Q2FY 19 Investor Presentation. Transforming life on the go for millions of people around the world.

Transcription

1 Q2FY 19 Investor Presentation Transforming life on the go for millions of people around the world. 1

2 Safe Harbor Statement In this presentation, we will make forward-looking statements about our business, including statements regarding, among others, the company s expected financial performance; expected profitability or loss; product and business strategies; and strategic relationships. We wish to caution you that such statements are just predictions based on management's current expectations or beliefs, are subject to risks and uncertainties, and that actual events or results may differ materially. We refer you to documents that we file with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q where we discuss important risks in greater detail in Risk factors and elsewhere. You should review our SEC filings carefully and with the understanding that our actual future results may be materially different from what we expect. We assume no duty to confirm, update or revise the financial forecast for the year, or any other forward looking information in this presentation as a result of new developments or otherwise. Use of Non-GAAP Financial Measures In this presentation, we will be discussing our results on a GAAP as well as a non-gaap basis, including billings, direct contribution from billings, adjusted EBITDA and adjusted cash flow from operations. These non-gaap measures are presented because management believes they help provide a consistent basis for comparison between periods that are not influenced by certain non-cash or other charges. Adjusted cash flow from operations, while generally a measure of profitability, can also represent a loss, consistent with our guidance for the second quarter of fiscal 2019 provided on November 8, Billings equals GAAP revenue recognized plus the change in deferred revenue from the beginning to the end of the applicable period. Direct contribution from billings reflects GAAP gross profit plus change in deferred revenue less change in deferred costs from the beginning to the end of the applicable period. Adjusted EBITDA measures GAAP net loss 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, deferred rent reversal and tenant improvement allowance recognition due to sublease termination, net of tax. Adjusted cash flow from operations measures adjusted EBITDA plus the effect of changes in deferred revenue and deferred costs. 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 of our business. 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 use these additional non-gaap measures as we believe they give useful operating information in addition to the GAAP results. Reconciliations of GAAP to non-gaap measures are available at the end of this presentation. 2

3 Telenav Investor Highlights Leading provider of connected car and location-based platform Connected car industry is predicted to grow at 33% CAGR 1 ; TNAV well positioned 3 of top 5 automotive manufacturers as customers (Ford, GM & Toyota) Q1FY 19 Auto Gross Profit has grown 12% YoY to $16.5M, driven by GM ramp up $247M TTM billings, 2 strong balance sheet, no debt, improving cash flow $(4.4)M Q1FY 18 Actual Adjusted Cash Flow from Operations 3 $(2.8)M $0 to $(2.0)M Q1FY 19 Actual Q2FY 19 Guidance TTM = Trailing Twelve Months. Billings is defined as recognized revenue plus the change in deferred revenue from the beginning to end of period. 3. Adjusted Cash Flow from Operations is defined as adjusted EBITDA plus the effect of changes in deferred revenue and deferred costs. See tables at end of this presentation for reconciliation from GAAP to non-gaap measures 3

4 Telenav s Connected Car Platform Designed to Support Current and Future Business Opportunities Smart Navigation ADAS/Safety Semi-Autonomous Vertical services Telenav Connected Car Platform Location Based Intelligence (LBI) Big Data/AI Location-based Ads and Commerce Data Intelligence Services Sensor and AI based Dynamic Road Information (1) Currently offered (2) Planned offering (3) Planned offering 4

5 $125B+ Connected Car Market by 2020 Safety, $36.6B Entertainment, $11.1B Driver Assistance, $54.4B Mobility management Navigation Current traffic information Parking garage assistance Optimized fuel consumption Driver assistance Highway assist/piloting (ADAS/Autonomous) High-definition maps Traffic sign recognition Well-being, $8.9B Mobility Management, $6.7B Vehicle Management, $7.8B Vehicle management Vehicle monitoring Maintenance scheduling Remote operation Sources: PwC (2016), BI Intelligence, Statista.com 5

6 Telenav is Well Positioned with Market Products and Customers Ford TDI Sync 2 Sync 3 + Cloud Search Next Gen Connected Delphi White Label OnStar RemoteLink Hybrid Embedded (Tier 2) Next Gen Connected Scout GPS Link Toyota Scout GPS Link Toyota/Xevo Embedded 6

7 Telenav s Growing Base of Deployed Vehicles Telenav has delivered licensed software/services to nearly 20 million vehicles, including more than 10 million connected vehicles Cumulative Connected Units Deployed Thousands 12,000 10,000 8,000 6,000 4,000 3,579 4,171 4,795 9,408 8,194 6,959 5,379 6,025 76% Y/Y Growth 10,605 2,000 0 Q1FY'17 Q2FY'17 Q3FY'17 Q4FY'17 Q1FY'18 Q2FY'18 Q3FY'18 Q4FY'18 Q1FY'19 Note: Telenav s measurement of units is based on vehicles licensed with Telenav software and/or connected service 7

8 Telenav s Auto Business Has Grown Significantly over the Last 7 Fiscal Years with 51% CAGR $M 250 Auto Billings % CAGR 50 - FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Q1FY Billings is defined as GAAP revenue recognized plus the change in deferred revenue from the beginning to the end of the applicable period 2. Billings for 2nd half of FY18 and Q1FY19 included significantly lower third-party content costs See tables at end of this presentation for reconciliation from GAAP to non-gaap measures 8

9 Both Auto Gross Profit (ASC606) and Total Adjusted CFFO Have Improved YoY; Total Adjusted CFFO Approaching Breakeven 3 $M 25.0 Auto Gross Profit/DCFB and Total Adjusted CFFO Q1 FY18 Q1FY Gross Profit (Auto) Direct Contribution From Billings (Auto) 1 Adjusted Cash Flow From Operations (All TNAV) 2 1. Direct contribution from billings (DCFB) is defined as GAAP gross profit plus the change in deferred revenue less the change in deferred costs from the beginning to the end of the applicable period. 2. Adjusted cash flow from operations (Adjusted CFFO) is defined as adjusted EBITDA plus the effect of changes in deferred revenue and deferred costs. See tables at end of this presentation for reconciliation from GAAP to non-gaap measures 9

10 Billings Trend Billings 1 Decline in auto billings due to significant reduction in third-party content costs $80 Millions $70 $60 $60 $60 $67 $66 $70 $59 $59 $59 $50 $47 $40 $30 $20 $10 $ Q1FY'17 Q2FY'17 Q3FY'17 Q4FY'17 Q1FY'18 Q2FY'18 Q3FY'18 Q4FY'18 Q1FY'19 Auto Billings Ads Billings Mobile Billings 1. Billings is defined as recognized revenue plus the change in deferred revenue from the beginning to the end of the applicable period. See tables at end of this presentation for reconciliation from GAAP to non-gaap measures 10

11 Telenav Strategy & Competitive Advantages Innovate: Consumer Centric Seamless Experience: o Multiple screens and physical buttons o Functions (nav, music, communication) o Autonomous driving/parking & manual o Inside and outside of cars Best of Breed (value, cost) o Content agnostic o OS agnostic o Global coverage Partner: OEM Centric Aligned Long Term Interest: o Robust and customizable platform to allow OEMs to differentiate and enhance brand Share: o Data, insight, revenue Additional Monetization o In-car ads/commerce o Date intelligence service o Vertical services Competitive advantages to build Intelligent HMI: Most delightful experience driven by data and AI Growing scale: Connected car network, data and insight Growing scale: Auto OEM and service/content partner network and shared revenue 11

12 Company Financials 12

13 Total Billings Growth: Auto, Ads and Mobile Millions $300 $250 Total Billings 1 $200 $150 $100 $50 $0 FY16 FY17 FY18 1. Billings is defined as GAAP revenue recognized plus the change in deferred revenue from the beginning to the end of the applicable period See tables at end of this presentation for reconciliation from GAAP to non-gaap measures 13

14 Combined Financial Metrics: Auto, Ads and Mobile 4 Q1FY 18 Q1FY 19 Revenue Billings 1 Gross Margin Direct Contribution from Billings 2 Net Loss Adjusted Cash Flow from Operations 3 $57.0M $65.8M 37% $24.5M $(10.4)M $(4.4)M $52.2M $59.0M 40% $23.9M $(7.9)M $(2.8)M 1. Billings equals GAAP revenue recognized plus the change in deferred revenue from the beginning to the end of the applicable period. 2. Direct contribution from billings reflects GAAP gross profit plus change in deferred revenue less change in deferred costs from the beginning to the end of the applicable period. 3. Adjusted cash flow from operations measures adjusted EBITDA plus the effect of changes in deferred revenue and deferred costs. 4. Adjusted for ASC 606. See tables at end of this presentation for reconciliation from GAAP to non-gaap measures 14

15 Balance Sheet 6/30/18 9/30/18 Cash and Short-Term Investments Deferred Revenue 1 Deferred Costs 1 $84.9M $72.1M $56.3M $81.3M $78.9M $60.3M Debt Weighted Quarterly Average Shares M M 1. Adjusted for ASC

16 Financial Reconciliation Tables 16

17 Telenav, Inc. Unaudited Reconciliation of Non-GAAP Adjustments (in thousands) Reconciliation of Revenue to Billings Three Months Ended September 30, Revenue $ 52,168 $ 56,962 Adjustments: Change in deferred revenue 6,873 8,826 Billings $ 59,041 $ 65,788 17

18 Telenav, Inc. Unaudited Reconciliation of Non-GAAP Adjustments (in thousands) Reconciliation of Net Loss to Adjusted EBITDA and Adjusted Cash Flow from Operations Three Months Ended September 30, Net loss $ (7,943) $ (10,369) Adjustments: Legal settlement and contingencies Deferred rent reversal due to lease termination - (538) Tenant improvement allowance recognition due to lease termination - (582) Stock-based compensation expense 2,269 2,480 Depreciation and amortization expense 1, Other income (expense), net (1,590) 47 Provision for income taxes Adjusted EBITDA (5,624) (7,741) Change in deferred revenue 6,873 8,826 Change in deferred costs (1) (4,039) (5,474) Adjusted cash flow from operations (1) $ (2,790) $ (4,389) (1) 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 prepaid content and associated technology costs. Accordingly, adjusted cash flow from operations does not reflect all costs associated with billings. 18