iPass (IPAS) Misses Q2 EPS by 3c

iPass (NASDAQ: IPAS) reported Q2 EPS of ($0.10), $0.03 worse than the analyst estimate of ($0.07). Revenue for the quarter came in at $15.6 million versus the consensus estimate of $16.49 million.

iPass sees Q3 2015 revenue of $15-17 million.

"Since joining iPass five months ago, our mantra has been change," said iPass CEO Gary Griffiths. "Change has been realized across all elements of the company, from a new board of directors, a new sales model, a new expense structure, and a new product roadmap. Moreover, we have a new and significantly smaller executive team that has done more than simply reduce expenses. Our streamlined operating structure has made us more nimble and decisive, moving closer to the culture of the startup we should and will be. We've strengthened and expanded our partnership with Microsoft, which has chosen iPass as the Wi-Fi partner for Windows 10. Meanwhile, HP shipments with iPass have exceeded the commitment in only half of the contract period, marked by an increase in deferred revenue from $1.5M in the first quarter to $2.1M in the second quarter of 2015."

"Most importantly, our strategy of 'Unlimited, Everywhere, and Invisible' is off to a fast start. Despite launching in late April, we've seen healthy quarterly ACV of $1.3M, directly attributed to our focus on UNLIMITED. The appeal of UNLIMITED has been broad, closing accounts with as few as 10 seats and as many as 10,000. The velocity of the sales has confirmed our belief that the UNLIMITED subscription model would shorten the 9-18 month average sales cycles iPass has experienced in the past. With approximately 20 UNLIMITED deals closed in only two months, we believe our intuition was correct. These sales included selling UNLIMITED into our install base, including recovery of three accounts that had previously terminated."

"Meanwhile, our leadership in global Wi-Fi footprint has expanded dramatically, notably with the partnership with Devicescape announced today that will ultimately add 20M hotspots. Combined with other partnerships which will be announced on the earnings call, we expect the iPass global Wi-Fi network will approximate 50M hotspots by the end of 2015 with roll outs starting immediately, already exceeding our stated goal to double our footprint by the end of the year. EVERYWHERE is quickly becoming a reality, and as this network grows, we are building the foundation to become the obvious choice for providing WiFi-first connectivity, globally, for the Internet of Things."

"The sheer mass of global hotspots is critically important in establishing a dominant global position in connectivity, but location is equally important. To that end, during this quarter, we've added a number of new hotspots in key locations around the world: more airports, hotels, trains and train stations, and public venues. And the product has already achieved the first milestones down the path towards being INVISIBLE. Our increasing bookings and deferred revenue are building the foundation for revenue growth as our significantly reduced operating expenses further shorten the path to profitability."

For earnings history and earnings-related data on iPass (IPAS) click here.

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