Zix Corporation (NASDAQ:ZIXI) Q3 2019 Earnings Conference Call - Final Transcript

Oct 31, 2019 • 05:00 pm ET

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Zix Corporation (NASDAQ:ZIXI) Q3 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good morning and welcome to Zix' Third Quarter 2019 Earnings Conference Call. My name is Don and I will be your operator today. [Operator Instructions]

Joining us for today's presentation are the company's President and CEO, David Wagner; CFO, David Rockvam; and Vice President of Marketing; Geoff Bibby. Following their remarks we will open the call for your questions. I would like to remind everyone that this call will be recorded and made available for replay via link in the Investor Relations section of the company's website.

Now I would like to turn the call over to Geoff Bibby. Sir, please proceed.

Executive
Geoff Bibby

Thank you, Don. Good morning everyone, and thank you, for joining our third quarter 2019 earnings call. With me today are CEO, Dave Wagner; and the CFO, Dave Rochvam. Before the market opened we issued a press release announcing our results for the third quarter ended September 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 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 Factors section in our most recent Form 10-K and 10-Q filings with the SEC provides examples of those risks. During the call we will 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 would like to turn the call over to Dave Wagner, for his opening remarks. Dave?

Executive
David Wagner

Thanks Geoff. Happy Halloween and thank you everyone for joining us this morning. The third quarter was a continuation of the same strong operating performance we have been achieving since the acquisition of a AppRiver back in February of this year. We delivered 15% organic revenue growth for the second consecutive quarter and we expanded our adjusted EBITDA margins to 24% with organic ARR growth of 18%. Organically we are delivering on The Rule of 40 and inorganically year-over-year total revenue for the third quarter was up 168% and adjusted EBITDA was up 116%. The 18% organic year-over-year ARR growth in the quarter means that we have crossed the $200 million ARR threshold which is an important growth goal as we continue to achieve a greater scale that