Zix Corporation (NASDAQ:ZIXI) Q2 2019 Earnings Conference Call Transcript

Aug 01, 2019 • 05:00 pm ET

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Zix Corporation (NASDAQ:ZIXI) Q2 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good afternoon. Welcome to Zix's Second Quarter 2019 Earnings Conference Call. My name is Brian, and I will be your operator this afternoon. Joining us for today's presentation are the Company's President and Chief Executive Officer, David Wagner; Chief Financial Officer, David Rockvam; and Vice President and General Counsel Noah Webster.

Following their remarks, we will open the call for your questions. I would like to remind everyone that this call is being recorded and made available for replay via a link in the Investor Relations section of the Company's website.

Now I'd like to turn the call over to Noah Webster. Sir, please proceed.

Executive
Noah Webster

Thank you, Brian. Good afternoon, everyone, and thank you for joining our second quarter 2019 earnings conference call. With me today are our CEO Dave Wagner and our CFO Dave Rockvam. After the market closed, we issued a press release announcing our results for the second quarter ended June 30, 2019. A copy of which is available in the Investor Relations section of our website at www.zixcorp.com.

Please note that during the course of this call, we will make forward-looking statements regarding future events and the future financial performance of the Company. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. It's important to note also that the company undertakes no obligation to update such statements. We caution you to consider the risk factors that could cause actual results to differ materially from those in the forward-looking statements contained in today's press release and in this conference call.

The risk factor section in our most recent Form 10-K and 10-Q filings with the SEC provides examples of those risks. During the call, we'll present both GAAP and non-GAAP financial measures. Non-GAAP financial measures are not intended to be considered in isolation from or a substitute for or superior to our GAAP results. We encourage you to consider all measures when analyzing the Company's performance. A reconciliation of certain GAAP to non-GAAP measures is included in today's press release, which can be found in the Investor Relations section of our website.

Now with that, I'd like to turn the call over to Dave Wagner for his opening remarks, Dave?

Executive
David Wagner

Thanks, Noah. Good afternoon and thank you, everyone, for joining us today. The second quarter of 2019 continued the acceleration of our growth strategy as we delivered another quarter of solid results and made further progress integrating Zix and AppRiver. We achieved overall organic revenue growth of 15% and adjusted EBITDA margins of 23% pushing right up against the rule of 40,' and demonstrating that our business is moving in the right direction with improving profitable growth. Our annual recurring revenue or ARR was up 162% year-over-year and on an organic basis ARR was up 17% across Zix and AppRiver.

I'm happy to report new company records for core Zix; record revenue of $18.7 million representing 7% growth over last quarter, and record ARR