February 2, 2016

Telenav Reports Second Quarter Fiscal 2016 Financial Results

-Automotive Revenue of $31.8 million, up 32% year-over-year

-Location-based Advertising Revenue of $6.7 million, up 41% year-over-year

-Total Billings of $48.4 million, up 14% year-over-year

SUNNYVALE, Calif., Feb. 02, 2016 (GLOBE NEWSWIRE) -- Telenav®, Inc. (NASDAQ:TNAV), a leader in connected car services, today announced its financial results for the second quarter that ended December 31, 2015.

"We delivered solid results, achieving sequential and year-over-year growth in both revenue and billings, for the second quarter of fiscal 2016," said HP Jin, chairman and CEO of Telenav. "We continued to strengthen our relationships with our current auto OEM partners within connected navigation as well as exploring new areas of partnerships. In location-based advertising, we delivered 41% year-over-year revenue growth while significantly lowering our operating losses. We remain focused on our long-term goals of steady growth and profitability."

Financial Highlights

  • Total revenue for the second quarter of fiscal 2016 was $45.3 million, compared with $44.1 million in the first quarter of fiscal 2016 and $39.8 million in the second quarter of fiscal 2015.
  • Automotive revenue was $31.8 million, or 70 percent of total revenue, for the second quarter of fiscal 2016, compared with $31.7 million, or 72 percent of total revenue, in the first quarter of fiscal 2016 and $24.1 million, or 61 percent of total revenue, for the second quarter of fiscal 2015.
  • Advertising revenue was $6.7 million, or 15 percent of total revenue, for the second quarter of fiscal 2016, compared with $4.9 million, or 11 percent of total revenue, for the first quarter of fiscal 2016, and $4.7 million, or 12 percent of total revenue, for the second quarter of fiscal 2015.
  • Billings for the second quarter of fiscal 2016 was $48.4 million, compared with $47.9 million in the first quarter of fiscal 2016 and $42.7 million in the second quarter of fiscal 2015.
  • Deferred revenue at December 31, 2015 was $13.9 million, compared with $10.7 million at September 30, 2015 and $5.2 million at December 31, 2014.
  • Operating expenses for the second quarter of fiscal 2016 were $27.6 million, compared with $31.2 million in first quarter of fiscal 2016 and $29.6 million in the second quarter of fiscal 2015.
  • GAAP net loss for the second quarter of fiscal 2016 was ($6.6) million, or ($0.16) per diluted share, compared with a GAAP net loss of ($10.8) million, or ($0.27) per diluted share, in the first quarter of fiscal 2016 and a GAAP net loss of ($2.7) million, or ($0.07) per diluted share, for the second quarter of fiscal 2015.
  • Adjusted EBITDA for the second quarter of fiscal 2016 was a ($4.1) million loss after adjusting our GAAP net loss for the impact of stock-based compensation expense, depreciation, and amortization expense, reversals of accruals related to restructuring and deferred rent resulting from our lease termination, legal contingencies, interest income, other income (expense), net and provision (benefit) for income taxes, compared with a ($6.4) million loss in the first quarter of fiscal 2016 and a ($4.8) million loss in the second quarter of fiscal 2015.
  • Ending cash, cash equivalents and short-term investments, excluding restricted cash, were $110.3 million, and Telenav had no debt as of December 31, 2015. This represented cash, cash equivalents and short-term investments of $2.67 per share, based on 41.4 million shares of common stock outstanding as of December 31, 2015.

Business Outlook

For the third fiscal quarter ending March 31, 2016, Telenav offers the following guidance, which is predicated on management's judgments. 

  • Total revenue is expected to be $44 to $46 million;
  • Automotive revenue is expected to be 73 to 75 percent of total revenue, including approximately $1.5 million of customized software revenue;
  • Advertising revenue is expected to be 11 to 12 percent of total revenue; 
  • Billings are expected to be $49 to $51 million;
  • GAAP gross margin is expected to be approximately 45 percent;
  • Non-GAAP gross margin is expected to be approximately 46 percent;
  • GAAP operating expenses are expected to be $30 to $31 million;
  • Non-GAAP operating expenses are expected to be $27 to $28 million, and represent operating expenses adjusted for the impact of approximately $3.0 million of stock-based compensation expense;
  • Estimated provision (benefit) for income taxes will be de minimis;
  • GAAP net loss is expected to be ($9.0) to ($10.0) million;
  • Diluted GAAP net loss per share is expected to be ($0.21) to ($0.24);
  • Non-GAAP net loss is expected to be ($6.0) to ($7.0) million, and represents GAAP net loss adjusted for the add back of approximately $3.0 million of stock-based compensation expense;
  • Non-GAAP diluted net loss per share is expected to be ($0.14) to ($0.17);
  • Adjusted EBITDA is expected to be ($6.0) to ($7.0) million, and represents GAAP net loss adjusted for the impact of approximately $3.0 million of stock-based compensation expense, and approximately $1.0 million of depreciation and amortization expense, interest income, other income (expense), and provision (benefit) from income taxes; and
  • Weighted average diluted shares outstanding are expected to be approximately 42 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
The company 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 888-438-5491 (toll-free, domestic only) or 719-457-2727 (domestic and international toll) and enter pass code 854675. 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 854675.

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, change in deferred revenue, change in deferred costs, non-GAAP net income (loss), non-GAAP net income (loss) per share, non-GAAP gross margin, non-GAAP operating expenses, and adjusted EBITDA 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.

Billings measure revenue recognized plus the change in deferred revenue from the beginning to the end of the period. We consider billings to be a useful metric for management and investors because billings drive deferred revenue, which is an important indicator of the health and viability of our business. There are a number of limitations related to the use of billings versus revenue calculated in accordance with GAAP. First, billings include amounts that have not yet been recognized as revenue 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. Second, we may calculate billings in a manner that is different from peer companies that report similar financial measures. When we use these measures, we compensate for these limitations by providing specific information regarding revenue and evaluating billings together with revenue calculated in accordance with GAAP. We have also provided a breakdown of the calculation of the change in deferred revenue by segment, which is added to revenue in calculating our non-GAAP metric of billings. In connection with our presentation of the change in deferred revenue, we have 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 our operating results, we believe these metrics are useful in evaluating cash flow.

Non-GAAP net loss and non-GAAP gross margin exclude the impact of stock-based compensation expense, capitalized software and developed technology amortization expense, and other applicable items such as legal contingencies, changes in valuation allowance on certain deferred tax assets, restructuring accruals and reversals, and deferred rent reversals due to lease termination, net of taxes or tax benefits, as applicable to each non-GAAP financial metric. Stock-based compensation expense relates to equity incentive awards granted to our employees, directors, and consultants.  Stock-based compensation expense has been and will continue to be a significant recurring non-cash expense for Telenav that we exclude from non-GAAP financial metrics.  Legal contingencies represent settlements and offers made to settle patent litigation cases in which we are defendants and royalty disputes. Deferred rent reversals represents the reversal of our deferred rent liability that is no longer required due to our facility lease termination.  Capitalized software amortization expense represents internal software costs that were capitalized and are charged to expense as the software is used in our operations.  Developed technology amortization expense relates to the amortization of acquired intangible assets. Our non-GAAP tax rate differs from the tax rate due to the elimination of any tax effect of stock-based compensation expense, capitalized software and developed technology amortization expense, legal contingencies, restructuring accruals and reversals, and other applicable items that are being eliminated to arrive at the non-GAAP net loss.

Adjusted EBITDA measures our GAAP net loss excluding the impact of stock-based compensation expense, depreciation, amortization, interest income, other income (expense), provision (benefit) for income taxes, and other applicable items such as legal contingencies, restructuring accruals and reversals, and deferred rent reversals due to lease termination. We believe this 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, while generally a measure of profitability, can also represent a loss.

We 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 we are including such presentation in our non-GAAP reporting results.  This presentation reflects operating expenses that are directly attributable to the advertising business. We are 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, comprise operating expenses which are not fully attributable to either.   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.

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 our 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 General Motors ("GM") and Toyota and to support GM and Toyota and their customers; adoption by vehicle purchasers of Scout for Cars; Telenav's dependence on a limited number of automotive manufacturers and original equipment manufacturers ("OEM") for a substantial portion of its revenue; Telenav's ability to develop and implement products for Ford's Sync 3 system; automotive manufacturers, automotive OEM, and consumer acceptance of Scout; Telenav's success in achieving additional design wins from OEM and automotive manufacturers and the delivery dates of automobiles including Telenav's products; Telenav's ability to grow and scale its advertising through the retention of additional, productive sales personnel, new advertising sales and technology delivery; Telenav incurring losses; competition from other market participants who may provide comparable services to subscribers without charge; Telenav's limited history in the automotive navigation market and the advertising market; the timing of new product releases and vehicle production by Telenav's automotive customers, including inventory procurement and fulfillment; Telenav's ability to develop search products with Nuance; possible warranty claims, and the impact on consumer perception of its brand; Telenav's ability to develop and support products including 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 we may not be able to realize our deferred tax assets and may have to take a reserve against them; Telenav's ability to qualify for tax refunds and credits; and macroeconomic and political conditions in the US and abroad, in particular China. We discuss these risks in greater detail in "Risk factors" and elsewhere in our Form 10-Q for the three months  ended September  30, 2015 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.

About Telenav, Inc.

Telenav is 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 Nissan, Denny's, Walmart, and Best Buy reach millions of users with our 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 2016 Telenav, Inc. All Rights Reserved.

"Telenav," "Scout," and the Telenav and Scout logos are registered trademarks of Telenav, Inc.  Unless otherwise noted, all other trademarks, service marks, and logos used in this press release are the trademarks, service marks or logos of their respective owners. 

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 Telenav, Inc.
 Condensed Consolidated Balance Sheets
 (in thousands, except par value)
      
   December 31, 2015 June 30, 2015 *
 Assets (unaudited)  
 Current assets:    
 Cash and cash equivalents $  12,093  $  18,721 
 Short-term investments    98,201     101,195 
 Accounts receivable, net of allowances of $85 and $211, at    
 December 31, 2015 and June 30, 2015, respectively    37,449     36,493 
 Deferred income taxes, net    -     327 
 Restricted cash    4,679     4,878 
 Income taxes receivable    5,466     6,080 
 Deferred costs    1,157     432 
 Prepaid expenses and other current assets    4,095     3,856 
 Total current assets    163,140     171,982 
 Property and equipment, net    4,680     7,126 
 Deferred income taxes, net, non-current    649      443 
 Goodwill and intangible assets, net    36,513     37,528 
 Deferred costs, non-current    6,286     2,709 
 Other assets    2,741     4,134 
 Total assets $  214,009  $  223,922 
      
 Liabilities and stockholders' equity    
 Current liabilities:    
 Accounts payable $  910  $  830 
 Accrued compensation    8,105     9,628 
 Accrued royalties    11,395     9,358 
 Other accrued expenses    13,371     10,918 
 Deferred revenue    3,109     2,109 
 Income taxes payable    886     724 
 Total current liabilities    37,776     33,567 
 Deferred rent, non-current    81      4,858 
 Deferred revenue, non-current    10,742     4,719 
 Other long-term liabilities    2,696     4,595 
 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;     
 41,375 and 40,537 shares issued and outstanding at December 31, 2015 and June 30, 2015, respectively    41     41 
 Additional paid-in capital    145,546     140,406 
 Accumulated other comprehensive loss    (2,344)    (1,540)
 Retained earnings    19,471     37,276 
 Total stockholders' equity    162,714     176,183 
 Total liabilities and stockholders' equity  $  214,009  $  223,922 
      
 * Derived from audited consolidated financial statements as of and for the year ended June 30, 2015  
 .    
      

 

           
 Telenav, Inc. 
 Condensed Consolidated Statements of Operations 
 (in thousands, except per share amounts) 
           
   Three Months Ended
December 31,
 Six Months Ended
December 31,
 
    2015   2014   2015   2014  
   (unaudited) (unaudited) 
           
 Revenue:         
 Product   $  31,160  $  23,461  $  62,269  $  42,377  
 Services    14,093     16,319     27,045     32,390  
 Total revenue    45,253      39,780     89,314     74,767  
           
 Cost of revenue:         
 Product     18,364     12,824     36,447     23,002  
 Services    6,168     6,709     11,472     12,491  
 Total cost of revenue    24,532     19,533     47,919     35,493  
           
 Gross profit    20,721     20,247     41,395     39,274  
 Operating expenses:         
 Research and development    16,653     16,620     34,640     33,618  
 Sales and marketing    6,524     6,710     13,522     12,906  
 General and administrative    5,844     5,697     12,079     11,910  
 Restructuring    (1,468)    565     (1,468)    565  
 Total operating expenses    27,553     29,592     58,773     58,999  
           
 Loss from operations    (6,832)    (9,345)     (17,378)    (19,725) 
           
 Interest income     255     240     509     485  
 Other income (expense), net    265     630     (176)    1,688  
 Loss before provision (benefit) for income taxes    (6,312)    (8,475)    (17,045)    (17,552) 
 Provision (benefit) for income taxes    327      (5,752)    440     (6,892) 
 Net loss $  (6,639) $  (2,723) $  (17,485) $  (10,660) 
           
 Net loss per share           
 Basic and diluted $  (0.16) $  (0.07) $  (0.43) $  (0.27) 
            
 Weighted average shares used in computing net loss per share          
 Basic and diluted    41,038     39,916     40,820     39,727  
           

 

       
 Telenav, Inc. 
 Condensed Consolidated Statements of Cash Flows  
 (in thousands) 
   Six Months Ended 
December 31,
 
    
     2015   2014   
   (unaudited) 
 Operating activities     
 Net loss $  (17,485) $  (10,660) 
 Adjustments to reconcile net loss to net cash used in operating activities:     
 Depreciation and amortization    1,916     2,876  
 Amortization of net premium on short-term investments    381     850  
 Stock-based compensation expense    6,267     5,927  
 Write-off of long-term investments    477     -  
 (Gain) loss on disposal of property and equipment    (4)    8  
 Bad debt expense    51     14  
 Changes in operating assets and liabilities:     
 Accounts receivable    (1,007)    (5,524) 
 Deferred income taxes    121     673  
 Restricted cash     199     898  
 Income taxes receivable    614     (7,243) 
 Deferred costs    (4,302)    (723) 
 Prepaid expenses and other current assets    (239)    3,775  
 Other assets    908     42  
 Accounts payable    80     647  
 Accrued compensation    (1,523)    (3,956) 
 Accrued royalties    2,037     6,156  
 Accrued expenses and other liabilities    (1,524)    (953) 
 Income taxes payable    162     64  
 Deferred rent    (814 )    (1,104) 
 Deferred revenue    7,023     2,807  
 Net cash used in operating activities    (6,662)    (5,426) 
       
 Investing activities     
 Purchases of property and equipment    (332)    (512) 
 Purchases of short-term investments    (20,622)    (87,803) 
 Purchases of long-term investments    -     (200) 
 Proceeds from sales and maturities of short-term investments      23,009     95,611  
 Net cash provided by investing activities    2,055     7,096  
       
 Financing activities     
 Proceeds from exercise of stock options    921     1,781  
 Repurchase of common stock    (570)    (1,139) 
 Tax withholdings related to net share settlements of restricted stock units    (1,796)    (854) 
 Net cash used in financing activities    (1,445)    (212) 
       
 Effect of exchange rate changes on cash and cash equivalents    (576)    (1,005) 
 Net increase (decrease) in cash and cash equivalents    (6,628)    453  
 Cash and cash equivalents, at beginning of period    18,721     14,534  
 Cash and cash equivalents, at end of period $  12,093   $  14,987  
        
 Supplemental disclosure of cash flow information     
 Income taxes (received) paid, net $  (528) $  97  
       

 

          
 Telenav, Inc.
 Condensed Consolidated Segment Summary
 (in thousands, except percentages)
          
   Three Months Ended
December 31,
 Six Months Ended
December 31,
    2015   2014   2015   2014 
   (unaudited) (unaudited)
          
 Revenue:        
 Automotive $  31,846  $  24,077  $  63,589  $  43,579 
 Advertising    6,688     4,732     11,539     8,707 
 Mobile Navigation    6,719     10,971     14,186     22,481 
 Total revenue    45,253      39,780     89,314     74,767 
          
 Cost of revenue:        
 Automotive    18,931     13,240     37,452     23,636 
 Advertising    3,755     3,298      6,750     5,838 
 Mobile Navigation    1,846     2,995     3,717      6,019 
 Total cost of revenue    24,532     19,533     47,919     35,493 
          
 Gross profit:        
 Automotive    12,915     10,837     26,137     19,943 
 Advertising    2,933     1,434     4,789     2,869 
 Mobile Navigation    4,873     7,976     10,469     16,462 
 Total gross profit $  20,721  $  20,247  $  41,395  $  39,274 
          
 Gross margin:        
 Automotive  41%  45%  41%  46%
 Advertising  44%  30%  42%  33%
 Mobile Navigation  73%  73%  74%  73%
 Total gross margin  46%  51%  46%  53%
           

 

                  
 Telenav, Inc.
 Unaudited Reconciliation of Non-GAAP Adjustments
 (in thousands)
                  
 Reconciliation of Revenue  to Billings (Non-GAAP)
                  
   Three Months Ended December 31, 2015 Six Months Ended December 31, 2015
   Automotive Advertising Mobile
Navigation
  Total Automotive Advertising Mobile
Navigation
 Total
                  
 Revenue $  31,846  $  6,688  $  6,719  $  45,253  $  63,589  $  11,539  $  14,186  $  89,314 
                  
 Adjustments:                 
 Change in deferred revenue    3,434     -      (252)    3,182     7,251     -      (228)    7,023 
                  
 Billings (Non-GAAP) $  35,280  $  6,688  $  6,467  $  48,435  $  70,840  $  11,539  $  13,958  $  96,337 
                  
                  
                  
   Three Months Ended December 31, 2014 Six Months Ended December 31, 2014
   Automotive Advertising Mobile
Navigation
 Total Automotive Advertising Mobile
Navigation
 Total
                  
 Revenue $  24,077  $  4,732  $  10,971  $  39,780  $  43,579  $  8,707   $  22,481  $  74,767 
                  
 Adjustments:                
 Change in deferred revenue    3,331     -      (446)    2,885     3,353     -      (546)    2,807 
                  
 Billings (Non-GAAP) $  27,408  $  4,732  $  10,525  $  42,665  $  46,932  $  8,707  $  21,935  $  77,574 
                  
                  
                  
 Reconciliation of Deferred Revenue to Increase (Decrease) in Deferred Revenue 
 Reconciliation of Deferred Costs to Increase (Decrease) in Deferred Costs
      
   Three Months Ended December 31, 2015 Three Months Ended December 31, 2014
   Automotive Advertising Mobile
Navigation
 Total Automotive Advertising Mobile
Navigation
 Total
                   
 Deferred revenue, December 31 $  12,443  $  -   $  1,408  $  13,851   $  3,483  $  -   $  1,760  $  5,243 
 Deferred revenue, September 30    9,009     -      1,660     10,669     152       2,206     2,358 
                  
 Increase (decrease) in deferred revenue $  3,434  $  -   $  (252) $  3,182  $  3,331  $  -   $  (446) $  2,885 
                  
                  
 Deferred costs, December 31 $  7,443  $  -   $  -   $  7,443  $  1,223  $  -   $  -   $  1,223 
 Deferred costs, September 30    5,814     -      -     5,814     1,034     -      -     1,034 
                  
 Increase (decrease) in deferred costs $  1,629  $  -  $  -  $  1,629  $  189  $  -   $  -  $  189 
                  
   Six Months Ended December 31, 2015 Six Months Ended December 31, 2014
   Automotive Advertising Mobile
Navigation
 Total Automotive Advertising Mobile
Navigation
 Total
                   
 Deferred revenue, December 31 $  12,443   $  -  $  1,408  $  13,851  $  3,483  $  -  $  1,760  $  5,243 
 Deferred revenue, June 30    5,192     -      1,636     6,828     130     -      2,306     2,436 
                  
 Increase (decrease) in deferred revenue $  7,251  $  -  $  (228) $  7,023  $  3,353  $  -  $  (546) $  2,807 
                  
                  
 Deferred costs, December 31 $  7,443  $  -  $  -  $  7,443  $  1,223   $  -  $  -  $  1,223 
 Deferred costs, June 30    3,141     -      -     3,141     500     -      -     500 
                  
 Increase (decrease) in deferred costs $  4,302  $  -  $  -  $  4,302  $  723  $  -  $  -  $  723 
                  

 

           
 Telenav, Inc.
 Unaudited Reconciliation of Non-GAAP Adjustments
 (in thousands, except per share amounts and percentages)
           
 Reconciliation of GAAP Net Loss
 to Non-GAAP Net Loss
           
   Three Months Ended
December 31,
 Six Months Ended
December 31,
 
    2015   2014   2015    2014  
            
 GAAP Net loss $   (6,639) $  (2,723) $  (17,485) $  (10,660) 
           
 Adjustments:         
           
 Legal contingencies    750     -     750     -  
 Benefit for income taxes due to changes in tax accounting method and amended tax returns    -      (4,061)    -      (4,061) 
 Restructuring accrual (reversal)    (1,468)    565     (1,468)    565  
 Deferred rent reversal due to lease termination    (621)    -     (621)    -  
 Capitalized software and developed technology amortization expense    307     867     1,015     1,770  
 Stock-based compensation expense:         
 Cost of revenue    39     27     71     51  
 Research and development    1,771     1,125     3,229     2,625  
 Sales and marketing    835     730     1,675     1,494  
 General and administrative    535     657     1,292     1,757  
 Total stock-based compensation expense    3,180     2,539     6,267     5,927  
           
 Tax effect of adding back adjustments    -      (182)    -      (407) 
           
 Non-GAAP net loss $  (4,491) $  (2,995) $  (11,542) $  (6,866) 
           
           
 Non-GAAP net loss per share          
 Basic and diluted $  (0.11) $  (0.08) $  (0.28) $  (0.17) 
            
 Weighted average shares used in computing non-GAAP net loss per share         
 Basic and diluted    41,038     39,916     40,820     39,727  
           
           
 Telenav, Inc.
 Unaudited Reconciliation of Non-GAAP Adjustments
 (in thousands, except per share amounts and percentages)
            
 Reconciliation of GAAP Net Loss  to Adjusted EBITDA
           
   Three Months Ended
December 31,
 Six Months Ended
December 31,
 
    2015   2014   2015   2014  
           
 GAAP Net loss $  (6,639) $  (2,723) $  (17,485) $  (10,660) 
           
  Adjustments:         
 Legal contingencies  750     -    750      -   
 Restructuring accrual (reversal)  (1,468)   565   (1,468)  565  
 Deferred rent reversal due to lease termination  (621)    -    (621)    -   
 Stock-based compensation expense  3,180   2,539    6,267   5,927  
 Depreciation and amortization expense    847     1,399     1,916     2,876  
 Interest income    (255)    (240)    (509)    (485) 
 Other income (expense), net    (265)    (630)    176     (1,688) 
 Provision (benefit) for income taxes    327     (5,752)    440     (6,892) 
           
 Adjusted EBITDA $  (4,144) $  (4,842) $  (10,534) $  (10,357) 
           
           
 Reconciliation of Operating Expenses to Non-GAAP Operating Expenses
           
   Three Months Ended
December 31,
 Six Months Ended
December 31,
 
    2015   2014   2015   2014  
           
 Operating expenses $  27,553  $  29,592   $  58,773  $  58,999  
           
 Adjustments:         
 Legal contingencies  (750)    -    (750)    -   
 Restructuring accrual (reversal)  1,468   (565)  1,468   (565) 
 Deferred rent reversal due to lease termination  588     -     588     -   
 Stock-based compensation expense    (3,141)    (2,512)    (6,196)    (5,876)  
           
 Non-GAAP operating expenses $  25,718  $  26,515  $  53,883  $  52,558  
           

 

                  
 Telenav, Inc.
 Unaudited Reconciliation of Non-GAAP Adjustments
 (in thousands, except percentages)
 Reconciliation of Gross Margin to Non-GAAP Gross Margin
                   
                  
   Automotive  Advertising Mobile Navigation Total
   Three Months Ended
December 31,
 Three Months Ended
December 31,
 Three Months Ended
December 31,
 Three Months Ended
December 31,
    2015   2014   2015   2014   2015   2014   2015   2014 
                  
 Gross margin  41%  45%  44%  30%  73%  73%  46%  51%
                  
 Adjustments:                 
 Capitalized software and developed technology amortization expense  0%  1%  1%  9%  1%  1%  1%  2%
                  
 Non-GAAP gross margin  41%  46%  45%  39%  74%  74%  47%  53%
                   
                  
   Automotive Advertising Mobile Navigation Total
   Six Months Ended
December 31,
 Six Months Ended
December 31,
 Six Months Ended
December 31,
 Six Months Ended
December 31,
    2015   2014   2015   2014   2015   2014   2015   2014 
                    
 Gross margin  41%  46%  42%  33%  74%   73%  46%  53%
                  
 Adjustments:                
 Capitalized software and developed technology amortization expense  1%  1%  4%  10%  1%  2%  1%  2%
                  
 Non-GAAP gross margin  42%  47%  46%  43%  75%  75%  47%  55%
                  
                  

 

                
 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 December 31, 2015  
   GAAP
Consolidated
 
 Non-GAAP
Consolidated
 
 Non-GAAP
Advertising
 Automotive (1)  Mobile
Navigation
(1)
 Total
Non-GAAP
Automotive
and Mobile
Navigation
(1)
  
                 
 Revenue $  45,253    $  6,688  $  31,846  $  6,719  $  38,565   
 Cost of revenue     24,532       3,755      18,931     1,846      20,777   
 Gross profit    20,721       2,933  $  12,915  $  4,873     17,788   
                
 Operating expenses:               
 Research and development    16,653       1,051   (2)       15,602   
 Sales and marketing    6,524       3,661   (2 )       2,863   
 General and administrative    5,844       503   (3)       5,341   
 Restructuring     (1,468)      (375)        (1,093)  
 Total operating expenses    27,553       4,840         22,713   
                 
 Loss from operations    (6,832)      (1,907)        (4,925)  
                
 Interest income    255       -    (4)       255   
 Other income (expense), net    265       -   (4)       265   
                
 Loss before provision for income taxes    (6,312)      (1,907)        (4,405)  
 Provision for income taxes    327       -         327   
 Net loss $  (6,639) $  (6,639)     (1,907)        (4,732)  
                
 Adjustments:              
 Legal contingencies      750     -          750   
 Stock-based compensation expense      3,180     337         2,843   
 Restructuring reversal      (1,468)    (375)        (1,093)  
 Deferred rent reversal due to lease termination      (621)    (159)        (462)  
 Depreciation and amortization expense      847     203         644   
  Interest income      (255)    -   (4)       (255)  
  Other income (expense), net      (265)    -   (4)       (265)  
  Provision for income taxes      327     -         327   
                
 Adjusted EBITDA   $  (4,144) $  (1,901)     $  (2,243)  
                
                 
                 
  Three Months Ended December 31, 2014  
   GAAP Consolidated  Non-GAAP Consolidated  Non-GAAP Advertising Automotive (1) Mobile
Navigation
(1)
 Total
Non-GAAP
Automotive
and Mobile
Navigation
(1)
  
                
 Revenue $  39,780    $  4,732  $  24,077  $  10,971  $  35,048   
 Cost of revenue    19,533       3,298     13,240     2,995     16,235   
 Gross profit    20,247       1,434  $  10,837  $  7,976     18,813   
                
 Operating expenses:               
 Research and development    16,620       1,355   (2)       15,265   
 Sales and marketing    6,710       3,512   (2)       3,198   
 General and administrative    5,697        486   (3)       5,211   
 Restructuring     565       132          433   
 Total operating expenses    29,592       5,485         24,107   
                
 Loss from operations    (9,345)      (4,051)        (5,294)  
                
 Interest income     240       -   (4)       240   
 Other income (expense), net    630        -   (4 )       630   
                
 Loss before benefit from income taxes    (8,475)      (4,051)         (4,424)  
 Benefit from income taxes    (5,752)      (1,274)        (4,478)  
 Net loss $  (2,723) $  (2,723) $  (2,777)     $  54   
                 
 Adjustments:              
 Stock-based compensation expense      2,539     294         2,245    
 Restructuring accrual      565     132         433   
 Depreciation and amortization expense      1,399     594          805   
  Interest income       (240)    -   (4)       (240)  
  Other income (expense), net      (630)    -   (4)       (630)  
 Benefit from income taxes      (5,752)    (1,274)        (4,478)  
                
 Adjusted EBITDA   $  (4,842) $  (3,031)      $  (1,811)  
                
                 
                 
                
  Six Months Ended December 31, 2015  
   GAAP
Consolidated
 
 Non-GAAP
Consolidated
 
 Non-GAAP
Advertising
 Automotive (1) Mobile
Navigation
(1)
 
Total

Non-GAAP
Automotive
and Mobile
Navigation
(1)
  
                
 Revenue $  89,314    $  11,539  $  63,589  $  14,186  $  77,775   
 Cost of revenue    47,919       6,750     37,452      3,717     41,169   
 Gross profit    41,395       4,789   $  26,137  $  10,469     36,606   
                
 Operating expenses:               
 Research and development    34,640       2,530   (2)       32,110   
 Sales and marketing    13,522       7,491   (2)       6,031   
 General and administrative    12,079       1,044   (3)        11,035   
 Restructuring     (1,468)      (375)        (1,093)  
 Total operating expenses    58,773       10,690          48,083   
                
 Loss from operations    (17,378)      (5,901)         (11,477)  
                
 Interest income    509       -   (4)       509   
 Other income (expense), net    (176)      -   (4)       (176)  
                
 Loss before provision for income taxes    (17,045)      (5,901)        (11,144)  
 Provision for income taxes    440       -         440   
 Net loss $  (17,485) $  (17,485) $  (5,901)     $  (11,584)  
                
 Adjustments:              
 Legal contingencies      750     -         750   
 Stock-based compensation expense      6,267     659         5,608   
 Restructuring reversal      (1,468)    (375)        (1,093)  
 Deferred rent reversal due to lease termination      (621)    (159)        (462)  
 Depreciation and amortization expense      1,916     656         1,260   
 Interest income      (509)     -   (4)       (509)  
 Other income (expense), net      176     -   (4)       176   
 Provision for income taxes      440     -         440   
                
 Adjusted EBITDA   $  (10,534) $  (5,120)     $  (5,414)   
                 
                
                
  Six Months Ended December 31, 2014  
   GAAP
Consolidated
 
 Non-GAAP
Consolidated
 
 Non-GAAP
Advertising
 Automotive (1) Mobile
Navigation
(1)
 Total
Non-GAAP
Automotive
and Mobile
Navigation
(1)
  
                
 Revenue $  74,767    $  8,707  $  43,579  $  22,481  $  66,060   
 Cost of revenue    35,493       5,838     23,636     6,019     29,655   
 Gross profit    39,274       2,869  $  19,943  $  16,462     36,405   
                
 Operating expenses:              
 Research and development    33,618       2,930   (2)       30,688   
 Sales and marketing    12,906       6,525   (2)        6,381   
 General and administrative    11,910       1,093   (3)       10,817   
 Restructuring     565       132         433   
 Total operating expenses    58,999       10,680         48,319   
                 
 Loss from operations    (19,725)      (7,811)        (11,914)  
                
 Interest income    485       -   (4)       485   
 Other income (expense), net    1,688       -   (4)       1,688    
                 
 Loss before benefit from income taxes    (17,552)      (7,811)        (9,741)  
 Benefit from income taxes    (6,892)      (1,784)        (5,108)  
 Net loss $  (10,660) $  (10,660) $  (6,027)     $  (4,633)  
                
 Adjustments:               
 Stock-based compensation expense      5,927      1,094         4,833   
 Restructuring accrual      565     132         433   
 Depreciation and amortization expense      2,876     1,044         1,832   
 Interest income      (485)    -   (4)       (485)  
 Other income (expense), net      (1,688)    -   (4)       (1,688)  
 Benefit from income taxes       (6,892)    (1,784)        (5,108)  
                
 Adjusted EBITDA   $  (10,357) $  (5,541)     $  (4,816)  
                 
                
                
 (1) Automotive and mobile navigation segments share many of the same technologies and resources. Accordingly, we are unable to allocate the operating expenses, other income (expense), net and provision (benefit) for income taxes to these individual segments.   
                 
  For purposes of calculating the Non-GAAP net loss attributable to the advertising segment :   
 (2) These expenses represent research and development and sales and marketing 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 resource services. 
  
 (4) Expenses or income cannot be directly allocated to the advertising segment.   
                

 

 

Media Contact:

Airfoil Group on Behalf of Telenav:

telenav@airfoilgroup.com



Investor Relations Contact:

Cynthia Hiponia or Erin Rheaume

The Blueshirt Group for Telenav, Inc.

408-990-1265

IR@telenav.com

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