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February 9, 2017

Determine Announces 3rd Quarter Fiscal Year 2017 Financial Results, Exceeding Revenue and Earnings Expectations

CARMEL, IN February 9, 2017 – Determine, Inc. (NASDAQ: DTRM), a leading global provider of SaaS enterprise Source to Pay and Enterprise Contract Lifecycle Management solutions, including cloud-based strategic sourcing, supplier management, contract management and procure-to-pay solutions, announced financial results for its third fiscal quarter ended December 31, 2016.

Q3 FY2017 GAAP Financial Highlights:

  • GAAP revenue was $6.9 million in Q3 FY2017, compared to $6.6 million in Q2 FY2017, representing a 4.1% increase quarter-over-quarter, and compared to $7.1 million in Q3 FY2016 GAAP revenue, representing a 3.5% decrease year-over-year.
  • GAAP gross profit percentage increased to 48.8% in Q3 FY2017, compared to 47.7% in Q2 FY2017, representing a quarter-over-quarter increase of 1.1 percentage points, and compared to 51.9% in Q3 FY2016, representing a 3.1 percentage points decrease year-over-year.
  • Deferred revenues increased 11.1% to $10.0 million in Q3 FY2017 from $9.0 million in Q3 FY2016.
  • GAAP net loss was $2.2 million or ($0.18) per share in Q3 FY2017, compared to $3.2 million or ($0.28) per share in Q2 FY2017, representing a $0.10 improvement per share quarter-over-quarter; in Q3 FY2016 the GAAP net loss was $2.8 million or ($0.25) per share.
(in thousands, except per share amounts)
GAAPQ3Q2Q3ChangeChangeNine Months
Financial MeasuresFY 2017FY 2017FY 2016Q/QY/YFY 2017′FY 2016′Change Y/Y
Revenue – total$6,852$6,584$7,1004.10%-3.50%$19,928$20,080-0.80%
Revenue – recurring$5,054$5,145$5,354-1.80%-5.60%$15,267$15,862-3.80%
Revenue – non-recurring$1,798$1,439$1,74624.90%3.00%$4,661$4,21810.50%
Gross profit – total$3,341$3,138$3,6826.50%-9.30%$9,865$10,494-6.00%
Gross profit – recurring$3,277$3,442$3,538-4.80%-7.40%$10,182$10,859-6.20%
Gross profit/(loss) – non-recurring$64($304)$144121.00%-55.60%($317)($365)13.20%
Gross margin – total48.80%47.70%51.90%1.1 pts(3.1 pts)49.50%52.30%(2.8 pts)
Gross margin – recurring64.80%66.90%66.10%(2.1 pts)(1.3 pts)66.70%68.50%(1.8 pts)
Gross margin – non recurring3.50%-21.10%8.20%24.6 pts(4.7 pts)-6.80%-8.70%1.9 pts
Net loss($2,193)($3,207)($2,845)31.60%22.90%($7,743)($10,212)24.20%
EPS($0.18)($0.28)($0.25)$0.10$0.07($0.67)($0.90)$0.23

Q3 FY2017 Non-GAAP Financial Highlights:

  • Non-GAAP revenue was $6.9 million in Q3 FY2017, compared to $6.6 million in Q2 FY2017, representing a 4.1% quarter-over-quarter increase, and compared to $7.2 million in Q3 FY2016, representing a 4.7% decrease year-over-year.
  • Non-GAAP gross profit percentage was 54.4% in Q3 FY2017, compared to 52.5% in Q2 FY2017, representing a 1.9 percentage point increase, and compared to 57.5% in Q3 FY2016, representing a 3.1 percentage point decrease.
  • Non-GAAP net loss was $1.0 million or ($0.08) per share in Q3 FY2017, compared to $2.0 million or ($0.17) per share in Q2 FY2017, representing an improvement of $0.09 per share quarter-over-quarter, compared to $1.5 million or ($0.13) per share in Q3 FY2016, representing a $0.05 improvement per share year-over-year.
  • Billings decreased 3.3% to $7.5 million in Q3 FY2017 from $7.8 million in Q3 FY2016. Billings, a non-GAAP measure, are defined as revenue plus the change in deferred revenues.
  • Non-GAAP EBITDA was ($0.2) million in Q3 FY2017, and compared to ($1.4) million in Q3 FY2016, representing an improvement of $1.2 million year-over-year.
(in thousands, except per share amounts)
Non-GAAPQ3Q2Q1ChangeChangeNine Months
Financial MeasuresFY 2017FY 2017FY 2016Q/QY/YFY 2017′FY 2016′Change Y/Y
Revenue – total$6,852$6,584$7,1874.10%-4.70%$19,936$20,308-1.80%
Revenue – recurring$5,054$5,145$5,400-1.80%-6.40%$15,275$16,021-4.70%
Revenue – non-recurring$1,798$1,439$1,78724.90%0.60%$4,661$4,2878.70%
Gross profit – total$3,726$3,460$4,1357.70%-9.90%$10,896$11,677-6.70%
Gross profit – recurring$3,591$3,710$3,859-3.20%-7.00%$11,037$11,736-6.00%
Gross profit/(loss) – non-recurring$135($250)$276154.00%-51.10%($141)($59)-139.00%
Gross margin – total54.40%52.50%57.50%1.9 pts(3.1 pts)54.70%57.50%(2.8 pts)
Gross margin – recurring71.00%72.10%71.50%(1.1 pts)(0.5 pts)72.30%73.30%(1.0 pts)
Gross margin – non recurring7.50%-17.40%15.50%24.9 pts(8.0 pts)-3.00%-1.40%(1.6 pts)
Net loss($1,010)($1,959)($1,503)48.40%32.80%($4,253)($4,585)7.20%
EPS($0.08)($0.17)($0.13)$0.09$0.05($0.37)($0.45)$0.08
Billings$7,545$5,770$7,80030.80%-3.30%$19,595$20,667-5.20%

This quarter we are very pleased by our return to the million dollar range for new Annualized Bookings, with quarter-over-quarter new sales growing at a rate in excess of 30%. Driving the sales performance was our disruptive, new Determine Cloud Platform offering, with over 90% of our new customers opting for the platform for their Source-to-Pay or Enterprise Contract Lifecycle Management needs.” said Patrick Stakenas, President and CEO of Determine. “Over the coming months, we look forward to continuing to focus on several key executional tasks including advancing the Determine Cloud Platform’s capabilities – to provide our customers with ‘Platformance’, continuing to optimize organizational efficiencies, and building upon our robust lead pipeline to deliver incremental and accelerated sales in the coming quarters.”

Q3 FY2017 Business Highlights:

  • Annualized Bookings: The sales team delivered approximately $983,000 in Annualized Bookings for the quarter, with more than 90% of new customers selecting the new Determine Cloud Platform for their Source-to-Pay or Contract Lifecycle Management needs.
  • Determine Cloud Platform Empowers Companies in Source-to-Pay and Enterprise Contract Lifecycle Management: During Q3 FY2017, Determine introduced a range of additional benefits that empower customers to deliver results now, and as they grow. These include the following improvements to the Determine Cloud Platform: improved supplier certification and compliance through triggered automation based on answers provided during registration and supplier monitoring, side-by-side comparison of contract requests and attachments for enhanced version control and user authorization, time tracking for services procurement that requires calendar management, PO matching, and automatic receipt/invoice generation. In addition, the Determine Cloud Platform mobile application is now available on Google Play and the Apple Store.
  • Business Analyst Recognition across the Determine Cloud Platform: In Q3 FY2017, Determine achieved a number of important recognitions from leading industry analyst organizations:
  • New Leadership: In October 2016, Determine appointed Steve Potts as Chief Revenue Officer. Steve brings over thirty years of sales management, sales performance management, and sales training experience in the enterprise software and SaaS sectors. He most recently served as Chief Sales and Marketing Officer at AXIOM Sales Force Development, a leading cloud-based sales training and productivity improvement supplier.
  • New Customer Expansions: During Q3 FY2017, Determine engaged numerous new customer accounts in the US and Europe across its Determine Cloud Platform Source-to-Pay and Enterprise Contract Lifecycle Management solutions. Determine added new customers to its portfolio including companies in key verticals such as energy, financial, healthcare products, consumer goods, manufacturing, and retail.
  • Thought Leadership: In Q3 FY2017, Determine continued to provide meaningful educational resources to inform our customers and prospects on the ever-changing Source-to-Pay and Enterprise Contract Lifecycle Management landscape:
    • Improving Business Outcomes by Managing the Link Between Suppliers and Contract Management: IACCM, Determine and Protiviti presented how organizations are achieving better results for customers and suppliers by improving the integration of their supplier management and contracting processes.
    • 5 Core Processes that will Reinvent P2P ‘s View of Supplier Management: Paystream Advisors and Determine covered five everyday yet core processes and how real-world organizations have transformed them through better supplier management.
    • The Procurement Revolution held its first annual procurement virtual summit featuring the leading professionals in the industry. Constantine Limberakis was featured with a presentation called Six Disruptive Forces & their Impact on Procurement, examining some of the many trends impacting procurement now and on the horizon.
    • Décision-Achats (a French procurement magazine) featured an interview with Patrick Chabannes, Determine ‘s Senior Solution Strategist, about recent and forthcoming developments of Determine ‘s Cloud Platform Source-to-Pay and Contract Management solutions as well as his thoughts on trends in procurement.

Conference Call and Webcast: Thursday, February 9, 2017 at 5:00 PM (Eastern Time)

Participant Conference Call Numbers:
Toll-Free: 1-877-407-0789
Toll/International: 1-201-689-8562
Participant Webcast Link: http://public.viavid.com/index.php?id=122692

Replay Dial-in Information:

Toll-Free: 1-844-512-2921
Toll/International: 1-412-317-6671
From: 02/09/17 @ 8:00 pm Eastern Time
To: 02/16/17 @ 11:59 pm Eastern Time
Replay Pin Number: 13653707
Related: http://investor.determine.com

Supporting Resources

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About Determine, Inc.

Determine, Inc. (NASDAQ: DTRM) is a leading global provider of SaaS Source to Pay and Enterprise Contract Lifecycle Management (ECLM) solutions. Our visionary technologies allow our customers to effectively manage the full scope of Source to Pay and ECLM using our Determine Cloud Platform. Our Source to Pay software suite includes strategic sourcing, supplier management, contract management and procure-to-pay applications.

The Determine Cloud Platform gives procurement, finance and legal professionals the ability to deliver profound insights through analysis of their supplier relationships and contractual requirements. Our customers leverage the Determine Cloud Platform to discover previously unseen supplier and spend data; make more informed and smarter business decisions; drive new revenue; control costs; improve workflow efficiencies; and mitigate risk.

Our customers benefit from the Determine Cloud Platform’s robust suite of integrated applications. Whether they start with a full-suite implementation or choose to implement just one application and build over time, each additional application allows for the automatic sharing of data already in place on the Determine Cloud Platform.

For more information, please visit: www.determine.com.

Contact

Media Relations:
Rose Lee
Determine Inc.
+1.650.532.1590
pr@determine.com

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