Vocera first quarter revenue increases 26% to $23.1 million

Vocera Communications, Inc. (NYSE: VCRA), a provider of mobile communication solutions focused on addressing critical communication challenges facing hospitals, today announced results for its first quarter that ended March 31, 2012.

Revenue for the quarter of $23.1 million increased 26% compared to $18.3 million in the first quarter of 2011. For the first quarter of 2012, GAAP net loss was $0.8 million, or a loss of $0.23 per diluted share, compared to net income of $0.2 million, or $0.00 per diluted share, in the first quarter of 2011. Non-GAAP net income was $1.4 million for the first quarter of 2012, or $0.06 per diluted share, which compares to non-GAAP net income of $1.2 million, or $0.07 per diluted share, for the first quarter of 2011. A reconciliation of GAAP to non-GAAP financial measures is provided in the schedules included below.

"We are very pleased to report strong results in our first quarter as a public company," said Bob Zollars, Vocera Chairman and CEO. "Our business continues to perform well and we are receiving great feedback on our recently released B3000 badge from initial users. We believe 2012 is off to a great start and we remain focused on executing on the numerous opportunities that are in front of us."

First Quarter 2012 Results

• Total revenue in the first quarter of 2012 of $23.1 million was comprised of $14.6 million of product revenue and $8.5 million of service revenue.
• Product revenue increased 26% compared to the first quarter of 2011 and was driven by strength in our Voice Communication solution and sales of our new B3000 badge and server software. Product revenue in the first quarter of 2012 was comprised of $4.3 million from software sales and $10.3 million of device sales. GAAP product gross margin of 62.9% in the quarter decreased 570 basis points compared to the year ago period. Non-GAAP product gross margin of 63.6% in the quarter decreased 600 basis points compared to the year ago period.
• Service revenue increased 27% compared to the first quarter of 2011 and was driven by new customers and expanded implementations at existing customers. Service revenue in the first quarter of 2012 was comprised of $6.1 million of software maintenance and $2.4 million of professional services. GAAP services gross margin of 57.9% in the quarter increased 520 basis points compared to the year ago period. Non-GAAP services gross margin of 58.1% in the quarter increased 540 basis points compared to the year ago period.
• Non-GAAP net income was $1.4 million for the first quarter of 2012, or $0.06 per diluted share, which excludes $0.3 million in stock compensation expense, $0.2 million in amortization of acquired intangibles, and $1.7 million in stock warrant revaluation expense. This compares to non-GAAP net income of $1.2 million, or $0.07 per diluted share, for the first quarter of 2011, which excludes $0.3 million in stock compensation expense, $0.3 million in amortization of acquired intangibles and $0.5 million in stock warrant revaluation expense.
• Non-GAAP Adjusted EBITDA of $2.0 million in the first quarter of 2012 increased 44% year over year compared to $1.4 million in the first quarter of 2011. Non-GAAP Adjusted EBITDA margins in the first quarter of 2012 were 8.7% compared to 7.6% in the first quarter of 2011.
• Cash and cash equivalents totaled $14.2 million as of March 31, 2012. On April 2, 2012, we closed our initial public offering through which we received net proceeds of $74.4 million. A portion of the proceeds from our initial public offering were used to pay down the outstanding balance of $8.3 million under our credit facility.

2012 Guidance

The Company is introducing guidance for the full year and second quarter of 2012. For the full year 2012, Vocera expects revenue between $100 million and $102 million, GAAP loss per share between $(0.06) and $(0.11), non-GAAP earnings between $2.5 million and $3.5 million, non-GAAP earnings per share between $0.10 and $0.14 and non-GAAP Adjusted EBITDA between $4 million and $5 million. Our full year 2012 non-GAAP guidance excludes stock compensation expense of $3.5 to $4.0 million and amortization of intangibles of approximately $0.8 million.

For the second quarter of 2012, Vocera expects revenues between $24 million and $25 million, GAAP loss per share between $(0.03) and $(0.05), non-GAAP earnings between $0.1 million and $0.5 million, non-GAAP earnings per share between $0.00 and $0.02, and non-GAAP Adjusted EBITDA between $0.5 million and $1.0 million. Our second quarter 2012 non-GAAP guidance excludes stock compensation expense of $0.9 million and amortization of intangibles of $0.2 million.

Initial Public Offering

Subsequent to the close of the Company's first quarter ended March 31, 2012, on April 2, 2012, the Company closed its initial public offering ("IPO") of 6,727,500 shares of common stock, at $16.00 per share, before underwriting discounts and commissions. The Company sold 5,000,000 shares and existing stockholders sold an aggregate of 1,727,500 shares, including 877,500 shares as a result of the underwriters' exercise of their over-allotment option. The IPO generated net proceeds to the Company of approximately $74.4 million, after deducting underwriting discounts and commissions. The Company incurred approximately $3.8 million in offering expenses, which will be recorded against the offering proceeds. The Company did not receive any proceeds from the sale of shares by the selling stockholders.

The outstanding shares of convertible preferred stock converted into shares of the Company's common stock concurrent with the IPO. The outstanding warrants to purchase shares of convertible preferred stock converted into warrants to purchase shares of common stock. Following the IPO, there were no shares of the Company's convertible preferred stock outstanding.

Concurrent with the IPO, the Company paid off all of its outstanding debt under its credit facility.