Telecom Ramblings

PR Archives:  LatestBy Company By Date


Press Release -- August 8th, 2011
Source: Broadsoft
Tags: Earnings, Equipment, Exchange, Video

BroadSoft Reports Record Second Quarter 2011 Financial Results

GAITHERSBURG, MD -- (MARKET WIRE) -- 08/08/11 -- BroadSoft, Inc. (NASDAQ:BSFT, news, filings), the leading global provider of software that enables mobile, fixed-line, and cable service providers to deliver real time voice and multimedia communications services over their IP-based networks, today announced financial results for the quarter and six months ended June 30, 2011.

Financial Highlights for the Second Quarter of 2011

  • Total revenue increased 63% year-over-year to $32.2 million
  • License revenue increased 82% year-over-year to $19.2 million
  • GAAP gross profit increased to 81% of total revenue; non-GAAP gross profit increased to 82% of total revenue
  • GAAP income from operations increased to $5.6 million or 18% of revenue; non-GAAP income from operations increased to $7.8 million, or 24% of revenue.
  • GAAP diluted EPS increased to $0.57 per common share; non-GAAP diluted EPS increased to $0.29 per common share

Results for the three months ended June 30, 2011

Total revenue rose to $32.2 million in the second quarter of 2011, an increase of 63% compared to $19.8 million in the second quarter of 2010.

Net income for the second quarter of 2011 was $15.8 million, or $0.57 per diluted common share, compared to a net loss of ($1.8) million, or $(0.20) per basic and diluted common share, for the second quarter of 2010. In addition, GAAP results for the second quarter of 2011 included an income tax benefit of $9.9 million, or $0.36 per diluted common share, resulting from the release of a tax valuation allowance relating to net deferred tax assets.

On a non-GAAP basis, net income for the second quarter of 2011 was $8.2 million, or $0.29 per diluted common share, compared to a non-GAAP net loss of $0.5 million, or $(0.03) per basic and diluted common share, in the second quarter of 2010. A reconciliation of non-GAAP and GAAP results is included in the financial tables below.

Results for the six months ended June 30, 2011

Total revenue was $61.8 million for the first six months of 2011, compared to $37.6 million for the first six months of 2010, reflecting year-over-year growth of 65%.

Net income for the first six months of 2011 was $19.5 million, or $0.70 per diluted share, compared to a net loss of ($4.4) million, or $(0.58) per basic and diluted share for the first six months of 2010. In addition, GAAP results for the six months ended June 30, 2011 included an income tax benefit of $9.9 million, or $0.36 per diluted common share, resulting from the release of a tax valuation allowance.

On a non-GAAP basis, net income for the first six months of 2011 was $13.2 million or $0.48 per diluted share, compared to a non-GAAP net loss of ($2.6) million, or $(0.13) per basic and diluted share in the first six months of 2010. A reconciliation of non-GAAP and GAAP results is included in the financial tables below.

Management Commentary

"We continue to see demand across our product line grow globally, helping drive our record second quarter financial results," said Michael Tessler, president and chief executive officer, BroadSoft. "We believe our financial performance for the first half of 2011 demonstrates our ability to execute our long-term strategy of enabling our customers to deliver innovative, real-time communications services to their subscribers."

"We are again delighted to deliver another strong quarter, marked by an 82% increase in license revenue compared to the same period in 2010, driven primarily by robust demand from our North American service provider customers," said Jim Tholen, chief financial officer, BroadSoft. "Our margins and profitability improved significantly relative to last year's second quarter, as operating margins rose to 24% on a non-GAAP basis. In addition, we generated $8.9 million in cash flow from operations during the second quarter and ended the quarter with cash, cash equivalents and marketable securities totaling $194.1 million."

Guidance

For the third quarter of 2011, BroadSoft anticipates revenue of $31.0 million to $33.0 million, which represents growth of 39% to 48% over third quarter 2010 revenue of $22.3 million. The Company expects to achieve third quarter earnings on a non-GAAP basis of $0.20 to $0.23 per diluted common share and on a GAAP basis of $0.16 to $0.19 per diluted common share.

For the full year 2011, BroadSoft is increasing its guidance and now expects revenue of $127.0 to $130.0 million, reflecting growth of 33% to 36% over 2010 revenue of $95.6 million. The Company anticipates full year 2011 earnings on a non-GAAP basis of $0.90 to $0.95 per diluted common share and on a GAAP basis of $1.10 to $1.15 per diluted common share, which includes an estimated income tax benefit of $0.52 per diluted common share resulting from the release of a tax valuation allowance.

Conference Call

BroadSoft will discuss its second quarter results and business outlook today via teleconference at 8:00 a.m. Eastern Time. To participate in the teleconference, callers can dial the toll free number 1-877-312-5517 (U.S. callers only) or +1-760-666-3772 (from outside the U.S.). The conference call can also be heard live via audio webcast at http://investors.broadsoft.com/events.cfm. To help ensure the conference begins on time, please dial in or connect via the web five minutes prior to the scheduled start time.

For those unable to participate in the live call, an audio replay will be available between 11:00 a.m. Eastern Time August 8, 2011 and 11:59 p.m. Eastern Time August 25, 2011 by calling 1-855-859-2056 or +1-404-537-3406, with Conference ID 83055974. A recording of the call will be available at http://investors.broadsoft.com beginning two hours following the conclusion of the call until September 8, 2011.

Use of Non-GAAP Financial Measures

BroadSoft has provided in this release, and will provide on this morning's teleconference, financial information that has not been prepared in accordance with generally accepted accounting principles, or GAAP. BroadSoft uses these non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, as a supplement to GAAP measures, in evaluating BroadSoft's ongoing operational performance. BroadSoft's management regularly uses these non-GAAP financial measures to understand and manage its business and believes that these non-GAAP financial measures provide meaningful supplemental information regarding the Company's performance by excluding certain non-cash expenses, and may include additional adjustments for items that are infrequent in nature. BroadSoft believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing its financial results with other companies in BroadSoft's industry, many of which present similar non-GAAP financial measures to investors. A reconciliation of the non-GAAP financial measures included in this release and to be discussed on this morning's teleconference to the most directly comparable GAAP financial measures is set forth below.

Non-GAAP net income (loss) and net income (loss) per share. BroadSoft defines non-GAAP net income (loss) as net income (loss) plus stock-based compensation expense, amortization expense for acquired intangible assets and non-cash interest expense on the Company's convertible notes, less the tax benefit related to a valuation allowance release. BroadSoft defines non-GAAP income (loss) per share as non-GAAP net income (loss) divided by the weighted average shares outstanding. Also, in calculating non-GAAP net loss per share for the three and six months ended June 30, 2010, BroadSoft adjusted the GAAP weighted average shares outstanding to include shares of redeemable convertible preferred stock on an "as-if-converted to common stock" basis. BroadSoft considers these non-GAAP financial measures to be useful metrics for management and investors because they exclude the effect of certain non-cash expenses so that management and investors can compare BroadSoft's core business operating results over multiple periods.

Non-GAAP gross margin, license gross margin and maintenance and services gross margin. BroadSoft defines non-GAAP gross margin as gross margin plus stock-based compensation expense and amortization expense for acquired intangible assets. BroadSoft considers non-GAAP gross margin to be a useful metric for management and investors because it excludes the effect of certain non-cash expenses so that management and investors can compare BroadSoft's sales margins over multiple periods. Where BroadSoft provides further breakdown of non-GAAP gross margin between license and maintenance services, the Company adds back the stock-based compensation expense and amortization expense, as applicable, to the related gross margin.

Non-GAAP income (loss) from operations. BroadSoft defines non-GAAP income (loss) from operations as income (loss) from operations plus stock-based compensation expense and amortization expense for acquired intangible assets. BroadSoft considers non-GAAP income (loss) from operations to be a useful metric for management and investors because it excludes the effect of certain non-cash expenses so that management and investors can compare BroadSoft's core business operating results over multiple periods. Where BroadSoft provides further breakdown of non-GAAP operating expenses for sales and marketing, research and development and general and administrative, the Company deducts stock-based compensation expense included in the applicable expense item.

The presentation of non-GAAP net income (loss), non-GAAP net income (loss) per share, non-GAAP gross margin, non-GAAP income (loss) from operations and other non-GAAP financial measures in this release and on this morning's teleconference is not meant to be a substitute for "net income (loss)," "net income (loss) per share," "gross margin," "income (loss) from operations" or other financial measures presented in accordance with GAAP, but rather should be evaluated in conjunction with such data. BroadSoft's definition of "non-GAAP net income (loss)," "non-GAAP net income (loss) per share," "non-GAAP gross margin," "non-GAAP income (loss) from operations" and other non-GAAP financial measures may differ from similarly titled non-GAAP measures used by other companies and may differ from period to period. In reporting non-GAAP measures in the future, management may make other adjustments for expenses and gains that it does not consider reflective of core operating performance in a particular period and may modify "non-GAAP net income (loss)," "non-GAAP net income (loss) per share," "non-GAAP gross margin," "non-GAAP income (loss) from operations" and such other non-GAAP measures by excluding these expenses and gains.

Forward-Looking Statements

This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by their use of terms and phrases such as "anticipate, "enable," "estimate," "expect," "will," "believe" and other similar terms and phrases, and such forward-looking statements include, but are not limited to, the statements regarding the Company's future financial performance set forth under the heading "Guidance." The outcome of the events described in these forward-looking statements is subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from the results anticipated by these forward-looking statements, including, but not limited to: the Company's dependence on the success of BroadWorks® and on its service provider customers to sell services using its applications; claims that the Company infringes the intellectual property rights of others; the Company's dependence in large part on service providers' continued deployment of, and investment in, their IP-based networks; and the Company's ability to expand its product offerings, as well as those factors contained in the "Risk Factors" section of the Company's Form 10-Q for the quarter ended June 30, 2011 filed with the Securities and Exchange Commission, or SEC, on August 8, 2011, and in the Company's other filings with the SEC. All information in this release is as of August 8, 2011. Except as required by law, the Company undertakes no obligation to update publicly any forward-looking statement made herein for any reason to conform the statement to actual results or changes in the Company's expectations.

About BroadSoft

BroadSoft provides software that enables mobile, fixed-line and cable service providers to deliver voice and multimedia services over their IP-based networks. The Company's software, BroadWorks, enables service providers to provide enterprises and consumers with a range of cloud-based, or hosted, IP multimedia communications, such as hosted IP private branch exchanges, video calling, unified communications, collaboration and converged mobile and fixed-line services.

Financial Statements

The financial statements set forth below are not the complete set of the Company's financial statements for the quarter and are presented below without footnotes. Readers are encouraged to obtain and carefully review BroadSoft's Quarterly Report on Form 10-Q for the quarter ended June 30, 2011, including all financial statements contained therein and the footnotes thereto, as filed with the SEC on August 8, 2011. The SEC, the Form 10-Q may be retrieved from the SEC's website at www.sec.gov or from BroadSoft's website at www.broadsoft.com.

                               BroadSoft, Inc

                   Condensed Consolidated Balance Sheets

                                (unaudited)

                                                   June 30,    December 31,

                                                      2011          2010

                                                 ------------  ------------

                                                    (In thousands, except

                                                  share and per share data)

Assets:

Current assets:

  Cash and cash equivalents                      $    157,984  $     47,254

  Short-term investments                               36,125        13,703

  Accounts receivable, net of allowance for

   doubtful accounts of $54 and $38 at June 30,

   2011 and December 31, 2010, respectively            34,083        40,491

  Deferred tax asset                                   16,481             -

  Other current assets                                  5,740         4,866

                                                 ------------  ------------

    Total current assets                              250,413       106,314

                                                 ------------  ------------

Long-term assets:

  Property and equipment, net                           3,657         3,590

  Long-term investments                                   759         4,970

  Restricted cash                                         937           972

  Intangible assets, net                                3,219         3,709

  Goodwill                                              6,226         6,226

  Other long-term assets                                3,329         1,575

                                                 ------------  ------------

    Total long-term assets                             18,127        21,042

                                                 ------------  ------------

      Total assets                               $    268,540  $    127,356

                                                 ============  ============

Liabilities and stockholders' equity:

Current liabilities:

  Accounts payable and accrued expenses          $      9,232  $     12,439

  Notes payable and bank loans, current portion         1,194         1,170

  Deferred revenue, current portion                    53,014        57,437

                                                 ------------  ------------

      Total current liabilities                        63,440        71,046

Convertible senior notes                               79,551             -

Notes payable and bank loans                                -           800

Deferred revenue, net of current portion                1,365         1,827

Deferred tax liability                                  6,589             -

Other long-term liabilities                             1,066         1,138

                                                 ------------  ------------

      Total liabilities                               152,011        74,811

                                                 ------------  ------------

Stockholders' equity:

  Preferred stock, $0.01 par value per share;

   5,000,000 shares authorized at June 30, 2011

   and December 31, 2010; no shares issued and

   outstanding at June 30, 2011 and December 31,

   2010                                                     -             -

  Common stock, par value $0.01 per share;

   100,000,000 shares authorized at June 30,

   2011 and December 31, 2010; 26,889,058 and

   25,452,227 shares issued and outstanding at

   June 30, 2011 and December 31, 2010,

   respectively                                           269           255

  Additional paid-in capital                          187,260       142,508

  Accumulated other comprehensive loss                 (2,004)       (1,736)

  Accumulated deficit                                 (68,996)      (88,482)

                                                 ------------  ------------

Total stockholders' equity                            116,529        52,545

                                                 ------------  ------------

Total liabilities and stockholders' equity       $    268,540  $    127,356

                                                 ============  ============

                               BroadSoft, Inc

              Condensed Consolidated Statements of Operations

                                (unaudited)

                                     Three Months Ended   Six Months Ended

                                          June 30,            June 30,

                                     ------------------  ------------------

                                       2011      2010      2011      2010

                                     --------  --------  --------  --------

                                      (In thousands, except per share data)

Revenue:

  Licenses                           $ 19,202  $ 10,555  $ 34,393  $ 19,338

  Maintenance and services             12,977     9,216    27,440    18,237

                                     --------  --------  --------  --------

    Total revenue                      32,179    19,771    61,833    37,575

Cost of revenue:

  Licenses                              1,345     1,026     2,621     2,242

  Maintenance and services              4,635     3,842     8,950     7,227

  Amortization of intangibles             251       192       490       385

                                     --------  --------  --------  --------

    Total cost of revenue               6,231     5,060    12,061     9,854

                                     --------  --------  --------  --------

Gross profit                           25,948    14,711    49,772    27,721

Operating expenses:

  Sales and marketing                   9,077     7,710    17,561    14,812

  Research and development              6,730     4,952    13,546     9,443

  General and administrative            4,496     3,608     8,882     6,887

                                     --------  --------  --------  --------

    Total operating expenses           20,303    16,270    39,989    31,142

                                     --------  --------  --------  --------

Income (loss) from operations           5,645    (1,559)    9,783    (3,421)

Other expense (income):

  Interest income                         (44)      (10)      (87)      (12)

  Interest expense                        238       393       258       699

  Other (income) expense, net               -       (12)        -       173

                                     --------  --------  --------  --------

    Total other expense                   194       371       171       860

                                     --------  --------  --------  --------

Income (loss) before income taxes       5,451    (1,930)    9,612    (4,281)

  (Benefit from) provision for

   income taxes                       (10,340)     (156)   (9,874)      126

                                     --------  --------  --------  --------

Net income (loss)                    $ 15,791  $ (1,774) $ 19,486  $ (4,407)

                                     ========  ========  ========  ========

Net income (loss) per common share

 available to BroadSoft, Inc. common

 stockholders:

  Basic                              $   0.59  $  (0.20) $   0.74  $  (0.58)

  Diluted                            $   0.57  $  (0.20) $   0.70  $  (0.58)

Weighted average common shares

 outstanding:

  Basic                                26,670     8,824    26,189     7,615

  Diluted                              27,939     8,824    27,796     7,615

Stock-based compensation expense

 included above:

  Cost of revenue                    $    211  $     57  $    277  $     92

  Sales and marketing                     415       254       749       365

  Research and development                510       201       757       267

  General and administrative              765       551     1,220       660

                              BroadSoft, Inc.

           Summary of Condensed Consolidated Cash Flow Activity

                                (unaudited)

                                                         Six months ended

                                                           June 30, 2011

                                                        --------------------

Net cash provided by operating activities               $            11,990

Net cash used in investing activities                               (19,055)

Net cash provided by financing activities                           117,727

                              BroadSoft, Inc.

               Reconciliation of Non-GAAP Financial Measures

                                (Unaudited)

                     Three Months Ended   Three Months    Six Months Ended

                          June 30,            Ended           June 30,

                       2011      2010    March 31, 2011    2011      2010

                     --------  --------  --------------  --------  --------

                                         (In thousands)

Non-GAAP gross

 profit:

GAAP gross profit    $ 25,948  $ 14,711  $       23,824  $ 49,772  $ 27,721

  (percent of total

   revenue)                81%       74%             80%       80%       74%

Plus:

  Stock-based

   compensation

   expense                211        57              66       277        92

  Amortization of

   acquired

   intangible assets      251       192             239       490       385

                     --------  --------  --------------  --------  --------

Non-GAAP gross

 profit              $ 26,410  $ 14,960  $       24,129  $ 50,539  $ 28,198

                     ========  ========  ==============  ========  ========

  (percent of total

   revenue)                82%       76%             81%       82%       75%

GAAP license gross

 profit              $ 17,606  $  9,337  $       13,676  $ 31,282  $ 16,711

  (percent of

   related revenue)        92%       88%             90%       91%       86%

Plus:

  Stock-based

   compensation

   expense                 62        31              30        92        48

  Amortization of

   acquired

   intangible assets      251       192             239       490       385

Non-GAAP license

 gross profit        $ 17,919  $  9,560  $       13,945  $ 31,864  $ 17,144

                     ========  ========  ==============  ========  ========

  (percent of

   related revenue)        93%       91%             92%       93%       89%

GAAP maintenance and

 services gross

 profit              $  8,342  $  5,374  $       10,148  $ 18,490  $ 11,010

  (percent of

   related revenue)        64%       58%             70%       67%       60%

Plus:

  Stock-based

   compensation

   expense                149        26              36       185        44

Non-GAAP maintenance

 and services gross

 profit              $  8,491  $  5,400  $       10,184  $ 18,675  $ 11,054

                     ========  ========  ==============  ========  ========

  (percent of

   related revenue)        65%       59%             70%       68%       61%

                              BroadSoft, Inc.

               Reconciliation of Non-GAAP Financial Measures

                                (Unaudited)

                   Three Months Ended    Three Months    Six Months Ended

                        June 30,             Ended           June 30,

                     2011      2010     March 31, 2011    2011      2010

                   --------  --------   --------------  --------  --------

                                        (In thousands)

Non-GAAP income

 (loss) from

 operations:

GAAP income (loss)

 from operations   $  5,645  $ (1,559)  $        4,138  $  9,783  $ (3,421)

  (percent of

   total revenue)        18%       (8)%             14%       16%       (9)%

Plus:

  Stock-based

   compensation

   expense            1,901     1,063            1,102     3,003     1,384

  Amortization of

   acquired

   intangible

   assets               251       192              239       490       385

                   --------  --------   --------------  --------  --------

Non-GAAP income

 (loss) from

 operations        $  7,797  $   (304)  $        5,479  $ 13,276  $ (1,652)

                   ========  ========   ==============  ========  ========

  (percent of

   total revenue)        24%       (2)%             18%       21%       (4)%

GAAP operating

 expense           $ 20,303  $ 16,270   $       19,686  $ 39,989  $ 31,142

Less:

  Stock-based

   compensation

   expense            1,690     1,006            1,036     2,726     1,292

                   --------  --------   --------------  --------  --------

Non-GAAP operating

 expense           $ 18,613  $ 15,264   $       18,650  $ 37,263  $ 29,850

                   ========  ========   ==============  ========  ========

  (as percent of

   total revenue)        58%       77%              63%       60%       79%

GAAP sales and

 marketing expense $  9,077  $  7,710   $        8,484  $ 17,561  $ 14,812

Less:

  Stock-based

   compensation

   expense              415       254              334       749       365

                   --------  --------   --------------  --------  --------

Non-GAAP sales and

 marketing expense $  8,662  $  7,456   $        8,150  $ 16,812  $ 14,447

                   ========  ========   ==============  ========  ========

  (as percent of

   total revenue)        27%       38%              27%       27%       38%

GAAP research and

 development

 expense           $  6,730  $  4,952   $        6,816  $ 13,546  $  9,443

Less:

  Stock-based

   compensation

   expense              510       201              247       757       267

                   --------  --------   --------------  --------  --------

Non-GAAP research

 and development

 expense           $  6,220  $  4,751   $        6,569  $ 12,789  $  9,176

                   ========  ========   ==============  ========  ========

  (as percent of

   total revenue)        19%       24%              22%       21%       24%

GAAP general and

 administrative

 expense           $  4,496  $  3,608   $        4,386  $  8,882  $  6,887

Less:

  Stock-based

   compensation

   expense              765       551              455     1,220       660

                   --------  --------   --------------  --------  --------

Non-GAAP general

 and

 administrative

 expense           $  3,731  $  3,057   $        3,931  $  7,662  $  6,227

                   ========  ========   ==============  ========  ========

  (as percent of

   total revenue)        12%       15%              13%       12%       17%

                              BroadSoft, Inc.

               Reconciliation of Non-GAAP Financial Measures

                                (Unaudited)

                      Three Months Ended   Three Months   Six Months Ended

                           June 30,            Ended          June 30,

                        2011      2010    March 31, 2011   2011      2010

                      --------  --------  -------------- --------  --------

                              (In thousands, except per share data)

Non-GAAP net income

 (loss) and income

 (loss) per share:

GAAP net income

 (loss)               $ 15,791  $ (1,774) $        3,695 $ 19,486  $ (4,407)

Adjusted for:

  Stock-based

   compensation

   expense               1,901     1,063           1,102    3,003     1,384

  Amortization of

   acquired

   intangible assets       251       192             239      490       385

  Non-cash interest

   expense on our

   convertible notes       172         -               -      172         -

  Tax benefit related

   to valuation

   allowance release    (9,926)        -               -   (9,926)        -

                      --------  --------  -------------- --------  --------

Non-GAAP net income

 (loss)               $  8,189  $   (519) $        5,036 $ 13,225  $ (2,638)

                      ========  ========  ============== ========  ========

GAAP net income

 (loss) per basic

 common share         $   0.59  $  (0.20) $         0.14 $   0.74  $  (0.58)

Adjusted for:

  Adjustment for

   preferred stock

   conversion (1)            -      0.11               -        -      0.36

  Stock-based

   compensation

   expense                0.07      0.05            0.04     0.11      0.07

  Amortization of

   acquired

   intangible assets      0.01      0.01            0.01     0.02      0.02

  Non-cash interest

   expense on our

   convertible notes      0.01         -               -     0.01         -

  Tax benefit related

   to valuation

   allowance release     (0.37)        -               -    (0.38)        -

                      --------  --------  -------------- --------  --------

Non-GAAP net income

 (loss) per basic

 common share         $   0.31  $  (0.03) $         0.19 $   0.50  $  (0.13)

                      ========  ========  ============== ========  ========

GAAP net income per

 diluted common share

 (2)                  $   0.57            $         0.13 $   0.70

Adjusted for:

  Stock-based

   compensation

   expense                0.06                      0.04     0.11

  Amortization of

   acquired

   intangible assets      0.01                      0.01     0.02

  Non-cash interest

   expense on our

   convertible notes      0.01                         -     0.01

  Tax benefit related

   to valuation

   allowance release     (0.36)                        -    (0.36)

                      --------            -------------- --------

Non-GAAP net income

 per diluted common

 share                $   0.29            $         0.18 $   0.48

                      ========            ============== ========

Non-GAAP weighted

 average shares

 outstanding:(3)

GAAP weighted average

 shares outstanding                8,824                              7,615

Adjusted for:

  Adjustment for

   convertible

   preferred stock

   conversion                     11,538                             12,246

Non-GAAP weighted

 average shares

 outstanding                      20,362                             19,861

(1) For purposes of the calculation of non-GAAP net loss per basic and

diluted common share for the three and six months ended June 30, 2010, GAAP

weighted average shares outstanding was adjusted as if the conversion of all

shares of redeemable convertible preferred stock into common stock occurred

at the beginning of the period.

(2) Net loss per diluted common share for the three and six months ended

June 30, 2010 is not presented because the effect of the share equivalents

is anti-dilutive given the Company's losses for this period. As a result,

non-GAAP net loss per diluted common share is equal to non-GAAP net loss per

basic common share for these periods.

(3) For the calculation of GAAP weighted average shares outstanding, the

shares of common stock underlying shares of redeemable convertible preferred

stock were not included for the period prior to the Company's initial public

offering of its common stock, whereas for the non-GAAP weighted average

shares outstanding, the conversion of all shares of redeemable convertible

preferred stock was assumed to have occurred at the beginning of the

respective periods.

                              BroadSoft, Inc.

               Reconciliation of Non-GAAP Financial Measures

                                (Unaudited)

                            Three Months Ending           Year Ending

                            September 30, 2011         December 31, 2011

                         ------------------------  ------------------------

                           Low End      High End     Low End      High End

                         -----------  -----------  -----------  -----------

                                (In thousands, except per share data)

Non-GAAP net income:

GAAP net income          $     4,400  $     5,400  $    30,700  $    32,300

Adjusted for:

  Stock-based

   compensation expense        1,900        1,900        6,800        6,800

  Amortization of

   acquired intangible

   assets                        250          250        1,000        1,000

  Non-cash interest

   expense on our

   convertible notes             500          500        1,130        1,130

  Tax benefit related to

   valuation allowance

   release                    (1,610)      (1,610)     (14,500)     (14,500)

                         -----------  -----------  -----------  -----------

Non-GAAP net income      $     5,440  $     6,440  $    25,130  $    26,730

                         ===========  ===========  ===========  ===========

Non-GAAP net income per

 share:

GAAP net income per

 diluted common share    $      0.16  $      0.19  $      1.10  $      1.15

Adjusted for:

  Stock-based

   compensation expense         0.07         0.07         0.24         0.24

  Amortization of

   acquired intangible

   assets                       0.01         0.01         0.04         0.04

  Non-cash interest

   expense on our

   convertible notes            0.02         0.02         0.04         0.04

  Tax benefit related to

   valuation allowance

   release                     (0.06)       (0.06)       (0.52)       (0.52)

                         -----------  -----------  -----------  -----------

Non-GAAP net income per

 diluted common share    $      0.20  $      0.23  $      0.90  $      0.95

                         -----------  -----------  -----------  -----------
Contact Information

For further information contact:

Investor Relations:

Monica Gould

+1-212-871-3927

monica@blueshirtgroup.com

Industry Analyst / Media Relations:

Elaine Myada

+1-240-720-9558

emyada@broadsoft.com

Brian Lustig

+1-301-775-6203

brian@lustigcommunications.com

Source: BroadSoft, Inc.

News Provided by Acquire Media

PR Archives: Latest, By Company, By Date