MobileIron Announces Solid First Quarter 2019 Results

MobileIron (NASDAQ: MOBL), the secure foundation for modern work, today
announced results for its first quarter ended March 31, 2019.

First Quarter 2019 Financial Highlights

• Revenue was $48.1 million, up 10% year-over-year.
• ARR was $167.2 million, up 18% year-over-year.
• Cash generated in operating activities was $7.8 million.

“MobileIron began 2019 with a solid first quarter, delivering revenue
growth of 10% and robust ARR growth of 18%. Our team is executing on our
objective of growing our recurring revenue base through subscription
solutions with our best-in-class cloud products,” said Simon
Biddiscombe, CEO, MobileIron. “As IT departments shift to address the
threats of a Zero Trust world, we believe we are ideally poised to
capitalize on this market. Already possessing the most comprehensive
mobile security suite to address a Zero Trust environment, MobileIron
will continue to deliver a roadmap of innovation to strengthen our
security framework while enhancing the user’s experience. I am confident
that our focus on market-leading innovation and customer satisfaction
will continue to propel us on our upward growth trajectory.”

Financial Outlook

The company is providing the following outlook for its second quarter
2019 (ending June 30, 2019):

• Revenue is expected to be between $49 million and $52 million, for
  growth of 6% to 13% year-over-year.
• Non-GAAP gross margin is expected to be approximately 82%.
• Non-GAAP operating expenses are expected to be approximately $46
  million.

The company is reaffirming the following outlook for 2019 (ending
December 31, 2019):

• Revenue is expected to be between $205 million and $215 million, for
  growth of 6% to 11%.
• We expect ARR to grow by approximately 20% by year end.
• We expect to generate non-GAAP operating profit.

First Quarter 2019 Business Highlights

Milestones and Recognition

• Recognized as a 2019 Gartner Peer Insights Customers’ Choice for
  Unified Endpoint Management Tools, for the second consecutive year.
  MobileIron is the only Leader in the Gartner UEM Magic Quadrant to be
  recognized with this distinction.
• Became the first UEM vendor to receive Common Criteria certification
  for MDM Protection Profile Version 3.0, from the US
  government-operated National Information Assurance Partnership (NIAP).
• Obtained certification from the Service Capability & Performance
  Standards for excellence in customer support for the second year in a
  row and MobileIron remains the only UEM vendor to receive this
  certification for excellence.
• Appointed Leslie Stretch to our Board of Directors. Currently Mr.
  Stretch is the CEO of the cloud company Medallia. He was previously
  the CEO of Callidus, which he transitioned from a perpetual license
  business to a cloud and subscription model.
• Announced partnership with NetMotion Software to enable secure,
  reliable access to mission-critical mobile apps and real-time data for
  mobile workforces for MobileIron’s UEM, Core, and Cloud offerings.
• Recognized as a Customer Experience Award winner by Info-Tech Research
  Group, an IT research and advisory company, for MobileIron’s top
  scores in the categories of Fair-Cost to Value (user satisfaction
  given software cost) and Net Emotional Footprint (user feeling towards
  vendor and product). This report is a detailed analysis of software
  vendors in the market and the report’s results are based on end-user
  feedback.
• Awarded two additional US patents for mobile security, bringing
  MobileIron’s total number of awarded patents to 84.

Platform

• Announced new capabilities to improve workforce productivity by
  strengthening access to corporate applications and services, including
  Mobile Application Management (MAM) for unmanaged devices and
  Frontline worker enablement, optimized security with mobile threat
  detection, and expanded OS compatibility for macOS, Android, and
  Windows 10 endpoints.
• Released new versions of MobileIron Cloud, Access, Core, AppConnect,
  Docs@Work, Derived Credentials (PIV-D), Email+, Tunnel, Sentry, and
  Web@Work.
• Integrated with Mopria Alliance for Android Enterprise mobile printing.
• Integrated with Mobile Box for iOS email and PIM.
• EBF published new Microsoft Office AppConfig integrations for Excel,
  OneDrive, OneNote, Outlook, PowerPoint, and Word.
• MobileIron Access now documented as an authentication provider with
  PingFederate delegated-IdP flow.
• Announced partnership with IDEMIA for eSIM and connectivity management.

All forward-looking non-GAAP financial measures contained in this
section exclude estimates for stock-based compensation expense,
amortization of intangible assets and restructuring expense. While a
reconciliation of non-GAAP guidance measures to corresponding GAAP
measures is not available on a forward-looking basis, the company has
provided a reconciliation of GAAP to non-GAAP financial measures in the
financial statement tables included in this press release for its first
quarter of 2018 and 2019.

Conference Call and Webcast

MobileIron will report final results for the first quarter and fiscal
year 2019 on Thursday, April 25, 2019 after the close of the market and
host a conference call and live webcast at 1:30 p.m. Pacific Time (4:30
p.m. ET) to discuss the company’s financial results, product
announcements and business highlights. Interested parties may access the
call by dialing 1-866-602-7050 in the U.S. or 1-409-216-6455 from
international locations (passcode 4868103). The live webcast will be
available on the MobileIron Investor Relations website at http://investors.mobileiron.com.
A replay will be available through the same link.

Safe Harbor Statement

This press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. Such
statements contain words such as “may,” “will,” “might,” “expect,”
“believe,” “anticipate,” “could,” “would,” “estimate,” “continue,”
“pursue,” or the negative thereof or comparable terminology, and may
include (without limitation) information regarding our expectations,
goals or intentions regarding future performance. Forward-looking
statements in this press release include, but are not limited to,
statements regarding MobileIron’s revenue, operating expenses, cost
structure, GAAP and non-GAAP financial metrics, as well as statements
that we expect to continue to see progress through 2019 on executing on
our objective of growing our recurring revenue base through subscription
solutions with our best in class cloud products, that we believe we are
ideally poised to capitalize on the market of IT departments shifting to
address the threats of a Zero Trust world, that we will continue to
deliver a roadmap of innovation to strengthen our security framework
while enhancing the user’s experience, that our continued focus on
market-leading innovation and customer satisfaction will continue to
propel us on our upward growth trajectory, and all statements under the
heading “Financial Outlook.” Forward-looking statements involve certain
risks and uncertainties, and there are a significant number of factors
that could cause actual results to differ materially from statements
made in this press release, including, but not limited to, our limited
operating history, quarterly fluctuations in our operating results,
one-time expenses, including restructuring charges, seasonality, our
need to develop new solutions and enhancements to compete in rapidly
evolving markets, product defects, strength of our intellectual property
portfolio, litigation, customer adoption, competitive pressures,
billings type mix shift, our ability to scale, our ability to recruit
and retain key personnel, and the quality of our support services.

Additional information on potential factors that could affect
MobileIron’s financial results is included in our SEC filings, including
our reports on Forms 10-K, 10-Q and 8-K and other filings that we make
with the SEC from time to time. All forward-looking statements in this
press release are made as of the date hereof, based on information
available to us as of the date hereof, and MobileIron does not assume
any obligation to update the forward-looking statements provided to
reflect events that occur or circumstances that exist after the date on
which they were made.

Disclosure Information

MobileIron uses the investor relations section on its website as the
means of complying with its disclosure obligations under Regulation FD.
Accordingly, we recommend that investors should monitor MobileIron’s
investor relations website in addition to following MobileIron’s press
releases, SEC filings, and public conference calls and webcasts.

About MobileIron

MobileIron provides the secure foundation for modern work. For more
information, please visit www.mobileiron.com.

“MobileIron” is a registered trademark of MobileIron, Inc. in the United
States and other countries. Trade names, trademarks, and service marks
of other companies that are used in this press release belong to their
respective owners.

Financial Results

Non-GAAP Financial Measures and Reconciliations and Other Metrics

Non-GAAP Financial Measures

To supplement our financial results presented on a U.S. GAAP basis, we
provide investors with certain non-GAAP financial measures, including
non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income
(loss), non-GAAP operating margin, non-GAAP net income (loss), non-GAAP
net income (loss) per share and free cash flow. These non-GAAP financial
measures exclude stock-based compensation, amortization of intangible
assets, and restructuring expense.

Stock-based compensation expenses: In our
non-GAAP financial measures, we have excluded the effect of stock-based
compensation expenses. We exclude stock-based compensation expense
because it is non-cash in nature and excluding this expense provides
meaningful supplemental information regarding our operational
performance. In particular, because of varying available valuation
methodologies, subjective assumptions and the variety of award types
that companies can use under FASB ASC Topic 718, we believe that
providing non-GAAP financial measures that exclude this expense allows
investors the ability to make more meaningful comparisons between
MobileIron operating results and those of other companies. Stock-based
compensation expenses will recur in future periods.

Amortization of intangible assets: In our
non-GAAP financial measures, we have excluded the effect of the
amortization of intangible assets. Amortization of intangible assets can
be significantly affected by the timing and size of our acquisitions.
Beginning our second quarter ended June 30, 2018, we no longer have
amortizing intangible assets.

Restructuring expense: In our non-GAAP
financial measures, we have excluded the effect of severance and other
expenses related to a reduction in our workforce. Restructuring expense
may recur in future years; however, the timing and amounts are difficult
to predict.

Non-GAAP gross profit, non-GAAP gross margin,
non-GAAP operating loss, non-GAAP operating margin, non-GAAP net loss,
and non-GAAP net loss per share: We believe that the exclusion of
stock-based compensation expense, the amortization of intangible assets,
and restructuring expense from various non-GAAP financial metrics such
as gross profit, gross margin, operating income (loss), operating
margin, net income (loss), and net income (loss) per share provides
useful measures for management and investors. Stock-based compensation,
restructuring expense, and the amortization of intangible assets have
been and can continue to be inconsistent in amount from period to
period. We believe the inclusion of these items makes it difficult to
compare periods and understand the growth and performance of our
business. In addition, we evaluate our business performance and
compensate management based in part on these non-GAAP measures. There
are limitations in using non-GAAP financial measures because the
non-GAAP financial measures are not prepared in accordance with GAAP,
may be different from non-GAAP financial measures used by our
competitors and exclude expenses that may have a material impact on our
reported financial results. Further, stock-based compensation expense
has been and will continue to be for the foreseeable future a
significant recurring expense in our business and an important part of
the compensation provided to our employees.

Free cash flow: Our non-GAAP financial
measures also include free cash flow, which we define as cash
provided by (used in) operating activities less the amount of property
and equipment purchased. Management believes that information regarding
free cash flow provides investors with an important perspective on the
cash available to invest in our business and fund ongoing operations.
However, our calculation of free cash flow may not be comparable to
similar measures used by other companies.

We believe these non-GAAP financial measures are helpful in
understanding our past financial performance and our future results. Our
non-GAAP financial measures are not meant to be considered in isolation
or as a substitute for comparable GAAP measures and should be read only
in conjunction with our consolidated financial statements prepared in
accordance with GAAP. Our management regularly uses our supplemental
non-GAAP financial measures internally to understand, manage and
evaluate our business, and make operating decisions. These non-GAAP
measures are among the primary factors management uses in planning for
and forecasting future periods. Compensation of our executives is based
in part on the performance of our business relative to certain of these
non-GAAP measures.

Other Metrics

Annual Recurring Revenue (ARR). Beginning with the fourth quarter
of 2018, we began monitoring a new operating metric, Total ARR, which is
defined as the annualized value of all recurring revenue contracts
active at the end of a reporting period. Total ARR includes the
annualized value of subscriptions (“Subscription ARR”) and the
annualized value of software support contracts related to perpetual
licenses (“Perpetual license support ARR”) active at the end of a
reporting period and does not include revenue reported as perpetual
license or professional services in our consolidated statement of
operations. We are monitoring these metrics because they align with how
our customers are increasingly purchasing our solutions and how we are
managing our business. These ARR measures should be viewed independently
of revenue, unearned revenue, and customer arrangements with termination
rights as ARR is an operating metric and is not intended to be combined
with or replace those items. ARR is not a forecast of future revenue and
can be impacted by contract start and end dates and renewal rates.

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