Zix Reports Third Quarter 2021 Financial Results

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• Record Net Dollar Retention of 103.1% Driven by Strong Customer Adoption of CloudAlly and Secure Cloud
• 18% Increase in Revenue and Annual Recurring Revenue (ARR)
• Generated $10.1 Million in Cash Flow from Operations, $35.5 Million Year-to-date, up 46.7%
• Cash Position Increased $5.1 Million or 15.0% to $39.0 Million Compared to Q2 2021

DALLAS, TX – Nov. 8, 2021 — /BackupReview.info/ — Zix Corporation (Zix) (NASDAQ: ZIXI), a leading provider of cloud email security, productivity, and compliance solutions, today announced financial results for the third quarter ended September 30, 2021.

Third Quarter 2021 Financial Highlights (results compared to the same year-ago quarter)

• Revenue increased 18% to $64.9 million.
• Annual recurring revenue (ARR) increased 18% to $262.8 million. Cloud ARR increased 19% to $236.9 million or 90% of total ARR.
• GAAP net loss totaled ($2.4) million compared to a year ago net loss of ($0.7) million.
• GAAP net loss attributable to common stockholders totaled ($4.9) million compared to a year ago net loss attributable to common stockholders of ($3.0) million. The company’s Q3 2021 net loss attributable to common shareholders includes the effect of a deemed dividend to preferred shareholders of $2.4 million and acquisition-related expenses of $0.5 million.
• GAAP fully diluted earnings (loss) per share attributable to common stockholders totaled ($0.09) compared to ($0.05).
• Non-GAAP adjusted net income before deemed dividends and excluding deferred tax (benefit) expense totaled $8.2 million compared to $9.2 million.
• Non-GAAP adjusted net income per share before deemed dividends and excluding deferred tax (benefit) expense totaled $0.15.
• Adjusted EBITDA increased to $13.9 million, representing an adjusted EBITDA margin of 21.5%.
• The company ended the quarter with $39.0 million in cash, an increase of 15.0% or $5.1 million compared to the end of the prior quarter.
• Cash flow from operations was $10.1 million, a decrease of 33% or $5.0 million compared to the prior year period.

Recent Operational Highlights

• Expanded Global Partner Program in the United Kingdom and Germany, adding solutions and support services to further enhance partner growth and operating capabilities.
• Zix added over 40,000 cloud mailboxes in Q3 2021.
• Direct customers and MSP partners started nearly 2,800 trials of Advanced Threat Protection, ZixEncrypt, ZixArchive and Secure File Share in Q3 2021.

Management Commentary
“We delivered strong financial results across the board in the third quarter, highlighted by 18% growth in revenue and ARR, along with solid EBITDA and cash flow generation,” said David Wagner, Zix’s Chief Executive Officer. “The double-digit growth we achieved was driven by strong Zix IP attach rates as well as increasing sales synergies we are realizing across our organization, which produced a record of over 103% net dollar revenue retention rate in Q3. This achievement is a direct reflection of Zix’s successful transformation into a cloud-first organization and underscores the success we are having retaining customers, adding customers onto Secure Cloud, and selling CloudAlly backup into our base. CloudAlly continues to perform exceptionally well, with a record number of transacting partners coming online in Q3, helping produce 20% sequential growth and 74% year-over-year growth in this segment.”

Zix’s Chief Financial Officer Dave Rockvam commented: “In addition to robust, double-digit revenue and ARR increases as well as strong cash flow generation, we also delivered meaningful quarter-to-quarter adjusted EBITDA dollar expansion in Q3, highlighting our success in layering on organic, higher-margin products. We believe our financial performance also reflects the economic recovery we’re seeing globally across small and medium-sized businesses.”

For detailed financial reports, visit: http://investor.zixcorp.com/news-releases/news-release-details/zix-reports-third-quarter-2021-financial-results

Zix Company Contact
Geoff Bibby
1-214-370-2241
gbibby@zixcorp.com

Zix Investor Contact
Matt Glover and Tom Colton
Gateway Investor Relations
1-949-574-3860
ZIXI@gatewayir.com

Source: Zix Corporation

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