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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 2020

or 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from            to            
Commission file number: 001-34720
TELENAV, INC.
(Exact name of registrant as specified in its charter)
Delaware 77-0521800
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification Number)

4655 Great America Parkway, Suite 300
Santa Clara, California 95054
(Address of principal executive offices, including zip code)
(408) 245-3800
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, $0.001 Par Value per ShareTNAVThe NASDAQ Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. 
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  
As of December 31, 2020, there were 47,999,507 shares of the Registrant’s Common Stock outstanding.


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TELENAV, INC.
TABLE OF CONTENTS
 
  Page No.
RISK FACTORS SUMMARYi
Item 1.
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 2.
Item 6.


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RISK FACTORS SUMMARY

You should carefully consider the information set forth below under the heading “Risk Factors” in Part II, Item 1A before deciding whether to invest in our securities. Below is a summary of certain of the principal risks associated with an investment in our securities.
We face risks related to our proposed acquisition by V99 Inc. that could impact our business, financial condition, results of operations, and the market price of our common stock.
We face significant risks related to the COVID-19 pandemic and related economic recession, which we expect to continue.
We are dependent on a few OEM partners for a substantial portion of our billings and revenue, and our business, financial condition and results of operations will be significantly harmed if our billings and revenue from Ford Motor Company (“Ford”) and General Motors Holdings (“GM”) decline or if they transition to competitive offerings.
Although we were profitable for part of fiscal 2020, we may incur additional losses in fiscal 2021, and we cannot predict when, or if, we will return to consistent profitability.
The success of our automotive navigation products may be affected by the number of vehicle models our OEM partners offer with our navigation solutions, as well as overall demand for such new vehicles.
If we fail to comply with our automobile manufacturer and tier-one contracts, our business, financial condition and results of operations could suffer.
We may not be successful at adapting our business model for the Chinese automotive navigation market, which may reduce our revenue.
We may not be successful in generating material revenue from automobile manufacturers and tier ones other than Ford and GM.
We may incur substantial costs when engaging with a new automotive navigation customer and may not realize substantial revenue from that new customer in the short-term, if at all.
Our quarterly revenue and operating results have fluctuated in the past and may fluctuate in the future due to a number of factors.
Our automotive revenue and earnings could fluctuate due to the complexities of revenue recognition and capitalization of expenses related to customized products.
We rely on our customers for timely and accurate vehicle and subscriber sales information; a failure or disruption in the provisioning of this data to us would materially and adversely affect our ability to manage our business effectively.
We recently implemented a new enterprise resource planning system and are also implementing project and human resources management systems; if these new systems prove ineffective, we may be unable to timely or accurately prepare financial reports, or invoice and collect from our customers.
We may be required to recognize a significant charge to earnings if our goodwill becomes impaired.
We rely on our management team and need specialized personnel to grow our business, and the loss of one or more key employees or our inability to attract and retain qualified personnel could harm our business.
Warranty claims, product liability claims, product recalls and regulatory liability claims could subject us to significant costs and adversely affect our financial results.
Indemnity provisions in various agreements potentially expose us to substantial liability for intellectual property infringement, damages caused by defective software and other losses.
Our effective tax rate may fluctuate, which could increase our anticipated income tax expense or reduce our anticipated income tax benefit in the future.
Changes in accounting principles, or interpretations thereof, could have a significant impact on our financial position and results of operations.
Our ability to use our net operating losses and credits to offset future taxable income may be subject to certain limitations.
Our business practices with respect to data could give rise to liabilities or reputational harm as a result of governmental regulation, legal requirements or industry standards relating to consumer privacy and data protection.
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We rely on a proprietary provisioning and reporting system for our navigation products and services to track end user activation, deactivation and usage data, and any material failures in this system could harm our revenue, affect our costs and impair our ability to manage our business effectively.
We rely on third-party data and content to provide our services, and if we were unable to obtain content at reasonable prices, or at all, our gross margins and our ability to provide our services would be harmed.
Network failures, disruptions or capacity constraints in our third-party-hosted data center facilities could affect the performance of our navigation services and harm our reputation and our revenue.
We may not be able to enhance our location services to keep pace with technological and market developments, or develop new location services in a timely manner or at competitive prices.
We rely on network infrastructures provided by our wireless carriers, mobile phones and in-car wireless connections for the delivery of our navigation services to end users.
We operate in an industry with extensive intellectual property litigation.
Unauthorized control or manipulation of our systems in vehicles may cause them to operate improperly, or not at all, or compromise their safety and data security, which could result in loss of confidence in us and our products, cancellation of our contracts with certain of our automobile manufacturer or tier-one customers and harm our business.
Our business is subject to online security risks, including potential security and privacy incidents.
Vulnerabilities in our products and services have been publicly disclosed before; if we are unable to adequately detect and address vulnerabilities in our products and services, these vulnerabilities, including new ones we may not yet understand, may result in harm to our business.
If we are unable to protect our intellectual property and proprietary rights, or if claims are asserted against us, our competitive position and our business could be harmed.
Confidentiality agreements with employees and others may not adequately prevent disclosure of our trade secrets and other proprietary information.
Our use of open source software could negatively affect our ability to sell our products and services and subject us to possible litigation.
We are subject to complex and evolving U.S. and foreign laws and regulations regarding privacy, data protection and other matters, and violations of these complex and dynamic laws, rules and regulations may result in claims, changes to our business practices, monetary penalties, increased costs of operations, and/or other harms to our business.
Changes to United States tax, tariff and import/export regulations may have a negative effect on global economic conditions, financial markets and our business.
Our operations in certain emerging markets expose us to political, economic and regulatory risks.
We conduct substantial research and development operations in China; risks associated with a business presence in China could negatively affect our business and results of operations.
We could be subject to additional income tax liabilities.
Our international operations and corporate structure subject us to potential adverse tax consequences.
The U.K.’s decision to leave the EU will continue to have uncertain effects and could adversely affect us.
Changes in government regulation of the wireless communications, automobile and in-car commerce industries may adversely affect our business.
Certain of our products are subject to U.S. export controls; where we fail to comply with these laws, we could suffer monetary or other penalties.
Government regulation designed to protect end-user privacy may make it difficult for us to provide our services or provide in-car commerce services.
If we are unable to obtain the required government licenses or approvals to comply with government regulation relating to map data and location-based services, we may not be able to provide our products and services and our business could be adversely impacted.
Regulations relating to investments in offshore companies by Chinese residents may subject our Chinese-resident beneficial owners or our Chinese subsidiaries to liability or penalties, limit our ability to inject capital into our Chinese subsidiaries, limit our Chinese subsidiaries’ ability to increase their registered capital or limit their ability to distribute profits to us.
ii

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We face intense competition in our market, especially from competitors that offer their location services for free, which could make it difficult for us to acquire and retain customers and end users.
If we are unable to integrate future investments or acquisitions successfully, our operating results and prospects could be harmed.
Our investment portfolio and cash balances may become impaired by poor investment performance, deterioration of the financial markets or the economic effects of COVID-19.
Changes in business direction and market conditions could lead to charges we may take related to structural reorganization and discontinuation of certain products or services, which may adversely affect our financial results.
We may not always complete our assessment of the effectiveness of our internal control over financial reporting in a timely manner, or such internal control may not be determined to be effective, which may adversely affect investor confidence in our company and, as a result, the value of our common stock.
We will continue to incur high costs and demands upon management as a result of complying with the laws and regulations affecting public companies, which could harm our operating results.
If securities analysts do not publish research or reports about our business or if they publish negative evaluations of our stock, the price of our stock could decline.
Our stock price has fluctuated significantly and may continue to fluctuate in the future.
The concentration of ownership of our capital stock limits your ability to influence corporate matters.
Certain provisions in our charter documents and under Delaware law could limit attempts by our stockholders to replace or remove members of our Board of Directors or current management and may adversely affect the market price of our common stock.

iii

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PART I. FINANCIAL INFORMATION
Item 1.Financial Statements.

TELENAV, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except par value)
(unaudited)
December 31,
2020
June 30,
2020
Assets
Current assets:
Cash and cash equivalents$37,252 $20,518 
Short-term investments75,739 90,315 
Accounts receivable, net of allowances of $34 and $5 at December 31, 2020 and June 30, 2020, respectively44,026 34,542 
Restricted cash1,539 1,494 
Deferred costs20,697 26,121 
Prepaid expenses and other current assets4,893 4,505 
Total current assets184,146 177,495 
Property and equipment, net3,154 4,319 
Operating lease right-of-use assets8,435 7,067 
Deferred income taxes, non-current1,463 1,515 
Goodwill14,255 14,255 
Deferred costs, non-current50,825 54,548 
Other assets43,641 34,552 
Total assets$305,919 $293,751 
Liabilities and stockholders’ equity
Current liabilities:
Trade accounts payable$32,172 $12,291 
Accrued expenses30,776 36,210 
Operating lease liabilities3,539 2,786 
Deferred revenue32,816 37,973 
Income taxes payable473 715 
Total current liabilities99,776 89,975 
Operating lease liabilities, non-current5,857 5,191 
Deferred revenue, non-current95,182 100,970 
Other long-term liabilities688 645 
Commitments and contingencies   
Stockholders’ equity:
Preferred stock, $0.001 par value: 50,000 shares authorized; no shares issued or outstanding
  
Common stock, $0.001 par value: 600,000 shares authorized; 48,000 and 47,342 shares issued and outstanding at December 31, 2020 and June 30, 2020, respectively48 47 
Additional paid-in capital196,796 192,170 
Accumulated other comprehensive loss(330)(477)
Accumulated deficit(92,098)(94,770)
Total stockholders’ equity104,416 96,970 
Total liabilities and stockholders’ equity$305,919 $293,751 

See accompanying Notes to Condensed Consolidated Financial Statements.
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TELENAV, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)

Three Months EndedSix Months Ended
 December 31,December 31,
 2020201920202019
Revenue:
Product$53,449 $61,543 $110,258 $117,533 
Services12,405 12,332 25,192 22,971 
Total revenue65,854 73,875 135,450 140,504 
Cost of revenue:
Product31,098 26,434 63,628 58,423 
Services7,030 7,288 14,583 12,150 
Total cost of revenue38,128 33,722 78,211 70,573 
Gross profit27,726 40,153 57,239 69,931 
Operating expenses:
Research and development18,528 19,717 37,514 40,380 
Sales and marketing1,677 2,134 3,673 4,080 
General and administrative9,448 6,428 15,960 13,715 
Total operating expenses29,653 28,279 57,147 58,175 
Income (loss) from operations(1,927)11,874 92 11,756 
Other income, net521 596 1,235 1,157 
Income (loss) from continuing operations before provision (benefit) for income taxes(1,406)12,470 1,327 12,913 
Provision (benefit) for income taxes(67)205 (53)616 
Equity in net (income) of equity method investees(1,279)(797)(1,895)(797)
Income (loss) from continuing operations (60)13,062 3,275 13,094 
Discontinued operations:
Income from operations of Advertising business, net of tax   832 
Loss from sale of Advertising business (56) (4,874)
Loss on discontinued operations (56) (4,042)
Net income (loss)$(60)$13,006 $3,275 $9,052 
Basic income (loss) per share:
Income (loss) from continuing operations$(0.00)$0.27 $0.07 $0.27 
Loss on discontinued operations   (0.08)
Net income (loss)$(0.00)$0.27 $0.07 $0.19 
Diluted income (loss) per share:
Income (loss) from continuing operations$(0.00)$0.27 $0.07 $0.27 
Loss on discontinued operations   (0.08)
Net income (loss)$(0.00)$0.27 $0.07 $0.18 
Weighted average shares used in computing income (loss) per share:
Basic47,825 48,475 47,526 48,127 
Diluted47,825 48,821 48,151 49,257 
Stock-based compensation expense included in continuing operations above:
Cost of revenue$22 $13 $41 $29 
Research and development1,603 623 3,433 1,718 
Sales and marketing308 190 677 325 
General and administrative707 652 1,346 1,158 
Total stock-based compensation expense$2,640 $1,478 $5,497 $3,230 
See accompanying Notes to Condensed Consolidated Financial Statements.
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TELENAV, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
(unaudited)


Three Months EndedSix Months Ended
 December 31,December 31,
 2020201920202019
Net income (loss)$(60)$13,006 $3,275 $9,052 
Other comprehensive income (loss):
Foreign currency translation adjustment, net of tax346 207 706 (103)
Available-for-sale securities:
Unrealized gain (loss) on available-for-sale securities, net of tax(230)(15)(357)44 
Reclassification adjustments for loss on available-for-sale securities recognized, net of tax(14)(1)(202)(2)
Net increase (decrease) from available-for-sale securities, net of tax(244)(16)(559)42 
Other comprehensive income (loss), net of tax102 191 147 (61)
Comprehensive income $42 $13,197 $3,422 $8,991 

See accompanying Notes to Condensed Consolidated Financial Statements.

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TELENAV, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands)
(unaudited)
 Common StockAdditional
Paid-in
Capital
Accumulated
Other
Comprehensive
Loss
Accumulated DeficitTotal Stockholders' Equity
Six Months Ended December 31, 2020SharesAmount
Balance at June 30, 202047,342 $47 $192,170 $(477)$(94,770)$96,970 
Issuance of common stock upon exercise of stock options14 — 67 — — 67 
Release of restricted stock units, net of shares withheld for taxes162 — (359)— — (359)
Issuance of common stock under employee stock purchase plan305 — 1,204 — — 1,204 
Repurchase of common stock(300)— (1,027)— (603)(1,630)
Stock-based compensation expense, continuing operations— — 2,857 — — 2,857 
Foreign currency translation adjustment, net of tax— — — 360 — 360 
Unrealized loss on available-for-sale securities, net of tax— — — (315)— (315)
Net income— — — — 3,335 3,335 
Balance at September 30, 202047,523 47 194,912 (432)(92,038)102,489 
Release of restricted stock units, net of shares withheld for taxes477 1 (756)— — (755)
Stock-based compensation expense, continuing operations— — 2,640 — — 2,640 
Foreign currency translation adjustment, net of tax— — — 346 — 346 
Unrealized net loss on available-for-sale securities, net of tax— — — (244)— (244)
Net loss— — — — (60)(60)
Balance at December 31, 202048,000 $48 $196,796 $(330)$(92,098)$104,416 
Six Months Ended December 31, 2019
Balance at June 30, 201946,911 $47 $182,349 $(1,477)$(90,279)$90,640 
Issuance of common stock upon exercise of stock options1,326 1 8,340 — — 8,341 
Release of restricted stock units, net of shares withheld for taxes329 1 (1,273)— — (1,272)
Stock-based compensation expense, continuing operations— — 1,752 — — 1,752 
Stock-based compensation expense, discontinued operations— — 887 — — 887 
Foreign currency translation adjustment, net of tax— — — (310)— (310)
Unrealized net gain on available-for-sale securities, net of tax— — — 58 — 58 
Net loss— — — — (3,954)(3,954)
Balance at September 30, 201948,566 49 192,055 (1,729)(94,233)96,142 
Release of restricted stock units, net of shares withheld for taxes352 — (317)— — (317)
Repurchases of common stock(767)(1)(2,623)— (1,395)(4,019)
Stock-based compensation expense, continuing operations— — 1,478 — — 1,478 
Foreign currency translation adjustment, net of tax— — — 207 — 207 
Unrealized net loss on available-for-sale securities, net of tax— — — (16)— (16)
Net income— — — — 13,006 13,006 
Balance at December 31, 201948,151 $48 $190,593 $(1,538)$(82,622)$106,481 
See accompanying Notes to Condensed Consolidated Financial Statements.
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TELENAV, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Six Months Ended
December 31,
 20202019
Operating activities
Net income$3,275 $9,052 
Loss on discontinued operations 4,042 
Income from continuing operations3,275 13,094 
Adjustments to reconcile income from continuing operations to net cash provided by operating activities:
Stock-based compensation expense5,497 3,230 
Depreciation and amortization1,426 1,856 
Operating lease amortization, net of accretion1,727 1,321 
Accretion of net premium on short-term investments170 75 
Unrealized gain on non-marketable equity investments (62)
Equity in net (income) of equity method investees(1,895)(797)
Other(346)(1)
Changes in operating assets and liabilities:
Accounts receivable(9,160)25,835 
Deferred income taxes154 (409)
Deferred costs9,280 (1,961)
Prepaid expenses and other current assets(514)(3,992)
Other assets(406)21 
Trade accounts payable19,874 (15,054)
Accrued expenses and other liabilities(5,755)3,945 
Income taxes payable(258)130 
Operating lease liabilities(1,673)(1,754)
Deferred revenue(11,449)9,036 
Net cash provided by operating activities9,947 34,513 
Investing activities
Purchases of property and equipment(155)(1,078)
Purchases of short-term investments(10,703)(54,439)
Purchase of long-term investments(6,733)(3,500)
Proceeds from sales and maturities of short-term investments24,550 24,067 
Proceeds from sales of long-term investments447  
Net cash provided by (used in) investing activities
7,406 (34,950)
Financing activities
Proceeds from exercise of stock options67 8,306 
Tax withholdings related to net share settlements of restricted stock units(1,114)(1,148)
Proceeds from issuance of common stock under employee stock purchase plan1,204  
Repurchase of common stock(1,630)(4,019)
Net cash provided by (used in) financing activities(1,473)3,139 
Effect of exchange rate changes on cash, cash equivalents and restricted cash899 (85)
Net increase in cash, cash equivalents and restricted cash, continuing operations16,779 2,617 
Net cash used in discontinued operations (3,975)
Cash, cash equivalents and restricted cash, beginning of period22,012 29,225 
Cash, cash equivalents and restricted cash, end of period$38,791 $27,867 
Supplemental disclosure of cash flow information
Income taxes paid, net$503 $1,279 
Non-cash investing: Investment in inMarket Media, LLC acquired in exchange for sale of Advertising business$ $15,600 
Cash flows from discontinued operations:
Net cash used in operating activities$ $(3,569)
Net cash used in financing activities (406)
Net cash transferred from continuing operations 3,975 
Net change in cash and cash equivalents from discontinued operations  
Cash and cash equivalents of discontinued operations, beginning of period  
Cash and cash equivalents of discontinued operations, end of period$ $ 
Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheets
Cash and cash equivalents$37,252 $26,347 
Restricted cash 1,539 1,520 
Total cash, cash equivalents and restricted cash$38,791 $27,867 
See accompanying Notes to Condensed Consolidated Financial Statements.
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TELENAV, INC.
Notes to Condensed Consolidated Financial Statements
(unaudited)
1.Summary of business and significant accounting policies
Description of business
Telenav, Inc., also referred to in this report as “Telenav,” the “Company,” “we,” “our” or “us,” was incorporated in September 1999 in the State of Delaware. We are a leading provider of automotive software and services providing both in-vehicle and cloud-based solutions. We focus on navigation and location-based services (LBS), where we pioneered many innovations including the market’s first mobile cloud-based navigation service. Navigation and LBS are the primary applications for in-vehicle infotainment (IVI) systems and we are using our strengths and core competencies to address the growing demand for overall connected car services. We provide our connected-car products and services directly to automobile manufacturers, as well as tier-one suppliers. Our fiscal year ends on June 30, and in this report we refer to the fiscal year ended June 30, 2020 as “fiscal 2020” and the fiscal year ending June 30, 2021 as “fiscal 2021.”
Commencing July 1, 2019, we operate in a single segment, automotive. Through June 30, 2019, we operated in three segments - automotive, advertising and mobile navigation. In August 2019, we completed the disposition of our digital advertising operations (the "Ads Business") and have presented the results of operations for the Ads Business as discontinued operations for all prior periods presented. See Note 11. Our mobile navigation services business represented less than 5% of total revenue for the three and six months ended December 31, 2020 and 2019 and we expect the business to continue to decline. Our chief executive officer, or CEO, the chief operating decision maker, does not review mobile navigation revenue and cost of revenue separately. As a result, we combine the mobile navigation business with the automotive business in a single segment.
Proposed merger
On November 2, 2020, we entered into an Agreement and Plan of Merger (as amended on December 17, 2020, and as it may be further amended, supplemented or otherwise modified in accordance with its terms, the “Merger Agreement”) with V99, Inc., a Delaware corporation led by H.P. Jin, President, Co-Founder, Chair of the Board of Directors, President and Chief Executive Officer of Telenav, and Telenav99, Inc., a newly formed Delaware corporation and wholly owned subsidiary of V99 (“Merger Sub”), providing for, subject to the satisfaction or waiver of specified conditions, the acquisition of Telenav by V99. Subject to the terms and conditions of the Merger Agreement, Merger Sub will be merged with and into Telenav (the “Merger”), with Telenav surviving the Merger as a wholly owned subsidiary of Parent. Subject to the satisfaction of closing conditions, the parties expect the Merger to close in February 2021. See Note 13.
Basis of presentation
The unaudited condensed consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP. The condensed consolidated financial statements include the accounts of Telenav, Inc. and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The financial statements include all adjustments (consisting only of normal recurring adjustments) that our management believes are necessary for a fair presentation of the periods presented. These interim financial results are not necessarily indicative of results expected for the full fiscal year or for any subsequent interim period.
Our condensed consolidated financial statements also include the financial results of Shanghai Jitu Software Development Ltd., or Jitu, located in China. Based on our contractual arrangements with the shareholders of Jitu, we have determined that Jitu is a variable interest entity, or VIE, for which we are the primary beneficiary and are required to consolidate in accordance with Accounting Standards Codification, or ASC, subtopic 810-10, or ASC 810-10, Consolidation: Overall. The results of Jitu did not have a material impact on our financial statements for the three and six months ended December 31, 2020 and 2019.
The condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and the related notes thereto for fiscal 2020, included in our Annual Report on Form 10-K for fiscal 2020 filed with the U.S. Securities and Exchange Commission, or SEC, on August 21, 2020, which we refer to as the Form 10-K.
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TELENAV, INC.
Notes to Condensed Consolidated Financial Statements—(Continued)
(unaudited)
Significant accounting policies
There have been no material changes to our significant accounting policies as compared to the significant accounting policies described in our Form 10-K.
Use of estimates
The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Significant estimates and assumptions made by us include the determination of revenue recognition and deferred revenue, including estimating and allocating the transaction price of customer contracts, the recoverability of accounts receivable and short-term investments, the determination of the fair value of non-marketable debt and equity investments, the assessment of goodwill for impairment, the fair value of stock-based awards issued, the determination of income taxes and the recoverability of deferred tax assets. Actual results could differ from those estimates.
In March 2020, the World Health Organization declared the outbreak of the novel coronavirus first identified in China in late 2019 (COVID-19) as a pandemic, which continues to spread throughout the U.S. and the world. The COVID-19 pandemic and related adverse public health developments have caused and will continue to cause disruption to the economy and our business operations resulting from shelter-at-home orders, quarantines, self-isolations, or other restrictions on the ability of our employees to perform their jobs. For example, our automotive manufacturer partners closed manufacturing plants in response to the COVID-19 pandemic and only re-opened them in the three months ended June 30, 2020 for production in North America and Europe. The extent of the impact of the COVID-19 pandemic on our operational and financial performance will depend on future developments, including the duration and spread of the outbreak, its severity, the actions to contain the virus or treat its impact, and how quickly and to what extent normal economic and operating conditions can resume, all of which are uncertain and we cannot predict. During the three and six months ended December 31, 2020, this uncertainty resulted in a higher level of judgment related to our estimates and assumptions concerning short-term investments, long-lived assets, non-marketable equity and debt investments, goodwill, and variable consideration related to revenue recognition. We expect uncertainties around our key accounting estimates to continue to evolve depending on the duration and degree of impact associated with the COVID-19 pandemic. Our estimates may change as new events occur and additional information emerges, and such changes are recognized or disclosed in our condensed consolidated financial statements.
Disaggregation of revenue
In order to further depict how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors, the following table depicts the disaggregation of revenue according to revenue type and pattern of recognition (in thousands):
Three Months Ended December 31, Six Months Ended
December 31,
2020201920202019
Product
On-board automotive navigation solutions (point in time)(1)
$53,449 $61,543 $110,258 $117,533 
Total product revenue53,449 61,543 110,258 117,533 
Services
Brought-in automotive navigation solutions (over time)(2)
9,988 8,787 20,902 15,009 
Automotive maintenance and support and other (over time)542 1,206 632 2,875 
Mobile navigation services (over time) 1,875 2,339 3,658 5,087 
Total services revenue12,405 12,332 25,192 22,971 
Total revenue$65,854 $73,875 $135,450 $140,504 
(1)Includes i) royalties earned and recognized at the point in time usage occurs, ii) map updates and iii) customized software development fees.
(2)Includes royalties earned and recognized over time from the allocation of transaction price to service obligations for hybrid automotive solutions.
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TELENAV, INC.
Notes to Condensed Consolidated Financial Statements—(Continued)
(unaudited)
Contract assets
Contract assets relate to our rights to consideration for performance obligations satisfied but not billed at the reporting date. As of December 31, 2020 and June 30, 2020, we had no contract assets.
Deferred costs
Changes in the balance of total deferred costs (current and non-current) during the six months ended December 31, 2020 were as follows (in thousands):
Deferred Costs
ContentDevelopmentTotal
Balance, June 30, 2020$73,598 $7,071 $80,669 
Content licensing costs incurred64,686  64,686 
Customized software development costs incurred 1,468 1,468 
Less: cost of revenue recognized(73,014)(2,287)(75,301)
Balance, December 31, 2020$65,270 $6,252 $71,522 
Concentrations of risk and significant customers
Revenue related to products and services provided through Ford Motor Company and affiliated entities, or Ford, comprised 44% and 39% of total revenue for the three months ended December 31, 2020 and 2019, respectively, and comprised 45% and 45% for the six months ended December 31, 2020 and 2019, respectively. As of December 31, 2020 and June 30, 2020, receivables due from Ford were 36% and 39% of total accounts receivable, respectively.
Revenue related to products and services provided through General Motors Holdings and its affiliates, or GM, comprised 47% and 31% of total revenue for the three months ended December 31, 2020 and 2019, respectively, and comprised 46% and 28% for the six months ended December 31, 2020 and 2019, respectively. As of December 31, 2020 and June 30, 2020, receivables due from GM were 47% and 44% of total accounts receivable, respectively.
Revenue related to products and services provided to affiliates of Grab Holdings, Inc., which, collectively with certain of its affiliates, we refer to as Grab, comprised 19% and 15% of total revenue for the three and six months ended December 31, 2019, respectively. We did not have any revenue related to Grab in the three and six months ended December 31, 2020. See Note 12.
Restricted cash
As of December 31, 2020 and June 30, 2020, we had restricted cash of $1.5 million on our condensed consolidated balance sheets, comprised primarily of prepayments from a customer.
Accumulated other comprehensive loss, net of tax
The components of accumulated other comprehensive loss, net of related taxes, and activity as of December 31, 2020, were as follows (in thousands):
Foreign Currency
Translation
Adjustments
Unrealized
Gains (Losses) on
Available-for-Sale
Securities
Total
Balance, net of tax as of June 30, 2020$(1,834)$1,357 $(477)
Other comprehensive income (loss) before reclassifications, net of tax706 (357)349 
Amount reclassified from accumulated other comprehensive loss, net of tax  (202)(202)
Other comprehensive income (loss), net of tax706 (559)147 
Balance, net of tax as of December 31, 2020$(1,128)$798 $(330)

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TELENAV, INC.
Notes to Condensed Consolidated Financial Statements—(Continued)
(unaudited)
The amount of income tax benefit allocated to each component of accumulated other comprehensive loss was not material for the six months ended December 31, 2020.
Recent accounting pronouncements not yet adopted
There have been no changes in accounting pronouncements during the six months ended December 31, 2020, as compared to the recent accounting pronouncements not yet adopted described in our Form 10-K, that are of significance or potential significance to us.
2.Net income (loss) per share
Basic income (loss) per share is calculated by dividing income (loss) by the weighted-average number of common shares outstanding for the period. Diluted income (loss) per share is computed by dividing income (loss) by the weighted-average number of common shares outstanding for the period, including potential dilutive common shares assuming the dilutive effect of outstanding stock options, restricted stock units and employee stock purchase plan rights using the treasury-stock method.
The following table presents the calculation of basic and diluted net income per share (in thousands, except per share amounts):
 
 Three Months Ended December 31, Six Months Ended
December 31,
 2020201920202019
Income (loss) from continuing operations$(60)$13,062 $3,275 $13,094 
Loss on discontinued operations (56) (4,042)
Net income (loss)$(60)$13,006 $3,275 $9,052 
Shares used to compute basic income (loss) per share47,825 48,475 47,526 48,127 
Dilutive potential common shares:
Stock options   112 
Restricted stock units 346 609 1,018 
Employee stock purchase plan  16  
Shares used to compute diluted income (loss) per share47,825 48,821 48,151 49,257 
Basic income (loss) per share:
Income (loss) from continuing operations $(0.00)$0.27 $0.07 $0.27 
Loss on discontinued operations   (0.08)
Net income (loss)$(0.00)$0.27 $0.07 $0.19 
Diluted income (loss) per share:
Income (loss) from continuing operations $(0.00)$0.27 $0.07 $0.27 
Loss on discontinued operations   (0.08)
Net income (loss)$(0.00)$0.27 $0.07