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Feb 13, 2020
Telenav Files Form 10-Q/A for First Quarter of 2020 and 10-Q for Second Quarter of 2020

Reports additional $9M Revenue, $9M Net Income and $9M Adjusted EBITDA for First Half Fiscal 2020

Guidance for Third Quarter Operational Metrics Remains Unchanged

SANTA CLARA, Calif., Feb. 13, 2020 (GLOBE NEWSWIRE) -- Telenav®, Inc. (NASDAQ:TNAV), a leading provider of connected car and location-based services, announced that on February 12, 2020 it filed with the Securities and Exchange Commission an amended Form 10-Q/A for three months ended September 30, 2019, and its Form 10-Q for the three months ended December 31, 2019.

Subsequent to the issuance of Telenav’s earnings release and related investor presentation on February 6, 2020, and conference call and webcast with investors, Telenav further reviewed and updated its reporting of revenue related to its agreements with Grab Holdings, Inc. and certain of its subsidiaries (the “Grab Transaction”).  This updated revenue affects the three months ended September 30, 2019 and the three and six months ended December 31, 2019, as well as the outlook Telenav provided on February 6, 2020 for the three months ending March 31, 2020.  The Form 10-Q/A for the three months ended September 30, 2019 and Form 10-Q for the three months ended December 31, 2019 reflect the following updated revenue and other effects of the Grab Transaction:

First Quarter of Fiscal 2020

  • Revenue of $66.6 million, an increase of $2.2 million from the previously reported first quarter of fiscal 2020
  • Revenue growth of 44% over the first quarter of fiscal 2019
  • Net loss of $4.0 million, an improvement of $2.2 million from the previously reported first quarter of fiscal 2020
  • Adjusted EBITDA of $2.6 million, an increase of $2.2 million from the previously reported first quarter of fiscal 2020

Second Quarter of Fiscal 2020

  • Revenue of $73.9 million, an increase of $6.5 million from the previously reported second quarter of fiscal 2020
  • Revenue growth of 47% over the second quarter of fiscal 2019.
  • Net income of $13.0 million, an improvement of $6.5 million from the previously reported second quarter of fiscal 2020
  • Adjusted EBITDA of $14.3 million, an increase of $6.5 million from the previously reported second quarter of fiscal 2020

First Half of Fiscal 2020

  • Revenue of $140.5 million, an increase of $8.7 million from the previously reported first half of fiscal 2020
  • Net income of $9.1 million, an improvement of $8.7 million from the previously reported first half of fiscal 2020
  • Adjusted EBITDA of $16.8 million, an increase of $8.7 million from the previously reported first half of fiscal 2020

There was no impact on Telenav’s cash balances at December 31, 2019 as a result of the updates.  Attached at the end of this press release are financial results for the three and six months ended December 31, 2019 that reflect the amounts set forth in the 10-Q/A for the three months ended September 30, 2019 and Form 10-Q for the three months ended December 31, 2019.

Third Quarter of Fiscal 2020

Telenav also updated the information it provided on February 6, 2020 regarding Telenav’s outlook for the three months ending March 31, 2020. Telenav reconfirms its operating outlook Telenav for the three months ending March 31, 2020, as follows:

  • Telenav expects total revenue to be $61.5 million to $63.5 million
  • Telenav expects billings, a non-GAAP measure, to be between $62.5 million to $64.5 million, and GAAP gross margin to be within 42% to 44%
  • Telenav expects GAAP operating expenses to be between $29 million to $31 million.
  • Telenav expects Adjusted EBITDA, a non-GAAP measure, to be within negative $1.5 million to positive $0.5 million
  • For fiscal 2020 as a whole, Telenav expects Adjusted EBITDA to be positive

However, Telenav estimates that net loss for this period will now be between $(3.0) million and $(5.0) million.

Please visit Telenav’s investor relations website at http://investor.telenav.com to view the updated financial results and supplemental comments and materials.

Use of Non-GAAP Financial Measures

Telenav prepares its financial statements in accordance with generally accepted accounting principles for the United States, or GAAP. The non-GAAP financial measures such as billings, change in deferred revenue, change in deferred costs, adjusted EBITDA, and free cash flow included in this press release are different from those otherwise presented under GAAP. Telenav has provided these measures in addition to GAAP financial results because management believes these non-GAAP measures help provide a consistent basis for comparison between periods that are not influenced by certain items and, therefore, are helpful in understanding Telenav’s underlying operating results. These non-GAAP measures are some of the primary measures Telenav’s management uses for planning and forecasting. These measures are not in accordance with, or an alternative to, GAAP and these non-GAAP measures may not be comparable to information provided by other companies.

To reconcile the historical GAAP results to non-GAAP financial metrics, please refer to the reconciliations in the financial statements included in this earnings release.

Billings equals GAAP revenue recognized plus the change in deferred revenue from the beginning to the end of the applicable period. In connection with its presentation of the change in deferred revenue, Telenav has provided a similar presentation of the change in the related deferred costs. Such deferred costs primarily include costs associated with third party content and certain development costs associated with its customized software solutions whereby customized engineering fees are earned. As Telenav enters into more hybrid and brought-in navigation programs, deferred revenue and deferred costs become larger components of its operating results, so Telenav believes these metrics are useful in evaluating cash flows.

Telenav considers billings to be a useful metric for management and investors because billings drive revenue and deferred revenue, which is an important indicator of its business. There are a number of limitations related to the use of billings versus revenue calculated in accordance with GAAP. First, billings include amounts that have not yet been recognized as revenue or cost and may require additional services or costs to be provided over contracted service periods. For example, billings related to certain brought-in solutions cannot be fully recognized as revenue in a given period due to requirements for ongoing map updates and provisioning of services such as hosting, monitoring, customer support and, for certain customers, additional period content and associated technology costs. Second, we may calculate billings in a manner that is different from peer companies that report similar financial measures, making comparisons between companies more difficult. Accordingly, when Telenav uses this measure, it attempts to compensate for these limitations by providing specific information regarding billings and how they relate to revenue calculated in accordance with GAAP.

Adjusted EBITDA measures GAAP net loss adjusted for discontinued operations and excluding the impact of stock-based compensation expense, depreciation and amortization, other income (expense) net, provision (benefit) for income taxes, and other applicable items such as legal settlements and contingencies and merger and acquisition, or M&A, transaction expenses, net of tax. Stock-based compensation expense relates to equity incentive awards granted to its employees, directors, and consultants. Legal settlements and contingencies represent settlements, offers made to settle, or loss accruals relating to litigation or other disputes in which Telenav is a party or the indemnitor of a party. M&A transaction expenses relate primarily to costs associated with transactions, such as the inMarket transaction and the Grab transaction.

Adjusted EBITDA, while generally a measure of profitability, can also represent a loss. Adjusted EBITDA is a key measure used by Telenav’s management and board of directors to understand and evaluate Telenav’s core operating performance and trends, to prepare and approve its annual budget and to develop short- and long-term operational plans. In particular, Telenav believes that the exclusion of the expenses eliminated in calculating adjusted EBITDA can provide a useful measure for period-to-period comparisons of Telenav’s core business. Accordingly, Telenav believes that adjusted EBITDA generally provides useful information to investors and others in understanding and evaluating Telenav’s operating results in the same manner as Telenav’s management and board of directors.

Free cash flow is a non-GAAP financial measure Telenav defines as net cash provided by (used in) operating activities, less purchases of property and equipment. Telenav considers free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash (used in) generated by its business after purchases of property and equipment.

In this press release, or in the supplemental investor presentation on its website, Telenav may provide guidance for the third quarter of fiscal 2020 on a non-GAAP basis for billings and adjusted EBITDA. Telenav does not provide reconciliations of these forward-looking non-GAAP financial measures to the corresponding GAAP measures due to the high variability and difficulty in making accurate forecasts and projections with respect to deferred revenue, deferred costs, stock-based compensation and tax provision (benefit), which are components of these non-GAAP financial measures. In particular, stock-based compensation is impacted by future hiring and retention needs, as well as the future fair market value of Telenav’s common stock, all of which is difficult to predict and subject to constant change. The actual amounts of these items will have a significant impact on Telenav’s net loss per diluted share and tax provision (benefit). Accordingly, reconciliations of Telenav’s forward-looking non-GAAP financial measures to the corresponding GAAP measures are not available without unreasonable effort.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to anticipated financial performance, management’s plans and objectives for future operations, business prospects, market penetration, and other matters. Any forward-looking statement made in this press release speaks only as of the date on which it is made. Telenav undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise. Actual events or results may differ materially from those described in this document due to a number of risks and uncertainties. These forward-looking statements are based on management’s current beliefs and assumptions and on information currently available to management. Telenav cautions that these statements are subject to risks and uncertainties, many of which are outside of Telenav’s control and could cause future events or results to be materially different from those stated or implied in this document, or to not occur at all. These potential risks and uncertainties include, among others: the Company's ability to determine, achieve and accurately recognize revenue under customer engagements, including specifically related to the Company’s transaction with Grab Holdings; the Company’s ability to develop and implement products for Ford, GM and Toyota and to support Ford, GM and Toyota and their customers; the impact of Ford’s announcement regarding the elimination of various sedans in North America over the near term; the impact of tariffs on sales of automobiles in the United States and other markets; the Company’s success in extending its contracts for current and new generation of products with its existing automobile manufacturers and tier ones, particularly Ford; the impact of GM’s announcement regarding Google Automotive Services; the impact of Garmin’s announcement that it is providing navigation services to Ford; the Company’s ability to achieve additional design wins and the delivery dates of automobiles including the Company’s products; adoption by vehicle purchasers of Scout GPS Link; the Company’s ability to demonstrate internal controls over financial reporting and disclosures, including as it may relate to our recognition of revenue; the Company’s dependence on a limited number of automobile manufacturers and tier ones for a substantial portion of its revenue and the impact of labor stoppages on those automobile manufacturers’ and tier ones’ ability to produce vehicles; reductions in demand for automobiles; potential impacts of automobile manufacturers and tier ones including competitive capabilities in their vehicles such as Apple CarPlay and Android Auto; the Company’s continued reporting of losses and operating expenses in excess of expectations; the Company’s ability to acquire certification for automotive SPICE and other contractual obligations with customers; failure to reach agreement with customers for awards and contracts on products and services in which the Company has expended resources developing; competition from other market participants who may provide comparable services to subscribers without charge; the timing of new product releases and vehicle production by the Company’s automotive customers, including inventory procurement and fulfillment; possible warranty claims, and the impact on consumer perception of its brand; the Company’s ability to perform under its initiatives with Amazon and Microsoft, and benefit from those initiatives; the potential that the Company may not be able to realize its deferred tax assets and may have to take a reserve against them; the Company’s reliance on its automobile manufacturers for volume and royalty reporting; the impact on revenue recognition and other financial reporting due to the amendment of contracts or changes in accounting standards; the impact of the novel corona virus on business activity and the Company’s operations; the Company’s ability to remediate its material weaknesses in its internal control over financial reporting and disclosures, and timely demonstrate such mitigation, including as it may relate to the Company’s recognition of revenue, including under the Grab Transaction; and macroeconomic and political conditions in the U.S. and abroad, in particular China. The Company discusses these risks in greater detail in “Risk Factors” and elsewhere in its Form 10-K for the fiscal year ended June 30, 2019 and other filings with the U.S. Securities and Exchange Commission (“SEC”), which are available at the SEC’s website at www.sec.gov. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent management’s beliefs and assumptions only as of the date made. You should review the company’s SEC filings carefully and with the understanding that actual future results may be materially different from what the Company expects.

ABOUT TELENAV, INC.

Telenav is a leading provider of connected car and location-based services, focused on transforming life on the go for people - before, during, and after every drive. Leveraging our location platform, we enable our customers to deliver custom connected car and mobile experiences. To learn more about how Telenav’s location platform powers personalized navigation, mapping, big data intelligence, social driving, and location-based advertising, visit www.telenav.com.

“Telenav” and the Telenav Logo are registered trademarks and “VIVID” is a trademark of Telenav, Inc. Unless otherwise noted, all other trademarks, service marks, and logos used in this press release are the trademarks, service marks or logos of their respective owners.

© 2020 Telenav, Inc. All Rights Reserved.

TNAV-F

Investor Relations:
Bishop IR
Mike Bishop
415-894-9633
IR@telenav.com

Media:
Raphel Finelli
408-667-5970
raphelf@telenav.com


Telenav, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except par value)
(unaudited)
  December 31,   June 30,
    2019       2019  
       
Assets      
Current assets:      
Cash and cash equivalents $ 26,347     $ 27,275  
Short-term investments   102,603       72,203  
Accounts receivable, net of allowances of $7 and $7 at December 31, 2019 and June 30, 2019, respectively   44,463       69,781  
Restricted cash   1,520       1,950  
Deferred costs   33,117       18,752  
Prepaid expenses and other current assets   8,933       3,784  
Assets of discontinued operations, non-current   -       6,330  
Total current assets   216,983       200,075  
Property and equipment, net   5,215       5,583  
Operating lease right-of-use assets   8,749       -  
Deferred income taxes, non-current   1,401       998  
Goodwill and intangible assets, net   15,265       15,701  
Deferred costs, non-current   48,646       61,050  
Other assets   21,285       1,414  
Assets of discontinued operations, non-current   -       12,194  
Total assets $ 317,544     $ 297,015  
Liabilities and stockholders’ equity      
Current liabilities:      
Trade accounts payable $ 1,113     $ 16,061  
Accrued expenses   54,182       48,899  
Operating lease liabilities   3,532       -  
Deferred revenue   50,416       31,270  
Income taxes payable   928       800  
Liabilities of discontinued operations   -       3,373  
Total current liabilities   110,171       100,403  
Deferred rent, non-current   -       1,266  
Operating lease liabilities, non-current   6,459       -  
Deferred revenue, non-current   93,755       103,865  
Other long-term liabilities   678       811  
Liabilities of discontinued operations, non-current   -       30  
Commitments and contingencies   -       -  
Stockholders’ equity:      
Preferred stock, $0.001 par value: 50,000 shares authorized; no shares issued or outstanding   -       -  
Common stock, $0.001 par value: 600,000 shares authorized; 48,151 and 46,911 shares issued and outstanding at December 31, 2019 and June 30, 2019, respectively   48       47  
Additional paid-in capital   190,593       182,349  
Accumulated other comprehensive loss   (1,538 )     (1,477 )
Accumulated deficit   (82,622 )     (90,279 )
Total stockholders’ equity   106,481       90,640  
Total liabilities and stockholders’ equity $ 317,544     $ 297,015  


Telenav, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)
                 
    Three Months Ended   Six Months Ended
    December 31,   December 31,
      2019       2018       2019       2018  
                 
Revenue:                
Product   $ 61,543     $ 42,397     $ 117,533     $ 82,327  
Services     12,332       7,763       22,971       14,085  
Total revenue     73,875       50,160       140,504       96,412  
Cost of revenue:                
Product     26,434       25,015       58,423       48,603  
Services     7,288       3,891       12,150       7,845  
Total cost of revenue     33,722       28,906       70,573       56,448  
Gross profit     40,153       21,254       69,931       39,964  
Operating expenses:                
Research and development     19,717       17,766       40,380       36,258  
Sales and marketing     2,134       1,665       4,080       3,368  
General and administrative     6,428       5,721       13,715       11,171  
Legal settlements and contingencies     -       650       -       650  
Total operating expenses     28,279       25,802       58,175       51,447  
Income (loss) from operations     11,874       (4,548 )     11,756       (11,483 )
Other income, net     596       532       1,157       2,122  
Income (loss) from continuing operations before provision for income taxes     12,470       (4,016 )     12,913       (9,361 )
Provision for income taxes     205       102       616       842  
Equity in net (income) of equity method investees     (797 )     -       (797 )     -  
Income (loss) from continuing operations     13,062       (4,118 )     13,094       (10,203 )
Discontinued operations:                
Income (loss) from operations of Advertising business, net of tax     -       (463 )     832       (1,948 )
Loss from sale of Advertising business     (56 )     -       (4,874 )     -  
Loss on discontinued operations     (56 )     (463 )     (4,042 )     (1,948 )
Net income (loss)   $ 13,006     $ (4,581 )   $ 9,052     $ (12,151 )
                 
Basic income (loss) per share:                
Income (loss) from continuing operations   $ 0.27     $ (0.09 )   $ 0.27     $ (0.23 )
Loss on discontinued operations     -       (0.01 )     (0.08 )     (0.04 )
Net income (loss)   $ 0.27     $ (0.10 )   $ 0.19     $ (0.27 )
Diluted income (loss) per share:                
Income (loss) from continuing operations   $ 0.27     $ (0.09 )   $ 0.27     $ (0.23 )
Loss on discontinued operations     -       (0.01 )     (0.08 )     (0.04 )
Net income (loss)   $ 0.27     $ (0.10 )   $ 0.18     $ (0.27 )
Weighted average shares used in computing income (loss) per share                
Basic     48,475       45,443       48,127       45,230  
Diluted     48,821       45,443       49,257       45,230  


Telenav, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
         
    Six Months Ended December 31,
      2019       2018  
Operating activities        
Net income (loss)   $ 9,052     $ (12,151 )
Loss on discontinued operations     4,042       1,948  
Income (loss) from continuing operations     13,094       (10,203 )
Adjustments to reconcile net income (loss) to net cash provided by operating activities:        
Stock-based compensation expense     3,230       3,923  
Depreciation and amortization     1,856       2,016  
Operating lease amortization net of accretion     1,321       -  
Accretion of net premium on short-term investments     75       -  
Unrealized gain on non-marketable equity investments     (62 )     (1,259 )
Equity in net income of equity method investee     (797 )     -  
Other     (1 )     (14 )
Changes in operating assets and liabilities:        
Accounts receivable     25,835       3,390  
Deferred income taxes     (409 )     445  
Deferred costs     (1,961 )     (7,040 )
Prepaid expenses and other current assets     (3,992 )     216  
Other assets     21       (116 )
Trade accounts payable     (15,054 )     9,812  
Accrued expenses and other liabilities     3,945       (9,575 )
Income taxes payable     130       39  
Deferred rent     -       91  
Operating lease liabilities     (1,754 )     -  
Deferred revenue     9,036       13,234  
Net cash provided by operating activities     34,513       4,959  
Investing activities        
Purchases of property and equipment     (1,078 )     (445 )
Purchases of short-term investments     (54,439 )     (15,862 )
Purchases of long-term investments     (3,500 )     -  
Proceeds from sales and maturities of short-term investments     24,067       20,342  
Net cash provided by (used in) investing activities     (34,950 )     4,035  
Financing activities        
Proceeds from exercise of stock options     8,306       26  
Tax withholdings related to net share settlements of restricted stock units     (1,148 )     (1,559 )
Repurchase of common stock     (4,019 )     -  
Net cash provided by (used in) financing activities     3,139       (1,533 )
Effect of exchange rate changes on cash, cash equivalents and restricted cash     (85 )     (360 )
Net increase in cash, cash equivalents and restricted cash, continuing operations     2,617       7,101  
Net cash used in discontinued operations     (3,975 )     (2,319 )
Cash, cash equivalents and restricted cash, beginning of period     29,225       20,099  
Cash, cash equivalents and restricted cash, end of period   $ 27,867     $ 24,881  
Supplemental disclosure of cash flow information        
Income taxes paid, net   $ 1,279     $ 586  
Non-cash investing: Investment in LLC acquired in exchange for sale of Advertising business   $ 15,600     $ -  
Cash flow from discontinued operations:        
Net cash used in operating activities   $ (3,569 )   $ (2,319 )
Net cash used in financing activities     (406 )     -  
Net cash transferred from continuing operations     3,975       2,319  
Net change in cash and cash equivalent from discontinued operation     -       -  
Cash and cash equivalent of discontinued operations, beginning of period     -       -  
Cash and cash equivalent of discontinued operations, end of period   $ -     $ -  
Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheets        
Cash and cash equivalents   $ 26,347     $ 22,405  
Restricted cash     1,520       2,476  
Total cash, cash equivalents and restricted cash   $ 27,867     $ 24,881  


Telenav, Inc.
Unaudited Reconciliation of Non-GAAP Adjustments
(in thousands)
Reconciliation of Revenue to Billings
                 
    Three Months Ended Six Months Ended
    December 31,   December 31,
      2019       2018     2019     2018
                 
Revenue   $ 73,875     $ 50,160   $ 140,504   $ 96,412
Adjustments:                
Change in deferred revenue     (1,210 )     6,392     9,036     13,234
Billings   $ 72,665     $ 56,552   $ 149,540   $ 109,646


Telenav, Inc.
Unaudited Reconciliation of Non-GAAP Adjustments
(in thousands)
Reconciliation of Deferred Revenue to Change in Deferred Revenue
Reconciliation of Deferred Costs to Change in Deferred Costs
                 
    Three Months Ended December 31,   Six Months Ended December 31,
      2019       2018     2019     2018
Deferred revenue, end of period   $ 144,171     $ 87,772   $ 144,171   $ 87,772
Deferred revenue, beginning of period     145,381       81,380     135,135     74,538
Change in deferred revenue   $ (1,210 )   $ 6,392   $ 9,036   $ 13,234
                 
Deferred costs, end of period   $ 81,763     $ 65,465   $ 81,763   $ 65,465
Deferred costs, beginning of period     77,795       62,806     79,802     58,425
Change in deferred costs(1)   $ 3,968     $ 2,659   $ 1,961   $ 7,040
                 
                 
(1) Deferred costs primarily include costs associated with third-party content and in connection with certain customized software solutions, the costs incurred to develop those solutions. We expect to incur additional costs in the future due to requirements to provide ongoing map updates and provisioning of services such as hosting, monitoring, customer support and, for certain customers, additional period content and associated technology costs.


Telenav, Inc.
Unaudited Reconciliation of Non-GAAP Adjustments
(in thousands)
Reconciliation of Net Income (Loss) to Adjusted EBITDA
                 
    Three Months Ended Six Months Ended
    December 31,   December 31,
      2019       2018       2019       2018  
                 
Net income (loss)   $ 13,006     $ (4,581 )   $ 9,052     $ (12,151 )
Loss on discontinued operations     56       463       4,042       1,948  
Income (loss) from continuing operations     13,062   0   (4,118 )     13,094   0   (10,203 )
                 
Adjustments:                
Legal settlement and contingencies     -       650       -       650  
Stock-based compensation expense     1,478       1,875       3,230       3,923  
Depreciation and amortization expense     934       1,006       1,856       2,016  
Other income, net     (596 )     (532 )     (1,157 )     (2,122 )
Provision for income taxes     205       102       616       842  
Equity in net income of equity method investees     (797 )     -       (797 )     -  
Adjusted EBITDA   $ 14,286     $ (1,017 )   $ 16,842     $ (4,894 )


Telenav, Inc.
Unaudited Reconciliation of Non-GAAP Adjustments
(in thousands)
Reconciliation of Net Income (Loss) to Free Cash Flow
                 
    Three Months Ended   Six Months Ended
    December 31,   December 31,
      2019       2018       2019       2018  
                 
Net income (loss)   $ 13,006     $ (4,581 )   $ 9,052     $ (12,151 )
Loss on discontinued operations     56       463       4,042       1,948  
Income (Loss) from continuing operations     13,062       (4,118 )     13,094       (10,203 )
                 
Adjustments to reconcile net loss to net cash provided by operating activities:                
Change in deferred revenue (1)     (1,309 )     6,392       9,036       13,234  
Change in deferred costs (2)     (3,940 )     (2,659 )     (1,961 )     (7,040 )
Changes in other operating assets and liabilities     2,240       3,036       8,722       4,302  
Other adjustments (3)     2,291       2,862       5,622       4,666  
Net cash provided by operating activities     12,344       5,513       34,513       4,959  
Less: Purchases of property and equipment     (617 )     (346 )     (1,078 )     (445 )
Free cash flow   $ 11,727     $ 5,167     $ 33,435     $ 4,514  
                 
(1) Consists of product royalties, customized software development fees, service fees and subscription fees.        
(2) Consists primarily of third party content costs and customized software development expenses.          
(3) Consist primarily of depreciation and amortization, stock-based compensation expense and other non-cash items.        


Telenav, Inc.          
Summarized Financial Information Depicting the Impact of Restatement          
(in thousands, except per share amounts)          
(unaudited)          
             
    As of December 31, 2019            
    As Reported(1)   Adjustments   As Adjusted            
Assets                        
Prepaid expenses and other current assets   $ 3,231     $ 5,702     $ 8,933              
Total current assets     211,281       5,702       216,983              
Total assets     311,842       5,702       317,544              
Liabilities and stockholders' equity                        
Accrued expenses     57,856       (3,674 )     54,182              
Deferred revenue     50,582       (166 )     50,416              
Total current liabilities     114,011       (3,840 )     110,171              
Accumulated deficit     (92,164 )     9,542       (82,622 )            
Total liabilities and stockholders' equity     311,842       5,702       317,544              
                         
                         
    Three Months Ended December 31, 2019   Six Months Ended December 31, 2019
    As Reported(1)   Adjustments   As Adjusted   As Reported(2)   Adjustments   As Adjusted
Revenue                        
Product   $ 55,362     $ 6,181     $ 61,543     $ 110,545   $ 6,988   $ 117,533
Services     11,984       348       12,332       21,256     1,715     22,971
Total revenue     67,346       6,529       73,875       131,801     8,703     140,504
Gross profit     33,624       6,529       40,153       61,228     8,703     69,931
Income from continuing operations     6,533       6,529       13,062       4,391     8,703     13,094
Net income     6,477       6,529       13,006       349     8,703     9,052
                         
Basic income per share:                        
Income from continuing operations   $ 0.13     $ 0.14     $ 0.27     $ 0.09   $ 0.18   $ 0.27
Net income     0.13       0.14       0.27       0.01     0.18     0.19
Diluted income per share:                        
Income from continuing operations   $ 0.13     $ 0.14     $ 0.27     $ 0.09   $ 0.18   $ 0.27
Net income     0.13       0.14       0.27       0.01     0.17     0.18
Weighted average shares used in computing income per share                        
Basic     48,475       -       48,475       48,127     -     48,127
Diluted     48,821       -       48,821       49,257     -     49,257
                         
(1) As reported in Form 8-K on February 6, 2020.                        
(2) Includes three months ended Sept. 30, 2019 as reported in Form 10-Q on Nov. 8, 2019 plus three months ended December 31, 2019 as reported in Form 8-K on Feb. 6, 2020.


Telenav, Inc.
Summarized Financial Information Depicting the Impact of Restatement of Non-GAAP Adjustments
(in thousands, except per share amounts)
(unaudited)
                         
Reconciliation of Revenue to Billings
                         
    Three Months Ended December 31, 2019   Six Months Ended December 31, 2019
    As Reported(1)   Adjustments   As Adjusted   As Reported(2)   Adjustments   As Adjusted
                         
Revenue   $ 67,346     $ 6,529     $ 73,875     $ 131,801     $ 8,703     $ 140,504  
Adjustments:                        
Change in deferred revenue     (2,920 )     1,710       (1,210 )     9,202       (166 )     9,036  
Billings   $ 64,426     $ 8,239     $ 72,665     $ 141,003     $ 8,537     $ 149,540  
                         
                         
Reconciliation of Net Income to Adjusted EBITDA
                         
    Three Months Ended December 31, 2019   Six Months Ended December 31, 2019
    As Reported(1)   Adjustments   As Adjusted   As Reported(2)   Adjustments   As Adjusted
Net income   $ 6,477     $ 6,529     $ 13,006     $ 349     $ 8,703     $ 9,052  
Loss on discontinued operations     56       -       56       4,042       -       4,042  
Income from continuing operations     6,533       6,529       13,062       4,391       8,703       13,094  
                         
Adjustments:                        
Stock-based compensation expense     1,478       -       1,478       3,230       -       3,230  
Depreciation and amortization expense     934       -       934       1,856       -       1,856  
Other income, net     (596 )     -       (596 )     (1,157 )     -       (1,157 )
Provision for income taxes     205       -       205       616       -       616  
Equity in net income of equity method investees     (797 )     -       (797 )     (797 )     -       (797 )
Adjusted EBITDA   $ 7,757     $ 6,529     $ 14,286     $ 8,139     $ 8,703     $ 16,842  
                         
                         
Reconciliation of Net Income to Free Cash Flow
                         
    Three Months Ended December 31, 2019   Six Months Ended December 31, 2019
    As Reported(1)   Adjustments   As Adjusted   As Reported(2)   Adjustments   As Adjusted
Net income   $ 6,477     $ 6,529     $ 13,006     $ 349     $ 8,703     $ 9,052  
Loss on discontinued operations     56       -       56       4,042       -       4,042  
Income from continuing operations     6,533       6,529       13,062       4,391       8,703       13,094  
                         
Adjustments to reconcile net income to net cash provided by operating activities:                        
Change in deferred revenue (3)     (3,019 )     1,710       (1,309 )     9,202       (166 )     9,036  
Change in deferred costs (4)     (3,940 )     -       (3,940 )     (1,961 )     -       (1,961 )
Changes in other operating assets and liabilities     10,479       (8,239 )     2,240       17,259       (8,537 )     8,722  
Other adjustments (5)     2,291       -       2,291       5,622       -       5,622  
Net cash provided by operating activities     12,344       -       12,344       34,513       -       34,513  
Less: Purchases of property and equipment     (617 )     -       (617 )     (1,078 )     -       (1,078 )
Free cash flow   $ 11,727     $ -     $ 11,727     $ 33,435     $ -     $ 33,435  
                         
(1) As reported in Form 8-K on February 6, 2020.
(2) Includes three months ended Sept. 30, 2019 as reported in Form 10-Q on Nov. 8, 2019 plus three months ended December 31, 2019 as reported in Form 8-K on Feb. 6, 2020.
(3) Consists of product royalties, customized software development fees, service fees and subscription fees.
(4) Consists primarily of third party content costs and customized software development expenses.
(5) Consist primarily of depreciation and amortization, stock-based compensation expense and other non-cash items.


Telenav, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except par value)
(unaudited)
    September 30,   June 30,
      2019       2019  
         
Assets        
Current assets:        
Cash and cash equivalents   $ 19,278     $ 27,275  
Short-term investments     102,515       72,203  
Accounts receivable, net of allowances of $7 and $7 at September 30, 2019 and June 30, 2019, respectively     53,271       69,781  
Restricted cash     2,452       1,950  
Deferred costs     19,416       18,752  
Prepaid expenses and other current assets     4,281       3,784  
Assets of discontinued operations, non-current     1,788       6,330  
Total current assets     203,001       200,075  
Property and equipment, net     5,304       5,583  
Operating lease right-of-use assets     9,325       -  
Deferred income taxes, non-current     798       998  
Goodwill and intangible assets, net     15,483       15,701  
Deferred costs, non-current     58,379       61,050  
Other assets     18,977       1,414  
Assets of discontinued operations, non-current     259       12,194  
Total assets   $ 311,526     $ 297,015  
Liabilities and stockholders’ equity        
Current liabilities:        
Trade accounts payable   $ 17,804     $ 16,061  
Accrued expenses     38,365       48,899  
Operating lease liabilities     3,566       -  
Deferred revenue     41,197       31,270  
Income taxes payable     635       800  
Liabilities of discontinued operations     1,876       3,373  
Total current liabilities     103,443       100,403  
Deferred rent, non-current     -       1,266  
Operating lease liabilities, non-current     7,011       -  
Deferred revenue, non-current     104,184       103,865  
Other long-term liabilities     639       811  
Liabilities of discontinued operations, non-current     107       30  
Commitments and contingencies     -       -  
Stockholders’ equity:        
Preferred stock, $0.001 par value: 50,000 shares authorized; no shares issued or outstanding     -       -  
Common stock, $0.001 par value: 600,000 shares authorized; 48,566 and 46,911 shares issued and outstanding at September 30, 2019 and June 30, 2019, respectively     49       47  
Additional paid-in capital     192,055       182,349  
Accumulated other comprehensive loss     (1,729 )     (1,477 )
Accumulated deficit     (94,233 )     (90,279 )
Total stockholders’ equity     96,142       90,640  
Total liabilities and stockholders’ equity   $ 311,526     $ 297,015  


Telenav, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)
         
    Three Months Ended
    September 30,
      2019       2018  
         
Revenue:        
Product   $ 55,990     $ 39,930  
Services     10,639       6,322  
Total revenue     66,629       46,252  
Cost of revenue:        
Product     31,989       23,588  
Services     4,862       3,954  
Total cost of revenue     36,851       27,542  
Gross profit     29,778       18,710  
Operating expenses:        
Research and development     20,663       18,492  
Sales and marketing     1,946       1,703  
General and administrative     7,287       5,450  
Total operating expenses     29,896       25,645  
Loss from operations     (118 )     (6,935 )
Other income, net     561       1,590  
Income (loss) from continuing operations before provision for income taxes     443       (5,345 )
Provision for income taxes     411       740  
Income (loss) from continuing operations     32       (6,085 )
Discontinued operations:        
Income (loss) from operations of Advertising business, net of tax     832       (1,485 )
Loss from sale of Advertising business     (4,818 )     -  
Loss on discontinued operations     (3,986 )     (1,485 )
Net loss   $ (3,954 )   $ (7,570 )
         
Basic income (loss) per share:        
Income (loss) from continuing operations   $ 0.00     $ (0.14 )
Loss on discontinued operations     (0.08 )     (0.03 )
Net income (loss)   $ (0.08 )   $ (0.17 )
Diluted income (loss) per share:        
Income (loss) from continuing operations   $ 0.00     $ (0.14 )
Loss on discontinued operations     (0.08 )     (0.03 )
Net income (loss)   $ (0.08 )   $ (0.17 )
Weighted average shares used in computing income (loss) per share        
Basic     47,780       45,018  
Diluted     49,661       45,018  


Telenav, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
         
    Three Months Ended September 30,
      2019       2018  
Operating activities        
Net loss   $ (3,954 )   $ (7,570 )
Loss on discontinued operations     3,986       1,485  
Income (loss) from continuing operations     32       (6,085 )
Adjustments to reconcile net loss to net cash provided by operating activities:        
Stock-based compensation expense     1,752       2,048  
Depreciation and amortization     922       1,010  
Operating lease amortization net of accretion     544       -  
Accretion of net premium on short-term investments     12       5  
Unrealized gain on non-marketable equity investments     -       (1,259 )
Realized loss on non-marketable equity investments     100       -  
Other     1       -  
Changes in operating assets and liabilities:        
Accounts receivable     16,355       (252 )
Deferred income taxes     171       198  
Deferred costs     1,979       (4,381 )
Prepaid expenses and other current assets     (502 )     369  
Other assets     28       (35 )
Trade accounts payable     1,738       3,267  
Accrued expenses and other liabilities     (10,259 )     (2,467 )
Income taxes payable     (152 )     149  
Deferred rent     -       37  
Operating lease liabilities     (897 )     -  
Deferred revenue     10,345       6,842  
Net cash provided by (used in) operating activities     22,169       (554 )
Investing activities        
Purchases of property and equipment     (461 )     (99 )
Purchases of short-term investments     (41,418 )     (10,624 )
Purchases of long-term investments     (2,000 )     -  
Proceeds from sales and maturities of short-term investments     11,052       10,865  
Net cash provided by (used in) investing activities     (32,827 )     142  
Financing activities        
Proceeds from exercise of stock options     8,306       24  
Tax withholdings related to net share settlements of restricted stock units     (832 )     (1,206 )
Net cash provided by (used in) financing activities     7,474       (1,182 )
Effect of exchange rate changes on cash, cash equivalents and restricted cash     (336 )     (239 )
Net decrease in cash, cash equivalents and restricted cash     (3,520 )     (1,833 )
Net cash used in discontinued operation     (3,975 )     (1,740 )
Cash, cash equivalents and restricted cash, beginning of period     29,225       20,099  
Cash, cash equivalents and restricted cash, end of period   $ 21,730     $ 16,526  
Supplemental disclosure of cash flow information        
Income taxes paid, net   $ 739     $ 166  
Non-cash investing: Investment in LLC acquired in exchange for sale of Advertising business   $ 15,600     $ -  
Cash flow from discontinued operations:        
Net cash used in operating activities   $ (3,569 )   $ (1,740 )
Net cash used in financing activities     (406 )     -  
Net cash transferred from continuing operations     3,975       1,740  
Net change in cash and cash equivalent from discontinued operation     -       -  
Cash and cash equivalent of discontinued operations, beginning of period     -       -  
Cash and cash equivalent of discontinued operations, end of period   $ -     $ -  
Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheets        
Cash and cash equivalents   $ 19,278     $ 13,596  
Restricted cash     2,452       2,930  
Total cash, cash equivalents and restricted cash   $ 21,730     $ 16,526  


Telenav, Inc.
Unaudited Reconciliation of Non-GAAP Adjustments
(in thousands)
Reconciliation of Revenue to Billings
         
    Three Months Ended
    September 30,
      2019     2018
         
Revenue   $ 66,629   $ 46,252
Adjustments:        
Change in deferred revenue     10,246     6,842
Billings   $ 76,875   $ 53,094
         


Telenav, Inc.
Unaudited Reconciliation of Non-GAAP Adjustments
(in thousands)
Reconciliation of Deferred Revenue to Change in Deferred Revenue
Reconciliation of Deferred Costs to Change in Deferred Costs
         
    Three Months Ended September 30,
      2019       2018
Deferred revenue, end of period   $ 145,381     $ 81,380
Deferred revenue, beginning of period     135,135       74,538
Change in deferred revenue   $ 10,246     $ 6,842
         
Deferred costs, end of period   $ 77,795     $ 62,806
Deferred costs, beginning of period     79,802       58,425
Change in deferred costs(1)   $ (2,007 )   $ 4,381
         
(1) Deferred costs primarily include costs associated with third-party content and in connection with certain customized software solutions, the costs incurred to develop those solutions. We expect to incur additional costs in the future due to requirements to provide ongoing map updates and provisioning of services such as hosting, monitoring, customer support and, for certain customers, additional period content and associated technology costs.


Telenav, Inc.
Unaudited Reconciliation of Non-GAAP Adjustments
(in thousands)
Reconciliation of Net Loss to Adjusted EBITDA
         
    Three Months Ended
    September 30,
      2019       2018  
         
Net loss   $ (3,954 )   $ (7,570 )
Loss on discontinued operations     3,986       1,485  
Income (loss) from continuing operations     32       (6,085 )
         
Adjustments:        
Stock-based compensation expense     1,752       2,048  
Depreciation and amortization expense     922       1,010  
Other income, net     (561 )     (1,590 )
Provision for income taxes     411       740  
Adjusted EBITDA   $ 2,556     $ (3,877 )


Telenav, Inc.
Unaudited Reconciliation of Non-GAAP Adjustments
(in thousands)
Reconciliation of Net Loss to Free Cash Flow
         
    Three Months Ended
    September 30,
      2019       2018  
         
Net loss   $ (3,954 )   $ (7,570 )
Loss on discontinued operations     3,986       1,485  
Income (Loss) from continuing operations     32       (6,085 )
         
Adjustments to reconcile net income (loss) to net cash provided by operating activities:        
Change in deferred revenue (1)     10,345       6,842  
Change in deferred costs (2)     1,979       (4,381 )
Changes in other operating assets and liabilities     6,482       1,266  
Other adjustments (3)     3,331       1,804  
Net cash provided by (used in) operating activities     22,169       (554 )
Less: Purchases of property and equipment     (461 )     (99 )
Free cash flow   $ 21,708     $ (653 )
         
(1) Consists of product royalties, customized software development fees, service fees and subscription fees.
(2) Consists primarily of third party content costs and customized software development expenses.  
(3) Consist primarily of depreciation and amortization, stock-based compensation expense and other non-cash items.


Telenav, Inc.
Summarized Financial Information Depicting the Impact of Restatement
(in thousands, except per share amounts)
(unaudited)
 
    As of September 30, 2019
    As Reported Sept. 30, 2019 Form 10-Q   Adjustments   As Adjusted
Assets            
Accounts receivable   $ 52,973     $ 298     $ 53,271  
Total current assets     202,703       298       203,001  
Total assets     311,228       298       311,526  
Liabilities and stockholders' equity            
Deferred revenue     43,073       (1,876 )     41,197  
Accumulated deficit     (96,407 )     2,174       (94,233 )
Total liabilities and stockholders' equity     311,228       298       311,526  
             
             
    Three Months Ended September 30, 2019
    As Reported Sept. 30, 2019 Form 10-Q   Adjustments   As Adjusted
Revenue            
Product   $ 55,183     $ 807     $ 55,990  
Services     9,272       1,367       10,639  
Total revenue     64,455       2,174       66,629  
Gross profit     27,604       2,174       29,778  
Income (loss) from continuing operations     (2,142 )     2,174       32  
Net income (loss)     (6,128 )     2,174       (3,954 )
             
Income (loss) from continuing operations per share, basic and diluted   $ (0.04 )   $ 0.04       -  
Net loss per share, basic and diluted     (0.13 )     0.05       (0.08 )
Shares used in computing income (loss) per share            
Basic     47,780           47,780  
Diluted     47,780           49,648  
             


Telenav, Inc.
Summarized Financial Information Depicting the Impact of Restatement of Non-GAAP Adjustments
(in thousands, except per share amounts)
(unaudited)
             
Reconciliation of Revenue to Billings
             
    Three Months Ended September 30, 2019
    As Reported Sept. 30, 2019 Form 10-Q   Adjustments   As Adjusted
             
Revenue   $ 64,455     $ 2,174     $ 66,629  
Adjustments:            
Change in deferred revenue     12,122       (1,876 )     10,246  
Billings   $ 76,577     $ 298     $ 76,875  
             
             
Reconciliation of Net Income to Adjusted EBITDA
             
    Three Months Ended September 30, 2019
    As Reported Sept. 30, 2019 Form 10-Q   Adjustments   As Adjusted
Net income (loss)   $ (6,128 )   $ 2,174     $ (3,954 )
Loss on discontinued operations     3,986       -       3,986  
Income (loss) from continuing operations     (2,142 )     2,174       32  
             
Adjustments:            
Stock-based compensation expense     1,752       -       1,752  
Depreciation and amortization expense     922       -       922  
Other income, net     (561 )     -       (561 )
Provision for income taxes     411       -       411  
Adjusted EBITDA   $ 382     $ 2,174     $ 2,556  
             
             
Reconciliation of Net Income (Loss) to Free Cash Flow
             
    Three Months Ended September 30, 2019
    As Reported Sept. 30, 2019 Form 10-Q   Adjustments   As Adjusted
Net income (loss)   $ (6,128 )   $ 2,174     $ (3,954 )
Loss on discontinued operations     3,986       -       3,986  
Income (Loss) from continuing operations     (2,142 )     2,174       32  
             
Adjustments to reconcile net loss to net cash provided by operating activities:            
Change in deferred revenue (1)     12,221       (1,876 )     10,345  
Change in deferred costs (2)     1,979       -       1,979  
Changes in other operating assets and liabilities     6,780       (298 )     6,482  
Other adjustments (3)     3,331       -       3,331  
Net cash provided by operating activities     22,169       -       22,169  
Less: Purchases of property and equipment     (461 )     -       (461 )
Free cash flow   $ 21,708     $ -     $ 21,708  
             
(1) Consists of product royalties, customized software development fees, service fees and subscription fees.    
(2) Consists primarily of third party content costs and customized software development expenses.      
(3) Consist primarily of depreciation and amortization, stock-based compensation expense and other non-cash items.    


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