Boingo Wireless (NASDAQ: WIFI), the leading distributed antenna system
(DAS) and Wi-Fi provider that serves carriers, consumers, property
owners and advertisers worldwide, today announced the Company’s
financial results for the first quarter ended March 31, 2019.
First Quarter 2019 Financial Highlights
-
Revenue of $66.5 million increased 14.3% compared to $58.2 million in
the first quarter of 2018. Growth was driven by strength in
military/multifamily and DAS.-
Military/multifamily revenue of $25.9 million increased 63.3%
compared to $15.9 million in the first quarter of 2018. -
DAS revenue of $24.1 million increased 1.9% compared to $23.6
million in the first quarter of 2018. DAS revenue for the quarter
was comprised of $17.7 million of build-out project revenue and
$6.4 million of access fee revenue. Access fee revenue grew 28.0%
year-over-year.
-
Military/multifamily revenue of $25.9 million increased 63.3%
-
Net loss attributable to common stockholders was $(5.2) million, or
$(0.12) per diluted share, compared to a net loss of $(3.2) million,
or $(0.08) per diluted share, in the first quarter of 2018. -
Adjusted EBITDA of $19.1 million decreased 12.7% compared to $21.9
million in the first quarter of 2018. Adjusted EBITDA, which is a
non-GAAP financial measure, is defined below and is reconciled to net
loss attributable to common stockholders, the most comparable measure
under GAAP, in the schedule entitled “Reconciliation of Net Loss
Attributable to Common Stockholders to Adjusted EBITDA.”
-
Net cash provided by operating activities was $23.7 million compared
to $17.3 million in the first quarter of 2018. -
Free cash flow was $(8.6) million, compared to $(3.8) million in the
first quarter of 2018. Free cash flow, which is a non-GAAP financial
measure, is defined below and is reconciled to net cash provided by
operating activities, the most comparable measure under GAAP, in the
schedule entitled “Reconciliation of Net Cash Provided by Operating
Activities to Free Cash Flows.”
Business Highlights
-
The Company announced it was selected to be the Wi-Fi service provider
by London Heathrow airport, Europe’s largest airport. Passengers at
all Heathrow terminals now have access to seamless and secure
high-speed Wi-Fi via carrier offloading on Boingo’s
Passpoint-certified networks. -
The Company deployed a Wi-Fi 6 commercial trial at John Wayne Airport
(SNA) to test next-generation Wi-Fi capabilities. Wi-Fi 6 is a new
industry standard and meets 5G requirements to power a broad range of
connected use cases in dense environments with greater capacity, speed
and scalability. This is the first Wi-Fi 6 deployment in a major
airport. -
The Company launched one new DAS venue location during the quarter
bringing the total to 59 DAS venues live comprised of 31,100 DAS
nodes. The Company also added three new DAS venues to total 74 venues
and 13,700 nodes in backlog as of March 31, 2019. -
The Company implemented speed and price increases to its military
broadband offering which led to 12% growth in ARPU compared to the
first quarter of 2018.
Management Commentary
“I’m pleased to share that Boingo’s strong results and momentum
continued through the first quarter of 2019 with our top-line
performance fueled by growth in military/multifamily and DAS,” commented
Mike Finley, Chief Executive Officer of Boingo Wireless. “We are very
excited about the multifamily vertical and its growth potential. As of
March 31st, we had 228 multifamily properties live with our
Wi-Fi solution with another 15 under contract. Consistent with our 2019
focus for military, we grew ARPU by 12% year-over-year. Importantly, DAS
continued to be robust with 28% year-over-year growth in high-margin
access fee revenue.”
Mr. Finley continued, “I believe Boingo is at the forefront of a
transformative time in history with respect to 5G and that we are very
well-positioned to take advantage of the incredible changes it will
bring. Since Boingo has the wireless rights at the venues we have
deployed, carriers will work with us to deploy 5G networks at these
venues. We are a ready-made, neutral-host operator and can build 5G
networks just as fast as a carrier wants to deploy. The multifamily
product and 5G upgrades represent huge opportunities for Boingo and I am
very excited for the future.”
Business Outlook
Boingo Wireless is initiating guidance for the second quarter ending
June 30, 2019 and is reiterating guidance for the full year ending
December 31, 2019, as follows:
Second Quarter 2019
-
Revenue is expected to be in the range of $66.0 million to $71.0
million. -
Net loss attributable to common stockholders is expected to be in the
range of $(4.0) million to $(1.0) million, or a net loss of $(0.09)
to $(0.02) per diluted share. -
Adjusted EBITDA is expected to be in the range of $20.0
million to $24.0 million. Adjusted EBITDA, which is a non-GAAP
financial measure, is defined below and is reconciled to net loss
attributable to common stockholders, the most comparable measure under
GAAP, in the schedule entitled “Reconciliation of Net Loss
Attributable to Common Stockholders to Adjusted EBITDA – Guidance.”
Full Year 2019
-
Revenue is expected to be in the range of $270.0 million to $280.0
million. -
Net loss attributable to common stockholders is expected to be in the
range of $(20.0) million to $(15.0) million, or a net loss of $(0.45)
to $(0.34) per diluted share. -
Adjusted EBITDA is expected to be in the range of $80.0 million to
$87.0 million.
Conference Call Information
Members of Boingo Wireless’ management will host a conference call to
discuss its first quarter 2019 financial results beginning at 4:30 p.m.
ET (1:30 p.m. PT), today, May 8, 2019. To participate in the conference
call, investors from the U.S. and Canada should dial (877) 407-9716 and
enter the passcode: 13689494 ten minutes prior to the scheduled start
time. International callers should dial +1 (201) 493-6779 and enter the
same passcode. The conference call will be broadcast live over the
Internet in the Investor Relations section of the Company’s website at http://investors.boingo.com.
In addition, a supplement reflecting the Company’s key business metrics
will be made available in the Investor Relations section of the
Company’s website. The supplement and webcast will be archived online
upon completion of the conference call.
Use of Non-GAAP Financial Measures
To supplement Boingo Wireless’ financial statements presented on a GAAP
basis, Boingo Wireless provides Adjusted EBITDA and free cash flow as
supplemental measures of its performance.
The Company defines Adjusted EBITDA as net loss attributable to common
stockholders plus depreciation and amortization of property and
equipment, stock-based compensation expense, amortization of intangible
assets, income tax expense, interest and other expense, net,
non-controlling interests, and excludes charges or gains that are
nonrecurring, infrequent, or unusual. Boingo Wireless believes Adjusted
EBITDA is useful to investors in evaluating its operating performance.
Boingo’s management uses Adjusted EBITDA in conjunction with accounting
principles generally accepted in the United States, or GAAP, and other
operating performance measures as part of its overall assessment of the
Company’s performance for planning purposes, including the preparation
of its annual operating budget, to evaluate the effectiveness of its
business strategies and to communicate with its board of directors
concerning its financial performance. Adjusted EBITDA should not be
considered as an alternative financial measure to net loss attributable
to common stockholders, which is the most directly comparable financial
measure calculated in accordance with GAAP, or any other measure of
financial performance calculated in accordance with GAAP.
The Company defines free cash flow as net cash provided by operating
activities, less purchases of property and equipment. Boingo Wireless
believes that free cash flow provides investors with additional useful
information to measure operating liquidity because it reflects the
amount of cash generated by the Company’s operations after the purchases
of property and equipment that can be used for strategic opportunities.
Free cash flow should not be considered as an alternative financial
measure to net cash provided by operating activities, which is the most
directly comparable financial measure calculated in accordance with
GAAP, or any other measure of financial performance calculated in
accordance with GAAP.
Lease Changes
On January 1, 2019, the Company adopted ASC 842, Leases, using
the modified retrospective transition method. Results for reporting
periods beginning on January 1, 2019 are presented under ASC 842, while
prior period amounts are not adjusted and continue to be reported in
accordance with ASC 840, Leases. Adoption of the new standard
resulted in the recording of $16.9 million of operating lease
right-of-use assets and $22.3 million of operating lease liabilities as
of January 1, 2019.
About Boingo Wireless
Boingo Wireless, Inc. (NASDAQ: WIFI) helps the world stay connected. Our
vast footprint of DAS, Wi-Fi and small cells reaches more than a billion
people annually, making Boingo one of the largest providers of indoor
wireless networks. You’ll find Boingo connecting people at airports,
stadiums, military bases, convention centers, multifamily communities
and commercial properties. To learn more about the Boingo story, visit www.boingo.com.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains “forward-looking statements” that involves
risks, uncertainties and assumptions. Forward-looking statements can be
identified by words such as “anticipates,” “intends,” “plans,” “seeks,”
“believes,” “estimates,” “expects” and similar references to future
periods. These forward-looking statements include the quotations from
management in this press release, as well as any statements regarding
Boingo’s strategic plans, future guidance and future growth
opportunities and the ability of Boingo to achieve financial,
operational and strategic benefits from the acquisition of Elauwit
Networks. Forward-looking statements are based on the Company’s current
expectations and assumptions regarding its business, the economy and
other future conditions. Since forward-looking statements relate to the
future, they are subject to inherent uncertainties, risks and changes in
circumstances that are difficult to predict. The Company’s actual
results may differ materially from those contemplated by the
forward-looking statements. Important factors that could cause actual
results to differ materially from those in the forward-looking
statements include the Company’s ability to maintain its existing
relationships and establish new relationships with venue partners, its
ability to complete build-outs and sign venue contracts, its ability to
maintain revenue growth and achieve profitability, its ability to
execute on its strategic and business plans, its ability to successfully
compete with new technologies and adapt to changes in the wireless
industry, the application of new accounting standards, as well as other
risks and uncertainties described more fully in documents filed with or
furnished to the Securities and Exchange Commission (SEC), including
Boingo’s Form 10-K for the year ended December 31, 2018 filed with the
SEC on March 1, 2019 which the Company incorporates by reference into
this press release. Any forward-looking statement made by Boingo in this
press release speaks only as of the date on which it is made. Factors or
events that could cause the Company’s actual results to differ may
emerge from time to time, and it is not possible for Boingo to predict
all of them. Boingo undertakes no obligation to publicly update any
forward-looking statement, whether as a result of new information,
future developments or otherwise, except as may be required by law.
Boingo, Boingo Wi-Finder, Boingo Broadband, and the Boingo Wireless
Logo are registered trademarks of Boingo Wireless, Inc. All other
trademarks are the properties of their respective owners.
| Boingo Wireless, Inc. | ||||||||||
| Condensed Consolidated Statements of Operations | ||||||||||
| (Unaudited) | ||||||||||
| (In thousands, except per share amounts) | ||||||||||
|
Three Months Ended March 31, |
||||||||||
| 2019 | 2018 | |||||||||
| Revenue | $ | 66,473 | $ | 58,159 | ||||||
| Costs and operating expenses: | ||||||||||
| Network access | 31,411 | 26,565 | ||||||||
| Network operations | 14,142 | 12,846 | ||||||||
| Development and technology | 8,999 | 7,425 | ||||||||
| Selling and marketing | 5,867 | 5,463 | ||||||||
| General and administrative | 8,294 | 7,699 | ||||||||
| Amortization of intangible assets | 1,131 | 727 | ||||||||
| Total costs and operating expenses | 69,844 | 60,725 | ||||||||
| Loss from operations | (3,371 | ) | (2,566 | ) | ||||||
| Interest and other expense, net | (1,676 | ) | (79 | ) | ||||||
| Loss before income taxes | (5,047 | ) | (2,645 | ) | ||||||
| Income tax expense | 192 | 128 | ||||||||
| Net loss | (5,239 | ) | (2,773 | ) | ||||||
| Net (loss) income attributable to non-controlling interests | (86 | ) | 456 | |||||||
| Net loss attributable to common stockholders | $ | (5,153 | ) | $ | (3,229 | ) | ||||
| Net loss per share attributable to common stockholders: | ||||||||||
| Basic | $ | (0.12 | ) | $ | (0.08 | ) | ||||
| Diluted | $ | (0.12 | ) | $ | (0.08 | ) | ||||
|
Weighted average shares used in computing net loss per share attributable to common stockholders: |
||||||||||
| Basic | 43,527 | 41,330 | ||||||||
| Diluted | 43,527 | 41,330 | ||||||||
| Boingo Wireless, Inc. | ||||||||||
| Condensed Consolidated Balance Sheets | ||||||||||
| (Unaudited) | ||||||||||
| (In thousands, except per share amounts) | ||||||||||
|
March 31, 2019 |
December 31, 2018 |
|||||||||
| Assets | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 69,016 | $ | 149,412 | ||||||
| Marketable securities | 36,888 | — | ||||||||
| Accounts receivable, net | 38,434 | 42,766 | ||||||||
| Prepaid expenses and other current assets | 8,823 | 7,815 | ||||||||
| Total current assets | 153,161 | 199,993 | ||||||||
| Property and equipment, net | 329,734 | 314,179 | ||||||||
| Operating lease right-of-use assets(1) | 16,478 | — | ||||||||
| Goodwill | 58,890 | 59,640 | ||||||||
| Intangible assets, net | 18,021 | 19,152 | ||||||||
| Other assets | 10,784 | 9,936 | ||||||||
| Total assets | $ | 587,068 | $ | 602,900 | ||||||
| Liabilities and stockholders’ equity | ||||||||||
| Current liabilities: | ||||||||||
| Accounts payable | $ | 25,829 | $ | 21,543 | ||||||
| Accrued expenses and other liabilities | 57,765 | 62,653 | ||||||||
| Deferred revenue | 68,351 | 80,383 | ||||||||
| Current portion of operating leases(1) | 2,736 | — | ||||||||
| Current portion of long-term debt | 778 | — | ||||||||
| Current portion of finance leases | 3,843 | 4,201 | ||||||||
| Current portion of notes payable | 2,204 | 2,411 | ||||||||
| Total current liabilities | 161,506 | 171,191 | ||||||||
| Deferred revenue, net of current portion | 149,675 | 137,205 | ||||||||
| Long-term portion of operating leases(1) | 18,915 | — | ||||||||
| Long-term debt | 156,411 | 151,670 | ||||||||
| Long-term portion of finance leases | 2,475 | 3,293 | ||||||||
| Long-term portion of notes payable | 1,148 | 1,618 | ||||||||
| Deferred tax liabilities | 1,132 | 1,073 | ||||||||
| Other liabilities | 1,268 | 6,728 | ||||||||
| Total liabilities | 492,530 | 472,778 | ||||||||
| Commitments and contingencies | ||||||||||
| Stockholders’ equity: | ||||||||||
|
Preferred stock, $0.0001 par value; 5,000 shares authorized; no shares issued and outstanding |
— | — | ||||||||
|
Common stock, $0.0001 par value; 100,000 shares authorized; 43,979 and 42,669 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively |
4 | 4 | ||||||||
| Additional paid-in capital | 228,805 | 259,132 | ||||||||
| Accumulated deficit | (135,083 | ) | (129,930 | ) | ||||||
| Accumulated other comprehensive loss | (1,317 | ) | (1,295 | ) | ||||||
| Total common stockholders’ equity | 92,409 | 127,911 | ||||||||
| Non-controlling interests | 2,129 | 2,211 | ||||||||
| Total stockholders’ equity | 94,538 | 130,122 | ||||||||
| Total liabilities and stockholders’ equity | $ | 587,068 | $ | 602,900 | ||||||
|
______________________________ |
|||||
| (1) |
We adopted ASC 842 on January 1, 2019 using the modified retrospective transition method. Adoption of ASC 842 using the modified retrospective method required us to record operating lease right-of-use assets of $16,916 and operating lease liabilities of $22,338 on January 1, 2019. |
||||
| Boingo Wireless, Inc. | ||||||||||
| Condensed Consolidated Statements of Cash Flows | ||||||||||
| (Unaudited) | ||||||||||
| (In thousands) | ||||||||||
|
Three Months Ended March 31, |
||||||||||
| 2019 | 2018 | |||||||||
| Cash flows from operating activities | ||||||||||
| Net loss | $ | (5,239 | ) | $ | (2,773 | ) | ||||
|
Adjustments to reconcile net loss including non-controlling interests to net cash provided by operating activities: |
||||||||||
| Depreciation and amortization of property and equipment | 19,009 | 20,606 | ||||||||
| Amortization of intangible assets | 1,131 | 727 | ||||||||
|
Impairment loss and loss on disposal of fixed assets and intangible assets held for sale, net |
91 | 70 | ||||||||
| Stock-based compensation | 2,344 | 3,126 | ||||||||
|
Amortization of deferred financing costs and debt discount, net of amounts capitalized |
2,256 | — | ||||||||
| Amortization of operating lease right-of-use assets | 438 | — | ||||||||
|
Unrealized gains and amortization of premiums/discounts for marketable securities |
(207 | ) | — | |||||||
| Changes in operating assets and liabilities: | ||||||||||
| Accounts receivable | 4,307 | (3,799 | ) | |||||||
| Prepaid expenses and other assets | (13 | ) | 551 | |||||||
| Accounts payable | 1,397 | 706 | ||||||||
| Accrued expenses and other liabilities | (1,481 | ) | 1,014 | |||||||
| Deferred revenue | 439 | (2,958 | ) | |||||||
| Operating lease liabilities | (729 | ) | — | |||||||
| Net cash provided by operating activities | 23,743 | 17,270 | ||||||||
| Cash flows from investing activities | ||||||||||
| Purchases of marketable securities | (36,665 | ) | — | |||||||
| Purchases of property and equipment | (32,390 | ) | (21,117 | ) | ||||||
| Net cash used in investing activities | (69,055 | ) | (21,117 | ) | ||||||
| Cash flows from financing activities | ||||||||||
| Debt issuance costs | (1,687 | ) | — | |||||||
| Proceeds from credit facility | 3,500 | — | ||||||||
| Principal payments on credit facility | (194 | ) | (219 | ) | ||||||
| Payments of acquisition related consideration | (1,952 | ) | — | |||||||
| Proceeds from exercise of stock options | 6 | 4,228 | ||||||||
| Payments of finance leases and notes payable | (1,853 | ) | (1,450 | ) | ||||||
| Payments of withholding tax on net issuance of restricted stock units | (32,907 | ) | (6,340 | ) | ||||||
| Net cash used in financing activities | (35,087 | ) | (3,781 | ) | ||||||
| Effect of exchange rates on cash | 3 | 7 | ||||||||
| Net decrease in cash, cash equivalents, and restricted cash | (80,396 | ) | (7,621 | ) | ||||||
| Cash and cash equivalents at beginning of period | 149,412 | 26,685 | ||||||||
| Cash, cash equivalents, and restricted cash at end of period | $ | 69,016 | $ | 19,064 | ||||||
|
Supplemental disclosure of non-cash investing and financing activities |
||||||||||
|
Property and equipment costs included in accounts payable, accrued expenses and other liabilities |
$ | 39,309 | $ | 20,377 | ||||||
|
Purchase of equipment and prepaid maintenance services under capital financing arrangements |
$ | — | $ | 1,930 | ||||||
|
Capitalized stock-based compensation included in property and equipment costs |
$ | 230 | $ | 186 | ||||||
|
Purchase price for business acquisition included in accrued expenses and other liabilities |
$ | 2,961 | $ | — | ||||||
|
Debt issuance costs included in accrued expenses and other liabilities |
$ | 125 | $ | — | ||||||
| Financed sale of intangible assets held for sale | $ | 311 | $ | — | ||||||
| Boingo Wireless, Inc. | ||||||||||
|
Reconciliation of Net Loss Attributable to Common Stockholders to Adjusted EBITDA |
||||||||||
| (Unaudited) | ||||||||||
| (In thousands) | ||||||||||
|
Three Months Ended March 31, |
||||||||||
| 2019 | 2018 | |||||||||
| Net loss attributable to common stockholders | $ | (5,153 | ) | $ | (3,229 | ) | ||||
| Depreciation and amortization of property and equipment | 19,009 | 20,606 | ||||||||
| Stock-based compensation expense | 2,344 | 3,126 | ||||||||
| Amortization of intangible assets | 1,131 | 727 | ||||||||
| Income tax expense | 192 | 128 | ||||||||
| Interest and other expense, net | 1,676 | 79 | ||||||||
| Non-controlling interests | (86 | ) | 456 | |||||||
| Adjusted EBITDA | $ | 19,113 | $ | 21,893 | ||||||
| Boingo Wireless, Inc. | ||||||||||
|
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flows |
||||||||||
| (Unaudited) | ||||||||||
| (In thousands) | ||||||||||
|
Three Months Ended March 31, |
||||||||||
| 2019 | 2018 | |||||||||
| Net cash provided by operating activities | $ | 23,743 | $ | 17,270 | ||||||
| Purchases of property and equipment | (32,390 | ) | (21,117 | ) | ||||||
| Free cash flows | $ | (8,647 | ) | $ | (3,847 | ) | ||||
| Boingo Wireless, Inc. | |||||||||
| Revenue Summary | |||||||||
| (Unaudited) | |||||||||
| (In thousands) | |||||||||
|
Three Months Ended March 31, |
|||||||||
| 2019 | 2018 | ||||||||
| Revenue: | |||||||||
| Military/multifamily | $ | 25,897 | $ | 15,854 | |||||
| DAS | 24,095 | 23,645 | |||||||
| Wholesale—Wi-Fi | 11,020 | 11,149 | |||||||
| Retail | 3,926 | 5,310 | |||||||
| Advertising and other | 1,535 | 2,201 | |||||||
| Total revenue | $ | 66,473 | $ | 58,159 | |||||
| Boingo Wireless, Inc. | ||||||||||||||||||||
|
Reconciliation of Net Loss Attributable to Common Stockholders to Adjusted EBITDA – Guidance |
||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| (In millions) | ||||||||||||||||||||
|
Three Months Ended June 30, 2019 |
Year Ended December 31, 2019 |
|||||||||||||||||||
| Low | High | Low | High | |||||||||||||||||
| Net loss attributable to common stockholders | $ | (4.0 | ) | $ | (1.0 | ) | $ | (20.0 | ) | $ | (15.0 | ) | ||||||||
| Depreciation and amortization of property and equipment | 17.8 | 18.8 | 75.2 | 77.2 | ||||||||||||||||
| Stock-based compensation expense |
|
2.5 |
|
11.3 |
||||||||||||||||
| Amortization of intangible assets |
|
1.1 |
|
4.6 |
||||||||||||||||
| Income tax expense and interest and other expense, net |
|
2.2 |
|
7.3 |
||||||||||||||||
| Non-controlling interests |
|
0.4 |
|
1.6 |
||||||||||||||||
| Adjusted EBITDA | $ | 20.0 | $ | 24.0 | $ | 80.0 | $ | 87.0 | ||||||||||||
| Boingo Wireless, Inc. | |||||||
| Key Business Metrics | |||||||
| (Unaudited) | |||||||
| (In thousands) | |||||||
|
Three Months Ended March 31, |
|||||||
| 2019 | 2018 | ||||||
| Key business metrics: | |||||||
| DAS nodes(1) | 31.1 | 24.2 | |||||
| DAS nodes in backlog(2) | 13.7 | 11.4 | |||||
| Subscribers—military(3) | 147 | 142 | |||||
| Subscribers—retail(3) | 113 | 168 | |||||
| Connects(4) | 78,625 | 65,901 | |||||
|
______________________________ |
|||||
| (1) |
This metric represents the number of active DAS nodes as of the end of the period. A DAS node is a single communications endpoint, typically an antenna, which transmits or receives radio frequency signals wirelessly. This measure is an indicator of the reach of the Company’s DAS network. |
||||
| (2) |
This metric represents the number of DAS nodes under contract but not yet active as of the end of the period. |
||||
| (3) |
This metric represents the number of paying customers who are on a month-to-month subscription plan at a given period end. |
||||
| (4) |
This metric shows how often individuals connect to the Company’s global Wi-Fi network in a given period. The connects include wholesale and retail customers in both customer pay locations and customer free locations where Boingo is a paid service provider or receives sponsorship or promotion fees. The Company counts each connect as a single connect regardless of how many times that individual accesses the network at a given venue during their 24-hour period. This measure is an indicator of paid activity throughout Boingo’s network. |
||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20190508005752/en/