REDWOOD SHORES, CA — (Marketwired) — 08/07/13 — (NASDAQ: IPAS), the global Wi-Fi roaming leader for enterprises and telecom service providers, today announced financial results for the second quarter ended June 30, 2013.
“iPass Open Mobile continues to be a defining growth engine as OM revenue grew 14% quarter-over-quarter, and now represents nearly 60% of Mobility revenue. Importantly, OM Wi-Fi revenue continues to lead this growth, increasing 24% sequentially,” said , president and chief executive officer of iPass. “With nearly three fourths of our monetized users now migrated to the OM platform, I believe a significant portion of the heavy lifting in converting iPass to a Wi-Fi-centric connectivity company has been successfully completed. The business case we presented over two years ago has created a compelling outcome, and we will look to invest wisely in accelerating growth over the near-term.”
The following key operating metrics highlight the progress that the company made in Q2 2013 with its Open Mobile (OM) business.
Grew Open Mobile revenue by $1.5 million or 14% sequentially, to $12.0 million in Q2 2013, representing 59% of total Mobility Services revenue, up from 50% in Q1 2013. OM revenue grew 94% in the second quarter over the same quarter in 2012.
Delivered the ninth sequential quarter of growth in total Open Mobile revenue and Open Mobile Wi-Fi network revenue. OM Wi-Fi network revenue grew by $1.3 million or 24% sequentially, and approximately 150% over Q2 2012.
Increased total Wi-Fi sessions by 11% and Wi-Fi usage hours by 5% over Q1 2013. Sessions and hours growth directly correlate with the improving penetration of OM on smartphones and tablets, and the overall higher Wi-Fi consumption rates of the growing OM user base.
Grew Open Mobile Wi-Fi network users as a percentage of total Wi-Fi network users from 56% for the month of March 2013 to 67% for the month of June 2013. Year over year, the number of OM Wi-Fi network users was 60,000 in June 2013 compared to 26,000 in June 2012, a 130% increase.
Increased Open Mobile smartphone and tablet Wi-Fi network users by 25% in June 2013 compared to March 2013 and by nearly four times from June 2012. OM smartphone and tablet Wi-Fi network users represented 28% of total OM Wi-Fi network users for the month of June 2013.
Grew Open Mobile platform active monetized users by 16% from 470,000 users for the month of March 2013 to 546,000 users for the month of June 2013, representing 74% of total platform users as the company exited the second quarter. Year over year, OM platform active monetized users increased approximately 160%.
Signed thirteen new large enterprise customers to Open Mobile during the second quarter of 2013, including Aurizon, Birmingham Community Healthcare, BNP Paribas, Cement Australia, Commonwealth Bank, HCL Great Britain Limited, and Wolseley.
Signed nine existing enterprise customers on Open Mobile during the second quarter of 2013, including Blackboard, Cummins, Digital River, Essilor International, Hughes Network Systems, and Koninklijke DSM N.V.
Added four large and strategic carriers during the second quarter of 2013, further expanding iPass OMX customer base to a total of 30 carriers and service providers signed to date.
Announced that iPass OMX will supply Skype Communications S.a.r.l, a global provider of internet communications software and Luxembourg-based subsidiary of Microsoft Corp., with network infrastructure to expand the reach of Skype Wi-Fi services.
Announced that TTNET, a subsidiary of Türk Telekom Group, Turkey-s leading internet provider, will offer its customers unlimited international Wi-Fi roaming services through the iPass OMX platform.
Announced that Zain Jordan and Zain Kuwait, subsidiaries of Zain Group and the pioneer of mobile telecommunications across the Middle East and North Africa, have chosen iPass OMX to provide global Wi-Fi access to their international travelers.
Deployments to existing partners began to accelerate as the company-s OMX network revenue grew approximately 90% from the first quarter of 2013 to the second quarter of 2013.
Key renewals signed with a Fortune 500 retailer, a large insurance company, and one of the market leaders in specialty consumer finance.
Signed a channel agreement with McGraw Communications, a New York based leading managed service provider of voice, data and Internet services, to offer its customers broadband based WAN network services.
Recently released significant enhancements to the iPass Open Mobile clients for iOS, Android and Windows Touch, including a simple email end-user account setup wizard, and support for additional inflight and rail networks. The email end-user account setup wizard continues the company-s development effort to make user provisioning simple and easy.
For the third quarter of 2013 ending September 30, 2013, iPass anticipates total revenue and adjusted EBITDA income (loss) to be in the following ranges:
iPass will host a live conference call today at 2:00 PM Pacific Time (5:00 PM Eastern Time).
The conference call will be accessible by telephone, toll-free at 888-438-5524 or direct dial at 719-325-2376 with a participant confirmation code of 6265206. The conference call will also be available live via webcast on the company-s web site at . The webcast will be available for replay until iPass reports its third quarter 2013 results.
The dial-in number for a telephone replay of the conference call is 888-203-1112 and 719-457-0820 and will be available until August 16, 2013. The confirmation code for the replay is 6265206.
Evan Kaplan, President and CEO, will be presenting at the Oppenheimer 16th Annual Technology, Internet & Communications Conference on August 14 in Boston and attending the 4th Annual BWS Financial Growth and Value Summer Investor Series on August 21 in New York, and will provide an overview of the company-s business, growth strategy and financial fundamentals. There will be a live webcast of the iPass presentation at the Oppenheimer conference on August 14 at 1:05 p.m. ET at . The webcast reply will be available for 90 days.
Evan Kaplan, President and CEO, will be presenting at the Informa Wi-Fi World Summit during the week of September 23 in London and will provide insights on the company-s leading role in the Wi-Fi roaming market.
The statements in this press release regarding iPass- expectations and belief that a significant portion of the heavy lifting in converting iPass to a Wi-Fi-centric connectivity company has been successfully completed, that iPass will look to invest wisely in accelerating growth over the near-term, and iPass- projections of its third quarter 2013 financial results under the caption “Q3 2013 Guidance” are forward-looking statements. Actual results may differ materially from the expectations contained in these statements due to a number of risks and uncertainties, including the following: the risk that the “End of Life” of iPass- legacy Mobile Office product may negatively impact customer retention and mobility revenues more than iPass expects; the risk that the Open Mobile platform and Open Mobile Exchange will not achieve the market acceptance iPass expects; the risk that iPass customers and partners may not be willing to agree to minimum purchase and resale commitments at the rate iPass expects; the risk of material reductions in iPass customers- existing minimum commitments more than iPass currently expects; the risk that iPass carrier and channel partners do not successfully market iPass services to their customers; the risk that iPass does not accurately predict usage for its Enterprise Flat Rate price plan which could result in iPass expenses exceeding revenues for these plans; the risk that iPass customers do not widely deploy iPass Open Mobile on smartphones, tablets and other mobile handheld devices at the rate iPass expects; the risk that demand for Mobility Services does not grow as iPass expects; the risk that strong competition in the market for Mobility Services and iPass Unity Network Services could reduce demand for iPass- services; the risk that iPass fails to address market requirements, evolving standards and technological changes in the mobility services industry, which could reduce demand for iPass- services; and the risk that a meaningful portion of iPass business is international, which subjects iPass to additional risks such as currency fluctuations. Detailed information about these and other risk factors that could potentially affect iPass- business, financial condition and results of operations are included in iPass- Annual Report on Form 10-K filed with the SEC on March 15, 2013, and available at the SEC-s Web site at and the company-s website at . iPass undertakes no responsibility to update the information in this press release if any forward-looking statement later turns out to be an inaccurate prediction of the actual results.
In addition, investors and others should note that iPass announces material financial information to its investors using its investor relations website, SEC filings, press releases, public conference calls and webcasts. iPass also uses social media to communicate with its customers and the public about iPass, its products and services and other matters relating to its business and market. It is possible that the information iPass posts on social media could be deemed to be material information. Therefore, iPass encourages investors, the media, and others interested in iPass to review the information it posts on U.S. social media channels including the iPass Twitter Feed, the iPass LinkedIn Feed, the iPass Google+ Feed, the iPass Facebook Page, the iPass Blog, and Evan Kaplan-s Twitter Feed. These social media channels may be updated from time to time.
This press release also contains financial measures that are not calculated in accordance with U.S. generally accepted accounting principles (GAAP). iPass considers Adjusted EBITDA as a supplemental measure of the company-s performance that is not required by, nor presented in accordance with GAAP.
The company defines Adjusted EBITDA as net income (loss) before interest income, income taxes, depreciation and amortization, stock-based compensation expense, restructuring charges, and certain state sales and federal tax charges. The company believes Adjusted EBITDA provides a meaningful comparison between its core operating results, on a consistent basis, over different periods of time. Accordingly, management uses this financial measure for evaluating and making operating decisions and for purposes of comparison with its strategic plan, operating budgets and allocation of resources.
Furthermore, iPass believes the use of Adjusted EBITDA is useful to investors:
1) To provide an additional analytical tool for understanding the company-s financial performance by excluding the impact of items which may obscure trends in the core operating performance of the business;
2) To provide consistency and enhance investors- ability to compare the company-s performance across financial reporting periods; and
3) To facilitate comparisons to the operating results of other companies in the company-s industry, which may use similar financial measures to supplement their GAAP results.
Adjusted EBITDA should not be considered in isolation, or construed as an alternative to net income, or any other performance measure derived in accordance with GAAP, or as an alternative to cash flow from operating activities or as a measure of the company-s liquidity.
iPass helps and ensure their employees and subscribers stay well connected. Founded in 1996, iPass delivers the world-s largest commercial-grade and trusted . With more than 1.2 million Wi-Fi hotspots in over 120 countries and territories, iPass gives its customers always-on, frictionless connectivity for smartphones, tablets and laptops anywhere in the world — simply, securely and cost effectively. Additional information is available at or on , the iPass blog.
NOTE: iPass® is a registered trademark of iPass Inc. Open Mobile, OME, Open Mobile Express, Open Mobile Exchange and OMX are trademarks of iPass Inc. Wi-Fi® is a registered trademark of the Wi-Fi Alliance. Other company names, logos and product or service names mentioned herein are the trademarks owned by their respective owners.
Mike Bishop
The Blueshirt Group
Tel. +1 415 217 4968
Email:
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