Boingo Wireless, Inc.
Aug 7, 2014

Boingo Wireless Reports Strong Second Quarter 2014 Results

--Exceeds revenue and profitability guidance--

--Nearly doubled growth in advertising revenue--

--Nearly doubled size of DAS network through six new venue wins in the second quarter--

LOS ANGELES--(BUSINESS WIRE)-- 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 second quarter ended June 30, 2014.

Second Quarter 2014 Financial Highlights

Operational Highlights

Management Commentary

"Our second quarter financial performance exceeded our expectations, despite ongoing investments in our strategic growth initiatives," said David Hagan, Chief Executive Officer of Boingo Wireless. "Once again, DAS, military and advertising were the primary growth drivers. DAS continues to gain momentum as evidenced by the signing of six new DAS agreements and our military build-out is well underway. We are scheduled to deploy more than 30 military bases this year and since preliminary service launches, adoption rates have surpassed our expectations. Advertising, which nearly doubled in terms of year-over-year revenue growth during the quarter, continues to provide a strong opportunity for us to monetize our managed and operated network."

Mr. Hagan added, "For the second half of 2014, we will remain focused on our core strategic initiatives: to acquire long-term wireless rights in large venues; to build state-of-the-art DAS, Wi-Fi, and small cell networks to address the wireless industry's capacity crunch; and to monetize those networks through our retail, wholesale and advertising offerings."

Corporate Developments

Boingo Wireless today announced that Sky Dayton is stepping down as Chairman of the Board of Directors, and that the Board has appointed the Company's current Chief Executive Officer, David Hagan, as Chairman of the Board, and Charles Boesenberg, as Lead Independent Director. A serial entrepreneur, Sky Dayton founded Boingo in 2001 and has served as Chairman of Boingo's Board of Directors since its inception.

"Boingo has never been as well off as it is today, with double-digit revenue growth and unprecedented network wins under its belt," said Mr. Boesenberg. "The Board would like to thank Sky for his many years of leadership and congratulate Dave on his well-earned appointment."

Mr. Dayton added, "Dave and I have worked hand-in-hand since 2001 to build Boingo from concept to the leading DAS and Wi-Fi provider. As I return to spending all of my time on start-ups, which are my passion, I am extremely pleased to have Dave succeed me as Chairman. Dave is widely respected and under his thoughtful leadership, Boingo is thriving and extremely well positioned to ride the small cell tsunami. No one is more qualified to deliver continued value for our shareholders for years to come."

Business Outlook

Boingo Wireless is initiating guidance for the third quarter ending September 30, 2014, as follows:

Third Quarter 2014

Boingo Wireless is reiterating revenue and adjusted EBITDA guidance and updating net loss and net loss per share guidance for the full year ending December 31, 2014, as follows:

Full Year 2014

Conference Call Information

Members of Boingo Wireless' management will host a conference call to discuss its second quarter 2014 financial results beginning at 4:30 pm ET (1:30 pm PT), today, August 7, 2014. To participate in the conference call, investors from the U.S. and Canada should dial (877) 407-0789 and enter the passcode: 13586790 ten minutes prior to the scheduled start time. International callers should dial +1 (201) 689-8562 and enter the same passcode. In addition, the call will be broadcast live over the Internet hosted on the Investor Relations section of the company's website at http://investors.boingo.com and 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 as a supplemental measure of its performance. The company defines Adjusted EBITDA as net loss attributable to common stockholders plus depreciation and amortization of property and equipment, income tax expense (benefit), amortization of intangible assets, stock-based compensation expense, non-controlling interests and interest and other expense (income), net.

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 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.

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 DAS and Wi-Fi locations and reaches more than 1 billion consumers annually - in places as varied as airports, stadiums, universities, and military bases. For more information about the Boingo story, visit www.boingo.com.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains "forward-looking statements" that involve 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 and future guidance. 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 regional, national or global political, economic, business, competitive, market and regulatory conditions, 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, 2013 filed with the SEC on March 17, 2014, and Form 10-Q for the quarter ended March 31, 2014 filed with the SEC on May 12, 2014, 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
June 30,

   

Six Months Ended
June 30,

2014     2013 2014     2013
 
Revenue $ 28,396 $ 26,239 $ 54,848 $ 49,373
Costs and operating expenses:
Network access 13,247 11,035 26,172 20,705
Network operations 5,793 4,753 11,617 8,704
Development and technology 3,169 2,726 6,840 5,862
Selling and marketing 3,966 3,822 7,851 6,812
General and administrative 4,645 3,811 9,040 8,301
Amortization of intangible assets 928   516   1,853   915  
Total costs and operating expenses 31,748   26,663   63,373   51,299  
Loss from operations (3,352 ) (424 ) (8,525 ) (1,926 )
Interest and other (expense) income, net (18 ) 25   1   72  
Loss before income taxes (3,370 ) (399 ) (8,524 ) (1,854 )
Income tax expense (benefit) 155   (173 ) 303   (640 )
Net loss (3,525 ) (226 ) (8,827 ) (1,214 )

Net income attributable to non-controlling interests

209 173 355 306

Net loss attributable to common stockholders

$ (3,734 ) $ (399 ) $ (9,182 ) $ (1,520 )
 
Net loss per share attributable to common stockholders:
Basic $ (0.10 ) $ (0.01 ) $ (0.26 ) $ (0.04 )
Diluted $ (0.10 ) $ (0.01 ) $ (0.26 ) $ (0.04 )
 
Weighted average shares used in computing net loss per share attributable to common stockholders:
Basic 35,621 35,670 35,486 35,634
Diluted 35,621 35,670 35,486 35,634
 
 
Boingo Wireless, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands, except per share amounts)
 
       

June 30,
2014

   

December 31,
2013

Assets
Current assets:
Cash and cash equivalents $ 7,954 $ 27,338
Restricted cash 545 545
Marketable securities 29,909 32,962
Accounts receivable, net 26,597 16,326
Prepaid expenses and other current assets 3,267 2,566
Deferred tax assets 1,192   1,192  
Total current assets 69,464 80,929
Property and equipment, net 93,515 67,560
Goodwill 42,578 42,431
Intangible assets, net 21,549 23,413
Other assets 1,227   1,210  
Total assets $ 228,333   $ 215,543  
 
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 15,392 $ 11,642
Accrued expenses and other liabilities 20,091 16,908
Deferred revenue 26,467   19,292  
Total current liabilities 61,950 47,842
Deferred revenue, net of current portion 27,646 21,591
Deferred tax liabilities 3,599 3,369
Other liabilities   1,264   2,133  
Total liabilities 94,459 74,935
 
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; 35,810 and 35,226 shares issued and outstanding at June 30, 2014 and December 31, 2013, respectively 4 4
Additional paid-in capital 185,643 182,927
Accumulated deficit (52,370 ) (43,188 )
Total common stockholders' equity 133,277 139,743
Non-controlling interests 597   865  
Total stockholders' equity 133,874   140,608  
Total liabilities and stockholders' equity $ 228,333   $ 215,543  
 
 
Boingo Wireless, Inc.
Reconciliation of Net Loss Attributable to Common Stockholders to Adjusted EBITDA
(Unaudited)
(In thousands)
 
   

Three Months Ended
June 30,

   

Six Months Ended
June 30,

2014     2013 2014     2013
 
Net loss attributable to common stockholders $ (3,734 ) $ (399 ) $ (9,182 ) $ (1,520 )
Depreciation and amortization of property and equipment 6,531 4,734 12,315 8,867
Income tax expense (benefit) 155 (173 ) 303 (640 )
Amortization of intangible assets 928 516 1,853 915
Stock-based compensation expense 1,851 1,245 3,368 1,847
Non-controlling interests 209 173 355 306
Interest and other expense (income), net 18   (25 ) (1 ) (72 )
Adjusted EBITDA $ 5,958   $ 6,071   $ 9,011   $ 9,703  

Boingo Wireless, Inc.
Christian Gunning
Vice President, Corporate Communications
310-586-4009
cgunning@boingo.com
or
Addo Communications
Laura Bainbridge / Kimberly Orlando
310-829-5400
laurab@addocommunications.com / kimberlyo@addocommunications.com

Source: Boingo Wireless, Inc.

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