Vocera Announces First Quarter Financial Results

Vocera
Communications, Inc. (NYSE: VCRA), a recognized leader in clinical
communication and workflow solutions, today reported total revenue of
$35.3 million for the first quarter of 2019, compared to revenue of
$40.2 million in the first quarter of 2018.

“The first quarter of 2019 was an extremely busy quarter for Vocera and
provided a strong and strategic start to the year,” said Brent Lang,
Chairman and Chief Executive Officer of Vocera. “Our revenue came in as
expected as we progressed through the first months of the Smartbadge
introduction. We achieved strong bookings, particularly in the Federal
market, and we won our largest non-healthcare booking in the history of
the company.”

First quarter of 2019 financial highlights include:

• Total revenue of $35.3 million, compared to $40.2 million last year
• GAAP net loss per share of $(0.38); non-GAAP net income per share of
  $(0.17)
• GAAP net loss of $(11.7) million; Adjusted EBITDA of $(3.5) million
• Deferred revenue and backlog of $118.6 million as of March 31, 2019

First Quarter 2019 Results

Total revenue for the first quarter of 2019 was $35.3 million, a
decrease of 12% compared to last year.

GAAP gross margin for the first quarter of 2019 was 55.8%, compared to
59.4% in the first quarter of 2018. Gross margin for the first quarter
of 2019 was lower than last year due largely to lower product revenue.

GAAP net loss for the first quarter of 2019 was $(11.7) million, or
$(0.38) per share, compared to GAAP net loss of $(4.8) million, or
$(0.16) per share in the first quarter of 2018.

Deferred revenue at March 31, 2019 was $52.9 million compared to $58.6
million at December 31, 2018. Cash equivalents and short-term
investments were $222.3 million at March 31, 2019 and $221.2 million at
December 31, 2018.

Full Year and Second Quarter 2019 Guidance

For the full-year 2019, the Company expects revenue between $187 million
and $197 million and a GAAP loss per share between $(0.58) and $(0.39).
The Company expects non-GAAP net income per share to be between $0.36
and $0.48 and non-GAAP Adjusted EBITDA to be between $22 million and $26
million.

For the second quarter of 2019, the Company expects revenue between $41
million and $45 million and a GAAP loss per share between $(0.28) and
$(0.19). The Company expects non-GAAP net income (loss) per share to be
between $(0.04) and $0.03 and non-GAAP Adjusted EBITDA to be between
$0.5 million and $3.0 million.

Certain amounts in our release may not re-compute due to rounding. A
reconciliation of non-GAAP to GAAP financial measures, and second
quarter and full-year guidance, are included in the financial schedules.

Conference Call Information

Vocera Communications will host a conference call at 5 p.m. ET (2 p.m.
PT) today, April 25, 2019, to discuss the Company’s results.

Investors may access a free, live webcast of the call through the
Investors section of the Company’s website at investors.vocera.com.

The call also can be accessed by dialing 833-238-7944, or 647-689-4192
for international callers, and using the access code 4299349.

A webcast replay of the call will be archived at investors.vocera.com.

Forward-Looking Statements

Statements in this press release that are not strictly historical in
nature are forward-looking statements within the meaning of the U.S.
federal securities laws, including our expected operating results for
the second quarter and full year 2019. These forward-looking statements
are based on limited information currently available to us and our
management`s expectations, which are inherently subject to change and
involve a number of risks and uncertainties.

Actual events or results may differ materially from those in any
forward-looking statement due to various factors, including but not
limited to, changes in regulations in the U.S. and other countries; the
effects on government and commercial hospital customers of the federal
budget and budgetary uncertainty; changes in healthcare insurance
coverage and consumers’ utilization of healthcare and hospital services;
our ability to achieve and maintain profitability; the demand for our
various solutions in the healthcare and other markets; our lengthy and
unpredictable sales cycle; our ability to offer high-quality services
and support for our solutions; our ability to achieve anticipated
strategic or financial benefits from our acquisitions; our ability to
acquire the sole and limited source hardware and software components of
our solutions; our ability to obtain the required capacity and product
quality from our contract manufacturers; our ability to develop and
introduce new solutions and features to existing solutions and to manage
our growth; the impact of tax law reform on us or our customers; and the
other factors described in our most recently filed Quarterly Report on
Form 10-Q, as well as our other filings with the Securities and Exchange
Commission (SEC). Our filings with the SEC are available on the
Investors section of the Company’s web site at www.vocera.com.
The financial and other information contained in this press release
should be read in conjunction with the financial statements and notes
thereto included in our filings with the SEC. Our operating results for
any historical period, including the first quarter of 2019, are not
necessarily indicative of our operating results for any future periods.
This press release speaks only as of its date. We assume no obligation
to update the information in this press release, to revise any
forward-looking statements, or to update the reasons actual events or
results could differ materially from those anticipated in
forward-looking statements.

Use of Non-GAAP Financial Information

This press release contains financial measures that are not calculated
in accordance with U.S. generally accepted accounting principles (GAAP).
Our management evaluates the Company’s results and makes operating
decisions using various GAAP and non-GAAP measures. In addition to our
GAAP results, we also consider non-GAAP gross margin, non-GAAP gross
margin for products and for services, non-GAAP net income/(loss),
non-GAAP income/(loss) per diluted share and non-GAAP operating
expenses. We also present Adjusted EBITDA, a non-GAAP measure that we
reconcile to net income/(loss). These non-GAAP measures should not be
considered as a substitute for the corresponding financial measure
derived in accordance with GAAP. We present the non-GAAP measures
because we consider them to be important supplemental information for
our investors for analyzing our performance, core operating results and
trends. Investors are encouraged to review the reconciliation of
non-GAAP financial measures to their most directly comparable GAAP
measures included with this press release.

Our non-GAAP gross margins, non-GAAP net income/(loss), non-GAAP
earnings/(loss) per diluted share, non-GAAP operating expenses, and
Adjusted EBITDA are exclusive of certain items to facilitate
management’s review of the comparability of our core operating results
on a period to period basis because such items are not related to our
ongoing core operating results as viewed by management. We define our
“core operating results” as those revenues recorded in a particular
period and the expenses incurred within that period that directly drive
operating income in that period. Management uses these non-GAAP
financial measures in making operating decisions because, in addition to
meaningful supplemental information regarding operating performance, the
measures give us a better understanding of how we should invest in
research and development, fund infrastructure growth and evaluate the
effectiveness of marketing strategies. In calculating the above non-GAAP
results, management specifically adjusted for the following excluded
items:

a) Stock-based compensation expense impact. We recognize
equity plan-related compensation expenses, which represent the fair
value of all share-based payments to employees, including grants of
employee stock options and restricted stock units as non-GAAP
adjustments in each period.

b) Amortization of acquired intangibles. We acquired certain
companies in 2014 and 2016, and booked intangible assets related to
these acquisitions. The amortization of these acquired intangible assets
is excluded from non-GAAP net income because it is not related to
ongoing controllable management decisions and because it is non-cash in
nature.

c) Acquisition related expenses. In addition to the amortization
of acquired intangibles mentioned above, we also adjust for certain
acquisition-related expenses that we may incur including (i)
professional service fees and (ii) transition costs. Professional
service fees include third party costs related to the acquisition, such
as due diligence costs, accounting fees, legal fees, valuation services
and commissions, if any. Transition costs include retention payments,
transitional employee costs and earn-out payments (including amounts
relating to the distribution of purchase consideration among the selling
equity holders) treated as compensation expense. We consider such costs
and adjustments as highly variable in amount and frequency, being
significantly impacted by the timing and size of any acquisitions. By
excluding acquisition-related costs and adjustments from our non-GAAP
measures, management can better focus on the organic continuing
operations of our baseline and acquired businesses.

d) Restructuring costs. We exclude restructuring costs from
non-GAAP measures because we do not regard these limited-term or
one-time costs as reflective of normal costs we incur to operate our
business. These are defined in U.S. GAAP to include one-time employee
termination benefits, contract termination costs, and other associated
costs, with respect to exit or disposal activities.

Management adjusts for the above items because management believes that,
in general, these items possess one or more of the following
characteristics: their magnitude and timing is largely outside of
Vocera’s control; they are unrelated to the ongoing operation of the
business in the ordinary course; they are unusual and we do not expect
them to occur in the ordinary course of business; or they are
non-operational, or non-cash expenses involving stock award grants.

We believe that the presentation of these non-GAAP financial measures is
warranted for several reasons:

1) Such non-GAAP financial measures provide an additional analytical
tool for understanding our financial performance by excluding the impact
of items which may obscure trends in the core operating results of the
business;

2) These non-GAAP financial measures facilitate comparisons to the
operating results of other companies commonly compared to us, which use
similar financial measures to supplement their GAAP results, thus
enhancing the perspective of investors who wish to utilize such
comparisons in their analysis of our performance; and

3) These non-GAAP financial measures are employed by our management in
their own evaluation of performance and are utilized in financial and
operational decision making processes, such as budget planning and
forecasting.

Set forth below are additional reasons why share-based compensation
expense is excluded from our non-GAAP financial measures:

i) While share-based compensation constitutes one of our ongoing and
recurring expenses, it is not an expense that requires cash settlement
by us. We therefore exclude these charges for purposes of evaluating
core operating results. Thus, our non-GAAP measurements are presented
exclusive of stock-based compensation expense to assist management and
investors in evaluating our core operating results.

ii) We present share-based payment compensation expense in our
reconciliation of non-GAAP financial measures on a pre-tax basis because
the exact tax differences related to the timing and deductibility of
share-based compensation are dependent upon the trading price of our
common stock and the timing and exercise by employees of their stock
options. As a result of these timing and market uncertainties, the tax
effect related to share-based compensation expense would be inconsistent
in amount and frequency and is therefore excluded from our non-GAAP
results.

As stated above, we present non-GAAP financial measures because we
consider them to be important supplemental measures of performance.
However, non-GAAP financial measures have limitations as an analytical
tool and should not be considered in isolation or as a substitute for
our GAAP results. In the future, we expect to incur expenses similar to
certain of the non-GAAP adjustments described above and expect to
continue reporting non-GAAP financial measures excluding such items.
Some of the limitations in relying on non-GAAP financial measures are:

• Our stock options, restricted stock units, and stock purchase plans
  are important components of incentive compensation arrangements and
  will be reflected as expenses in our GAAP results for the foreseeable
  future; and
• Other companies may calculate non-GAAP financial measures differently
  than us, limiting their usefulness as a comparative measure.

Pursuant to the requirements of SEC Regulation G, a detailed
reconciliation between our non-GAAP and GAAP financial results is set
forth in the financial tables referred to above, and linked to, this
press release. Investors are advised to carefully review and consider
this information strictly as a supplement to the GAAP results for the
respective periods.

About Vocera:

The mission of Vocera Communications, Inc. is to simplify and improve
the lives of healthcare professionals and patients, while enabling
hospitals to enhance quality of care and operational efficiency. In
2000, when the company was founded, we began to forever change the way
care teams communicate. Today, Vocera offers the leading platform for
improving clinical communication and workflow. More than 1,850
facilities worldwide, including nearly 1,600 hospitals and healthcare
facilities, have selected our clinical communication and workflow
solutions. Care team members use our solutions to communicate and
collaborate with co-workers by securely texting or calling, and to be
notified of important alerts and alarms. They can choose the right
device for their role or task, including smartphones or our hands-free,
wearable Vocera Smartbadge and Vocera Badge. Interoperability between
the Vocera Platform and more than 140 clinical and operational systems
helps reduce alarm fatigue; speed up staff response times; and improve
patient care, safety, and experience. In addition to healthcare, Vocera
is at home in luxury hotels, aged care facilities, nuclear power
facilities, schools, libraries, retail stores, and more. Vocera
solutions make a difference in any industry where workers are on the
move and need to connect instantly with team members and access
resources or information quickly. In 2017, Vocera made the list of
Forbes 100 Most Trustworthy Companies in America. Learn more at www.vocera.com,
and follow @VoceraComm on Twitter.

The Vocera logo is a trademark of Vocera Communications, Inc. Vocera®
is a trademark of Vocera Communications, Inc. registered in the United
States and other jurisdictions. All other trademarks appearing in this
release are the property of their respective owners.

* Amounts may not recompute due to rounding.

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