February 1, 2018

Telenav Reports Second Quarter Fiscal 2018 Financial Results

SANTA CLARA, Calif., Feb. 01, 2018 (GLOBE NEWSWIRE) -- Telenav®, Inc. (NASDAQ:TNAV), a leading provider of connected car and location-based platform services, today released its financial results for the second fiscal quarter ended December 31, 2017 by issuing this press release and posting a letter to stockholders on the quarter on its website. Please visit Telenav's investor relations website at http://investor.telenav.com to view the Q2 fiscal year 2018 financial results and letter to stockholders.

"We are pleased that Ford has awarded us an extension of our SYNC® 3 partnership through December 2020. We are also excited to be awarded Ford's next generation connected navigation for North America," said HP Jin, Chairman and CEO of Telenav.

"During the quarter, Ford introduced our connected services on SYNC 3 in North America through its FordPassTM and Lincoln WayTM mobile applications. With this addition, there are now nearly 7 million connected cars on the road powered by Telenav's location-based services platform."

Financial Highlights for the second quarter ended December 31, 2017

  • Total revenue for the second quarter of fiscal 2018 was $39.1 million, compared with $52.0 million in the same prior year period.
  • Billings for the second quarter of fiscal 2018 were $70.1 million, compared with $59.7 million in the same prior year period.
  • GAAP net loss for the second quarter of fiscal 2018 was ($15.7) million, compared with a GAAP net loss of ($11.4) million for the second quarter of fiscal 2017.
  • Adjusted EBITDA on billings for the second quarter of fiscal 2018 was a ($1.8) million loss compared with a $1.3 million profit in the second quarter of fiscal 2017. 
  • Ending cash, cash equivalents and short-term investments, excluding restricted cash, were $90.7 million as of December 31, 2017. This represented cash and short-term investments of $2.03 per share, based on 44.6 million shares of common stock outstanding as of December 31, 2017.  Telenav had no debt as of December 31, 2017.

Recent Business Highlights

  • Ford® entered into an agreement to extend Telenav's offering for SYNC 3 for calendar 2018 and awarded, subject to completion of contracts, a further extension of Telenav's SYNC 3 partnership for all current geographies through calendar year 2020
  • Ford awarded Telenav, subject to completion of contracts, its next generation navigation solution for North America
  • Ford has entered into an agreement with Telenav to provide map updates in North America, China and South America, effective January 1, 2018
  • Ford launched our connected services across various model year 2018 SYNC 3 vehicles in North America using its FordPass and Lincoln Way mobile phone applications
  • GM has launched our premium embedded navigation in the Middle East in addition to the already launched geographies of North America, China and Europe
  • Fiat Chrysler Automobiles (FCA), another Top 10 Global Automotive OEM, will offer Telenav's embedded navigation solution on select Jeep and Chrysler vehicles for the China market

Q3 Fiscal 2018 Business Outlook

Telenav's amended Ford agreement and related awards specify future deliverables. In conjunction with these changes, under current GAAP, certain revenue which Telenav has been recognizing upon product delivery will prospectively not be recognized until these defined deliverables are met. This will result in a significant decline in revenue and gross profit, commencing in the March 2018 quarter. However, effective July 1, 2018, Telenav will adopt the new revenue recognition standard, ASC 606, resulting in the ability to once again recognize substantial revenue and gross profit from Ford as our product is delivered.

Telenav's amended Ford agreement also reflects a decrease in pass-through third-party licensed content costs, which will result in a decrease in billings per unit, but an increase in direct contribution margin from billings.  The company expects auto unit volumes to increase, which should result in an increase in direct contribution from billings in the automotive business unit. Telenav also expects to record a non-cash impairment of goodwill of approximately $2.7 million related to its declining mobile navigation business during the March 2018 quarter.

For the quarter ending March 31, 2018, Telenav offers the following guidance:

  • Total revenue is expected to be $13 to $14 million
  • Billings are expected to be $56 to $59 million
  • Deferred revenue is expected to increase by approximately $43 to $45 million
  • Deferred costs are expected to increase by approximately $23 million
  • GAAP gross profit is expected to be approximately $6 million
  • GAAP gross margin is expected to be approximately 45 percent
  • Direct contribution from billings is expected to be approximately $26 to $28 million
  • Direct contribution margin from billings is expected to be approximately 47 percent
  • GAAP operating expenses are expected to be $38 to $39 million, and include a $2.7 million goodwill impairment related to Telenav's mobile navigation business
  • GAAP net loss is expected to be $(32) to $(34) million
  • Adjusted EBITDA loss is expected to be $(25) to $(27) million
  • Adjusted EBITDA loss on billings is expected to be $(4) to $(6) million
  • Automotive is expected to be approximately 35 percent of total revenue and 83 percent of billings
  • Advertising is expected to be approximately 45 percent of total revenue and 11 percent of billings
  • Weighted average diluted shares outstanding are expected to be approximately 44.8 million

The Company anticipates that for the second half of fiscal 2018, adjusted EBITDA on billings will continue to be negative.  Subject to anticipated volumes, take rates and timing of model expansion under the Company's various automotive OEM programs, the Company anticipates that adjusted EBITDA on billings will be positive for fiscal 2019.

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 and Quarterly Commentary

The company will host an investor conference call and live webcast on Thursday, February 1, 2018 at 2:30 p.m. Pacific Time (5:30 p.m. Eastern Time). Management has posted its letter to stockholders in combination with our Second Quarter Fiscal 2018 Financial Results press release on Telenav's investor relations website in lieu of management providing remarks at the start of the conference call. Instead management will respond to questions during the call. To listen to the webcast and view the company's quarterly commentary, please visit Telenav's investor relations website at http://investor.telenav.com.  Listeners can also access the conference call by dialing 800-281-7973 (toll-free, domestic only) or 323-794-2093 (domestic and international toll) and entering pass code 7507108. 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 7507108.

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, direct contribution from billings, direct contribution margin from 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. Direct contribution from billings reflects GAAP gross profit plus change in deferred revenue less change in deferred costs. Direct contribution margin from billings reflects direct contribution from 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 certain development costs associated with our customized software 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, direct contribution from billings and direct contribution margin from billings to be useful metrics for management and investors because billings drive revenue and deferred revenue, which is an important indicator of its business.  Telenav believes direct contribution from billings and direct contribution margin from billings are useful metrics because they reflect the impact of the contribution 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, direct contribution from billings and direct contribution margin from billings versus revenue, gross profit, and gross margin calculated in accordance with GAAP. Second, billings, direct contribution from billings and direct contribution margin from 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, including certain third-party technology and content license fees as applicable. Accordingly, direct contribution from billings and direct contribution margin from billings do not include all costs associated with billings. Second, Telenav may calculate billings, direct contribution from billings, and direct contribution margin from 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, direct contribution from billings and direct contribution margin from billings and how they relate to revenue, gross profit and gross margin calculated in accordance with GAAP.

Adjusted EBITDA measures GAAP net loss excluding the impact of stock-based compensation expense, depreciation and amortization, other income (expense), provision (benefit) for income taxes, and other applicable items such as legal settlements and contingencies, and deferred rent reversal and tenant improvement allowance recognition due to sublease termination, net of tax. Stock-based compensation expense relates to equity incentive awards granted to its employees, directors, and consultants. Legal settlements and contingencies represent settlements and offers made to settle litigation in which Telenav is a defendant and royalty disputes. Deferred rent reversal and tenant improvement allowance recognition represent the reversal of Telenav's deferred rent liability and recognition of Telenav's deferred tenant improvement allowance, as amortization of these amounts is no longer required due to the termination of our Santa Clara facility sublease and subsequent entry into a new lease agreement with our landlord for this same facility effective September 2017.

Adjusted EBITDA and adjusted EBITDA on billings are key measures used by Telenav's management and board of directors to understand and evaluate Telenav's core operating performance and trends, to prepare and approve our annual budget and to develop short- and long-term operational plans. In particular, Telenav believes that the exclusion of the expenses eliminated in calculating adjusted EBITDA can provide a useful measure for period-to-period comparisons of Telenav's core business. In addition, adjusted EBITDA is a key financial measure used by the compensation committee of Telenav's board of directors in connection with the development of incentive-based compensation for Telenav's executive officers. Accordingly, Telenav believes that adjusted EBITDA generally provides useful information to investors and others in understanding and evaluating Telenav's operating results in the same manner as its management and board of directors.

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

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

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

Forward Looking Statements

This press release contains forward-looking statements that are based on Telenav management's beliefs and assumptions and on information currently available to its management.  Actual events or results may differ materially from those described in this document due to a number of risks and uncertainties. These potential risks and uncertainties include, among others:  Telenav's ability to develop and implement products for Ford, GM and Toyota and to support Ford, GM and Toyota and their customers; Telenav's success in extending its contracts for current and new generation of products with its existing OEMs and automotive manufacturers, particularly Ford; 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 Telenav's 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; the impact on revenue recognition and other financial reporting due to the amendment of contracts or changes in accounting standards, such as the implementation of ASC 606; 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 quarter ended September 30, 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 management's beliefs and assumptions only as of the date made. You should review our SEC filings carefully and with the understanding that actual future results may be materially different from what Telenav expects.

ABOUT TELENAV, INC.

Telenav is a leading provider of connected car and location-based platform services, focused on transforming life on the go for people - before, during, and after every drive. Leveraging our location platform, global brands such as Ford, GM, Toyota and AT&T deliver custom connected car and mobile experiences. Fortune 500 advertisers and local advertisers can now 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 2018 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. 
TNAV-F
TNAV-C

Investor Relations:
Michael Look
408-990-1232
IR@telenav.com

Media:
Raphel Finelli
408-667-5970
media@telenav.com


Telenav, Inc. 
Consolidated Balance Sheets 
(in thousands, except par value)  
     
 December 31,
2017
 June 30,
2017*
 
 (unaudited) 
Assets   
Current assets:   
Cash and cash equivalents $  13,956  $  20,757  
Short-term investments  76,773   77,598  
Accounts receivable, net of allowances of $112 and $75 at
December 31, 2017 and June 30, 2017, respectively
  52,287   57,834  
Restricted cash   3,404   3,401  
Income taxes receivable  32   34  
Deferred costs  19,545   11,703  
Prepaid expenses and other current assets  4,392   3,988  
Total current assets  170,389   175,315  
Property and equipment, net  7,138   4,658  
Deferred income taxes, non-current  958   900  
Goodwill and intangible assets, net  34,278   34,844  
Deferred costs, non-current  75,362   42,389  
Other assets  1,877   1,454  
Total assets $  290,002  $  259,560  
Liabilities and stockholders' equity     
Current liabilities:     
Trade accounts payable $  4,676  $  6,151  
Accrued expenses  51,350   51,528  
Deferred revenue  31,908   20,345  
Income taxes payable  138    197  
Total current liabilities  88,072   78,221  
Deferred rent, non-current  710   996  
Deferred revenue, non-current  115,689   67,056  
Other long-term liabilities  1,073   1,139  
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;
44,552 and 43,946 shares issued and outstanding at December 31,
2017 and June 30, 2017, respectively
  45   44  
Additional paid-in capital  163,663   159,666  
Accumulated other comprehensive loss  (1,576)  (1,934) 
Accumulated deficit   (77,674)  (45,628) 
Total stockholders' equity  84,458   112,148  
Total liabilities and stockholders' equity $  290,002  $  259,560  
   
*Derived from audited consolidated financial statements as of and for the year ended June 30, 2017. 
 

 

Telenav, Inc.  
Consolidated Statements of Operations 
(in thousands, except per share amounts) 
     
          
  Three Months Ended Six Months Ended 
  December 31, December 31, 
   2017   2016   2017   2016  
  (unaudited)   (unaudited)    
Revenue:         
Product $  25,307  $  37,804   $  49,271  $  67,227  
Services  13,773   14,197   26,467    27,001  
Total revenue  39,080   52,001   75,738   94,228  
Cost of revenue:         
Product  15,053   22,598   29,727   40,359  
Services  7,258   6,129   13,431   11,844  
Total cost of revenue  22,311   28,727   43,158   52,203  
Gross profit  16,769   23,274   32,580   42,025  
Operating expenses:         
Research and development  21,903   16,301    42,985   34,319  
Sales and marketing  5,136   5,277   10,200    10,545  
General and administrative  5,514   6,872   10,725   12,363  
Legal settlement and contingencies    60     6,424     310     6,424  
Total operating expenses  32,613   34,874   64,220   63,651  
Loss from operations  (15,844)  (11,600)  (31,640)  (21,626) 
Other income (expense), net  218   714   171   1,010   
Loss before provision for income taxes  (15,626)  (10,886)  (31,469)  (20,616) 
Provision for income taxes  26   537   281   142  
Net loss $  (15,652) $  (11,423) $  (31,750) $  (20,758) 
          
Net loss per share:         
Basic and diluted $  (0.35) $  (0.26) $  (0.71) $  (0.48) 
          
Weighted average shares used in computing net loss per share:         
Basic and diluted  44,476   43,208   44,495   42,932  
          

 

Telenav, Inc. 
Consolidated Statements of Cash Flows 
(in thousands) 
  
      
  Six Months Ended
December 31,
 
   2017      2016   
  (unaudited)   
Operating activities     
Net loss $  (31,750) $  (20,758) 
Adjustments to reconcile net loss to net cash used in operating activities:     
Depreciation and amortization    1,513     1,260  
Deferred rent reversal due to lease termination    (538)  -  
Tenant improvement allowance recognition due to lease termination    (582)  -  
Accretion of net premium on short-term investments    113     237  
Stock-based compensation expense    5,368     4,529  
Loss (gain) on disposal of property and equipment     6     (2) 
Bad debt expense    37     125  
Changes in operating assets and liabilities:     
Accounts receivable    5,545     (5,724) 
Deferred income taxes    (23)    226  
Restricted cash    (3)    1,015  
Income taxes receivable    2     39  
Deferred costs    (40,815)    (6,704) 
Prepaid expenses and other current assets    (476)    580  
Other assets    (620)    98   
Trade accounts payable    (1,563)    5,309  
Accrued expenses and other liabilities    (263)    3,945  
Income taxes payable    (61)    154  
Deferred rent    767     44  
Deferred revenue    60,196     12,728  
   Net cash used in operating activities    (3,147)    (2,899) 
      
Investing activities     
Purchases of property and equipment    (3,350)    (531) 
Purchases of short-term investments    (32,817)    (37,788) 
Proceeds from sales and maturities of short-term investments    33,322     39,392  
Proceeds from sales of long-term investments  -     246  
   Net cash (used in) provided by investing activities    (2,845)    1,319  
      
Financing activities     
Proceeds from exercise of stock options    235     159  
Tax withholdings related to net share settlements of restricted stock units    (1,606)    (1,638) 
   Net cash used in financing activities    (1,371)    (1,479) 
      
Effect of exchange rate changes on cash and cash equivalents    562     (596) 
Net decrease in cash and cash equivalents    (6,801)    (3,655) 
Cash and cash equivalents, at beginning of period    20,757      21,349  
Cash and cash equivalents, at end of period $  13,956  $  17,694  
      
Supplemental disclosure of cash flow information     
Income taxes paid, net $  640  $  1,410  
      

 

Telenav, Inc.
Consolidated Segment Summary
(in thousands, except percentages)
    
         
  Three Months Ended Six Months Ended
  December 31, December 31,
   2017   2016   2017   2016 
         
Automotive        
Revenue $  26,838  $  38,744  $  52,142  $  69,011 
Cost of revenue    16,416     23,438     32,301     41,983 
Gross profit $  10,422  $  15,306  $  19,841  $  27,028 
Gross margin  39%  40%  38%  39%
         
Advertising        
Revenue $  8,742  $  8,208  $  16,357  $  14,753 
Cost of revenue    4,402     3,919     7,814     7,445 
Gross profit $  4,340  $  4,289  $  8,543  $  7,308 
Gross margin  50%  52 %  52%  50%
          
Mobile Navigation        
Revenue $  3,500  $  5,049  $  7,239  $  10,464 
Cost of revenue    1,493     1,370     3,043     2,775 
Gross profit $  2,007  $  3,679  $  4,196  $  7,689 
Gross margin  57%  73%  58%  73%
         
Total        
Revenue $  39,080  $  52,001  $  75,738  $  94,228 
Cost of revenue    22,311     28,727     43,158     52,203 
Gross profit $  16,769  $  23,274  $  32,580  $  42,025 
Gross margin  43%  45%  43%  45%
         

 

Telenav, Inc.
Unaudited Reconciliation of Non-GAAP Adjustments
(in thousands)
          
Reconciliation of Revenue to Billings
         
         
  Three Months Ended  Six Months Ended
  December 31, December 31,
   2017   2016   2017   2016 
Automotive        
Revenue $  26,838  $  38,744  $  52,142  $  69,011 
Adjustments:        
Change in deferred revenue  31,259    7,694   60,447   12,807 
Billings  $  58,097  $  46,438  $  112,589  $  81,818 
         
Advertising        
Revenue $  8,742  $  8,208  $  16,357  $  14,753 
Adjustments:        
Change in deferred revenue  -   -   -   - 
Billings  $  8,742  $  8,208  $  16,357  $  14,753 
         
Mobile Navigation        
Revenue $  3,500  $  5,049  $  7,239  $  10,464 
Adjustments:        
Change in deferred revenue  (194)  (8)  (251)  (79)
Billings  $  3,306  $  5,041  $  6,988  $  10,385 
         
Total        
Revenue $  39,080  $  52,001  $  75,738  $  94,228 
Adjustments:        
Change in deferred revenue  31,065   7,686   60,196   12,728 
Billings  $  70,145  $  59,687  $  135,934  $  106,956 
         

 

Telenav, Inc. 
Unaudited Reconciliation of Non-GAAP Adjustments 
(in thousands) 
                  
Reconciliation of Deferred Revenue to change in Deferred Revenue 
Reconciliation of Deferred Costs to change in Deferred Costs 
                  
  Automotive Advertising Mobile Navigation Total 
  Three Months Ended
December 31,
 Three Months Ended
December 31,
 Three Months Ended
December 31,
 Three Months Ended
December 31,
 
  2017 2016 2017 2016  2017   2016  2017 2016 
Deferred revenue, December 31 $  146,964 $  34,960 $- $- $  633  $  1,137  $  147,597 $  36,097 
Deferred revenue, September 30    115,705    27,266  -  -    827     1,145     116,532    28,411 
Change in deferred revenue $  31,259 $  7,694 $- $- $  (194) $  (8) $  31,065 $  7,686 
                  
Deferred costs, December 31 $  94,907 $  18,780 $- $- $-  $-  $  94,907 $  18,780 
Deferred costs, September 30    74,140    14,933  -  -  -   -     74,140    14,933 
Change in deferred costs $  20,767 $  3,847 $- $- $-  $-  $  20,767 $  3,847 
                  
                   
                   
   Automotive   Advertising   Mobile Navigation   Total  
   Six Months Ended 
December 31, 
  Six Months Ended 
December 31, 
  Six Months Ended 
December 31, 
  Six Months Ended 
December 31, 
 
   2017    2016   2017   2016    2017     2016    2017   2016  
Deferred revenue, December 31 $  146,964 $  34,960 $- $- $  633  $  1,137  $  147,597 $  36,097 
Deferred revenue, June 30    86,517    22,153  -  -    884     1,216     87,401    23,369 
Change in deferred revenue $  60,447 $  12,807 $- $- $  (251) $  (79) $  60,196 $  12,728 
                  
Deferred costs, December 31 $  94,907 $  18,780 $- $- $-  $-  $  94,907 $  18,780 
Deferred costs, June 30    54,092    12,076  -  -  -   -     54,092    12,076 
Change in deferred costs $  40,815 $  6,704 $- $- $-  $-  $  40,815  $  6,704 
                   

 

Telenav, Inc. 
Unaudited Reconciliation of Non-GAAP Adjustments  
(in thousands, except percentages) 
          
Reconciliation of Gross Profit to Direct Contribution from Billings 
     
          
  Three Months Ended Six Months Ended 
  December 31, December 31, 
    2017   2016   2017   2016  
          
Automotive         
Gross profit $  10,422  $  15,306  $  19,841  $  27,028  
Gross margin  39%  40%  38%  39% 
Adjustments to gross profit:         
Change in deferred revenue  $  31,259  $  7,694  $  60,447   $  12,807  
Change in deferred costs(1)  (20,767)  (3,847)  (40,815)  (6,704) 
Net change  10,492   3,847   19,632   6,103  
Direct Contribution from billings(1) $  20,914  $  19,153  $  39,473  $  33,131  
Direct Contribution Margin from billings(1)  36%  41%  35%  40% 
          
Advertising         
Gross profit $  4,340  $  4,289  $  8,543  $  7,308  
Gross margin  50%  52%  52%  50% 
Adjustments to gross profit:         
Change in deferred revenue $-  $-  $-  $-  
Change in deferred costs(1)  -   -   -   -   
Net change  -   -   -   -  
Direct Contribution from billings(1) $  4,340  $  4,289  $  8,543  $  7,308  
Direct Contribution Margin from billings(1)  50%  52%  52%  50% 
          
Mobile Navigation         
Gross profit $  2,007  $  3,679  $  4,196  $  7,689  
Gross margin  57%  73%  58%  73% 
Adjustments to gross profit:         
Change in deferred revenue $  (194) $  (8) $  (251) $  (79) 
Change in deferred costs(1)  -   -   -   -  
Net change  (194)  (8)  (251)  (79) 
Direct Contribution from billings(1) $  1,813  $  3,671  $  3,945  $  7,610  
Direct Contribution Margin from billings(1)  55%  73%  56%  73% 
          
Total         
Gross profit $  16,769  $  23,274  $  32,580  $  42,025  
Gross margin  43%  45%  43%  45% 
Adjustments to gross profit:         
Change in deferred revenue $  31,065  $  7,686  $  60,196  $  12,728  
Change in deferred costs(1)  (20,767)  (3,847)  (40,815)  (6,704) 
Net change  10,298   3,839   19,381   6,024  
Direct Contribution from billings(1) $  27,067  $  27,113  $  51,961  $  48,049  
Direct Contribution Margin from billings(1)  39%  45%  38%  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, direct contribution from billings and direct contribution margin from billings do not reflect all costs associated with billings. 
          

 

Telenav, Inc. 
Unaudited Reconciliation of Non-GAAP Adjustments 
(in thousands) 
           
Reconciliation of Net Loss to Adjusted EBITDA 
          
  Three Months Ended Six Months Ended 
  December 31, December 31, 
   2017   2016   2017   2016  
           
Net loss $  (15,652) $  (11,423) $  (31,750) $  (20,758) 
          
Adjustments:         
Legal settlement and contingencies    60     6,424     310     6,424  
Deferred rent reversal due to lease termination  -   -     (538)  -  
Tenant improvement allowance recognition due to lease termination  -   -     (582)  -  
Stock-based compensation expense  2,888   1,988   5,368   4,529  
Depreciation and amortization expense  797   623   1,513   1,260  
Other income (expense), net  (218)  (714)  (171)   (1,010) 
Provision for income taxes  26   537   281   142  
Adjusted EBITDA $  (12,099) $  (2,565) $  (25,569) $  (9,413) 
          
Change in deferred revenue  31,065   7,686   60,196   12,728  
Change in deferred costs(1)  (20,767)  (3,847)  (40,815)   (6,704) 
Adjusted EBITDA on billings(1) $  (1,801) $  1,274  $  (6,188) $  (3,389) 
          
          
(1) We expect to incur additional costs in the future due to requirements to provide ongoing provisioning of services such as hosting, monitoring and customer support.  Accordingly, adjusted EBITDA on billings does not reflect all costs associated with billings. 
          

 

Telenav, Inc.
Unaudited Reconciliation of Non-GAAP Adjustments
(in thousands)
         
Reconciliation of Net Loss to Free Cash Flow
         
  Three Months Ended
December 31,
 Six Months Ended
December 31,
   2017   2016   2017   2016 
         
Net loss $  (15,652) $  (11,423) $  (31,750) $  (20,758)
         
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:        
Change in deferred revenue (1)  31,065   7,686   60,196   12,728 
Change in deferred costs (2)  (20,767)  (3,847)  (40,815)  (6,704)
                 
Changes in other operating assets and liabilities  2,259   7,595   3,305   5,686 
Other adjustments (3)  3,736   2,779   5,917   6,149 
Net cash provided by (used in) operating activities  641   2,790   (3,147)  (2,899)
Less: Purchases of property and equipment  (1,064 )  (137)  (3,350)  (531)
Free cash flow $  (423) $  2,653  $  (6,497) $  (3,430)
         
(1) Consists of product royalties, customized software development fees, service 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.   
    

 

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