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May 03, 2016
Telenav Reports Third Quarter Fiscal 2016 Financial Results

-Automotive Revenue of $34.7 million, up 18% year-over-year

-Location-based Advertising Revenue of $5.2 million, up 28% year-over-year

-Total Billings of $53.1 million, up 25% year-over-year

 

Santa Clara, Calif., May 03, 2016 (GLOBE NEWSWIRE) --  Telenav®, Inc. (NASDAQ:TNAV), a leader in connected car services, today announced its financial results for the third quarter that ended March 31, 2016.

"Telenav delivered solid results for the third quarter of fiscal 2016, achieving sequential and year-over-year growth in both revenue and billings," said HP Jin, chairman and CEO of Telenav. "During the quarter, we benefited from the strength in orders from Ford SYNC 2 in Europe. More recently, SYNC 3 with Ford has been officially launched in China following our release of SYNC 3 in North America in 2015. We are very pleased with the positive reviews of the SYNC 3 platform as we progress through the transition from SYNC 2. We believe the strengthening market leadership of our automotive business combined with the increasing momentum in the location-based advertising business are key to our future success in becoming a global leader in the fast growing connected car industry."

"Following a successful launch in North America, we look forward to consumer adoption of SYNC 3 in international markets," said Michael Strambi, CFO of Telenav. "As we have noted in the past, revenue recognition for SYNC 3 differs from the SYNC 2 platform. As a result, we expect the transition to result in a sequential decline in revenue for the June quarter, which is reflected in our outlook."

 

Financial Highlights

  • Total revenue for the third quarter of fiscal 2016 was $46.3 million, compared with $45.3 million in the second quarter of fiscal 2016 and $42.3 million in the third quarter of fiscal 2015.
  • Automotive revenue was $34.7 million, or 75 percent of total revenue, for the third quarter of fiscal 2016, compared with $31.8 million, or 70 percent of total revenue, in the second quarter of fiscal 2016 and $29.5 million, or 70 percent of total revenue, for the third quarter of fiscal 2015.
  • Advertising revenue was $5.2 million, or 11 percent of total revenue, for the third quarter of fiscal 2016, compared with $6.7 million, or 15 percent of total revenue, for the second quarter of fiscal 2016, and $4.0 million, or 10 percent of total revenue, for the third quarter of fiscal 2015.
  • Billings for the third quarter of fiscal 2016 was $53.1 million, compared with $48.4 million in the second quarter of fiscal 2016 and $42.5 million in the third quarter of fiscal 2015.
  • Deferred revenue at March 31, 2016 was $20.7 million, compared with $13.9 million at December 31, 2015 and $5.4 million at March 31, 2015.
  • Operating expenses for the third quarter of fiscal 2016 were $29.4 million, compared with $27.6 million in second quarter of fiscal 2016 and $30.4 million in the third quarter of fiscal 2015.
  • GAAP net loss for the third quarter of fiscal 2016 was ($9.8) million, or ($0.23) per diluted share, compared with a GAAP net loss of ($6.6) million, or ($0.16) per diluted share, in the second quarter of fiscal 2016 and a GAAP net loss of ($4.8) million, or ($0.12) per diluted share, for the third quarter of fiscal 2015.
  • Adjusted EBITDA for the third quarter of fiscal 2016 was a ($6.4) million loss after adjusting our GAAP net loss for the impact of stock-based compensation expense, depreciation and amortization expense, restructuring accruals and reversals, reversals of accruals related to deferred rent resulting from our lease termination, legal contingencies, interest and other income (expense), net and provision (benefit) for income taxes, compared with a ($4.1) million loss in the second quarter of fiscal 2016 and a ($4.7) million loss in the third quarter of fiscal 2015.
  • Ending cash, cash equivalents and short-term investments, excluding restricted cash, were $108.6 million, and Telenav had no debt as of March 31, 2016. This represented cash and short-term investments of $2.55 per share, based on 42.6 million shares of common stock outstanding as of March 31, 2016.
  • Free cash flow for the third quarter of fiscal 2016 was ($2.0) million, compared with ($0.9) million in the second quarter of fiscal 2016 and $5.8 million in the third quarter of fiscal 2015.

Business Outlook

For the fourth fiscal quarter ending June 30, 2016, Telenav offers the following guidance, which is predicated on management's judgments. 

  • Total revenue is expected to be $40 to $43 million;
  • Automotive revenue is expected to be 72 to 75 percent of total revenue, including approximately $1.5 million of customized software development fee revenue;
  • Advertising revenue is expected to be approximately 14 percent of total revenue;
  • Billings are expected to be $43 to $46 million;
  • GAAP gross margin is expected to be approximately 47 percent;
  • Non-GAAP gross margin is expected to be approximately 48 percent;
  • GAAP operating expenses are expected to be $29.5 to $30.5 million;
  • Non-GAAP operating expenses are expected to be $26.5 to $27.5 million, and represent operating expenses adjusted for the impact of approximately $3.0 million of stock-based compensation expense;
  • Estimated provision (benefit) for income taxes is expected to be de minimis;
  • GAAP net loss is expected to be ($9.5) to ($10.5) million;
  • Diluted GAAP net loss per share is expected to be ($0.22) to ($0.24 );
  • Non-GAAP net loss is expected to be ($7.0) to ($8.0) million, and represents GAAP net loss adjusted for the add back of approximately $3.0 million of stock-based compensation expense;
  • Non-GAAP diluted net loss per share is expected to be ($0.16) to ($0.19);
  • Adjusted EBITDA is expected to be ($6.0) to ($7.0) million, and represents GAAP net loss adjusted for the impact of approximately $3.0 million of stock-based compensation expense, and approximately $1.0 million of depreciation and amortization expense, interest and other income (expense), and provision (benefit) from income taxes; and
  • Weighted average diluted shares outstanding are expected to be approximately 43 million.

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
The company will host an investor conference call and live webcast at 2:00 p.m. PT (5:00 p.m. ET) today. To access the conference call, dial 888-329-8862 (toll-free, domestic only) or 719-457-2664 (domestic and international toll) and enter pass code 9337624. The webcast will be accessible on Telenav's investor relations website at http://investor.telenav.com.  A replay of the conference call will be available for two weeks beginning approximately two hours after its completion. To access the replay, dial 888-203-1112 (toll-free, domestic only) or 719-457-0820 (domestic and international toll) and enter pass code 9337624.

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, non-GAAP net income (loss), non-GAAP net income (loss) per share, non-GAAP gross margin, non-GAAP operating expenses, 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.

Billings measure revenue recognized plus the change in deferred revenue from the beginning to the end of the period. We consider billings to be a useful metric for management and investors because billings drive deferred revenue, which is an important indicator of the health and viability of our 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 and may require additional services to be provided over contracted service periods. For example, billings related to certain connected solutions cannot be fully recognized as revenue in a given period due to requirements for ongoing provisioning of services such as hosting, monitoring and customer support. Second, we may calculate billings in a manner that is different from peer companies that report similar financial measures. When we use these measures, we compensate for these limitations by providing specific information regarding revenue and evaluating billings together with revenue calculated in accordance with GAAP. We have also provided a breakdown of the calculation of the change in deferred revenue by segment, which is added to revenue in calculating our non-GAAP metric of billings. In connection with our presentation of the change in deferred revenue, we have provided a similar presentation of the change in the related deferred costs. Such 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. As deferred revenue and deferred costs become larger components of our operating results, we believe these metrics are useful in evaluating cash flow.

Non-GAAP net loss and non-GAAP gross margin exclude the impact of stock-based compensation expense, capitalized software and developed technology amortization expense, and other applicable items such as legal contingencies, benefit from income taxes due to change in tax accounting method and amended tax return, restructuring accruals and reversals, and deferred rent reversals due to lease termination, net of taxes or tax benefits, as applicable to each non-GAAP financial metric. Stock-based compensation expense relates to equity incentive awards granted to our employees, directors, and consultants.  Stock-based compensation expense has been and will continue to be a significant recurring non-cash expense for Telenav that we exclude from non-GAAP financial metrics.  Legal contingencies represent settlements and offers made to settle patent litigation cases in which we are defendants and royalty disputes. Deferred rent reversals represent the reversal of our deferred rent liability that is no longer required due to our facility lease termination.  Capitalized software amortization expense represents internal software costs that were capitalized and are charged to expense as the software is used in our operations.  Developed technology amortization expense relates to the amortization of acquired intangible assets. Our non-GAAP tax rate differs from the tax rate due to the elimination of any tax effect of stock-based compensation expense, capitalized software and developed technology amortization expense, legal contingencies, restructuring accruals and reversals, and other applicable items that are being eliminated to arrive at the non-GAAP net loss.

Adjusted EBITDA measures our GAAP net loss excluding the impact of stock-based compensation expense, depreciation and amortization, interest and other income (expense), provision (benefit) for income taxes, and other applicable items such as legal contingencies, restructuring accruals and reversals, and deferred rent reversals due to lease termination. We believe this is a useful measure of profitability before the impact of certain non-cash expenses, interest income, income taxes, and certain other items that management believes affect the comparability of operating results. Adjusted EBITDA, while generally a measure of profitability, can also represent a loss.

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

We determined that it would be meaningful to investors to develop a breakout of the operating results of the advertising business beyond the current GAAP segment reporting of revenue, cost of revenue and gross margin, and we are including such presentation in our non-GAAP reporting results.  This presentation reflects operating expenses that are directly attributable to the advertising business. We are unable to provide a similar breakout of operating results for the automotive and mobile navigation businesses beyond the current GAAP segment reporting of revenue, cost of revenue and gross margin because these segments share many of the same technologies and resources and as such, comprise operating expenses which are not fully attributable to either.   In addition, the reported non-GAAP operating results for the advertising business only include an allocation of certain shared corporate general and administrative costs that directly benefit the business, such as accounting and human resource services.

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.

Forward Looking Statements
This press release contains forward-looking statements that are based on Telenav management's beliefs and assumptions and on information currently available to our management.  Actual events or results may differ materially from those described in this document due to a number of risks and uncertainties. These potential risks and uncertainties include, among others; Telenav's ability to develop and implement products for General Motors ("GM") and Toyota and to support GM and Toyota and their customers; adoption by vehicle purchasers of Scout for Cars; Telenav's dependence on a limited number of automotive manufacturers and original equipment manufacturers ("OEM") for a substantial portion of its revenue; Telenav's ability to develop and implement products for Ford's Sync 3 system; the timing transition of Ford to its Sync 3 system and the timing of revenue recognition in connection with the Sync 3 due to different title transfer requirements, particularly outside of the U.S.; potential delays in new orders of Sync 3 as Ford uses its Sync 2 inventory in connection with the Sync 3 transition and the impact of the transition on order timing and delivery; automotive manufacturers, automotive OEM, and consumer acceptance of Scout; Telenav's success in achieving additional design wins from OEM and automotive manufacturers and the delivery dates of automobiles including Telenav's products; Telenav's ability to grow and scale its advertising business through the retention of additional, productive sales personnel, new advertising sales and technology delivery while also achieving cash flow break even and profitability in the advertising business; Telenav incurring losses; competition from other market participants who may provide comparable services to subscribers without charge; Telenav's limited history in the automotive navigation market and the advertising market; the timing of new product releases and vehicle production by Telenav's automotive customers, including inventory procurement and fulfillment; Telenav's ability to develop search products with Nuance; possible warranty claims, and the impact on consumer perception of its brand; Telenav's ability to develop and support products including OSM, as well as transition existing navigation products to OSM and any economic benefit anticipated from the use of OSM versus proprietary map products; the potential that we may not be able to realize our deferred tax assets and may have to take a reserve against them; Telenav's ability to qualify for tax refunds and credits; and macroeconomic and political conditions in the U.S. and abroad, in particular China. We discuss these risks in greater detail in "Risk factors" and elsewhere in our Form 10-Q for the three months ended December 31, 2015 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 our management's beliefs and assumptions only as of the date made. You should review our SEC filings carefully and with the understanding that our actual future results may be materially different from what we expect.

About Telenav, Inc.

Telenav is transforming life on the go for people — before, during, and after every drive. Leveraging our location platform, global brands such as Ford, GM, Toyota, and AT&T deliver custom connected car and mobile experiences. Additionally, advertisers such as Nissan, Denny's, Walmart, and Best Buy reach millions of users with our highly-targeted advertising platform. To learn more about how Telenav's location platform powers personalized navigation, mapping, big data intelligence, social driving, and location-based ads, visit www.telenav.com.

Copyright 2016 Telenav, Inc. All Rights Reserved.

"Telenav," "Scout," and the Telenav and Scout 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. 

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Telenav, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except par value)
         
    March 31,
2016
  June 30,
2015*
    (unaudited)    
Assets        
Current assets:        
Cash and cash equivalents   $   15,437     $   18,721  
Short-term investments      93,147        101,195  
Accounts receivable, net of allowances of $75 and $211, at March 31, 2016 and June 30, 2015, respectively      39,434        36,493  
Deferred income taxes, net    —        327  
Restricted cash      4,687        4,878  
Income taxes receivable      5,464        6,080  
Deferred costs, non-current      1,850        432  
Prepaid expenses and other current assets      4,576        3,856  
Total current assets      164,595        171,982  
Property and equipment, net      5,846        7,126  
Deferred income taxes, non-current      722        443  
Goodwill and intangible assets, net      36,253        37,528  
Deferred costs      8,567        2,709  
Other assets      2,262        4,134  
Total assets   $   218,245     $  223,922  
Liabilities and stockholders' equity        
Current liabilities:        
Accounts payable   $   6,438     $   830  
Accrued compensation      8,064        9,628  
Accrued royalties      11,235        9,358  
Other accrued expenses      11,984        10,918  
Deferred revenue      5,392        2,109  
Income taxes payable      237        724  
Total current liabilities      43,350        33,567  
Deferred rent, non-current      983        4,858  
Deferred revenue, non-current      15,315        4,719  
Other long-term liabilities      2,673        4,595  
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; 42,551 and 40,537 shares issued and outstanding at March 31, 2016 and June 30, 2015, respectively      43        41  
Additional paid-in capital      147,822        140,406  
Accumulated other comprehensive loss      (1,574 )      (1,540 )
Retained earnings      9,633        37,276  
Total stockholders' equity      155,924        176,183  
Total liabilities and stockholders' equity   $   218,245     $  223,922  
         
*Derived from audited consolidated financial statements as of and for the year ended June 30, 2015
         

 

                   
Telenav, Inc.  
Condensed Consolidated Statements of Operations  
(in thousands, except per share amounts)  
(unaudited)  
                   
    Three Months Ended
March 31,
  Nine Months Ended
March 31,
 
      2016       2015       2016       2015    
Revenue:                  
Product   $   33,936     $   28,915     $   96,205     $   71,292    
Services      12,342        13,371        39,387        45,761    
Total revenue      46,278        42,286        135,592        117,053    
Cost of revenue:                  
Product      20,957        15,475        57,404        38,477    
Services      5,149        5,364        16,621        17,855    
Total cost of revenue      26,106        20,839        74,025        56,332    
Gross profit      20,172        21,447        61,567        60,721    
Operating expenses:                  
Research and development      16,990        17,384        51,630        51,002    
Sales and marketing      6,793        6,869        20,315        19,775    
General and administrative      5,521        5,682        17,600        17,592    
Restructuring      107        422        (1,361 )      987    
Total operating expenses      29,411        30,357        88,184        89,356    
Loss from operations      (9,239 )      (8,910 )      (26,617 )      (28,635 )  
Interest and other income (expense), net      (610 )      900        (277 )      3,073    
Loss before provision (benefit) for income taxes      (9,849 )      (8,010 )      (26,894 )      (25,562 )  
Provision (benefit) for income taxes      (11 )      (3,243 )      429        (10,135 )  
Net loss   $   (9,838 )   $   (4,767 )   $   (27,323 )   $   (15,427 )  
                   
Net loss per share                  
Basic and diluted   $   (0.23 )   $   (0.12 )   $   (0.66 )   $   (0.39 )  
                   
Weighted average shares used in computing net loss per share                  
Basic and diluted      42,047        40,140        41,226        39,863    
                   

 

Telenav, Inc.  
Condensed Consolidated Statements of Cash Flows  
(in thousands)  
(unaudited)  
           
    Nine Months Ended
March 31, 
 
      2016       2015    
Operating activities          
Net loss   $   (27,323 )   $   (15,427 )  
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:          
Depreciation and amortization      2,696        4,054    
Amortization of net premium on short-term investments      523        1,099    
Stock-based compensation expense      8,887        8,559    
Write-off of long term investments      977        460    
(Gain) loss on disposal of property and equipment      (15 )      10    
Bad debt expense      59        33    
Changes in operating assets and liabilities:          
Accounts receivable      (3,000 )      (11,076 )  
Deferred income taxes      48        1,334    
Income taxes receivable      616        2,354    
Restricted cash      191        910    
Prepaid expenses and other current assets      (720 )      4,452    
Deferred costs      (7,276 )      (2,061 )  
Other assets      895        277    
Accounts payable      5,485        889    
Accrued compensation      (1,564 )      (5,080 )  
Accrued royalties      1,877        10,882    
Accrued expenses and other liabilities      (2,456 )      (2,951 )  
Income taxes payable      (487 )      (82 )  
Deferred rent      (505 )      (1,149 )  
Deferred revenue      13,879        2,986    
Net cash provided by (used in) operating activities      (7,213 )      473    
           
Investing activities          
Purchases of property and equipment      (1,775 )      (650 )  
Purchases of short-term investments      (38,010 )      (101,394 )  
Purchases of long-term investments    —        (450 )  
Proceeds from sales and maturities of short-term investments      45,686        109,215    
Net cash provided by investing activities      5,901        6,721    
           
Financing activities          
Proceeds from exercise of stock options      1,536        3,321    
Tax withholdings related to net share settlements of restricted stock units      (2,755 )      (2,057 )  
Repurchase of common stock      (570 )      (2,519 )  
Net cash used in financing activities      (1,789 )      (1,255 )  
           
Effect of exchange rate changes on cash and cash equivalents      (183 )      (1,888 )  
Net increase (decrease) in cash and cash equivalents      (3,284 )      4,051    
Cash and cash equivalents, at beginning of period      18,721        14,534    
Cash and cash equivalents, at end of period   $   15,437     $   18,585    
           
Supplemental disclosure of cash flow information          
Income taxes (received) paid, net   $   150     $   (10,981 )  
           

 

Telenav, Inc.
Condensed Consolidated Segment Summary
(in thousands, except percentages)
(unaudited)
                 
    Three Months Ended
March 31,
  Nine Months Ended
March 31,
      2016       2015        2016         2015   
Revenue:                
Automotive   $   34,717     $   29,472     $   98,306     $   73,051  
Advertising      5,156        4,019        16,695        12,726  
Mobile Navigation      6,405        8,795        20,591        31,276  
Total revenue      46,278        42,286        135,592        117,053  
                 
Cost of revenue:                
Automotive      21,495        15,759        58,947        39,395  
Advertising      2,788        2,690        9,538        8,528  
Mobile Navigation      1,823        2,390        5,540        8,409  
Total cost of revenue      26,106        20,839        74,025        56,332  
                 
Gross profit:                
Automotive      13,222        13,713        39,359        33,656  
Advertising      2,368        1,329        7,157        4,198  
Mobile Navigation      4,582        6,405        15,051        22,867  
Total gross profit   $   20,172     $   21,447     $   61,567     $   60,721  
                 
Gross margin:                
Automotive     38 %     47 %     40 %     46 %
Advertising     46 %     33 %     43 %     33 %
Mobile Navigation     72 %     73 %     73 %     73 %
Total gross margin     44 %     51 %     45 %     52 %
                 

 

Telenav, Inc.
Unaudited Reconciliation of Non-GAAP Adjustments
(in thousands)
Reconciliation of Revenue  to Billings (Non-GAAP)
                                 
    Three Months Ended March 31, 2016   Nine Months Ended March 31, 2016
    Automotive   Advertising   Mobile
Navigation
  Total   Automotive   Advertising   Mobile
Navigation
  Total
Revenue   $   34,717     $   5,156     $   6,405     $   46,278     $   98,306     $   16,695        20,591     $   135,592  
Adjustments:                                
Increase (decrease) in deferred revenue      6,992      —        (136 )      6,856        14,243      —        (364 )      13,879  
Billings (Non-GAAP)   $   41,709     $   5,156     $   6,269     $   53,134     $   112,549     $   16,695     $   20,227     $   149,471  
                                 
                                 
    Three Months Ended March 31, 2015   Nine Months Ended March 31, 2015
    Automotive   Advertising   Mobile
Navigation
  Total   Automotive   Advertising   Mobile
Navigation
  Total
Revenue   $   29,472     $   4,019     $   8,795     $   42,286     $   73,051     $   12,726     $   31,276     $   117,053  
Adjustments:                                
Increase (decrease) in deferred revenue      297      —        (118 )      179        3,650      —        (664 )      2,986  
Billings (Non-GAAP)   $   29,769     $   4,019     $   8,677     $   42,465     $   76,701     $   12,726     $   30,612     $   120,039  
                                 

 

Telenav, Inc.  
Unaudited Reconciliation of Non-GAAP Adjustments  
(in thousands)  
Reconciliation of Deferred Revenue to Increase (Decrease) in Deferred Revenue  
Reconciliation of Deferred Costs to Increase (Decrease) in Deferred Costs  
                                   
    Automotive   Advertising   Mobile Navigation   Total  
    Three Months Ended 
March 31,
  Three Months Ended 
March 31,
  Three Months Ended 
March 31,
  Three Months Ended 
March 31,
 
      2016       2015     2016   2015     2016       2015       2016       2015    
Deferred revenue, March 31   $   19,435     $   3,780      $  —    $  —   $   1,272     $   1,642     $   20,707     $   5,422    
Deferred revenue, December 31      12,443        3,483      —    —      1,408        1,760        13,851        5,243    
Increase (decrease) in deferred revenue   $   6,992     $   297      $  —    $  —   $   (136 )   $   (118 )   $   6,856     $   179    
                                   
Deferred costs, March 31   $   10,417     $   2,561      $  —    $  —    $      $     $   10,417     $   2,561    
Deferred costs, December 31      7,443        1,223      —    —    —      —        7,443        1,223    
Increase (decrease) in deferred costs   $   2,974     $   1,338      $  —    $  —    $      $     $   2,974     $   1,338    
                                   
                                   
    Automotive   Advertising   Mobile Navigation   Total  
    Nine Months Ended 
March 31,
  Nine Months Ended 
March 31,
  Nine Months Ended 
March 31,
  Nine Months Ended 
March 31,
 
      2016       2015     2016   2015     2016       2015       2016       2015    
Deferred revenue, March 31   $   19,435     $   3,780      $  —    $  —   $   1,272     $   1,642     $   20,707     $   5,422    
Deferred revenue, June 30      5,192        130      —    —      1,636        2,306        6,828        2,436    
Increase (decrease) in deferred revenue   $   14,243     $   3,650      $  —    $  —   $   (364 )   $   (664 )   $   13,879     $   2,986    
                                   
Deferred costs, March 31   $   10,417     $   2,561      $  —    $  —   $      $     $   10,417     $   2,561    
Deferred costs, June 30      3,141        500      —    —    —      —        3,141        500    
Increase (decrease) in deferred costs   $   7,276     $   2,061      $  —    $  —   $      $     $   7,276     $   2,061    
                                   

 

                                   
Telenav, Inc.                  
Unaudited Reconciliation of Non-GAAP Adjustments                  
(in thousands, except per share amounts)                  
Reconciliation of Net Loss to Non-GAAP Net Loss                  
                                   
    Three Months Ended
March 31,
  Nine Months Ended
March 31,
                 
      2016       2015       2016       2015                    
Net loss   $   (9,838 )   $   (4,767 )   $  (27,323 )   $  (15,427 )                  
                                   
Adjustments:                                  
Legal contingencies    —      —        750      —                    
Benefit from income taxes due to change in tax accounting method and amended tax return    —      —      —        (4,061 )                  
Restructuring accrual (reversal)      107        422        (1,361 )      987                    
Deferred rent reversal due to lease termination      (621 )    —        (1,242 )    —                    
Capitalized software and developed technology amortization expense      260        753        1,275        2,523                    
Stock-based compensation expense:                                  
Cost of revenue      39        15        110        66                    
Research and development      1,483        1,243        4,712        3,868                    
Sales and marketing      582        699        2,257        2,193                    
General and administrative      516        675        1,808        2,432                    
Total stock-based compensation expense      2,620        2,632        8,887        8,559                    
Tax effect of adding back adjustments    —        (217 )    —        (625 )                  
Non-GAAP net loss   $   (7,472 )   $   (1,177 )   $  (19,014 )   $   (8,044 )                  
                                   
Non-GAAP net loss per share                                  
Basic and diluted   $   (0.18 )   $   (0.03 )   $   (0.46 )   $   (0.20 )                  
                                   
Weighted average shares used in computing non-GAAP net loss per share                                  
Basic and diluted      42,047        40,140        41,226        39,863                    
                                   
                   
Telenav, Inc.                  
Unaudited Reconciliation of Non-GAAP Adjustments                  
(in thousands)                  
Reconciliation of Net Loss to Adjusted EBITDA                  
                                   
    Three Months Ended
March 31,
  Nine Months Ended
March 31,
                 
      2016       2015       2016       2015                    
Net loss   $   (9,838 )   $   (4,767 )   $   (27,323 )   $   (15,427 )                  
                                   
Adjustments:                                  
Legal contingencies    —      —        750      —                    
Restructuring accrual (reversal)      107        422        (1,361 )      987                    
Deferred rent reversal due to lease termination      (621 )    —        (1,242 )    —                    
Stock-based compensation expense      2,620        2,632        8,887        8,559                    
Depreciation and amortization expense      780        1,178        2,696        4,054                    
Interest and other income (expense), net      610        (900 )      277        (3,073 )                  
Provision (benefit) for income taxes      (11 )       (3,243 )      429        (10,135 )                  
Adjusted EBITDA   $   (6,353 )   $   (4,678 )   $  (16,887 )   $  (15,035 )                  
                                   
   
   
Telenav, Inc.  
Unaudited Reconciliation of Non-GAAP Adjustments  
(in percentages)  
   
Reconciliation of Gross Margin to Non-GAAP Margin  
                                   
    Automotive   Advertising   Mobile Navigation   Total  
    Three Months Ended
March 31,
  Three Months Ended
March 31,
  Three Months Ended
March 31,
  Three Months Ended
March 31,
 
      2016       2015       2016       2015        2016         2015         2016         2015     
                                   
Gross margin     38 %     47 %     46 %     33 %     72 %     73 %     44 %     51 %  
                                   
Adjustments:                                  
Capitalized software and developed technology amortization expense     1 %   —%   —%     11 %     1 %     1 %     1 %     2 %  
                                   
Non-GAAP gross margin     39 %     47 %     46 %     44 %     73 %     74 %     45 %     53 %  
                                   
    Automotive   Advertising   Mobile Navigation   Total  
    Nine Months Ended
March 31,
  Nine Months Ended
March 31,
  Nine Months Ended
March 31 ,
  Nine Months Ended
March 31,
 
      2016       2015       2016       2015        2016         2015         2016         2015     
                                   
Gross margin     40 %     46 %     43 %     33 %     73 %     73 %     45 %     52 %  
                                   
Adjustments:                                  
Capitalized software and developed technology amortization expense     1 %     1 %     4 %     10 %     1 %     1 %     1 %     2 %  
                                   
Non-GAAP gross margin     41 %     47 %     47 %     43 %     74 %     74 %     46 %     54 %  
                                   
                                   
               
Unaudited Reconciliation of Non-GAAP Adjustments              
(in thousands)              
                                   
Reconciliation of Operating Expenses to Non-GAAP Operating Expenses              
                                   
    Three Months Ended
March 31,
  Nine Months Ended
March 31,
                 
      2016       2015       2016       2015                    
                                   
Operating expenses   $   29,411     $   30,357     $   88,184     $   89,356                    
                                   
Adjustments:                                  
Legal contingencies    —      —        (750 )    —                    
Restructuring accrual (reversal)      (107 )      (422 )      1,361        (987 )                  
Deferred rent reversal due to lease termination      588      —        1,176      —                    
Stock-based compensation expense      (2,581 )      (2,617 )      (8,777 )      (8,493 )                  
                                   
Non-GAAP operating expenses   $  27,311     $  27,318     $   81,194     $   79,876                    
                                   

 

Telenav, Inc.
Unaudited Reconciliation of Non-GAAP Adjustments
(in thousands)
Reconciliation of Net Loss to Free Cash Flow
                     
    Three Months Ended
March 31,
  Nine Months Ended
March 31,
   
      2016       2015       2016       2015      
Net loss   $   (9,838 )   $   (4,767 )   $   (27,323 )   $   (15,427 )    
                     
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:                    
Increase in deferred revenue (1)      6,856        179        13,879        2,986      
Increase in deferred costs (1)      (2,974 )      (1,338 )      (7,276 )      (2,061 )    
Changes in other operating assets and liabilities      1,366        7,285        380        760      
Other adjustments (2)      4,039        4,540        13,127        14,215      
Net cash provided by (used in) operating activities      (551 )      5,899        (7,213 )      473      
Less: Purchases of property and equipment      (1,443 )      (138 )      (1,775 )      (650 )    
Free cash flow   $   (1,994 )   $   5,761     $   (8,988 )   $   (177 )    
                     
(1) Relates primarily to automotive royalties and customized software development fees            
(2) Consists primarily of depreciation and amortization and stock-based compensation expense    
                     

 

Telenav, Inc.  
Unaudited Reconciliation of Non-GAAP Adjustments  
(in thousands)  
Non-GAAP metrics for the Advertising segment and the combined Automotive and Mobile Navigation segments  
                           
    Three Months Ended March 31, 2016  
    GAAP
Consolidated
  Non-GAAP
Consolidated
  Non-GAAP
Advertising
  Automotive (1)   Mobile
Navigation
(1)
  Total
Non-GAAP
Automotive
and Mobile
Navigation
(1)
 
                           
Revenue   $   46,278         $   5,156     $   34,717     $   6,405     $   41,122    
Cost of revenue      26,106            2,788        21,495        1,823        23,318    
Gross profit      20,172            2,368     $   13,222     $   4,582        17,804    
Operating expenses:                          
Research and development      16,990            978      (2 )            16,012    
Sales and marketing      6,793            3,606      (2 )            3,187    
General and administrative      5,521            494      (3 )            5,027    
Restructuring      107            146                (39 )  
Total operating expenses      29,411            5,224                24,187    
Loss from operations      (9,239 )          (2,856 )              (6,383 )  
Interest and other income (expense), net      (610 )        —      (4 )            (610 )  
Loss before benefit from
  income taxes
     (9,849 )          (2,856 )              (6,993 )  
Benefit from income taxes      (11 )        —                (11 )  
Net loss   $   (9,838 )   $   (9,838 )      (2,856 )              (6,982 )  
                           
Adjustments:                          
Stock-based compensation
  expense
         2,620        196                2,424    
Restructuring accrual (reversal)          107        146                (39 )  
Deferred rent reversal due to lease termination          (621 )      (141 )              (480 )  
Depreciation
  and amortization expense
         780        94                686    
Interest and other income
  (expense), net
         610      —      (4 )            610    
Benefits for
  income taxes
         (11 )    —                (11 )  
Adjusted EBITDA       $   (6,353 )   $   (2,561 )           $   (3,792 )  
                           
(1) Automotive and mobile navigation segments share many of the same technologies and resources. Accordingly, we are unable to allocate the operating expenses, other income (expense), net and provision (benefit) for income taxes to these individual segments.  
                           
For purposes of calculating the Non-GAAP net loss attributable to the advertising segment :  
(2) These expenses represent research and development and sales and marketing costs directly attributable to the advertising segment.   
(3) These expenses represent actual general and administrative costs directly attributable to the advertising segment as well as an allocation of certain shared corporate costs that directly benefit the advertising segment such as accounting and human resource services.  
(4) Expenses or income cannot be directly allocated to the advertising segment.  
                           
                           
Telenav, Inc.  
Unaudited Reconciliation of Non-GAAP Adjustments  
(in thousands)  
Non-GAAP metrics for the Advertising segment and the combined Automotive and Mobile Navigation segments  
                           
    Three Months Ended March 31, 2015  
    GAAP
Consolidated
  Non-GAAP
Consolidated
  Non-GAAP
Advertising
  Automotive (1)   Mobile
Navigation
(1)
  Total
Non-GAAP
Automotive
and Mobile
Navigation
(1)
 
                           
Revenue   $   42,286         $   4,019     $   29,472     $   8,795     $   38,267    
Cost of revenue      20,839            2,690        15,759        2,390        18,149    
Gross profit      21,447            1,329     $   13,713     $   6,405        20,118    
Operating
  expenses:
                         
Research and development      17,384            1,552      (2 )            15,832    
Sales and marketing      6,869            3,544      (2 )            3,325    
General and administrative      5,682            517      (3 )            5,165    
Restructuring      422            103                319    
Total operating expenses:      30,357            5,716                24,641    
Loss from operations      (8,910 )          (4,387 )              (4,523 )  
Interest and other income (expense), net      900          —    (4 )            900    
Loss before benefit from
  income taxes
     (8,010 )          (4,387 )              (3,623 )  
Benefit from income taxes      (3,243 )          (1,612 )              (1,631 )  
Net loss   $   (4,767 )   $   (4,767 )      (2,775 )              (1,992 )  
                           
Adjustments:                          
Stock-based compensation
  expense
         2,632        333                2,299    
Restructuring          422        103                319    
Depreciation
 and amortization expense
         1,178        502                676    
Interest and other income
  (expense), net
         (900 )    —    (4 )            (900 )  
Benefit from
  income taxes
         (3,243 )      (1,612 )              (1,631 )  
Adjusted EBITDA       $   (4,678 )   $   (3,449 )           $   (1,229 )  
                           
(1) Automotive and mobile navigation segments share many of the same technologies and resources. Accordingly, we are unable to allocate the operating expenses, other income (expense), net and provision (benefit) for income taxes to these individual segments.  
                           
For purposes of calculating the Non-GAAP net loss attributable to the advertising segment :  
(2) These expenses represent research and development and sales and marketing costs directly attributable to the advertising segment.   
(3) These expenses represent actual general and administrative costs directly attributable to the advertising segment as well as an allocation of certain shared corporate costs that directly benefit the advertising segment such as accounting and human resource services.  
(4) Expenses or income cannot be directly allocated to the advertising segment.  
                           
                           
Telenav, Inc.  
Unaudited Reconciliation of Non-GAAP Adjustments  
(in thousands)  
Non-GAAP metrics for the Advertising segment and the combined Automotive and Mobile Navigation segments  
                           
    Nine Months Ended March 31, 2016  
    GAAP
Consolidated
  Non-GAAP
Consolidated
  Non-GAAP
Advertising
  Automotive (1)   Mobile
Navigation
(1)
  Total
Non-GAAP
Automotive
and Mobile
Navigation
(1)
 
                           
Revenue   $   135,592         $   16,695     $   98,306     $   20,591     $   118,897    
Cost of revenue      74,025            9,538        58,947        5,540        64,487    
Gross profit      61,567            7,157     $   39,359     $   15,051        54,410    
Operating
  expenses:
                         
Research and development      51,630            3,508      (2 )            48,122    
Sales and marketing      20,315            11,097      (2 )            9,218    
General and administrative      17,600            1,538      (3 )            16,062    
Restructuring      (1,361 )          (229 )              (1,132 )  
Total operating expenses      88,184            15,914                72,270    
Loss from operations      (26,617 )          (8,757 )              (17,860 )  
Interest and other income (expense), net      (277 )        —      (4 )            (277 )  
Loss before provision for
  income taxes
     (26,894 )          (8,757 )              (18,137 )  
Provision for income taxes      429          —                429    
Net loss   $   (27,323 )   $   (27,323 )      (8,757 )              (18,566 )  
                           
Adjustments:                          
Legal contingencies          750      —                750    
Stock-based compensation
  expense
         8,887        855                8,032    
Restructuring          (1,361 )      (229 )              (1,132 )  
Deferred rent reversal due to lease termination          (1,242 )      (300 )              (942 )  
Depreciation
  and amortization expense
         2,696        750                1,946    
Interest and other income
  (expense), net
         277      —      (4 )            277    
Provision for income taxes          429      —                429    
Adjusted EBITDA       $   (16,887 )   $   (7,681 )           $   (9,206 )  
                           
(1) Automotive and mobile navigation segments share many of the same technologies and resources. Accordingly, we are unable to allocate the operating expenses, other income (expense), net and provision (benefit) for income taxes to these individual segments.  
                           
For purposes of calculating the Non-GAAP net loss attributable to the advertising segment :  
(2) These expenses represent research and development and sales and marketing costs directly attributable to the advertising segment.   
(3) These expenses represent actual general and administrative costs directly attributable to the advertising segment as well as an allocation of certain shared corporate costs that directly benefit the advertising segment such as accounting and human resource services.  
(4) Expenses or income cannot be directly allocated to the advertising segment.  
                           
                           
Telenav, Inc.  
Unaudited Reconciliation of Non-GAAP Adjustments  
(in thousands)  
Non-GAAP metrics for the Advertising segment and the combined Automotive and Mobile Navigation segments  
                           
    Nine Months Ended March 31, 2015  
    GAAP
Consolidated
  Non-GAAP
Consolidated
  Non-GAAP
Advertising
  Automotive (1)   Mobile
Navigation
(1)
  Total
Non-GAAP
Automotive
and Mobile
Navigation
(1)
 
                           
Revenue   $   117,053         $   12,726     $   73,051     $   31,276     $   104,327    
Cost of revenue      56,332            8,528        39,395        8,409        47,804    
Gross profit      60,721            4,198     $   33,656     $   22,867        56,523    
Operating expenses:                          
Research and development      51,002            4,482      (2 )            46,520    
Sales and marketing      19,775            10,069      (2 )            9,706    
General and administrative      17,592            1,610      (3 )            15,982    
Restructuring      987            235                752    
Total operating expenses      89,356            16,396                72,960    
Loss from operations      (28,635 )          (12,198 )              (16,437 )  
Interest and other income (expense), net      3,073          —      (4 )            3,073    
Loss before benefit from
  income taxes
     (25,562 )          (12,198 )              (13,364 )  
Benefit from income taxes      (10,135 )          (3,396 )              (6,739 )  
Net loss   $   (15,427 )   $   (15,427 )      (8,802 )              (6,625 )  
                           
Adjustments:                          
Stock-based compensation
  expense
         8,559        1,427                7,132    
Restructuring          987        235                752    
Depreciation
  and amortization expense
         4,054        1,546                2,508    
Interest and other income
  (expense), net
         (3,073 )    —      (4 )            (3,073 )  
Benefit from income taxes          (10,135 )      (3,396 )              (6,739 )  
Adjusted EBITDA       $   (15,035 )   $   (8,990 )           $   (6,045 )  
                           
(1) Automotive and mobile navigation segments share many of the same technologies and resources. Accordingly, we are unable to allocate the operating expenses, other income (expense), net and provision (benefit) for income taxes to these individual segments.  
                           
For purposes of calculating the Non-GAAP net loss attributable to the advertising segment :  
(2) These expenses represent research and development and sales and marketing costs directly attributable to the advertising segment.   
(3) These expenses represent actual general and administrative costs directly attributable to the advertising segment as well as an allocation of certain shared corporate costs that directly benefit the advertising segment such as accounting and human resource services.  
(4) Expenses or income cannot be directly allocated to the advertising segment.  
                           
Investor Relations Contact:



Cynthia Hiponia or Erin RheaumeThe Blueshirt Group for Telenav, Inc.

408-990-1265

IR@telenav.com

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Source: Telenav, Inc.

 

 

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