October 28, 2010

TeleNav Reports First Quarter Fiscal 2011 Financial Results

Oct 28, 2010 (GlobeNewswire via COMTEX News Network) -- -- Quarterly revenue increased 42 percent year over year to $51.1 million

-- Net income increased 52 percent year over year to $12.4 million

-- Average monthly paid subscribers for the first quarter reached 17.7 million, up from 16.1 million in the prior quarter

SUNNYVALE, Calif., Oct. 28, 2010 (GLOBE NEWSWIRE) -- TeleNav, Inc. (Nasdaq:TNAV), a leading provider of location-based services, or LBS, including voice guided navigation and local search on mobile phones, autos and enterprise LBS, today announced its financial results for the first quarter of fiscal 2011 ended September 30, 2010.

Financial Highlights

  --  Revenue for the first quarter of fiscal 2011 grew 42 percent over the
      prior year to $51.1 million.
  --  Net income for the first quarter of fiscal 2011 grew 52 percent over the
      prior year to $12.4 million.
  --  Cash generated from operations for the first quarter of fiscal 2011 was
      $20.2 million.
  --  Average monthly revenue per end user (ARPU) for the first quarter of
      fiscal 2011 decreased 14 percent over the first quarter of fiscal 2010
      to $0.94.
  --  Average monthly paying end users for the first quarter of fiscal 2011
      increased 65 percent year over year to 17.7 million.


"We continued to achieve record number of average monthly paying end users, which grew over 1.6 million quarterly to 17.7 million in the September quarter," said HP Jin, president, CEO and co-founder of TeleNav. "We are also leveraging our core business to grow revenue from premium navigation, automotive, enterprise LBS, and mobile advertising and commerce opportunities, which comprised more than five percent of our total revenue in the September quarter."

Revenue for the first quarter of fiscal 2011 was $51.1 million, compared to revenue of $49.5 million for the fourth quarter of fiscal 2010 and $36.0 million for the first quarter of fiscal 2010. Revenue for the first quarter of fiscal 2011 reflects the one month impact from the amended Sprint agreement.

Net income for the first quarter of fiscal 2011 was $12.4 million, or $0.27 per diluted share, compared to net income of $10.6 million, or $0.24 per diluted share, for the fourth quarter of fiscal 2010 and $8.1 million, or $0.15 per diluted share, for the first quarter of fiscal 2010.

Non-GAAP net income for the first quarter of fiscal 2011 was $13.0 million, or $0.29 per diluted share, compared to non-GAAP net income of $13.0 million, or $0.31 per diluted share, for the fourth quarter of fiscal 2010 and $8.3 million, or $0.22 per diluted share, for the first quarter of fiscal 2010. Non-GAAP net income excludes stock-based compensation expense net of the related tax effect. The shares used in the calculation of TeleNav's non-GAAP net income per share assume the conversion of all outstanding preferred stock into shares of common stock using the as-if converted method as of the beginning of each period presented or the date of issuance, if later.

"Our cash, cash equivalents and short-term investment balances increased during the quarter by $18.2 million, ending the quarter with a total of $131.1 million," said Douglas Miller, chief financial officer of TeleNav. "In addition, our accounts receivable rose to $57.3 million as of September 30, 2010, of which we collected $46.5 million to date in the month of October, further increasing our cash balances."

Recent Business Highlights

  --  In September 2010, TeleNav amended and extended its Master Application
      and Services Agreement with Sprint, its largest customer, and also
      amended its License Agreement with Tele Atlas, a supplier of map and
      points of interest content used in TeleNav's services.
  --  In September 2010, TeleNav launched an updated navigation-based mobile
      advertising platform, that allows advertisers to reach millions of
      on-the-go users by delivering a relevant and targeted ad to users based
      on the location and context of their search query, and by providing
      advertisers with action-based metrics such as "Drive-to Rate," a metric
      that captures the number of users who viewed an ad and chose to drive to
      the advertiser's business location.
  --   In August 2010, TeleNav announced the availability of its in-dash,
      connected navigation product with the recent rollout of the 2011 Ford
      Edge, and the 2011 Lincoln MKX, called MyFord Touch and MyLincoln Touch,
      respectively.
  --  In August 2010, TeleNav announced the availability of its OnMyWay mobile
      application for the iPhone and Android devices. Initially launched in
      March 2010 for BlackBerry devices, OnMyWay automatically alerts a
      pre-determined person or group of people of a driver's trip status and
      estimated time of arrival (ETA).


Business Outlook

TeleNav offers the following guidance for the quarter ending December 31, 2010:

  --  Total revenue is expected to be approximately $45.0 to $47.0 million and
      reflects a full three month impact from our recently renegotiated
      agreement with Sprint;
  --  Gross margins are expected to be approximately 79 to 80 percent;
  --  Non-GAAP operating expenses are expected to be approximately $21.0 to
      $23.0 million, and exclude approximately $900,000 in stock-based
      compensation;
  --  GAAP net income is expected to be approximately $6.5 to $7.5 million;
  --  GAAP diluted net income per share is expected to be approximately $0.14
      to $0.16;
  --  Non-GAAP net income is expected to be approximately $7.0 to $8.0
      million;
  --  Non-GAAP diluted net income per share is expected to be approximately
      $0.15 to $0.17;
  --  Effective tax rate is expected to be 41 percent;
  --  Weighted-average diluted shares outstanding are expected to be 45 to 46
      million.


TeleNav offers the following guidance for the fiscal year ending June 30, 2011:

  --  Total revenue is expected to be approximately $187.0 to $192.0 million;
  --  Gross margins are expected to be 78 to 80 percent;
  --  Non-GAAP operating expenses are expected to be approximately $90.0 to
      $94.0 million, and exclude approximately $4.0 million in stock-based
      compensation;
  --  GAAP net income is expected to be approximately $29.0 to $33.0 million;
  --  GAAP diluted net income per share is expected to be approximately $0.64
      to $0.72;
  --  Non-GAAP net income is expected to be approximately $32.0 to $36.0
      million;
  --  Non-GAAP diluted net income per share is expected to be approximately
      $0.70 to $0.78;
  --  Effective tax rate is expected to be 41 percent;
  --  Weighted-average diluted shares outstanding are expected to be 45 to 46
      million.


The above information concerning the forecast for the quarter ending December 31, 2010 and the fiscal year ending June 30, 2011 represents the company's outlook only as of the date hereof, and TeleNav undertakes no obligation to update or revise any financial forecast or other forward looking statements, as a result of new developments or otherwise.

Conference Call

The company will host an investor conference call and live webcast today at 2:00 p.m. PDT (5:00 p.m. EDT) to discuss its first quarter fiscal 2011 results and outlook for the second quarter of fiscal 2011. To access the conference call, dial 888-724-9493 or 913-312-1456. 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 approximately two hours after its completion and will be available through Tuesday, November 2, 5:00 p.m. PDT. To access the replay, please dial 888-203-1112 or 719-457-0820 and enter pass code 2154783.

Use of Non-GAAP Financial Measures

TeleNav prepares its financial statements in accordance with generally accepted accounting principles for the United States (GAAP). The non-GAAP financial measures such as net income and earnings per share information for the first quarter of fiscal 2011 and the first and fourth quarter of fiscal 2010 included in this press release are different from those otherwise presented under GAAP. The following are explanations of each type of adjustment that we incorporate into non-GAAP financial measures:

Stock-based compensation expense relates to equity incentive awards granted to our employees, directors, and consultants accounted for under GAAP. Stock-based compensation expense has been and will continue to be a significant recurring expense for TeleNav. While we include the dilutive impact of such equity awards in weighted average shares outstanding, the expense associated with stock-based awards reflects a non-cash charge that we exclude from non-GAAP net income.

Our non-GAAP tax rate differs from the GAAP tax rate due to the elimination of the tax rate effect of the GAAP stock compensation expenses that are being eliminated to arrive at the non-GAAP expenses.

The shares used to compute non-GAAP basic and diluted net income per share include the assumed conversion of all outstanding shares of convertible preferred stock into shares of common stock using the as-if converted method as of the beginning of each period presented or the date of issuance, if later. In May 2010, in conjunction with the closing of our initial public offering, all of our outstanding preferred stock was converted into shares of our common stock.

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 quarters and fiscal year growth rates that are not influenced by certain non-cash charges 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. Reconciliations of the GAAP to non-GAAP results are presented at the end of this press release.

Forward Looking Statements

This press release contains forward-looking statements that are based on TeleNav's management's beliefs and assumptions and on information currently available to our management. Forward-looking statements include information concerning TeleNav's anticipated or assumed future financial results, shares outstanding and anticipated business activities. 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, fluctuations in TeleNav's quarterly and annual operating results; TeleNav's dependence on Sprint and AT&T for a substantial majority of its revenue; changes in the contractual relationships with Sprint, AT&T and other wireless carriers to whom TeleNav provides services, competition from other market participants who may provide comparable services to subscribers without charge; TeleNav's inexperience in the automotive navigation market; TeleNav's inexperience in the mobile advertising market; TeleNav's ability to estimate and sustain or increase its revenue and profitability; TeleNav's ability to attract, migrate and retain new wireless carriers and auto manufacturers; TeleNav's ability to issue new releases of its products and services and expand its product portfolio; changes to current accounting policies which may have a significant, adverse impact upon TeleNav's financial results; the introduction of new products by competitors or the entry of new competitors into the markets for TeleNav's services and products; the impact of current or future intellectual property litigation and claims for indemnification and litigation related to U.S securities laws and economic and political conditions in the US and abroad. We discuss these risks in greater detail in "Risk factors" and elsewhere in our Form S-1 and other filings with the U.S. Securities and Exchange Commission (SEC), which are available at the SEC's website at www.sec.gov. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our management's beliefs and assumptions only as of the date made. You should review our SEC filings carefully and with the understanding that our actual future results may be materially different from what we expect.

Except as required by law, we assume no obligation to update these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

TeleNav, Inc. is a leading provider of consumer location-based services (LBS), enterprise LBS and automotive LBS. TeleNav's solutions provide consumers, wireless service providers, enterprises and automakers with location-specific, real-time, personalized services such as GPS navigation, local search, mobile advertising, mobile commerce, location tracking and workflow automation. TeleNav's technology is available across more than 500 types of mobile phones, all major mobile phone operating systems and a broad range of wireless network protocols. TeleNav's service providers and partners include AT&T, Bell Mobility, Boost Mobile, China Mobile, Cincinnati Bell, Ford Motor Company, NII Holdings, Rogers, Sprint Nextel, Telcel, T-Mobile UK, T-Mobile USA, U.S. Cellular, Verizon Wireless and Vivo Brazil.

For more information on TeleNav, please visit www.telenav.com. Follow TeleNav on Twitter at www.twitter.com/telenav or on Facebook at www.facebook.com/telenav.

The TeleNav, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=7118

Copyright 2010 TeleNav, Inc. All Rights Reserved.

"TeleNav," the TeleNav logo, "telenav.com" and "OnMyWay" are registered and unregistered trademarks and/or service marks 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

                     TeleNav, Inc.
         Condensed Consolidated Balance Sheets
                     (in thousands)


                                9/30/2010   6/30/2010*
                               -----------  ----------
  Assets                       (Unaudited)
  Current assets:
   Cash and cash equivalents      $ 50,085   $ 112,862
   Short-term investments           81,002          --
   Accounts receivable, net
    of allowances of $308 and
    $246, respectively              57,266      37,322
   Deferred tax assets               4,013       3,247
   Prepaid expenses and other
    current assets                   3,023       3,020
                               -----------  ----------
    Total current assets           195,389     156,451
   Property and equipment,
    net                             10,230       9,637
   Deferred tax assets,
    non-current                         --       1,874

   Deposits and other assets         7,520       5,758
                               -----------  ----------

    Total assets                 $ 213,139   $ 173,720
                               ===========  ==========

  Liabilities and
   stockholders' equity
  Current liabilities:
   Accounts payable                $ 1,748     $ 2,507
   Accrued compensation              4,099       5,583
   Accrued royalties                 3,602       2,988
   Other accrued expenses            2,842       2,721
   Deferred revenue                 27,892       6,746

   Income taxes payable              5,868       1,028
                               -----------  ----------
    Total current liabilities       46,051      21,573
   Deferred revenue,
    non-current                      1,647         172
   Other liabilities                 3,267       2,938

  Stockholders' equity:
   Preferred stock, $0.001
    par value: 50,000 shares
    authorized; no shares
    issued
   or outstanding                       --          --
   Common stock, $0.001 par
    value: 600,000 shares
    authorized; 42,156 and
   42,140 shares issued and
    outstanding at September
    30, 2010 and June 30,
    2010,
   respectively                         42          42
   Additional paid-in capital      110,583     109,687
   Accumulated other
    comprehensive income               282         399

   Retained earnings                51,267      38,909
                               -----------  ----------

   Total stockholders' equity      162,174     149,037
                               -----------  ----------
   Total liabilities and
    stockholders' equity         $ 213,139   $ 173,720
                               ===========  ==========

  * Derived from audited consolidated financial
   statements as of June 30, 2010

                    TeleNav, Inc.
   Condensed Consolidated Statements of Operations
       (in thousands, except per share amounts)
                     (unaudited)

                                Three Months Ended
                                   September 30
                               --------------------

                                    2010       2009
                               ---------  ---------


  Revenue                       $ 51,100   $ 36,048

  Cost of revenue                  8,852      7,067
                               ---------  ---------
   Gross profit                   42,248     28,981

  Operating expenses:
   Research and development       13,027      7,912
   Sales and marketing             4,726      3,914

   General and administrative      3,746      2,559
                               ---------  ---------

    Total operating expenses      21,499     14,385
                               ---------  ---------

  Income from operations          20,749     14,596

  Interest income                     97         32

  Other income (expense), net        100      (554)
                               ---------  ---------
  Income before provision for
   income taxes                   20,946     14,074

  Provision for income taxes       8,588      5,953
                               ---------  ---------

  Net income                    $ 12,358    $ 8,121
                               =========  =========
  Net income applicable to
   common stockholders          $ 12,358    $ 4,373
                               =========  =========
  Net income per share
   applicable to common
   stockholders:
    Basic                         $ 0.29     $ 0.38
    Diluted                       $ 0.27     $ 0.15
  Weighted average shares
   used in computing net
   income applicable to
   common stockholders:
    Basic                         42,151     11,556
    Diluted                       44,939     28,420

                           TeleNav, Inc.
         Condensed Consolidated Statements of Cash Flows
                          (in thousands)
                           (unaudited)

                                             Three Months Ended
                                                September 30
                                            --------------------

                                                 2010       2009
                                            ---------  ---------

  Operating activities
  Net income                                 $ 12,358    $ 8,121
   Adjustments to reconcile net income to
    net cash provided by (used in)
    operating activities:
    Depreciation, amortization, and
     accretion                                  1,938      1,038
    Stock-based compensation expense              852        315
    Loss on disposal of property and
     equipment                                     --          3
    Write-off of capitalized software             691         --
    Revaluation of preferred stock
     warrants                                      --        547
    Excess tax benefit from stock-based
     compensation                                  --         --
    Changes in operating assets and
     liabilities:
     Accounts receivable                     (19,944)        175
     Deferred income taxes                        332        513
     Prepaid expenses and other current
      assets                                  (1,030)      1,109
     Other assets                               (838)    (1,353)
     Accounts payable                         (1,152)      (264)
     Accrued compensation                     (1,484)      (486)
     Accrued royalties                            614       (30)
     Accrued expenses and other
      liabilities                                 449      2,304
     Income taxes payable                       4,840      2,684

     Deferred revenue                          22,622        469
                                            ---------  ---------
  Net cash provided by operating
   activities                                  20,248     15,145
                                            ---------  ---------

  Investing activities
   Purchases of property and equipment        (1,512)    (2,402)
   Additions to capitalized software            (340)      (973)

   Purchases of short-term investments       (81,128)         --
                                            ---------  ---------

   Net cash used in investing activities     (82,980)    (3,375)
                                            ---------  ---------

  Financing activities
   Proceeds from exercise of stock options         44        321
   Repurchase of common stock                      --    (1,228)
   Excess tax benefit from stock-based
    compensation                                   --         --
                                            ---------  ---------
   Net cash provided by financing
    activities                                     44      (907)
                                            ---------  ---------

   Effect of exchange rate changes on cash
    and cash equivalents                         (89)        (7)
                                            ---------  ---------
   Net (decrease) increase in cash and
    cash equivalents                         (62,777)     10,856
   Cash and cash equivalents, at beginning
    of period                                 112,862     33,128
                                            ---------  ---------
   Cash and cash equivalents, at end of
    period                                   $ 50,085   $ 43,984
                                            =========  =========

  Supplemental disclosure of cash flow
   information
   Income taxes paid                          $ 3,026      $ 629

                                            TeleNav, Inc.
                           Unaudited Reconciliation of Non-GAAP Adjustments
                             (in thousands except for per share amounts)


                                                     Three Months Ended         Fiscal Year Ended
                                              -------------------------------  --------------------

                                              September   June 30,  September   June 30,   June 30,
                                               30, 2010     2010     30, 2009     2010       2009
                                              ---------  ---------  ---------  ---------  ---------

  GAAP net income                              $ 12,358   $ 10,612    $ 8,121   $ 41,410   $ 29,618
  Stock-based compensation:
   Cost of revenue                                   25          4          3         18          4
   Research and development                         493      1,863        157      2,604        237
   Sales and marketing                              151        170         77        516        155

   General and administrative                       183      1,443         78      1,789        111
                                              ---------  ---------  ---------  ---------  ---------

   Total stock-based compensation                   852      3,480        315      4,927        507
                                              ---------  ---------  ---------  ---------  ---------
  Tax effect of adding back stock
   compensation                                   (251)    (1,111)      (140)    (1,132)       (38)
                                              ---------  ---------  ---------  ---------  ---------

  Non-GAAP net income                          $ 12,959   $ 12,981    $ 8,296   $ 45,205   $ 30,087
                                              =========  =========  =========  =========  =========

  Shares used in computing GAAP basic net
   income per share                              42,151     27,624     11,556     15,569     11,273
  Weighted average effect of the assumed
   conversion of convertible preferred stock
   on the original dates of issuance                 --     11,031     23,084     20,161     23,084
                                              ---------  ---------  ---------  ---------  ---------
  Shares used in computing non-GAAP basic
   net income per share                          42,151     38,655     34,640     35,730     34,357
                                              =========  =========  =========  =========  =========

  Shares used in computing GAAP diluted net
   income per share                              44,939     37,481     28,420     30,833     27,724
  Weighted average effect of the assumed
   conversion of convertible preferred stock
   on the original dates of issuance                 --      4,424      9,101      8,014      9,101
                                              ---------  ---------  ---------  ---------  ---------
  Shares used in computing non-GAAP diluted
   net income per share                          44,939     41,905     37,521     38,847     36,825
                                              =========  =========  =========  =========  =========

  Non-GAAP basic net income per share            $ 0.31     $ 0.34     $ 0.24     $ 1.27     $ 0.88
  Non-GAAP diluted net income per share          $ 0.29     $ 0.31     $ 0.22     $ 1.16     $ 0.82

This news release was distributed by GlobeNewswire, www.globenewswire.com

SOURCE: TeleNav, Inc.

CONTACT:  TeleNav, Inc.
Media Contacts:
Todd Witkemper
408-990-1216
toddw@telenav.com
The Blueshirt Group
Investor Relations:
Cynthia Hiponia
408.990.1265
IR@telenav.com

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