Data

Telenav (NASDAQ:TNAV), a leading provider of connected car and location-based services reported its financial results for the fourth fiscal quarter ending June 30, 2018. The company’s total revenue for the fourth quarter of fiscal 2018 was US$16.6 million as compared to US$13.8 million in the third quarter of fiscal 2018. Telenav’s revenue in the fourth …

Telenav (NASDAQ:TNAV), a leading provider of connected car and location-based services reported its financial results for the fourth fiscal quarter ending June 30, 2018.

The company’s total revenue for the fourth quarter of fiscal 2018 was US$16.6 million as compared to US$13.8 million in the third quarter of fiscal 2018. Telenav’s revenue in the fourth quarter of fiscal 2017 were US$40.3 million.

As quoted in the press release:

“We are pleased that we continue to increase penetration of our location-based services solution across more vehicles and brands, including new GM models such as the 2019 Chevrolet Silverado and GMC Sierra trucks and Chevrolet Equinox,” said HP Jin, Chairman and CEO of Telenav.  “We continue to work to expand billings and revenue, with the goal of achieving positive adjusted EBITDA on billings in fiscal 2019.”

Financial Highlights for the fourth quarter ended June 30, 2018

  • Total revenue for fiscal 2018 was $106.2 million, compared with $169.6 million in fiscal 2017.  As previously announced, the year-over-year decline resulted primarily from a change in revenue recognition due to the commencement of Ford’s map update program, whereby revenue from certain on-board navigation products offered with map updates is deferred and recognized over the contractual period during which we provide map updates, as well as the deferral of all prospective Ford royalties beginning January 1, 2018 pending completion of milestone deliveries.
  • When we adopt ASC 606 as of July 1, 2018, we expect we will be able to recognize a substantial portion of revenue as automotive royalties are billed.
  • Billings for the fourth quarter of fiscal 2018 were $59.2 million, compared with $58.7 million in the third quarter of fiscal 2018 and $66.5 million in the fourth quarter of fiscal 2017.  The year over year decline was due primarily to lower per unit pricing resulting from lower third-party content costs.  Billings for fiscal 2018 were $253.9 million, compared with $233.6 million for fiscal 2017.
  • Net loss for the fourth quarter of fiscal 2018 was $(26.6) million, compared with $(30.8) million for the third quarter of fiscal 2018 and $(12.8) million for the fourth quarter of fiscal 2017, with the year over year increase in net loss primarily due to the change in revenue recognition criteria related to the Ford agreement.  Net loss for fiscal 2018 was $(89.1) million compared with $(47.3) million for fiscal 2017.
  • Adjusted EBITDA on billings for the fourth quarter of fiscal 2018 was a $(2.5) million loss compared with a $(4.1) million loss in the third quarter of fiscal 2018 and a $(0.4) million loss in the fourth quarter of fiscal 2017.  Adjusted EBITDA on billings for fiscal 2018 was a $(12.8) million loss, compared with a $(6.1) million loss in fiscal 2017.
  • Ending cash, cash equivalents and short-term investments, excluding restricted cash, were $84.9 million as of June 30, 2018. This represented cash and short-term investments of $1.89 per share, based on 44.8 million shares of common stock outstanding as of June 30, 2018.  Telenav had no debt as of June 30, 2018.

Q1 Fiscal 2019 Business Outlook

  • Total revenue is expected to be $52 million to $56 million, including approximately $3 million of customized software development fees, which reflects the anticipated impact of Telenav’s adoption of ASC 606 on July 1, 2018.

  • Billings are expected to be $60 million to $62 million.

  • Deferred revenue is expected to increase by $8 million to $10 million, from a lower, restated balance that will reflect the adoption of ASC 606 on July 1, 2018.

  • Deferred costs are expected to increase by $5 million to $8 million, from a lower restated balance that will reflect the adoption of ASC 606 on July 1, 2018.  Telenav has not yet finalized the accounting treatment of certain research and development costs as a result of its adoption of ASC 606 and 340-40 on July 1, 2018.  Should we determine that we are required to capitalize certain research and development costs as deferred development costs under ASC 340-40 rather than expense them, such amounts for the three months ending September 30, 2018 are estimated to be $3 million to $5 million which would be in addition to the potential recognition during the quarter of approximately $2.5 million as cost of revenue from the balance of deferred development costs.  This would result in a net increase in capitalized deferred development costs of $0.5 million to $2.5 million (such recognition and such capitalization, the “Capitalized Research and Development Costs”).

  • Non-GAAP gross profit is expected to be approximately $22 million to $24 million, and non-GAAP gross margin is expected to be approximately 45 percent, both of which exclude the potential recognition of $2.5 million as cost of revenue from the balance of deferred development costs should the company determine such accounting treatment under ASC 340-40.

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