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LogMeIn (LOGM) Q4 Earnings and Revenues Surpass Estimates

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LogMeIn LOGM recently released fourth-quarter 2019 results, wherein both top and bottom lines beat estimates. Non-GAAP revenues of $322.9 million beat the Zacks Consensus Estimate by 0.87% and increased 3.9% year over year.

Non-GAAP earnings of $1.43 per share beat the consensus mark by 2.14%. However, the figure decreased 2.7% year over year.

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 did not hold a conference discussing the recently released fourth-quarter 2019 result or provide any guidance due to its impending acquisition agreement.

LogMein, Inc. Price, Consensus and EPS Surprise

LogMein, Inc. Price, Consensus and EPS Surprise

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

Q4 Details

Unified Communication and Collaboration (UCC) business revenues dipped 1% year over year to $173 million.

Identity and Access Management revenues rose 15% from the year-ago quarter to $106 million.

Customer Engagement and Support business revenues declined 1% on a year-over-year basis to $44 million.

The company’s gross renewal rate across all products was nearly 85%.

International revenues constituted 21% of total revenues during the quarter.

Margins

In the fourth quarter, the company’s non-GAAP operating income decreased 7.1% year over year to $95 million. Also, operating margin contracted 350 bps to 29.4%.

Adjusted EBITDA was down 6.4% year over year to $111.1 million. Additionally, adjusted EBITDA margin shrank 380 bps to 34.4%.

Balance Sheet and Other Financial Details

LogMeIn ended the quarter with cash and cash equivalents of $128 million compared with $119.2 million, sequentially.

The company generated $78.6 million of adjusted cash flow from operational activities and $62.6 million of adjusted free cash flow in the quarter under review.

Full-Year Highlights

LogMeIn reported full-year revenues of $1.26 billion, up 4.2% year over year. However, non-GAAP earnings of $5.15 per share declined 4.5% year over year.

In 2019, the company repurchased shares worth $208.5 million and paid out $64.6 million as dividends.

Zacks Rank & Stocks to Consider

The company currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the broader technology sector are CEVA, Inc. (CEVA - Free Report) , SYNNEX SNX and Silicon Motion Technology Corporation SIMO, all sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for CEVA, SYNNEX and Silicon Motion is currently pegged at 20%, 10.37% and 7%, respectively.

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