- Published: 29 October 2010
- Written by Editor
TeleNav Reports First Quarter Fiscal 2011 Financial Results
-- Quarterly revenue increased 42 percent year over year to $51.1 million
-- Net income increased 52 percent year over year to $12.4 million
-- Average monthly paid subscribers for the first quarter reached 17.7 million, up from 16.1 million in the prior quarter
TeleNav, Inc. (Nasdaq:TNAV), a leading provider of location-based services, or LBS, including voice guided navigation and local search on mobile phones, autos and enterprise LBS, today announced its financial results for the first quarter of fiscal 2011 ended September 30, 2010.
Financial Highlights
-- Revenue for the first quarter of fiscal 2011 grew 42 percent over the
prior year to $51.1 million.
-- Net income for the first quarter of fiscal 2011 grew 52 percent over the
prior year to $12.4 million.
-- Cash generated from operations for the first quarter of fiscal 2011 was
$20.2 million.
-- Average monthly revenue per end user (ARPU) for the first quarter of
fiscal 2011 decreased 14 percent over the first quarter of fiscal 2010
to $0.94.
-- Average monthly paying end users for the first quarter of fiscal 2011
increased 65 percent year over year to 17.7 million.
"We continued to achieve record number of average monthly paying end users, which grew over 1.6 million quarterly to 17.7 million in the September quarter," said HP Jin, president, CEO and co-founder of TeleNav. "We are also leveraging our core business to grow revenue from premium navigation, automotive, enterprise LBS, and mobile advertising and commerce opportunities, which comprised more than five percent of our total revenue in the September quarter."
Revenue for the first quarter of fiscal 2011 was $51.1 million, compared to revenue of $49.5 million for the fourth quarter of fiscal 2010 and $36.0 million for the first quarter of fiscal 2010. Revenue for the first quarter of fiscal 2011 reflects the one month impact from the amended Sprint agreement.
Net income for the first quarter of fiscal 2011 was $12.4 million, or $0.27 per diluted share, compared to net income of $10.6 million, or $0.24 per diluted share, for the fourth quarter of fiscal 2010 and $8.1 million, or $0.15 per diluted share, for the first quarter of fiscal 2010.
Non-GAAP net income for the first quarter of fiscal 2011 was $13.0 million, or $0.29 per diluted share, compared to non-GAAP net income of $13.0 million, or $0.31 per diluted share, for the fourth quarter of fiscal 2010 and $8.3 million, or $0.22 per diluted share, for the first quarter of fiscal 2010. Non-GAAP net income excludes stock-based compensation expense net of the related tax effect. The shares used in the calculation of TeleNav's non-GAAP net income per share assume the conversion of all outstanding preferred stock into shares of common stock using the as-if converted method as of the beginning of each period presented or the date of issuance, if later.
"Our cash, cash equivalents and short-term investment balances increased during the quarter by $18.2 million, ending the quarter with a total of $131.1 million," said Douglas Miller, chief financial officer of TeleNav. "In addition, our accounts receivable rose to $57.3 million as of September 30, 2010, of which we collected $46.5 million to date in the month of October, further increasing our cash balances."
Recent Business Highlights
-- In September 2010, TeleNav amended and extended its Master Application
and Services Agreement with Sprint, its largest customer, and also
amended its License Agreement with Tele Atlas, a supplier of map and
points of interest content used in TeleNav's services.
-- In September 2010, TeleNav launched an updated navigation-based mobile
advertising platform, that allows advertisers to reach millions of
on-the-go users by delivering a relevant and targeted ad to users based
on the location and context of their search query, and by providing
advertisers with action-based metrics such as "Drive-to Rate," a metric
that captures the number of users who viewed an ad and chose to drive to
the advertiser's business location.
-- In August 2010, TeleNav announced the availability of its in-dash,
connected navigation product with the recent rollout of the 2011 Ford
Edge, and the 2011 Lincoln MKX, called MyFord Touch and MyLincoln Touch,
respectively.
-- In August 2010, TeleNav announced the availability of its OnMyWay mobile
application for the iPhone and Android devices. Initially launched in
March 2010 for BlackBerry devices, OnMyWay automatically alerts a
pre-determined person or group of people of a driver's trip status and
estimated time of arrival (ETA).
Business Outlook
TeleNav offers the following guidance for the quarter ending December 31, 2010:
-- Total revenue is expected to be approximately $45.0 to $47.0 million and
reflects a full three month impact from our recently renegotiated
agreement with Sprint;
-- Gross margins are expected to be approximately 79 to 80 percent;
-- Non-GAAP operating expenses are expected to be approximately $21.0 to
$23.0 million, and exclude approximately $900,000 in stock-based
compensation;
-- GAAP net income is expected to be approximately $6.5 to $7.5 million;
-- GAAP diluted net income per share is expected to be approximately $0.14
to $0.16;
-- Non-GAAP net income is expected to be approximately $7.0 to $8.0
million;
-- Non-GAAP diluted net income per share is expected to be approximately
$0.15 to $0.17;
-- Effective tax rate is expected to be 41 percent;
-- Weighted-average diluted shares outstanding are expected to be 45 to 46
million.
TeleNav offers the following guidance for the fiscal year ending June 30, 2011:
-- Total revenue is expected to be approximately $187.0 to $192.0 million;
-- Gross margins are expected to be 78 to 80 percent;
-- Non-GAAP operating expenses are expected to be approximately $90.0 to
$94.0 million, and exclude approximately $4.0 million in stock-based
compensation;
-- GAAP net income is expected to be approximately $29.0 to $33.0 million;
-- GAAP diluted net income per share is expected to be approximately $0.64
to $0.72;
-- Non-GAAP net income is expected to be approximately $32.0 to $36.0
million;
-- Non-GAAP diluted net income per share is expected to be approximately
$0.70 to $0.78;
-- Effective tax rate is expected to be 41 percent;
-- Weighted-average diluted shares outstanding are expected to be 45 to 46
million.
The above information concerning the forecast for the quarter ending December 31, 2010 and the fiscal year ending June 30, 2011 represents the company's outlook only as of the date hereof, and 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 today at 2:00 p.m. PDT (5:00 p.m. EDT) to discuss its first quarter fiscal 2011 results and outlook for the second quarter of fiscal 2011. To access the conference call, dial 888-724-9493 or 913-312-1456. 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 approximately two hours after its completion and will be available through Tuesday, November 2, 5:00 p.m. PDT. To access the replay, please dial 888-203-1112 or 719-457-0820 and enter pass code 2154783.
Use of Non-GAAP Financial Measures
TeleNav prepares its financial statements in accordance with generally accepted accounting principles for the United States (GAAP). The non-GAAP financial measures such as net income and earnings per share information for the first quarter of fiscal 2011 and the first and fourth quarter of fiscal 2010 included in this press release are different from those otherwise presented under GAAP. The following are explanations of each type of adjustment that we incorporate into non-GAAP financial measures:
Stock-based compensation expense relates to equity incentive awards granted to our employees, directors, and consultants accounted for under GAAP. Stock-based compensation expense has been and will continue to be a significant recurring expense for TeleNav. While we include the dilutive impact of such equity awards in weighted average shares outstanding, the expense associated with stock-based awards reflects a non-cash charge that we exclude from non-GAAP net income.
Our non-GAAP tax rate differs from the GAAP tax rate due to the elimination of the tax rate effect of the GAAP stock compensation expenses that are being eliminated to arrive at the non-GAAP expenses.
The shares used to compute non-GAAP basic and diluted net income per share include the assumed conversion of all outstanding shares of convertible preferred stock into shares of common stock using the as-if converted method as of the beginning of each period presented or the date of issuance, if later. In May 2010, in conjunction with the closing of our initial public offering, all of our outstanding preferred stock was converted into shares of our common stock.
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 quarters and fiscal year growth rates that are not influenced by certain non-cash charges 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. Reconciliations of the GAAP to non-GAAP results are presented at the end of this press release.
Forward Looking Statements
This press release contains forward-looking statements that are based on TeleNav's management's beliefs and assumptions and on information currently available to our management. Forward-looking statements include information concerning TeleNav's anticipated or assumed future financial results, shares outstanding and anticipated business activities. 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, fluctuations in TeleNav's quarterly and annual operating results; TeleNav's dependence on Sprint and AT&T for a substantial majority of its revenue; changes in the contractual relationships with Sprint, AT&T and other wireless carriers to whom TeleNav provides services, competition from other market participants who may provide comparable services to subscribers without charge; TeleNav's inexperience in the automotive navigation market; TeleNav's inexperience in the mobile advertising market; TeleNav's ability to estimate and sustain or increase its revenue and profitability; TeleNav's ability to attract, migrate and retain new wireless carriers and auto manufacturers; TeleNav's ability to issue new releases of its products and services and expand its product portfolio; changes to current accounting policies which may have a significant, adverse impact upon TeleNav's financial results; the introduction of new products by competitors or the entry of new competitors into the markets for TeleNav's services and products; the impact of current or future intellectual property litigation and claims for indemnification and litigation related to U.S securities laws and economic and political conditions in the US and abroad. We discuss these risks in greater detail in "Risk factors" and elsewhere in our Form S-1 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.
Except as required by law, we assume no obligation to update these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.
TeleNav, Inc. is a leading provider of consumer location-based services (LBS), enterprise LBS and automotive LBS. TeleNav's solutions provide consumers, wireless service providers, enterprises and automakers with location-specific, real-time, personalized services such as GPS navigation, local search, mobile advertising, mobile commerce, location tracking and workflow automation. TeleNav's technology is available across more than 500 types of mobile phones, all major mobile phone operating systems and a broad range of wireless network protocols. TeleNav's service providers and partners include AT&T, Bell Mobility, Boost Mobile, China Mobile, Cincinnati Bell, Ford Motor Company, NII Holdings, Rogers, Sprint Nextel, Telcel, T-Mobile UK, T-Mobile USA, U.S. Cellular, Verizon Wireless and Vivo Brazil.
For more information on TeleNav, please visit www.telenav.com. Follow TeleNav on Twitter at www.twitter.com/telenav or on Facebook at www.facebook.com/telenav.
The TeleNav, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=7118
Copyright 2010 TeleNav, Inc. All Rights Reserved.
"TeleNav," the TeleNav logo, "telenav.com" and "OnMyWay" are registered and unregistered trademarks and/or service marks 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.
TNAV-F
TeleNav, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
9/30/2010 6/30/2010*
----------- ----------
Assets (Unaudited)
Current assets:
Cash and cash equivalents $ 50,085 $ 112,862
Short-term investments 81,002 --
Accounts receivable, net
of allowances of $308 and
$246, respectively 57,266 37,322
Deferred tax assets 4,013 3,247
Prepaid expenses and other
current assets 3,023 3,020
----------- ----------
Total current assets 195,389 156,451
Property and equipment,
net 10,230 9,637
Deferred tax assets,
non-current -- 1,874
Deposits and other assets 7,520 5,758
----------- ----------
Total assets $ 213,139 $ 173,720
=========== ==========
Liabilities and
stockholders' equity
Current liabilities:
Accounts payable $ 1,748 $ 2,507
Accrued compensation 4,099 5,583
Accrued royalties 3,602 2,988
Other accrued expenses 2,842 2,721
Deferred revenue 27,892 6,746
Income taxes payable 5,868 1,028
----------- ----------
Total current liabilities 46,051 21,573
Deferred revenue,
non-current 1,647 172
Other liabilities 3,267 2,938
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; 42,156 and
42,140 shares issued and
outstanding at September
30, 2010 and June 30,
2010,
respectively 42 42
Additional paid-in capital 110,583 109,687
Accumulated other
comprehensive income 282 399
Retained earnings 51,267 38,909
----------- ----------
Total stockholders' equity 162,174 149,037
----------- ----------
Total liabilities and
stockholders' equity $ 213,139 $ 173,720
=========== ==========
* Derived from audited consolidated financial
statements as of June 30, 2010
TeleNav, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)
Three Months Ended
September 30
--------------------
2010 2009
--------- ---------
Revenue $ 51,100 $ 36,048
Cost of revenue 8,852 7,067
--------- ---------
Gross profit 42,248 28,981
Operating expenses:
Research and development 13,027 7,912
Sales and marketing 4,726 3,914
General and administrative 3,746 2,559
--------- ---------
Total operating expenses 21,499 14,385
--------- ---------
Income from operations 20,749 14,596
Interest income 97 32
Other income (expense), net 100 (554)
--------- ---------
Income before provision for
income taxes 20,946 14,074
Provision for income taxes 8,588 5,953
--------- ---------
Net income $ 12,358 $ 8,121
========= =========
Net income applicable to
common stockholders $ 12,358 $ 4,373
========= =========
Net income per share
applicable to common
stockholders:
Basic $ 0.29 $ 0.38
Diluted $ 0.27 $ 0.15
Weighted average shares
used in computing net
income applicable to
common stockholders:
Basic 42,151 11,556
Diluted 44,939 28,420
TeleNav, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Three Months Ended
September 30
--------------------
2010 2009
--------- ---------
Operating activities
Net income $ 12,358 $ 8,121
Adjustments to reconcile net income to
net cash provided by (used in)
operating activities:
Depreciation, amortization, and
accretion 1,938 1,038
Stock-based compensation expense 852 315
Loss on disposal of property and
equipment -- 3
Write-off of capitalized software 691 --
Revaluation of preferred stock
warrants -- 547
Excess tax benefit from stock-based
compensation -- --
Changes in operating assets and
liabilities:
Accounts receivable (19,944) 175
Deferred income taxes 332 513
Prepaid expenses and other current
assets (1,030) 1,109
Other assets (838) (1,353)
Accounts payable (1,152) (264)
Accrued compensation (1,484) (486)
Accrued royalties 614 (30)
Accrued expenses and other
liabilities 449 2,304
Income taxes payable 4,840 2,684
Deferred revenue 22,622 469
--------- ---------
Net cash provided by operating
activities 20,248 15,145
--------- ---------
Investing activities
Purchases of property and equipment (1,512) (2,402)
Additions to capitalized software (340) (973)
Purchases of short-term investments (81,128) --
--------- ---------
Net cash used in investing activities (82,980) (3,375)
--------- ---------
Financing activities
Proceeds from exercise of stock options 44 321
Repurchase of common stock -- (1,228)
Excess tax benefit from stock-based
compensation -- --
--------- ---------
Net cash provided by financing
activities 44 (907)
--------- ---------
Effect of exchange rate changes on cash
and cash equivalents (89) (7)
--------- ---------
Net (decrease) increase in cash and
cash equivalents (62,777) 10,856
Cash and cash equivalents, at beginning
of period 112,862 33,128
--------- ---------
Cash and cash equivalents, at end of
period $ 50,085 $ 43,984
========= =========
Supplemental disclosure of cash flow
information
Income taxes paid $ 3,026 $ 629
TeleNav, Inc.
Unaudited Reconciliation of Non-GAAP Adjustments
(in thousands except for per share amounts)
Three Months Ended Fiscal Year Ended
------------------------------- --------------------
September June 30, September June 30, June 30,
30, 2010 2010 30, 2009 2010 2009
--------- --------- --------- --------- ---------
GAAP net income $ 12,358 $ 10,612 $ 8,121 $ 41,410 $ 29,618
Stock-based compensation:
Cost of revenue 25 4 3 18 4
Research and development 493 1,863 157 2,604 237
Sales and marketing 151 170 77 516 155
General and administrative 183 1,443 78 1,789 111
--------- --------- --------- --------- ---------
Total stock-based compensation 852 3,480 315 4,927 507
--------- --------- --------- --------- ---------
Tax effect of adding back stock
compensation (251) (1,111) (140) (1,132) (38)
--------- --------- --------- --------- ---------
Non-GAAP net income $ 12,959 $ 12,981 $ 8,296 $ 45,205 $ 30,087
========= ========= ========= ========= =========
Shares used in computing GAAP basic net
income per share 42,151 27,624 11,556 15,569 11,273
Weighted average effect of the assumed
conversion of convertible preferred stock
on the original dates of issuance -- 11,031 23,084 20,161 23,084
--------- --------- --------- --------- ---------
Shares used in computing non-GAAP basic
net income per share 42,151 38,655 34,640 35,730 34,357
========= ========= ========= ========= =========
Shares used in computing GAAP diluted net
income per share 44,939 37,481 28,420 30,833 27,724
Weighted average effect of the assumed
conversion of convertible preferred stock
on the original dates of issuance -- 4,424 9,101 8,014 9,101
--------- --------- --------- --------- ---------
Shares used in computing non-GAAP diluted
net income per share 44,939 41,905 37,521 38,847 36,825
========= ========= ========= ========= =========
Non-GAAP basic net income per share $ 0.31 $ 0.34 $ 0.24 $ 1.27 $ 0.88
Non-GAAP diluted net income per share $ 0.29 $ 0.31 $ 0.22 $ 1.16 $ 0.82
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SOURCE: TeleNav, Inc.
CONTACT: TeleNav, Inc. Media Contacts: Todd Witkemper 408-990-1216 This email address is being protected from spambots. You need JavaScript enabled to view it. The Blueshirt Group Investor Relations: Cynthia Hiponia 408.990.1265 This email address is being protected from spambots. You need JavaScript enabled to view it.
