8-K
false 0001237746 0001237746 2020-04-30 2020-04-30

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 30, 2020

 

Endurance International Group Holdings, Inc.

(Exact Name of Registrant as Specified in Charter)

 

Delaware

 

001-36131

 

46-3044956

(State or Other Jurisdiction

 

(Commission

 

(IRS Employer

of Incorporation)

 

File Number)

 

Identification No.)

10 Corporate Drive , Suite 300

Burlington , MA

 

01803

(Address of Principal Executive Offices)

 

(Zip Code)

Registrant’s telephone number, including area code: (781) 852-3200

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange

on which registered

Common Stock, $0.0001 par value

 

EIGI

 

The Nasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

 

 


Item 2.02. Results of Operations and Financial Condition

On April 30, 2020, Endurance International Group Holdings, Inc. issued a press release announcing certain financial results and other information for the quarter ended March 31, 2020. The full text of the press release issued in connection with the announcement is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information reported under Item 2.02 in this Form 8-K (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Exchange Act or the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such a filing.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits

         
 

99.1

   

Press release issued by Endurance International Group Holdings, Inc. on April 30, 2020

         
 

104

   

The cover page from this Current Report on Form 8-K, formatted in Inline XBRL


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

ENDURANCE INTERNATIONAL GROUP HOLDINGS, INC.

             

Date: April 30, 2020

 

 

 

         

 

 

/s/ Marc Montagner

 

 

(Signature)

 

 

Name:

 

Marc Montagner

 

 

Title:

 

Chief Financial Officer

EX-99.1

Exhibit 99.1

 

LOGO

Endurance International Group Reports 2020 First Quarter Results

 

   

GAAP revenue of $272.2 million

 

   

Net loss of $2.2 million

 

   

Adjusted EBITDA of $72.5 million

 

   

Cash flow from operations of $34.9 million

 

   

Free cash flow of $23.7 million

 

   

Total subscribers on platform were approximately 4.780 million at March 31, 2020

BURLINGTON, MA (April 30, 2020) — Endurance International Group Holdings, Inc. (NASDAQ: EIGI), a leading provider of cloud-based platform solutions designed to help small and medium-sized businesses succeed online, today reported financial results for its first quarter ended March 31, 2020.

“Our first quarter results reflect continued progress operationally and financially across our scale strategic platform. Our focused investment in our strategic brands has resulted in positive subscriber growth for our third consecutive quarter, adjusted for the sale of SinglePlatform,” commented Jeffrey H. Fox, president and chief executive officer of Endurance International Group. “Obviously, the COVID-19 pandemic has disrupted the global economy and it’s still too early to predict the extent of the pandemic’s effect on our business. At this time, our execution remains consistent with our 2020 growth plan, but we believe it is prudent to suspend guidance while we continue to focus on the health and safety of our employees and on delivering value to our customers in this critical time of need.”

First Quarter 2020 Financial Highlights

As previously disclosed, the Company completed the sale of SinglePlatform on December 5, 2019. For year over year comparative purposes, selected figures presented below do not adjust for the sale of SinglePlatform unless noted.

 

   

Revenue for the first quarter of 2020 was $272.2 million, a decrease of 1 percent compared to revenue of $273.7 million in the first quarter of 2019, excluding SinglePlatform. Revenue in the first quarter of 2019 was $280.7 million, including the contribution of approximately $7.0 million from SinglePlatform.


   

Net loss for the first quarter of 2020 was $2.2 million, or $(0.02) per diluted share, compared to net loss of $3.5 million, or $(0.02) per diluted share, for the first quarter of 2019.

 

   

Adjusted EBITDA for the first quarter of 2020 was $72.5 million, a decrease of 6 percent compared to first quarter 2019 adjusted EBITDA of $76.9 million, excluding SinglePlatform. Adjusted EBITDA in the first quarter of 2019 was $78.5 million, including the contribution of approximately $1.6 million from SinglePlatform.

 

   

Cash flow from operations for the first quarter of 2020 was $34.9 million, an increase of 132 percent compared to $15.0 million for the first quarter of 2019.

 

   

Free cash flow, defined as cash flow from operations less capital expenditures and financed equipment obligations, for the first quarter of 2020 was $23.7 million, an increase of 236 percent compared to $7.1 million for the first quarter of 2019.

 

   

Under its previously announced authorization, during the quarter the Company repurchased 7,603,620 shares for a total of $12.3 million, at an average price per share of $1.62. Year to date the Company repurchased 8,708,720 shares for a total of $14.4 million, at an average price per share of $1.66.

First Quarter 2020 Operating Highlights

 

   

Total subscribers on platform at March 31, 2020 were approximately 4.780 million, compared to approximately 4.783 million subscribers at March 31, 2019 and approximately 4.766 million subscribers at December 31, 2019. See “Total Subscribers” below.

 

   

Average revenue per subscriber, or ARPS, for the first quarter of 2020 was $19.01, compared to $19.52 for the first quarter 2019 and $19.34 for the fourth quarter of 2019. See “Average Revenue Per Subscriber” below.

Update on Outlook

Given the uncertainty regarding the COVID-19 pandemic and the related economic impact, the Company is suspending the guidance previously issued on February 6, 2020.

Conference Call and Webcast Information

Endurance International Group’s first quarter 2020 financial results teleconference and webcast is scheduled to begin at 8:00 a.m. EDT on Thursday, April 30, 2020. To participate on the live call, analysts and investors should dial (888) 734-0328 at least ten minutes prior to the call. Endurance International Group will also offer a live and archived webcast of the conference call, accessible from the Investor Relations section of the Company’s website at http://ir.endurance.com.

Non-GAAP Financial Measures

In addition to our financial information presented in accordance with GAAP, we use adjusted EBITDA and free cash flow, which are non-GAAP financial measures, to evaluate the operating and financial performance of our business, identify trends affecting our business, develop projections and make strategic business decisions. In this press release, we are also presenting the following additional non-GAAP financial measures for the first quarter of 2019: revenue—excluding SinglePlatform and adjusted

 

2


EBITDA - excluding SinglePlatform. A non-GAAP financial measure is a numerical measure of a company’s operating performance, financial position or cash flow that excludes amounts that are included in the most directly comparable measure calculated and presented in accordance with GAAP or includes amounts that are excluded from the most directly comparable measure calculated and presented in accordance with GAAP.

Our non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in our industry, as other companies in our industry may calculate non-GAAP financial results differently. In addition, there are limitations in using non-GAAP financial measures because they are not prepared in accordance with GAAP and exclude expenses that may have a material impact on our reported financial results. For example, adjusted EBITDA excludes interest expense, which has been and will continue to be for the foreseeable future a significant recurring expense in our business. The presentation of non-GAAP financial information is not meant to be considered in isolation from, or as a substitute for, the most directly comparable financial measures prepared in accordance with GAAP. We urge you to review the additional information about adjusted EBITDA and free cash flow shown below, including the reconciliations of these non-GAAP financial measures to their comparable GAAP financial measures, and not to rely on any single financial measure to evaluate our business.

Revenue - excluding SinglePlatform is a non-GAAP financial measure that we calculate as revenue excluding revenue contributed by our SinglePlatform business, which we sold on December 5, 2019. We believe that this measure helps investors evaluate and compare our past performance excluding the impact of a non-core business that we have sold.

Adjusted EBITDA is a non-GAAP financial measure that we calculate as net (loss) income, excluding the impact of interest expense (net), income tax expense (benefit), depreciation, amortization of other intangible assets, stock-based compensation, restructuring expenses, transaction expenses and charges, gain on sale of business, (gain) loss of unconsolidated entities, impairment of goodwill and other longlived assets, and shareholder litigation reserve. We view adjusted EBITDA as a performance measure and believe it helps investors evaluate and compare our core operating performance from period to period.

Adjusted EBITDA - excluding SinglePlatform is a non-GAAP financial measure that we calculate as adjusted EBITDA less adjusted EBITDA contributed by our SinglePlatform business, which we sold on December 5, 2019. Adjusted EBITDA contributed by our SinglePlatform business excludes the impact of corporate costs that we had allocated to SinglePlatform, since we are continuing to incur these costs following the sale. We believe that this measure helps investors evaluate and compare our past performance excluding the impact of a non-core business that we have sold.

Free Cash Flow, or FCF, is a non-GAAP financial measure that we calculate as cash flow from operations less capital expenditures and financed equipment. We believe that FCF provides investors with an indicator of our ability to generate positive cash flows after meeting our obligations with regard to capital expenditures (including financed equipment).

 

3


Key Operating Metrics

Total Subscribers - We define total subscribers as the approximate number of subscribers that, as of the end of a period, are identified as subscribing directly to our products on a paid basis, excluding accounts that access our solutions via resellers or that purchase only domain names from us. Subscribers of more than one brand, and subscribers with more than one distinct billing relationship or subscription with us, are counted as separate subscribers. Total subscribers for a period reflects adjustments to add or subtract subscribers as we integrate acquisitions and/or are otherwise able to identify subscribers that meet, or do not meet, this definition of total subscribers. In the first quarter of 2020, these adjustments had a negligible impact on total subscriber count.

Average Revenue Per Subscriber (ARPS) - We calculate ARPS as the amount of revenue we recognize in a period, including marketing development funds and other revenue not received from subscribers, divided by the average of the number of total subscribers at the beginning of the period and at the end of the period, which we refer to as average subscribers for the period, divided by the number of months in the period. See definition of “Total Subscribers” above. ARPS does not represent an exact measure of the average amount a subscriber spends with us each month, since our calculation of ARPS is impacted by revenues generated by non-subscribers.

Forward-Looking Statements

This press release includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements about the potential impact of the COVID-19 pandemic. These forward-looking statements include, but are not limited to, plans, objectives, expectations and intentions and other statements contained in this press release that are not historical facts, and statements identified by words such as “expects,” “believes,” “estimates,” “may,” “continue,” “positions,” “confident,” and variations of such words or words of similar meaning and the use of future dates. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, we can give no assurance that these plans, intentions, expectations or strategies will be attained or achieved. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control including, without limitation: the possibility that the impact of the COVID-19 pandemic on the economy and our business will be different from or more extensive than we expect; the possibility that our planned investment initiatives will not result in the anticipated benefits to our business; the possibility that we will be unable to maintain subscriber growth; an adverse impact on our

 

4


business from litigation or regulatory proceedings or commercial disputes; an adverse impact on our business from our substantial indebtedness and the cost of servicing our debt; the rate of growth of the Small and Medium Business (“SMB”) market for our solutions or the impact of COVID-19 on that market; our inability increase sales to our existing subscribers or retain our existing subscribers; system or Internet failures; our inability to maintain or improve our competitive position or market share; and other risks and uncertainties discussed in our filings with the SEC, including those set forth under the caption “Risk Factors” in our Annual Report on Form 10-K for the period ended December 31, 2019 filed with the SEC on February 14, 2020 and other reports we file with the SEC. We assume no obligation to update any forward-looking statements contained in this document as a result of new information, future events or otherwise.

About Endurance International Group

Endurance International Group Holdings, Inc. (NASDAQ:EIGI) helps millions of small businesses worldwide with products and technology to enhance their online web presence, email marketing, business solutions, and more. The Endurance family of brands includes: Constant Contact, Bluehost, HostGator and Domain.com, among others. Headquartered in Burlington, Massachusetts, Endurance employs approximately 3,600 people across the United States, Brazil, India and the Netherlands. For more information, visit: www.endurance.com.

Endurance International Group and the compass logo are trademarks of The Endurance International Group, Inc. Constant Contact, the Constant Contact logo and other brand names of Endurance International Group are trademarks of The Endurance International Group, Inc. or its subsidiaries.

Investor Contact:

Angela White

Endurance International Group

(781) 852-3450

ir@endurance.com

Press Contact:

Kristen Andrews

Endurance International Group

(781) 418-6716

press@endurance.com

 

5


Endurance International Group Holdings, Inc.

Consolidated Balance Sheets

(in thousands, except share and per share amounts)

 

     December 31,
2019
    March 31,
2020
 
           (unaudited)  

Assets

    

Current assets:

    

Cash and cash equivalents

   $ 111,265     $ 111,808  

Restricted cash

     1,732       1,731  

Accounts receivable

     10,224       10,631  

Prepaid domain name registry fees

     55,237       56,584  

Prepaid commissions

     38,435       38,421  

Prepaid and refundable taxes

     6,810       5,247  

Prepaid expenses and other current assets

     23,883       30,842  
  

 

 

   

 

 

 

Total current assets

     247,586       255,264  

Property and equipment—net

     85,925       92,184  

Operating lease right-of-use assets

     90,519       84,878  

Goodwill

     1,835,310       1,834,329  

Other intangible assets—net

     245,002       227,670  

Deferred financing costs—net

     1,778       1,559  

Investments

     15,000       15,000  

Prepaid domain name registry fees, net of current portion

     11,107       11,536  

Prepaid commissions, net of current portion

     48,780       52,050  

Deferred tax asset

     64       123  

Other assets

     3,015       3,258  
  

 

 

   

 

 

 

Total assets

   $ 2,584,086     $ 2,577,851  
  

 

 

   

 

 

 

Liabilities and stockholders’ equity

    

Current liabilities:

    

Accounts payable

   $ 10,054     $ 14,679  

Accrued expenses

     64,560       66,338  

Accrued taxes

     251       471  

Accrued interest

     23,434       13,243  

Deferred revenue

     369,475       377,518  

Operating lease liabilities—short term

     21,193       20,309  

Current portion of notes payable

     31,606       31,606  

Current portion of financed equipment

     790       6,081  

Deferred consideration—short term

     2,201       2,225  

Other current liabilities

     2,165       2,588  
  

 

 

   

 

 

 

Total current liabilities

     525,729       535,058  

Long-term deferred revenue

     99,652       102,092  

Operating lease liabilities—long term

     78,151       73,340  

Notes payable—long term, net of original issue discounts of $16,859 and $15,640 and deferred financing costs of $25,690 and $23,962, respectively

     1,649,867       1,641,938  

Financed equipment—long term

     —         597  

Deferred tax liability

     27,097       25,799  

Other liabilities

     6,636       6,982  
  

 

 

   

 

 

 

Total liabilities

     2,387,132       2,385,806  
  

 

 

   

 

 

 

Stockholders’ equity:

    

Preferred Stock—par value $0.0001; 5,000,000 shares authorized; no shares issued or outstanding

     —         —    

Common Stock—par value $0.0001; 500,000,000 shares authorized; 146,259,868 and 147,570,072 shares issued at December 31, 2019 and March 31, 2020, respectively; 146,259,868 and 139,966,452 outstanding at December 31, 2019 and March 31, 2020, respectively

     15       15  

Additional paid-in capital

     996,958       1,006,807  

Treasury stock, at cost, 0 and 7,603,620 shares at December 31, 2019 and March 31, 2020, respectively

     —         (12,329

Accumulated other comprehensive loss

     (4,088     (4,273

Accumulated deficit

     (795,931     (798,175
  

 

 

   

 

 

 

Total stockholders’ equity

     196,954       192,045  
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 2,584,086     $ 2,577,851  
  

 

 

   

 

 

 

 

6


Endurance International Group Holdings, Inc.

Consolidated Statements of Operations and Comprehensive Income (Loss)

(unaudited)

(in thousands, except share and per share amounts)

 

     Three Months Ended March 31,  
     2019     2020  

Revenue

   $ 280,683     $ 272,194  

Cost of revenue

     123,854       116,264  
  

 

 

   

 

 

 

Gross profit

     156,829       155,930  
  

 

 

   

 

 

 

Operating expense:

    

Sales and marketing

     66,588       67,191  

Engineering and development

     23,694       26,874  

General and administrative

     31,393       30,876  
  

 

 

   

 

 

 

Total operating expense

     121,675       124,941  
  

 

 

   

 

 

 

Income from operations

     35,154       30,989  
  

 

 

   

 

 

 

Other income (expense):

    

Interest income

     291       170  

Interest expense

     (37,214     (32,734
  

 

 

   

 

 

 

Total other expense—net

     (36,923     (32,564
  

 

 

   

 

 

 

Loss before income taxes and equity earnings of unconsolidated entities

     (1,769     (1,575

Income tax expense

     1,719       669  
  

 

 

   

 

 

 

Net loss

   $ (3,488   $ (2,244
  

 

 

   

 

 

 

Comprehensive (loss) income:

    

Foreign currency translation adjustments

     (401     (557

Unrealized (loss) gain on cash flow hedge, net of tax benefit (expense) of $304 and ($119) for the three months ended March 31, 2019 and 2020, respectively

     (961     372  
  

 

 

   

 

 

 

Total comprehensive loss

   $ (4,850   $ (2,429
  

 

 

   

 

 

 

Basic net loss per share

   $ (0.02   $ (0.02
  

 

 

   

 

 

 

Diluted net loss per share

   $ (0.02   $ (0.02
  

 

 

   

 

 

 

Weighted-average common shares used in computing net loss per share:

    
  

 

 

   

 

 

 

Basic

     143,512,293       146,027,241  
  

 

 

   

 

 

 

Diluted

     143,512,293       146,027,241  
  

 

 

   

 

 

 

 

7


Endurance International Group Holdings, Inc.

Consolidated Statements of Cash Flows

(unaudited)

(in thousands)

 

       Three Months Ended March 31,  
       2019     2020  

Cash flows from operating activities:

      

Net loss

     $ (3,488   $ (2,244

Adjustments to reconcile net loss to net cash provided by operating activities:

      

Depreciation of property and equipment

       11,206       12,696  

Amortization of other intangible assets

       21,120       17,311  

Amortization of deferred financing costs

       1,733       1,853  

Amortization of net present value of deferred consideration

       61       24  

Amortization of original issue discounts

       1,087       1,184  

Stock-based compensation

       9,016       9,836  

Deferred tax expense

       (906     (1,478

Loss on sale of assets

       26       —    

Gain on early extinguishment of debt

       —         (11

Changes in operating assets and liabilities, net of acquisitions:

      

Accounts receivable

       (1,383     (696

Prepaid and refundable taxes

       (591     1,359  

Prepaid expenses and other current assets

       (2,292     (12,997

Leases right-of-use asset, net

       573       (37

Accounts payable and accrued expenses

       (31,512     (4,869

Deferred revenue

       10,399       12,979  
    

 

 

   

 

 

 

Net cash provided by operating activities

       15,049       34,910  
    

 

 

   

 

 

 

Cash flows from investing activities:

      

Purchases of property and equipment

       (5,423     (9,916
    

 

 

   

 

 

 

Net cash used in investing activities

       (5,423     (9,916
    

 

 

   

 

 

 

Cash flows from financing activities:

      

Repayments of term loans

       (25,000     (7,902

Repayments of senior notes

       —         (2,836

Purchase of treasury stock

       —         (11,636

Principal payments on financed equipment

       (2,570     (1,254

Proceeds from exercise of stock options

       5       13  
    

 

 

   

 

 

 

Net cash used in financing activities

       (27,565     (23,615
    

 

 

   

 

 

 

Net effect of exchange rate on cash and cash equivalents and restricted cash

       (622     (837
    

 

 

   

 

 

 

Net (decrease) increase in cash and cash equivalents and restricted cash

       (18,561     542  

Cash and cash equivalents and restricted cash:

      

Beginning of period

       90,576       112,997  
    

 

 

   

 

 

 

End of period

     $ 72,015     $ 113,539  
    

 

 

   

 

 

 

Supplemental cash flow information:

      

Interest paid

     $ 44,259     $ 39,434  

Income taxes paid (refunded)

     $ 1,866     $ (21

Assets acquired under equipment financing

     $ —       $ 7,704  

 

8


GAAP to Non-GAAP Reconciliation – Adjusted EBITDA

The following table presents a reconciliation of net (loss) income calculated in accordance with GAAP to adjusted EBITDA (all data in thousands):

 

     Three Months Ended March 31,  
     2019      2020  

Net (loss) income

   $ (3,488    $ (2,244

Interest expense, net (1)

     36,923        32,564  

Income tax expense

     1,719        669  

Depreciation

     11,206        12,696  

Amortization of other intangible assets

     21,120        17,311  

Stock-based compensation

     9,016        9,836  

Restructuring expenses

     2,015        1,682  
  

 

 

    

 

 

 

Adjusted EBITDA

   $ 78,511      $ 72,514  
  

 

 

    

 

 

 

 

  (1)

Interest expense includes impact of amortization of deferred financing costs, original issuance discounts and interest income.

GAAP to Non-GAAP Reconciliation – Free Cash Flow

The following table reflects the reconciliation of cash flow from operations to free cash flow (“FCF”) (all data in thousands):

 

     Three Months Ended March 31,  
     2019      2020  

Cash flows from operations

   $ 15,049      $ 34,910  

Less:

     

Capital expenditures and financed equipment obligations (1)

     (7,993      (11,170
  

 

 

    

 

 

 

Free cash flow

   $ 7,056      $ 23,740  
  

 

 

    

 

 

 

 

  (1)

Capital expenditures during the three months ended March 31, 2019 and 2020 includes $2.6 million and $1.3 million, respectively, of principal payments under a three year agreement for equipment financing. The remaining balance on the equipment financing is $6.7 million as of March 31, 2020.

 

9


Average Revenue Per Subscriber - Calculation and Segment Detail

From fiscal year 2017 through fiscal year 2019, we reported our financial results in three reportable segments. In the second half of 2019, we started the process of simplifying our organization to support our two key strategic platforms, web presence (including our web hosting and domain offerings) and email marketing. During the three months ended March 31, 2020, we modified our internal reporting structure to reflect these changes in our structure and leadership, and also changed the name of the email marketing segment to the “digital marketing” segment. This resulted in consolidation of the former domain segment into the web presence segment. We now report our financial results in two segments—web presence (including domains) and digital marketing.

 

   

Web presence . The web presence segment consists of our web hosting brands, including Bluehost and HostGator, as well as our domain-focused brands such as Domain.com, ResellerClub and LogicBoxes. This segment includes web hosting, website security, website design tools and services, e-commerce products, domain names and domain privacy. It also includes the sale of domain management services to resellers and end users, as well as premium domain names, and generates advertising revenue from domain name parking. The results presented below for the web presence segment include the former domain segment.

 

   

Digital marketing . The digital marketing segment consists of Constant Contact email marketing tools and related products. This segment also generates revenue from sales of our Constant Contact-branded website builder tool and our Ecomdash inventory management and marketplace listing solution. For most of 2019, the digital marketing segment also included the SinglePlatform digital storefront business, which was sold on December 5, 2019.

The following table presents the calculation of ARPS, on a consolidated basis and by segment (all data in thousands, except ARPS data):

 

     Three Months Ended March 31,  
     2019      2020  

Consolidated revenue

   $ 280,683      $ 272,194  

Consolidated total subscribers

     4,783        4,780  

Consolidated average subscribers for the period

     4,793        4,773  

Consolidated ARPS

   $ 19.52      $ 19.01  

Web presence revenue

   $ 177,943      $ 174,290  

Web presence subscribers

     4,288        4,309  

Web presence average subscribers for the period

     4,297        4,303  

Web presence ARPS

   $ 13.80      $ 13.50  

Digital marketing revenue

   $ 102,740      $ 97,904  

Digital marketing subscribers

     495        471  

Digital marketing average subscribers for the period

     496        470  

Digital marketing ARPS

   $ 69.11      $ 69.50  

 

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The following table presents revenue, gross profit, and a reconciliation by segment of net (loss) income calculated in accordance with GAAP to adjusted EBITDA (all data in thousands):

 

     Three Months Ended March 31, 2019  
     Web presence      Digital
marketing
     Total  

Revenue

   $ 177,943      $ 102,740      $ 280,683  

Gross profit

   $ 82,782      $ 74,047      $ 156,829  

Net (loss) income

   $ (9,426    $ 5,938      $ (3,488

Interest expense, net (1)

     19,529        17,394        36,923  

Income tax expense

     1,091        628        1,719  

Depreciation

     8,882        2,324        11,206  

Amortization of other intangible assets

     9,837        11,283        21,120  

Stock-based compensation

     5,933        3,083        9,016  

Restructuring expenses

     661        1,354        2,015  
  

 

 

    

 

 

    

 

 

 

Adjusted EBITDA

   $ 36,507      $ 42,004      $ 78,511
  

 

 

    

 

 

    

 

 

 

 

     Three Months Ended March 31, 2020  
     Web presence      Digital
marketing
     Total  

Revenue

   $ 174,290      $ 97,904      $ 272,194  

Gross profit

   $ 84,142      $ 71,788      $ 155,930  

Net (loss) income

   $ (7,234    $ 4,990      $ (2,244

Interest expense, net (1)

     15,604        16,960        32,564  

Income tax expense

     428        241        669  

Depreciation

     10,423        2,273        12,696  

Amortization of other intangible assets

     7,590        9,721        17,311  

Stock-based compensation

     6,590        3,246        9,836  

Restructuring expenses

     1,032        650        1,682  
  

 

 

    

 

 

    

 

 

 

Adjusted EBITDA

   $ 34,433      $ 38,081      $ 72,514  
  

 

 

    

 

 

    

 

 

 

 

  (1)

Interest expense includes impact of amortization of deferred financing costs, original issuance discounts and interest income.

  *

Excluding SinglePlatform, which contributed approximately $1.6 million in adjusted EBITDA (excluding the impact of corporate cost allocations) in the first quarter of 2019, adjusted EBITDA would have been approximately $76.9 million.

 

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