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Jul. 29, 2010
TeleNav Press Release:
TeleNav Reports Fourth Quarter and Fiscal 2010 Financial Results
-Quarterly revenue increased 10 percent sequentially, 45 percent year over year, to $49.5 million with annual revenue growth of 54 percent to $171.2 million
-Average monthly paid subscribers for the fourth quarter reached 16.1 million, up from 14.5 million in the prior quarter
Sunnyvale, Calif. – July 29, 2010 –TeleNav, Inc. (NASDAQ:TNAV), a leading provider of location-based services, or LBS, including voice guided navigation on mobile phones, autos and enterprise LBS, today announced its financial results for the fourth quarter and fiscal year ended June 30, 2010.
Financial Highlights
- Record revenue for the fourth quarter of fiscal 2010 grew 45 percent over the prior year to $49.5 million.
- Net income for the fourth quarter of fiscal 2010 grew 3 percent over the prior year to $10.6 million.
- Record revenue for fiscal 2010 grew 54 percent year over year to $171.2 million.
- Record net income for fiscal 2010 grew 40 percent year over year to $41.4 million.
- Cash generated from operations for the fourth quarter of fiscal 2010 was $24.7 million.
- Average monthly revenue per end user (ARPU) for the fourth quarter of fiscal 2010 decreased 13 percent over the fourth quarter of fiscal 2009 to $1.03.
- Average monthly paying end users for the fourth quarter of fiscal 2010 increased 69 percent year over year to 16.1 million.
- Completed initial public offering in May 2010 with approximately $44.6 million in net proceeds to TeleNav, after underwriting commissions and discounts and offering expenses.
"In our first quarter as a public company, TeleNav is pleased to report solid financial results for the fourth quarter and fiscal 2010," said HP Jin, president, CEO and co-founder of TeleNav. "During fiscal 2010, TeleNav substantially increased its subscriber base and expanded its partnership with Ford Motor Company, paving the way for growth in our in-dash navigation segment. More recently, TeleNav expanded its U.S. carrier base with the addition of U.S. Cellular, the nation's sixth largest wireless carrier."
Revenue for the fourth quarter of fiscal 2010 was $49.5 million, compared to revenue of $45.1 million for the third quarter of fiscal 2010 and $34.3 million for the fourth quarter of fiscal 2009. Revenue for fiscal 2010 was $171.2 million, compared to revenue of $110.9 million in fiscal 2009.
Net income for the fourth quarter of fiscal 2010 was $10.6 million, or $0.24 per diluted share, compared to net income of $12.5 million, or $0.23 per diluted share, for the third quarter of fiscal 2010 and $10.3 million, or $0.20 per diluted share, for the fourth quarter of fiscal 2009. Net income for fiscal 2010 was $41.4 million, or $0.83 per diluted share, compared to net income of $29.6 million, or $0.57 per diluted share, in fiscal 2009.
Non-GAAP net income for the fourth quarter of fiscal 2010 was $13.0 million, or $0.31 per diluted share, compared to non-GAAP net income of $13.1 million, or $0.34 per diluted share, for the third quarter of fiscal 2010 and $10.5 million, or $0.28 per diluted share, for the fourth quarter of fiscal 2009. For fiscal 2010, non-GAAP net income was $45.2 million, or $1.16 per diluted share, compared to $30.1 million, or $0.82 per diluted share, in fiscal 2009. Our Non-GAAP net income excludes stock-based compensation expense net of the related tax effect. The shares used in the calculation of our 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.
"Cash generated from operations of $44.5 million increased 93 percent year over year. Including the successful completion of TeleNav's initial public offering this quarter, TeleNav increased its cash and cash equivalents 241 percent year over year to $112.9 million as of June 30, 2010," said Douglas Miller, chief financial officer of TeleNav. "TeleNav's strengthened balance sheet positions us to further invest in our core LBS business, as well as other strategic initiatives such as in-dash navigation and mobile advertising."
Recent Business Highlights
- In July 2010, U.S. Cellular, the nation's sixth largest wireless carrier, selected TeleNav as a GPS navigation partner and launched Your Navigator Deluxe™, powered by TeleNav, on multiple smartphones.
- In May 2010, TeleNav announced the availability of the Sendum PT200 tracking device for Sprint wireless enterprise customers using the TeleNav Asset Tracker platform. The device provides highly accurate location information allowing TeleNav Asset Tracker users to monitor the real-time location of assets, such as high-value packages, cargo or equipment, using a secure, Web-based portal.
- In April 2010, TeleNav announced the availability of TeleNav business mobility products for Verizon Wireless enterprise customers, which allow organizations' field personnel to manage their work and exchange data with back-office systems using their smartphones on the Verizon Wireless network.
- In March 2010, TeleNav unveiled the new version of TeleNav GPS Navigator™ with new features including one-touch speech recognition, lane assist, red light traffic camera and speed limit alerts, and navigation while out of wireless coverage areas.
- In March 2010, TeleNav introduced OnMyWay™, a new location-based mobile application that automatically alerts a pre-determined person or group of people of the sender's trip status and estimated time of arrival (ETA).
- In January 2010 during CES, Ford Motor Company announced that it would use TeleNav's automotive-grade GPS navigation software in its next generation of the Ford SYNC™ platform.
TeleNav's largest customer, Sprint, is in negotiations with TeleNav regarding potential amendment of its current contract, which expires as to TeleNav's right to be Sprint's exclusive provider of Sprint Navigation on December 31, 2010 and terminates on December 31, 2011. Sprint and TeleNav are currently in active discussions to amend material terms of that contract including an extension of the contract and TeleNav's preferred provider status, changes to the current per subscriber revenue model, and provisions for new revenue opportunities from premium products, advertising and mobile commerce. TeleNav anticipates that any extended agreement would result in declines in ARPU and significant reductions in total revenue from Sprint for bundled basic navigation services compared to the most recent quarter, but would also likely result in continued increases in the number of subscribers. TeleNav cannot predict whether or when it will reach agreement with Sprint on these matters or what the ultimate financial impact would be.
Business Outlook
TeleNav offers the following guidance for the first quarter ending September 30, 2010, which assumes no amendment to the Sprint agreement would be effective during the quarter ending September 30, 2010:
- Total revenue is expected to be approximately $50.0 million;
- Gross margins are expected to be 80 percent;
- Non-GAAP operating expenses are expected to increase 10 percent sequentially, and exclude approximately $800,000 in stock-based compensation;
- GAAP net income is expected to be approximately $10.0 million;
- GAAP diluted net income per share is expected to be approximately $0.22;
- Non-GAAP net income is expected to be approximately $11.0 million;
- Non-GAAP diluted net income per share is expected to be approximately $0.23;
- 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 September 30, 2010 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 fourth quarter and fiscal year 2010 results and outlook for the first quarter of fiscal 2011. To access the conference call, dial 888-221-9466 or 913-312-6664 and enter pass code 5484800. 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, August 3, 5:00 p.m. PDT. To access the replay, please dial 888-203-1112 or 719-457-0820 and enter pass code 5484800.
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 fiscal 2010 and the third and fourth quarter of fiscal 2010 and similar periods from the prior year 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 results of operations, the anticipated outcome of current negotiations with Sprint to amend TeleNav's current contract, and the benefits of TeleNav's relationship with Ford and US Cellular. 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; the amendments, if any, to TeleNav's agreement with Sprint; TeleNav's dependence on Sprint and AT&T for a substantial majority of its revenue; competition from other market participants who may provide comparable services to subscribers without charge; TeleNav's inexperience in the automotive navigation market; TeleNav's ability to estimate and sustain or increase its 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 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.
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Media Contacts
Mary Beth Lowell
425-531-0122 phone
marybethl@telenav.com
Mark Burfeind
206-240-3970 phone
markb@telenav.com
Todd Witkemper
408-306-6677 phone
toddw@telenav.com
Investor Relations:
Cynthia Hiponia
The Blueshirt Group (for TeleNav)
408.990.1265
IR@telenav.com
About TeleNav
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
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