RealPage Announces Preliminary Second Quarter 2014 Financial Results

  RealPage Announces Preliminary Second Quarter 2014 Financial Results

       Announces Second Quarter 2014 Financial Results Conference Call

Business Wire

CARROLLTON, Texas -- July 17, 2014

RealPage, Inc. (NASDAQ:RP), a leading provider of on-demand property
management solutions, today announced preliminary Non-GAAP total revenue and
Adjusted EBITDA results for the second quarter ended June 30, 2014.

Revised Financial Outlook

RealPage expects the following results for the second quarter ended June 30,
2014:

  *Non-GAAP total revenue of $93.8 million to $94.8 million; and
  *Adjusted EBITDA of $11.5 million to $12.5 million.

The primary factor that impacted second quarter financial performance was
lower than expected revenue from products and services related to leasing
activity. These products include organic lead-generation tools, screening and
the contact center. For the three months ended June 30, 2014, these solutions
represented approximately 30% of Non-GAAP total revenue. The company believes
owners are spending less in marketing and advertising due to low vacancy and
resident turnover rates. Against this back drop, during the second quarter of
2014, the company took actions that resulted in lower revenue per transaction,
primarily in the contact center, while increasing market share.

In addition, revenue related to the company’s renter’s insurance solutions
declined significantly. A component of the company’s renter’s insurance
revenue is dependent on the sharing of its underwriting partner’s profit. The
company believes higher than expected average cost per claim led to lower
revenue from its profit sharing arrangement, but expects this trend to be
temporary as renter’s insurance claims have been stable historically.

“We believe lower than expected revenue driven by weakness in leasing velocity
and marketing products was primarily responsible for our revenue and profit
miss,” said Steve Winn, Chairman and CEO of RealPage. “We intend to stay the
course on our sales expansion investments and complete the rollout of the
richest product development backlog in our history. During our second quarter
conference call, we will provide additional details of our action plan, our
progress with respect to new product introductions, sales force expansion and
pricing actions taken to expand market share going forward.”

“As we address the factors that impacted our revenue performance, we will also
discuss certain actions underway to restructure or eliminate cost that we
expect will enable margin expansion over the long-term,” said W. Bryan Hill,
CFO and Treasurer of RealPage.

Please note that the above statements are forward looking and that Non-GAAP
total revenue includes an adjustment for the effect of acquisition-related and
other deferred revenue. In addition, the above statements also include the
impact of acquisitions. Actual results may differ materially. Please reference
the information under the caption "Non-GAAP Financial Measures."

Conference Call and Webcast

The Company will host a conference call on August 4, 2014 at 5 p.m. EDT to
discuss its financial results. Participants are encouraged to listen to the
presentation via a live Web broadcast at http://www.realpage.com on the
Investor Relations section. In addition, a live dial-in is available
domestically at 866-743-9666 and internationally at 760-298-5103. A replay
will be available at 855-859-2056 or 404-537-3406, passcode 76947839, until
August 10, 2014.

AboutRealPage

RealPage, Inc.is a leading provider of comprehensive property management
software solutions for the multifamily, commercial, single-family and vacation
rental housing industries. These solutions help property owners increase
efficiency, decrease expenses, enhance the resident experience and generate
more revenue. Using its innovativeSaaSplatform, RealPage's on-demand
software enables easy system integration and streamlines online property
management. Its product line covers the full spectrum of property management
solutions, including leasing, accounting, revenue management, marketing
solutions, resident services, renter insurance, utility management, spend
management and apartment market research. Founded in 1998 and headquartered
inCarrollton, Texas.RealPagecurrently serves over 9,200 clients worldwide
from offices inNorth America, Europeand Asia. For more information about the
company, visithttp://www.realpage.com.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains "forward-looking" statements relating toRealPage,
Inc.'s expected, possible or assumed future results; expected increase in
market share; expected improvement in revenue from its renter’s insurance
solutions; anticipated sales expansion investments and product roll-out; and
anticipated cost reduction measures and related margin expansion. These
forward-looking statements are based on management's beliefs and assumptions
and on information currently available to management. Forward-looking
statements include all statements that are not historical facts and may be
identified by terms such as "expects," "believes," "plans," or similar
expressions and the negatives of those terms. Those forward-looking statements
involve known and unknown risks, uncertainties and other factors that may
cause actual results, performance or achievements to be materially different
from any future results, performance or achievements expressed or implied by
the forward-looking statements. The Company may be required to revise its
results upon finalizing its review of second quarter results, which could
cause or contribute to such differences. Additional factors that could cause
or contribute to such differences include, but are not limited to, the
following: (a) the possibility that general economic conditions, including
leasing velocity, or uncertainty cause information technology spending,
particularly in the rental housing industry, to be reduced or purchasing
decisions to be delayed; (b) an increase in insurance claims; (c) an increase
in customer cancellations; (d) the inability to increase sales to existing
customers and to attract new customers; (e)RealPage, Inc.'s failure to
integrate acquired businesses and any future acquisitions successfully; (f)
the timing and success of new product introductions by RealPage, Inc.or its
competitors; (g) changes inRealPage, Inc.'s pricing policies or those of its
competitors; (h) litigation; (i) inability to complete the integration of our
LeaseStar products and deliver enhanced functionality on a timely basis; (j)
the ability to enable margin expansion; and (k) such other risks and
uncertainties described more fully in documents filed with or furnished to
theSecurities and Exchange Commission ("SEC") byRealPage, including its
Quarterly Report on Form 10-Q previously filed with theSEConMay 12, 2014.
All information provided in this release is as of the date hereof
andRealPageundertakes no duty to update this information except as required
by law.

Non-GAAP Financial Measures

This press release contains non-GAAP financial measures. These measures differ
from GAAP in that they include acquisition-related and other deferred revenue
and exclude amortization of intangible assets, stock-based compensation
expenses, any impact related to the Yardi litigation (including related
insurance litigation and settlement costs), and acquisition related expenses
(including any purchase accounting adjustments) and include income taxes at a
sustainable effective rate, which excludes the reversal of valuation
allowances due to expected or realization of deferred tax assets.

We define Adjusted EBITDA as net (loss) income plus acquisition-related and
other deferred revenue adjustment, depreciation and asset impairment,
amortization of intangible assets, net interest expense, income tax expense
(benefit), stock-based compensation expense, any impact related to Yardi
litigation (including related insurance litigation and settlement costs), and
acquisition-related expenses.

We believe that the use of Adjusted EBITDA is useful to investors and other
users of our financial statements in evaluating our operating performance
because it provides them with an additional tool to compare business
performance across companies and across periods. We believe that:

  *Adjusted EBITDA provides investors and other users of our financial
    information consistency and comparability with our past financial
    performance, facilitates period-to-period comparisons of operations and
    facilitates comparisons with our peer companies, many of which use similar
    non-GAAP financial measures to supplement their GAAP results;
  *it is useful to exclude certain non-cash charges, such as depreciation and
    asset impairment, amortization of intangible assets and stock-based
    compensation and non-core operational charges, such as acquisition-related
    expenses and any impact related to the Yardi litigation (including related
    insurance litigation and settlement costs), from Adjusted EBITDA because
    the amount of such expenses in any specific period may not directly
    correlate to the underlying performance of our business operations and
    these expenses can vary significantly between periods as a result of new
    acquisitions, full amortization of previously acquired tangible and
    intangible assets or the timing of new stock-based awards, as the case may
    be; and
  *it is useful to include deferred revenue written down for GAAP purposes
    under purchase accounting rules and revenue deferred due to a lack of
    historical experience determining the settlement of the contractual
    obligation in order to appropriately measure the underlying performance of
    our business operations in the period of activity and associated expense.

We use Adjusted EBITDA in conjunction with traditional GAAP operating
performance measures as part of our overall assessment of our performance, for
planning purposes, including the preparation of our annual operating budget,
to evaluate the effectiveness of our business strategies and to communicate
with our board of directors concerning our financial performance.

We do not place undue reliance on Adjusted EBITDA as our only measure of
operating performance. Adjusted EBITDA should not be considered as a
substitute for other measures of liquidity or financial performance reported
in accordance with GAAP. There are limitations to using non-GAAP financial
measures, including that other companies may calculate these measures
differently than we do, that they do not reflect our capital expenditures or
future requirements for capital expenditures and that they do not reflect
changes in, or cash requirements for, our working capital. We compensate for
the inherent limitations associated with using Adjusted EBITDA measures
through disclosure of these limitations, presentation of our financial
statements in accordance with GAAP and reconciliation of Adjusted EBITDA to
the most directly comparable GAAP measure, net (loss) income.

Contact:

RealPage, Inc.
Investor Relations
Rhett Butler, 972-820-3773
rhett.butler@realpage.com
 
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