LogMeIn CEO Michael Simon Comments on LogMeIn Central Price Increase

LogMeIn (LOGM) CEO Michael Simon spoke publicly for the first time this week about the price increase on his company’s LogMeIn Central service. The comments came during a conference call with financial analysts, following the release of the company’s earnings. Here are the details.

But first, some quick background. LogMeIn recently implemented price hikes to its LogMeIn Central offering, a tool and platform used by many IT service providers and managed service providers (MSPs). We’ve covered the price hike here, and offered lists of alternatives here and here.

LogMeIn CEO comments on LogMeIn Central price increase

During Thursday’s earnings conference call, held after market close, an analyst asked CEO Michael Simon to “help frame for us how that change might impact billings and revenues in 2015, even from a high level.” (Comments and quotes taken from the Seeking Alpha transcript of the call.)

Here’s how Simon responded, in full:

“Our Central product is geared at IT professionals rather than mobile access usage, and we did a couple of things during the year. We’ve continued to invest pretty heavily in improving the product, a long list of features from 2-factor authentication, mobile enhancements, automating some tasks, multi-monitor support, things that aren’t necessarily germane to investors, but if you use the product all day long, really makes it a more comfortable and productive tool.

“At the same time, we’ve worked to dramatically simplify the way the product is packaged. So it’s not necessarily obvious if you just look at Central in a vacuum. But for a Central customer, they would — in addition to LogMeIn Central itself, you would then acquire licenses for LogMeIn Basic, which is basically a free extension to LogMeIn Central, or LogMeIn Pro, which has advanced management capabilities.

“And so with the new packaging of Central, the LogMeIn Pro licenses or LogMeIn Basic licenses are included with it. So it’s just simply, I buy Central with a certain feature set and for a certain number of computers and endpoints, and I’m done with it. So it is a change in price. Some of our customers are paying less, some are paying a bit more. And it really depends on the mix of how many LogMeIn Basic and LogMeIn Pro seats they had with the Central account in terms of the individual, whether they’re paying more or less. And that much said, the LogMeIn Central change in pricing and packaging is incorporated into our guidance as it stands now.”

Simon’s statement echoes what a spokesman told MSPmentor following the price hike. But Simon’s statement adds the detail about the company’s guidance building in any expected changes to revenues and profits as a result of the change in pricing.

So those changes have already been factored into the company’s financials in the year ahead, and whatever gains and losses the company expects in the managed services customer base have been factored in as well. Judging from the number of comments we’ve received on our stories covering the price change, many IT service providers may be dumping LogMeIn. But it’s unclear whether the company expected that or not.

LogMeIn’s guidance is as follows:

The company expects first quarter revenue to be in the range of $60.2 million to $60.7 million. Adjusted EBITDA is expected to be in the range of $11.5 million to $12.1 million. Non-GAAP net income is expected to be in the range of $6.6 million to $6.9 million, or $0.26 to $0.27 per diluted share.

For the fiscal year 2015, LogMeIn expects full year 2015 revenue to be in the range of $260 million to $264 million. Adjusted EBITDA is expected to be in the range of $54 million to $58 million. Non-GAAP net income is expected to be in the range of $31.6 million to $34.1 million, or $1.24 to $1.34 per diluted share.

Earnings for Q4 2014

Fiscal year 2014 financials