalents (4,275) (189,256) (26,821) (231,522)
Cash and cash equivalents at beginning of period 80,588 292,390 103,134 334,656
Cash and cash equivalents at end of period $76,313 $103,134 $76,313 $103,134


Actua Corporation
Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures
(In thousands, except per share data)
(Unaudited)
20142015
Q1Q2Q3Q4Q1Q2Q3Q4
GAAP Net income (loss) attributable to Actua: $(10,150)$(12,894)$(10,680)$10,168 $(14,765)$(15,282)$(13,882)$(52,151)
Add back:
Share-based compensation 3,876 6,739 6,357 6,917 7,222 7,121 6,661 $6,030
Amortization of intangibles 2,301 2,275 2,373 3,569 4,016 3,706 3,728 3,801
Impairment related and other costs 247 1,645 256 352 360 663 228 39,155
Transaction expenses 90 257 1,548 827 70 180 108
Other (income) loss, net (300)(637)(96)(4,280)(1,365)425 144 (204)
Acquired businesses' deferred revenue 76 76 336 1,991 677 678 557 505
Equity loss 312 320 144
Impact on non-cash income tax benefit items (800)(2,131)(10,567)34
Loss (Income) from discontinued operations (48)(1,315)(2,426)(10,237)
Non-GAAP net income (loss) $(3,596)$(4,334)$(4,319)$(1,260)$(3,751)$(2,509)$(2,456)$(2,864)
GAAP Net income (loss) per diluted share: $(0.27)$(0.35)$(0.29)$0.28 $(0.40)$(0.41)$(0.37)$(1.40)
Add back:
Share-based compensation 0.10 0.18 0.17 0.19 0.20 0.19 0.18 0.16
Amortization of intangibles 0.06 0.06 0.06 0.10 0.11 0.10 0.10 0.10
Impairment related and other 0.01 0.01 0.01 0.01 0.02 0.01 1.05
Transaction expenses 0.01 0.04 0.02
Other (income) loss, net (0.01)(0.02) (0.11)(0.04)0.01 (0.01)
Acquired businesses' deferred revenue 0.01 0.05 0.02 0.02 0.01 0.01
Equity loss 0.01 0.01
Impact on non-cash income tax benefit items (0.02)(0.06)(0.29)
Income from discontinued operations (0.04)(0.06)(0.28)
Non-GAAP net income (loss) per diluted share $(0.10)$(0.11)$(0.12)$(0.03)$(0.10)$(0.07)$(0.07)$(0.08)
Shares used in calculation of GAAP net income (loss) per share attributable to Actua:
Basic 37,096 37,313 37,335 36,780 36,842 37,123 37,146 37,190
Diluted 37,096 37,313 37,335 36,780 36,842 37,123 37,146 37,190
Shares used in calculation of non-GAAP net income (loss) per share attributable to Actua:
Basic 37,096 37,313 37,335 36,780 36,842 37,123 37,146 37,190
Diluted 37,096 37,313 37,335 36,780 36,842 37,123 37,146 37,190


Actua Corporation
Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures (Continued)
(In thousands, except per share data)
(Unaudited)
20142015
Q1Q2Q3Q4Q1Q2Q3Q4
GAAP Net income (loss) attributable to Actua: $(10,150)$(12,894)$(10,680)$10,168 $(14,765)$(15,282)$(13,882)$(52,151)
Add back:
Share-based compensation 3,876 6,739 6,357 6,917 7,222 7,121 6,661 $6,030
Amortization of intangibles 2,301 2,275 2,373 3,569 4,016 3,706 3,728 3,801
Impairment related and other costs 247 1,645 256 352 360 663 228 39,155
Transaction expenses 90 257 1,548 827 70 180 108
Other (income) loss, net (300)(637)(96)(4,280)(1,365)425 144 (204)
Acquired businesses' deferred revenue 76 76 336 1,991 677 678 557 505
Equity loss 312 320 144
Impact on non-cash income tax benefit items (800)(2,131)(10,567)34
Loss (Income) from discontinued operations (48)(1,315)(2,426)(10,237)
Interest expense (income), net 425 934 (151)(58)18 (4)2 2
Income tax expense (current/cash only) 94 201 261 11 143 1 41 41
Depreciation 822 798 1,013 918 1,224 1,123 1,076 1,072
Adjusted EBITDA $(2,255)$(2,401)$(3,196)$(389)$(2,366)$(1,389)$(1,337)$(1,749)
GAAP Cost of Revenue $4,899 $5,519 $5,911 $8,091 $9,732 $9,783 $9,627 $10,087
Share-based compensation 19 $20 16 21 26 $29 $48 $54
Adjusted Cost of revenue $4,880 $5,499 $5,895 $8,070 $9,706 $9,754 $9,579 $10,033
GAAP Sales and marketing $8,531 $9,585 $10,718 $10,876 $11,236 $12,163 $12,945 $12,070
Share-based compensation 41 42 35 42 58 79 173 118
Adjusted Sales and marketing $8,490 $9,543 $10,683 $10,834 $11,178 $12,084 $12,772 $11,952
GAAP General and administrative $10,009 $12,915 $13,798 $15,062 $15,936 $15,966 $14,440 $16,015
Share-based compensation 3,788 6,648 6,270 6,803 7,093 6,887 6,270 5,717
Adjusted General and administrative $6,221 $6,267 $7,528 $8,259 $8,843 $9,079 $8,170 $10,298
GAAP Research and development $3,253 $3,547 $3,960 $4,648 $7,093 $7,373 $7,612 $7,090
Share-based compensation 28 29 36 51 45 52 170 141
Adjusted Research and development $3,225 $3,518 $3,924 $4,597 $7,048 $7,321 $7,442 $6,949


About Actua’s Non-GAAP Financial Measures

This release contains non-GAAP financial measures. The tables above reconcile these non-GAAP financial measures to the most directly comparable GAAP financial measures.

Non-GAAP financial measures should not be considered as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP. Actua strongly urges investors and potential investors in our securities to review the reconciliation of our non-GAAP financial measures to the comparable GAAP financial measures that are included in this release.

Actua’s management believes that its non-GAAP financial measures provide useful information to investors because they allow investors to view the business through the eyes of management and provide meaningful supplemental information regarding Actua’s operating results, as they exclude amounts that Actua excludes as part of its monitoring of operating results and assessment of the performance of the business.

Actua presents the following non-GAAP financial measures in this release: (1) non-GAAP net income (loss) (which term may be used interchangeably with adjusted net income (loss) by management during quarterly earnings presentations), (2) non-GAAP net income (loss) per diluted share (which term may be used interchangeably with adjusted net income (loss) per diluted share by management during quarterly earnings presentations), (3) Adjusted EBITDA, (4) Adjusted Cost of revenue, (5) Adjusted Sales and marketing, (6) Adjusted General and administrative and (7) Adjusted Research and development. Actua excludes items from these non-GAAP financial measures as described below.

Non-GAAP net income (loss) excludes from GAAP net income (loss) the following items:

  • Share-based compensation. Actua excludes share-based compensation expenses and other expenses associated with equity granted to employees and non-employee directors primarily because they are non-cash expenses that Actua does not consider part of ongoing operating results when assessing the performance of its business, and the exclusion of these expenses facilitates the comparison of results over different time periods and the comparison of Actua’s results with results of other companies.
  • Amortization of intangibles. Actua excludes amortization of acquired intangibles, which consists primarily of customer relationships and technology, because they are expenses that Actua does not consider part of ongoing operating results when assessing the performance of its business, and Actua believes that doing so facilitates comparisons to its historical operating results and to the results of other companies.
  • Impairment-related and other costs. Actua excludes the effect of impairment-related and other costs, which primarily include impairment charges, revaluation of contingent consideration, restructuring and severance fees, settlement costs and other one-time costs, because Actua does not consider them part of ongoing operating results when assessing the performance of its business and believes it is useful for investors to understand the effects of these items on Actua’s operations.
  • Transaction expenses. Actua excludes the effect of acquisition related expenses because Actua does not consider them part of ongoing operating results when assessing the performance of its business and believes it is useful for investors to understand the effects of these items on Actua’s operations.
  • Other income (loss), net. Actua excludes the effect of other income (loss), net, which primarily includes transaction-driven gains and losses, as well as certain foreign currency impacts, because Actua does not consider them part of ongoing operating results when assessing the performance of its business and believes it is useful for investors to understand the effects of these items on Actua’s operations.
  • Acquired businesses’ deferred revenue. Actua includes acquired businesses’ previously deferred revenues that are not recognized under GAAP because Actua considers them a part of ongoing operating results when assessing the performance of its business and believes it is useful for investors to understand the effects of these items on its operations.
  • Equity loss. In accordance with GAAP, Actua recognizes its share of the earnings or losses of each company accounted for under the equity method and adjusts the carrying amount for each such company for its share of the earnings or losses of the company. Actua excludes GAAP equity income (loss) because it is significantly impacted by factors outside its direct control.
  • Impact of non-cash income tax benefit items. Actua excludes the impact of any non-cash income tax benefit items as Actua believes it is useful for investors to understand the effect of this item and does not consider them a part of ongoing operating results when assessing the performance of its business.
  • Income (loss) from discontinued operations. Actua excludes the income (loss) from discontinued operations as Actua believes it is useful for investors to understand the effect of these items for all periods presented and does not consider them a part of ongoing operating results when assessing the performance of its business.

Non-GAAP net income (loss) per diluted share is calculated as follows:

  • Non-GAAP net income (loss) (as defined above) is the numerator.
  • Shares used in calculation of non-GAAP net income (loss) per diluted share. For periods where GAAP and non-GAAP net income (loss) are both losses, Actua uses the same number of shares used to calculate GAAP and non-GAAP net loss per share. For periods where GAAP and non-GAAP net income (loss) are both income, Actua uses the same number of shares used to calculate GAAP and non-GAAP net income per diluted share. For periods where GAAP net income (loss) is a loss but non-GAAP net income (loss) is income, Actua includes the impact of incremental dilutive securities for the period to determine non-GAAP net income per diluted share. For periods where GAAP net income (loss) is income but non-GAAP net income (loss) is a loss, Actua excludes the impact of incremental dilutive securities for the period to determine non-GAAP net loss per diluted share.

Adjusted EBITDA excludes from GAAP net income (loss) the following items:

  • Share-based compensation. Actua excludes share-based compensation expenses and other expenses associated with equity granted to employees and non-employee directors primarily because they are non-cash expenses that Actua does not consider part of ongoing operating results when assessing the performance of its business, and the exclusion of these expenses facilitates the comparison of results over different time periods and the comparison of Actua’s results with results of other companies.
  • Amortization of intangibles. Actua excludes amortization of acquired intangibles, which consists primarily of customer relationships and technology, because they are expenses that Actua does not consider part of ongoing operating results when assessing the performance of its business, and Actua believes that doing so facilitates comparisons to its historical operating results and to the results of other companies.
  • Impairment-related and other costs. Actua excludes the effect of impairment-related and other costs, which primarily include impairment charges, restructuring and severance fees, settlement costs and other one-time costs, because Actua does not consider them part of ongoing operating results when assessing the performance of its business and believes it is useful for investors to understand the effects of these items on Actua’s operations.
  • Transaction expenses. Actua excludes the effect of acquisition related expenses because Actua does not consider them part of ongoing operating results when assessing the performance of its business and believes it is useful for investors to understand the effects of these items on Actua’s operations.
  • Other income (loss), net. Actua excludes the effect of other income (loss), net, which primarily includes transaction-driven gains and losses and revaluation of contingent consideration, as well as certain foreign currency impacts because Actua does not consider them part of ongoing operating results when assessing the performance of its business and believes it is useful for investors to understand the effects of these items on Actua’s operations.
  • Acquired businesses’ deferred revenue. Actua includes acquired businesses’ previously deferred revenues that are not recognized under GAAP because Actua considers them a part of ongoing operating results when assessing the performance of its business and believes it is useful for investors to understand the effects of these items on its operations.
  • Equity loss. In accordance with GAAP, Actua recognizes its share of the earnings or losses of each company accounted for under the equity method and adjusts the carrying amount for each such company for its share of the earnings or losses of the company. Actua excludes GAAP equity income (loss) because it is significantly impacted by factors outside its direct control.
  • Impact of non-cash income tax benefit items. Actua excludes the impact of any non-cash income tax benefit items as Actua believes it is useful for investors to understand the effect of this item and Actua does not consider them a part of ongoing operating results when assessing the performance of its business.
  • Income (loss) from discontinued operations. Actua excludes the income (loss) from discontinued operations as Actua believes it is useful for investors to understand the effect of these items for all periods presented and does not consider them a part of ongoing operating results when assessing the performance of its business.
  • Interest expense (income), net. Actua excludes income and expense from interest as Actua believes it is useful for investors to understand the effect of these items for all periods presented and does not consider them a part of ongoing operating results when assessing the performance of its business.
  • Income tax expense (current/cash only). Actua excludes the impact of any current, cash income tax expense as Actua believes it is useful for investors to understand the effect of this item and does not consider them a part of ongoing operating results when assessing the performance of its business.
  • Depreciation. Actua excludes depreciation expense as Actua believes it is useful for investors to understand the effect of these items for all periods presented and does not consider them a part of ongoing operating results when assessing the performance of its business.

Adjusted Cost of revenue excludes from GAAP Cost of revenue operating expenses the following item:

  • Share-based compensation. Actua excludes share-based compensation expenses and other expenses associated with equity granted to employees and non-employee directors in the cost of revenue category on Actua's statements of operations primarily because they are non-cash expenses that Actua does not consider part of ongoing operating results when assessing the performance of its business, and the exclusion of these expenses facilitates the comparison of results over different time periods and the comparison of Actua’s results with results of other companies.

Adjusted Sales and marketing excludes from GAAP Sales and marketing operating expenses the following item:

  • Share-based compensation. Actua excludes share-based compensation expenses and other expenses associated with equity granted to employees and non-employee directors in the sales and marketing category on Actua's statements of operations primarily because they are non-cash expenses that Actua does not consider part of ongoing operating results when assessing the performance of its business, and the exclusion of these expenses facilitates the comparison of results over different time periods and the comparison of Actua’s results with results of other companies.

Adjusted General and administrative excludes from GAAP General and administrative operating expenses the following item:

  • Share-based compensation. Actua excludes share-based compensation expenses and other expenses associated with equity granted to employees and non-employee directors in the general and administrative category on Actua's statements of operations primarily because they are non-cash expenses that Actua does not consider part of ongoing operating results when assessing the performance of its business, and the exclusion of these expenses facilitates the comparison of results over different time periods and the comparison of Actua’s results with results of other companies.

Adjusted Research and development excludes from GAAP Research and development operating expenses the following item:

  • Share-based compensation. Actua excludes share-based compensation expenses and other expenses associated with equity granted to employees and non-employee directors in the research and development category on Actua's statements of operations primarily because they are non-cash expenses that Actua does not consider part of ongoing operating results when assessing the performance of its business, and the exclusion of these expenses facilitates the comparison of results over different time periods and the comparison of Actua’s results with results of other companies.

Actua believes that the following considerations apply to the non-GAAP financial measures that it presents:

  • Actua’s management uses non-GAAP net income (loss), non-GAAP net income (loss) per diluted share, adjusted EBITDA, adjusted cost of revenue, adjusted sales and marketing, adjusted general and administrative and adjusted research and development in internal reports used by management in monitoring and making decisions regarding Actua’s business, including in monthly financial reports prepared for management and in periodic reports to Actua’s Board of Directors.
  • An important limitation of Actua’s non-GAAP financial measures is that they exclude expenses or cash flows, some of which may be significant, that are required by GAAP to be recorded. In addition, non-GAAP financial measures are subject to inherent limitations because they reflect the exercise of judgments by management about which charges to exclude from the non-GAAP financial measures.

To mitigate the limitations associated with non-GAAP financial measures, Actua reconciles its non-GAAP financial measures to the nearest comparable GAAP financial measures and recommends that investors and potential investors do not give undue weight to its non-GAAP financial measures.


Investor inquiries: Karen Greene Actua Investor Relations 610.727.6900 IR@actua.com

Source:Actua Corporation