May 2, 2017

Telenav Reports Third Quarter Fiscal 2017 Financial Results

  • Launched connected embedded navigation services with General Motors
  • General Motors extends partnership through model year 2025


SANTA CLARA, Calif., May 02, 2017 (GLOBE NEWSWIRE) -- Telenav®, Inc. (NASDAQ:TNAV), a leader in connected car services, today announced its financial results for the third fiscal quarter ended March 31, 2017.

"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 Telenav. "This has been the result of our successful collaboration with GM for the last three years. We are also very pleased that GM has decided to expand and extend our relationship to provide their next generation connected embedded navigation service through model year 2025. This reflects our strength in innovation, excellent execution and shared vision."

Financial Highlights for the third quarter ended March 31, 2017

  • 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 of December 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 select Toyota and Lexus vehicles for model years 2018 to 2023.

Business Outlook
For the quarter ending June 30, 2017, Telenav offers the following guidance, which is predicated on management's judgments: 

  • 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. Telenav undertakes no obligation to update or revise any financial forecast or other forward looking statements, as a result of new developments or otherwise.

Conference Call
Telenav will host an investor conference call and live webcast at 2:00 p.m. PT (5:00 p.m. ET) today. To access the conference call, dial 877-879-6203 (toll-free, domestic only) or 719-325-4823 (domestic and international toll) and enter pass code 3148147. The webcast will be accessible on Telenav's investor relations website at http://investor.telenav.com. A replay of the conference call will be available for two weeks beginning approximately two hours after its completion. To access the replay, dial 888-203-1112 (toll-free, domestic only) or 719-457-0820 (domestic and international toll) and enter pass code 3148147.

Use of Non-GAAP Financial Measures
Telenav prepares its financial statements in accordance with generally accepted accounting principles for the United States, or GAAP. The non-GAAP financial measures such as billings, non-GAAP gross profit on billings, non-GAAP gross margin on billings, change in deferred revenue, change in deferred costs, adjusted EBITDA, adjusted EBITDA on billings and free cash flow included in this press release are different from those otherwise presented under GAAP. 

Telenav has provided these measures in addition to GAAP financial results because management believes these non-GAAP measures help provide a consistent basis for comparison between periods that are not influenced by certain items and therefore are helpful in understanding Telenav's underlying operating results. These non-GAAP measures are some of the primary measures Telenav's management uses for planning and forecasting. These measures are not in accordance with, or an alternative to, GAAP and these non-GAAP measures may not be comparable to information provided by other companies.

In addition to billings as a non-GAAP metric, last quarter Telenav began providing non-GAAP gross profit on billings, non-GAAP gross margin on billings and adjusted EBITDA on billings' metrics. Telenav anticipates providing non-GAAP gross profit on billings, non-GAAP gross margin on billings and adjusted EBITDA on billings through the three months ending June 30, 2017 due to the impact on reported GAAP revenue of certain value-added offerings, including Ford's map updates for SYNC 3 vehicles in the Europe region, which commenced during the three months ended March 31, 2017. The providing of map updates in combination with Telenav's on-board navigation products results in revenue being deferred and recognized over time. 

Telenav anticipates early adopting the FASB's new accounting standard, ASC 606, Revenue from Contracts with Customers, effective July 1, 2017. Telenav anticipates that with the adoption of ASC 606, revenue recognition for certain value-added offerings may change. Once Telenav adopts ASC 606, Telenav does not expect that it will continue to provide the metrics non-GAAP gross profit on billings, non-GAAP gross margin on billings and adjusted EBITDA on billings. However, if Telenav is not able to adopt ASC 606 as of July 1, 2017, or if the impact of adoption is not in line with the company's current expectations, revenue and profitability will continue to be affected by the revenue recognition requirements to which its business is currently subject.

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. Telenav has also provided a breakdown of the calculation of the change in deferred revenue by segment, which is added to revenue in calculating its non-GAAP metric of billings. In connection with its presentation of the change in deferred revenue, Telenav has provided a similar presentation of the change in the related deferred costs. Such deferred costs primarily include costs associated with third party content and in connection with certain customized software solutions, the costs incurred to develop those solutions. As deferred revenue and deferred costs become larger components of its operating results, Telenav believes these metrics are useful in evaluating cash flows.

Telenav considers billings, non-GAAP gross profit on billings and non-GAAP gross margin on billings to be useful metrics for management and investors because billings drive deferred revenue, which is an important indicator of its business. Telenav believes non-GAAP gross profit on billings and non-GAAP gross margin on billings are useful metrics because they reflect the impact of the gross profit to be earned over time for such billings, exclusive of the incremental costs incurred to deliver any related service obligations. There are a number of limitations related to the use of billings, non-GAAP gross profit on billings and non-GAAP gross margin on billings versus revenue, gross profit, and gross margin calculated in accordance with GAAP. First, billings, non-GAAP gross profit on billings, and non-GAAP gross margin on billings include amounts that have not yet been recognized as revenue or cost and may require additional services to be provided over contracted service periods. For example, billings related to certain connected solutions cannot be fully recognized as revenue in a given period due to requirements for ongoing provisioning of services such as hosting, monitoring and customer support. Accordingly, non-GAAP gross profit on billings and non-GAAP gross margin on billings do not include all costs associated with billings. Second, Telenav may calculate billings, non-GAAP gross profit on billings, and non-GAAP gross margin on billings in a manner that is different from peer companies that report similar financial measures, making comparisons between companies more difficult. When Telenav uses these measures, it attempts to compensate for these limitations by providing specific information regarding billings, non-GAAP gross profit on billings and non-GAAP gross margin on billings and how they relate to revenue, gross profit, and gross margin calculated in accordance with GAAP.

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 Telenav is a defendant and royalty disputes. Deferred rent reversals represent the reversal of deferred rent liability that is no longer required due to the facility lease termination in fiscal 2016. Telenav believes adjusted EBITDA is a useful measure of profitability before the impact of certain non-cash expenses, interest income, income taxes, and certain other items that management believes affect the comparability of operating results.

Adjusted EBITDA on billings measures adjusted EBITDA plus the effect of changes in deferred revenue and deferred costs. Telenav believes adjusted EBITDA on billings is a useful measure, especially in light of the impact it continues to expect on reported GAAP revenue for certain value-added offerings the company provides its customers, including Ford map updates. Adjusted EBITDA and adjusted EBITDA on billings, while generally measures of profitability, can also represent losses.

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

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

To reconcile the historical GAAP results to non-GAAP financial metrics, please refer to the reconciliations in the financial statements included in this earnings release.

In this earnings release, Telenav has provided guidance for the fourth quarter of fiscal 2017 on a non-GAAP basis, for billings, non-GAAP gross margin on billings, adjusted EBITDA and adjusted EBITDA on billings. Telenav does not provide reconciliations of its forward-looking non-GAAP financial measures of billings, non-GAAP gross margin on billings, adjusted EBITDA and adjusted EBITDA on billings to the corresponding GAAP measures due to the high variability and difficulty in making accurate forecasts and projections with respect to deferred revenue, deferred costs, stock-based compensation and tax provision (benefit), which are components of these non-GAAP financial measures. In particular, stock-based compensation is impacted by future hiring and retention needs, as well as the future fair market value of Telenav's common stock, all of which is difficult to predict and subject to constant change. The actual amounts of these items will have a significant impact on Telenav's GAAP net loss per diluted share and GAAP tax provision (benefit). Accordingly, reconciliations of Telenav's forward-looking non-GAAP financial measures to the corresponding GAAP measures are not available without unreasonable effort.

Forward Looking Statements
This press release contains forward-looking statements that are based on Telenav management's beliefs and assumptions and on information currently available to its management. Actual events or results may differ materially from those described in this document due to a number of risks and uncertainties. These potential risks and uncertainties include, among others: Telenav's ability to develop and implement products for Ford, GM and Toyota and to support Ford, GM and Toyota and their customers; Telenav's success in extending its contracts with existing original equipment manufacturers ("OEMs") and automotive manufacturers, achieving additional design wins and the delivery dates of automobiles including Telenav's products; adoption by vehicle purchasers of Scout GPS Link; Telenav's dependence on a limited number of automotive manufacturers and OEMs for a substantial portion of its revenue; Ford's announcement that it believes that the market for automobiles generally will not grow at the pace that it has been growing; the impact of changes in the timing of revenue recognition upon Telenav's adoption of ASC 606; potential impacts of OEMs including competitive capabilities in their vehicles such as Apple Car-Play and Android Auto; Telenav's ability to grow and scale its advertising business; Telenav's ability to develop new advertising products and technology while also achieving cash flow break even and ultimately profitability in the advertising business; Telenav incurring losses; competition from other market participants who may provide comparable services to subscribers without charge; the timing of new product releases and vehicle production by Telenav's automotive customers, including inventory procurement and fulfillment; possible warranty claims, and the impact on consumer perception of its brand; Telenav's ability to develop and support products including Open Street Maps ("OSM"), as well as transition existing navigation products to OSM and any economic benefit anticipated from the use of OSM versus proprietary map products; the potential that Telenav may not be able to realize its deferred tax assets and may have to take a reserve against them; and macroeconomic and political conditions in the U.S. and abroad, in particular China. Telenav discusses these risks in greater detail in "Risk factors" and elsewhere in its Form 10-Q for the three months ended December 31, 2016 and other filings with the U.S. Securities and Exchange Commission (SEC), which are available at the SEC's website at www.sec.gov. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent its management's beliefs and assumptions only as of the date made. You should review its SEC filings carefully and with the understanding that actual future results may be materially different from what Telenav expects.

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

Copyright 2017 Telenav, Inc. All Rights Reserved.

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Telenav, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except par value)
     
 March 31,
2017
  June 30,
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 $54 and $111 at March 31, 2017 and June 30, 2016, respectively  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 
Goodwill and intangible assets, net  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, $0.001 par value: 50,000 shares authorized; no shares issued or outstanding       
          
Common stock, $0.001 par value: 600,000 shares authorized; 43,735 and 42,708 shares issued and outstanding at March 31, 2017 and June 30, 2016, respectively  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 June 30, 2016.
 

 

             
Telenav, Inc. 
Condensed Consolidated Statements of Operations 
(in thousands, except per share amounts) 
(unaudited) 
              
  Three Months Ended
March 31,
  Nine Months Ended
March 31,
 
   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  
             

 

Telenav, Inc. 
Condensed Consolidated Statements of Cash Flows 
(in thousands) 
(unaudited) 
       
  Nine Months Ended
March 31,
 
   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  
       

 

Telenav, Inc.
Condensed Consolidated Segment Summary
(in thousands, except percentages)
(unaudited)
 
 Three Months Ended
March 31,
  Nine Months Ended
March 31,
  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%
 

 

Telenav, Inc.
Unaudited Reconciliation of Non-GAAP Adjustments
(in thousands)
 
Reconciliation of Revenue to Billings (Non-GAAP)
 
 Three Months Ended March 31, 2017  Nine Months Ended March 31, 2017
 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 March 31, 2016  Nine Months Ended March 31, 2016
 Automotive Advertising Mobile Navigation Total  Automotive Advertising Mobile Navigation Total
Revenue  $34,717 $5,156 $6,405  $46,278  $98,306  $16,695 $20,591  $135,592
Adjustments: 
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
 
  
 

 

Telenav, Inc. 
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
March 31,
  Nine Months Ended
March 31,
 
   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. 
           

 

Telenav, Inc. 
Unaudited Reconciliation of Non-GAAP Adjustments 
(in thousands) 
              
Reconciliation of Deferred Revenue to Increase (Decrease) in Deferred Revenue 
Reconciliation of Deferred Costs to Increase (Decrease) in Deferred Costs 
              
   Three Months Ended March 31, 2017 
   Automotive  Advertising  Mobile
Navigation
  Total 
Deferred revenue, March 31  $60,083  $  $1,101   $61,184 
Deferred revenue, December 31   34,960     $1,137    36,097 
Increase (decrease) in deferred revenue  $25,123  $  $(36)  $25,087 
              
Deferred costs, March 31  $36,216  $  $   $36,216 
Deferred costs, December 31   18,780          18,780 
Increase in deferred costs  $17,436  $  $   $17,436 
              
   Three Months Ended March 31, 2016 
   Automotive  Advertising  Mobile
Navigation
  Total 
Deferred revenue, March 31  $19,435  $  $1,272   $20,707 
Deferred revenue, December 31   12,443     $1,408    13,851 
Increase (decrease) in deferred revenue  $6,992  $  $(136)  $6,856 
              
Deferred costs, March 31  $10,417  $  $   $10,417 
Deferred costs, December 31   7,443          7,443 
Increase in deferred costs  $2,974  $  $   $2,974 
              
   Nine Months Ended March 31, 2017 
   Automotive  Advertising  Mobile
Navigation
  Total 
Deferred revenue, March 31  $60,083  $  $1,101   $61,184 
Deferred revenue, June 30   22,153      1,216    23,369 
Increase (decrease) in deferred revenue  $37,930  $  $(115)  $37,815 
              
Deferred costs, March 31  $36,216  $  $   $36,216 
Deferred costs, June 30   12,076          12,076 
Increase in deferred costs  $24,140  $  $    $24,140 
              
   Nine Months Ended March 31, 2016 
   Automotive  Advertising  Mobile
Navigation
  Total 
Deferred revenue, March 31  $19,435  $  $1,272   $20,707 
Deferred revenue, June 30   5,192      1,636    6,828 
Increase (decrease) in deferred revenue  $14,243  $  $(364)  $13,879 
              
Deferred costs, March 31  $10,417  $  $   $10,417 
Deferred costs, June 30   3,141          3,141 
Increase in deferred costs  $7,276  $  $    $7,276 
              

 

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
March 31,
 Nine Months Ended
March 31,
 
   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. 
          

 

Telenav, Inc.
Unaudited Reconciliation of Non-GAAP Adjustments
(in thousands)
             
Reconciliation of Net Loss to Free Cash Flow
             
   Three Months Ended
March 31,
  Nine Months Ended
March 31,
    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.
 

 

Telenav, Inc. 
Unaudited Reconciliation of Non-GAAP Adjustments 
(in thousands) 
              
Non-GAAP metrics for the Advertising segment and the combined Automotive and Mobile Navigation segments 
              
  Three Months Ended March 31, 2017 
  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. 
              
Telenav, Inc. 
Unaudited Reconciliation of Non-GAAP Adjustments 
(in thousands) 
              
Non-GAAP metrics for the Advertising segment and the combined Automotive and Mobile Navigation segments 
              
  Three Months Ended March 31, 2016 
  GAAP
Consolidated
 Non-GAAP
Consolidated
 Non-GAAP
Advertising
 Automotive (1) Mobile
Navigation
(1)
 Total
Non-GAAP
Automotive and
Mobile
Navigation
(1)
 
               
Revenue $46,278    $5,156  $34,717 $6,405 $41,122  
Cost of revenue  26,106     2,788   21,495  1,823  23,318  
Gross profit  20,172     2,368  $13,222 $4,582  17,804  
Operating expenses:             
Research and development  16,990     978  (2)     16,012  
Sales and marketing  6,793     3,606  (2)     3,187  
General and administrative  5,521     494  (3)      5,027  
Restructuring  107     146  (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. 
              
Telenav, Inc. 
Unaudited Reconciliation of Non-GAAP Adjustments 
(in thousands) 
              
Non-GAAP metrics for the Advertising segment and the combined Automotive and Mobile Navigation segments 
               
  Nine Months Ended March 31, 2017 
  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. 
              
Telenav, Inc. 
Unaudited Reconciliation of Non-GAAP Adjustments 
(in thousands) 
              
Non-GAAP metrics for the Advertising segment and the combined Automotive and Mobile Navigation segments 
              
  Nine Months Ended March 31, 2016 
  GAAP
Consolidated
 Non-GAAP
Consolidated
 Non-GAAP
Advertising
 Automotive (1) Mobile
Navigation
(1)
 Total
Non-GAAP
Automotive and
Mobile
Navigation
(1)
 
              
Revenue $135,592    $16,695  $98,306 $20,591 $118,897  
Cost of revenue  74,025     9,538   58,947  5,540  64,487  
Gross profit  61,567     7,157  $39,359 $15,051  54,410  
Operating expenses:              
Research and development  51,630     3,508  (2)      48,122  
Sales and marketing  20,315     11,097  (2)     9,218  
General and administrative  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:

Mike Look, Telenav, Inc.

408-990-1265

IR@telenav.com

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Source: Telenav, Inc.

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