OREANDA-NEWS. Reis, Inc. (NASDAQ:REIS) ("Reis" or the "Company"), a leading provider of commercial real estate market information and analytical tools, announced its financial results for the three and nine months ended September 30, 2016.

Financial Highlights

Subscription revenue was $11.5 million for the three months ended September 30, 2016, a 4.9% decrease from the three months ended September 30, 2015 revenue of $12.1 million. For the nine months ended September 30, 2016, the Company reported subscription revenue of $36.0 million, a 1.9% decrease from the comparable 2015 nine month period amount of $36.7 million.

Income from continuing operations was $0.5 million, or $0.04 per basic and diluted share, for the three months ended September 30, 2016, as compared to $1.5 million, or $0.13 per basic and diluted share, for the three months ended September 30, 2015. For the nine months ended September 30, 2016, the Company reported income from continuing operations of $3.0 million, or $0.27 per basic share and $0.26 per diluted share, as compared to the nine months ended September 30, 2015 amount of $5.7 million, or $0.51 per basic share and $0.49 per diluted share.

Reis Services EBITDA was $3.4 million during the third quarter of 2016, a 31.5% decrease from the third quarter 2015 amount of $4.9 million. The Reis Services EBITDA margins were 29.1% and 40.5% for the three months ended September 30, 2016 and 2015, respectively (see the "Supplemental Financial Information and Reconciliations from GAAP to Non-GAAP Metrics" section at the end of this earnings release for a definition and reconciliations of income from continuing operations to EBITDA and Adjusted EBITDA for the Reis Services segment and on a consolidated basis). Reis Services EBITDA was $12.9 million during the nine months ended September 30, 2016, a 17.5% decrease from the comparable 2015 period’s amount of $15.6 million. The Reis Services EBITDA margins were 35.8% and 42.5% for the nine months ended September 30, 2016 and 2015, respectively.

Consolidated Adjusted EBITDA was $3.0 million during the third quarter of 2016, a 31.0% decrease from the third quarter 2015 amount of $4.3 million. The consolidated Adjusted EBITDA margins were 25.6% and 35.4% for the three months ended September 30, 2016 and 2015, respectively. Consolidated Adjusted EBITDA was $11.2 million during the nine months ended September 30, 2016, a 17.1% decrease from the comparable 2015 period’s amount of $13.6 million. The consolidated Adjusted EBITDA margins were 31.2% and 36.9% for the nine months ended September 30, 2016 and 2015, respectively.

Reis’s CEO, Lloyd Lynford, stated, "As Reis moves towards the end of 2016, we look forward to getting past the challenging financial comparison between 2015 and 2016. Approximately 95% of this year’s revenues comes from recurring subscriptions, well above last year’s 86% contribution. Together with our robust new product pipeline and the investment we have made in expanding our sales force, Reis’s higher proportion of recurring revenue positions the Company well to return to healthy growth in 2017."

Product Highlights

Through the first nine months of 2016, Reis has achieved the following milestones:

September 2016 further expansion of the sales transaction database to include virtually all U.S. CRE transactions regardless of geography or sector;

August 2016 roll-out of the affordable housing sector (specifically low income housing tax credit, or LIHTC properties), Reis’s ninth property type, publishing information on 176 counties in 45 metropolitan areas;

July 2016 move to daily reporting of apartment rent and other property level information in Reis’s popular Apartment Rent Comparables Report;

June 2016 launch of editable versions of metro and submarket level Executive Briefing reports and property level Investment Analyses;

June 2016 enhanced office coverage with features similar to the March 2016 apartment coverage enhancements;

May 2016 expansion of the sales transaction database with the addition of 25 new data elements; and

March 2016 enhancement of apartment coverage including photographs, sector-specific details, contact information, effective rents at the property level, sales transaction history and numerous illustrative charts and graphs.

For the remainder of 2016 and into 2017, the following products are anticipated for launch:

the enhancement of coverage in Reis’s other sectors similar to the apartment and office enhancements made earlier in 2016;

the introduction of a module that will allow portfolio managers and C-level executives to look for market opportunities based upon Reis’s forecasts at the market and submarket level; and

the further expansion of the affordable housing sector to publish information on up to an additional 55 metropolitan areas.

Management believes that these additional product capabilities will further differentiate Reis from the competition, distinguishing its offers with respect to their superior timeliness, quality and scope of coverage. Reis has been monetizing the new products that we have introduced in recent years and we anticipate upselling our latest enhancements in 2016 and 2017 to our existing customers, new debt and equity investors, and transactional based services providers.

Balance Sheet, Liquidity and Other Metrics

Following are current balance sheet, liquidity and other metrics reported by the Company:

cash at September 30, 2016 was $25.2 million;

investments in the Company’s website and database intangible assets aggregated nearly $6.6 million in the nine months ended September 30, 2016 (see above for product highlights in 2016);

dividends declared and paid quarterly to shareholders during the nine months ended September 30, 2016 aggregated $5.8 million, or a rate of $0.17 per share for each quarter;

deferred revenue ($22.1 million), Aggregate Revenue Under Contract ($46.4 million) (see the "Supplemental Financial Information and Reconciliations from GAAP to Non-GAAP Metrics" section at the end of this earnings release for a definition and reconciliations of deferred revenue to Aggregate Revenue Under Contract) and the forward twelve month component of Aggregate Revenue Under Contract ($31.7 million) at September 30, 2016 each continue to demonstrate strong visibility into future revenue; and

Reis SE renewal rates for the trailing twelve months ended September 30, 2016 were 82% overall and 84% for institutional subscribers.