AVG Reports Third Quarter Financial Results Posts Revenue of $100.1 million, non-GAAP diluted EPS of $0.52 and GAAP diluted EPS of $0.09

AMSTERDAM, Nov. 7, 2013 /PRNewswire/ -- AVG Technologies N.V. (NYSE: AVG), the provider of Internet and mobile security, privacy and optimization to 172 million active users, today reported results for the third quarter ended September 30, 2013.

Revenue for the third quarter of 2013 was $100.1 million, compared with $95.3 million in the third quarter of 2012.

Non-GAAP net income for the third quarter of 2013 was $28.8 million, or $0.52 per diluted ordinary share.  This compares with non-GAAP net income of $23.4 million, or $0.43 per diluted ordinary share, for the same period of the prior year1

GAAP net income for the third quarter of 2013 was $4.8 million, or $0.09 per diluted ordinary share.  This compares with net income of $19.0 million, or $0.35 per diluted ordinary share in the prior year's third quarter.  In the third quarter of 2013, AVG incurred a $11.3 million non-cash tax charge as the results of an internal group restructuring completed in the quarter, which equates to a $0.21 per share reduction in GAAP EPS and a non-cash tax credit of $1.6 million, a $0.03 per share benefit to non-GAAP EPS.

Non-GAAP unlevered free cash flow was $21.4 million for the quarter, compared with $26.8 million for the same period in the prior year.  Operating cash flow was $24.8 million for quarter, compared with $24.9 million for the third quarter last year.  At September 30, 2013, deferred revenue was $189.5 million and net cash was $15.8 million.

"I am encouraged with the base we are building as we refine our focus and expand our ability to deliver privacy, protection and performance solutions for the next wave of Internet users around the world," commented Gary Kovacs, CEO of AVG Technologies.  "In the third quarter, active user count increased substantially to 172 million, with mobile users reaching 57 million alone.  We were also able to translate 5% revenue growth into 23% net income growth as we focused on optimizing for our core businesses."

"I remain excited by the opportunities ahead of us as the Internet continues to grow in each of our lives," concluded Kovacs.

Financial Outlook

Based on information available as of November 7, 2013, AVG is updating its outlook for fiscal 2013 as follows:

  • Revenue is expected to be in the range of $398 million to $402 million.
  • Non-GAAP adjusted net income is expected to be in the range of $111 million to $113 million; non-GAAP diluted EPS is expected to be in the range of $2.01 to $2.06.
  • GAAP net income is expected to be in the range of $62 million to $64 million; GAAP diluted EPS is expected to be in the range of $1.12 to $1.16.
  • Operating cash flow is expected to be in the range of $140 million to $146 million; non-GAAP unlevered free cash flow is expected to be in the range of $130 million to $136 million.

Similarly, AVG is providing the following financial outlook for the fourth quarter of 2013:

  • Revenue is expected to be in the range of $93 million to $97 million.
  • Non-GAAP adjusted net income is expected to be in the range of $21 million to $23 million; non-GAAP diluted EPS is expected to be in the range of $0.37 to $0.42.
  • GAAP adjusted net income is expected to be in the range of $11 million to $13 million; GAAP diluted EPS is expected to be in the range of $0.19 to $0.23.

AVG's expectation of non-GAAP adjusted net income for the fourth quarter of 2013 and fiscal year 2013 excludes share-based compensation expense, acquisition amortization and certain other adjustments, and assumes a normalized tax rate of 12.5 percent.  For the purpose of calculating diluted EPS and non-GAAP diluted EPS, the Company assumes approximately 55 million weighted-average diluted ordinary shares outstanding for the fourth quarter and for the full year. 

Conference Call Information

AVG will hold its quarterly conference call today at 23:00 CET/5:00 p.m. ET/2:00 p.m. PT to discuss its third quarter 2013 financial results, business highlights and outlook.  The conference call may be accessed via webcast at http://investors.avg.com or by calling +1 (877) 941-1428 (United States and Canada) or +1 (480) 629-9665 (International).

A replay of the webcast can be accessed via http://investors.avg.com.  Additionally, an audio replay of the conference call will be available through November 14, 2013 by calling +1 (800) 406-7325 (United States and Canada) or +1 (303) 590-3030 (International), conference passcode required: 4645850#.

Use of Non-GAAP Financial Information

This press release contains supplemental non-GAAP financial measures including the following: non-GAAP adjusted net income, non-GAAP adjusted net income per diluted ordinary share and non-GAAP unlevered free cash flow.  The presentation of this supplemental non-GAAP financial information, which is not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with generally accepted accounting principles in the United States.  In particular, adjusted net income, adjusted net income per diluted ordinary share and unlevered free cash flow should not be considered as measurements of the Company's financial performance or liquidity under U.S. GAAP, as alternatives to income, operating income, cash flow from operations or any other performance measures derived in accordance with U.S. GAAP or as alternatives to cash flow from operating activities as a measure of the Company's liquidity.  Adjusted net income, adjusted net income per diluted ordinary share and unlevered free cash flow have limitations as analytical tools and should not be considered in isolation from, or as substitutes for, analysis of AVG's results of operations, including its cash flows, as reported under U.S. GAAP.  Some of the limitations of adjusted net income, adjusted net income per diluted ordinary share and unlevered free cash flow as financial measures are:

  • they do not reflect the Company's future requirements for capital expenditure or contractual commitments, nor, in the case of the income measures, do they reflect the actual cash contributions received from customers;
  • except in the case of unlevered free cash flow, they do not reflect changes in, or cash requirements for, the Company's working capital needs;
  • they do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on the Company's debt;
  • although amortization and share-based compensation are non-cash charges, the assets being amortized will often have to be replaced in the future and such measures do not reflect any cash requirements for such replacements; and
  • other companies in AVG's industry may calculate these measures differently than AVG does, limiting their usefulness as comparative measures.

Because of these limitations, investors should rely on AVG's consolidated financial statements prepared in accordance with U.S. GAAP and treat the Company's non-GAAP financial measures as supplemental information only. 

AVG is providing these non-GAAP financial measures because it believes that such measures provide important supplemental information to management and investors about the Company's core operating results, primarily because the non-GAAP financial measures exclude certain expenses and other amounts that management does not consider to be indicative of the Company's core operating results or business outlook.  AVG management uses these non-GAAP financial measures, in addition to the corresponding U.S. GAAP financial measures, in evaluating the Company's operating performance, in planning and forecasting future periods, in making decisions regarding business operations and allocation of resources, and in comparing the Company's performance against its historical performance.

For a reconciliation of these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with U.S. GAAP, please see "Reconciliation of GAAP to non-GAAP financial measures".  All non-GAAP financial measures should be read in conjunction with the comparable information presented in accordance with U.S. GAAP. 

Forward-Looking Statements

This press release contains forward-looking statements within the Private Securities Litigation Reform Act of 1995, including those relating to an expected range of revenue, net income, EPS, operating cash flow, non-GAAP adjusted net income, non-GAAP EPS and non-GAAP unlevered free cash flow for the three months ending December 31, 2013 and/or the fiscal year ending December 31, 2013 and/or future periods, as well as those relating to the future prospects of AVG.  Words such as "expects," "expectation," "intends," "assumes," "believes" and "estimates," variations of such words and similar expressions are also intended to identify forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those contemplated herein. Factors that could cause or contribute to such differences include but are not limited to: voting results at the Company's general meetings of shareholders; changes in the Company's growth strategies; changes in the Company's future prospects, business development, results of operations and financial condition; changes to the online and computer threat environment and the endpoint security industry; competition from local and international companies, new entrants in the market and changes to the competitive landscape; the adoption of new, or changes to existing, laws and regulations; flaws in the assumptions underlying the calculation of the number of the Company's active users; the effects of changes in the applicable search guidelines of our search partners, including the Company's and its competitors' responses to these changes; the termination of or changes to the Company's relationships with its partners, including Google, Yahoo! and other third parties; changes in the Company's and its partners' responses to privacy concerns; the ability for the Company to successfully diversify its portfolio of search partners; the Company's plans to launch new products and online services and monetize its full user base; the Company's ability to attract and retain active and subscription users; the Company's ability to retain key personnel and attract new talent; the Company's ability to adequately protect its intellectual property; flaws in the Company's internal controls or IT systems; the Company's geographic expansion plans; the anticipated costs and benefits of the Company's acquisitions; the outcome of ongoing or any future litigation or arbitration, including litigation or arbitration relating to intellectual property rights; the Company's legal and regulatory compliance efforts; and worldwide economic conditions and their impact on demand for the Company's products and services.  Given these risks and uncertainties, you should not place undue reliance on these forward-looking statements.

Further information on these factors and other risks that may affect the Company's business is included in filings AVG makes with the U.S. Securities and Exchange Commission (SEC) from time to time, including its Annual Report on Form 20-F, particularly under the heading "Risk Factors".

The financial information contained in this press release should be read in conjunction with the consolidated financial statements and notes thereto to be included in the Company's reports on Form 6-K and Form 20-F.  The Company's results of operations for the third quarter ended September 30, 2013 are not necessarily indicative of the Company's operating results for any future periods.

These documents are available online from the SEC or in the Investor Relations section of the Company's website at http://investors.avg.com.  Information on the AVG website is not part of this release.  All forward-looking statements in this press release are based on information currently available to the Company, and AVG assumes no obligation to update these forward-looking statements in light of new information or future events.

(Logo: http://photos.prnewswire.com/prnh/20120306/SF65434LOGO)

About AVG

AVG's mission is to simplify, optimize and secure the Internet experience, providing peace of mind to a connected world.  AVG's powerful yet easy‐to‐use software and online services put users in control of their Internet experience.  By choosing AVG's software and services, users become part of a trusted global community that benefits from inherent network effects, mutual protection and support.  AVG has grown its user base to 172 million active users as of September 30, 2013 and offers a protection, performance and privacy products and services suite to consumers and small businesses including Internet security, performance optimization, mobile security, online backup, identity protection and family safety software.  www.avg.com





1   Non-GAAP results for the third quarter of 2013 exclude $2.5 million in share based compensation expense, $3.4 million in acquisition amortization and $4.0 million in restructuring, legal and other charges, together with a $14.2 million adjustment to normalize to a tax rate of 12.5 percent, as described in the Reconciliation of GAAP measures to non-GAAP measures. The effect of changing from a 14 percent normalized tax rate to 12.5 percent in the third quarter was to increase non-GAAP net income by $1.6 million and non-GAAP diluted EPS by $0.03, of which $1.1 million and $0.02, respectively, related to the first two quarters.

 


AVG Technologies N.V.

Unaudited condensed consolidated balance sheets

(in thousands of U.S. dollars)



December 31,
2012


September 30,
2013

ASSETS






Current assets:






Cash and cash equivalents

$

51,890


$

54,937

Restricted cash


514



797

Trade accounts receivable, net


32,664



30,194

Inventories


702



1,002

Deferred income taxes


24,361



18,828

Prepaid expenses


5,080



6,290

Other current assets


6,684



7,177

Total current assets


121,895



119,225

Property and equipment, net


14,594



16,238

Deferred income taxes


53,805



43,087

Intangible assets, net


41,207



63,269

Goodwill


81,276



86,497

Investment in equity affiliate


-



-

Investments


9,750



160

Other assets


939



6,027

Total assets

$

323,466


$

334,503







LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY






Current liabilities:






Accounts payable

$

8,757


$

10,638

Accrued compensation and benefits


21,575



20,041

Accrued expenses and other current liabilities


28,787



36,342

Current portion of long-term debt


12,226



4,167

Income taxes payable


3,343



5,816

Deferred tax liabilities


1,091



86

Deferred revenue


148,308



157,495

Total current liabilities


224,087



234,585

Long-term debt, less current portion


85,005



35,000

Deferred revenue, less current portion


32,848



32,019

Deferred tax liabilities


-



816

Other non-current liabilities


4,096



6,839

Total liabilities


346,036



309,259

Ordinary shares


722



727

Additional paid-in capital (Distributions in excess of capital)


(130,432)



(129,004)

Treasury shares


(3,826)



(7,351)

Accumulated other comprehensive loss


(4,090)



(5,068)

Retained earnings


115,056



165,940

Total shareholders' (deficit) equity


(22,570)



25,244

Total liabilities and shareholders' (deficit) equity

$

323,466


$

334,503

 

 


AVG Technologies N.V.

Unaudited condensed consolidated interim statements of comprehensive income

(in thousands of U.S. dollars, except for share data and per share data)



Three months ended


Nine months ended


September 30,


September 30,


2012


2013


2012


2013

Revenue:












Subscription

$

49,226


$

65,998


$

143,210


$

183,577

Platform-derived


46,027



34,106



117,551



121,634

Total revenue


95,253



100,104



260,761



305,211

Cost of revenue:












Subscription


(5,794)



(7,660)



(19,597)



(21,309)

Platform-derived


(9,548)



(12,345)



(20,214)



(28,559)

Total cost of revenue


(15,342)



(20,005)



(39,811)



(49,868)

Gross profit


79,911



80,099



220,950



255,343

Operating expenses:












Research and development


(11,833)



(15,072)



(38,981)



(43,863)

Sales and marketing


(22,298)



(25,002)



(63,710)



(71,568)

General and administrative


(16,784)



(17,645)



(48,588)



(53,418)

Total operating expenses


(50,915)



(57,719)



(151,279)



(168,849)

Operating income


28,996



22,380



69,671



86,494

Other expense, net


(6,383)



(556)



(17,732)



(7,154)

Income before income taxes and loss from investment in equity affiliate


22,613



21,824



51,939



79,340

Income tax (provision) benefit


(3,581)



(17,072)



(10,845)



(28,456)

Loss from investment in equity affiliate


(69)



-



(178)



-

Net income

$

18,963


$

4,752


$

40,916


$

50,884

Comprehensive income

$

19,686


$

3,846


$

42,111


$

49,906













Earnings per share:












Net income

$

18,963


$

4,752


$

40,916


$

50,884

Preferred share dividends


-



-



(753)



-

Net income available to ordinary shareholders - basic

$

18,963


$

4,752


$

40,163


$

50,884

Net income available to ordinary shareholders - diluted

$

18,963


$

4,752


$

40,916


$

50,884

Earnings per ordinary share – basic

$

0.35


$

0.09


$

0.77


$

0.94

Earnings per ordinary share – diluted

$

0.35


$

0.09


$

0.75


$

0.93

Weighted-average shares outstanding – basic


54,232,743



54,568,035



51,850,912



54,362,375

Weighted-average shares outstanding – diluted


54,710,323



55,140,477



54,231,072



54,907,175

 

 

AVG Technologies N.V.

Unaudited condensed consolidated interim statements of cash flows

(in thousands of U.S. dollars)



Three months ended


Nine months ended


September 30,


September 30,


2012


2013


2012


2013

OPERATING ACTIVITIES:












Net income

$

18,963


$

4,752


$

40,916


$

50,884

Adjustments to reconcile net income to net cash provided by operating activities












Depreciation and amortization


4,279



6,712



12,652



17,173

Share-based compensation


2,727



2,494



10,753



7,720

Deferred income taxes


2,122



14,736



3,487



15,302

Change in the fair value of contingent consideration liabilities


(600)



159



(332)



1,146

Amortization of financing costs and loan discount


2,179



203



3,512



4,048

Loss from investment in equity affiliate


69



-



178



-

Loss (gain) on sale of property and equipment


(9)



(52)



(50)



(128)

Net change in assets and liabilities, excluding effects of acquisitions:












Trade accounts receivable, net


(5,345)



(3,394)



(8,629)



3,147

Inventories


(271)



(498)



(42)



(300)

Accounts payable and accrued liabilities


1,577



7,603



8,089



8,821

Accrued compensation and benefits


(1,983)



760



488



(1,822)

Deferred revenue


3,272



(2,887)



9,540



6,999

Income taxes payable


(1,850)



(1,704)



(803)



2,401

Other assets


(257)



(1,131)



(1,468)



(565)

Other liabilities


54



(2,927)



(184)



(2,571)

Net cash provided by operating activities


24,927



24,826



78,107



112,255

INVESTING ACTIVITIES:












Purchase of property and equipment and intangible assets


(1,572)



(4,640)



(10,264)



(12,461)

Proceeds from sale of property and equipment


9



59



83



187

Cash payments for acquisitions, net of cash acquired


(500)



(1,491)



(4,447)



(27,686)

Purchase of investment of debt securities


-



(160)



-



(160)

Proceeds from sale of investment


-



-



-



9,750

Decrease (increase) in restricted cash


34



(30)



(527)



(4,617)

Net cash used in investing activities


(2,029)



(6,262)



(15,155)



(34,987)

FINANCING ACTIVITIES:












Payment of contingent consideration


(11,240)



(173)



(11,240)



(398)

Payment of deferred purchase consideration


-



-



(1,900)



-

Proceeds of credit agreement


-



-



-



75,000

Debt issuance costs


-



(236)



-



(1,010)

Repayments of principal on current credit agreement


-



(27,500)



-



(35,833)

Repayments of principal on former credit facility


(46,675)



-



(76,050)



(100,863)

Proceeds from issuance of ordinary shares


-



-



64,000



-

Share issuance costs


(262)



-



(8,302)



-

Dividends paid


-



-



(2,555)



-

Excess tax benefit


674



-



674



-

Proceeds from exercise of share options


-



6,309



347



8,217

Repurchases of share rights and options from employees


(114)



-



(1,022)



(2,906)

Repurchase of own shares


(3,869)



(15,077)



(3,869)



(16,586)

Net cash provided by (used in) financing activities


(61,486)



(36,677)



(39,917)



(74,379)

Effect of exchange rate fluctuations on cash and cash equivalents


1,566



1,338



2,928



158

Change in cash and cash equivalents


(37,022)



(16,775)



25,963



3,047

Beginning cash and cash equivalents


123,725



71,712



60,740



51,890

Ending cash and cash equivalents

$

$86,703


$

54,937


$

86,703


$

54,937

Supplemental cash flow disclosures:












Income taxes paid

$

(3,440)


$

(4,744)


$

(6,028)


$

(9,403)

Interest paid

$

(3,842)


$

(758)


$

(12,715)


$

(3,448)

Supplemental non-cash disclosures:












Issuance of ordinary shares on conversion of Class D preferred shares

$

-


$

-


$

191,954


$

-

 

 

 

AVG Technologies N.V.

Reconciliation of GAAP measures to non-GAAP measures

(in thousands of U.S. dollars, except for users, active users
and revenue per average active user data)



Three months ended


Nine months ended


September 30,


September 30,


2012


2013


2012


2013

Net cash provided by operating activities

$

24,927


$

24,826


$

78,107


$

112,255

Less: Payments for property and equipment and intangible assets


(1,572)



(4,640)



(10,264)



(12,461)

Add: Interest paid, net of tax


3,458



682



11,444



3,103

Less: Other adjustments (1)


-



510



-



3,531

Unlevered free cash flow

$

26,813


$

21,378


$

79,287


$

106,428


(1)     Other adjustments relate to the rationalization of the Company's global operations.









Revenue

$

95,253


$

100,104


$

260,761


$

305,211

Unlevered free cash flow


26,813



21,378



79,287



106,428

Cash conversion


28%



21%



30%



35%













Total revenue

$

95,253


$

100,104


$

260,761


$

305,211

Active users at period end (in millions) (1)


143



172



143



172

Average active users (in millions) (2)


136



164



126



159

Three and nine months revenue per average active user

$

0.70


$

0.61


$

2.07


$

1.92




Twelve months ended


September 30,



2012



2013

Revenue

$

335,060


$

400,416

Active users at period end (in millions) (1)


143



172

Average active users (in millions) (2)


125



158

Rolling twelve months revenue per average active user

$

2.68


$

2.54



(1)

We continue to measure the number of our active users as (i) PCs or mobile devices on which our free software has been downloaded and installed and that have connected to our server at least twice, including at least once in the preceding 30-day period; (ii) have a valid subscription license for our software solutions; or (iii) represent a unique device using our secure search solution that has made at least one secure search in the preceding 30-day period.  

(2)

The number of average active users is calculated as the simple average of active users at the beginning of a period and the end of a period.

 

 


AVG Technologies N.V.

Reconciliation of GAAP measures to non-GAAP measures

(in thousands of U.S. dollars)








Three months ended


Nine months ended



September 30,


September 30,



2012


2013


2012


2013

Gross profit

$

79,911

$

80,099

$

220,950

$

255,343

Add back:









- Share-based compensation


(12)


7


1


32

- Acquisition amortization


1,051


1,898


3,264


4,513

- Other adjustments (1)


-


51


-


44

Non-GAAP adjusted gross profit

$

80,950

$

82,055

$

224,215

$

259,932

Revenue

$

95,253

$

100,104

$

260,761

$

305,211

Non-GAAP adjusted gross profit margin


85%


82%


86%


85%










Operating expenses

$

50,915

$

57,719

$

151,279

$

168,849

Less:









- Share-based compensation


(2,739)


(2,486)


(10,752)


(7,687)

- Acquisition amortization


(831)


(1,497)


(2,666)


(3,490)

- Other adjustments (1)


-


(3,959)


-


(5,167)

Non-GAAP adjusted operating expenses

$

47,345

$

49,777

$

137,861

$

152,505










Operating income

$

28,996

$

22,380

$

69,671

$

86,494

Add back:









- Share-based compensation


2,727


2,493


10,753


7,719

- Acquisition amortization


1,882


3,395


5,930


8,003

- Other adjustments (1)


-


4,010


-


5,211

Non-GAAP adjusted operating income

$

33,605

$

32,278

$

86,354

$

107,427

Revenue

$

95,253

$

100,104

$

260,761

$

305,211

Non-GAAP adjusted operating income margin


35%


32%


33%


35%










Other expense, net

$

6,383

$

556

$

17,732

$

7,154

Less:









- Other adjustments (1)


-


-


-


(2,643)

Non-GAAP adjusted other expense, net

$

6,383

$

556

$

17,732

$

4,511












(1)

Other adjustments between GAAP and non-GAAP measures in the nine months ended September 30, 2013 comprise $2.6 million of accelerated deferred financing costs due to the full voluntary repayment and termination of long-term debt, $2.8 million in charges associated with a litigation settlement, $1.4 million in charges associated with the rationalization of the Company's global operations, including integrating the business acquired from LPI Level Platforms Inc., and $1.0 million in acquisition related charges arising on the PrivacyChoice integration.  In the nine months ended September 30, 2012 the Company did not record any charges related to other adjustments.

 

 

AVG Technologies N.V.

Reconciliation of GAAP measures to non-GAAP measures

(in thousands of U.S. dollars, except for share data and per share data)








Three months ended


Nine months ended



September 30,


September 30,



2012


2013


2012


2013

Net income

$

18,963

$

4,752

$

40,916

$

50,884

Add back:









- Share-based compensation


2,727


2,493


10,753


7,719

- Acquisition amortization


1,882


3,395


5,930


8,003

- Other adjustments (1)


-


4,010


-


7,854

- Provision (Benefit) for income taxes


3,581


17,072


10,845


28,456

Adjusted profit before taxes


27,153


31,722


68,444


102,916

Less: Tax effect (2)


(3,786)


(2,898)


(9,582)


(12,865)

Non-GAAP adjusted net income

$

23,367

$

28,824

$

58,862

$

90,051










Weighted-average shares outstanding - diluted (in thousands)


54,710


55,140


54,231


54,907

Non-GAAP adjusted net income

$

23,367

$

28,824

$

58,862

$

90,051

Non-GAAP diluted EPS

$

0.43

$

0.52

$

1.09

$

1.64



(1)

Other adjustments between GAAP and non-GAAP measures in the nine months ended September 30, 2013 comprise $2.6 million of accelerated deferred financing costs due to the full voluntary repayment and termination of long-term debt, $2.8 million in charges associated with a litigation settlement, $1.4 million in charges associated with the rationalization of the Company's global operations, including integrating the business acquired from LPI Level Platforms Inc., and $1.0  million in acquisition related charges arising on the PrivacyChoice integration.  In the nine months ended September 30, 2012 the Company did not record any charges related to other adjustments.

(2)

The Company's profit and loss tax charge varies from period to period and has shown significant variations from its cash tax charge.  In order to remove the period to period impact of these variations, the Company has used an estimated normalized tax rate of 12.5% (2012: 14%) in its financial reporting and future projections to better reflect the core operational changes in the business.  The revised normalized tax rate of 12.5% is approximate and based on an estimate of the Company's future cash tax rate as well as its recent cash and income statement tax charges.  The effect of changing from a normalized rate of 14% to 12.5% was an increase of non-GAAP adjusted net income and non-GAAP diluted EPS by $1.6 million and $0.03, respectively, for the three months ended September 30, 2013, of which $1.1 million and $0.02, respectively, related to the six months ended June 30, 2013.

 

 

Share-based compensation

(in thousands of U.S. dollars)












Three months ended


Nine months ended



September 30,


September 30,



2012


2013


2012


2013

Cost of revenue


12

$

(7)

$

(1)

$

(32)

Research and development


(214)


(376)


(1,274)


(628)

Sales and marketing


(582)


(884)


(1,687)


(1,440)

General and administrative


(1,943)


(1,226)


(7,791)


(5,619)

Share-based compensation


(2,727)

$

(2,493)

$

(10,753)

$

(7,719)










Acquisition amortization

(in thousands of U.S. dollars)












Three months ended


Nine months ended



September 30,


September 30,



2012


2013


2012


2013

Cost of revenue


(1,051)

$

(1,898)

$

(3,264)

$

(4,513)

Research and development


(2)


(7)


(6)


(15)

Sales and marketing


(829)


(1,490)


(2,660)


(3,475)

Acquisition amortization


(1,882)

$

(3,395)

$

(5,930)

$

(8,003)

 

 

SOURCE AVG Technologies N.V.



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