“We are pleased to deliver a record number of
Financial Highlights for the third quarter ended
- Total revenue for the third quarter of fiscal 2018 was $13.8 million, compared with $35.1 million in the same prior year period. As previously announced, the decline was primarily due to the change in revenue recognition as a result of the Company’s commencement of offering multi-year value-added map services in all major markets to Ford®, its largest customer, effective
January 1, 2018 , which results in significant deferral of amounts that would have previously been recognized as revenue when the vehicle is produced. When Telenav adopts ASC 606 as ofJuly 1, 2018 , it expects it will be able to recognize substantial revenue from Ford as our product is delivered. - Billings for the third quarter of fiscal 2018 were $58.7 million, compared with $60.2 million in the same prior year period.
- GAAP net loss for the third quarter of fiscal 2018 was $(30.8) million, compared with a GAAP net loss of
$(13.7) million for the third quarter of fiscal 2017, with the decrease due primarily to the change in revenue recognition criteria for the Ford agreement. - Adjusted EBITDA on billings for the third quarter of fiscal 2018 was a $(4.1) million loss compared with a $(2.3) million loss in the third quarter of fiscal 2017.
- Ending cash, cash equivalents and short-term investments, excluding restricted cash, were $88.6 million as of March 31, 2018. This represented cash and short-term investments of $1.98 per share, based on 44.7 million shares of common stock outstanding as of March 31, 2018.
Telenav had no debt as of March 31, 2018.
Recent Business Highlights
- A record 1.4 million
Telenav equipped cars were deployed into the market during the quarter endedMarch 31, 2018 of which 1.2 million units were capable of connected services - Ford entered into an agreement to extend Telenav’s offering for SYNC 3 for calendar years 2019 and 2020 for all current geographies
- Ford launched Telenav’s connected services across select model year 2018 SYNC 3 vehicles in
Europe andChina using its FordPass mobile phone application Fiat Chrysler Automobiles (FCA) launched Telenav’s embedded navigation solution on Jeep’s 2018 Grand Cherokee, Grand Commander, Wrangler and Grand Voyager models inChina - Thinknear® by
Telenav launched GeolinkTM, a self-serve mobile advertising platform that utilizes Thinknear’s proven location-targeting and campaign-optimization technology at scale
Q4 Fiscal 2018 Business Outlook
For the quarter ending June 30, 2018, Telenav offers the following guidance:
- Total revenue is expected to be $15 to $16 million
- Billings are expected to be $55 to $58 million
- Deferred revenue is expected to increase by
$40 to $42 million - Deferred costs are expected to increase by approximately
$19 to $20 million - GAAP gross profit is expected to be approximately
$6 million - GAAP gross margin is expected to be approximately 40 percent
- Direct contribution from billings is expected to be approximately
$27 to $28 million - Direct contribution margin from billings is expected to be approximately 48 percent
- GAAP operating expenses are expected to be $34 to $35 million
- GAAP net loss is expected to be
$(29) to $(31) million - Adjusted EBITDA loss is expected to be
$(25) to $(27) million - Adjusted EBITDA loss on billings is expected to be
$(3.5) to $(5.5) million - Automotive is expected to be 40 to 45 percent of total revenue and 85 percent of billings
- Advertising is expected to be approximately 40 percent of total revenue and 11 percent of billings
- Weighted average diluted shares outstanding are expected to be approximately 45.0 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
Conference Call and Quarterly Commentary
Use of Non-GAAP Financial Measures
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
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 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:
Michael Look
408-990-1232
IR@telenav.com
Media:
Raphel Finelli
408-667-5970
media@telenav.com
Telenav, Inc. | |||||||||
Condensed Consolidated Balance Sheets | |||||||||
(in thousands, except par value) | |||||||||
March 31, 2018 |
June 30, 2017* |
||||||||
(unaudited) | |||||||||
Assets | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 17,509 | $ | 20,757 | |||||
Short-term investments | 71,086 | 77,598 | |||||||
Accounts receivable, net of allowances of $73 and $75 at March 31, 2018 and June 30, 2017, respectively | 51,207 | 57,834 | |||||||
Restricted cash | 3,207 | 3,401 | |||||||
Income taxes receivable | 32 | 34 | |||||||
Deferred costs | 23,745 | 11,703 | |||||||
Prepaid expenses and other current assets | 3,742 | 3,988 | |||||||
Total current assets | 170,528 | 175,315 | |||||||
Property and equipment, net | 7,630 | 4,658 | |||||||
Deferred income taxes, non-current | 1,027 | 900 | |||||||
Goodwill and intangible assets, net | 31,329 | 34,844 | |||||||
Deferred costs, non-current | 95,503 | 42,389 | |||||||
Other assets | 1,878 | 1,454 | |||||||
Total assets | $ | 307,895 | $ | 259,560 | |||||
Liabilities and stockholders’ equity | |||||||||
Current liabilities: | |||||||||
Trade accounts payable | $ | 17,578 | $ | 6,151 | |||||
Accrued expenses | 39,577 | 51,528 | |||||||
Deferred revenue | 37,843 | 20,345 | |||||||
Income taxes payable | 266 | 197 | |||||||
Total current liabilities | 95,264 | 78,221 | |||||||
Deferred rent, non-current | 1,074 | 996 | |||||||
Deferred revenue, non-current | 154,634 | 67,056 | |||||||
Other long-term liabilities | 1,116 | 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; 44,744 and 43,946 shares issued and outstanding at March 31, 2018 and June 30, 2017, respectively | 45 | 44 | |||||||
Additional paid-in capital | 165,690 | 159,666 | |||||||
Accumulated other comprehensive loss | (1,491 | ) | (1,934 | ) | |||||
Accumulated deficit | (108,437 | ) | (45,628 | ) | |||||
Total stockholders’ equity | 55,807 | 112,148 | |||||||
Total liabilities and stockholders’ equity | $ | 307,895 | $ | 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) | |||||||||||||||||
(unaudited) | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
March 31, | March 31, | ||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||
Revenue: | |||||||||||||||||
Product | $ | 4,014 | $ | 24,426 | $ | 53,285 | $ | 91,653 | |||||||||
Services | 9,809 | 10,639 | 36,276 | 37,640 | |||||||||||||
Total revenue | 13,823 | 35,065 | 89,561 | 129,293 | |||||||||||||
Cost of revenue: | |||||||||||||||||
Product | 3,105 | 13,174 | 32,832 | 53,533 | |||||||||||||
Services | 5,115 | 4,493 | 18,546 | 16,337 | |||||||||||||
Total cost of revenue | 8,220 | 17,667 | 51,378 | 69,870 | |||||||||||||
Gross profit | 5,603 | 17,398 | 38,183 | 59,423 | |||||||||||||
Operating expenses: | |||||||||||||||||
Research and development | 22,212 | 19,106 | 65,197 | 53,425 | |||||||||||||
Sales and marketing | 5,654 | 5,980 | 15,854 | 16,525 | |||||||||||||
General and administrative | 5,618 | 5,485 | 16,343 | 17,848 | |||||||||||||
Goodwill impairment | 2,666 | - | 2,666 | - | |||||||||||||
Legal settlement and contingencies | 115 | - | 425 | 6,424 | |||||||||||||
Total operating expenses | 36,265 | 30,571 | 100,485 | 94,222 | |||||||||||||
Loss from operations | (30,662 | ) | (13,173 | ) | (62,302 | ) | (34,799 | ) | |||||||||
Other income, net | 229 | 142 | 400 | 1,152 | |||||||||||||
Loss before provision for income taxes | (30,433 | ) | (13,031 | ) | (61,902 | ) | (33,647 | ) | |||||||||
Provision for income taxes | 330 | 663 | 611 | 805 | |||||||||||||
Net loss | $ | (30,763 | ) | $ | (13,694 | ) | $ | (62,513 | ) | $ | (34,452 | ) | |||||
Net loss per share: | |||||||||||||||||
Basic and diluted | $ | (0.69 | ) | $ | (0.31 | ) | $ | (1.41 | ) | $ | (0.80 | ) | |||||
Weighted average shares used in computing net loss per share: | |||||||||||||||||
Basic and diluted | 44,637 | 43,528 | 44,396 | 43,189 | |||||||||||||
Telenav, Inc. | |||||||||
Condensed Consolidated Statements of Cash Flows | |||||||||
(in thousands) | |||||||||
(unaudited) | |||||||||
Nine Months Ended March 31, |
|||||||||
2018 | 2017 | ||||||||
Operating activities | |||||||||
Net loss | $ | (62,513 | ) | $ | (34,452 | ) | |||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||
Depreciation and amortization | 2,476 | 1,886 | |||||||
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 | 156 | 326 | |||||||
Stock-based compensation expense | 7,614 | 7,154 | |||||||
Goodwill impairment | 2,666 | - | |||||||
Loss (gain) on disposal of property and equipment | 13 | (3 | ) | ||||||
Bad debt expense | (17 | ) | 149 | ||||||
Changes in operating assets and liabilities: | |||||||||
Accounts receivable | 6,706 | (6,227 | ) | ||||||
Deferred income taxes | (68 | ) | 219 | ||||||
Restricted cash | 194 | 1,184 | |||||||
Income taxes receivable | 2 | 41 | |||||||
Deferred costs | (65,156 | ) | (24,140 | ) | |||||
Prepaid expenses and other current assets | 177 | 1,090 | |||||||
Other assets | (614 | ) | 386 | ||||||
Trade accounts payable | 11,398 | 5,774 | |||||||
Accrued expenses and other liabilities | (12,079 | ) | (2,369 | ) | |||||
Income taxes payable | 64 | 200 | |||||||
Deferred rent | 1,145 | 49 | |||||||
Deferred revenue | 105,076 | 37,815 | |||||||
Net cash used in operating activities | (3,880 | ) | (10,918 | ) | |||||
Investing activities | |||||||||
Purchases of property and equipment | (4,572 | ) | (867 | ) | |||||
Purchases of short-term investments | (42,849 | ) | (51,258 | ) | |||||
Proceeds from sales and maturities of short-term investments | 48,690 | 62,468 | |||||||
Proceeds from sales of long-term investments | - | 246 | |||||||
Net cash provided by investing activities | 1,269 | 10,589 | |||||||
Financing activities | |||||||||
Proceeds from exercise of stock options | 463 | 2,354 | |||||||
Tax withholdings related to net share settlements of restricted stock units | (2,052 | ) | (2,163 | ) | |||||
Net cash provided by (used in) financing activities | (1,589 | ) | 191 | ||||||
Effect of exchange rate changes on cash and cash equivalents | 952 | (448 | ) | ||||||
Net decrease in cash and cash equivalents | (3,248 | ) | (586 | ) | |||||
Cash and cash equivalents, at beginning of period | 20,757 | 21,349 | |||||||
Cash and cash equivalents, at end of period | $ | 17,509 | $ | 20,763 | |||||
Supplemental disclosure of cash flow information | |||||||||
Income taxes paid, net | $ | 803 | $ | 1,861 | |||||
Telenav, Inc. | ||||||||||||||||
Condensed Consolidated Segment Summary | ||||||||||||||||
(in thousands, except percentages) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
March 31, | March 31, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Automotive | ||||||||||||||||
Revenue | $ | 5,808 | $ | 25,476 | $ | 57,950 | $ | 94,487 | ||||||||
Cost of revenue | 4,616 | 14,112 | 36,917 | 56,095 | ||||||||||||
Gross profit | $ | 1,192 | $ | 11,364 | $ | 21,033 | $ | 38,392 | ||||||||
Gross margin | 21 | % | 45 | % | 36 | % | 41 | % | ||||||||
Advertising | ||||||||||||||||
Revenue | $ | 4,811 | $ | 5,284 | $ | 21,168 | $ | 20,037 | ||||||||
Cost of revenue | 2,174 | 2,224 | 9,988 | 9,669 | ||||||||||||
Gross profit | $ | 2,637 | $ | 3,060 | $ | 11,180 | $ | 10,368 | ||||||||
Gross margin | 55 | % | 58 | % | 53 | % | 52 | % | ||||||||
Mobile Navigation | ||||||||||||||||
Revenue | $ | 3,204 | $ | 4,305 | $ | 10,443 | $ | 14,769 | ||||||||
Cost of revenue | 1,430 | 1,331 | 4,473 | 4,106 | ||||||||||||
Gross profit | $ | 1,774 | $ | 2,974 | $ | 5,970 | $ | 10,663 | ||||||||
Gross margin | 55 | % | 69 | % | 57 | % | 72 | % | ||||||||
Total | ||||||||||||||||
Revenue | $ | 13,823 | $ | 35,065 | $ | 89,561 | $ | 129,293 | ||||||||
Cost of revenue | 8,220 | 17,667 | 51,378 | 69,870 | ||||||||||||
Gross profit | $ | 5,603 | $ | 17,398 | $ | 38,183 | $ | 59,423 | ||||||||
Gross margin | 41 | % | 50 | % | 43 | % | 46 | % | ||||||||
Telenav, Inc. | |||||||||||||||
Unaudited Reconciliation of Non-GAAP Adjustments | |||||||||||||||
(in thousands) | |||||||||||||||
Reconciliation of Revenue to Billings | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
March 31, | March 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Automotive | |||||||||||||||
Revenue | $ | 5,808 | $ | 25,476 | $ | 57,950 | $ | 94,487 | |||||||
Adjustment: | |||||||||||||||
Change in deferred revenue | 44,855 | 25,123 | 105,302 | 37,930 | |||||||||||
Billings | $ | 50,663 | $ | 50,599 | $ | 163,252 | $ | 132,417 | |||||||
Advertising | |||||||||||||||
Revenue | $ | 4,811 | $ | 5,284 | $ | 21,168 | $ | 20,037 | |||||||
Adjustment: | |||||||||||||||
Change in deferred revenue | - | - | - | - | |||||||||||
Billings | $ | 4,811 | $ | 5,284 | $ | 21,168 | $ | 20,037 | |||||||
Mobile Navigation | |||||||||||||||
Revenue | $ | 3,204 | $ | 4,305 | $ | 10,443 | $ | 14,769 | |||||||
Adjustment: | |||||||||||||||
Change in deferred revenue | 25 | (36 | ) | (226 | ) | (115 | ) | ||||||||
Billings | $ | 3,229 | $ | 4,269 | $ | 10,217 | $ | 14,654 | |||||||
Total | |||||||||||||||
Revenue | $ | 13,823 | $ | 35,065 | $ | 89,561 | $ | 129,293 | |||||||
Adjustment: | |||||||||||||||
Change in deferred revenue | 44,880 | 25,087 | 105,076 | 37,815 | |||||||||||
Billings | $ | 58,703 | $ | 60,152 | $ | 194,637 | $ | 167,108 | |||||||
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 March 31, |
Three Months Ended March 31, |
Three Months Ended March 31, |
Three Months Ended March 31, |
||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||
Deferred revenue, March 31 | $ | 191,819 | $ | 60,083 | $ | - | $ | - | $ | 658 | $ | 1,101 | $ | 192,477 | $ | 61,184 | |||||||||||
Deferred revenue, December 31 | 146,964 | 34,960 | - | - | 633 | 1,137 | 147,597 | 36,097 | |||||||||||||||||||
Change in deferred revenue | $ | 44,855 | $ | 25,123 | $ | - | $ | - | $ | 25 | $ | (36 | ) | $ | 44,880 | $ | 25,087 | ||||||||||
Deferred costs, March 31 | $ | 119,248 | $ | 36,216 | $ | - | $ | - | $ | - | $ | - | $ | 119,248 | $ | 36,216 | |||||||||||
Deferred costs, December 31 | 94,907 | 18,780 | - | - | - | - | 94,907 | 18,780 | |||||||||||||||||||
Change in deferred costs | $ | 24,341 | $ | 17,436 | $ | - | $ | - | $ | - | $ | - | $ | 24,341 | $ | 17,436 | |||||||||||
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, |
||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||
Deferred revenue, March 31 | $ | 191,819 | $ | 60,083 | $ | - | $ | - | $ | 658 | $ | 1,101 | $ | 192,477 | $ | 61,184 | |||||||||||
Deferred revenue, June 30 | 86,517 | 22,153 | - | - | 884 | 1,216 | 87,401 | 23,369 | |||||||||||||||||||
Change in deferred revenue | $ | 105,302 | $ | 37,930 | $ | - | $ | - | $ | (226 | ) | $ | (115 | ) | $ | 105,076 | $ | 37,815 | |||||||||
Deferred costs, March 31 | $ | 119,248 | $ | 36,216 | $ | - | $ | - | $ | - | $ | - | $ | 119,248 | $ | 36,216 | |||||||||||
Deferred costs, June 30 | 54,092 | 12,076 | - | - | - | - | 54,092 | 12,076 | |||||||||||||||||||
Change in deferred costs | $ | 65,156 | $ | 24,140 | $ | - | $ | - | $ | - | $ | - | $ | 65,156 | $ | 24,140 | |||||||||||
Telenav, Inc. | |||||||||||||||||
Unaudited Reconciliation of Non-GAAP Adjustments | |||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||
Reconciliation of Gross Profit to Direct Contribution from Billings | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
March 31, | March 31, | ||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||
Automotive | |||||||||||||||||
Gross profit | $ | 1,192 | $ | 11,364 | $ | 21,033 | $ | 38,392 | |||||||||
Gross margin | 21 | % | 45 | % | 36 | % | 41 | % | |||||||||
Adjustments to gross profit: | |||||||||||||||||
Change in deferred revenue | 44,855 | 25,123 | 105,302 | 37,930 | |||||||||||||
Change in deferred costs(1) | (24,341 | ) | (17,436 | ) | (65,156 | ) | (24,140 | ) | |||||||||
Net change | 20,514 | 7,687 | 40,146 | 13,790 | |||||||||||||
Direct Contribution from billings(1) | $ | 21,706 | $ | 19,051 | $ | 61,179 | $ | 52,182 | |||||||||
Direct Contribution Margin from billings(1) | 43 | % | 38 | % | 37 | % | 39 | % | |||||||||
Advertising | |||||||||||||||||
Gross profit | $ | 2,637 | $ | 3,060 | $ | 11,180 | $ | 10,368 | |||||||||
Gross margin | 55 | % | 58 | % | 53 | % | 52 | % | |||||||||
Adjustments to gross profit: | |||||||||||||||||
Change in deferred revenue | - | - | - | - | |||||||||||||
Change in deferred costs(1) | - | - | - | - | |||||||||||||
Net change | - | - | - | - | |||||||||||||
Direct Contribution from billings(1) | $ | 2,637 | $ | 3,060 | $ | 11,180 | $ | 10,368 | |||||||||
Direct Contribution Margin from billings(1) | 55 | % | 58 | % | 53 | % | 52 | % | |||||||||
Mobile Navigation | |||||||||||||||||
Gross profit | $ | 1,774 | $ | 2,974 | $ | 5,970 | $ | 10,663 | |||||||||
Gross margin | 55 | % | 69 | % | 57 | % | 72 | % | |||||||||
Adjustments to gross profit: | |||||||||||||||||
Change in deferred revenue | 25 | (36 | ) | (226 | ) | (115 | ) | ||||||||||
Change in deferred costs(1) | - | - | - | - | |||||||||||||
Net change | 25 | (36 | ) | (226 | ) | (115 | ) | ||||||||||
Direct Contribution from billings(1) | $ | 1,799 | $ | 2,938 | $ | 5,744 | $ | 10,548 | |||||||||
Direct Contribution Margin from billings(1) | 56 | % | 69 | % | 56 | % | 72 | % | |||||||||
Total | |||||||||||||||||
Gross profit | $ | 5,603 | $ | 17,398 | $ | 38,183 | $ | 59,423 | |||||||||
Gross margin | 41 | % | 50 | % | 43 | % | 46 | % | |||||||||
Adjustments to gross profit: | |||||||||||||||||
Change in deferred revenue | 44,880 | 25,087 | 105,076 | 37,815 | |||||||||||||
Change in deferred costs(1) | (24,341 | ) | (17,436 | ) | (65,156 | ) | (24,140 | ) | |||||||||
Net change | 20,539 | 7,651 | 39,920 | 13,675 | |||||||||||||
Direct Contribution from billings(1) | $ | 26,142 | $ | 25,049 | $ | 78,103 | $ | 73,098 | |||||||||
Direct Contribution Margin from billings(1) | 45 | % | 42 | % | 40 | % | 44 | % | |||||||||
(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, including certain third party technology and content license fees, as applicable. 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 | Nine Months Ended | ||||||||||||||||
March 31, | March 31, | ||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||
Net loss | $ | (30,763 | ) | $ | (13,694 | ) | $ | (62,513 | ) | $ | (34,452 | ) | |||||
Adjustments: | |||||||||||||||||
Goodwill impairment | 2,666 | - | 2,666 | - | |||||||||||||
Legal settlement and contingencies | 115 | - | 425 | 6,424 | |||||||||||||
Deferred rent reversal due to lease termination | - | - | (538 | ) | - | ||||||||||||
Tenant improvement allowance recognition due to lease termination | - | - | (582 | ) | - | ||||||||||||
Stock-based compensation expense | 2,246 | 2,625 | 7,614 | 7,154 | |||||||||||||
Depreciation and amortization expense | 963 | 626 | 2,476 | 1,886 | |||||||||||||
Other income (expense), net | (229 | ) | (142 | ) | (400 | ) | (1,152 | ) | |||||||||
Provision for income taxes | 330 | 663 | 611 | 805 | |||||||||||||
Adjusted EBITDA | (24,672 | ) | (9,922 | ) | (50,241 | ) | (19,335 | ) | |||||||||
Change in deferred revenue | 44,880 | 25,087 | 105,076 | 37,815 | |||||||||||||
Change in deferred costs(1) | (24,341 | ) | (17,436 | ) | (65,156 | ) | (24,140 | ) | |||||||||
Adjusted EBITDA on billings(1) | $ | (4,133 | ) | $ | (2,271 | ) | $ | (10,321 | ) | $ | (5,660 | ) | |||||
(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. | |||||||||||||||||
Telenav, Inc. | ||||||||||||||||
Unaudited Reconciliation of Non-GAAP Adjustments | ||||||||||||||||
(in thousands) | ||||||||||||||||
Reconciliation of Net Loss to Free Cash Flow | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
March 31, | March 31, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Net loss | $ | (30,763 | ) | $ | (13,694 | ) | $ | (62,513 | ) | $ | (34,452 | ) | ||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||||||
Change in deferred revenue (1) | 44,880 | 25,087 | 105,076 | 37,815 | ||||||||||||
Change in deferred costs (2) | (24,341 | ) | (17,436 | ) | (65,156 | ) | (24,140 | ) | ||||||||
Changes in other operating assets and liabilities | 3,620 | (5,339 | ) | 6,925 | 347 | |||||||||||
Other adjustments (3) | 5,871 | 3,363 | 11,788 | 9,512 | ||||||||||||
Net cash used in operating activities | (733 | ) | (8,019 | ) | (3,880 | ) | (10,918 | ) | ||||||||
Less: Purchases of property and equipment | (1,222 | ) | (336 | ) | (4,572 | ) | (867 | ) | ||||||||
Free cash flow | $ | (1,955 | ) | $ | (8,355 | ) | $ | (8,452 | ) | $ | (11,785 | ) | ||||
(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.