![Page 1: 1Q17 IR Website Deck v1s21.q4cdn.com/.../2016/4Q16-Investor-Presentation_v1.1.pdf(in USD '000s, except for %s) Q1 2015 Q2 2015 Q3 2015 Q4 2015 FY 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016](https://reader035.vdocument.in/reader035/viewer/2022070810/5f08e41c7e708231d4243905/html5/thumbnails/1.jpg)
Investor Presentation
February 2017
![Page 2: 1Q17 IR Website Deck v1s21.q4cdn.com/.../2016/4Q16-Investor-Presentation_v1.1.pdf(in USD '000s, except for %s) Q1 2015 Q2 2015 Q3 2015 Q4 2015 FY 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016](https://reader035.vdocument.in/reader035/viewer/2022070810/5f08e41c7e708231d4243905/html5/thumbnails/2.jpg)
Safe Harbor SlideSafe Harbor Statement
This presentation contains forward-looking statements that involve risks and uncertainties, including statements regarding MobileIron's revenue and other GAAP and non-GAAP financial metrics for the company's third quarter in 2015 and other statements regarding trends in the company's business, including statements regarding MobileIron's GAAP and non-GAAP revenue and operating expense targets, growth in our customer base, increased customer adoption, and expected benefits from new product offerings and MobileIron’s partner ecosystem. There are a significant number of factors that could cause actual results to differ materially from statements made in this presentation, including MobileIron's limited operating history,quarterly fluctuations in MobileIron's operating results, MobileIron's need to develop new solutions and enhancements to compete in rapidly evolving markets, product defects, competitive pressures, customer adoption, changes by operating system providers and mobile device manufacturers, MobileIron's inability to manage growth, the quality of MobileIron support, MobileIron's reliance on channel partners and development of partner ecosystem.
Additional information on potential factors that could affect MobileIron's financial results is included in the company's SECfilings, including its most recent Form 10-K and Form 10-Q. MobileIron does not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.
![Page 3: 1Q17 IR Website Deck v1s21.q4cdn.com/.../2016/4Q16-Investor-Presentation_v1.1.pdf(in USD '000s, except for %s) Q1 2015 Q2 2015 Q3 2015 Q4 2015 FY 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016](https://reader035.vdocument.in/reader035/viewer/2022070810/5f08e41c7e708231d4243905/html5/thumbnails/3.jpg)
VisionUnlock human
potential
MissionProvide security and apps
backbone for modern computing
StrategyBuild scalable, multi-OS
architecture with repeatable business model
![Page 4: 1Q17 IR Website Deck v1s21.q4cdn.com/.../2016/4Q16-Investor-Presentation_v1.1.pdf(in USD '000s, except for %s) Q1 2015 Q2 2015 Q3 2015 Q4 2015 FY 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016](https://reader035.vdocument.in/reader035/viewer/2022070810/5f08e41c7e708231d4243905/html5/thumbnails/4.jpg)
Large Secular Trend of Enterprise Security & Mobility
Leadership Positionin the Magic Quadrant
Rapidly Growing Base with over 10+ million Cumulative seats and 13,500 Cumulative Customers since 2009
High Organic GrowthRecurring Revenue Growth 25% in 2016
Sales Leverage & Reach through Global Channels
Strong ecosystem100+ OS, device, security, cloud, network, apps ISVs
Accelerating Business Modelwith Compelling Economics & Path to Profitability
Data as of fourth quarter 2015
![Page 5: 1Q17 IR Website Deck v1s21.q4cdn.com/.../2016/4Q16-Investor-Presentation_v1.1.pdf(in USD '000s, except for %s) Q1 2015 Q2 2015 Q3 2015 Q4 2015 FY 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016](https://reader035.vdocument.in/reader035/viewer/2022070810/5f08e41c7e708231d4243905/html5/thumbnails/5.jpg)
Two trends power our business
Mobile security
Cloud security
Network security
Enablement
Intelligence
Move to cloudMove to mobile
![Page 6: 1Q17 IR Website Deck v1s21.q4cdn.com/.../2016/4Q16-Investor-Presentation_v1.1.pdf(in USD '000s, except for %s) Q1 2015 Q2 2015 Q3 2015 Q4 2015 FY 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016](https://reader035.vdocument.in/reader035/viewer/2022070810/5f08e41c7e708231d4243905/html5/thumbnails/6.jpg)
Old: Perimeter Model
Enterprise Boundary Collapsing
System imageAnti-malware agents
PerimeterFirewall
Device VPNVDI
Mobile & Cloud Model
Salesforce Office365 Workday SAP Oracle
Concur Google Drive box Dropbox
![Page 7: 1Q17 IR Website Deck v1s21.q4cdn.com/.../2016/4Q16-Investor-Presentation_v1.1.pdf(in USD '000s, except for %s) Q1 2015 Q2 2015 Q3 2015 Q4 2015 FY 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016](https://reader035.vdocument.in/reader035/viewer/2022070810/5f08e41c7e708231d4243905/html5/thumbnails/7.jpg)
![Page 8: 1Q17 IR Website Deck v1s21.q4cdn.com/.../2016/4Q16-Investor-Presentation_v1.1.pdf(in USD '000s, except for %s) Q1 2015 Q2 2015 Q3 2015 Q4 2015 FY 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016](https://reader035.vdocument.in/reader035/viewer/2022070810/5f08e41c7e708231d4243905/html5/thumbnails/8.jpg)
Enterprise Information is Everywhere:
In the datacenter
In the cloud
In mobileapps
On mobile devices
In motion between them
![Page 9: 1Q17 IR Website Deck v1s21.q4cdn.com/.../2016/4Q16-Investor-Presentation_v1.1.pdf(in USD '000s, except for %s) Q1 2015 Q2 2015 Q3 2015 Q4 2015 FY 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016](https://reader035.vdocument.in/reader035/viewer/2022070810/5f08e41c7e708231d4243905/html5/thumbnails/9.jpg)
Apps@WorkEnterprise app store
Docs@WorkSecure content
Web@WorkSecure browsing
Help@WorkTroubleshooting
TunnelPer app VPN
Email+Secure email
Note: Some features will vary by device and deployment model
AppConnectEcosystem
Conditional Access Integration
Policy and Identity Cloud SecurityEnablement Enforcement
MobileIron end-to-end product architecture
![Page 10: 1Q17 IR Website Deck v1s21.q4cdn.com/.../2016/4Q16-Investor-Presentation_v1.1.pdf(in USD '000s, except for %s) Q1 2015 Q2 2015 Q3 2015 Q4 2015 FY 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016](https://reader035.vdocument.in/reader035/viewer/2022070810/5f08e41c7e708231d4243905/html5/thumbnails/10.jpg)
Broad, Integrated Ecosystem
Service providers
Services multiplier
Infrastructure
Mobile awareness
OS/ODM
Device Adoption
Applications
Security
![Page 11: 1Q17 IR Website Deck v1s21.q4cdn.com/.../2016/4Q16-Investor-Presentation_v1.1.pdf(in USD '000s, except for %s) Q1 2015 Q2 2015 Q3 2015 Q4 2015 FY 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016](https://reader035.vdocument.in/reader035/viewer/2022070810/5f08e41c7e708231d4243905/html5/thumbnails/11.jpg)
Significant Business DriversGrow EMM Business: 15-20% Market Growth
Expand TAM: 500M Laptops Increase ASP $ / customer: 10 - 33%
New products
Fed RampCalifornia law
Common criteria
Mobile Apps and Regulatory
Requirement
![Page 12: 1Q17 IR Website Deck v1s21.q4cdn.com/.../2016/4Q16-Investor-Presentation_v1.1.pdf(in USD '000s, except for %s) Q1 2015 Q2 2015 Q3 2015 Q4 2015 FY 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016](https://reader035.vdocument.in/reader035/viewer/2022070810/5f08e41c7e708231d4243905/html5/thumbnails/12.jpg)
Certifications awarded
FedRAMPGovernment Cloud
US-EU Privacy Shield CSfCNSA Commercial Solutions for Classified
FIPS 140-2 Common CriteriaMDMPP V2
SOC 2 Type II
![Page 13: 1Q17 IR Website Deck v1s21.q4cdn.com/.../2016/4Q16-Investor-Presentation_v1.1.pdf(in USD '000s, except for %s) Q1 2015 Q2 2015 Q3 2015 Q4 2015 FY 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016](https://reader035.vdocument.in/reader035/viewer/2022070810/5f08e41c7e708231d4243905/html5/thumbnails/13.jpg)
Why We Win
We secure apps
AppConnect
We secure the network
Sentry
We secure identity
Certs and SSO
![Page 14: 1Q17 IR Website Deck v1s21.q4cdn.com/.../2016/4Q16-Investor-Presentation_v1.1.pdf(in USD '000s, except for %s) Q1 2015 Q2 2015 Q3 2015 Q4 2015 FY 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016](https://reader035.vdocument.in/reader035/viewer/2022070810/5f08e41c7e708231d4243905/html5/thumbnails/14.jpg)
Routes to Market
Operators
VARs
![Page 15: 1Q17 IR Website Deck v1s21.q4cdn.com/.../2016/4Q16-Investor-Presentation_v1.1.pdf(in USD '000s, except for %s) Q1 2015 Q2 2015 Q3 2015 Q4 2015 FY 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016](https://reader035.vdocument.in/reader035/viewer/2022070810/5f08e41c7e708231d4243905/html5/thumbnails/15.jpg)
Financial Overview
![Page 16: 1Q17 IR Website Deck v1s21.q4cdn.com/.../2016/4Q16-Investor-Presentation_v1.1.pdf(in USD '000s, except for %s) Q1 2015 Q2 2015 Q3 2015 Q4 2015 FY 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016](https://reader035.vdocument.in/reader035/viewer/2022070810/5f08e41c7e708231d4243905/html5/thumbnails/16.jpg)
Sales Model: Optimized for Long Term Growth
SELL MORE SEATS
INCR
EASE
$/S
EAT
1) Renew: renewals of subscription and software support agreements on a device basis
Upsell More ProductsIncreased $ per seat
Land New CustomersSubscription or Perpetual
Expand OrdersExisting Customer Upside
RenewHigh Renewal Rate
MCM MAM
MDM
Kerberos
![Page 17: 1Q17 IR Website Deck v1s21.q4cdn.com/.../2016/4Q16-Investor-Presentation_v1.1.pdf(in USD '000s, except for %s) Q1 2015 Q2 2015 Q3 2015 Q4 2015 FY 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016](https://reader035.vdocument.in/reader035/viewer/2022070810/5f08e41c7e708231d4243905/html5/thumbnails/17.jpg)
Revenue Mix Shifting Towards Subscription
See earnings press release for non-GAAP reconciliation
Shift from Perpetual to Subscription64% to 25%
HigherNet Present Value on Subscription
Increased Predictability
![Page 18: 1Q17 IR Website Deck v1s21.q4cdn.com/.../2016/4Q16-Investor-Presentation_v1.1.pdf(in USD '000s, except for %s) Q1 2015 Q2 2015 Q3 2015 Q4 2015 FY 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016](https://reader035.vdocument.in/reader035/viewer/2022070810/5f08e41c7e708231d4243905/html5/thumbnails/18.jpg)
Perpetual 32%
Subscription 36%
Software Support/Services
32%
4Q REVENUE
$45.5M
+6%
4Q YoY Revenue Growth by Category
$42.9 $45.5
-1.0
+2.0 +1.6
![Page 19: 1Q17 IR Website Deck v1s21.q4cdn.com/.../2016/4Q16-Investor-Presentation_v1.1.pdf(in USD '000s, except for %s) Q1 2015 Q2 2015 Q3 2015 Q4 2015 FY 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016](https://reader035.vdocument.in/reader035/viewer/2022070810/5f08e41c7e708231d4243905/html5/thumbnails/19.jpg)
Recurring Billings and Revenue
Recurring Billings Recurring Revenue
Billings Model
Perpetual (One Time)
Software Support
Term Subscription(12/24/36 Month)
Monthly Recurring (MRC)Billed Each Month by Service Provider
Not in Deferred Revenue
Footnotes:1) See earnings press release for non-GAAP reconciliation2) Recurring billings: Billings from subscription (term and MRC) plus service support. 3) Recurring revenue: revenue from subscription (term and MRC) plus service support.
46% CAGR 49% CAGR
![Page 20: 1Q17 IR Website Deck v1s21.q4cdn.com/.../2016/4Q16-Investor-Presentation_v1.1.pdf(in USD '000s, except for %s) Q1 2015 Q2 2015 Q3 2015 Q4 2015 FY 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016](https://reader035.vdocument.in/reader035/viewer/2022070810/5f08e41c7e708231d4243905/html5/thumbnails/20.jpg)
Billings and revenue shift to recurring modelBillings mix Revenue mix
Footnotes:1) See earnings press release for non-GAAP reconciliation2) Recurring billings: Billings from subscription (term and MRC) plus service support. 3) Recurring revenue: revenue from subscription (term and MRC) plus service support.
![Page 21: 1Q17 IR Website Deck v1s21.q4cdn.com/.../2016/4Q16-Investor-Presentation_v1.1.pdf(in USD '000s, except for %s) Q1 2015 Q2 2015 Q3 2015 Q4 2015 FY 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016](https://reader035.vdocument.in/reader035/viewer/2022070810/5f08e41c7e708231d4243905/html5/thumbnails/21.jpg)
Focus on Expense Optimization
4Q16: Non-GAAP Operating expenses of $41.1M• Down $0.9M from 4Q15• Down 7% as a % of revenue
Non-GAAP Operating Expenses as % of Revenue
Non-GAAP Target Model Target
Gross Margin 85% – 87%
Sales & Marketing 33% - 36%
Research & Development 18% – 20%
General & Admin 7% - 9%
Operating Income 20% - 25%
30% 35% 30%
70% 51%50%
15%
15%11%
4Q 14 4Q 15 4Q 16
Research & Development Sales & Marketing General & Admin
114%
97%90%
Footnotes:1) See earnings press release for non-GAAP reconciliation2) Recurring billings: Billings from subscription (term and MRC) plus service support. 3) Recurring revenue: revenue from subscription (term and MRC) plus service support.
![Page 22: 1Q17 IR Website Deck v1s21.q4cdn.com/.../2016/4Q16-Investor-Presentation_v1.1.pdf(in USD '000s, except for %s) Q1 2015 Q2 2015 Q3 2015 Q4 2015 FY 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016](https://reader035.vdocument.in/reader035/viewer/2022070810/5f08e41c7e708231d4243905/html5/thumbnails/22.jpg)
![Page 23: 1Q17 IR Website Deck v1s21.q4cdn.com/.../2016/4Q16-Investor-Presentation_v1.1.pdf(in USD '000s, except for %s) Q1 2015 Q2 2015 Q3 2015 Q4 2015 FY 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016](https://reader035.vdocument.in/reader035/viewer/2022070810/5f08e41c7e708231d4243905/html5/thumbnails/23.jpg)
MobileIron Confidential
Quarterly GAAP to Non-GAAP Reconciliations
![Page 24: 1Q17 IR Website Deck v1s21.q4cdn.com/.../2016/4Q16-Investor-Presentation_v1.1.pdf(in USD '000s, except for %s) Q1 2015 Q2 2015 Q3 2015 Q4 2015 FY 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016](https://reader035.vdocument.in/reader035/viewer/2022070810/5f08e41c7e708231d4243905/html5/thumbnails/24.jpg)
GAAP to Non-GAAP Reconciliation
(inUSD'000s,exceptfor%s) Q12015 Q22015 Q32015 Q42015 FY2015 Q12016 Q22016 Q32016 Q42016 FY2016GAAPrevenue 33,494$ 34,757$ 38,002$ 43,047$ 149,300$ 38,007$ 38,881$ 41,566$ 45,531$ 163,985$VSOErevenuepriorto2013 (771) (616) (326) (129) (1,842) - - - - -
Non-GAAPrevenue 32,723$ 34,141$ 37,676$ 42,918$ 147,458$ 38,007$ 38,881$ 41,566$ 45,531$ 163,985$
GAAPgrossprofit 26,999$ 28,188$ 30,429$ 35,506$ 121,122$ 30,737$ 30,764$ 33,757$ 38,179$ 133,437$VSOErevenuepriorto2013 (771) (616) (326) (129) (1,842) - - - - -Amortizationofintangibles 223 223 223 200 869 154 154 154 154 616Stock-basedcompensationexpenses 431 443 1,056 845 2,775 390 1,055 747 851 3,043Restructuringexpense - - - - - - - 181 - 181
Non-GAAPgrossprofit 26,882$ 28,238$ 31,382$ 36,422$ 122,924$ 31,281$ 31,973$ 34,839$ 39,184$ 137,277$Non-GAAPgrossmargin( non- GA A P pro f it over non- GA A P revenue) 82.2% 82.7% 83.3% 84.9% 83.4% 82.3% 82.2% 83.8% 86.1% 83.7%
![Page 25: 1Q17 IR Website Deck v1s21.q4cdn.com/.../2016/4Q16-Investor-Presentation_v1.1.pdf(in USD '000s, except for %s) Q1 2015 Q2 2015 Q3 2015 Q4 2015 FY 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016](https://reader035.vdocument.in/reader035/viewer/2022070810/5f08e41c7e708231d4243905/html5/thumbnails/25.jpg)
GAAP to Non-GAAP Reconciliation – cont.
(inUSD'000s,exceptfor%s) Q12015 Q22015 Q32015 Q42015 FY2015 Q12016 Q22016 Q32016 Q42016 FY2016Researchanddevelopment-GAAP 13,501$ 14,899$ 16,969$ 16,504$ 61,873$ 16,927$ 18,019$ 16,238$ 16,214$ 67,398$Stock-basedcompensationexpenses (1,728) (2,149) (3,832) (2,898) (10,607) (2,601) (3,812) (2,709) (2,606) (11,728)
Researchanddevelopment-non-GAAP 11,773$ 12,750$ 13,137$ 13,606$ 51,266$ 14,326$ 14,207$ 13,529$ 13,608$ 55,670$As%ofnon-GAAPrevenue 36% 37% 35% 32% 35% 38% 37% 33% 30% 34%
Salesandmarketing-GAAP 25,805$ 29,037$ 25,855$ 24,822$ 105,519$ 25,669$ 27,246$ 24,001$ 24,759$ 101,675$Stock-basedcompensationexpenses (1,834) (2,193) (2,586) (2,894) (9,507) (3,119) (2,992) (2,307) (2,056) (10,474)
Salesandmarketing-non-GAAP 23,971$ 26,844$ 23,269$ 21,928$ 96,012$ 22,550$ 24,254$ 21,694$ 22,703$ 91,201$As%ofnon-GAAPrevenue 73% 79% 62% 51% 65% 59% 62% 52% 50% 56%
Generalandadministrative-GAAP 8,398$ 9,105$ 10,469$ 8,065$ 36,037$ 7,548$ 8,265$ 6,961$ 7,021$ 29,795$Stock-basedcompensationexpenses (1,143) (1,167) (1,812) (1,780) (5,902) (2,139) (2,686) (2,109) (2,210) (9,144)
Generalandadministrative-non-GAAP 7,255$ 7,938$ 8,657$ 6,285$ 30,135$ 5,409$ 5,579$ 4,852$ 4,811$ 20,651$As%ofnon-GAAPrevenue 22% 23% 23% 15% 20% 14% 14% 12% 11% 13%
![Page 26: 1Q17 IR Website Deck v1s21.q4cdn.com/.../2016/4Q16-Investor-Presentation_v1.1.pdf(in USD '000s, except for %s) Q1 2015 Q2 2015 Q3 2015 Q4 2015 FY 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016](https://reader035.vdocument.in/reader035/viewer/2022070810/5f08e41c7e708231d4243905/html5/thumbnails/26.jpg)
GAAP to Non-GAAP Reconciliation – cont.
(inUSD'000s,exceptfor%s) Q12015 Q22015 Q32015 Q42015 FY2015 Q12016 Q22016 Q32016 Q42016 FY2016Operatingincome(loss)-GAAP (20,705)$ (24,853)$ (23,914)$ (13,885)$ (83,357)$ (19,407)$ (22,766)$ (14,314)$ (9,815)$ (66,302)$VSOErevenuepriorto2013 (771) (616) (326) (129) (1,842) - - - - -Amortizationofintangibles 223 223 223 200 869 154 154 154 154 616Stock-basedcompensationexpenses 5,136 5,952 9,286 8,417 28,791 8,249 10,545 7,872 7,723 34,389Restructuringexpense - - 1,050 - 1,050 - - 1,053 - 1,053
Operatingincome(loss)-non-GAAP (16,117)$ (19,294)$ (13,681)$ (5,397)$ (54,489)$ (11,004)$ (12,067)$ (5,235)$ (1,938)$ (30,244)$Operatingmargin-non-GAAP( non- GA A P operat ing income ( loss) over non-GA A P revenue) -49% -57% -36% -13% -37% -29% -31% -13% -4% -18%
![Page 27: 1Q17 IR Website Deck v1s21.q4cdn.com/.../2016/4Q16-Investor-Presentation_v1.1.pdf(in USD '000s, except for %s) Q1 2015 Q2 2015 Q3 2015 Q4 2015 FY 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016](https://reader035.vdocument.in/reader035/viewer/2022070810/5f08e41c7e708231d4243905/html5/thumbnails/27.jpg)
Explanation ofNon-GAAPMeasures
TosupplementourfinancialresultspresentedonaGAAPbasis,weusethenon-GAAPmeasuresindicatedinthetables,whichexcludestock-basedcompensation,theamortizationofintangibleassets,andperpetualrevenue recognizedfromlicensesdeliveredpriorto2013,thatwebelievearehelpfulinunderstandingourpastfinancialperformanceandourfutureresults.Ournon-GAAPfinancialmeasuresarenotmeanttobeconsideredinisolationorasasubstituteforcomparableGAAPmeasuresandshouldbereadonlyinconjunctionwithourconsolidatedfinancialstatementspreparedinaccordancewithGAAP.Ourmanagement regularly usesoursupplementalnon-GAAPfinancialmeasuresinternallytounderstand,manageandevaluateourbusinessandmakeoperatingdecisions.Thesenon-GAAPmeasuresareamongtheprimary factorsmanagementusesin planningforandforecastingfutureperiods.Compensationofourexecutivesisbasedinpartontheperformanceofourbusinessbasedonthesenon-GAAPmeasures.Ournon-GAAPfinancialmeasuresreflectadjustmentsbasedonthefollowingitems:
Perpetuallicenserevenuerecognizedfromlicensesdeliveredpriorto2013 Wehaveexcludedtheeffectofperpetuallicenserevenuerecognizedfromlicensesdeliveredpriorto2013fromrevenuegrossprofit,grossmargin,operatingloss,andoperatingmargin.Becausewehadnotestablishedvendorspecificobjectiveevidence,orVSOE,offairvalueofsoftwaresupportandservicespriortoJanuary1,2013,werecognizedperpetuallicenserevenueratablyover thetermoftherelatedsoftwaresupportagreement.UponestablishingVSOEonJanuary1,2013,webegantorecognizeperpetuallicense revenueupondeliveryassumingallotherrevenue recognitioncriteriaaremet.Asaresult,ourperpetual licenserevenueincludesamountsrelatedtolicensesdelivered inpreviousyears.Revenue fromtheseperpetual licensesdeliveredpriorto2013hasdeclinedovereachquartersincethequarterendedMarch31,2013andwillcontinuetodeclinesequentiallyuntilitisfullyamortized.Weevaluateourbusinessperformanceexcludingrevenuefromtheseperpetual licensesdeliveredpriorto2013aswebelievethattheinclusionofthisrevenuemakesitdifficulttocompareperiodsandunderstandgrowthin ourbusiness.
Stock-basedcompensationexpenses:Wehaveexcludedtheeffectofstock-basedcompensationexpensesfromournon-GAAPcostofrevenue,operatingexpensesandnet incomemeasures.Althoughstock-basedcompensationisakeyincentiveofferedtoouremployees,andwebelievesuchcompensationcontributedtotherevenuesearnedduringtheperiodspresentedandalsobelieve itwillcontributetothegenerationoffutureperiodrevenues,wecontinuetoevaluateourbusinessperformanceexcludingstock-basedcompensationexpenses.Stock-basedcompensationexpenseswillrecurinfutureperiods.
Amortizationofintangibleassets:Wehaveexcludedtheeffectofamortizationofintangibleassetsfromournon-GAAPcostofrevenue,operatingexpensesandnet incomemeasures.Amortizationofintangibleassetsisinconsistentinamountandfrequencyandissignificantlyaffectedbythetimingandsizeofouracquisitions.Investorsshouldnotethattheuseofintangibleassetscontributedtoourrevenuesearnedduringtheperiodspresentedandwillcontributetoourfutureperiodrevenuesaswell.Amortizationofintangibleassetswillrecurinfutureperiods.
RestructuringCharges:Inournon-GAAPfinancialmeasures,wehaveexcludedtheeffectoftheseveranceandotherexpensesrelated toourreductioninworkforce.Restructuringchargesmay recurinthefuture;however, thetimingandamountsaredifficulttopredict.
GAAP to Non-GAAP Reconciliation
![Page 28: 1Q17 IR Website Deck v1s21.q4cdn.com/.../2016/4Q16-Investor-Presentation_v1.1.pdf(in USD '000s, except for %s) Q1 2015 Q2 2015 Q3 2015 Q4 2015 FY 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016](https://reader035.vdocument.in/reader035/viewer/2022070810/5f08e41c7e708231d4243905/html5/thumbnails/28.jpg)