LogMeIn continued its eight-year streak of beating Wall Street expectations with its latest earnings report on Thursday, prompting the company's stock to slightly jump to a $6.6 billion market cap. But not everyone is getting to share in that success.
Following the closing of the Boston tech company's merger with Citrix's GoTo business in February, LogMeIn laid off roughly 200 people this year, which amounts to less than 10 percent of the company's 2,800-person workforce, CEO Bill Wagner told BostInno on Thursday in a phone interview. The Boston Globe reported on the layoffs in August.
Wagner said the layoffs are part of the company's $100 million cost-cutting goals. Some of the job cuts were the result of some employees performing the same tasks. The company is also cutting down on its customer support workforce and outsourcing those jobs to focus on hiring in customer success, a role that Wagner says takes a more proactive approach to working with customers than the traditional support role. In all, the layoffs impacted offices in Northern California, Boston and its other locations across the world.
At the same time, LogMeIn's hiring spree is set to outpace those job losses.
"It's really important to let people know we’ll end up hiring more than the people who were let go as part of this synergy exercise," Wagner said.
"It’s a mindset of pushing the team internally but sharing more modest expectations externally."
For LogMeIn's third quarter, the company posted $276.12 million in revenue, a 224 percent increase from the same period last year, and net earnings of $1.16 per share. With those figures, the company surpassed the average analyst estimate on Wall Street once again, continuing a winning streak that has now last for 33 consecutive quarters over eight years, according to the research firm Bespoke Investment Group.
Wagner attributes the company's success on Wall Street to three things: operational discipline, the predictability of revenue in a software-as-a-service business model and its focus on small- to medium-sized businesses, which account for roughly 75 percent of revenue and can make faster buying decisions than larger companies.
"We will do meaningful M&A over the next several years."
"It’s a mindset of pushing the team internally but sharing more modest expectations externally," Wagner added.
With LogMeIn's merger with GoTo and its acquisition of artificial intelligence startup NanoRep this year, Wagner said there are more M&A deals to come in the future, specifically with respect to its customer engagement, collaboration and IT portfolios.
"We have identified opportunities where we can fill some gaps in our portfolio," Wagner said, echoing previous statements about using M&A to accelerate the company's go-to-market strategy. "You can expect us to continue to be — aggressive is too strong a word — but it's certainly part of our motion. We will do meaningful M&A over the next several years."
Editor's note: The story's headline was updated to remove the mention of layoffs to avoid the implication that they were recent. The layoffs happened in February, according to a LogMeIn spokeswoman.
