Telenav®, Inc. (NASDAQ:TNAV), a leading provider of
connected-car and location-based services, today released its
financial results for the second fiscal quarter ended Dec. 31,
2020. In light of the previously announced proposed acquisition of
Telenav by V99, Inc., Telenav will not host a conference call to
discuss these financial results or provide outlook regarding future
operating performance or conditions.
Financial Highlights for the Second Quarter Ended Dec. 31,
2020
- Total revenue for the second quarter of fiscal 2021 was $65.9
million, compared with $73.9 million in the second quarter of
fiscal 2020.
- Services revenue for the second quarter of fiscal 2021 was
$12.4 million, compared with $12.3 million in the second quarter of
fiscal 2020.
- GAAP gross profit for the second quarter of fiscal 2021 was
$27.7 million, compared with $40.2 million in the second quarter of
fiscal 2020.
- Billings, a non-GAAP measure, for the second quarter of fiscal
2021 were $60.3 million, compared with $72.7 million in the second
quarter of fiscal 2020.
- GAAP net loss for the second quarter of fiscal 2021 was $(0.1)
million, compared with GAAP net income of $13.0 million for the
second quarter of fiscal 2020.
- Adjusted EBITDA, a non-GAAP measure, for the second quarter of
fiscal 2021 was $5.0 million, compared with $14.3 million for the
second quarter of fiscal 2020.
- Ending cash, cash equivalents and short-term investments,
excluding restricted cash, were $113.0 million as of Dec. 31, 2020.
This represented cash, cash equivalents and short-term investments
of $2.35 per share, based on 48 million shares of common stock
outstanding as of Dec. 31, 2020. Telenav had no debt as of Dec. 31,
2020.
Use of Non-GAAP Financial Measures
Telenav prepares its financial statements in accordance with
generally accepted accounting principles for the United States, or
GAAP. The non-GAAP financial measures, such as billings, change in
deferred revenue, change in deferred costs, adjusted EBITDA, and
free cash flow included in this press release are different from
those otherwise presented under GAAP. Telenav has provided these
measures in addition to GAAP financial results because management
believes these non-GAAP measures help provide a consistent basis
for comparison between periods that are not influenced by certain
items and, therefore, may be 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.
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.
Billings equals GAAP revenue recognized plus the change in
deferred revenue from the beginning to the end of the applicable
period. 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 its customized software
solutions whereby customized engineering fees are earned. As the
company enters into more hybrid and brought-in navigation programs,
deferred revenue and deferred costs become larger components of its
operating results, so Telenav believes these metrics are useful in
evaluating cash flows.
Telenav considers billings to be a useful metric for management
and investors because billings drive revenue and deferred revenue,
which is an important indicator of its business. There are a number
of limitations related to the use of billings versus revenue
calculated in accordance with GAAP. First, billings include amounts
that have not yet been recognized as revenue and may require
additional services to be provided over contracted service periods.
For example, billings related to certain brought-in solutions
cannot be fully recognized as revenue in a given period due to
requirements for ongoing map updates and provisioning of services
such as hosting, monitoring, customer support and, for certain
customers, additional period content and associated technology
costs. Second, we may calculate billings in a manner that is
different from peer companies that report similar financial
measures, making comparisons between companies more difficult.
Accordingly, when Telenav uses this measure, it attempts to
compensate for these limitations by providing specific information
regarding billings and how they relate to revenue calculated in
accordance with GAAP.
Adjusted EBITDA measures GAAP net loss adjusted for discontinued
operations and excluding the impact of stock-based compensation
expense, depreciation and amortization, other income (expense) net,
provision (benefit) for income taxes, and other applicable items
such as merger and acquisition expense and legal settlements and
contingencies. Stock-based compensation expense relates to equity
incentive awards granted to its employees, directors, and
consultants. Merger and acquisition expense represents costs
associated with the V99 Merger Agreement. Legal settlements and
contingencies represent settlements, offers made to settle, or loss
accruals relating to litigation or other disputes in which Telenav
is a party or the indemnitor of a party.
Adjusted EBITDA, while generally a measure of profitability, can
also represent a loss. Adjusted EBITDA is a key measure used by
Telenav’s management and board of directors to understand and
evaluate Telenav’s core operating performance and trends, to
prepare and approve its 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. Accordingly, Telenav
believes that adjusted EBITDA generally provides useful information
to investors and others in understanding and evaluating our
operating results in the same manner as Telenav’s management and
board of directors.
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.
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 these
documents or communications due to a number of risks and
uncertainties. These potential risks and uncertainties include,
among others: the risk that the proposed transaction with V99, Inc.
may not be completed in a timely manner or at all, which may
adversely affect Telenav’s business and the price of the common
stock of Telenav; the failure to satisfy any of the conditions to
the consummation of the proposed transaction, including the
adoption of the merger agreement by the stockholders of Telenav and
the receipt of required regulatory approvals; the occurrence of any
event, change or other circumstance that could give rise to the
termination of the merger agreement; the effect of the announcement
or pendency of the proposed transaction on Telenav’s business
relationships, operating results and business generally; the risks
that the proposed transaction disrupts current plans and operations
and the potential difficulties in employee retention as a result of
the proposed transaction; the risks related to diverting
management’s attention from Telenav’s ongoing business operations;
the outcome of any legal proceedings against Telenav or the special
committee of its independent directors related to the merger
agreement or the proposed transaction; unexpected costs, charges or
expenses resulting from the proposed transaction; the impact of the
COVID-19 pandemic on business activity, including but not limited
to reduced consumer demand for new vehicles; whether Ford, GM and
other automobile manufacturer partners will be required to suspend
production in response to spikes in COVID-19 cases and if so, when
and to what extent they will be able to resume full production and
the impact the continued period of reduced volume of new vehicles
being produced will have on our revenue and operating results; the
ensuing economic recession; the Company’s ability to achieve future
revenue currently estimated under customer engagements, including
the Company’s ability to determine, achieve and accurately
recognize revenue under customer engagements; the Company’s ability
to develop and implement products for Ford, GM and Toyota and to
support Ford, GM and Toyota and their customers; the impact of
Ford’s announcement regarding the elimination of various sedans in
North America over the near term; the impact of tariffs on sales of
automobiles in the United States and other markets; the Company’s
success in extending its contracts for current and new generation
of products with its existing automobile manufacturers and tier
ones, particularly Ford; the impact of Ford’s announcement
regarding its partnerships with Garmin and Google Automotive
Services; the impact of GM’s announcement regarding Google
Automotive Services; the Company’s ability to achieve additional
design wins and the delivery dates of automobiles including the
Company’s products; adoption by vehicle purchasers of Scout GPS
Link; the Company’s dependence on a limited number of automobile
manufacturers and tier ones for a substantial portion of its
revenue, such as Ford and GM; reductions in demand for automobiles
in general and specifically for Ford and GM vehicles; potential
impacts of automobile manufacturers and tier ones, in particular
Ford and GM, including competitive capabilities in their vehicles
such as Apple CarPlay and Android Auto; the Company’s continued
reporting of losses and operating expenses in excess of
expectations; the timing of new product releases and vehicle
production by the Company’s automotive customers, including
inventory procurement and fulfillment; possible warranty claims,
and the impact on consumer perception of its brand; the Company’s
ability to perform under its initiatives with Amazon and Microsoft,
and benefit from those initiatives; and the potential that the
Company may not be able to realize its deferred tax assets and may
have to take a reserve against them. Telenav discusses these risks
in greater detail in “Risk Factors” and elsewhere in its Form 10-Q
for the fiscal quarter ended September 30, 2020 and other filings
with the U.S. Securities and Exchange Commission (“SEC”), including
any subsequent Annual Report on Form 10-K or Quarterly Report on
Form 10-Q, which are available on the SEC’s website at www.sec.gov.
Also, forward-looking statements represent management’s beliefs and
assumptions only as of the date made. You should review the
company’s SEC filings carefully and with the understanding that
actual future results may be materially different from what Telenav
expects. Given these uncertainties, you should not place undue
reliance on these forward-looking statements.
ABOUT TELENAV, INC.
Telenav is a leading provider of connected car and
location-based services, focused on transforming life on the go for
people - before, during, and after every drive. Leveraging our
location platform, we enable our customers to deliver custom
connected car and mobile experiences. 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 2021 Telenav, Inc. All Rights Reserved.
Telenav and the “Telenav” logo are registered trademarks and
“VIVID” is a trademark of Telenav, Inc. All rights reserved. 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. Condensed Consolidated Balance Sheets
(in thousands, except par value) (unaudited)
December 31,
June 30,
2020
2020
Assets Current assets: Cash and cash equivalents
$
37,252
$
20,518
Short-term investments
75,739
90,315
Accounts receivable, net of allowances of $34 and $5 at December
31, 2020 and June 30, 2020, respectively
44,026
34,542
Restricted cash
1,539
1,494
Deferred costs
20,697
26,121
Prepaid expenses and other current assets
4,893
4,505
Total current assets
184,146
177,495
Property and equipment, net
3,154
4,319
Operating lease right-of-use assets
8,435
7,067
Deferred income taxes, non-current
1,463
1,515
Goodwill and intangible assets, net
14,255
14,255
Deferred costs, non-current
50,825
54,548
Other assets
43,641
34,552
Total assets
$
305,919
$
293,751
Liabilities and stockholders’ equity Current liabilities:
Trade accounts payable
$
32,172
$
12,291
Accrued expenses
30,776
36,210
Operating lease liabilities
3,539
2,786
Deferred revenue
32,816
37,973
Income taxes payable
473
715
Total current liabilities
99,776
89,975
Operating lease liabilities, non-current
5,857
5,191
Deferred revenue, non-current
95,182
100,970
Other long-term liabilities
688
645
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; 48,000
and 47,342 shares issued and outstanding at December 31, 2020 and
June 30, 2020, respectively
48
47
Additional paid-in capital
196,796
192,170
Accumulated other comprehensive loss
(330
)
(477
)
Accumulated deficit
(92,098
)
(94,770
)
Total stockholders’ equity
104,416
96,970
Total liabilities and stockholders’ equity
$
305,919
$
293,751
Telenav, Inc. Condensed Consolidated Statements of
Operations (in thousands, except per share amounts)
(unaudited)
Three Months Ended
Six Months Ended
December 31,
December 31,
2020
2019
2020
2019
Revenue: Product
$
53,449
$
61,543
$
110,258
$
117,533
Services
12,405
12,332
25,192
22,971
Total revenue
65,854
73,875
135,450
140,504
Cost of revenue: Product
31,098
26,434
63,628
58,423
Services
7,030
7,288
14,583
12,150
Total cost of revenue
38,128
33,722
78,211
70,573
Gross profit
27,726
40,153
57,239
69,931
Operating expenses: Research and development
18,528
19,717
37,514
40,380
Sales and marketing
1,677
2,134
3,673
4,080
General and administrative
9,448
6,428
15,960
13,715
Total operating expenses
29,653
28,279
57,147
58,175
Income (loss) from operations
(1,927
)
11,874
92
11,756
Other income, net
521
596
1,235
1,157
Income (loss) from continuing operations before provision (benefit)
for income taxes
(1,406
)
12,470
1,327
12,913
Provision (benefit) for income taxes
(67
)
205
(53
)
616
Equity in net (income) of equity method investees
(1,279
)
(797
)
(1,895
)
(797
)
Income (loss) from continuing operations
(60
)
13,062
3,275
13,094
Loss on discontinued operations
-
(56
)
-
(4,042
)
Net income (loss)
$
(60
)
$
13,006
$
3,275
$
9,052
Basic income (loss) per share: Income (loss) from continuing
operations
$
(0.00
)
$
0.27
$
0.07
$
0.27
Loss on discontinued operations
-
-
-
(0.08
)
Net income (loss)
$
(0.00
)
$
0.27
$
0.07
$
0.19
Diluted income (loss) per share: Income (loss) from continuing
operations
$
(0.00
)
$
0.27
$
0.07
$
0.27
Loss on discontinued operations
-
-
-
(0.08
)
Net income (loss)
$
(0.00
)
$
0.27
$
0.07
$
0.18
Weighted average shares used in computing income (loss) per share
Basic
47,825
48,475
47,526
48,127
Diluted
47,825
48,821
48,151
49,257
Telenav, Inc. Condensed Consolidated Statements of Cash
Flows (in thousands) (unaudited) Six
Months EndedDecember 31,
2020
2019
Operating activities Net income
$
3,275
$
9,052
Loss on discontinued operations
-
4,042
Income from continuing operations
3,275
13,094
Adjustments to reconcile income from continuing operations to net
cash provided by operating activities: Stock-based compensation
expense
5,497
3,230
Depreciation and amortization
1,426
1,856
Operating lease amortization, net of accretion
1,727
1,321
Accretion of net premium on short-term investments
170
75
Unrealized gain on non-marketable equity investments
-
(62
)
Equity in net (income) of equity method investees
(1,895
)
(797
)
Other
(346
)
(1
)
Changes in operating assets and liabilities: Accounts receivable
(9,160
)
25,835
Deferred income taxes
154
(409
)
Deferred costs
9,280
(1,961
)
Prepaid expenses and other current assets
(514
)
(3,992
)
Other assets
(406
)
21
Trade accounts payable
19,874
(15,054
)
Accrued expenses and other liabilities
(5,755
)
3,945
Income taxes payable
(258
)
130
Operating lease liabilities
(1,673
)
(1,754
)
Deferred revenue
(11,449
)
9,036
Net cash provided by operating activities
9,947
34,513
Investing activities Purchases of property and equipment
(155
)
(1,078
)
Purchases of short-term investments
(10,703
)
(54,439
)
Purchases of long-term investments
(6,733
)
(3,500
)
Proceeds from sale of long-term investments
447
-
Proceeds from sales and maturities of short-term investments
24,550
24,067
Net cash provided by (used in) investing activities
7,406
(34,950
)
Financing activities Proceeds from exercise of stock options
67
8,306
Tax withholdings related to net share settlements of restricted
stock units
(1,114
)
(1,148
)
Proceeds from issuance of common stock under employee stock
purchase plan
1,204
-
Repurchase of common stock
(1,630
)
(4,019
)
Net cash provided by (used in) financing activities
(1,473
)
3,139
Effect of exchange rate changes on cash, cash equivalents and
restricted cash
899
(85
)
Net increase in cash, cash equivalents and restricted cash,
continuing operations
16,779
2,617
Net cash used in discontinued operations
-
(3,975
)
Cash, cash equivalents and restricted cash, beginning of period
22,012
29,225
Cash, cash equivalents and restricted cash, end of period
$
38,791
$
27,867
Supplemental disclosure of cash flow information Income
taxes paid, net
$
503
$
1,279
Non-cash investing: Investment in inMarket Media, LLC acquired in
exchange for sale of Advertising business
$
-
$
15,600
Cash flow from discontinued operations: Net cash used in operating
activities
$
-
$
(3,569
)
Net cash used in financing activities
-
(406
)
Net cash transferred from continuing operations
-
3,975
Cash and cash equivalents of discontinued operations, end of period
$
-
$
-
Reconciliation of cash, cash equivalents and restricted cash to
the condensed consolidated balance sheets Cash and cash
equivalents
$
37,252
$
26,347
Restricted cash
1,539
1,520
Total cash, cash equivalents and restricted cash
$
38,791
$
27,867
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,
2020
2019
2020
2019
Revenue
$
65,854
$
73,875
$
135,450
$
140,504
Adjustments: Change in deferred revenue
(5,532
)
(1,210
)
(10,945
)
9,036
Billings
$
60,322
$
72,665
$
124,505
$
149,540
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
Three Months Ended Six Months Ended December
31, December 31,
2020
2019
2020
2019
Deferred revenue, end of period
$
127,998
$
144,171
$
127,998
$
144,171
Deferred revenue, beginning of period
133,530
145,381
138,943
135,135
Change in deferred revenue
$
(5,532
)
$
(1,210
)
$
(10,945
)
$
9,036
Deferred costs, end of period
$
71,522
$
81,763
$
71,522
$
81,763
Deferred costs, beginning of period
76,041
77,795
80,669
79,802
Change in deferred costs(1)
$
(4,519
)
$
3,968
$
(9,147
)
$
1,961
(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 map updates and provisioning of
services such as hosting, monitoring, customer support and, for
certain customers, additional period content and associated
technology costs.
Telenav, Inc. Unaudited Reconciliation
of Non-GAAP Adjustments (in thousands) Reconciliation
of Net Income (Loss) to Adjusted EBITDA Three Months
Ended Six Months Ended December 31, December
31,
2020
2019
2020
2019
Net income (loss)
$
(60
)
$
13,006
$
3,275
$
9,052
Loss on discontinued operations
-
56
-
4,042
Income (loss) from continuing operations
(60
)
13,062
3,275
13,094
Adjustments: Merger and acquisition expense
3,603
-
3,603
-
Stock-based compensation expense
2,640
1,478
5,497
3,230
Depreciation and amortization expense
666
934
1,426
1,856
Other income, net
(521
)
(596
)
(1,235
)
(1,157
)
Provision (benefit) for income taxes
(67
)
205
(53
)
616
Equity in net (income) of equity method investees
(1,279
)
(797
)
(1,895
)
(797
)
Adjusted EBITDA
$
4,982
$
14,286
$
10,618
$
16,842
Telenav, Inc. Unaudited Reconciliation of Non-GAAP
Adjustments (in thousands) Reconciliation of Net
Income (Loss) to Free Cash Flow Three Months
Ended Six Months Ended December 31, December
31,
2020
2019
2020
2019
Net income (loss)
$
(60
)
$
13,006
$
3,275
$
9,052
Loss on discontinued operations
-
56
-
4,042
Income (loss) from continuing operations
(60
)
13,062
3,275
13,094
Adjustments to reconcile income (loss) from continuing
operations to net cash provided by operating activities: Change in
deferred revenue (1)
(5,793
)
(1,309
)
(11,449
)
9,036
Change in deferred costs (2)
4,586
(3,940
)
9,280
(1,961
)
Changes in other operating assets and liabilities
13,088
2,240
2,262
8,722
Other adjustments (3)
3,134
2,291
6,579
5,622
Net cash provided by operating activities
14,955
12,344
9,947
34,513
Less: Purchases of property and equipment
(88
)
(617
)
(155
)
(1,078
)
Free cash flow
$
14,867
$
11,727
$
9,792
$
33,435
(1) Consists of product royalties, customized
software development fees, service fees and subscription fees. (2)
Consist 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210205005064/en/
Investor Relations: Bishop IR Mike Bishop 415-894-9633
IR@telenav.com
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