- Launched connected embedded navigation services with General Motors
- General Motors extends partnership through model year 2025
"We are very excited about the launch of our connected embedded services to General Motors in the March quarter," said HP Jin, Chairman and CEO of
Financial Highlights for the third quarter ended
- Total revenue was
$35.1 million , compared with$46.3 million in the same prior year period. - Billings were
$60.2 million , compared with$53.1 million in the same prior year period. - Automotive revenue was
$25.5 million , compared with$34.7 million in the same prior year period. - Advertising revenue was
$5.3 million , compared with$5.2 million in the same prior year period. - Deferred revenue as of
March 31, 2017 was$61.2 million , compared with$36.1 million as ofDecember 31, 2016 . - Gross margin was 50%, compared to 44% in the same prior year period.
- Non-GAAP gross margin on billings was 42%, compared to 45% in the same prior year period.
- Operating expenses were
$30.6 million , compared with$29.4 million in the same prior year period. - Net loss was
$(13.7) million , or$(0.31) per basic and diluted share, compared with$(9.8) million , or$(0.23) per basic and diluted share, in the same prior year period. - Adjusted EBITDA was a
$(9.9) million loss, compared with a$(6.4) million loss in the same prior year period. - Adjusted EBITDA on billings was a
$(2.3) million loss, compared with a$(2.5) million loss in the same prior year period. - As of
March 31, 2017 , ending cash, cash equivalents and short-term investments, excluding restricted cash, was$97.1 million . This represented cash and short-term investments of$2.22 per share, based on 43.7 million shares of common stock outstanding.Telenav had no debt as of quarter end. - Free cash flow was
$(8.4) million , inclusive of an$8.0 million litigation settlement payment, compared with$(2.0) million in the same prior year period.
Recent Business Highlights
- General Motors launched with Telenav's latest connected embedded navigation solution during the quarter and the solution is available today in GM's 2017 Cadillac CTS and CTS-V models in
North America . - General Motors extends partnership to provide their next generation connected embedded navigation solution on select cars for model years 2020 to 2025.
- Executed a contract to deliver an entry-level embedded navigation solution to General Motors via its Tier 1 supplier, LG Electronics, Inc., for the European market for model years 2018 to 2022.
- Executed a contract to deliver Scout® GPS Link to
Toyota via its Tier 1 supplier,Xevo Inc. , in selectToyota and Lexus vehicles for model years 2018 to 2023.
Business Outlook
For the quarter ending
-
Total revenue is expected to range from
$39 to$41 million . - Billings are expected to range from
$64 to$66 million . - Automotive revenue is expected to range from 73% to 76% of total revenue.
- Advertising revenue is expected to be approximately 15% of total revenue.
- Gross margin is expected to be approximately 45%.
- Non-GAAP gross margin on billings is expected to be approximately 40%.
- Operating expenses are expected to range from
$31 to$32 million . - Net loss is expected to range from
$(13.5) to$(14.5) million . - Net loss per share is expected to range from
$(0.30) to$(0.33) . - Adjusted EBITDA loss is expected to range from
$(9.5) to$(10.5) million . - Adjusted EBITDA on billings loss is expected to range from
$(1.5) to$(2.5) million . - Weighted average shares outstanding are expected to be approximately 44.3 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.
Conference Call
Use of Non-GAAP Financial Measures
In addition to billings as a non-GAAP metric, last quarter
Billings measure GAAP revenue recognized plus the change in deferred revenue from the beginning to the end of the period. Non-GAAP gross profit on billings reflects GAAP gross profit plus change in deferred revenue less change in deferred costs. Non-GAAP gross margin on billings reflects non-GAAP gross profit on 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, restructuring accruals and reversals, and deferred rent reversals due to lease termination, 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 and offers made to settle patent litigation cases in which
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
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.
In this earnings release,
Forward Looking Statements
This press release contains forward-looking statements that are based on
About
Copyright 2017 Telenav, Inc. All Rights Reserved.
TNAV-F
TNAV-C
Condensed Consolidated Balance Sheets | |||||||||
(in thousands, except par value) | |||||||||
2017 | 2016* | ||||||||
(unaudited) | |||||||||
Assets | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 20,763 | $ | 21,349 | |||||
Short-term investments | 76,368 | 88,277 | |||||||
Accounts receivable, net of allowances of | 48,294 | 42,216 | |||||||
Restricted cash | 3,925 | 5,109 | |||||||
Income taxes receivable | 646 | 687 | |||||||
Deferred costs | 6,735 | 1,784 | |||||||
Prepaid expenses and other current assets | 3,358 | 4,448 | |||||||
Total current assets | 160,089 | 163,870 | |||||||
Property and equipment, net | 4,690 | 5,247 | |||||||
Deferred income taxes, non-current | 442 | 661 | |||||||
35,218 | 35,993 | ||||||||
Deferred costs, non-current | 29,481 | 10,292 | |||||||
Other assets | 1,552 | 2,184 | |||||||
Total assets | $ | 231,472 | $ | 218,247 | |||||
Liabilities and stockholders' equity | |||||||||
Current liabilities: | |||||||||
Trade accounts payable | $ | 10,703 | $ | 4,992 | |||||
Accrued expenses | 35,313 | 36,274 | |||||||
Deferred revenue | 12,268 | 4,334 | |||||||
Income taxes payable | 288 | 88 | |||||||
Total current liabilities | 58,572 | 45,688 | |||||||
Deferred rent, non-current | 979 | 1,124 | |||||||
Deferred revenue, non-current | 48,916 | 19,035 | |||||||
Other long-term liabilities | 1,246 | 2,715 | |||||||
Commitments and contingencies | |||||||||
Stockholders' equity: | |||||||||
Preferred stock, | — | — | |||||||
Common stock, | 44 | 43 | |||||||
Additional paid-in capital | 157,119 | 149,775 | |||||||
Accumulated other comprehensive loss | (2,586 | ) | (1,767 | ) | |||||
Retained earnings (accumulated deficit) | (32,818 | ) | 1,634 | ||||||
Total stockholders' equity | 121,759 | 149,685 | |||||||
Total liabilities and stockholders' equity | $ | 231,472 | $ | 218,247 | |||||
*Derived from audited consolidated financial statements as of and for the year ended | |||||||||
Condensed Consolidated Statements of Operations | ||||||||||||||||||||
(in thousands, except per share amounts) | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||||||
Revenue: | ||||||||||||||||||||
Product | $ | 24,426 | $ | 33,936 | $ | 91,653 | $ | 96,205 | ||||||||||||
Services | 10,639 | 12,342 | 37,640 | 39,387 | ||||||||||||||||
Total revenue | 35,065 | 46,278 | 129,293 | 135,592 | ||||||||||||||||
Cost of revenue: | ||||||||||||||||||||
Product | 13,174 | 20,957 | 53,533 | 57,404 | ||||||||||||||||
Services | 4,493 | 5,149 | 16,337 | 16,621 | ||||||||||||||||
Total cost of revenue | 17,667 | 26,106 | 69,870 | 74,025 | ||||||||||||||||
Gross profit | 17,398 | 20,172 | 59,423 | 61,567 | ||||||||||||||||
Operating expenses: | ||||||||||||||||||||
Research and development | 19,106 | 16,990 | 53,425 | 51,630 | ||||||||||||||||
Sales and marketing | 5,980 | 6,793 | 16,525 | 20,315 | ||||||||||||||||
General and administrative | 5,485 | 5,521 | 17,848 | 16,850 | ||||||||||||||||
Legal settlement and contingencies | — | — | 6,424 | 750 | ||||||||||||||||
Restructuring | — | 107 | — | (1,361 | ) | |||||||||||||||
Total operating expenses | 30,571 | 29,411 | 94,222 | 88,184 | ||||||||||||||||
Loss from operations | (13,173 | ) | (9,239 | ) | (34,799 | ) | (26,617 | ) | ||||||||||||
Other income (expense), net | 142 | (610 | ) | 1,152 | (277 | ) | ||||||||||||||
Loss before provision (benefit) for income taxes | (13,031 | ) | (9,849 | ) | (33,647 | ) | (26,894 | ) | ||||||||||||
Provision (benefit) for income taxes | 663 | (11 | ) | 805 | 429 | |||||||||||||||
Net loss | $ | (13,694 | ) | $ | (9,838 | ) | $ | (34,452 | ) | $ | (27,323 | ) | ||||||||
Net loss per share: | ||||||||||||||||||||
Basic and diluted | $ | (0.31 | ) | $ | (0.23 | ) | $ | (0.80 | ) | $ | (0.66 | ) | ||||||||
Weighted average shares used in computing net loss per share: | ||||||||||||||||||||
Basic and diluted | 43,528 | 42,047 | 43,189 | 41,226 | ||||||||||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||||
(in thousands) | ||||||||||
(unaudited) | ||||||||||
Nine Months Ended | ||||||||||
2017 | 2016 | |||||||||
Operating activities | ||||||||||
Net loss | $ | (34,452 | ) | $ | (27,323 | ) | ||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||
Depreciation and amortization | 1,886 | 2,696 | ||||||||
Accretion of net premium on short-term investments | 326 | 523 | ||||||||
Stock-based compensation expense | 7,154 | 8,887 | ||||||||
Write-off of long term investments | — | 977 | ||||||||
(Gain) loss on disposal of property and equipment | (3 | ) | (15 | ) | ||||||
Bad debt expense | 149 | 59 | ||||||||
Changes in operating assets and liabilities: | ||||||||||
Accounts receivable | (6,227 | ) | (3,000 | ) | ||||||
Deferred income taxes | 219 | 48 | ||||||||
Restricted cash | 1,184 | 191 | ||||||||
Income taxes receivable | 41 | 616 | ||||||||
Deferred costs | (24,140 | ) | (7,276 | ) | ||||||
Prepaid expenses and other current assets | 1,090 | (720 | ) | |||||||
Other assets | 386 | 895 | ||||||||
Trade accounts payable | 5,774 | 5,485 | ||||||||
Accrued expenses and other liabilities | (2,369 | ) | (2,143 | ) | ||||||
Income taxes payable | 200 | (487 | ) | |||||||
Deferred rent | 49 | (505 | ) | |||||||
Deferred revenue | 37,815 | 13,879 | ||||||||
Net cash used in operating activities | (10,918 | ) | (7,213 | ) | ||||||
Investing activities | ||||||||||
Purchases of property and equipment | (867 | ) | (1,775 | ) | ||||||
Purchases of short-term investments | (51,258 | ) | (38,010 | ) | ||||||
Proceeds from sales and maturities of short-term investments | 62,468 | 45,686 | ||||||||
Proceeds from sales of long-term investments | 246 | — | ||||||||
Net cash provided by investing activities | 10,589 | 5,901 | ||||||||
Financing activities | ||||||||||
Proceeds from exercise of stock options | 2,354 | 1,536 | ||||||||
Repurchase of common stock | — | (570 | ) | |||||||
Tax withholdings related to net share settlements of restricted stock units | (2,163 | ) | (2,755 | ) | ||||||
Net cash provided by (used in) financing activities | 191 | (1,789 | ) | |||||||
Effect of exchange rate changes on cash and cash equivalents | (448 | ) | (183 | ) | ||||||
Net decrease in cash and cash equivalents | (586 | ) | (3,284 | ) | ||||||
Cash and cash equivalents, at beginning of period | 21,349 | 18,721 | ||||||||
Cash and cash equivalents, at end of period | $ | 20,763 | $ | 15,437 | ||||||
Supplemental disclosure of cash flow information | ||||||||||
Income taxes paid, net | $ | 1,861 | $ | 150 | ||||||
Condensed Consolidated Segment Summary | ||||||||||||||||||||
(in thousands, except percentages) | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||||||
Revenue: | ||||||||||||||||||||
Automotive | $ | 25,476 | $ | 34,717 | $ | 94,487 | $ | 98,306 | ||||||||||||
Advertising | 5,284 | 5,156 | 20,037 | 16,695 | ||||||||||||||||
Mobile Navigation | 4,305 | 6,405 | 14,769 | 20,591 | ||||||||||||||||
Total revenue | 35,065 | 46,278 | 129,293 | 135,592 | ||||||||||||||||
Cost of revenue: | ||||||||||||||||||||
Automotive | 14,112 | 21,495 | 56,095 | 58,947 | ||||||||||||||||
Advertising | 2,224 | 2,788 | 9,669 | 9,538 | ||||||||||||||||
Mobile Navigation | 1,331 | 1,823 | 4,106 | 5,540 | ||||||||||||||||
Total cost of revenue | 17,667 | 26,106 | 69,870 | 74,025 | ||||||||||||||||
Gross profit: | ||||||||||||||||||||
Automotive | 11,364 | 13,222 | 38,392 | 39,359 | ||||||||||||||||
Advertising | 3,060 | 2,368 | 10,368 | 7,157 | ||||||||||||||||
Mobile Navigation | 2,974 | 4,582 | 10,663 | 15,051 | ||||||||||||||||
Total gross profit | $ | 17,398 | $ | 20,172 | $ | 59,423 | $ | 61,567 | ||||||||||||
Gross margin: | ||||||||||||||||||||
Automotive | 45 | % | 38 | % | 41 | % | 40 | % | ||||||||||||
Advertising | 58 | % | 46 | % | 52 | % | 43 | % | ||||||||||||
Mobile Navigation | 69 | % | 72 | % | 72 | % | 73 | % | ||||||||||||
Total gross margin | 50 | % | 44 | % | 46 | % | 45 | % | ||||||||||||
Unaudited Reconciliation of Non-GAAP Adjustments | ||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||
Reconciliation of Revenue to Billings (Non-GAAP) | ||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||
Automotive | Advertising | Mobile Navigation | Total | Automotive | Advertising | Mobile Navigation | Total | |||||||||||||||||||||
Revenue | $ | 25,476 | $ | 5,284 | $ | 4,305 | $ | 35,065 | $ | 94,487 | $ | 20,037 | $ | 14,769 | $ | 129,293 | ||||||||||||
Adjustments: | ||||||||||||||||||||||||||||
Change in deferred revenue | 25,123 | — | (36 | ) | 25,087 | 37,930 | — | (115 | ) | 37,815 | ||||||||||||||||||
Billings (Non-GAAP) | $ | 50,599 | $ | 5,284 | $ | 4,269 | $ | 60,152 | $ | 132,417 | $ | 20,037 | $ | 14,654 | $ | 167,108 | ||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||
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: | ||||||||||||||||||||||||||||
Change 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 | ||||||||||||
Unaudited Reconciliation of Non-GAAP Adjustments | ||||||||||||||||||
(in thousands) | ||||||||||||||||||
Reconciliation of Gross Profit to Non-GAAP Gross Profit on Billings | ||||||||||||||||||
Reconciliation of Gross Margin to Non-GAAP Gross Margin on Billings | ||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||||
Gross profit | $ | 17,398 | $ | 20,172 | $ | 59,423 | $ | 61,567 | ||||||||||
Gross margin | 50 | % | 44 | % | 46 | % | 45 | % | ||||||||||
Adjustments to gross profit: | ||||||||||||||||||
Change in deferred revenue | 25,087 | 6,856 | 37,815 | 13,879 | ||||||||||||||
Change in deferred costs(1) | (17,436 | ) | (2,974 | ) | (24,140 | ) | (7,276 | ) | ||||||||||
Net change | 7,651 | 3,882 | 13,675 | 6,603 | ||||||||||||||
Non-GAAP gross profit on billings(1) | $ | 25,049 | $ | 24,054 | $ | 73,098 | $ | 68,170 | ||||||||||
Non-GAAP gross margin on billings(1) | 42 | % | 45 | % | 44 | % | 46 | % | ||||||||||
(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 provisioning of services such as hosting, monitoring and customer support. Accordingly, non-GAAP gross profit on billings and non-GAAP gross margin on billings do not reflect all costs associated with billings. | ||||||||||||||||||
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 | ||||||||||||||||||
Three
Months Ended | ||||||||||||||||||
Automotive | Advertising | Mobile Navigation | Total | |||||||||||||||
Deferred revenue, | $ | 60,083 | $ | — | $ | 1,101 | $ | 61,184 | ||||||||||
Deferred revenue, | 34,960 | — | $ | 1,137 | 36,097 | |||||||||||||
Increase (decrease) in deferred revenue | $ | 25,123 | $ | — | $ | (36 | ) | $ | 25,087 | |||||||||
Deferred costs, | $ | 36,216 | $ | — | $ | — | $ | 36,216 | ||||||||||
Deferred costs, | 18,780 | — | — | 18,780 | ||||||||||||||
Increase in deferred costs | $ | 17,436 | $ | — | $ | — | $ | 17,436 | ||||||||||
Three Months Ended | ||||||||||||||||||
Automotive | Advertising | Mobile Navigation | Total | |||||||||||||||
Deferred revenue, | $ | 19,435 | $ | — | $ | 1,272 | $ | 20,707 | ||||||||||
Deferred revenue, | 12,443 | — | $ | 1,408 | 13,851 | |||||||||||||
Increase (decrease) in deferred revenue | $ | 6,992 | $ | — | $ | (136 | ) | $ | 6,856 | |||||||||
Deferred costs, | $ | 10,417 | $ | — | $ | — | $ | 10,417 | ||||||||||
Deferred costs, | 7,443 | — | — | 7,443 | ||||||||||||||
Increase in deferred costs | $ | 2,974 | $ | — | $ | — | $ | 2,974 | ||||||||||
Nine Months Ended | ||||||||||||||||||
Automotive | Advertising | Mobile Navigation | Total | |||||||||||||||
Deferred revenue, | $ | 60,083 | $ | — | $ | 1,101 | $ | 61,184 | ||||||||||
Deferred revenue, | 22,153 | — | 1,216 | 23,369 | ||||||||||||||
Increase (decrease) in deferred revenue | $ | 37,930 | $ | — | $ | (115 | ) | $ | 37,815 | |||||||||
Deferred costs, | $ | 36,216 | $ | — | $ | — | $ | 36,216 | ||||||||||
Deferred costs, | 12,076 | — | — | 12,076 | ||||||||||||||
Increase in deferred costs | $ | 24,140 | $ | — | $ | — | $ | 24,140 | ||||||||||
Nine Months Ended | ||||||||||||||||||
Automotive | Advertising | Mobile Navigation | Total | |||||||||||||||
Deferred revenue, | $ | 19,435 | $ | — | $ | 1,272 | $ | 20,707 | ||||||||||
Deferred revenue, | 5,192 | — | 1,636 | 6,828 | ||||||||||||||
Increase (decrease) in deferred revenue | $ | 14,243 | $ | — | $ | (364 | ) | $ | 13,879 | |||||||||
Deferred costs, | $ | 10,417 | $ | — | $ | — | $ | 10,417 | ||||||||||
Deferred costs, | 3,141 | — | — | 3,141 | ||||||||||||||
Increase in deferred costs | $ | 7,276 | $ | — | $ | — | $ | 7,276 | ||||||||||
Unaudited Reconciliation of Non-GAAP Adjustments | |||||||||||||||||
(in thousands) | |||||||||||||||||
Reconciliation of Net Loss to Adjusted EBITDA and Adjusted EBITDA on Billings | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||
Net loss | $ | (13,694 | ) | $ | (9,838 | ) | $ | (34,452 | ) | $ | (27,323 | ) | |||||
Adjustments: | |||||||||||||||||
Legal settlement and contingencies | — | — | 6,424 | 750 | |||||||||||||
Restructuring accrual (reversal) | — | 107 | — | (1,361 | ) | ||||||||||||
Deferred rent reversal due to lease termination | — | (621 | ) | — | (1,242 | ) | |||||||||||
Stock-based compensation expense | 2,625 | 2,620 | 7,154 | 8,887 | |||||||||||||
Depreciation and amortization expense | 626 | 780 | 1,886 | 2,696 | |||||||||||||
Other income (expense), net | (142 | ) | 610 | (1,152 | ) | 277 | |||||||||||
Provision (benefit) for income taxes | 663 | (11 | ) | 805 | 429 | ||||||||||||
Adjusted EBITDA | $ | (9,922 | ) | $ | (6,353 | ) | $ | (19,335 | ) | $ | (16,887 | ) | |||||
Change in deferred revenue | 25,087 | 6,856 | 37,815 | 13,879 | |||||||||||||
Change in deferred costs(1) | (17,436 | ) | (2,974 | ) | (24,140 | ) | (7,276 | ) | |||||||||
Adjusted EBITDA on billings(1) | $ | (2,271 | ) | $ | (2,471 | ) | $ | (5,660 | ) | $ | (10,284 | ) | |||||
(1) We expect to incur additional costs in the future due to requirements to provide ongoing provisioning of services such as hosting, monitoring and customer support. Accordingly, adjusted EBITDA on billings does not reflect all costs associated with billings. | |||||||||||||||||
Unaudited Reconciliation of Non-GAAP Adjustments | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Reconciliation of Net Loss to Free Cash Flow | ||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||||||
Net loss | $ | (13,694 | ) | $ | (9,838 | ) | $ | (34,452 | ) | $ | (27,323 | ) | ||||||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||||||||||
Increase in deferred revenue (1) | 25,087 | 6,856 | 37,815 | 13,879 | ||||||||||||||||
Increase in deferred costs (2) | (17,436 | ) | (2,974 | ) | (24,140 | ) | (7,276 | ) | ||||||||||||
Changes in other operating assets and liabilities | (5,339 | ) | 1,366 | 347 | 380 | |||||||||||||||
Other adjustments (3) | 3,363 | 4,039 | 9,512 | 13,127 | ||||||||||||||||
Net cash used in operating activities | (8,019 | ) | (551 | ) | (10,918 | ) | (7,213 | ) | ||||||||||||
Less: Purchases of property and equipment | (336 | ) | (1,443 | ) | (867 | ) | (1,775 | ) | ||||||||||||
Free cash flow | $ | (8,355 | ) | $ | (1,994 | ) | $ | (11,785 | ) | $ | (8,988 | ) | ||||||||
(1) Consists of royalties, customized software development 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. | ||||||||||||||||||||
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 | |||||||||||||||||||||||
GAAP Consolidated | Non-GAAP Consolidated |
Non-GAAP Advertising | Automotive (1) | Mobile Navigation (1) | Total Non-GAAP Automotive and Mobile Navigation (1) | ||||||||||||||||||
Revenue | $ | 35,065 | $ | 5,284 | $ | 25,476 | $ | 4,305 | $ | 29,781 | |||||||||||||
Cost of revenue | 17,667 | 2,224 | 14,112 | 1,331 | 15,443 | ||||||||||||||||||
Gross profit | 17,398 | 3,060 | $ | 11,364 | $ | 2,974 | 14,338 | ||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Research and development | 19,106 | 1,378 | (2) | 17,728 | |||||||||||||||||||
Sales and marketing | 5,980 | 2,724 | (2) | 3,256 | |||||||||||||||||||
General and administrative | 5,485 | 123 | (3) | 5,362 | |||||||||||||||||||
Total operating expenses | 30,571 | 4,225 | 26,346 | ||||||||||||||||||||
Loss from operations | (13,173 | ) | (1,165 | ) | (12,008 | ) | |||||||||||||||||
Other income (expense), net | 142 | — | (4) | 142 | |||||||||||||||||||
Loss before provision for income taxes | (13,031 | ) | (1,165 | ) | (11,866 | ) | |||||||||||||||||
Provision for income taxes | 663 | — | (5) | 663 | |||||||||||||||||||
Net loss | $ | (13,694 | ) | $ | (13,694 | ) | $ | (1,165 | ) | $ | (12,529 | ) | |||||||||||
Adjustments: | |||||||||||||||||||||||
Stock-based compensation expense | 2,625 | 172 | (2) | 2,453 | |||||||||||||||||||
Depreciation and amortization expense | 626 | 50 | (2) | 576 | |||||||||||||||||||
Other income (expense), net | (142 | ) | — | (4) | (142 | ) | |||||||||||||||||
Provision for income taxes | 663 | — | (5) | 663 | |||||||||||||||||||
Adjusted EBITDA | $ | (9,922 | ) | $ | (943 | ) | $ | (8,979 | ) | ||||||||||||||
Change in deferred revenue | 25,087 | — | 25,087 | ||||||||||||||||||||
Change in deferred costs(6) | (17,436 | ) | — | (17,436 | ) | ||||||||||||||||||
Adjusted EBITDA on billings(6) | $ | (2,271 | ) | $ | (943 | ) | $ | (1,328 | ) | ||||||||||||||
(1) Automotive and mobile navigation segments share many of the same technologies and resources. Accordingly, we are unable to fully attribute the operating expenses, other income (expense), net and provision (benefit) for income taxes to one segment versus the other. | |||||||||||||||||||||||
For purposes of calculating the Non-GAAP net loss attributable to the advertising segment: | |||||||||||||||||||||||
(2) These expenses represent 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 resources. | |||||||||||||||||||||||
(4) Expenses or income cannot be directly allocated to the advertising segment. | |||||||||||||||||||||||
(5) Income taxes are primarily from foreign operations which support the automotive and mobile navigation segments. | |||||||||||||||||||||||
(6) We expect to incur additional costs in the future due to requirements to provide ongoing provisioning of services such as hosting, monitoring and customer support. Accordingly, adjusted EBITDA on billings does not reflect all costs associated with billings. | |||||||||||||||||||||||
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 | |||||||||||||||||||||||
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 | (2) | (39 | ) | ||||||||||||||||||
Total operating expenses | 29,411 | 5,224 | 24,187 | ||||||||||||||||||||
Loss from operations | (9,239 | ) | (2,856 | ) | (6,383 | ) | |||||||||||||||||
Other income (expense), net | (610 | ) | — | (4) | (610 | ) | |||||||||||||||||
Loss before benefit from income taxes | (9,849 | ) | (2,856 | ) | (6,993 | ) | |||||||||||||||||
Benefit from income taxes | (11 | ) | — | (5) | (11 | ) | |||||||||||||||||
Net loss | $ | (9,838 | ) | $ | (9,838 | ) | $ | (2,856 | ) | $ | (6,982 | ) | |||||||||||
Adjustments: | |||||||||||||||||||||||
Stock-based compensation expense | 2,620 | 196 | (2) | 2,424 | |||||||||||||||||||
Restructuring | 107 | 146 | (2) | (39 | ) | ||||||||||||||||||
Deferred rent reversal due to lease termination | (621 | ) | (141 | ) | (2) | (480 | ) | ||||||||||||||||
Depreciation and amortization expense | 780 | 94 | (2) | 686 | |||||||||||||||||||
Other income (expense), net | 610 | — | (4) | 610 | |||||||||||||||||||
Benefit from income taxes | (11 | ) | — | (5) | (11 | ) | |||||||||||||||||
Adjusted EBITDA | $ | (6,353 | ) | $ | (2,561 | ) | $ | (3,792 | ) | ||||||||||||||
Change in deferred revenue | 6,856 | — | 6,856 | ||||||||||||||||||||
Change in deferred costs(6) | (2,974 | ) | — | (2,974 | ) | ||||||||||||||||||
Adjusted EBITDA on billings(6) | $ | (2,471 | ) | $ | (2,561 | ) | $ | 90 | |||||||||||||||
(1) Automotive and mobile navigation segments share many of the same technologies and resources. Accordingly, we are unable to fully attribute the operating expenses, other income (expense), net and provision (benefit) for income taxes to one segment versus the other. | |||||||||||||||||||||||
For purposes of calculating the Non-GAAP net loss attributable to the advertising segment: | |||||||||||||||||||||||
(2) These expenses represent 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 resources. | |||||||||||||||||||||||
(4) Expenses or income cannot be directly allocated to the advertising segment. | |||||||||||||||||||||||
(5) Income taxes are primarily from foreign operations which support the automotive and mobile navigation segments. | |||||||||||||||||||||||
(6) We expect to incur additional costs in the future due to requirements to provide ongoing provisioning of services such as hosting, monitoring and customer support. Accordingly, adjusted EBITDA on billings does not reflect all costs associated with billings. | |||||||||||||||||||||||
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 | |||||||||||||||||||||||
GAAP Consolidated | Non-GAAP Consolidated | Non-GAAP Advertising | Automotive (1) | Mobile Navigation (1) | Total Non-GAAP Automotive and Mobile Navigation (1) | ||||||||||||||||||
Revenue | $ | 129,293 | $ | 20,037 | $ | 94,487 | $ | 14,769 | $ | 109,256 | |||||||||||||
Cost of revenue | 69,870 | 9,669 | 56,095 | 4,106 | 60,201 | ||||||||||||||||||
Gross profit | 59,423 | 10,368 | $ | 38,392 | $ | 10,663 | 49,055 | ||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Research and development | 53,425 | 3,786 | (2) | 49,639 | |||||||||||||||||||
Sales and marketing | 16,525 | 7,762 | (2) | 8,763 | |||||||||||||||||||
General and administrative | 17,848 | 996 | (3) | 16,852 | |||||||||||||||||||
Legal settlement and contingencies | 6,424 | — | (4) | 6,424 | |||||||||||||||||||
Total operating expenses | 94,222 | 12,544 | 81,678 | ||||||||||||||||||||
Loss from operations | (34,799 | ) | (2,176 | ) | (32,623 | ) | |||||||||||||||||
Other income (expense), net | 1,152 | — | (5) | 1,152 | |||||||||||||||||||
Loss before provision for income taxes | (33,647 | ) | (2,176 | ) | (31,471 | ) | |||||||||||||||||
Provision for income taxes | 805 | — | (6) | 805 | |||||||||||||||||||
Net loss | $ | (34,452 | ) | $ | (34,452 | ) | $ | (2,176 | ) | $ | (32,276 | ) | |||||||||||
Adjustments: | |||||||||||||||||||||||
Legal settlement and contingencies | 6,424 | — | (4) | 6,424 | |||||||||||||||||||
Stock-based compensation expense | 7,154 | 657 | (2) | 6,497 | |||||||||||||||||||
Depreciation and amortization expense | 1,886 | 153 | (2) | 1,733 | |||||||||||||||||||
Other income (expense), net | (1,152 | ) | — | (5) | (1,152 | ) | |||||||||||||||||
Provision for income taxes | 805 | — | (6) | 805 | |||||||||||||||||||
Adjusted EBITDA | $ | (19,335 | ) | $ | (1,366 | ) | $ | (17,969 | ) | ||||||||||||||
Change in deferred revenue | 37,815 | — | 37,815 | ||||||||||||||||||||
Change in deferred costs(7) | (24,140 | ) | — | (24,140 | ) | ||||||||||||||||||
Adjusted EBITDA on billings(7) | $ | (5,660 | ) | $ | (1,366 | ) | $ | (4,294 | ) | ||||||||||||||
(1) Automotive and mobile navigation segments share many of the same technologies and resources. Accordingly, we are unable to fully attribute the operating expenses, other income (expense), net and provision (benefit) for income taxes to one segment versus the other. | |||||||||||||||||||||||
For purposes of calculating the Non-GAAP net loss attributable to the advertising segment: | |||||||||||||||||||||||
(2) These expenses represent 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 resources. | |||||||||||||||||||||||
(4) Legal settlement and contingencies are not related to the advertising segment. | |||||||||||||||||||||||
(5) Expenses or income cannot be directly allocated to the advertising segment. | |||||||||||||||||||||||
(6) Income taxes are primarily from foreign operations which support the automotive and mobile navigation segments. | |||||||||||||||||||||||
(7) We expect to incur additional costs in the future due to requirements to provide ongoing provisioning of services such as hosting, monitoring and customer support. Accordingly, adjusted EBITDA on billings does not reflect all costs associated with billings. | |||||||||||||||||||||||
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 | |||||||||||||||||||||||
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 | 16,850 | 1,538 | (3) | 15,312 | |||||||||||||||||||
Legal settlement and contingencies | 750 | — | (4) | 750 | |||||||||||||||||||
Restructuring | (1,361 | ) | (229 | ) | (2) | (1,132 | ) | ||||||||||||||||
Total operating expenses | 88,184 | 15,914 | 72,270 | ||||||||||||||||||||
Loss from operations | (26,617 | ) | (8,757 | ) | (17,860 | ) | |||||||||||||||||
Other income (expense), net | (277 | ) | — | (5) | (277 | ) | |||||||||||||||||
Loss before provision for income taxes | (26,894 | ) | (8,757 | ) | (18,137 | ) | |||||||||||||||||
Provision for income taxes | 429 | — | (6) | 429 | |||||||||||||||||||
Net loss | $ | (27,323 | ) | $ | (27,323 | ) | $ | (8,757 | ) | $ | (18,566 | ) | |||||||||||
Adjustments: | |||||||||||||||||||||||
Legal settlement and contingencies | 750 | — | (4) | 750 | |||||||||||||||||||
Stock-based compensation expense | 8,887 | 855 | (2) | 8,032 | |||||||||||||||||||
Restructuring | (1,361 | ) | (229 | ) | (2) | (1,132 | ) | ||||||||||||||||
Deferred rent reversal due to lease termination | (1,242 | ) | (300 | ) | (2) | (942 | ) | ||||||||||||||||
Depreciation and amortization expense | 2,696 | 750 | (2) | 1,946 | |||||||||||||||||||
Other income (expense), net | 277 | — | (5) | 277 | |||||||||||||||||||
Provision for income taxes | 429 | — | (6) | 429 | |||||||||||||||||||
Adjusted EBITDA | $ | (16,887 | ) | $ | (7,681 | ) | $ | (9,206 | ) | ||||||||||||||
Change in deferred revenue | 13,879 | — | 13,879 | ||||||||||||||||||||
Change in deferred costs(7) | (7,276 | ) | — | (7,276 | ) | ||||||||||||||||||
Adjusted EBITDA on billings(7) | $ | (10,284 | ) | $ | (7,681 | ) | $ | (2,603 | ) | ||||||||||||||
(1) Automotive and mobile navigation segments share many of the same technologies and resources. Accordingly, we are unable to fully attribute the operating expenses, other income (expense), net and provision (benefit) for income taxes to one segment versus the other. | |||||||||||||||||||||||
For purposes of calculating the Non-GAAP net loss attributable to the advertising segment: | |||||||||||||||||||||||
(2) These expenses represent 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 resources. | |||||||||||||||||||||||
(4) Legal settlement and contingencies are not related to the advertising segment. | |||||||||||||||||||||||
(5) Expenses or income cannot be directly allocated to the advertising segment. | |||||||||||||||||||||||
(6) Income taxes are primarily from foreign operations which support the automotive and mobile navigation segments. | |||||||||||||||||||||||
(7) We expect to incur additional costs in the future due to requirements to provide ongoing provisioning of services such as hosting, monitoring and customer support. Accordingly, adjusted EBITDA on billings does not reflect all costs associated with billings. |
Investor Relations Contact:Source:Mike Look ,Telenav, Inc. 408-990-1265 IR@telenav.com
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