August 2, 2016

Telenav Reports Fourth Quarter and Fiscal Year 2016 Financial Results

-Full Year Fiscal 2016 Total Revenue of $183.3 million, up 14% year-over-year

-Full Year Fiscal 2016 Total Billings of $199.9 million, up 21% year-over-year

-Full Year Fiscal 2016 Automotive Revenue of $135.4 million, up 31% year-over-year

-Full Year Fiscal 2016 Automotive Billings of $152.3 million, up 41% year-over-year

SANTA CLARA, Calif., Aug. 02, 2016 (GLOBE NEWSWIRE) -- Telenav®, Inc. (NASDAQ:TNAV), a leader in connected car services, today announced its financial results for the fourth quarter and the fiscal year that ended June 30, 2016.

"Telenav delivered strong results, achieving year-over-year growth in both revenue and billings for the fourth quarter and the fiscal year," said HP Jin, chairman and CEO of Telenav. "We continued to expand the global rollout of Ford SYNC 3 to now include China and Europe, which we anticipate will be completed in the September quarter. We also continued to make steady progress with our OEM partners to expand our current offerings and capabilities. We are very pleased to have achieved almost $200 million in total billings for the fiscal year. We consider billings to be a key indicator of progress in our strategy to lead the connected car industry."

Financial Highlights

  • Total revenue for the fourth quarter of fiscal 2016 was $47.8 million, compared with $46.3 million in the third quarter of fiscal 2016 and $43.2 million in the fourth quarter of fiscal 2015. Revenue for fiscal 2016 was $183.3 million, compared with $160.2 million in fiscal 2015.
  • Automotive revenue was $37.1 million, or 78 percent of total revenue, for the fourth quarter of fiscal 2016, compared with $34.7 million, or 75 percent of total revenue, in the third quarter of fiscal 2016 and $30.0 million, or 70 percent of total revenue, for the fourth quarter of fiscal 2015. Automotive revenue for fiscal 2016 was $135.4 million, or 74 percent of total revenue, compared with $103.1 million in fiscal 2015, or 64 percent of total revenue.
  • Advertising revenue was $5.0 million, or 11 percent of total revenue, for the fourth quarter of fiscal 2016, compared with $5.2 million, or 11 percent of total revenue, in the third quarter of fiscal 2016, and $5.2 million, or 12 percent of total revenue, for the fourth quarter of fiscal 2015. Advertising revenue for fiscal 2016 was $21.7 million, or 12 percent of total revenue, compared with $17.9 million for fiscal 2015, or 11 percent of total revenue.
  • Deferred revenue as of June 30, 2016 was $23.4 million, compared with $20.7 million as of March 31, 2016 and $6.8 million as of June 30, 2015.
  • Billings for the fourth quarter of fiscal 2016 were $50.4 million, compared with $53.1 million in the third quarter of fiscal 2016 and $44.6 million in the fourth quarter of fiscal 2015. Billings for fiscal 2016 were $199.9 million, compared with $164.6 million for fiscal 2015.  
  • Operating expenses for the fourth quarter of fiscal 2016 were $28.9 million, compared with $29.4 million in third quarter of fiscal 2016 and $30.4 million in the fourth quarter of fiscal 2015.  Operating expenses for fiscal 2016 were $117.1 million, compared with $119.8 million for fiscal 2015.
  • GAAP net loss for the fourth quarter of fiscal 2016 was ($8.0) million, or ($0.19) per basic and diluted share, compared with a GAAP net loss of ($9.8) million, or ($0.23) per basic and diluted share, in the third quarter of fiscal 2016 and a GAAP net loss of ($7.6) million, or ($0.19) per basic and diluted share, for the fourth quarter of fiscal 2015.
  • Adjusted EBITDA for the fourth quarter of fiscal 2016 was a ($4.6) million loss compared with a ($6.4) million loss in the third quarter of fiscal 2016 and a ($5.5) million loss in the fourth quarter of fiscal 2015.  In each period, adjusted EBITDA reflects our GAAP net loss adjusted for the impact of stock-based compensation expense, depreciation and amortization expense, interest and other income (expense), provision (benefit) for income taxes, and other applicable items such as legal contingencies, restructuring accruals and reversals, and reversals of accruals related to deferred rent resulting from our lease termination. For fiscal 2016, adjusted EBITDA was a ($21.5) million loss compared with a ($20.5) million loss for fiscal 2015.
  • Ending cash, cash equivalents and short-term investments, excluding restricted cash, were $109.6 million as of June 30, 2016. This represented cash and short-term investments of $2.57 per share, based on 42.7 million shares of common stock outstanding as of June 30, 2016. Telenav had no debt as of June 30, 2016.
  • Free cash flow for the fourth quarter of fiscal 2016 was $1.9 million, compared with ($2.0) million in the third quarter of fiscal 2016 and ($8.7) million in the fourth quarter of fiscal 2015. Free cash flow reflects net cash provided by (used in) operating activities, less purchases of property and equipment. For fiscal 2016, free cash flow was ($7.1) million compared with ($8.9) million for fiscal 2015.

Business Outlook

For the quarter ending September 30, 2016, Telenav offers the following guidance, which is predicated on management's judgments. 

  • Total revenue is expected to be $40 to $43 million, which reflects the expected revenue timing impacts of the continued transition to Sync 3 of Ford in Europe and other geographies;
  • Automotive revenue is expected to be 71 to 74 percent of total revenue;
  • Advertising revenue is expected to be approximately 15 percent of total revenue; 
  • Billings are expected to be $45 to $48 million;
  • GAAP gross margin is expected to be approximately 45 percent, which is expected to decline as mobile navigation revenue declines;
  • GAAP operating expenses are expected to be $29.5 to $30.5 million;
  • Non-GAAP operating expenses are expected to be $26.5 to $27.5 million, and represent operating expenses adjusted for the impact of approximately $3.0 million of stock-based compensation expense;
  • Estimated benefit for income taxes is expected to be approximately $1 million;
  • GAAP net loss is expected to be ($10.0) to ($11.0) million;
  • Diluted GAAP net loss per share is expected to be ($0.23) to ($0.26);
  • Non-GAAP net loss is expected to be ($7.0) to ($8.0) 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 ($0.16) to ($0.19);
  • Adjusted EBITDA is expected to be ($7.0) to ($8.0) 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 and other income (expense), and provision (benefit) from income taxes; and
  • Weighted average diluted shares outstanding are expected to be approximately 43 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 888-401-4669 (toll-free, domestic only) or 719-457-2689 (domestic and international toll) and enter pass code 9548405. 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 9548405.

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, adjusted EBITDA 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.

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, benefit from income taxes due to change in tax accounting method and amended tax return, 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 represent 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. Restructuring accruals and reversals represent recognition of the estimated amount of costs associated with restructuring activities. Changes in valuation allowance on deferred tax assets represent changes in the realization of the underlying assets. Tax benefit represents the impact from change in tax accounting method and amended tax return. Our non-GAAP tax rate differs from the tax rate due to the elimination of any tax effect of stock-based compensation expense. Non-GAAP operating expenses exclude stock-based compensation and other applicable items discussed above, such as legal contingencies, restructuring accruals and reversals, and deferred rent reversals due to lease termination.

Adjusted EBITDA measures our GAAP net loss excluding the impact of stock-based compensation expense, depreciation and amortization, interest and 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.

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

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, 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.

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; Ford's announcement that it believes that the market for automobiles generally will not grow at the pace that it has been growing at recently; the timing of the transition of Ford to its Sync 3 system and the timing of revenue recognition in connection with the Sync 3 due to different title transfer requirements, particularly outside of the U.S.; potential delays in new orders of Sync 3 as Ford uses its Sync 2 inventory in connection with the Sync 3 transition and the impact of the transition on order timing and delivery; automotive manufacturers, automotive OEM, and consumer acceptance of Scout; potential impacts of OEM's including competitive capabilities in their vehicles such as Apple Car-Play and Android Auto; 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 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; 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 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 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 U.S. 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 March 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 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.
Consolidated Balance Sheets
(in thousands, except par value)
     
  June 30, 2016 June 302015*
  (unaudited)  
     
Assets    
Current assets:    
Cash and cash equivalents $  21,349  $  18,721 
Short-term investments   88,277    101,195 
Accounts receivable, net of allowances of $111 and $211, at June 30, 2016 and 2015, respectively   42,216    36,493 
Deferred income taxes, net      327 
Restricted cash   5,109    4,878 
Income taxes receivable   687    6,080 
Deferred costs   1,784    432 
Prepaid expenses and other current assets   4,448    3,856 
Total current assets   163,870    171,982 
Property and equipment, net   5,247     7,126 
Deferred income taxes, non-current   661    443 
Goodwill and intangible assets, net   35,993    37,528 
Deferred costs, non-current   10,292    2,709  
Other assets   2,184    4,134 
Total assets $  218,247  $  223,922 
Liabilities and stockholders' equity    
Current liabilities:    
Accounts payable $  4,992  $  830 
Accrued compensation   9,308    9,628 
Accrued royalties   15,331    9,358 
Other accrued expenses   11,635    10,918 
Deferred revenue   4,334    2,109 
Income taxes payable   88    724 
Total current liabilities   45,688    33,567 
Deferred rent, non-current    1,124    4,858 
Deferred revenue, non-current   19,035    4,719 
Other long-term liabilities   2,715     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; 42,708 and 40,537 shares issued and outstanding at June 30, 2016 and 2015, respectively   43    41 
Additional paid-in capital   149,775    140,406 
Accumulated other comprehensive loss   (1,767)   (1,540)
Retained earnings   1,634     37,276 
Total stockholders' equity   149,685    176,183 
Total liabilities and stockholders' equity $  218,247  $  223,922 
     
*Derived from audited consolidated financial statements as of and for the year ended June 30, 2015.


Telenav, Inc. 
Consolidated Statements of Operations 
(in thousands, except per share amounts) 
  
          
  Three Months Ended
June 30,
 Fiscal Year Ended
June 30,
 
   2016   2015   2016   2015* 
  (unaudited) (unaudited) (unaudited)   
Revenue:         
Product $36,249  $29,476  $132,454  $100,768  
Services  11,505   13,710   50,892   59,471  
Total revenue  47,754   43,186   183,346   160,239  
Cost of revenue:         
Product  21,761   16,793   79,165   55,270  
Services  5,011   5,659   21,632   23,514  
Total cost of revenue  26,772   22,452   100,797   78,784  
Gross profit  20,982   20,734   82,549   81,455  
Operating expenses:         
Research and development  17,281   17,058   68,911   68,060  
Sales and marketing  5,272   7,200   25,587   26,975  
General and administrative  6,394   6,014   23,994   23,606  
Restructuring  (1)  163   (1,362)  1,150  
Total operating expenses  28,946   30,435   117,130   119,791  
Loss from operations  (7,964)  (9,701)  (34,581)  (38,336) 
Interest and other income (expense), net  48   (806)  (229)  2,267  
Loss before provision (benefit) for income taxes  (7,916)  (10,507)  (34,810)  (36,069) 
Provision (benefit) for income taxes  82   (2,871)  511   (13,006) 
Net loss $(7,998) $(7,636) $(35,321) $(23,063) 
          
Net loss per share         
Basic and diluted $(0.19)  $(0.19) $(0.85) $ (0.58) 
          
Weighted average shares used in computing net loss per share         
Basic and diluted  42,600   40,376   41,567   39,991  
           
*Derived from audited consolidated financial statements as of and for the year ended June 30, 2015
 

 

Telenav, Inc. 
Consolidated Statements of Cash Flows 
(in thousands) 
  
      
  Fiscal Year Ended
June 30, 
 
   2016  2015* 
  (unaudited)   
Operating activities     
Net loss $(35,321) $(23,063) 
Adjustments to reconcile net loss to net cash used in operating activities:     
Depreciation and amortization  3,362   5,239  
Amortization of net premium on short-term investments  645   1,318  
Stock-based compensation expense  11,366   11,428  
Valuation allowance on deferred tax assets     (778) 
Bad debt expense  95   33  
Write-off of long term investments  977   1,302  
Loss on disposal of property and equipment  398    73  
Changes in operating assets and liabilities:     
Accounts receivable   (5,817)  (10,764) 
Deferred income taxes  109   1,342  
Restricted cash  (231)  1,117  
Income taxes receivable  5,393   852  
Prepaid expenses and other current assets  (592)  5,133  
Deferred costs  (8,935)  (2,641) 
Other assets  972   550  
Accounts payable  4,119   328  
Accrued compensation  (320)  (3,246) 
Accrued royalties  5,973   5,687  
Accrued expenses and other liabilities  (923)  (4,699) 
Income taxes payable  (636)  (80) 
Deferred rent  (272)  (1,219) 
Deferred revenue  16,541   4,392  
Net cash used in operating activities  (3,097)  (7,696) 
      
Investing activities     
Purchases of property and equipment  (4,004)  (1,208) 
Purchases of short-term investments  (55,021)  (113,144) 
Purchases of long-term investments     (2,500) 
Proceeds from sales of long-term investments     376  
Proceeds from sales and maturities of short-term investments  67,578   132,528  
Net cash provided by investing activities  8,553   16,052  
      
Financing activities      
Proceeds from exercise of stock options  1,549    4,412  
Repurchase of common stock  (570)  (3,780) 
Tax withholdings related to net share settlements of restricted stock units  (3,295)  (3,103) 
Net cash used in financing activities  (2,316)  (2,471) 
      
Effect of exchange rate changes on cash and cash equivalents  (512)  (1,698) 
Net increase in cash and cash equivalents  2,628   4,187   
Cash and cash equivalents, at beginning of period  18,721   14,534  
Cash and cash equivalents, at end of period $21,349  $18,721  
      
Supplemental disclosure of cash flow information     
Income taxes paid (received), net $(4,610) $(10,754) 
          
*Derived from audited consolidated financial statements as of and for the year ended June 30, 2015

 

Telenav, Inc.
Condensed Consolidated Segment Summary
(in thousands, except percentages)
 
         
  Three Months Ended
June 30,
 Fiscal Year Ended
June 30,
   2016   2015    2016    2015*
  (unaudited) (unaudited) (unaudited)  
Revenue:        
Automotive $  37,066  $  30,049  $  135,372  $  103,100 
Advertising   5,049    5,215     21,744    17,941 
Mobile Navigation   5,639    7,922    26,230    39,198 
Total revenue   47,754    43,186    183,346     160,239 
         
Cost of revenue:        
Automotive   22,346    17,102    81,293    56,319 
Advertising   2,758    3,182    12,296    11,710 
Mobile Navigation   1,668    2,168    7,208    10,755 
Total cost of revenue   26,772    22,452     100,797    78,784 
         
Gross profit:        
Automotive   14,720    12,947     54,079    46,781 
Advertising   2,291    2,033    9,448    6,231 
Mobile Navigation   3,971     5,754    19,022    28,443 
Total gross profit $  20,982  $  20,734  $  82,549  $  81,455 
         
Gross margin:         
Automotive  40%  43%  40%  45%
Advertising  45%  39%  43%  35%
Mobile Navigation  70%  73%  73%  73%
Total gross margin  44%  48%  45%  51%
          
*Derived from audited consolidated financial statements as of and for the year ended June 30, 2015

 

Telenav, Inc.
Unaudited Reconciliation of Non-GAAP Adjustments
(in thousands)
                 
Reconciliation of Revenue  to Billings (Non-GAAP)
                 
  Three Months Ended June 30, 2016 Fiscal Year Ended June 30, 2016
  Automotive Advertising Mobile Navigation Total Automotive  Advertising Mobile Navigation Total
Revenue $  37,066  $  5,049  $  5,639  $  47,754  $  135,372  $  21,744    26,230  $  183,346 
Adjustments:                
Increase (decrease) in deferred revenue   2,718       (56)   2,662    16,961       (420)   16,541 
Billings (Non-GAAP) $  39,784  $  5,049  $  5,583  $  50,416  $  152,333  $  21,744  $  25,810  $  199,887 
                 
                 
  Three Months Ended June 30, 2015 Fiscal Year Ended June 30, 2015
  Automotive Advertising  Mobile Navigation Total Automotive Advertising  Mobile Navigation Total
Revenue $  30,049  $  5,215  $  7,922  $  43,186  $  103,100  $  17,941  $  39,198  $  160,239 
Adjustments:                
Increase (decrease) in deferred revenue   1,412       (6)   1,406    5,062       (670)   4,392 
Billings (Non-GAAP) $  31,461  $  5,215  $  7,916  $  44,592  $  108,162  $  17,941   $  38,528  $  164,631  

 

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 
                    
  Automotive Advertising Mobile Navigation Total 
  Three Months Ended 
June 30,
 Three Months Ended 
June 30,
 Three Months Ended 
June 30,
 Three Months Ended 
June 30,
 
   2016   2015   2016  2015  2016   2015   2016   2015  
Deferred revenue, June 30 $22,153  $5,192  $—  $—  $1,216  $1,636  $23,369   $6,828  
Deferred revenue, March 31  19,435   3,780   —   —   1,272   1,642   20,707    5,422  
Increase (decrease) in deferred revenue $2,718   $1,412  $—  $—  $(56) $(6) $2,662  $1,406  
                      
Deferred costs, June 30 $12,076  $3,141  $—  $—  $  $  $12,076  $3,141  
Deferred costs, March 31  10,417   2,561   —   —         10,417   2,561  
Increase in deferred costs $1,659  $580  $—  $—  $  $  $1,659  $580  
                     
                    
                    
  Automotive Advertising Mobile Navigation  Total 
  Fiscal Year Ended 
June 30,
 Fiscal Year Ended 
June 30,
 Fiscal Year Ended 
June 30,
 Fiscal Year Ended 
June 30,
 
   2016   2015    2016  2015  2016   2015   2016    2015  
Deferred revenue, June 30 $22,153  $5,192  $—  $—  $1,216  $1,636  $23,369  $6,828  
Deferred revenue, June 30  5,192   130   —    —   1,636   2,306   6,828   2,436  
Increase (decrease) in deferred revenue $16,961  $5,062  $—  $—  $(420) $(670) $16,541  $4,392  
                    
Deferred costs, June 30 $12,076  $3,141  $—  $—  $  $  $12,076  $3,141  
Deferred costs, June 30   3,141   500   —   —         3,141   500  
Increase in deferred costs $8,935  $2,641  $—  $—   $  $  $8,935  $2,641  

 

Telenav, Inc.         
Unaudited Reconciliation of Non-GAAP Adjustments         
(in thousands, except per share amounts)         
                  
Reconciliation of Net Loss to Non-GAAP Net Loss         
                   
  Three Months Ended
June 30,
 Fiscal Year Ended
June 30,
         
   2016   2015   2016   2015          
                  
Net loss $(7,998) $(7,636) $(35,321) $(23,063)         
                          
Adjustments:                         
Legal contingencies  185      935             
Benefit from income taxes due to change in tax accounting method and amended tax return           (4,061)         
Restructuring accrual (reversal)  (1)  163   (1,362)  1,150          
Deferred rent reversal due to lease termination        (1,242)             
Capitalized software and developed technology amortization expense  260   753   1,535   3,275          
Change in valuation allowance against deferred tax asset     (778)     (778)         
Stock-based compensation expense:                         
Cost of revenue  33   32   143   98          
Research and development  1,350   1,407   6,062   5,275          
Sales and marketing  587   750   2,844   2,943          
General and administrative   509   680   2,317   3,112          
Total stock-based compensation expense  2,479   2,869   11,366   11,428           
Tax effect of adding back adjustments     (215)      (840)         
Non-GAAP net loss $(5,075) $(4,844) $(24,089) $(12,889)         
                  
Non-GAAP net loss per share                 
Basic and diluted $(0.12) $(0.12) $(0.58) $(0.32)         
                  
Weighted average shares used in computing non-GAAP net loss per share                 
Basic and diluted  42,600   40,376   41,567    39,991          
                  
                    
Telenav, Inc.         
Unaudited Reconciliation of Non-GAAP Adjustments         
(in thousands)         
Reconciliation of Net Loss to Adjusted EBITDA         
                  
  Three Months Ended
June 30,
 Fiscal Year Ended
June 30,
         
   2016   2015   2016   2015          
                  
Net loss $(7,998) $(7,636) $(35,321) $(23,063)         
                  
Adjustments:                 
Legal contingencies  185      935             
Restructuring accrual (reversal)  (1)  163   (1,362)   1,150          
Deferred rent reversal due to lease termination        (1,242)            
Stock-based compensation expense  2,479   2,869   11,366   11,428          
Depreciation and amortization expense  666   1,185   3,362   5,239          
Interest and other income (expense), net  (48)  806   229   (2,267)         
Provision (benefit) for income taxes  82   (2,871)  511   (13,006)         
Adjusted EBITDA $(4,635) $(5,484) $(21,522) $(20,519)         
                  
  
Telenav, Inc.
 
Unaudited Reconciliation of Non-GAAP Adjustments 
(in percentages) 
  
Reconciliation of Gross Margin to Non-GAAP Margin  
                  
  Automotive Advertising Mobile Navigation  Total 
  Three Months Ended
June 30,
 Three Months Ended
June 30,
 Three Months Ended
June 30,
 Three Months Ended
June 30,
 
   2016   2015   2016   2015    2016      2015       2016      2015    
                  
Gross margin  40%  43%  45%  39%  70%  73%  44%  48% 
                  
Adjustments:                 
Capitalized software and developed technology amortization expense —%  1% —%  8%  1% —%  1%  2% 
                  
Non-GAAP gross margin  40%  44%  45%  47%  71%  73%  45%  50% 
                   
  Automotive Advertising Mobile Navigation Total  
  Fiscal Year Ended
June 30,
 Fiscal Year Ended
June 30,
 Fiscal Year Ended
June 30,
 Fiscal Year Ended
June 30,
 
   2016   2015   2016   2015    2016      2015       2016      2015    
                  
Gross margin  40%  45%  43%  35%  73%  73%  45%  51% 
                  
Adjustments:                 
Capitalized software and developed technology amortization expense  1%  1%  3%  9% —%  1%  1%  2% 
                   
Non-GAAP gross margin  41%  46%  46%  44%  73%  74%  46%  53% 
                  
                  
                  
Reconciliation of Operating Expenses to Non-GAAP Operating Expenses         
                  
  Three Months Ended
June 30,
 Fiscal Year Ended
June 30,
         
   2016   2015   2016   2015           
                   
Operating expenses $28,946  $30,435  $117,130   $119,791          
                  
Adjustments:                         
Legal contingencies  (185 )     (935)            
Restructuring accrual (reversal)  1   (163)  1,362   (1,150)          
Deferred rent reversal due to lease termination        1,176              
Stock-based compensation expense  (2,446)  (2,837 )  (11,223)  (11,330)         
                  
Non-GAAP operating expenses $26,316  $27,435  $107,510  $107,311          
                   

 

Telenav, Inc.
Unaudited Reconciliation of Non-GAAP Adjustments
(in thousands, except per share amounts and percentages)
           
Reconciliation of Net Loss to Free Cash Flow
            
  Three Months Ended
June 30,
 Fiscal Year Ended
June 30,
  
   2016   2015   2016   2015   
           
Net loss $  (7,998) $  (7,636) $  (35,321) $  (23,063)  
            
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:           
Increase in deferred revenue (1)   2,662    1,406    16,541    4,392   
Increase in deferred costs (1)   (1,659)   (580)   (8,935)   (2,641)  
                   
Changes in other operating assets and liabilities   7,395    (5,759)   7,775     (4,999)  
Other adjustments (2)   3,716     4,400    16,843    18,615   
Net cash provided by (used in) operating activities   4,116    (8,169)   (3,097)   (7,696)  
Less: Purchases of property and equipment   (2,229)   (558)   (4,004)   (1,208)  
Free cash flow $  1,887  $  (8,727) $  (7,101) $  (8,904)  
           
(1) Relates primarily to automotive royalties and customized software development fees.  
(2) Consists primarily of depreciation and amortization and stock-based compensation expense.    

 

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 June 30, 2016 
  GAAP
Consolidated
 Non-GAAP Consolidated Non-GAAP Advertising Automotive (1) Mobile Navigation (1) Total
Non-GAAP Automotive and Mobile Navigation (1)
 
              
Revenue $  47,754    $   5,049  $  37,066  $  5,639  $  42,705  
Cost of revenue   26,772      2,758    22,346    1,668    24,014  
Gross profit   20,982      2,291  $  14,720  $  3,971    18,691  
Operating expenses:             
Research and development   17,281      1,214   (2)      16,067  
Sales and marketing   5,272      2,725   (2)      2,547  
General and administrative   6,394      458   (3)      5,936   
Restructuring   (1)     (1)        
Total operating expenses
   28,946      4,396        24,550  
Loss from operations   (7,964)     (2,105)       (5,859) 
Interest and other income (expense), net   48        (4)      48  
Loss before benefit from income taxes   (7,916)     (2,105)       (5,811) 
Benefit from income taxes   82             82  
Net loss $  (7,998) $  (7,998)   (2,105)       (5,893 ) 
              
Adjustments:             
Legal contingencies     185           185  
Stock-based compensation
  expense
     2,479    295        2,184  
Restructuring accrual (reversal)     (1)   (1)        
Deferred rent reversal due to lease termination                
Depreciation
  and amortization expense
     666    60        606  
Interest and other income
  (expense), net
     (48)      (4)      (48) 
Benefits for income taxes     82           82  
Adjusted EBITDA    $  (4,635) $  (1,751)     $  (2,884) 
              
               
(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 versus the other segment. 
              
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. 
              
              
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 June 30, 2015 
  GAAP
Consolidated
 Non-GAAP Consolidated Non-GAAP Advertising Automotive (1) Mobile Navigation (1) Total
Non-GAAP Automotive and Mobile Navigation (1)
 
               
Revenue $  43,186    $  5,215  $  30,049  $  7,922  $  37,971  
Cost of revenue   22,452      3,182    17,102    2,168    19,270  
Gross profit   20,734      2,033  $  12,947  $  5,754     18,701  
Operating
  expenses:
             
Research and development   17,058      1,664   (2)      15,394  
Sales and marketing   7,200      4,104   (2)      3,096  
General and administrative   6,014      501   (3)      5,513  
Restructuring   163      163         
Total operating expenses:

   30,435      6,432        24,003  
Loss from operations   (9,701)     (4,399)       (5,302) 
Interest and other income (expense), net   (806)        (4)      (806) 
Loss before benefit from
  income taxes
   (10,507)     (4,399)       (6,108) 
Benefit from income taxes   (2,871)     (928)       (1,943) 
Net loss $  (7,636) $  (7,636)   (3,471)       (4,165) 
              
Adjustments:             
Stock-based compensation
  expense
      2,869    326         2,543  
Restructuring     163    163         
Depreciation
 and amortization expense
     1,185    512        673  
Interest and other income
  (expense), net
     806      (4)      806  
Benefit from income taxes     (2,871)   (928)       (1,943) 
Adjusted EBITDA   $  (5,484) $  (3,398)     $  (2,086) 
              
              
(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 versus the other segment. 
              
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. 
              
              
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 
               
  Fiscal Year Ended June 30, 2016 
  GAAP
Consolidated
 Non-GAAP Consolidated Non-GAAP Advertising Automotive (1) Mobile Navigation (1) Total
Non-GAAP Automotive and Mobile Navigation (1)
 
              
Revenue $  183,346    $  21,744  $  135,372  $  26,230  $  161,602  
Cost of revenue   100,797      12,296    81,293    7,208    88,501   
Gross profit   82,549      9,448  $  54,079  $  19,022    73,101  
Operating
  expenses:
             
Research and development    68,911      4,722   (2 )      64,189  
Sales and marketing   25,587      13,822   (2)      11,765  
General and administrative   23,994      1,996   (3)      21,998  
Restructuring   (1,362)     (230)        (1,132) 
Total operating expenses

   117,130      20,310        96,820  
Loss from operations   (34,581)     (10,862)       (23,719) 
Interest and other income (expense), net   (229)        (4)      (229) 
Loss before provision for
  income taxes
   (34,810)     (10,862)       (23,948) 
Provision for income taxes   511             511  
Net loss $  (35,321) $  (35,321)   (10,862)       (24,459) 
              
Adjustments:             
Legal contingencies     935    —        935  
Stock-based compensation
  expense
     11,366     1,150        10,216  
Restructuring     (1,362)   (230)        (1,132) 
Deferred rent reversal due to lease termination     (1,242)   (300)        (942) 
Depreciation and amortization expense     3,362    810        2,552  
Interest and other income (expense), net     229      (4)       229  
Provision for income taxes     511           511  
Adjusted EBITDA   $  (21,522) $  (9,432)     $  (12,090) 
              
               
(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 versus the other segment. 
              
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. 
              
              
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 
              
  Fiscal Year Ended June 30, 2015 
  GAAP
Consolidated
 Non-GAAP Consolidated Non-GAAP Advertising Automotive (1) Mobile Navigation (1) Total
Non-GAAP Automotive and Mobile Navigation (1)
 
               
Revenue $  160,239    $  17,941  $  103,100  $  39,198  $  142,298  
Cost of revenue   78,784      11,710    56,319    10,755    67,074  
Gross profit    81,455      6,231  $  46,781  $  28,443    75,224  
Operating
  expenses:
              
Research and development   68,060       6,146   (2)      61,914  
Sales and marketing   26,975       14,173   (2)      12,802  
General and administrative   23,606      2,111   (3)      21,495  
Restructuring   1,150      398        752  
Total operating expenses

   119,791      22,828        96,963  
Loss from operations   (38,336)     (16,597)       (21,739) 
Interest and other income (expense), net   2,267        (4)      2,267  
Loss before benefit from
  income taxes
   (36,069)     (16,597)       (19,472) 
Benefit from income taxes   (13,006)     (4,324)       (8,682) 
Net loss $  (23,063) $  (23,063)   (12,273)       (10,790) 
              
Adjustments:              
Stock-based compensation
  expense
     11,428    1,753        9,675  
Restructuring     1,150    398        752  
Depreciation
  and amortization expense
     5,239    2,058        3,181  
Interest and other income
  (expense), net
     (2,267)     (4)      (2,267) 
Benefit from income taxes     (13,006)   (4,324)       (8,682) 
Adjusted EBITDA   $  (20,519) $  (12,388 )     $  (8,131) 
               
              
(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 versus the other segment. 
              
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. 
              
Investor Relations Contact:

Cynthia Hiponia or Erin Rheaume

The Blueshirt Group for Telenav, Inc.

408-990-1265

IR@telenav.com

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Source: Telenav, Inc.

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