February 2, 2016

Telenav Reports Second Quarter Fiscal 2016 Financial Results

Automotive Revenue of $31.8 million, up 32% year-over-year
Location-based Advertising Revenue of $6.7 million, up 41% year-over-year
Total Billings of $48.4 million, up 14% year-over-year

SUNNYVALE, Calif., Feb. 02, 2016 (GLOBE NEWSWIRE) -- Telenav®, Inc. (NASDAQ:TNAV), a leader in connected car services, today announced its financial results for the second quarter that ended December 31, 2015.

"We delivered solid results, achieving sequential and year-over-year growth in both revenue and billings, for the second quarter of fiscal 2016," said HP Jin, chairman and CEO of Telenav. "We continued to strengthen our relationships with our current auto OEM partners within connected navigation as well as exploring new areas of partnerships. In location-based advertising, we delivered 41% year-over-year revenue growth while significantly lowering our operating losses. We remain focused on our long-term goals of steady growth and profitability."

Financial Highlights

  • Total revenue for the second quarter of fiscal 2016 was $45.3 million, compared with money>$44.1 million in the first quarter of fiscal 2016 and $39.8 million in the second quarter of fiscal 2015.
  • Automotive revenue was $31.8 million, or 70 percent of total revenue, for the second quarter of fiscal 2016, compared with $31.7 million, or 72 percent of total revenue, in the first quarter of fiscal 2016 and $24.1 million, or 61 percent of total revenue, for the second quarter of fiscal 2015.
  • Advertising revenue was $6.7 million, or 15 percent of total revenue, for the second quarter of fiscal 2016, compared with $4.9 million, or 11 percent of total revenue, for the first quarter of fiscal 2016, and $4.7 million, or 12 percent of total revenue, for the second quarter of fiscal 2015.
  • Billings for the second quarter of fiscal 2016 was $48.4 million, compared with $47.9 million in the first quarter of fiscal 2016 and $42.7 million in the second quarter of fiscal 2015.
  • Deferred revenue at December 31, 2015 was $13.9 million, compared with $10.7 million at September 30, 2015 and $5.2 million at December 31, 2014.
  • Operating expenses for the second quarter of fiscal 2016 were $27.6 million, compared with $31.2 million in first quarter of fiscal 2016 and $29.6 million in the second quarter of fiscal 2015.
  • GAAP net loss for the second quarter of fiscal 2016 was ($6.6) million, or ($0.16) per diluted share, compared with a GAAP net loss of ($10.8) million, or ($0.27) per diluted share, in the first quarter of fiscal 2016 and a GAAP net loss of ($2.7) million, or ($0.07) per diluted share, for the second quarter of fiscal 2015.
  • Adjusted EBITDA for the second quarter of fiscal 2016 was a ($4.1) million loss after adjusting our GAAP net loss for the impact of stock-based compensation expense, depreciation, and amortization expense, reversals of accruals related to restructuring and deferred rent resulting from our lease termination, legal contingencies, interest income, other income (expense), net and provision (benefit) for income taxes, compared with a ($6.4) million loss in the first quarter of fiscal 2016 and a ($4.8) million loss in the second quarter of fiscal 2015.
  • Ending cash, cash equivalents and short-term investments, excluding restricted cash, were $110.3 million, and Telenav had no debt as of December 31, 2015. This represented cash, cash equivalents and short-term investments of $2.67 per share, based on 41.4 million shares of common stock outstanding as of December 31, 2015.

Business Outlook

For the third fiscal quarter ending March 31, 2016, Telenav offers the following guidance, which is predicated on management's judgments.

  • Total revenue is expected to be $44 to $46 million;
  • Automotive revenue is expected to be 73 to 75 percent of total revenue, including approximately $1.5 million of customized software revenue;
  • Advertising revenue is expected to be 11 to 12 percent of total revenue;
  • Billings are expected to be $49 to $51 million;
  • GAAP gross margin is expected to be approximately 45 percent;
  • Non-GAAP gross margin is expected to be approximately 46 percent;
  • GAAP operating expenses are expected to be $30 to $31 million;
  • Non-GAAP operating expenses are expected to be $27 to $28 million, and represent operating expenses adjusted for the impact of approximately $3.0 million of stock-based compensation expense;
  • Estimated provision (benefit) for income taxes will be de minimis;
  • GAAP net loss is expected to be ($9.0) to ($10.0) million;
  • Diluted GAAP net loss per share is expected to be ($0.21) to ($0.24);
  • Non-GAAP net loss is expected to be ($6.0) to ($7.0) million, and represents GAAP net loss adjusted for the add back of approximately $3.0 million of stock-based compensation expense;
  • Non-GAAP diluted net loss per share is expected to be ($0.14) to ($0.17);
  • Adjusted EBITDA is expected to be ($6.0) to ($7.0) million , and represents GAAP net loss adjusted for the impact of approximately $3.0 million of stock-based compensation expense, and approximately $1.0 million of depreciation and amortization expense, interest income, other income (expense), and provision (benefit) from income taxes; and
  • Weighted average diluted shares outstanding are expected to be approximately 42 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.

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 888-438-5491 (toll-free, domestic only) or 719-457-2727 (domestic and international toll) and enter pass code 854675. 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 854675.

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, non-GAAP net income (loss), non-GAAP net income (loss) per share, non-GAAP gross margin, non-GAAP operating expenses, and adjusted EBITDA 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 revenue recognized plus the change in deferred revenue from the beginning to the end of the period. We consider billings to be a useful metric for management and investors because billings drive deferred revenue, which is an important indicator of the health and viability of our 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 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. Second, we may calculate billings in a manner that is different from peer companies that report similar financial measures. When we use these measures, we compensate for these limitations by providing specific information regarding revenue and evaluating billings together with revenue calculated in accordance with GAAP. We have also provided a breakdown of the calculation of the change in deferred revenue by segment, which is added to revenue in calculating our non-GAAP metric of billings. In connection with our presentation of the change in deferred revenue, we have 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 our operating results, we believe these metrics are useful in evaluating cash flow.

Non-GAAP net loss and non-GAAP gross margin exclude the impact of stock-based compensation expense, capitalized software and developed technology amortization expense, and other applicable items such as legal contingencies, changes in valuation allowance on certain deferred tax assets, restructuring accruals and reversals, and deferred rent reversals due to lease termination, net of taxes or tax benefits, as applicable to each non-GAAP financial metric. Stock-based compensation expense relates to equity incentive awards granted to our employees, directors, and consultants. Stock-based compensation expense has been and will continue to be a significant recurring non-cash expense for Telenav that we exclude from non-GAAP financial metrics. Legal contingencies represent settlements and offers made to settle patent litigation cases in which we are defendants and royalty disputes. Deferred rent reversals represents the reversal of our deferred rent liability that is no longer required due to our facility lease termination. Capitalized software amortization expense represents internal software costs that were capitalized and are charged to expense as the software is used in our operations. Developed technology amortization expense relates to the amortization of acquired intangible assets. Our non-GAAP tax rate differs from the tax rate due to the elimination of any tax effect of stock-based compensation expense, capitalized software and developed technology amortization expense, legal contingencies, restructuring accruals and reversals, and other applicable items that are being eliminated to arrive at the non-GAAP net loss.

Adjusted EBITDA measures our GAAP net loss excluding the impact of stock-based compensation expense, depreciation, amortization, interest income, other income (expense), provision (benefit) for income taxes, and other applicable items such as legal contingencies, restructuring accruals and reversals, and deferred rent reversals due to lease termination. We believe this 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, while generally a measure of profitability, can also represent a loss.

We 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 we are including such presentation in our non-GAAP reporting results. This presentation reflects operating expenses that are directly attributable to the advertising business. We are 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, comprise operating expenses which are not fully attributable to either. 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.

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 our 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 General Motors ("GM") and Toyota and to support GM and Toyota and their customers; adoption by vehicle purchasers of Scout for Cars; Telenav's dependence on a limited number of automotive manufacturers and original equipment manufacturers ("OEM") for a substantial portion of its revenue; Telenav's ability to develop and implement products for Ford's Sync 3 system; automotive manufacturers, automotive OEM, and consumer acceptance of Scout; Telenav's success in achieving additional design wins from OEM and automotive manufacturers and the delivery dates of automobiles including Telenav's products; Telenav's ability to grow and scale its advertising through the retention of additional, productive sales personnel, new advertising sales and technology delivery; Telenav incurring losses; competition from other market participants who may provide comparable services to subscribers without charge; Telenav's limited history in the automotive navigation market and the advertising market; the timing of new product releases and vehicle production by Telenav's automotive customers, including inventory procurement and fulfillment; Telenav's ability to develop search products with Nuance; possible warranty claims, and the impact on consumer perception of its brand; Telenav's ability to develop and support products including 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 we may not be able to realize our deferred tax assets and may have to take a reserve against them; Telenav's ability to qualify for tax refunds and credits; and macroeconomic and political conditions in the US and abroad, in particular China. We discuss these risks in greater detail in "Risk factors" and elsewhere in our Form 10-Q for the three months ended September 30, 2015 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 our management's beliefs and assumptions only as of the date made. You should review our SEC filings carefully and with the understanding that our actual future results may be materially different from what we expect.

About Telenav

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. Fortune 500 advertisers and local advertisers can now reach millions of users with Telenav’s highly-targeted advertising platform. To learn more about how Telenav’s location platform powers personalized navigation, mapping, big data intelligence, social driving, and location-based advertising, visit www.telenav.com.

Telenav is a leading provider of connected car and location-based software and services, focused on transforming life on the go for people with safe, convenient, and delightful in-vehicle digital experiences. Our software and services run on tens of millions of vehicles from some of the world’s largest automotive manufacturers. To learn more about how Telenav is enabling automotive companies deliver unique user experiences in their vehicles visit www.telenav.com.

Copyright 2021 Telenav, Inc. All Rights Reserved.

“Telenav” and the “Telenav” logo 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.

"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.

“Telenav,” “Scout,” “Thinknear” and the Telenav, Scout and Thinknear 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.

“Telenav®,” “Vivid™,” “Scout®,” “Thinknear®” and the Telenav®, VIVID™, Scout® and Thinknear™ logos are 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.

“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 and Thinknear, as well as their respective 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.

Telenav, OpenStreetCam and the “Telenav” logo are trademarks of Telenav, Inc. Unless otherwise noted, all other trademarks, service marks, and logos used in this press release are the trademarks, service marks or logos of their respective owners.

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Media Contact

Michelle Del Rio or Liz Pandzich

Airfoil Group on Behalf of Telenav

408-380-7007telenav@airfoilgroup.com

Investor Relations

Cynthia Hiponia or Erin Rheaume

The Blueshirt Group for Telenav, Inc.

408-990-1265IR@telenav.com
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