Boingo Wireless, Inc.
May 4, 2017

Boingo Wireless Reports Strong First Quarter 2017 Financial Results

LOS ANGELES, May 04, 2017 (GLOBE NEWSWIRE) -- Boingo Wireless (NASDAQ:WIFI), the leading distributed antenna system (DAS) and Wi-Fi provider that serves consumers, carriers and advertisers worldwide, today announced the Company's financial results for the first quarter ended March 31, 2017.

First Quarter 2017 Financial Highlights

•  Revenue of $44.3 million increased 28.5% compared to $34.5 million in the first quarter of 2016. Growth was driven by strength in DAS, military and wholesale-Wi-Fi.

•  Net loss attributable to common stockholders was $(6.9) million, or $(0.18) per diluted share, compared to a net loss of $(10.0) million, or $(0.27) per diluted share, in the first quarter of 2016.

•  Adjusted EBITDA of $12.4 million increased 118.8% compared to $5.6 million in the first quarter of 2016. 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 $25.5 million compared to $41.0 million in the first quarter of 2016.

•  Free cash flows were $8.0 million compared to $(4.5) million in the first quarter 2016. Free cash flows, 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

Management Commentary

"After a record-setting 2016, our strong results and momentum continued with our tenth consecutive quarter of double-digit, year-over-year revenue growth which exceeded our guidance," commented David Hagan, Chief Executive Officer of Boingo Wireless. "We are pleased our net loss attributable to common stockholders was reduced to $6.9 million and Adjusted EBITDA was also very strong with nearly 119% growth over last year, which represents our seventh consecutive quarter of EBITDA margin expansion due to strength in DAS, military and Wholesale-Wi-Fi. The first quarter was the second largest venue acquisition quarter in our Company's history with the addition of 17 new DAS venues, including five Hawaiian airports, the new Transbay Transit Center in San Francisco and nine PATH stations in New York. Additionally, we achieved an important milestone in Military, exceeding 40% subscriber penetration for the first time with the addition of 21,000 new subscribers."

Mr. Hagan continued, "We made excellent progress with carrier offload during the first quarter as the number of Passpoint enabled devices with the ability to connect to our network more than doubled during the quarter. We expect carrier offload growth to be strong in the coming years as the carriers continue to ramp. In addition, we remain excited about the opportunity for small cell deployments to enable our business to expand into new venues. We believe the investments we have made over the past few years, coupled with our ability to leverage significant favorable industry dynamics, provide us with a long runway for continued growth."

Business Outlook

Boingo Wireless is initiating guidance for the second quarter ending June 30, 2017 and is reiterating guidance for the full year ending December 31, 2017, as follows:

Second Quarter 2017

Full Year 2017

Conference Call Information

Members of Boingo Wireless' management will host a conference call to discuss its first quarter 2017 financial results beginning at 4:30 p.m. ET (1:30 p.m. PT), today, May 4, 2017. To participate in the conference call, investors from the U.S. and Canada should dial (877) 407-0789 and enter the passcode: 13658019 ten minutes prior to the scheduled start time. International callers should dial +1 (201) 689-8562 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 flows 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 (income) 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. Adjusted EBITDA for 2016 excludes charges related to the Company's contested proxy election for the 2016 annual meeting of stockholders because they represent non-recurring charges and are not indicative of the underlying performance of the Company's business operations.

The Company defines free cash flows as net cash provided by operating activities, less purchases of property and equipment. Boingo Wireless believes that free cash flows 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 flows 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.

About Boingo Wireless

Boingo Wireless, Inc. (NASDAQ:WIFI) helps the world stay connected. Boingo's vast footprint of small cell networks covers more than a million and a half DAS and Wi-Fi locations and that we estimate reaches more than 1 billion consumers annually - in places as varied as airports, stadiums, arenas, universities, and military bases. For more information about Boingo, 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. 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, 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, 2016 filed with the SEC on March 13, 2017, 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 Wireless, the Boingo Wireless Logo and Don't Just Go. Boingo. 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,
 
  2017 2016 
       
Revenue $44,333 $34,499 
Costs and operating expenses:      
Network access 19,407 14,678 
Network operations 11,263 10,450 
Development and technology 6,334 5,353 
Selling and marketing 4,893 4,668 
General and administrative 8,103 8,152 
Amortization of intangible assets 911 865 
Total costs and operating expenses 50,911 44,166 
Loss from operations (6,578)(9,667)
Interest and other income (expense), net 4 (30)
Loss before income taxes (6,574)(9,697)
Income tax expense 199 238 
Net loss (6,773)(9,935)
Net income attributable to non-controlling interests 107 49 
Net loss attributable to common stockholders $(6,880) $(9,984)
      
Net loss per share attributable to common stockholders:     
Basic $(0.18)$(0.27)
Diluted $(0.18)$(0.27)
      
Weighted average shares used in computing net loss per share attributable to common stockholders:     
Basic 38,712 37,554 
Diluted 38,712 37,554 


Boingo Wireless, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands, except per share amounts)
 
  March 31,
2017
 December 31,
2016
 
Assets     
Current assets:     
Cash and cash equivalents $18,978 $19,485 
Accounts receivable, net 28,150 42,978 
Prepaid expenses and other current assets 5,587 5,344 
Total current assets 52,715 67,807 
Property and equipment, net 250,935 250,765 
Goodwill 42,403 42,403 
Intangible assets, net 12,867 13,783 
Other assets 6,228 6,223 
Total assets $365,148 $380,981 
       
Liabilities and stockholders' equity     
Current liabilities:     
Accounts payable $10,036 $15,516 
Accrued expenses and other liabilities 25,327 27,723 
Deferred revenue 55,081 50,869 
Current portion of long-term debt 875 1,094 
Current portion of capital leases and notes payable 4,243 3,993 
Total current liabilities 95,562 99,195 
Deferred revenue, net of current portion 150,764 152,719 
Long-term debt 10,656 15,875 
Long-term portion of capital leases and notes payable 4,128 4,612 
Deferred tax liabilities 3,386 3,208 
Other liabilities 6,723 6,826 
Total liabilities 271,219 282,435 
      
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; 38,951 and 38,562 shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively 4 4 
Additional paid-in capital 213,510 211,275 
Accumulated deficit (119,481)(112,601)
Accumulated other comprehensive loss (808)(870)
Total common stockholders' equity 93,225 97,808 
Non-controlling interests 704 738 
Total stockholders' equity 93,929 98,546 
Total liabilities and stockholders' equity $365,148 $380,981 


Boingo Wireless, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
 
  Three Months Ended
March 31,
 
  2017 2016 
Cash flows from operating activities     
Net loss $(6,773)$(9,935)
Adjustments to reconcile net loss including non-controlling interests to net cash provided by operating activities:      
Depreciation and amortization of property and equipment 14,985 10,308 
Amortization of intangible assets 911  865 
Bad debt expense 2  
Loss on disposal of fixed assets 9 19 
Stock-based compensation 3,044 3,605 
Change in deferred income taxes 121 140 
Changes in operating assets and liabilities:     
Accounts receivable 14,844 845 
Prepaid expenses and other assets (301)(149)
Accounts payable (2,434)4,659 
Accrued expenses and other liabilities (1,132)726 
Deferred revenue 2,256 29,954 
Net cash provided by operating activities 25,532 41,037 
Cash flows from investing activities     
Purchases of property and equipment (17,491)(45,522)
Payments for asset acquisition (1,150) 
Net cash used in investing activities (18,641)(45,522)
Cash flows from financing activities     
Proceeds from credit facility  5,000 
Principal payments on credit facility (5,438)(219)
Debt issuance costs  (124)
Proceeds from exercise of stock options 439 1,470 
Payments of capital leases and notes payable (844)(718)
Payments of withholding tax on net issuance of restricted stock units (1,562)(999)
Net cash (used in) provided by financing activities  (7,405)4,410 
Effect of exchange rates on cash 7 8 
Net decrease in cash and cash equivalents (507)(67)
Cash and cash equivalents at beginning of period 19,485 14,718 
Cash and cash equivalents at end of period $18,978 $14,651 
Supplemental disclosure of non-cash investing and financing activities     
Property and equipment costs in accounts payable, accrued expenses and other liabilities $13,797 $18,831 
Purchase of equipment and prepaid maintenance services under capital financing arrangements $574 $1,372 
Non-controlling interest distributions declared but unpaid $125 $ 



Boingo Wireless, Inc.
Reconciliation of Net Loss Attributable to Common Stockholders to Adjusted EBITDA
(Unaudited)
(In thousands)
 
  Three Months Ended
March 31,
 
  2017 2016 
      
Net loss attributable to common stockholders $(6,880)$(9,984)
Depreciation and amortization of property and equipment 14,985 10,308 
Stock-based compensation expense 3,044 3,605 
Amortization of intangible assets 911 865 
Income tax expense 199 238 
Interest and other (income) expense, net (4)30 
Non-controlling interests 107 49 
Contested proxy election expense  538 
Adjusted EBITDA $12,362 $5,649 


                         

Boingo Wireless, Inc.
Reconciliation of Net Loss Attributable to Common Stockholders to Adjusted EBITDA - Guidance
(Unaudited)
(In millions)
 
  Three Months Ended
June 30, 2017
 Year Ended
December 31, 2017
 
  Low High Low High 
          
Net loss attributable to common stockholders $(8.5)$(5.5)$(29.0)$(25.0)
Depreciation and amortization of property and equipment.. 15.4  63.0
   64.0 
Stock-based compensation expense 2.9 12.0 
Amortization of intangible assets 0.9 3.6 
Income tax expense and interest and other expense, net 0.2 0.9 
Non-controlling interests 0.1 0.5 
Adjusted EBITDA $11.0 $14.0 $51.0 $56.0 



Boingo Wireless, Inc.
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flows
(Unaudited)
(In thousands)
 
  Three Months Ended
March 31,
 
  2017 2016 
      
Net cash provided by operating activities $25,532 $41,037 
Purchases of property and equipment (17,491)(45,522)
Free cash flows $8,041 $(4,485)



Boingo Wireless, Inc.
Revenue Summary
(Unaudited)
(In thousands)
 
  Three Months Ended
March 31,
 
  2017 2016 
Revenue:     
DAS $16,256 $11,106 
Military 12,541 9,098 
Wholesale—Wi-Fi 6,831 4,937 
Retail 6,415 6,914 
Advertising and other 2,290 2,444 
Total revenue $44,333 $34,499  



Boingo Wireless, Inc.
Key Business Metrics
(Unaudited)
(In thousands)
 
 Three Months Ended
March 31,
 20172016
Key business metrics:  
DAS nodes(1)19.812.5
DAS nodes in backlog(2)10.55.2
Subscribers—military(3)12869
Subscribers—retail(3)194187
Connects(4)43,07730,353

                              

(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 retail and wholesale customers in both customer pay locations and customer free locations where Boingo is a paid service provider or receives revenue 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.

 

CONTACTS:

PRESS:

Lauren de la Fuente

Vice President, Marketing and Communications

ldelafuente@boingo.com

(310) 405-8517



INVESTORS:

Kimberly Orlando

ADDO Investor Relations

korlando@addoir.com

(310) 829-5400

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Source: Boingo Wireless, Inc.

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