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LogMeIn (LOGM) Q1 Earnings Miss, Revenues Beat Estimates

LogMeIn LOGM recently released mixed results for first-quarter 2020, wherein the top line surpassed the Zacks Consensus Estimate, while the bottom line missed the same. Non-GAAP revenues of $322.4 million marginally beat the Zacks Consensus Estimate of $322 million and increased 5% year over year.

Non-GAAP earnings of $1.21 per share increased 3.4% year over year. However, the reported figure missed the consensus mark by a penny.

LogMeIn did not hold a conference discussing the recently-released first-quarter 2020 results or issue any guidance due to its impending acquisition agreement. Notably, in December 2019, the company entered into a definitive agreement to be acquired by technology-focused global private equity firms Francisco Partners and Evergreen Coast Capital Corp. The transaction is expected to be completed by mid-2020.

LogMein, Inc. Price, Consensus and EPS Surprise

LogMein, Inc. Price, Consensus and EPS Surprise
LogMein, Inc. Price, Consensus and EPS Surprise

LogMein, Inc. price-consensus-eps-surprise-chart | LogMein, Inc. Quote

Q1 Details

Unified Communication and Collaboration (UCC) business revenues increased 2% year over year to $174 million.

Identity and Access Management revenues rose 12% from the year-ago quarter to $105 million.

Customer Engagement and Support business revenues declined 1% on a year-over-year basis to $43 million.

The company’s gross renewal rate across all products was nearly 80%.

International revenues constituted 22% of total revenues during the first quarter.

Margins

In the first quarter, the company’s non-GAAP operating income edged down 1.1% year over year to $79.6 million. Also, the operating margin contracted 170 basis points (bps) to 24.7%.

Adjusted EBITDA of $96.1 million was marginally down from the year-ago quarter’s level of $96.8 million. Additionally, the adjusted EBITDA margin shrunk 160 bps to 29.8%.

Balance Sheet and Other Financial Details

LogMeIn ended the March-end quarter with cash and cash equivalents of $189.6 million compared with $128 million at the end of fourth-quarter 2019.

The company generated $88 million of adjusted cash flow from operational activities and $88.1 million of adjusted free cash flow in the reported quarter.

Zacks Rank and Stocks to Consider

Currently, LogMeIn carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the broader technology sector are Avid Technology, Inc. AVID, InterDigital, Inc. IDCC  and BWX Technologies, Inc. BWXT, each flaunting a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The long-term earnings growth rate for Avid, InterDigital and BWX Technologies is currently pegged at 20%, 15% and 6.9%, respectively.

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