MariaDB Files First Quarter Fiscal 2024 Financial Results
- Annual Recurring Revenue (ARR) increased by 11% year-over-year in the first quarter of fiscal year 2024.
- Adjusted EBITDA loss improved by 77% to $2.7 million from $11.6 million in the previous year's first quarter.
- Net Loss for the first quarter was $8.8 million, showing a $3.9 million improvement compared to the prior period.
- The company's strategic measures to discontinue certain products and focus on MariaDB Enterprise Server have contributed to the positive financial results.
- Financial details are available in the Quarterly Report Form 10-Q on the SEC's website and MariaDB's Investor Relations website.
- None.
Insights
MariaDB plc's reported increase in Annual Recurring Revenue (ARR) by 11% is a significant indicator of the company's revenue stability and potential for sustainable growth. ARR is a critical metric for software companies, particularly those that offer subscription-based services, as it reflects predictable and recurring revenue streams from existing customers. An 11% year-over-year growth suggests that MariaDB is successfully retaining customers and potentially adding new ones, which is a positive sign for investors looking for long-term value.
The reported 77% improvement in Adjusted EBITDA loss is also noteworthy. Adjusted EBITDA is often used as a proxy for a company's operating performance because it excludes non-cash expenses and one-time items, providing a clearer picture of a company's ongoing operational profitability. MariaDB's significant reduction in this loss indicates effective cost management and operational efficiency improvements. Investors should consider how this might impact the company's ability to achieve profitability in future quarters.
The strategic decision to discontinue certain products and focus on the core MariaDB Enterprise Server product suggests a targeted approach to streamline operations and concentrate resources on areas with the highest growth potential. This kind of strategic pivot can be well-received in the market, as it often leads to better allocation of capital and can enhance product quality and customer satisfaction. However, it is also important to monitor customer response to these discontinued products and whether this focus narrows the company's market opportunity or impacts its competitive position.
Additionally, the company's efforts to reduce spending could reflect a broader industry trend towards cost optimization in the tech sector. As companies mature, there is often a shift from aggressive growth strategies to more sustainable, profit-oriented approaches. This may resonate with investors who prioritize fiscal discipline, especially in a market environment that increasingly favors profitability over growth.
The reduction in Net Loss by $3.9 million compared to the previous period is an encouraging sign of financial improvement. A shrinking net loss can be a precursor to achieving net profitability, which is a critical milestone for any company. It is essential to contextualize this performance within the broader economic environment. Considering the macroeconomic conditions, such as interest rate changes and inflationary pressures, can affect software companies' operational costs and customer purchasing power. Investors should weigh how external economic factors might influence MariaDB's financial trajectory and the tech sector as a whole.
Furthermore, the improvement in financial metrics during a period of economic uncertainty can be seen as a testament to the company's resilience and the robustness of its business model. However, it is crucial to assess whether this improvement is sustainable and if the company has a clear path to profitability, especially if economic headwinds persist.
“Annual Recurring Revenue (ARR) is up
The financial results can be found in the Quarterly Report Form 10-Q, which is available on the Securities & Exchange Commission’s (SEC’s) website at https://www.sec.gov and on MariaDB’s Investor Relations website at https://investors.mariadb.com under Financials.
About MariaDB
MariaDB is a new generation database company whose products are used by companies big and small, reaching more than a billion users through Linux distributions and have been downloaded over one billion times. Deployed in minutes and maintained with ease, leveraging cloud automation, MariaDB database products are engineered to support any workload, any cloud and any scale – all while saving up to
Key Business Metrics
We review a number of operating and financial metrics, including Annual Recurring Revenue (“ARR”), to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans and make strategic decisions.
We view ARR as an important indicator of our financial performance and operating results given the renewable nature of our business. ARR does not have a standardized meaning and is therefore unlikely to be comparable to similarly titled metrics presented by other companies. We define ARR as the annualized revenue for our subscription customers, excluding revenue from nonrecurring contract services (e.g., time and material consulting services). For our annual subscription customers, we calculate ARR as the annualized value of their subscription contracts as of the measurement date, assuming any contract that expires during the next 12 months is renewed on its existing terms (including contracts for which we are negotiating a renewal). In the event that we are still negotiating a renewal with a customer after the expiration of their subscription, we continue to include that revenue in ARR for a maximum period of 30 days after the subscription end date. Our calculation of ARR is not adjusted for the impact of any known or projected events that may cause any such contract not to be renewed on its existing terms. Consequently, our ARR may fluctuate within each quarter and from quarter to quarter. This metric should be viewed independently of
We define Adjusted EBITDA as net loss before (1) interest expense, (2) income tax expense or benefit, (3) depreciation and amortization, (4) stock-based compensation, (5) change in fair value of warrant liabilities, (6) other income (expense), net, (7) net costs associated with discontinued products pursuant to the Company’s October 2023 restructuring plan, and any other one-time non-recurring transaction amounts impacting the statement of operations during the relevant period. We believe that Adjusted EBITDA is useful to investors and other users of our financial statements in evaluating our operating performance because it provides them with an additional tool to compare business performance across periods. Our management uses Adjusted EBITDA to assess our operating performance and to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that Adjusted EBITDA, when considered together with our GAAP financial results, provides meaningful supplemental information regarding our operating performance by excluding certain items that may not be indicative of our business, results of operations or outlook, such as the impact of our capital structure (primarily interest charges) and asset base (primarily depreciation and amortization), items outside the control of the management team (taxes), expenses that do not relate to our core operations, and other non-cash items, including stock-based compensation, unrealized gains and losses related to foreign currency translation (included in other income (expense), net), and change in fair value of warrant liabilities. We consider Adjusted EBITDA to be an important measure because it helps illustrate underlying trends in our business and our historical operating performance on a more consistent basis.
Adjusted EBITDA Margin means Adjusted EBITDA as a percentage of revenue determined in accordance with GAAP. We calculate Adjusted EBITDA Margin by dividing Adjusted EBITDA by total GAAP revenue. We believe that Adjusted EBITDA Margin helps us to better understand MariaDB’s normalized operating performance (excluding certain non-indicative items) in the context of GAAP revenue providing management with important supplemental information in understanding business efficiency and trends.
Our calculation of Adjusted EBITDA and Adjusted EBITDA Margin may differ from how other companies, including companies in our industry, calculate these or similarly titled non-GAAP measures, which could reduce the usefulness of these measures as tools for comparison. Because of these limitations, when evaluating our performance, you should consider Adjusted EBITDA and Adjusted EBITDA Margin alongside other financial performance measures, including our net loss and other GAAP results.
|
Three Months Ended December 31, |
|||||||
($ in thousands) |
2023 |
|
2022 |
|||||
Net Loss |
$ |
(8,768 |
) |
|
$ |
(12,696 |
) |
|
Adjustments: |
|
|
|
|||||
Interest expense |
|
3,109 |
|
|
|
232 |
|
|
Income tax benefit |
|
(167 |
) |
|
|
(56 |
) |
|
Depreciation and amortization |
|
— |
|
|
|
238 |
|
|
Stock-based compensation |
|
13 |
|
|
|
616 |
|
|
Change in fair value of warrant liabilities |
|
(639 |
) |
|
|
(1,731 |
) |
|
Other income (expense), net |
|
908 |
|
|
|
1,829 |
|
|
Restructuring and other charges |
|
2,767 |
|
|
|
— |
|
|
Gain on divestitures |
|
(933 |
) |
|
|
— |
|
|
Costs associated with discontinued products, net |
|
992 |
|
|
|
— |
|
|
Adjusted EBITDA |
$ |
(2,718 |
) |
|
$ |
(11,568 |
) |
|
|
|
|
|
|||||
Net Loss Margin |
|
(64.4)% |
|
|
(99.1)% |
|||
Adjusted EBITDA Margin |
|
(20.0)% |
|
|
(90.3)% |
|||
Forward-Looking Statements
This report includes expectations, beliefs, projections, estimates, future plans and strategies, anticipated events or trends, and similar expressions concerning matters that are not historical facts and that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act, and Section 21E of the Exchange Act. Forward-looking statements may appear throughout this report, including, but not limited to, Management’s Discussion and Analysis of Financial Condition and Results of Operations”. The forward-looking statements included in this report include statements regarding our future financial position and operating results, as well as our strategy, future operations, prospects, plans and objectives of management. In some cases, you can identify these forward-looking statements by the use of terminology such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “projects,” “anticipates,” or the negative version of these words or other comparable words or phrases.
These forward-looking statements are based on management’s current expectations, assumptions, hopes, beliefs, intentions, strategies, and plans regarding future events and performance and are based on currently available information as to the outcome and timing of future events and performance. We caution you that these forward-looking statements are subject to risks and uncertainties (including those described in our filings with the Securities and Exchange Commission, including the 10-Q filing for the first quarter of the 2024 financial year), most of which are difficult to predict and many of which are beyond our control, incident to our operations.
These forward-looking statements are based on information available as of the date of this report. While our management believes such information forms a reasonable basis for such statements, such information may be limited or incomplete, and such statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely upon these statements.
Current expectations, forecasts and assumptions involve a number of risks and uncertainties. Accordingly, forward-looking statements in this report should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
Source: MariaDB
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Investors:
ir@mariadb.com
Media:
pr@mariadb.com
Source: MariaDB
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