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 OpenStreetMaps (“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. 

TNAV-F

TNAV-C



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. 

 


            

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