Benefitfocus Announces Fourth Quarter and Full Year 2014 Financial Results and Strategic Investment Transaction

• Total revenue of $40.2 million, up 33% year-over-year;
• Employer revenue up 47% year-over-yearGAAP Gross margin of 41%, expands 900 basis points sequentially
• Closes on $74.7 million strategic equity investment with Mercer

CHARLESTON, SC – Benefitfocus, Inc. (Nasdaq:BNFT), a leading provider of cloud-based benefits software solutions, announced financial results for the fourth quarter and full year 2014.

“Benefitfocus delivered a strong fourth quarter performance that capped a record year for the company. We exceeded expectations on both the top and bottom line during the quarter, with 33% total revenue growth driven by 47% growth in employer revenue, and a 900 basis point sequential improvement in gross margin,” said Shawn Jenkins, President
and Chief Executive Officer of Benefitfocus. “We delivered a number of exciting achievements in 2014, such as supporting dozens of private exchanges, including the nation’s largest; adding 160 new large employer customers; and successfully graduating our first class of third-party systems integrators.”

Jenkins added, “Today’s announcement with Mercer, which includes a long-term commercial contract expansion and a strategic equity investment in Benefitfocus, is further validation of our leadership in the private exchange and cloud-based benefits administration market. As we look ahead to 2015 we are focused on strengthening our position even more, with a specific emphasis on enhancing our marketplace solutions and creating the first significant upsell opportunity in our employer market with the introduction of several new product offerings. We also expect to continue leveraging the investments we made in 2014 and deliver improvements in profitability. We believe our strong growth profile in a dynamic, multi-billion dollar market, coupled with improving profitability, is a powerful combination that will deliver value for our shareholders.”