“We are pleased that we continue to increase penetration of our location-based services solution across more vehicles and brands, including new GM models such as the 2019 Chevrolet Silverado and GMC Sierra trucks and Chevrolet Equinox,” said HP Jin, Chairman and CEO of
Financial Highlights for the fourth quarter ended
- Total revenue for the fourth quarter of fiscal 2018 was $16.6 million, compared with $13.8 million in the third quarter of fiscal 2018, and
$40.3 million in the fourth quarter of fiscal 2017. Total revenue for fiscal 2018 was$106.2 million , compared with$169.6 million in fiscal 2017. As previously announced, the year-over-year decline resulted primarily from a change in revenue recognition due to the commencement of Ford's map update program, whereby revenue from certain on-board navigation products offered with map updates is deferred and recognized over the contractual period during which we provide map updates, as well as the deferral of all prospective Ford royalties beginningJanuary 1, 2018 pending completion of milestone deliveries. - When we adopt ASC 606 as of
July 1, 2018 , we expect we will be able to recognize a substantial portion of revenue as automotive royalties are billed. - Billings for the fourth quarter of fiscal 2018 were $59.2 million, compared with
$58.7 million in the third quarter of fiscal 2018 and$66.5 million in the fourth quarter of fiscal 2017. The year over year decline was due primarily to lower per unit pricing resulting from lower third-party content costs. Billings for fiscal 2018 were$253.9 million , compared with$233.6 million for fiscal 2017. - Net loss for the fourth quarter of fiscal 2018 was $(26.6) million, compared with
$(30.8) million for the third quarter of fiscal 2018 and$(12.8) million for the fourth quarter of fiscal 2017, with the year over year increase in net loss primarily due to the change in revenue recognition criteria related to the Ford agreement. Net loss for fiscal 2018 was$(89.1) million compared with$(47.3) million for fiscal 2017. - Adjusted EBITDA on billings for the fourth quarter of fiscal 2018 was a $(2.5) million loss compared with a
$(4.1) million loss in the third quarter of fiscal 2018 and a$(0.4) million loss in the fourth quarter of fiscal 2017. Adjusted EBITDA on billings for fiscal 2018 was a$(12.8) million loss, compared with a$(6.1) million loss in fiscal 2017. - Ending cash, cash equivalents and short-term investments, excluding restricted cash, were $84.9 million as of June 30, 2018. This represented cash and short-term investments of $1.89 per share, based on 44.8 million shares of common stock outstanding as of June 30, 2018.
Telenav had no debt as of June 30, 2018.
Recent Business Highlights
- 1.2 million
Telenav -equipped cars capable of connected services were deployed into the global market during the quarter endedJune 30, 2018 , now totaling 9.4 million cumulative units deployed to date. - GM launched Telenav’s hybrid navigation solution on additional model year 2019 truck and SUV/CUV models, including
Chevy Silverado , GMC Sierra and Chevrolet Equinox. - On
June 20, 2018 ,Ford Motor Company announced that it had earned its best-ever scores in the 2018 J.D. Power Initial Quality Study, which includes improvements in navigation technology.Telenav provides the embedded navigation solution for Ford SYNC®3 globally, including the recent availability of the connected services feature. Telenav announced its first open-source machine-learning technology designed to detect navigation features in street-level imagery to more efficiently improve OpenStreetMaps.
Q1 Fiscal 2019 Business Outlook
For the quarter ending September 30, 2018, Telenav offers the following guidance. The Company is finalizing its application of ASC 606, Revenue from Contracts with Customers, effective
- Total revenue is expected to be $52 million to $56 million, including approximately
$3 million of customized software development fees, which reflects the anticipated impact of Telenav’s adoption of ASC 606 onJuly 1, 2018 . - Billings are expected to be $60 million to $62 million.
- Deferred revenue is expected to increase by
$8 million to $10 million , from a lower, restated balance that will reflect the adoption of ASC 606 onJuly 1, 2018 . - Deferred costs are expected to increase by
$5 million to $8 million , from a lower restated balance that will reflect the adoption of ASC 606 onJuly 1 , 2018.Telenav has not yet finalized the accounting treatment of certain research and development costs as a result of its adoption of ASC 606 and 340-40 onJuly 1 , 2018. Should we determine that we are required to capitalize certain research and development costs as deferred development costs under ASC 340-40 rather than expense them, such amounts for the three months endingSeptember 30, 2018 are estimated to be$3 million to $5 million which would be in addition to the potential recognition during the quarter of approximately$2.5 million as cost of revenue from the balance of deferred development costs. This would result in a net increase in capitalized deferred development costs of$0.5 million to $2.5 million (such recognition and such capitalization, the “Capitalized Research and Development Costs”). - Non-GAAP gross profit is expected to be approximately
$22 million to $24 million , and non-GAAP gross margin is expected to be approximately 45 percent, both of which exclude the potential recognition of$2.5 million as cost of revenue from the balance of deferred development costs should the company determine such accounting treatment under ASC 340-40. - Direct contribution from billings is expected to be approximately
$26 million to $27 million , which range excludes the potential impact of theCapitalized Research and Development Costs. - Direct contribution margin from billings is expected to be approximately 44%, which margin excludes the potential impact of
Capitalized Research and Development Costs under ASC 340-40. - Non-GAAP operating expenses are expected to be $34 million to $35 million, which include
$3 million to $5 million of potential capitalizable research and development costs. - Non-GAAP net loss is expected to be approximately
$(9.5) million to $(11.5) million , which excludes the potential impact of theCapitalized Research and Development Costs. - Adjusted EBITDA loss is expected to be approximately
$(5.5) million to $(7.5) million , which excludes the potential impact of theCapitalized Research and Development Costs. - Adjusted EBITDA on billings loss is expected to be approximately
$(2.5) million to $(4.5) million , which excludes the potential impact of theCapitalized Research and Development Costs. In addition, effectiveSeptember 30, 2018 , the Company anticipates that the metric “adjusted EBITDA on billings” will be relabeled as “Adjusted Cash Flow from Operations.” - Automotive is expected to be approximately 80 percent to 85 percent of total revenue.
- Advertising is expected to be approximately 12 percent of total revenue.
- Weighted average diluted shares outstanding are expected to be approximately 45.5 million.
Subject to anticipated volumes, take rates and timing of model expansion under Telenav’s various automotive OEM programs, including the potential impact, if any, from Ford’s recent announcement of its intention to modify its North American passenger car portfolio,
The above information concerning guidance represents Telenav’s outlook only as of the date hereof, and is subject to change, as a result of amendments to material contracts and other changes in business conditions. Telenav undertakes no obligation to update or revise any financial forecast or other forward-looking statements, as a result of new developments, or otherwise.
Conference Call and Quarterly Commentary
ASC 606 Adoption
We anticipate that when we adopt ASC 606, significant amounts currently set forth in deferred revenue and deferred costs as of
Use of Non-GAAP Financial Measures
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 measure GAAP revenue recognized plus the change in deferred revenue from the beginning to the end of the period. Direct contribution from billings reflects GAAP gross profit plus change in deferred revenue less change in deferred costs. Direct contribution margin from billings reflects direct contribution from billings divided by billings.
Adjusted EBITDA measures GAAP net loss excluding the impact of stock-based compensation expense, depreciation and amortization, other income (expense), provision (benefit) for income taxes, and other applicable items such as legal settlements and contingencies, deferred rent reversal and tenant improvement allowance recognition due to sublease termination, net of tax and goodwill impairment. Stock-based compensation expense relates to equity incentive awards granted to its employees, directors, and consultants. Legal settlements and contingencies represent settlements and offers made to settle litigation in which
Adjusted EBITDA and adjusted EBITDA on billings are key measures used by Telenav’s management and board of directors to understand and evaluate Telenav’s core operating performance and trends, to prepare and approve our annual budget and to develop short- and long-term operational plans. In particular,
Adjusted EBITDA on billings measures adjusted EBITDA plus the effect of changes in deferred revenue and deferred costs.
Free cash flow is a non-GAAP financial measure
In this press release,
Forward Looking Statements
This press release contains forward-looking statements that are based on
ABOUT
Copyright 2018 Telenav, Inc. All Rights Reserved.
“Telenav,” “Scout,” “Thinknear” and the Telenav, Scout and Thinknear logos are registered trademarks 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.
TNAV-F
TNAV-C
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) | ||||||||
June 30, 2018 |
June 30, 2017* |
|||||||
(unaudited) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 17,117 | $ | 20,757 | ||||
Short-term investments | 67,829 | 77,598 | ||||||
Accounts receivable, net of allowances of $17 and $75 at June 30, 2018 and 2017, respectively | 46,188 | 57,834 | ||||||
Restricted cash | 2,982 | 3,401 | ||||||
Income taxes receivable | - | 34 | ||||||
Deferred costs | 31,888 | 11,703 | ||||||
Prepaid expenses and other current assets | 3,867 | 3,988 | ||||||
Total current assets | 169,871 | 175,315 | ||||||
Property and equipment, net | 6,987 | 4,658 | ||||||
Deferred income taxes, non-current | 867 | 900 | ||||||
Goodwill and intangible assets, net | 31,046 | 34,844 | ||||||
Deferred costs, non-current | 109,269 | 42,389 | ||||||
Other assets | 2,372 | 1,454 | ||||||
Total assets | $ | 320,412 | $ | 259,560 | ||||
Liabilities and stockholders’ equity | ||||||||
Current liabilities: | ||||||||
Trade accounts payable | $ | 13,008 | $ | 6,151 | ||||
Accrued expenses | 38,803 | 51,528 | ||||||
Deferred revenue | 52,871 | 20,345 | ||||||
Income taxes payable | 221 | 197 | ||||||
Total current liabilities | 104,903 | 78,221 | ||||||
Deferred rent, non-current | 1,112 | 996 | ||||||
Deferred revenue, non-current | 182,236 | 67,056 | ||||||
Other long-term liabilities | 1,115 | 1,139 | ||||||
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; 44,871 and 43,946 shares issued and outstanding at June 30, 2018 and 2017, respectively | 45 | 44 | ||||||
Additional paid-in capital | 167,895 | 159,666 | ||||||
Accumulated other comprehensive loss | (1,852 | ) | (1,934 | ) | ||||
Accumulated deficit | (135,042 | ) | (45,628 | ) | ||||
Total stockholders’ equity | 31,046 | 112,148 | ||||||
Total liabilities and stockholders’ equity | $ | 320,412 | $ | 259,560 | ||||
*Derived from audited consolidated financial statements as of and for the year ended June 30, 2017. | ||||||||
Telenav, Inc. | ||||||||||||||||
Condensed Consolidated Statements of Operations | ||||||||||||||||
(in thousands, except per share amounts) | ||||||||||||||||
Three Months Ended | Fiscal Year Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017* | |||||||||||||
(unaudited) | (unaudited) | (unaudited) | ||||||||||||||
Revenue: | ||||||||||||||||
Product | $ | 5,858 | $ | 28,132 | $ | 59,143 | $ | 119,785 | ||||||||
Services | 10,761 | 12,159 | 47,037 | 49,799 | ||||||||||||
Total revenue | 16,619 | 40,291 | 106,180 | 169,584 | ||||||||||||
Cost of revenue: | ||||||||||||||||
Product | 4,685 | 16,727 | 37,517 | 70,260 | ||||||||||||
Services | 6,167 | 5,738 | 24,713 | 22,075 | ||||||||||||
Total cost of revenue | 10,852 | 22,465 | 62,230 | 92,335 | ||||||||||||
Gross profit | 5,767 | 17,826 | 43,950 | 77,249 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | 22,291 | 19,677 | 87,488 | 73,102 | ||||||||||||
Sales and marketing | 4,894 | 5,470 | 20,748 | 21,995 | ||||||||||||
General and administrative | 5,219 | 5,193 | 21,562 | 23,041 | ||||||||||||
Goodwill impairment | - | - | 2,666 | - | ||||||||||||
Legal settlement and contingencies | - | - | 425 | 6,424 | ||||||||||||
Total operating expenses | 32,404 | 30,340 | 132,889 | 124,562 | ||||||||||||
Loss from operations | (26,637 | ) | (12,514 | ) | (88,939 | ) | (47,313 | ) | ||||||||
Other income (expense), net | 433 | (260 | ) | 833 | 892 | |||||||||||
Loss before provision for income taxes | (26,204 | ) | (12,774 | ) | (88,106 | ) | (46,421 | ) | ||||||||
Provision for income taxes | 401 | 36 | 1,012 | 841 | ||||||||||||
Net loss | $ | (26,605 | ) | $ | (12,810 | ) | $ | (89,118 | ) | $ | (47,262 | ) | ||||
Net loss per share: | ||||||||||||||||
Basic and diluted | $ | (0.59 | ) | $ | (0.29 | ) | $ | (2.00 | ) | $ | (1.09 | ) | ||||
Weighted average shares used in computing net loss per share: | ||||||||||||||||
Basic and diluted | 44,806 | 43,806 | 44,498 | 43,343 | ||||||||||||
*Derived from audited consolidated financial statements as of and for the year ended June 30, 2017. | ||||||||||||||||
Telenav, Inc. | ||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||
(in thousands) | ||||||||
Fiscal Year Ended June 30, |
||||||||
2018 | 2017* | |||||||
(unaudited) | ||||||||
Operating activities | ||||||||
Net loss | $ | (89,118 | ) | $ | (47,262 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation and amortization | 3,609 | 2,647 | ||||||
Deferred rent reversal due to lease termination | (538 | ) | - | |||||
Tenant improvement allowance recognition due to lease termination | (582 | ) | - | |||||
Accretion of net premium on short-term investments | 192 | 403 | ||||||
Stock-based compensation expense | 9,876 | 10,162 | ||||||
Goodwill impairment | 2,666 | - | ||||||
Bad debt expense | (24 | ) | 189 | |||||
Loss (gain) on disposal of property and equipment | 15 | (14 | ) | |||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 11,708 | (15,807 | ) | |||||
Deferred income taxes | 52 | (239 | ) | |||||
Restricted cash | 419 | 1,709 | ||||||
Income taxes receivable | 34 | 654 | ||||||
Deferred costs | (87,065 | ) | (42,016 | ) | ||||
Prepaid expenses and other current assets | 42 | 459 | ||||||
Other assets | (1,300 | ) | 483 | |||||
Trade accounts payable | 6,836 | 1,195 | ||||||
Accrued expenses and other liabilities | (12,725 | ) | 13,778 | |||||
Income taxes payable | 23 | 109 | ||||||
Deferred rent | 1,178 | 66 | ||||||
Deferred revenue | 147,706 | 64,032 | ||||||
Net cash used in operating activities | (6,996 | ) | (9,452 | ) | ||||
Investing activities | ||||||||
Purchases of property and equipment | (4,648 | ) | (1,225 | ) | ||||
Purchases of short-term investments | (49,287 | ) | (64,957 | ) | ||||
Proceeds from sales and maturities of short-term investments | 58,404 | 74,878 | ||||||
Proceeds from sales of long-term investments | - | 246 | ||||||
Net cash provided by investing activities | 4,469 | 8,942 | ||||||
Financing activities | ||||||||
Proceeds from exercise of stock options | 681 | 2,738 | ||||||
Tax withholdings related to net share settlements of restricted stock units | (2,327 | ) | (3,008 | ) | ||||
Net cash used in financing activities | (1,646 | ) | (270 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | 533 | 188 | ||||||
Net decrease in cash and cash equivalents | (3,640 | ) | (592 | ) | ||||
Cash and cash equivalents, at beginning of period | 20,757 | 21,349 | ||||||
Cash and cash equivalents, at end of period | $ | 17,117 | $ | 20,757 | ||||
Supplemental disclosure of cash flow information | ||||||||
Income taxes paid, net | $ | 1,053 | $ | 1,872 | ||||
*Derived from audited consolidated financial statements as of and for the year ended June 30, 2017. | ||||||||
Telenav, Inc. | ||||||||||||||||
Condensed Consolidated Segment Summary | ||||||||||||||||
(in thousands, except percentages) | ||||||||||||||||
Three Months Ended | Fiscal Year Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017* | |||||||||||||
(unaudited) | (unaudited) | (unaudited) | ||||||||||||||
Automotive | ||||||||||||||||
Revenue | $ | 7,609 | $ | 29,297 | $ | 65,559 | $ | 123,784 | ||||||||
Cost of revenue | 6,244 | 17,828 | 43,161 | 73,923 | ||||||||||||
Gross profit | $ | 1,365 | $ | 11,469 | $ | 22,398 | $ | 49,861 | ||||||||
Gross margin | 18 | % | 39 | % | 34 | % | 40 | % | ||||||||
Advertising | ||||||||||||||||
Revenue | $ | 6,061 | $ | 6,804 | $ | 27,229 | $ | 26,841 | ||||||||
Cost of revenue | 3,353 | 3,055 | 13,341 | 12,724 | ||||||||||||
Gross profit | $ | 2,708 | $ | 3,749 | $ | 13,888 | $ | 14,117 | ||||||||
Gross margin | 45 | % | 55 | % | 51 | % | 53 | % | ||||||||
Mobile Navigation | ||||||||||||||||
Revenue | $ | 2,949 | $ | 4,190 | $ | 13,392 | $ | 18,959 | ||||||||
Cost of revenue | 1,255 | 1,582 | 5,728 | 5,688 | ||||||||||||
Gross profit | $ | 1,694 | $ | 2,608 | $ | 7,664 | $ | 13,271 | ||||||||
Gross margin | 57 | % | 62 | % | 57 | % | 70 | % | ||||||||
Total | ||||||||||||||||
Revenue | $ | 16,619 | $ | 40,291 | $ | 106,180 | $ | 169,584 | ||||||||
Cost of revenue | 10,852 | 22,465 | 62,230 | 92,335 | ||||||||||||
Gross profit | $ | 5,767 | $ | 17,826 | $ | 43,950 | $ | 77,249 | ||||||||
Gross margin | 35 | % | 44 | % | 41 | % | 46 | % | ||||||||
*Derived from audited consolidated financial statements as of and for the year ended June 30, 2017. | ||||||||||||||||
Telenav, Inc. | ||||||||||||||||
Unaudited Reconciliation of Non-GAAP Adjustments | ||||||||||||||||
(in thousands) | ||||||||||||||||
Reconciliation of Revenue to Billings (Non-GAAP) | ||||||||||||||||
Three Months Ended | Fiscal Year Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Automotive | ||||||||||||||||
Revenue | $ | 7,609 | $ | 29,297 | $ | 65,559 | $ | 123,784 | ||||||||
Adjustments: | ||||||||||||||||
Change in deferred revenue | 42,751 | 26,434 | 148,053 | 64,364 | ||||||||||||
Billings | $ | 50,360 | $ | 55,731 | $ | 213,612 | $ | 188,148 | ||||||||
Advertising | ||||||||||||||||
Revenue | $ | 6,061 | $ | 6,804 | $ | 27,229 | $ | 26,841 | ||||||||
Adjustments: | ||||||||||||||||
Change in deferred revenue | - | - | - | - | ||||||||||||
Billings | $ | 6,061 | $ | 6,804 | $ | 27,229 | $ | 26,841 | ||||||||
Mobile Navigation | ||||||||||||||||
Revenue | $ | 2,949 | $ | 4,190 | $ | 13,392 | $ | 18,959 | ||||||||
Adjustments: | ||||||||||||||||
Change in deferred revenue | (121 | ) | (217 | ) | (347 | ) | (332 | ) | ||||||||
Billings | $ | 2,828 | $ | 3,973 | $ | 13,045 | $ | 18,627 | ||||||||
Total | ||||||||||||||||
Revenue | $ | 16,619 | $ | 40,291 | $ | 106,180 | $ | 169,584 | ||||||||
Adjustments: | ||||||||||||||||
Change in deferred revenue | 42,630 | 26,217 | 147,706 | 64,032 | ||||||||||||
Billings | $ | 59,249 | $ | 66,508 | $ | 253,886 | $ | 233,616 | ||||||||
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 | ||||||||||||||||||||||||||
Automotive | Advertising | Mobile Navigation | Total | |||||||||||||||||||||||
Three Months Ended June 30, |
Three Months Ended June 30, |
Three Months Ended June 30, |
Three Months Ended June 30, |
|||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | |||||||||||||||||||
Deferred revenue, June 30 | $ | 234,570 | $ | 86,517 | $ | - | $ | - | $ | 537 | $ | 884 | $ | 235,107 | $ | 87,401 | ||||||||||
Deferred revenue, March 31 | 191,819 | 60,083 | - | - | 658 | 1,101 | 192,477 | 61,184 | ||||||||||||||||||
Change in deferred revenue | $ | 42,751 | $ | 26,434 | $ | - | $ | - | $ | (121 | ) | $ | (217 | ) | $ | 42,630 | $ | 26,217 | ||||||||
Deferred costs, June 30 | $ | 141,157 | $ | 54,092 | $ | - | $ | - | $ | - | $ | - | $ | 141,157 | $ | 54,092 | ||||||||||
Deferred costs, March 31 | 119,248 | 36,216 | - | - | - | - | 119,248 | 36,216 | ||||||||||||||||||
Change in deferred costs | $ | 21,909 | $ | 17,876 | $ | - | $ | - | $ | - | $ | - | $ | 21,909 | $ | 17,876 | ||||||||||
Automotive | Advertising | Mobile Navigation | Total | |||||||||||||||||||||||
Fiscal Year Ended June 30, |
Fiscal Year Ended June 30, |
Fiscal Year Ended June 30, |
Fiscal Year Ended June 30, |
|||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | |||||||||||||||||||
Deferred revenue, ending | $ | 234,570 | $ | 86,517 | $ | - | $ | - | $ | 537 | $ | 884 | $ | 235,107 | $ | 87,401 | ||||||||||
Deferred revenue, beginning | 86,517 | 22,153 | - | - | 884 | 1,216 | 87,401 | 23,369 | ||||||||||||||||||
Change in deferred revenue | $ | 148,053 | $ | 64,364 | $ | - | $ | - | $ | (347 | ) | $ | (332 | ) | $ | 147,706 | $ | 64,032 | ||||||||
Deferred costs, ending | $ | 141,157 | $ | 54,092 | $ | - | $ | - | $ | - | $ | - | $ | 141,157 | $ | 54,092 | ||||||||||
Deferred costs, beginning | 54,092 | 12,076 | - | - | - | - | 54,092 | 12,076 | ||||||||||||||||||
Change in deferred costs | $ | 87,065 | $ | 42,016 | $ | - | $ | - | $ | - | $ | - | $ | 87,065 | $ | 42,016 | ||||||||||
Telenav, Inc. | ||||||||||||||||
Unaudited Reconciliation of Non-GAAP Adjustments | ||||||||||||||||
(in thousands, except percentages) | ||||||||||||||||
Reconciliation of Gross Profit to Direct Contribution from Billings | ||||||||||||||||
Three Months Ended | Fiscal Year Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Automotive | ||||||||||||||||
Gross profit | $ | 1,365 | $ | 11,469 | $ | 22,398 | $ | 49,861 | ||||||||
Gross margin | 18 | % | 39 | % | 34 | % | 40 | % | ||||||||
Adjustments to gross profit: | ||||||||||||||||
Change in deferred revenue | 42,751 | 26,434 | 148,053 | 64,364 | ||||||||||||
Change in deferred costs(1) | (21,909 | ) | (17,876 | ) | (87,065 | ) | (42,016 | ) | ||||||||
Net change | 20,842 | 8,558 | 60,988 | 22,348 | ||||||||||||
Direct contribution from billings(1) | $ | 22,207 | $ | 20,027 | $ | 83,386 | $ | 72,209 | ||||||||
Direct contribution margin from billings(1) | 44 | % | 36 | % | 39 | % | 38 | % | ||||||||
Advertising | ||||||||||||||||
Gross profit | $ | 2,708 | $ | 3,749 | $ | 13,888 | $ | 14,117 | ||||||||
Gross margin | 45 | % | 55 | % | 51 | % | 53 | % | ||||||||
Adjustments to gross profit: | ||||||||||||||||
Change in deferred revenue | - | - | - | - | ||||||||||||
Change in deferred costs(1) | - | - | - | - | ||||||||||||
Net change | - | - | - | - | ||||||||||||
Direct contribution from billings(1) | $ | 2,708 | $ | 3,749 | $ | 13,888 | $ | 14,117 | ||||||||
Direct contribution margin from billings(1) | 45 | % | 55 | % | 51 | % | 53 | % | ||||||||
Mobile Navigation | ||||||||||||||||
Gross profit | $ | 1,694 | $ | 2,608 | $ | 7,664 | $ | 13,271 | ||||||||
Gross margin | 57 | % | 62 | % | 57 | % | 70 | % | ||||||||
Adjustments to gross profit: | ||||||||||||||||
Change in deferred revenue | (121 | ) | (217 | ) | (347 | ) | (332 | ) | ||||||||
Change in deferred costs(1) | - | - | - | - | ||||||||||||
Net change | (121 | ) | (217 | ) | (347 | ) | (332 | ) | ||||||||
Direct contribution from billings(1) | $ | 1,573 | $ | 2,391 | $ | 7,317 | $ | 12,939 | ||||||||
Direct contribution margin from billings(1) | 56 | % | 60 | % | 56 | % | 69 | % | ||||||||
Total | ||||||||||||||||
Gross profit | $ | 5,767 | $ | 17,826 | $ | 43,950 | $ | 77,249 | ||||||||
Gross margin | 35 | % | 44 | % | 41 | % | 46 | % | ||||||||
Adjustments to gross profit: | ||||||||||||||||
Change in deferred revenue | 42,630 | 26,217 | 147,706 | 64,032 | ||||||||||||
Change in deferred costs(1) | (21,909 | ) | (17,876 | ) | (87,065 | ) | (42,016 | ) | ||||||||
Net change | 20,721 | 8,341 | 60,641 | 22,016 | ||||||||||||
Direct contribution from billings(1) | $ | 26,488 | $ | 26,167 | $ | 104,591 | $ | 99,265 | ||||||||
Direct contribution margin from billings(1) | 45 | % | 39 | % | 41 | % | 42 | % | ||||||||
(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 prepaid content and associated technology costs. Accordingly, direct contribution from billings and direct contribution margin from billings do not reflect all costs associated with billings. | ||||||||||||||||
Telenav, Inc. | ||||||||||||||||
Unaudited Reconciliation of Non-GAAP Adjustments | ||||||||||||||||
(in thousands) | ||||||||||||||||
Reconciliation of Net Loss to Adjusted EBITDA and Adjusted EBITDA on Billings | ||||||||||||||||
Three Months Ended | Fiscal Year Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Net loss | $ | (26,605 | ) | $ | (12,810 | ) | $ | (89,118 | ) | $ | (47,262 | ) | ||||
Adjustments: | ||||||||||||||||
Goodwill impairment | - | - | 2,666 | - | ||||||||||||
Legal settlement and contingencies | - | - | 425 | 6,424 | ||||||||||||
Deferred rent reversal due to lease termination | - | - | (538 | ) | - | |||||||||||
Tenant improvement allowance recognition due to lease termination | - | - | (582 | ) | - | |||||||||||
Stock-based compensation expense | 2,262 | 3,008 | 9,876 | 10,162 | ||||||||||||
Depreciation and amortization expense | 1,133 | 761 | 3,609 | 2,647 | ||||||||||||
Other income (expense), net | (433 | ) | 260 | (833 | ) | (892 | ) | |||||||||
Provision for income taxes | 401 | 36 | 1,012 | 841 | ||||||||||||
Adjusted EBITDA | (23,242 | ) | (8,745 | ) | (73,483 | ) | (28,080 | ) | ||||||||
Change in deferred revenue | 42,630 | 26,217 | 147,706 | 64,032 | ||||||||||||
Change in deferred costs(1) | (21,909 | ) | (17,876 | ) | (87,065 | ) | (42,016 | ) | ||||||||
Adjusted EBITDA on billings(1) | $ | (2,521 | ) | $ | (404 | ) | $ | (12,842 | ) | $ | (6,064 | ) | ||||
(1) 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 prepaid content and associated technology costs. Accordingly, adjusted EBITDA on billings does not reflect all costs associated with billings. | ||||||||||||||||
Telenav, Inc. | ||||||||||||||||
Unaudited Reconciliation of Non-GAAP Adjustments | ||||||||||||||||
(in thousands) | ||||||||||||||||
Reconciliation of Net Loss to Free Cash Flow | ||||||||||||||||
Three Months Ended | Fiscal Year Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Net loss | $ | (26,605 | ) | $ | (12,810 | ) | $ | (89,118 | ) | $ | (47,262 | ) | ||||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||||||||||
Change in deferred revenue (1) | 42,630 | 26,217 | 147,706 | 64,032 | ||||||||||||
Change in deferred costs (2) | (21,909 | ) | (17,876 | ) | (87,065 | ) | (42,016 | ) | ||||||||
Changes in other operating assets and liabilities | (658 | ) | 2,060 | 6,267 | 2,407 | |||||||||||
Other adjustments (3) | 3,427 | 3,875 | 15,214 | 13,387 | ||||||||||||
Net cash provided by (used in) operating activities | (3,115 | ) | 1,466 | (6,996 | ) | (9,452 | ) | |||||||||
Less: Purchases of property and equipment | (76 | ) | (358 | ) | (4,648 | ) | (1,225 | ) | ||||||||
Free cash flow | $ | (3,191 | ) | $ | 1,108 | $ | (11,644 | ) | $ | (10,677 | ) | |||||
(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. | ||||||||||||||||
Source: Telenav, Inc.