News

Telenav Reports Third Quarter Fiscal 2020 Financial Results

Third Consecutive Quarter of Double-Digit Revenue Growth and Positive Adjusted EBITDA

Revenue of $64 Million, up 33% YoY; Adjusted EBITDA of $1.6 Million

Cash Balance Grew 43% YoY to $124 Million

SANTA CLARA, Calif.–(BUSINESS WIRE)–Telenav®, Inc. (NASDAQ:TNAV), a leading provider of connected car and location-based products and services, today released its financial results for the third fiscal quarter ended March 31, 2020. In connection with this announcement, the company also posted a supplemental financial results presentation on its website. Please visit Telenav’s investor relations website at http://investor.telenav.com to view the financial results and materials, and additional commentary regarding the information in this release.

“Telenav executed well in a challenging economic environment, driving strong financial results,” said HP Jin, Chairman and CEO of Telenav. “We responded to the pandemic quickly to maintain productivity of our staff and maintain engineering schedules. We also maintained operational discipline and managed costs, thereby positioning the company to win deals that will emerge as the growth of connected vehicles opens new OEM opportunities.”

Financial highlights for the third quarter ended March 31, 2020

  • Total revenue for the third quarter of fiscal 2020 was $64.5 million, an increase of 33% compared with $48.5 million in the third quarter of fiscal 2019. Product revenue for the third quarter of fiscal 2020 was $52.1 million, an increase of 25% compared with $41.7 million in the third quarter of fiscal 2019. Services revenue for the third quarter of fiscal 2020 was $12.4 million, an increase of 82% compared with $6.8 million in the third quarter of fiscal 2019.
  • GAAP gross profit was $29.0 million in the third quarter of fiscal 2020, an increase of 37% compared with $21.1 million in the third quarter of fiscal 2019.
  • Billings, a non-GAAP measure, for the third quarter of fiscal 2020 were $63.5 million, a decrease of 2% compared with $64.6 million in the third quarter of fiscal 2019.
  • GAAP loss from continuing operations for the third quarter of fiscal 2020 was $(1.2) million, compared with $(5.9) million in the third quarter of fiscal 2019.
  • GAAP net loss for the third quarter of fiscal 2020 was $(0.7) million, compared with $(7.5) million for the third quarter of fiscal 2019.
  • Adjusted EBITDA, a non-GAAP measure, for the third quarter of fiscal 2020 was $1.6 million, compared with a loss of $(3.3) million for the third quarter of fiscal 2019.
  • Ending cash, cash equivalents and short-term investments, excluding restricted cash, were $123.7 million as of March 31, 2020, an increase of $24.3 million compared with $99.5 million as of June 30, 2019. This represented cash, cash equivalents and short-term investments of $2.62 per share, based on approximately 47.3 million shares of common stock outstanding as of March 31, 2020. Telenav had no debt as of March 31, 2020.
  • Telenav repurchased approximately 926,000 shares in the third quarter of fiscal 2020 for approximately $5.3 million.

Recent Business Highlights

  • Telenav continued to execute on its connected car platform strategy to capitalize on the $500B connected car market.
  • Telenav achieved Automotive SPICE® Level 2 Certification.
  • Telenav and Alpine have teamed to develop an easy, low-cost aftermarket way to quickly upgrade existing in-vehicle infotainment systems to Telenav’s VIVID™ solution.
  • Telenav increased its investment in MotionAuto, an intelligent, usage-based insurance company, as part of its In-Car Commerce and Communications domain initiatives.
  • 1.2 million Telenav-equipped cars capable of connected services were deployed into the global market during the quarter ended March 31, 2020, bringing total cumulative connected units deployed to date to 18.6 million and total cumulative auto units deployed to 28.4 million.

The company intends to provide information regarding its ongoing business and outlook for its fourth quarter fiscal 2020 on the conference call.

Conference Call and Quarterly Commentary

Telenav will host an investor conference call and live webcast on Thursday, May 7, 2020 at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). Management has posted a supplemental financial results presentation in combination with Telenav’s Third Quarter Fiscal Year 2020 Financial Results press release on its investor relations website. To listen to the webcast and view Telenav’s quarterly presentation, please visit Telenav’s investor relations website at http://investor.telenav.com. Listeners can also access the conference call by dialing 866-548-4713 (toll-free, domestic only) or 323-794-2093 (domestic and international toll) and entering pass code 8265409. A replay of the conference call will be available for two weeks beginning approximately two hours after the call’s 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 8265409.

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, 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.

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 or cost and may require additional services or costs 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 legal settlements and contingencies and merger and acquisition, or M&A, transaction expenses, 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, 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. M&A transaction expenses relate primarily to costs associated with transactions, such as the inMarket Transaction and the Grab Transaction.

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 and 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.

In the conference call associated with this press release, or in the supplemental investor presentation on its website, Telenav may provide guidance for the fourth quarter of fiscal 2020 on a non-GAAP basis for billings and adjusted EBITDA. Telenav does not provide reconciliations of these forward-looking non-GAAP financial measures 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 net loss per diluted share and 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: the impact of the COVID-19 on business activity, including but not limited to the shutdown of manufacturing operations by Ford, GM and other automobile manufacturer customers, consumer demand for new vehicles and the Company’s operations; when Ford, GM and other automobile manufacturer partners will resume partial or 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, including specifically related to the Company’s transaction with Grab Holdings; 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 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 ability to remediate its material weaknesses in its internal control over financial reporting and disclosures, and timely demonstrate such mitigation, including as it may relate to the Company’s recognition of revenue, including under the Grab Transaction; the Company’s dependence on a limited number of automobile manufacturers and tier ones for a substantial portion of its revenue and the impact of labor stoppages on those automobile manufacturers’ and tier ones’ ability to produce vehicles; reductions in demand for automobiles; potential impacts of automobile manufacturers and tier ones 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; 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-K for the fiscal year ended June 30, 2019 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 the company’s SEC filings carefully and with the understanding that actual future results may be materially different from what Telenav expect.

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 2020 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.

Telenav, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except par value)
(unaudited)
March 31, June 30,

 

2020

 

 

2019

 

 
Assets
Current assets:
Cash and cash equivalents

$

16,476

 

$

27,275

 

Short-term investments

 

107,273

 

 

72,203

 

Accounts receivable, net of allowances of $6 and $7 at March 31, 2020 and
June 30, 2019, respectively

 

41,926

 

 

69,781

 

Restricted cash

 

1,541

 

 

1,950

 

Deferred costs

 

29,744

 

 

18,752

 

Prepaid expenses and other current assets

 

3,477

 

 

3,784

 

Assets of discontinued operations, non-current

 

 

 

6,330

 

Total current assets

 

200,437

 

 

200,075

 

Property and equipment, net

 

5,411

 

 

5,583

 

Operating lease right-of-use assets

 

7,909

 

 

 

Deferred income taxes, non-current

 

1,081

 

 

998

 

Goodwill and intangible assets, net

 

14,255

 

 

15,701

 

Deferred costs, non-current

 

52,954

 

 

61,050

 

Other assets

 

33,504

 

 

1,414

 

Assets of discontinued operations, non-current

 

 

 

12,194

 

Total assets

$

315,551

 

$

297,015

 

Liabilities and stockholders’ equity
Current liabilities:
Trade accounts payable

$

24,082

 

$

16,061

 

Accrued expenses

 

36,208

 

 

48,899

 

Operating lease liabilities

 

3,161

 

 

 

Deferred revenue

 

43,841

 

 

31,270

 

Income taxes payable

 

537

 

 

800

 

Liabilities of discontinued operations

 

 

 

3,373

 

Total current liabilities

 

107,829

 

 

100,403

 

Deferred rent, non-current

 

 

 

1,266

 

Operating lease liabilities, non-current

 

5,785

 

 

 

Deferred revenue, non-current

 

99,361

 

 

103,865

 

Other long-term liabilities

 

667

 

 

811

 

Liabilities of discontinued operations, non-current

 

 

 

30

 

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; 47,288 and 46,911
shares issued and outstanding at March 31, 2020 and June 30, 2019, respectively

 

47

 

 

47

 

Additional paid-in capital

 

189,387

 

 

182,349

 

Accumulated other comprehensive loss

 

(2,004

)

 

(1,477

)

Accumulated deficit

 

(85,521

)

 

(90,279

)

Total stockholders’ equity

 

101,909

 

 

90,640

 

Total liabilities and stockholders’ equity

$

315,551

 

$

297,015

 

 
Telenav, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)
 
Three Months Ended Nine Months Ended
March 31, March 31,

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 
Revenue:
Product

$

52,106

 

$

41,723

 

$

169,639

 

$

124,050

 

Services

 

12,390

 

 

6,817

 

 

35,361

 

 

20,902

 

Total revenue

 

64,496

 

 

48,540

 

 

205,000

 

 

144,952

 

Cost of revenue:
Product

 

27,664

 

 

23,532

 

 

86,087

 

 

72,135

 

Services

 

7,859

 

 

3,917

 

 

20,009

 

 

11,762

 

Total cost of revenue

 

35,523

 

 

27,449

 

 

106,096

 

 

83,897

 

Gross profit

 

28,973

 

 

21,091

 

 

98,904

 

 

61,055

 

Operating expenses:
Research and development

 

21,617

 

 

19,322

 

 

61,997

 

 

55,580

 

Sales and marketing

 

2,166

 

 

2,167

 

 

6,246

 

 

5,535

 

General and administrative

 

6,403

 

 

5,523

 

 

20,118

 

 

16,694

 

Legal settlements and contingencies

 

 

 

 

 

 

 

650

 

Total operating expenses

 

30,186

 

 

27,012

 

 

88,361

 

 

78,459

 

Income (loss) from operations

 

(1,213

)

 

(5,921

)

 

10,543

 

 

(17,404

)

Other income, net

 

1,088

 

 

581

 

 

2,245

 

 

2,703

 

Income (loss) from continuing operations before provision for income taxes

 

(125

)

 

(5,340

)

 

12,788

 

 

(14,701

)

Provision for income taxes

 

505

 

 

194

 

 

1,121

 

 

1,036

 

Equity in net (income) loss of equity method investees

 

103

 

 

 

 

(694

)

 

 

Income (loss) from continuing operations

 

(733

)

 

(5,534

)

 

12,361

 

 

(15,737

)

Discontinued operations:
Income (loss) from operations of Advertising business, net of tax

 

 

 

(1,947

)

 

832

 

 

(3,895

)

Loss from sale of Advertising business

 

 

 

 

 

(4,874

)

 

 

Loss on discontinued operations

 

 

 

(1,947

)

 

(4,042

)

 

(3,895

)

Net income (loss)

$

(733

)

$

(7,481

)

$

8,319

 

$

(19,632

)

 
Basic income (loss) per share:
Income (loss) from continuing operations

$

(0.02

)

$

(0.12

)

$

0.26

 

$

(0.35

)

Loss on discontinued operations

 

 

 

(0.04

)

 

(0.08

)

 

(0.09

)

Net income (loss)

$

(0.02

)

$

(0.16

)

$

0.17

 

$

(0.43

)

Diluted income (loss) per share:
Income (loss) from continuing operations

$

(0.02

)

$

(0.12

)

$

0.25

 

$

(0.35

)

Loss on discontinued operations

 

 

 

(0.04

)

 

(0.08

)

 

(0.09

)

Net income (loss)

$

(0.02

)

$

(0.16

)

$

0.17

 

$

(0.43

)

Weighted average shares used in computing income (loss) per share
Basic

 

47,902

 

 

45,585

 

 

48,053

 

 

45,347

 

Diluted

 

47,902

 

 

45,585

 

 

49,022

 

 

45,347

 

 
Telenav, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
 
Nine Months Ended
March 31,

 

2020

 

 

2019

 

Operating activities
Net income (loss)

$

8,319

 

$

(19,632

)

Loss on discontinued operations

 

4,042

 

 

3,895

 

Income (loss) from continuing operations

 

12,361

 

 

(15,737

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Stock-based compensation expense

 

5,189

 

 

5,611

 

Depreciation and amortization

 

2,685

 

 

2,982

 

Operating lease amortization net of accretion

 

2,153

 

 

 

Accretion of net premium on short-term investments

 

157

 

 

(15

)

Unrealized gain on non-marketable equity investments

 

 

 

(1,260

)

Equity in net income of equity method investees

 

(694

)

 

 

Gain on sale of intellectual property and workforce to Grab

 

(45

)

Non-cash revenue associated with grant of perpetual license to Grab

 

(5,831

)

 

 

Other

 

(38

)

 

(22

)

Changes in operating assets and liabilities:
Accounts receivable

 

28,334

 

 

(11,581

)

Deferred income taxes

 

(110

)

 

209

 

Deferred costs

 

(2,924

)

 

(13,934

)

Prepaid expenses and other current assets

 

1,463

 

 

(162

)

Other assets

 

(21

)

 

(123

)

Trade accounts payable

 

7,913

 

 

12,020

 

Accrued expenses and other liabilities

 

(13,910

)

 

(1,728

)

Income taxes payable

 

(252

)

 

160

 

Deferred rent

 

 

 

488

 

Operating lease liabilities

 

(2,791

)

 

 

Deferred revenue

 

8,042

 

 

29,281

 

Net cash provided by operating activities

 

41,681

 

 

6,189

 

Investing activities
Purchases of property and equipment

 

(1,320

)

 

(956

)

Purchases of short-term investments

 

(67,347

)

 

(31,044

)

Purchases of long-term investments

 

(9,500

)

 

 

Proceeds from sales and maturities of short-term investments

 

31,789

 

 

34,214

 

Net cash provided by (used in) investing activities

 

(46,378

)

 

2,214

 

Financing activities
Proceeds from exercise of stock options

 

8,390

 

 

1,356

 

Tax withholdings related to net share settlements of restricted stock units

 

(1,230

)

 

(1,831

)

Repurchase of common stock

 

(9,353

)

 

(1,303

)

Net cash used in financing activities

 

(2,193

)

 

(1,778

)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

(343

)

 

(401

)

Net increase (decrease) in cash, cash equivalents and restricted cash, continuing operations

 

(7,233

)

 

6,224

 

Net cash used in discontinued operations

 

(3,975

)

 

(3,154

)

Cash, cash equivalents and restricted cash, beginning of period

 

29,225

 

 

20,099

 

Cash, cash equivalents and restricted cash, end of period

$

18,017

 

$

23,169

 

Supplemental disclosure of cash flow information
Income taxes paid, net

$

1,626

 

$

730

 

Non-cash investing: Investment in Market Media LLC acquired in exchange for sale of Advertising business

$

15,600

 

$

 

Non-cash sale of assets to Grab in exchange for equity investment and software

$

7,012

 

$

 

Cash flow from discontinued operations:
Net cash used in operating activities

$

(3,569

)

$

(3,154

)

Net cash used in financing activities

 

(406

)

 

 

Net cash transferred from continuing operations

 

3,975

 

 

3,154

 

Net change in cash and cash equivalent from discontinued operation

 

 

 

 

Cash and cash equivalent of discontinued operations, beginning of period

 

 

 

 

Cash and cash equivalent of discontinued operations, end of period

$

 

$

 

Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheets
Cash and cash equivalents

$

16,476

 

$

21,254

 

Restricted cash

 

1,541

 

 

1,915

 

Total cash, cash equivalents and restricted cash

$

18,017

 

$

23,169

 

 

Contacts

Investor Relations:

Bishop IR

Mike Bishop

415-894-9633

IR@telenav.com

Media:

Raphel Finelli

408-667-5970

raphelf@telenav.com

Read full story here

error: Content is protected !!