Xoom Reports Third Quarter 2015 Results

Xoom Corporation (NASDAQ:XOOM), a leading digital money transfer provider, today announced financial results for the third quarter of 2015.

• Revenue for the third quarter was $42.4 million, an increase of 8% from the third quarter of 2014.
• Gross profit for the third quarter was $27.9 million, a decrease of 1% from the third quarter of 2014.
• GAAP net loss for the third quarter was $16.0 million, or a loss of $0.41 per diluted share, compared to net income of $0.4 million, or $0.01 per diluted share, for the third quarter of 2014.
• Adjusted EBITDA for the third quarter was $(1.3) million, compared to $5.0 million for the third quarter of 2014.
• Non-GAAP net loss per diluted share for the third quarter was $0.07, compared to net income per diluted share of $0.08 for the third quarter of 2014.
• Cash, cash equivalents, disbursement prefunding and short-term investments were $207.0 million as of September 30, 2015, compared to $250.2 million as of December 31, 2014.
• There was no outstanding amount due under the line of credit as of September 30, 2015. Outstanding amount due under the line of credit was $28.0 million as of December 31, 2014.

Operating Metrics

• Gross sending volume for the quarter was $1.9 billion, an increase of 12% from the third quarter of 2014.
• Transactions for the quarter were 4,260,359, representing growth of 33% from the third quarter of 2014.
• Active customers for the quarter were 1,473,859, representing growth of 21% from the third quarter of 2014.
• Gross additional customers for the quarter were 186,268, an increase of 57% from the third quarter of 2014.

Highlights and Strategic Announcements

During the quarter, Xoom launched the following new initiatives to enhance its customer experience and expand its reach in new markets:

• Expansion into Singapore, which enables our customers to deposit funds into bank accounts via their U.S. bank accounts, credit cards or debit cards.
• Launched Vietnamese-language desktop and mobile sites to support our Vietnamese business.

On July 1, 2015, Xoom entered into a definitive agreement (the “Merger Agreement”) under which PayPal, Inc. will acquire Xoom for $25 per share in cash (the “Merger”). The Merger was unanimously approved by the Boards of Directors of both companies, as well as the Board of Directors of eBay Inc., PayPal, Inc.'s parent company on the date of the agreement. The Merger is conditioned upon, among other things, the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”). The waiting period under the HSR Act expired on August 14, 2015. The Company’s stockholders approved the adoption of the Merger Agreement at a special meeting of stockholders held on September 4, 2015. The Merger remains subject to the satisfaction or waiver of customary closing conditions and the receipt of certain regulatory consents relating to Xoom's money transmitter licenses.

Business Outlook

In connection with the pending Merger, Xoom will no longer provide details regarding its business outlook for future periods. The Company will not host a conference call to review its third quarter 2015 financial results.

About Xoom

Xoom is a leading digital money transfer provider that enables consumers to send money, pay bills and send prepaid mobile phone reloads for family and friends around the world in a secure, fast and cost-effective way, using their mobile phone, tablet or computer. During the 12 months ended September 30, 2015, Xoom’s 1.5 million active customers sent approximately $7.1 billion with Xoom. The company is headquartered in San Francisco and can be found online at www.xoom.com.

Non-GAAP Financial Measures

Xoom’s stated results include certain non-GAAP financial measures, including Adjusted EBITDA, non-GAAP net income and non-GAAP net income per diluted share. Adjusted EBITDA excludes (benefit) provision for income taxes, interest expense, interest income, amortization of acquired intangible asset, depreciation and other amortization expense, expenses related to stock-based compensation and Merger-related cost. Depreciation and other amortization expense includes impairment charges and loss on disposal of long-lived assets. Costs incurred in connection with the Merger are unique costs incurred out of the normal course of business and have therefore been excluded from Adjusted EBITDA and non-GAAP net income to reflect normalized business performance. Non-GAAP net income and non-GAAP net income per diluted share exclude expenses related to stock-based compensation, amortization of acquired intangible asset and Merger-related cost. Adjusted EBITDA, non-GAAP net income and non-GAAP net income per diluted share exclude these expenses as they are often excluded by other companies to help investors understand the operational performance of their business, and in the case of stock-based compensation, can be difficult to predict. Xoom believes these adjustments provide useful comparative information to investors.

Xoom considers these non-GAAP financial measures to be important because they provide useful measures of its operating performance and are used by its management for that purpose. In addition, investors often use measures such as these to evaluate the operating performance of a company. Non-GAAP results are presented for supplemental informational purposes only for understanding Xoom’s operating results. The non-GAAP results should not be considered a substitute for financial information presented in accordance with generally accepted accounting principles, and may be different from non-GAAP measures used by other companies.

(Xoom-f)

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