Telenav Files Form 10-Q/A for First Quarter of 2020 and 10-Q for Second Quarter of 2020


Reports additional $9M Revenue, $9M Net Income and $9M Adjusted EBITDA for First Half Fiscal 2020

Guidance for Third Quarter Operational Metrics Remains Unchanged

SANTA CLARA, Calif., Feb. 13, 2020 (GLOBE NEWSWIRE) -- Telenav®, Inc. (NASDAQ:TNAV), a leading provider of connected car and location-based services, announced that on February 12, 2020 it filed with the Securities and Exchange Commission an amended Form 10-Q/A for three months ended September 30, 2019, and its Form 10-Q for the three months ended December 31, 2019.

Subsequent to the issuance of Telenav’s earnings release and related investor presentation on February 6, 2020, and conference call and webcast with investors, Telenav further reviewed and updated its reporting of revenue related to its agreements with Grab Holdings, Inc. and certain of its subsidiaries (the “Grab Transaction”).  This updated revenue affects the three months ended September 30, 2019 and the three and six months ended December 31, 2019, as well as the outlook Telenav provided on February 6, 2020 for the three months ending March 31, 2020.  The Form 10-Q/A for the three months ended September 30, 2019 and Form 10-Q for the three months ended December 31, 2019 reflect the following updated revenue and other effects of the Grab Transaction:

First Quarter of Fiscal 2020

  • Revenue of $66.6 million, an increase of $2.2 million from the previously reported first quarter of fiscal 2020
  • Revenue growth of 44% over the first quarter of fiscal 2019
  • Net loss of $4.0 million, an improvement of $2.2 million from the previously reported first quarter of fiscal 2020
  • Adjusted EBITDA of $2.6 million, an increase of $2.2 million from the previously reported first quarter of fiscal 2020

Second Quarter of Fiscal 2020

  • Revenue of $73.9 million, an increase of $6.5 million from the previously reported second quarter of fiscal 2020
  • Revenue growth of 47% over the second quarter of fiscal 2019.
  • Net income of $13.0 million, an improvement of $6.5 million from the previously reported second quarter of fiscal 2020
  • Adjusted EBITDA of $14.3 million, an increase of $6.5 million from the previously reported second quarter of fiscal 2020

First Half of Fiscal 2020

  • Revenue of $140.5 million, an increase of $8.7 million from the previously reported first half of fiscal 2020
  • Net income of $9.1 million, an improvement of $8.7 million from the previously reported first half of fiscal 2020
  • Adjusted EBITDA of $16.8 million, an increase of $8.7 million from the previously reported first half of fiscal 2020

There was no impact on Telenav’s cash balances at December 31, 2019 as a result of the updates.  Attached at the end of this press release are financial results for the three and six months ended December 31, 2019 that reflect the amounts set forth in the 10-Q/A for the three months ended September 30, 2019 and Form 10-Q for the three months ended December 31, 2019.

Third Quarter of Fiscal 2020

Telenav also updated the information it provided on February 6, 2020 regarding Telenav’s outlook for the three months ending March 31, 2020. Telenav reconfirms its operating outlook Telenav for the three months ending March 31, 2020, as follows:

  • Telenav expects total revenue to be $61.5 million to $63.5 million
  • Telenav expects billings, a non-GAAP measure, to be between $62.5 million to $64.5 million, and GAAP gross margin to be within 42% to 44%
  • Telenav expects GAAP operating expenses to be between $29 million to $31 million.
  • Telenav expects Adjusted EBITDA, a non-GAAP measure, to be within negative $1.5 million to positive $0.5 million
  • For fiscal 2020 as a whole, Telenav expects Adjusted EBITDA to be positive

However, Telenav estimates that net loss for this period will now be between $(3.0) million and $(5.0) million.

Please visit Telenav’s investor relations website at http://investor.telenav.com to view the updated financial results and supplemental comments and materials.

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 Telenav 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 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 Telenav’s 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 this press release, or in the supplemental investor presentation on its website, Telenav may provide guidance for the third 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 within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to anticipated financial performance, management’s plans and objectives for future operations, business prospects, market penetration, and other matters. Any forward-looking statement made in this press release speaks only as of the date on which it is made. Telenav undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise. Actual events or results may differ materially from those described in this document due to a number of risks and uncertainties. These forward-looking statements are based on management’s current beliefs and assumptions and on information currently available to management. Telenav cautions that these statements are subject to risks and uncertainties, many of which are outside of Telenav’s control and could cause future events or results to be materially different from those stated or implied in this document, or to not occur at all. These potential risks and uncertainties include, among others: 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 impact of Garmin’s announcement that it is providing navigation services to Ford; 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 demonstrate internal controls over financial reporting and disclosures, including as it may relate to our recognition of revenue; 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 Company’s ability to acquire certification for automotive SPICE and other contractual obligations with customers; failure to reach agreement with customers for awards and contracts on products and services in which the Company 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 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; the Company’s reliance on its automobile manufacturers for volume and royalty reporting; the impact on revenue recognition and other financial reporting due to the amendment of contracts or changes in accounting standards; the impact of the novel corona virus on business activity and the Company’s operations; 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; and macroeconomic and political conditions in the U.S. and abroad, in particular China. The Company 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 the Company expects.

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.

“Telenav” and the Telenav Logo are registered trademarks and “VIVID” is a trademark 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.

© 2020 Telenav, Inc. All Rights Reserved.

TNAV-F

Investor Relations:
Bishop IR
Mike Bishop
415-894-9633
IR@telenav.com

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


Telenav, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except par value)
(unaudited)
 December 31, June 30,
  2019    2019 
    
Assets   
Current assets:   
Cash and cash equivalents$26,347  $27,275 
Short-term investments 102,603   72,203 
Accounts receivable, net of allowances of $7 and $7 at December 31, 2019 and June 30, 2019, respectively 44,463   69,781 
Restricted cash 1,520   1,950 
Deferred costs 33,117   18,752 
Prepaid expenses and other current assets 8,933   3,784 
Assets of discontinued operations, non-current -   6,330 
Total current assets 216,983   200,075 
Property and equipment, net 5,215   5,583 
Operating lease right-of-use assets 8,749   - 
Deferred income taxes, non-current 1,401   998 
Goodwill and intangible assets, net 15,265   15,701 
Deferred costs, non-current 48,646   61,050 
Other assets 21,285   1,414 
Assets of discontinued operations, non-current -   12,194 
Total assets$317,544  $297,015 
Liabilities and stockholders’ equity   
Current liabilities:   
Trade accounts payable$1,113  $16,061 
Accrued expenses 54,182   48,899 
Operating lease liabilities 3,532   - 
Deferred revenue 50,416   31,270 
Income taxes payable 928   800 
Liabilities of discontinued operations -   3,373 
Total current liabilities 110,171   100,403 
Deferred rent, non-current -   1,266 
Operating lease liabilities, non-current 6,459   - 
Deferred revenue, non-current 93,755   103,865 
Other long-term liabilities 678   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; 48,151 and 46,911 shares issued and outstanding at December 31, 2019 and June 30, 2019, respectively 48   47 
Additional paid-in capital 190,593   182,349 
Accumulated other comprehensive loss (1,538)  (1,477)
Accumulated deficit (82,622)  (90,279)
Total stockholders’ equity 106,481   90,640 
Total liabilities and stockholders’ equity$317,544  $297,015 


Telenav, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)
         
  Three Months Ended Six Months Ended
  December 31, December 31,
   2019   2018   2019   2018 
         
Revenue:        
Product $61,543  $42,397  $117,533  $82,327 
Services  12,332   7,763   22,971   14,085 
Total revenue  73,875   50,160   140,504   96,412 
Cost of revenue:        
Product  26,434   25,015   58,423   48,603 
Services  7,288   3,891   12,150   7,845 
Total cost of revenue  33,722   28,906   70,573   56,448 
Gross profit  40,153   21,254   69,931   39,964 
Operating expenses:        
Research and development  19,717   17,766   40,380   36,258 
Sales and marketing  2,134   1,665   4,080   3,368 
General and administrative  6,428   5,721   13,715   11,171 
Legal settlements and contingencies  -   650   -   650 
Total operating expenses  28,279   25,802   58,175   51,447 
Income (loss) from operations  11,874   (4,548)  11,756   (11,483)
Other income, net  596   532   1,157   2,122 
Income (loss) from continuing operations before provision for income taxes  12,470   (4,016)  12,913   (9,361)
Provision for income taxes  205   102   616   842 
Equity in net (income) of equity method investees  (797)  -   (797)  - 
Income (loss) from continuing operations  13,062   (4,118)  13,094   (10,203)
Discontinued operations:        
Income (loss) from operations of Advertising business, net of tax  -   (463)  832   (1,948)
Loss from sale of Advertising business  (56)  -   (4,874)  - 
Loss on discontinued operations  (56)  (463)  (4,042)  (1,948)
Net income (loss) $13,006  $(4,581) $9,052  $(12,151)
         
Basic income (loss) per share:        
Income (loss) from continuing operations $0.27  $(0.09) $0.27  $(0.23)
Loss on discontinued operations  -   (0.01)  (0.08)  (0.04)
Net income (loss) $0.27  $(0.10) $0.19  $(0.27)
Diluted income (loss) per share:        
Income (loss) from continuing operations $0.27  $(0.09) $0.27  $(0.23)
Loss on discontinued operations  -   (0.01)  (0.08)  (0.04)
Net income (loss) $0.27  $(0.10) $0.18  $(0.27)
Weighted average shares used in computing income (loss) per share        
Basic  48,475   45,443   48,127   45,230 
Diluted  48,821   45,443   49,257   45,230 


Telenav, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
     
  Six Months Ended December 31,
   2019   2018 
Operating activities    
Net income (loss) $9,052  $(12,151)
Loss on discontinued operations  4,042   1,948 
Income (loss) from continuing operations  13,094   (10,203)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:    
Stock-based compensation expense  3,230   3,923 
Depreciation and amortization  1,856   2,016 
Operating lease amortization net of accretion  1,321   - 
Accretion of net premium on short-term investments  75   - 
Unrealized gain on non-marketable equity investments  (62)  (1,259)
Equity in net income of equity method investee  (797)  - 
Other  (1)  (14)
Changes in operating assets and liabilities:    
Accounts receivable  25,835   3,390 
Deferred income taxes  (409)  445 
Deferred costs  (1,961)  (7,040)
Prepaid expenses and other current assets  (3,992)  216 
Other assets  21   (116)
Trade accounts payable  (15,054)  9,812 
Accrued expenses and other liabilities  3,945   (9,575)
Income taxes payable  130   39 
Deferred rent  -   91 
Operating lease liabilities  (1,754)  - 
Deferred revenue  9,036   13,234 
Net cash provided by operating activities  34,513   4,959 
Investing activities    
Purchases of property and equipment  (1,078)  (445)
Purchases of short-term investments  (54,439)  (15,862)
Purchases of long-term investments  (3,500)  - 
Proceeds from sales and maturities of short-term investments  24,067   20,342 
Net cash provided by (used in) investing activities  (34,950)  4,035 
Financing activities    
Proceeds from exercise of stock options  8,306   26 
Tax withholdings related to net share settlements of restricted stock units  (1,148)  (1,559)
Repurchase of common stock  (4,019)  - 
Net cash provided by (used in) financing activities  3,139   (1,533)
Effect of exchange rate changes on cash, cash equivalents and restricted cash  (85)  (360)
Net increase in cash, cash equivalents and restricted cash, continuing operations  2,617   7,101 
Net cash used in discontinued operations  (3,975)  (2,319)
Cash, cash equivalents and restricted cash, beginning of period  29,225   20,099 
Cash, cash equivalents and restricted cash, end of period $27,867  $24,881 
Supplemental disclosure of cash flow information    
Income taxes paid, net $1,279  $586 
Non-cash investing: Investment in LLC acquired in exchange for sale of Advertising business $15,600  $- 
Cash flow from discontinued operations:    
Net cash used in operating activities $(3,569) $(2,319)
Net cash used in financing activities  (406)  - 
Net cash transferred from continuing operations  3,975   2,319 
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 $26,347  $22,405 
Restricted cash  1,520   2,476 
Total cash, cash equivalents and restricted cash $27,867  $24,881 


Telenav, Inc.
Unaudited Reconciliation of Non-GAAP Adjustments
(in thousands)
Reconciliation of Revenue to Billings
         
  Three Months EndedSix Months Ended
  December 31, December 31,
   2019   2018  2019  2018
         
Revenue $73,875  $50,160 $140,504 $96,412
Adjustments:        
Change in deferred revenue  (1,210)  6,392  9,036  13,234
Billings $72,665  $56,552 $149,540 $109,646


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 December 31, Six Months Ended December 31,
   2019   2018  2019  2018
Deferred revenue, end of period $144,171  $87,772 $144,171 $87,772
Deferred revenue, beginning of period  145,381   81,380  135,135  74,538
Change in deferred revenue $(1,210) $6,392 $9,036 $13,234
         
Deferred costs, end of period $81,763  $65,465 $81,763 $65,465
Deferred costs, beginning of period  77,795   62,806  79,802  58,425
Change in deferred costs(1) $3,968  $2,659 $1,961 $7,040
         
         
(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 EndedSix Months Ended
  December 31, December 31,
   2019   2018   2019   2018 
         
Net income (loss) $13,006  $(4,581) $9,052  $(12,151)
Loss on discontinued operations  56   463   4,042   1,948 
Income (loss) from continuing operations  13,062 0 (4,118)  13,094 0 (10,203)
         
Adjustments:        
Legal settlement and contingencies  -   650   -   650 
Stock-based compensation expense  1,478   1,875   3,230   3,923 
Depreciation and amortization expense  934   1,006   1,856   2,016 
Other income, net  (596)  (532)  (1,157)  (2,122)
Provision for income taxes  205   102   616   842 
Equity in net income of equity method investees  (797)  -   (797)  - 
Adjusted EBITDA $14,286  $(1,017) $16,842  $(4,894)


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,
   2019   2018   2019   2018 
         
Net income (loss) $13,006  $(4,581) $9,052  $(12,151)
Loss on discontinued operations  56   463   4,042   1,948 
Income (Loss) from continuing operations  13,062   (4,118)  13,094   (10,203)
         
Adjustments to reconcile net loss to net cash provided by operating activities:        
Change in deferred revenue (1)  (1,309)  6,392   9,036   13,234 
Change in deferred costs (2)  (3,940)  (2,659)  (1,961)  (7,040)
Changes in other operating assets and liabilities  2,240   3,036   8,722   4,302 
Other adjustments (3)  2,291   2,862   5,622   4,666 
Net cash provided by operating activities  12,344   5,513   34,513   4,959 
Less: Purchases of property and equipment  (617)  (346)  (1,078)  (445)
Free cash flow $11,727  $5,167  $33,435  $4,514 
         
(1) Consists of product royalties, customized software development fees, service fees and subscription fees.    
(2) Consists primarily of third party content costs and customized software development expenses.     
(3) Consist primarily of depreciation and amortization, stock-based compensation expense and other non-cash items.    


Telenav, Inc.     
Summarized Financial Information Depicting the Impact of Restatement     
(in thousands, except per share amounts)     
(unaudited)     
       
  As of December 31, 2019      
  As Reported(1) Adjustments As Adjusted      
Assets            
Prepaid expenses and other current assets $3,231  $5,702  $8,933       
Total current assets  211,281   5,702   216,983       
Total assets  311,842   5,702   317,544       
Liabilities and stockholders' equity            
Accrued expenses  57,856   (3,674)  54,182       
Deferred revenue  50,582   (166)  50,416       
Total current liabilities  114,011   (3,840)  110,171       
Accumulated deficit  (92,164)  9,542   (82,622)      
Total liabilities and stockholders' equity  311,842   5,702   317,544       
             
             
  Three Months Ended December 31, 2019 Six Months Ended December 31, 2019
  As Reported(1) Adjustments As Adjusted As Reported(2) Adjustments As Adjusted
Revenue            
Product $55,362  $6,181  $61,543  $110,545 $6,988 $117,533
Services  11,984   348   12,332   21,256  1,715  22,971
Total revenue  67,346   6,529   73,875   131,801  8,703  140,504
Gross profit  33,624   6,529   40,153   61,228  8,703  69,931
Income from continuing operations  6,533   6,529   13,062   4,391  8,703  13,094
Net income  6,477   6,529   13,006   349  8,703  9,052
             
Basic income per share:            
Income from continuing operations $0.13  $0.14  $0.27  $0.09 $0.18 $0.27
Net income  0.13   0.14   0.27   0.01  0.18  0.19
Diluted income per share:            
Income from continuing operations $0.13  $0.14  $0.27  $0.09 $0.18 $0.27
Net income  0.13   0.14   0.27   0.01  0.17  0.18
Weighted average shares used in computing income per share            
Basic  48,475   -   48,475   48,127  -  48,127
Diluted  48,821   -   48,821   49,257  -  49,257
             
(1) As reported in Form 8-K on February 6, 2020.            
(2) Includes three months ended Sept. 30, 2019 as reported in Form 10-Q on Nov. 8, 2019 plus three months ended December 31, 2019 as reported in Form 8-K on Feb. 6, 2020.


Telenav, Inc.
Summarized Financial Information Depicting the Impact of Restatement of Non-GAAP Adjustments
(in thousands, except per share amounts)
(unaudited)
             
Reconciliation of Revenue to Billings
             
  Three Months Ended December 31, 2019 Six Months Ended December 31, 2019
  As Reported(1) Adjustments As Adjusted As Reported(2) Adjustments As Adjusted
             
Revenue $67,346  $6,529  $73,875  $131,801  $8,703  $140,504 
Adjustments:            
Change in deferred revenue  (2,920)  1,710   (1,210)  9,202   (166)  9,036 
Billings $64,426  $8,239  $72,665  $141,003  $8,537  $149,540 
             
             
Reconciliation of Net Income to Adjusted EBITDA
             
  Three Months Ended December 31, 2019 Six Months Ended December 31, 2019
  As Reported(1) Adjustments As Adjusted As Reported(2) Adjustments As Adjusted
Net income $6,477  $6,529  $13,006  $349  $8,703  $9,052 
Loss on discontinued operations  56   -   56   4,042   -   4,042 
Income from continuing operations  6,533   6,529   13,062   4,391   8,703   13,094 
             
Adjustments:            
Stock-based compensation expense  1,478   -   1,478   3,230   -   3,230 
Depreciation and amortization expense  934   -   934   1,856   -   1,856 
Other income, net  (596)  -   (596)  (1,157)  -   (1,157)
Provision for income taxes  205   -   205   616   -   616 
Equity in net income of equity method investees  (797)  -   (797)  (797)  -   (797)
Adjusted EBITDA $7,757  $6,529  $14,286  $8,139  $8,703  $16,842 
             
             
Reconciliation of Net Income to Free Cash Flow
             
  Three Months Ended December 31, 2019 Six Months Ended December 31, 2019
  As Reported(1) Adjustments As Adjusted As Reported(2) Adjustments As Adjusted
Net income $6,477  $6,529  $13,006  $349  $8,703  $9,052 
Loss on discontinued operations  56   -   56   4,042   -   4,042 
Income from continuing operations  6,533   6,529   13,062   4,391   8,703   13,094 
             
Adjustments to reconcile net income to net cash provided by operating activities:            
Change in deferred revenue (3)  (3,019)  1,710   (1,309)  9,202   (166)  9,036 
Change in deferred costs (4)  (3,940)  -   (3,940)  (1,961)  -   (1,961)
Changes in other operating assets and liabilities  10,479   (8,239)  2,240   17,259   (8,537)  8,722 
Other adjustments (5)  2,291   -   2,291   5,622   -   5,622 
Net cash provided by operating activities  12,344   -   12,344   34,513   -   34,513 
Less: Purchases of property and equipment  (617)  -   (617)  (1,078)  -   (1,078)
Free cash flow $11,727  $-  $11,727  $33,435  $-  $33,435 
             
(1) As reported in Form 8-K on February 6, 2020.
(2) Includes three months ended Sept. 30, 2019 as reported in Form 10-Q on Nov. 8, 2019 plus three months ended December 31, 2019 as reported in Form 8-K on Feb. 6, 2020.
(3) Consists of product royalties, customized software development fees, service fees and subscription fees.
(4) Consists primarily of third party content costs and customized software development expenses.
(5) Consist primarily of depreciation and amortization, stock-based compensation expense and other non-cash items.


Telenav, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except par value)
(unaudited)
  September 30, June 30,
   2019    2019 
     
Assets    
Current assets:    
Cash and cash equivalents $19,278  $27,275 
Short-term investments  102,515   72,203 
Accounts receivable, net of allowances of $7 and $7 at September 30, 2019 and June 30, 2019, respectively  53,271   69,781 
Restricted cash  2,452   1,950 
Deferred costs  19,416   18,752 
Prepaid expenses and other current assets  4,281   3,784 
Assets of discontinued operations, non-current  1,788   6,330 
Total current assets  203,001   200,075 
Property and equipment, net  5,304   5,583 
Operating lease right-of-use assets  9,325   - 
Deferred income taxes, non-current  798   998 
Goodwill and intangible assets, net  15,483   15,701 
Deferred costs, non-current  58,379   61,050 
Other assets  18,977   1,414 
Assets of discontinued operations, non-current  259   12,194 
Total assets $311,526  $297,015 
Liabilities and stockholders’ equity    
Current liabilities:    
Trade accounts payable $17,804  $16,061 
Accrued expenses  38,365   48,899 
Operating lease liabilities  3,566   - 
Deferred revenue  41,197   31,270 
Income taxes payable  635   800 
Liabilities of discontinued operations  1,876   3,373 
Total current liabilities  103,443   100,403 
Deferred rent, non-current  -   1,266 
Operating lease liabilities, non-current  7,011   - 
Deferred revenue, non-current  104,184   103,865 
Other long-term liabilities  639   811 
Liabilities of discontinued operations, non-current  107   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; 48,566 and 46,911 shares issued and outstanding at September 30, 2019 and June 30, 2019, respectively  49   47 
Additional paid-in capital  192,055   182,349 
Accumulated other comprehensive loss  (1,729)  (1,477)
Accumulated deficit  (94,233)  (90,279)
Total stockholders’ equity  96,142   90,640 
Total liabilities and stockholders’ equity $311,526  $297,015 


Telenav, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)
     
  Three Months Ended
  September 30,
   2019   2018 
     
Revenue:    
Product $55,990  $39,930 
Services  10,639   6,322 
Total revenue  66,629   46,252 
Cost of revenue:    
Product  31,989   23,588 
Services  4,862   3,954 
Total cost of revenue  36,851   27,542 
Gross profit  29,778   18,710 
Operating expenses:    
Research and development  20,663   18,492 
Sales and marketing  1,946   1,703 
General and administrative  7,287   5,450 
Total operating expenses  29,896   25,645 
Loss from operations  (118)  (6,935)
Other income, net  561   1,590 
Income (loss) from continuing operations before provision for income taxes  443   (5,345)
Provision for income taxes  411   740 
Income (loss) from continuing operations  32   (6,085)
Discontinued operations:    
Income (loss) from operations of Advertising business, net of tax  832   (1,485)
Loss from sale of Advertising business  (4,818)  - 
Loss on discontinued operations  (3,986)  (1,485)
Net loss $(3,954) $(7,570)
     
Basic income (loss) per share:    
Income (loss) from continuing operations $0.00  $(0.14)
Loss on discontinued operations  (0.08)  (0.03)
Net income (loss) $(0.08) $(0.17)
Diluted income (loss) per share:    
Income (loss) from continuing operations $0.00  $(0.14)
Loss on discontinued operations  (0.08)  (0.03)
Net income (loss) $(0.08) $(0.17)
Weighted average shares used in computing income (loss) per share    
Basic  47,780   45,018 
Diluted  49,661   45,018 


Telenav, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
     
  Three Months Ended September 30,
   2019   2018 
Operating activities    
Net loss $(3,954) $(7,570)
Loss on discontinued operations  3,986   1,485 
Income (loss) from continuing operations  32   (6,085)
Adjustments to reconcile net loss to net cash provided by operating activities:    
Stock-based compensation expense  1,752   2,048 
Depreciation and amortization  922   1,010 
Operating lease amortization net of accretion  544   - 
Accretion of net premium on short-term investments  12   5 
Unrealized gain on non-marketable equity investments  -   (1,259)
Realized loss on non-marketable equity investments  100   - 
Other  1   - 
Changes in operating assets and liabilities:    
Accounts receivable  16,355   (252)
Deferred income taxes  171   198 
Deferred costs  1,979   (4,381)
Prepaid expenses and other current assets  (502)  369 
Other assets  28   (35)
Trade accounts payable  1,738   3,267 
Accrued expenses and other liabilities  (10,259)  (2,467)
Income taxes payable  (152)  149 
Deferred rent  -   37 
Operating lease liabilities  (897)  - 
Deferred revenue  10,345   6,842 
Net cash provided by (used in) operating activities  22,169   (554)
Investing activities    
Purchases of property and equipment  (461)  (99)
Purchases of short-term investments  (41,418)  (10,624)
Purchases of long-term investments  (2,000)  - 
Proceeds from sales and maturities of short-term investments  11,052   10,865 
Net cash provided by (used in) investing activities  (32,827)  142 
Financing activities    
Proceeds from exercise of stock options  8,306   24 
Tax withholdings related to net share settlements of restricted stock units  (832)  (1,206)
Net cash provided by (used in) financing activities  7,474   (1,182)
Effect of exchange rate changes on cash, cash equivalents and restricted cash  (336)  (239)
Net decrease in cash, cash equivalents and restricted cash  (3,520)  (1,833)
Net cash used in discontinued operation  (3,975)  (1,740)
Cash, cash equivalents and restricted cash, beginning of period  29,225   20,099 
Cash, cash equivalents and restricted cash, end of period $21,730  $16,526 
Supplemental disclosure of cash flow information    
Income taxes paid, net $739  $166 
Non-cash investing: Investment in LLC acquired in exchange for sale of Advertising business $15,600  $- 
Cash flow from discontinued operations:    
Net cash used in operating activities $(3,569) $(1,740)
Net cash used in financing activities  (406)  - 
Net cash transferred from continuing operations  3,975   1,740 
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 $19,278  $13,596 
Restricted cash  2,452   2,930 
Total cash, cash equivalents and restricted cash $21,730  $16,526 


Telenav, Inc.
Unaudited Reconciliation of Non-GAAP Adjustments
(in thousands)
Reconciliation of Revenue to Billings
     
  Three Months Ended
  September 30,
   2019  2018
     
Revenue $66,629 $46,252
Adjustments:    
Change in deferred revenue  10,246  6,842
Billings $76,875 $53,094
     


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 September 30,
   2019   2018
Deferred revenue, end of period $145,381  $81,380
Deferred revenue, beginning of period  135,135   74,538
Change in deferred revenue $10,246  $6,842
     
Deferred costs, end of period $77,795  $62,806
Deferred costs, beginning of period  79,802   58,425
Change in deferred costs(1) $(2,007) $4,381
     
(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 Loss to Adjusted EBITDA
     
  Three Months Ended
  September 30,
   2019   2018 
     
Net loss $(3,954) $(7,570)
Loss on discontinued operations  3,986   1,485 
Income (loss) from continuing operations  32   (6,085)
     
Adjustments:    
Stock-based compensation expense  1,752   2,048 
Depreciation and amortization expense  922   1,010 
Other income, net  (561)  (1,590)
Provision for income taxes  411   740 
Adjusted EBITDA $2,556  $(3,877)


Telenav, Inc.
Unaudited Reconciliation of Non-GAAP Adjustments
(in thousands)
Reconciliation of Net Loss to Free Cash Flow
     
  Three Months Ended
  September 30,
   2019   2018 
     
Net loss $(3,954) $(7,570)
Loss on discontinued operations  3,986   1,485 
Income (Loss) from continuing operations  32   (6,085)
     
Adjustments to reconcile net income (loss) to net cash provided by operating activities:    
Change in deferred revenue (1)  10,345   6,842 
Change in deferred costs (2)  1,979   (4,381)
Changes in other operating assets and liabilities  6,482   1,266 
Other adjustments (3)  3,331   1,804 
Net cash provided by (used in) operating activities  22,169   (554)
Less: Purchases of property and equipment  (461)  (99)
Free cash flow $21,708  $(653)
     
(1) Consists of product royalties, customized software development fees, service fees and subscription fees.
(2) Consists primarily of third party content costs and customized software development expenses. 
(3) Consist primarily of depreciation and amortization, stock-based compensation expense and other non-cash items.


Telenav, Inc.
Summarized Financial Information Depicting the Impact of Restatement
(in thousands, except per share amounts)
(unaudited)
 
  As of September 30, 2019
  As Reported Sept. 30, 2019 Form 10-Q Adjustments As Adjusted
Assets      
Accounts receivable $52,973  $298  $53,271 
Total current assets  202,703   298   203,001 
Total assets  311,228   298   311,526 
Liabilities and stockholders' equity      
Deferred revenue  43,073   (1,876)  41,197 
Accumulated deficit  (96,407)  2,174   (94,233)
Total liabilities and stockholders' equity  311,228   298   311,526 
       
       
  Three Months Ended September 30, 2019
  As Reported Sept. 30, 2019 Form 10-Q Adjustments As Adjusted
Revenue      
Product $55,183  $807  $55,990 
Services  9,272   1,367   10,639 
Total revenue  64,455   2,174   66,629 
Gross profit  27,604   2,174   29,778 
Income (loss) from continuing operations  (2,142)  2,174   32 
Net income (loss)  (6,128)  2,174   (3,954)
       
Income (loss) from continuing operations per share, basic and diluted $(0.04) $0.04   - 
Net loss per share, basic and diluted  (0.13)  0.05   (0.08)
Shares used in computing income (loss) per share      
Basic  47,780     47,780 
Diluted  47,780     49,648 
       


Telenav, Inc.
Summarized Financial Information Depicting the Impact of Restatement of Non-GAAP Adjustments
(in thousands, except per share amounts)
(unaudited)
       
Reconciliation of Revenue to Billings
       
  Three Months Ended September 30, 2019
  As Reported Sept. 30, 2019 Form 10-Q Adjustments As Adjusted
       
Revenue $64,455  $2,174  $66,629 
Adjustments:      
Change in deferred revenue  12,122   (1,876)  10,246 
Billings $76,577  $298  $76,875 
       
       
Reconciliation of Net Income to Adjusted EBITDA
       
  Three Months Ended September 30, 2019
  As Reported Sept. 30, 2019 Form 10-Q Adjustments As Adjusted
Net income (loss) $(6,128) $2,174  $(3,954)
Loss on discontinued operations  3,986   -   3,986 
Income (loss) from continuing operations  (2,142)  2,174   32 
       
Adjustments:      
Stock-based compensation expense  1,752   -   1,752 
Depreciation and amortization expense  922   -   922 
Other income, net  (561)  -   (561)
Provision for income taxes  411   -   411 
Adjusted EBITDA $382  $2,174  $2,556 
       
       
Reconciliation of Net Income (Loss) to Free Cash Flow
       
  Three Months Ended September 30, 2019
  As Reported Sept. 30, 2019 Form 10-Q Adjustments As Adjusted
Net income (loss) $(6,128) $2,174  $(3,954)
Loss on discontinued operations  3,986   -   3,986 
Income (Loss) from continuing operations  (2,142)  2,174   32 
       
Adjustments to reconcile net loss to net cash provided by operating activities:      
Change in deferred revenue (1)  12,221   (1,876)  10,345 
Change in deferred costs (2)  1,979   -   1,979 
Changes in other operating assets and liabilities  6,780   (298)  6,482 
Other adjustments (3)  3,331   -   3,331 
Net cash provided by operating activities  22,169   -   22,169 
Less: Purchases of property and equipment  (461)  -   (461)
Free cash flow $21,708  $-  $21,708 
       
(1) Consists of product royalties, customized software development fees, service fees and subscription fees.  
(2) Consists primarily of third party content costs and customized software development expenses.   
(3) Consist primarily of depreciation and amortization, stock-based compensation expense and other non-cash items.