Mindbody Earnings: Key Metrics Continue to Move in the Right Direction
Mindbody (NASDAQ: MB) reported fourth-quarter and full-year 2017 results after the market close on Wednesday. For the quarter, the company that maintains an online platform for wellness service providers posted year-over-year revenue growth of 30% and adjusted earnings per share of $0.03, versus a loss of $0.04 in the year-ago period.
Mindbody's results: The raw numbers
|Metric||Q4 2017||Q4 2016||Year-Over-Year Change|
|Revenue||$49.7 million||$38.2 million||30%|
|Operating income||($3.0 million)||($3.7 million)||N/A|
|GAAP net income||($2.9 million)||($3.9 million)||N/A|
|Adjusted net income||$1.7 million||($1.6 million)||N/A|
Data source: Mindbody. GAAP = generally accepted accounting principles. EPS = earnings per share.
Both segments posted strong growth, with subscription and services revenue surging 34% year over year to $29.9 million and payments revenue jumping 25% to $19.1 million. (Total doesn't add up to $49.7 million because there's a small "other" category.)
Mindbody had guided for quarterly revenue in the range of $48.5 million to $49.5 million and adjusted EPS in the range of $0.00 to $0.02. The company therefore exceeded its own expectations for both the top and bottom lines.
For additional context -- though long-term investors shouldn't pay too much attention to Wall Street's near-term estimates -- analysts were looking for EPS of $0.01 on revenue of $49 million in the quarter. So Mindbody sprinted by the earnings consensus and also beat on the top line.
For full-year 2017, Mindbody's revenue jumped 31% to $182.6 million and the company posted adjusted EPS of $0.02, versus a loss of $0.35 per share in 2016.
What happened with Mindbody in the quarter?
- The number of wellness business subscribers (at the end of the period) declined 3% year over year to 58,584. This shouldn't concern investors as the company's refined strategy is to focus on higher-value subscribers.
- Monthly average revenue per subscriber (ARPS) soared 31% year over year to approximately $278.
- Payments volume jumped 23% year over year to $2.1 billion.
- The company appointed a chief revenue officer, who will oversee global sales, customer support, and business development.
- In the first quarter of 2018, Mindbody acquired FitMetrix, which provides performance tracking integrations with fitness studio equipment and wearables. Customers are able to reserve specific, integrated equipment while booking a class.
What management had to say
Here's what co-founder and CEO Rick Stollmeyer had to say in the press release:
This was the most successful year in Mindbody history. Throughout 2017, our platform delivered strong growth in total sessions booked, payments volume, and direct consumer engagement. We also saw rapid expansion of promoted introductory offer purchases and impressive early adoption of dynamic pricing in Q4. These results all point to the growing momentum of our transaction-enabled marketplace, which focuses on adding the right customers to our platform and promoting their offerings to an ever larger consumer audience. In the year ahead, we will leverage this momentum and the acquisition of FitMetrix to further engage with the best customers and accelerate consumer adoption. Our purpose is connecting the world to wellness and we intend to help more people live healthier, happier lives than ever before.
Mindbody capped off a solid year with another good quarter. The company issued first-quarter and full-year 2018 guidance as follows:
Projected Year-Over-Year Revenue Change
Adjusted EPS Guidance*
Projected Year-Over-Year Adjusted EPS Change
$53 million to $54.5 million
26% to 29%
$0.03 to $0.05
N/A; a projected improvement from a loss of $0.03.
$230 million to $236 million
26% to 29%
$0.18 to $0.26
800% to 1200%
Data source: Mindbody. *Mindbody provides guidance for adjusted earnings/loss and the weighted average shares outstanding in a period, from which an expected adjusted earnings/loss per share can be calculated.
Going into earnings, Wall Street was projecting that Mindbody would turn in adjusted EPS of $0.03 on revenue of $52.4 million in the first quarter of 2018, as well as EPS of $0.20 on revenue of $228.5 million for 2018. So the market should be pleased with Mindbody's outlook.
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