August 3, 2017

Telenav Reports Fourth Quarter and Fiscal Year 2017 Financial Results

  • Full Year Fiscal 2017 Total Revenue of $169.6 million
  • Full Year Fiscal 2017 Total Billings of $233.6 million, up 17% year-over-year
  • Full Year Fiscal 2017 Automotive Revenue of $123.8 million
  • Full Year Fiscal 2017 Automotive Billings of $188.1 million, up 24% year-over-year
  • Full Year Fiscal 2017 Advertising Revenue of $26.8 million, up 23% year-over-year

SANTA CLARA, Calif., Aug. 03, 2017 (GLOBE NEWSWIRE) -- Telenav®, Inc. (NASDAQ:TNAV), a leader in connected car and location-based platform services, today announced its financial results for the fourth quarter and the fiscal year ended June 30, 2017.

"Fiscal 2017 was an outstanding year for Telenav as we continue to deliver innovative services and solutions to the connected car industry," said HP Jin, chairman and CEO of Telenav. "This has enabled us to strengthen our partnerships with our existing global auto OEM customers, Ford, General Motors and Toyota and establish a new partnership with Daimler. We are pleased with our progress and remain focused on execution and achieving our long-term goal of sustainable profitable growth."

Financial Highlights

  • Total revenue for the fourth quarter of fiscal 2017 was $40.3 million, compared with $35.1 million in the third quarter of fiscal 2017 and $47.8 million in the fourth quarter of fiscal 2016. Revenue for fiscal 2017 was $169.6 million, compared with $183.3 million in fiscal 2016.  The decline in revenue was primarily due to the award of map update services from Ford, which resulted in a change in how the company recognizes the resulting revenue. 
  • Automotive revenue was $29.3 million, or 73 percent of total revenue, for the fourth quarter of fiscal 2017, compared with $25.5 million, or 73 percent of total revenue, in the third quarter of fiscal 2017 and $37.1 million, or 78 percent of total revenue, for the fourth quarter of fiscal 2016. Automotive revenue for fiscal 2017 was $123.8 million, or 73 percent of total revenue, compared with $135.4 million in fiscal 2016, or 74 percent of total revenue.
  • Advertising revenue was $6.8 million, or 17 percent of total revenue, for the fourth quarter of fiscal 2017, compared with $5.3 million, or 15 percent of total revenue, in the third quarter of fiscal 2017, and $5.0 million, or 11 percent of total revenue, for the fourth quarter of fiscal 2016. Advertising revenue for fiscal 2017 was $26.8 million, or 16 percent of total revenue, compared with $21.7 million for fiscal 2016, or 12 percent of total revenue.
  • Deferred revenue as of June 30, 2017 was $87.4 million, compared with $61.2 million as of March 31, 2017 and $23.4 million as of June 30, 2016.
  • Billings for the fourth quarter of fiscal 2017 were $66.5 million, compared with $60.2 million in the third quarter of fiscal 2017 and $50.4 million in the fourth quarter of fiscal 2016. Billings for fiscal 2017 were $233.6 million, compared with $199.9 million for fiscal 2016.  
  • Operating expenses for the fourth quarter of fiscal 2017 were $30.3 million, compared with $30.6 million in third quarter of fiscal 2017 and $28.9 million in the fourth quarter of fiscal 2016.  Operating expenses for fiscal 2017 were $124.6 million, compared with $117.1 million for fiscal 2016.
  • GAAP net loss for the fourth quarter of fiscal 2017 was ($12.8) million, or ($0.29) per basic and diluted share, compared with a GAAP net loss of ($13.7) million, or ($0.31) per basic and diluted share, in the third quarter of fiscal 2017 and a GAAP net loss of ($8.0) million, or ($0.19) per basic and diluted share, for the fourth quarter of fiscal 2016. GAAP net loss for fiscal 2017 was ($47.3) million, or ($1.09) per basic and diluted share, compared with a GAAP net loss of ($35.3) million, or ($0.85) per basic and diluted share, in fiscal 2016.
  • Adjusted EBITDA for the fourth quarter of fiscal 2017 was a ($8.7) million loss compared with a ($9.9) million loss in the third quarter of fiscal 2017 and a ($4.6) million loss in the fourth quarter of fiscal 2016.  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 settlements, contingencies and fees, restructuring accruals and reversals, and reversals of accruals related to deferred rent resulting from lease terminations. For fiscal 2017, adjusted EBITDA was a ($28.1) million loss compared with a ($21.5) million loss for fiscal 2016.
  • Ending cash, cash equivalents and short-term investments, excluding restricted cash, were $98.4 million as of June 30, 2017. This represented cash and short-term investments of $2.24 per share, based on 43.9 million shares of common stock outstanding as of June 30, 2017. Telenav had no debt as of June 30, 2017.
  • Free cash flow for the fourth quarter of fiscal 2017 was $1.1 million, compared with ($8.4) million in the third quarter of fiscal 2017 and $1.9 million in the fourth quarter of fiscal 2016. Free cash flow reflects net cash provided by (used in) operating activities, less purchases of property and equipment. For fiscal 2017, free cash flow was ($10.7) million compared with ($7.1) million for fiscal 2016.

Recent Business Highlights

  • Ford has chosen Telenav to provide connected services globally for Ford's SYNC® 3 platform starting with select model year 2018 vehicles.  These services are powered by Telenav's Cloud service platform and Auto Navigation SDK.
  • General Motors successfully launched its first connected embedded navigation service on Cadillac CTS, in February of 2017, and remains on track to launch on select new models and geographies for model year 2018 vehicles.  This service is powered by Telenav's cloud service platform, Auto Navigation SDK, mobile navigation SDK, and HMI.
  • Opel, previously a division of GM and now a division of PSA Group, launched Navi 4.0 IntelliLink, which utilizes Telenav's entry-level embedded navigation solution, in Opel's Adam and Corsa in Europe and will be available in other models later this year.  This solution is powered by Telenav's Auto Navigation SDK.
  • Toyota launched Telenav's latest version of Scout® GPS Link which is now available as a standard offering in all U.S. model year 2018 Camrys with additional models to follow.  This offering is powered by Telenav Enhanced OSM platform, mobile SDK and HMI.
  • Toyota launched its premium embedded navigation system utilizing Telenav's connected search as a standard feature for 3 years of service.  This is now available through Toyota's Entune™ 3.0 Premium Audio option in select 2018 vehicles in the U.S.  This offering is powered by Telenav's Cloud service platform.
  • Daimler has selected Telenav's enhanced OSM platform and navigation SDK to power its Mercedes-Benz COMAND TOUCH® Rear Seat Entertainment system throughout the world.

"We are very excited with the successful rollout of our products into the market and the new initiatives we are working on with our customers," said Hassan Wahla, Co-President, Automotive.  "While these programs require us to increase our resources, we believe these prudent investments strengthen our leadership position as we build the largest network of connected cars in the industry and increase stockholder value over time."

Business Outlook

For the quarter ending September 30, 2017, Telenav offers the following guidance, which reflects management's decision to defer its adoption of ASC 606, Revenue from Contracts with Customers, until July 1, 2018 and is predicated on management's judgments. 

  • Total revenue is expected to be $36 to $38 million;
  • Automotive revenue is expected to be 69 to 72 percent of total revenue;
  • Advertising revenue is expected to be approximately 21 percent of total revenue; 
  • Billings are expected to be $61 to $63 million;
  • Deferred revenue is expected to increase by approximately $25 million;
  • Deferred costs are expected to increase by approximately $18 million;
  • GAAP gross margin is expected to be approximately 46 percent;
  • GAAP operating expenses are expected to be $32.5 to $33.5 million, and are net of a one-time $1 million rent credit and an estimated $1.5 million in capitalized deferred software development costs;
  • GAAP net loss is expected to be ($15.5) to ($16.5) million;
  • Adjusted EBITDA loss is expected to range from ($12.5) to ($13.5) million; and
  • Weighted average diluted shares outstanding are expected to be approximately 44.5 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. Commencing with its outlook for the quarter ending September 30, 2017, Telenav is no longer going to report or provide guidance on gross profit on billings, gross margin on billings and adjusted EBITDA on billings.

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 888-394-8218 (toll-free, domestic only) or 323-794-2130 (domestic and international toll) and enter pass code 8666680. 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 8666680.

Use of Non-GAAP Financial Measures

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

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

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

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

Adjusted EBITDA measures GAAP net loss excluding the impact of stock-based compensation expense, depreciation and amortization, other income (expense), provision (benefit) for income taxes, and other applicable items such as legal settlements and fees, restructuring accruals and reversals, and deferred rent reversals due to lease termination, net of tax. Stock-based compensation expense relates to equity incentive awards granted to its employees, directors, and consultants. Legal settlements and fees represent settlements and offers made to settle patent litigation cases in which Telenav is a defendant and royalty disputes. Deferred rent reversals represent the reversal of deferred rent liability that was no longer required due to the facility lease termination in fiscal 2016. Telenav believes adjusted EBITDA is a useful measure of profitability before the impact of certain non-cash expenses, interest income, income taxes, and certain other items that management believes affect the comparability of operating results.

Adjusted EBITDA on billings measures adjusted EBITDA plus the effect of changes in deferred revenue and deferred costs. Effective July 1, 2017, Telenav will no longer report Adjusted EBITDA on billings. Deferred costs primarily include costs associated with third party content and in connection with certain customized software solutions, the costs incurred to develop those solutions. We expect to incur additional costs in the future in connection with such deferred revenue due to requirements to provide ongoing provisioning of services such as hosting, monitoring and customer support, including certain third party technology and content license costs, as applicable. Telenav believes adjusted EBITDA on billings was a useful measure, especially in light of the impact it continues to expect on reported GAAP revenue for certain value-added offerings the company provides its customers, including Ford map updates. Adjusted EBITDA and adjusted EBITDA on billings, while generally measures of profitability, can also represent losses.

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

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

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

In this earnings release, Telenav has provided guidance for the first quarter of fiscal 2018 on a non-GAAP basis, for billings and adjusted EBITDA.  Telenav does not provide reconciliations of its forward-looking non-GAAP financial measures of billings, and adjusted EBITDA to the corresponding GAAP measures due to the high variability and difficulty in making accurate forecasts and projections with respect to deferred revenue, deferred costs, stock-based compensation and tax provision (benefit), which are components of these non-GAAP financial measures.  In particular, stock-based compensation is impacted by future hiring and retention needs, as well as the future fair market value of Telenav's common stock, all of which is difficult to predict and subject to constant change. The actual amounts of these items will have a significant impact on Telenav's GAAP net loss per diluted share and GAAP tax provision (benefit). Accordingly, reconciliations of Telenav's forward-looking non-GAAP financial measures to the corresponding GAAP measures are not available without unreasonable effort.

Forward Looking Statements

This press release contains forward-looking statements that are based on Telenav management's beliefs and assumptions and on information currently available to its management.  Actual events or results may differ materially from those described in this document due to a number of risks and uncertainties. These potential risks and uncertainties include, among others:  Telenav's ability to develop and implement products for Ford, GM, Toyota and Daimler and to support Ford, GM, Toyota and Daimler and their customers; Telenav's success in extending its contracts with existing original equipment manufacturers ("OEMs") and automotive manufacturers, achieving additional design wins and the delivery dates of automobiles including Telenav's products; adoption by vehicle purchasers of Scout GPS Link; Telenav's dependence on a limited number of automotive manufacturers and OEMs for a substantial portion of its revenue; reductions in demand for automobiles; potential impacts of OEMs including competitive capabilities in their vehicles such as Apple Car-Play and Android Auto; exposure from the potential impairment of the carrying value of certain goodwill and intangible assets within our mobile navigation business unit where revenue continues to decline; 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 and operating expenses in excess of expectations; failure to reach agreement with customers for awards and contracts on products and services in which Telenav has expended resources developing; competition from other market participants who may provide comparable services to subscribers without charge; the timing of new product releases and vehicle production by Telenav's automotive customers, including inventory procurement and fulfillment; possible warranty claims, and the impact on consumer perception of its brand; Telenav's ability to develop and support products including OpenStreetMap ("OSM"), as well as transition existing navigation products to OSM and any economic benefit anticipated from the use of OSM versus proprietary map products; the potential that Telenav may not be able to realize its deferred tax assets and may have to take a reserve against them; and macroeconomic and political conditions in the U.S. and abroad, in particular China. Telenav discusses these risks in greater detail in "Risk factors" and elsewhere in its Form 10-Q for the three months ended March 31, 2017 and other filings with the U.S. Securities and Exchange Commission (SEC), which are available at the SEC's website at www.sec.gov. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent its management's beliefs and assumptions only as of the date made. You should review its SEC filings carefully and with the understanding that actual future results may be materially different from what Telenav expects.

ABOUT TELENAV, INC.

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

Copyright 2017 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,
2017
  June 30,
2016*
  (unaudited)  
Assets      
Current assets:      
Cash and cash equivalents   $ 20,757     $ 21,349  
Short-term investments     77,598       88,277  
Accounts receivable, net of allowances of $75 and $111 at June 30, 2017 and June 30, 2016, respectively     57,834       42,216  
Restricted cash     3,401       5,109  
Income taxes receivable     34       687  
Deferred costs     11,703       1,784  
Prepaid expenses and other current assets     3,988       4,448  
Total current assets     175,315       163,870  
Property and equipment, net     4,658       5,247  
Deferred income taxes, non-current     900       661  
Goodwill and intangible assets, net     34,844       35,993  
Deferred costs, non-current     42,389       10,292  
Other assets     1,454       2,184  
Total assets   $ 259,560     $ 218,247  
Liabilities and stockholders' equity        
Current liabilities:        
Trade accounts payable   $ 6,151     $ 4,992  
Accrued expenses     51,528       36,274  
Deferred revenue     20,345       4,334  
Income taxes payable     197       88  
Total current liabilities     78,221       45,688  
Deferred rent, non-current     996       1,124  
Deferred revenue, non-current     67,056       19,035  
Other long-term liabilities     1,139       2,715  
Commitments and contingencies        
Stockholders' equity:        
Preferred stock, $0.001 par value: 50,000 shares authorized; no shares issued or outstanding            
Common stock, $0.001 par value: 600,000 shares authorized; 43,946 and 42,708 shares issued and outstanding at June 30, 2017 and June 30, 2016, respectively     44       43  
Additional paid-in capital     159,666       149,775  
Accumulated other comprehensive loss     (1,934 )     (1,767 )
Retained earnings (accumulated deficit)     (45,628 )     1,634  
Total stockholders' equity     112,148       149,685  
Total liabilities and stockholders' equity   $ 259,560     $ 218,247  
     
*Derived from audited consolidated financial statements as of and for the year ended June 30, 2016.
 

 

                   
Telenav, Inc.  
Consolidated Statements of Operations  
(in thousands, except per share amounts)  
   
                   
    Three Months Ended   Fiscal Year Ended  
    June 30,   June 30,  
      2017       2016       2017     2016*  
    (unaudited)   (unaudited)   (unaudited)      
Revenue:                  
Product   $ 28,132     $ 36,249     $ 119,785     $ 132,454    
Services     12,159       11,505       49,799       50,892    
Total revenue     40,291       47,754       169,584       183,346    
Cost of revenue:                  
Product     16,727       21,761       70,260       79,165    
Services     5,738       5,011       22,075       21,632    
Total cost of revenue     22,465       26,772       92,335       100,797    
Gross profit     17,826       20,982       77,249       82,549    
Operating expenses:                  
Research and development     19,677       17,281       73,102       68,911    
Sales and marketing     5,470       5,272       21,995       25,587    
General and administrative     5,193       6,394       23,041       23,059    
Legal settlement and contingencies     -       -       6,424       935    
Restructuring     -       (1 )     -       (1,362 )  
Total operating expenses     30,340       28,946       124,562       117,130    
Loss from operations     (12,514 )     (7,964 )     (47,313 )     (34,581 )  
Other income (expense), net     (260 )     48       892       (229 )  
Loss before provision for income taxes     (12,774 )     (7,916 )     (46,421 )     (34,810 )  
Provision for income taxes     36       82       841       511    
Net loss   $ (12,810 )   $ (7,998 )   $ (47,262 )   $ (35,321 )  
                   
Net loss per share:                  
Basic and diluted   $ (0.29 )   $ (0.19 )   $ (1.09 )   $ (0.85 )  
                   
Weighted average shares used in computing net loss per share:                  
Basic and diluted     43,806       42,600       43,343       41,567    
                   
*Derived from audited consolidated financial statements as of and for the year ended June 30, 2016.          
                   

 

Telenav, Inc.  
Consolidated Statements of Cash Flows  
(in thousands)  
   
           
    Fiscal Year Ended
June 30,
 
      2017     2016*  
    (unaudited)      
Operating activities          
Net loss   $ (47,262 )   $ (35,321 )  
                   
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation and amortization     2,647       3,362    
Accretion of net premium on short-term investments     403       645    
Stock-based compensation expense     10,162       11,366    
Write-off of long term investments     -       977    
(Gain) loss on disposal of property and equipment     (14 )     398    
Bad debt expense     189       95    
Changes in operating assets and liabilities:          
Accounts receivable     (15,807 )     (5,817 )  
Deferred income taxes     (239 )     109    
Restricted cash     1,709       (231 )  
Income taxes receivable     654       5,393    
Deferred costs     (42,016 )     (8,935 )  
Prepaid expenses and other current assets     459       (592 )  
Other assets     483       972    
Trade accounts payable     716       4,118    
Accrued expenses and other liabilities     14,257       4,730    
Income taxes payable     109       (636 )  
Deferred rent     66       (272 )  
Deferred revenue     64,032       16,541    
Net cash used in operating activities     (9,452 )     (3,098 )  
           
Investing activities          
Purchases of property and equipment     (1,225 )     (4,004 )  
Purchases of short-term investments     (64,957 )     (55,021 )  
Proceeds from sales and maturities of short-term investments     74,878       67,578    
Proceeds from sales of long-term investments     246       -    
Net cash provided by investing activities     8,942       8,553    
           
Financing activities          
Proceeds from exercise of stock options     2,738       1,549    
Repurchase of common stock     -       (570 )  
Tax withholdings related to net share settlements of restricted stock units     (3,008 )     (3,295 )  
Net cash used in financing activities     (270 )     (2,316 )  
           
Effect of exchange rate changes on cash and cash equivalents     188       (511 )  
Net increase (decrease) in cash and cash equivalents     (592 )     2,628    
Cash and cash equivalents, at beginning of period     21,349       18,721    
Cash and cash equivalents, at end of period   $ 20,757     $ 21,349    
           
Supplemental disclosure of cash flow information          
Income taxes paid (received), net   $ 1,872     $ (4,610 )  
           
*Derived from audited consolidated financial statements as of and for the year ended June 30, 2016.  
           

 

Telenav, Inc.
Consolidated Segment Summary
(in thousands, except percentages)
 
 
  Three Months Ended
June 30,
  Fiscal Year Ended
June 30,
    2017       2016       2017     2016*
    (unaudited)   (unaudited)   (unaudited)    
Revenue:  
Automotive   $ 29,297     $ 37,066     $ 123,784     $ 135,372  
Advertising     6,804       5,049       26,841       21,744  
Mobile Navigation     4,190       5,639       18,959       26,230  
Total revenue     40,291       47,754       169,584       183,346  
               
Cost of revenue:                
Automotive     17,828       22,346       73,923       81,293  
Advertising     3,055       2,758       12,724       12,296  
Mobile Navigation     1,582       1,668       5,688       7,208  
Total cost of revenue     22,465       26,772       92,335       100,797  
               
Gross profit:                
Automotive     11,469       14,720       49,861       54,079  
Advertising     3,749       2,291       14,117       9,448  
Mobile Navigation     2,608       3,971       13,271       19,022  
Total gross profit   $ 17,826     $ 20,982     $ 77,249     $ 82,549  
 
Gross margin:  
Automotive     39 %     40 %     40 %     40 %
Advertising     55 %     45 %     53 %     43 %
Mobile Navigation     62 %     70 %     70 %     73 %
Total gross margin     44 %     44 %     46 %     45 %
 
*Derived from audited consolidated financial statements as of and for the year ended June 30, 2016.
 

 

Telenav, Inc.
Unaudited Reconciliation of Non-GAAP Adjustments
(in thousands)
 
Reconciliation of Revenue to Billings
 
  Three Months Ended June 30, 2017   Fiscal Year Ended June 30, 2017
  Automotive   Advertising   Mobile Navigation   Total   Automotive   Advertising   Mobile Navigation   Total
Revenue   $ 29,297   $ 6,804   $ 4,190     $ 40,291   $ 123,784   $ 26,841   $ 18,959     $ 169,584
Adjustments:                                
Change in deferred revenue     26,434     -     (217 )     26,217     64,364     -     (332 )     64,032
Billings   $ 55,731   $ 6,804   $ 3,973     $ 66,508   $ 188,148   $ 26,841   $ 18,627     $ 233,616
                                 
                                 
    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:                                
Change in deferred revenue     2,718     -     (56 )     2,662     16,961     -     (420 )     16,541
Billings   $ 39,784   $ 5,049   $ 5,583     $ 50,416   $ 152,333   $ 21,744   $ 25,810     $ 199,887
                                 
   
 

 

Telenav, Inc.  
Unaudited Reconciliation of Non-GAAP Adjustments  
(in thousands)  
                   
Reconciliation of Gross Profit to Non-GAAP Gross Profit on Billings  
Reconciliation of Gross Margin to Non-GAAP Gross Margin on Billings  
                   
    Three Months Ended
June 30,
  Fiscal Year Ended
June 30,
 
      2017       2016       2017       2016    
                   
Gross profit   $ 17,826     $ 20,982     $ 77,249     $ 82,549    
Gross margin     44 %     44 %     46 %     45 %  
                   
Adjustments to gross profit:                  
Change in deferred revenue   $ 26,217     $ 2,662     $ 64,032     $ 16,541    
Change in deferred costs(1)     (17,876 )     (1,659 )     (42,016 )     (8,935 )  
Net change     8,341       1,003       22,016       7,606    
                   
Non-GAAP gross profit on billings(1)   $ 26,167     $ 21,985     $ 99,265     $ 90,155    
Non-GAAP gross margin on billings(1)     39 %     44 %     42 %     45 %  
                   
                   
(1) Deferred costs primarily include costs associated with third party content and in connection with certain customized software solutions, the costs incurred to develop those solutions. We expect to incur additional costs in the future due to requirements to provide ongoing provisioning of services such as hosting, monitoring and customer support, including certain third party technology and content license fees, as applicable.  Accordingly, non-GAAP gross profit on billings and non-GAAP gross margin on billings do not reflect all costs associated with billings.  
                   

 

Telenav, Inc.  
Unaudited Reconciliation of Non-GAAP Adjustments  
(in thousands)  
                                   
Reconciliation of Deferred Revenue to Increase (Decrease) in Deferred Revenue  
Reconciliation of Deferred Costs to Increase (Decrease) in Deferred Costs  
                                   
    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,
 
      2017     2016     2017     2016     2017       2016       2017     2016  
Deferred revenue, June 30   $ 86,517   $ 22,153   $ -   $ -   $ 884     $ 1,216     $ 87,401   $ 23,369  
Deferred revenue, March 31     60,083     19,435     -     -     1,101       1,272       61,184     20,707  
Increase (decrease) in deferred revenue   $ 26,434   $ 2,718   $ -   $ -   $ (217 )   $ (56 )   $ 26,217   $ 2,662  
                                   
Deferred costs, June 30   $ 54,092   $ 12,076   $ -   $ -   $ -     $ -     $ 54,092   $ 12,076  
Deferred costs, March 31     36,216     10,417     -     -     -       -       36,216     10,417  
Increase in deferred costs   $ 17,876   $ 1,659   $ -   $ -   $ -     $ -     $ 17,876   $ 1,659  
                                   
                                   
                                   
     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, 
 
       2017       2016       2017       2016        2017         2016         2017       2016   
Deferred revenue, June 30   $ 86,517   $ 22,153   $ -   $ -   $ 884     $ 1,216     $ 87,401   $ 23,369  
Deferred revenue, June 30     22,153     5,192     -     -     1,216       1,636       23,369     6,828  
Increase (decrease) in deferred revenue   $ 64,364   $ 16,961   $ -   $ -   $ (332 )   $ (420 )   $ 64,032   $ 16,541  
                                   
Deferred costs, June 30   $ 54,092   $ 12,076   $ -   $ -   $ -     $ -     $ 54,092   $ 12,076  
Deferred costs, June 30     12,076     3,141     -     -     -       -       12,076     3,141  
Increase in deferred costs   $ 42,016   $ 8,935   $ -   $ -   $ -     $ -     $ 42,016   $ 8,935  
                                   

 

Telenav, Inc.  
Unaudited Reconciliation of Non-GAAP Adjustments  
(in thousands)  
                   
Reconciliation of Net Loss to Adjusted EBITDA and Adjusted EBITDA on Billings  
                   
    Three Months Ended
June 30,
  Fiscal Year Ended
June 30,
 
      2017       2016       2017       2016    
                   
Net loss   $ (12,810 )   $ (7,998 )   $ (47,262 )   $ (35,321 )  
                   
Adjustments:                  
Legal settlement and contingencies     -       185       6,424       935    
Restructuring reversal     -       (1 )     -       (1,362 )  
Deferred rent reversal due to lease termination     -       -       -       (1,242 )  
Stock-based compensation expense     3,008       2,479       10,162       11,366    
Depreciation and amortization expense     761       666       2,647       3,362    
Other income (expense), net     260       (48 )     (892 )     229    
Provision for income taxes     36       82       841       511    
Adjusted EBITDA     (8,745 )     (4,635 )     (28,080 )     (21,522 )  
                   
Change in deferred revenue     26,217       2,662       64,032       16,541    
Change in deferred costs(1)     (17,876 )     (1,659 )     (42,016 )     (8,935 )  
Adjusted EBITDA on billings(1)   $ (404 )   $ (3,632 )   $ (6,064 )   $ (13,916 )  
                   
                   
(1) We expect to incur additional costs in the future due to requirements to provide ongoing provisioning of services such as hosting, monitoring and customer support, including certain third party technology and content license fees, as applicable.  Accordingly, adjusted EBITDA on billings does not reflect all costs associated with billings.  
                   

 

Telenav, Inc.
Unaudited Reconciliation of Non-GAAP Adjustments
(in thousands)
                     
Reconciliation of Net Loss to Free Cash Flow
                     
    Three Months Ended
June 30,
  Fiscal Year Ended
June 30,
   
      2017       2016       2017       2016      
                     
Net loss   $ (12,810 )   $ (7,998 )   $ (47,262 )   $ (35,321 )    
                     
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:                    
Change in deferred revenue (1)     26,217       2,662       64,032       16,541      
Change in deferred costs (2)     (17,876 )     (1,659 )     (42,016 )     (8,935 )    
Changes in other operating assets and liabilities     2,060       7,395       2,407       7,774      
Other adjustments (3)     3,875       3,716       13,387       16,843      
Net cash provided by (used in) operating activities     1,466       4,116       (9,452 )     (3,098 )    
Less: Purchases of property and equipment     (358 )     (2,229 )     (1,225 )     (4,004 )    
Free cash flow   $ 1,108     $ 1,887     $ (10,677 )   $ (7,102 )    
                     
(1) Consists of royalties, customized software development fees and subscription fees.  
(2) Consists primarily of third party content costs and customized software development expenses.  
(3) Consist primarily of depreciation and amortization, stock-based compensation expense and other non-cash items.    
 

 

Telenav, Inc.  
Unaudited Reconciliation of Non-GAAP Adjustments  
(in thousands)  
                           
Non-GAAP metrics for the Advertising segment and the combined Automotive and Mobile Navigation segments  
                           
     Three Months Ended June 30, 2017   
     GAAP
Consolidated 
   Non-GAAP Consolidated     Non-GAAP Advertising     Automotive (1)     Mobile Navigation (1)     Total
Non-GAAP
Automotive and
Mobile
Navigation (1)
 
 
                           
Revenue   $ 40,291         $ 6,804     $ 29,297   $ 4,190   $ 33,487    
Cost of revenue     22,465           3,055       17,828     1,582     19,410    
Gross profit     17,826           3,749       11,469     2,608     14,077    
Operating expenses:                          
Research and development     19,677           1,280    (2 )           18,397    
Sales and marketing     5,470           2,762    (2 )           2,708    
General and administrative     5,193           191    (3 )           5,002    
Total operating expenses     30,340           4,233               26,107    
Loss from operations     (12,514 )         (484 )             (12,030 )  
Other income (expense), net     (260 )         -    (4 )           (260 )  
Loss before provision for income taxes     (12,774 )         (484 )             (12,290 )  
Provision for income taxes     36           -    (5 )           36    
Net loss   $ (12,810 )   $ (12,810 )   $ (484 )           $ (12,326 )  
                           
Adjustments:                          
Stock-based compensation expense         3,008       216    (2 )           2,792    
Depreciation and amortization expense         761       47    (2 )           714    
Other income (expense), net         260       -    (4 )           260    
Provision for income taxes         36       -    (5 )           36    
Adjusted EBITDA         (8,745 )     (221 )             (8,524 )  
Change in deferred revenue         26,217       -               26,217    
Change in deferred costs(6)         (17,876 )     -               (17,876 )  
Adjusted EBITDA on billings(6)       $ (404 )   $ (221 )           $ (183 )  
                           
(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 for income taxes to one segment versus the other.  
For purposes of calculating the Non-GAAP net loss attributable to the advertising segment:  
(2) These expenses represent costs directly attributable to the advertising segment.  
(3) These expenses represent actual general and administrative costs directly attributable to the advertising segment as well as an allocation of certain shared corporate costs that directly benefit the advertising segment, such as accounting and human resources.  
(4) Expenses or income cannot be directly allocated to the advertising segment.  
(5) Income taxes are primarily from foreign operations which support the automotive and mobile navigation segments.  
(6) We expect to incur additional costs in the future due to requirements to provide ongoing provisioning of services such as hosting, monitoring and customer support, including certain third party technology and content license fees, as applicable.  Accordingly, adjusted EBITDA on billings does not reflect all costs associated with billings.  
                           
                           
Telenav, Inc.  
Unaudited Reconciliation of Non-GAAP Adjustments  
(in thousands)  
                           
Non-GAAP metrics for the Advertising segment and the combined Automotive and Mobile Navigation segments  
                           
     Three Months Ended 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     6,209           458    (3 )           5,751    
Legal settlement and contingencies     185           -    (4 )           185    
Restructuring     (1 )         (1 )  (2 )           -    
Total operating expenses     28,946           4,396               24,550    
Loss from operations     (7,964 )         (2,105 )             (5,859 )  
Other income (expense), net     48           -    (5 )           48    
Loss before benefit from income taxes     (7,916 )         (2,105 )             (5,811 )  
Provision for income taxes     82           -    (6 )           82    
Net loss   $ (7,998 )   $ (7,998 )   $ (2,105 )           $ (5,893 )  
Adjustments:                          
Legal settlement and contingencies         185       -    (4 )           185    
Stock-based compensation expense         2,479       295    (2 )           2,184    
Restructuring         (1 )     (1 )  (2 )           -    
Depreciation and amortization expense         666       60    (2 )           606    
Other income (expense), net         (48 )     -    (5 )           (48 )  
Provision for income taxes         82       -    (6 )           82    
Adjusted EBITDA         (4,635 )     (1,751 )             (2,884 )  
Change in deferred revenue         2,662       -               2,662    
Change in deferred costs(7)         (1,659 )     -               (1,659 )  
Adjusted EBITDA on billings(7)       $ (3,632 )   $ (1,751 )           $ (1,881 )  
                           
(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 for income taxes to one segment versus the other.  
For purposes of calculating the Non-GAAP net loss attributable to the advertising segment:  
(2) These expenses represent costs directly attributable to the advertising segment.  
(3) These expenses represent actual general and administrative costs directly attributable to the advertising segment as well as an  allocation of certain shared corporate costs that directly benefit the advertising segment, such as accounting and human resources.  
(4) Legal settlement and contingencies are not related to the advertising segment.  
(5) Expenses or income cannot be directly allocated to the advertising segment.  
(6) Income taxes are primarily from foreign operations which support the automotive and mobile navigation segments.  
(7) We expect to incur additional costs in the future due to requirements to provide ongoing provisioning of services such as hosting, monitoring and customer support, including certain third party technology and content license fees, as applicable.  Accordingly, adjusted EBITDA on billings does not reflect all costs associated with billings.  
                           
                           
Telenav, Inc.  
Unaudited Reconciliation of Non-GAAP Adjustments  
(in thousands)  
                           
Non-GAAP metrics for the Advertising segment and the combined Automotive and Mobile Navigation segments  
                           
     Fiscal Year Ended June 30, 2017   
     GAAP
Consolidated 
   Non-GAAP Consolidated     Non-GAAP Advertising     Automotive (1)     Mobile Navigation (1)     Total
Non-GAAP
Automotive and
Mobile
Navigation (1)
 
 
                           
Revenue   $ 169,584         $ 26,841     $ 123,784   $ 18,959   $ 142,743    
Cost of revenue     92,335           12,724       73,923     5,688     79,611    
Gross profit     77,249           14,117       49,861     13,271     63,132    
Operating expenses:                          
Research and development     73,102           5,066    (2 )           68,036    
Sales and marketing     21,995           10,525    (2 )           11,470    
General and administrative     23,041           1,187    (3 )           21,854    
Legal settlement and contingencies     6,424           -    (4 )           6,424    
Total operating expenses     124,562           16,778               107,784    
Loss from operations     (47,313 )         (2,661 )             (44,652 )  
Other income (expense), net     892           -    (5 )           892    
Loss before provision for income taxes     (46,421 )         (2,661 )             (43,760 )  
Provision for income taxes     841           -    (6 )           841    
Net loss   $ (47,262 )   $ (47,262 )   $ (2,661 )           $ (44,601 )  
                           
Adjustments:                          
Legal settlement and contingencies         6,424       -    (4 )           6,424    
Stock-based compensation expense         10,162       874    (2 )           9,288    
Depreciation and amortization expense         2,647       200    (2 )           2,447    
Other income (expense), net         (892 )     -    (5 )           (892 )  
Provision for income taxes         841       -    (6 )           841    
Adjusted EBITDA         (28,080 )     (1,587 )             (26,493 )  
Change in deferred revenue         64,032       -               64,032    
Change in deferred costs(7)         (42,016 )     -               (42,016 )  
Adjusted EBITDA on billings(7)       $ (6,064 )   $ (1,587 )           $ (4,477 )  
                           
                           
(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 for income taxes to one segment versus the other.  
For purposes of calculating the Non-GAAP net loss attributable to the advertising segment:  
(2) These expenses represent costs directly attributable to the advertising segment.  
(3) These expenses represent actual general and administrative costs directly attributable to the advertising segment as well as an allocation of certain shared corporate costs that directly benefit the advertising segment, such as accounting and human resources.  
(4) Legal settlement and contingencies are not related to the advertising segment.  
(5) Expenses or income cannot be directly allocated to the advertising segment.  
(6) Income taxes are primarily from foreign operations which support the automotive and mobile navigation segments.  
(7) We expect to incur additional costs in the future due to requirements to provide ongoing provisioning of services such as hosting, monitoring and customer support, including certain third party technology and content license fees, as applicable.  Accordingly, adjusted EBITDA on billings does not reflect all costs associated with billings.  
                           
                           
Telenav, Inc.  
Unaudited Reconciliation of Non-GAAP Adjustments  
(in thousands)  
                           
Non-GAAP metrics for the Advertising segment and the combined Automotive and Mobile Navigation segments  
                           
     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     23,059           1,996    (3 )           21,063    
Legal settlement and contingencies     935           -    (4 )           935    
Restructuring     (1,362 )         (230 )  (2 )           (1,132 )  
Total operating expenses     117,130           20,310               96,820    
Loss from operations     (34,581 )         (10,862 )             (23,719 )  
Other income (expense), net     (229 )         -    (5 )           (229 )  
Loss before provision for income taxes     (34,810 )         (10,862 )             (23,948 )  
Provision for income taxes     511           -    (6 )           511    
Net loss   $ (35,321 )   $ (35,321 )   $ (10,862 )           $ (24,459 )  
                           
Adjustments:                          
Legal settlement and contingencies         935       -    (4 )           935    
Stock-based compensation expense         11,366       1,150    (2 )           10,216    
Restructuring         (1,362 )     (230 )  (2 )           (1,132 )  
Deferred rent reversal due to lease termination         (1,242 )     (300 )  (2 )           (942 )  
Depreciation and amortization expense         3,362       810    (2 )           2,552    
Other income (expense), net         229       -    (5 )           229    
Provision for income taxes         511       -    (6 )           511    
Adjusted EBITDA         (21,522 )     (9,432 )             (12,090 )  
Change in deferred revenue         16,541       -               16,541    
Change in deferred costs(7)         (8,935 )     -               (8,935 )  
Adjusted EBITDA on billings(7)       $ (13,916 )   $ (9,432 )           $ (4,484 )  
                           
(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 for income taxes to one segment versus the other.  
For purposes of calculating the Non-GAAP net loss attributable to the advertising segment:  
(2) These expenses represent costs directly attributable to the advertising segment.  
(3) These expenses represent actual general and administrative costs directly attributable to the advertising segment as well as an allocation of certain shared corporate costs that directly benefit the advertising segment, such as accounting and human resources.  
(4) Legal settlement and contingencies are not related to the advertising segment.  
(5) Expenses or income cannot be directly allocated to the advertising segment.  
(6) Income taxes are primarily from foreign operations which support the automotive and mobile navigation segments.  
(7) We expect to incur additional costs in the future due to requirements to provide ongoing provisioning of services such as hosting, monitoring and customer support, including certain third party technology and content license fees, as applicable.  Accordingly, adjusted EBITDA on billings does not reflect all costs associated with billings.  

 

Investor Relations:

Michael Look

408-990-1232

IR@telenav.com



Media:

Raphel Finelli

408-667-5970

media@telenav.com

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Source: Telenav, Inc.

 

 

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