- Fourth Quarter Fiscal 2020 Subscription revenue grew 54% year-over-year
- SaaS Annual Recurring Revenue (“ARR”) grew 85% year-over-year
“Duck Creek’s fourth quarter was an excellent finish to an incredible year for the company, highlighted by 54% growth in subscription revenue,” said
Jackowski added, “The success of our recent IPO was the latest important milestone for
Fourth Quarter Fiscal Year 2020 Financial Highlights
Revenue
- Total revenue for the fourth quarter of fiscal year 2020 was
$58.3 million , an increase of 22% from the fourth quarter in fiscal year 2019. Subscription revenue was$24.6 million , an increase of 54%; services revenue was$23.3 million , an increase of 6%; license revenue was$4.5 million , an increase of 6%; and maintenance revenue was$5.9 million , an increase of 2%.
Profitability
- GAAP loss from operations was
$21.6 million for the fourth quarter of fiscal year 2020, compared with a GAAP loss from operations of$2.4 million for the comparable period in fiscal year 2019. - Non-GAAP income from operations was
$2.2 million for the fourth quarter of fiscal year 2020, compared with non-GAAP income from operations of$2.9 million for the comparable period in fiscal year 2019. - GAAP net loss was
$21.5 million for the fourth quarter of fiscal year 2020, compared with a GAAP net loss of$2.8 million for the comparable period in fiscal year 2019. - Non-GAAP net income was
$2.3 million for the fourth quarter of fiscal year 2020, compared with non-GAAP net income of$2.5 million for the comparable period in fiscal year 2019. - GAAP net loss per share is not meaningful because it would only represent results for the 17-day period following our IPO. Non-GAAP net income per share was
$0.02 , based on basic weighted average shares outstanding of 129.3 million. - Adjusted EBITDA was
$3.0 million for the fourth quarter of fiscal 2020, compared with adjusted EBITDA of$3.6 million for the comparable period in fiscal year 2019.
Full Year Fiscal 2020 Financial Highlights
Revenue
- Total revenue for the full year fiscal 2020 was
$211.7 million , an increase of 24% from fiscal year 2019. Subscription revenue was$84.0 million , an increase of 50%; services revenue was$94.1 million , an increase of 21%; license revenue was$9.9 million , a decrease of 28%; and maintenance revenue was$23.7 million , which remained relatively flat. - SaaS annual recurring revenue, or SaaS ARR, was
$95.6 million as ofAugust 31, 2020 , an increase of 85% from fiscal year 2019.
Profitability
- GAAP loss from operations was
$28.7 million for the full year fiscal 2020, compared with a GAAP loss from operations of$14.2 million in fiscal year 2019. - Non-GAAP income from operations was
$8.6 million for the full year fiscal 2020, compared with non-GAAP income from operations of$4.4 million in fiscal year 2019. - GAAP net loss was
$29.9 million for the full year fiscal 2020, compared with a GAAP net loss of$16.9 million in fiscal year 2019. - Non-GAAP net income was
$7.3 million for the full year fiscal 2020, compared with non-GAAP net income of$1.7 million in fiscal year 2019. - GAAP net loss per share is not meaningful because it would only represent results for the 17-day period following our IPO. Non-GAAP net income per share was
$0.06 , based on basic weighted average shares outstanding of 127.4 million. - Adjusted EBITDA was
$11.7 million for the full year fiscal 2020, compared with adjusted EBITDA of$6.8 million in fiscal year 2019.
Liquidity
Duck Creek had$389.9 million in cash and cash equivalents atAugust 31, 2020 . The Company generated$25.7 million in cash from operations and had free cash flow of$19 .0 million in fiscal year 2020, compared with$14.8 million and$6.6 million , respectively, in fiscal year 2019.
The information presented above includes non-GAAP financial measures such as “non-GAAP income from operations,” “adjusted EBITDA,” “non-GAAP net income,” “non-GAAP net income per share,” and “free cash flow.” Refer to “Non-GAAP Financial Measures and Other Metrics” for a discussion of these measures and reconcilations of each non-GAAP financial measure to the most directly comparable GAAP financial measure.
Business Outlook
First Quarter Fiscal 2021 | Full Year Fiscal 2021 | |
Revenue | ||
Subscription Revenue | ||
Adjusted EBITDA | ||
Non-GAAP Net Loss Per Share |
Conference Call Information
About
Forward Looking Statements
This press release includes certain disclosures which contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements because they contain words such as “expect,” “believe,” “target,” “project,” “goals,” “estimate,” “potential,” “predict,” “may,” “will,” “might,” “could,” “forecast,” “outlook” and variations of these terms or the negative of these terms and similar expressions. Forward-looking statements, including statements regarding Duck Creek’s expected outlook for first quarter fiscal 2021 and full year fiscal 2021, are based on Duck Creek’s current expectations and assumptions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that may differ materially from those contemplated by the forward-looking statements, which are neither statements of historical fact nor guarantees or assurances of future performance. Important factors that could cause actual results to differ materially from those in the forward-looking statements will be set forth in
Any forward-looking statement in this release speaks only as of the date of this release.
Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance unless expressed as such, and should only be viewed as historical data.
Non-GAAP Financial Measures and Other Metrics
This press release contains the following non-GAAP financial measures: non-GAAP gross margin, non-GAAP income from operations, adjusted EBITDA, non-GAAP net income, non-GAAP net income per share, and free cash flow. Adjusted EBITDA excludes provision for income taxes, other (income)/expense, interest expense, net, depreciation of property and equipment, amortization of intangible assets, share-based compensation expense, and change in fair value of contingent earnout liability. Non-GAAP gross margin excludes share-based compensation expense, amortization of intangible assets, and amortization of capitalized internal-use software. Non-GAAP income from operations excludes share-based compensation expense, amortization of intangible assets and change in fair value of contingent earnout liability. Free cash flow consists of net cash provided by operating activities less cash used for purchases of property and equipment and capitalized internal-use software. See below for a reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure.
Other metrics include SaaS ARR and SaaS Net Dollar Retention, which are calculated for all SaaS continuing software services. Subscription revenue excluded from the calculations relate to one legacy contract for a service no longer offered separately by the Company. SaaS ARR is calculated by annualizing revenue recorded in the last month of the measurement period. SaaS Net Dollar Retention is a rate calculated by annualizing revenue recorded in the last month of the measurement period for those customers in place throughout the entire measurement period. We divide the result by annualized revenue from the month that is one year prior to the end of the measurement period, for all customers in place at the beginning of the measurement period.
The Company believes that these non-GAAP financial measures and other metrics provide useful information to management and investors regarding certain financial and business trends relating to Duck Creek’s financial condition and results of operations. The Company’s management uses these non-GAAP measures and other metrics to manage our business, make planning decisions, evaluate its performance and allocate resources. The Company believes that the use of these non-GAAP financial measures and other metrics help investors and analysts in comparing its results across reporting periods on a consistent basis by excluding items that the Company does not believe are indicative of its core operating performance. These non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation from, or as a substitute for, the analysis of other GAAP financial measures, including net income and cash flows from operating activities.
These non-GAAP financial measures are not universally consistent calculations, limiting their usefulness as comparative measures. Other companies may calculate similarly titled financial measures differently than the Company does or may not calculate them at all. Additionally, these non-GAAP financial measures are not measurements of financial performance or liquidity under GAAP. In order to facilitate a clear understanding of its consolidated historical operating results, readers should examine the Company’s non-GAAP financial measures in conjunction with its historical GAAP financial information.
To the extent that the Company provides guidance on a non-GAAP basis, it does not provide reconciliations of such forward-looking non-GAAP measures to GAAP due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation, including adjustments that could be made for the charges reflected in the Company’s reconciliation of historic numbers, the amount of which, based on historical experience, could be significant.
Investor Contact:
ICR
646-277-1251
Brian.denyeau@icrinc.com
Media Contact:
617 624 3295
prechichi@racepointglobal.com
857 201 5784
sam.shay@duckcreek.com
Condensed Consolidated Balance Sheets | |||||
(unaudited, in thousands) | |||||
August, 31 2020 | |||||
Assets | |||||
Current assets: | |||||
Cash and cash equivalents | $ | 389,878 | $ | 11,999 | |
Accounts receivable | 29,149 | 25,450 | |||
Unbilled revenue | 18,121 | 15,293 | |||
Prepaid expenses and other current assets | 12,186 | 5,772 | |||
Total current assets | 449,334 | 58,514 | |||
Property and equipment, net | 18,113 | 17,058 | |||
Operating lease assets | 18,171 | - | |||
272,455 | 272,455 | ||||
Intangible assets, net | 81,687 | 98,756 | |||
Unbilled revenue, net of current portion | 3,487 | 8,045 | |||
Other assets | 17,853 | 12,449 | |||
Total assets | 861,100 | 467,277 | |||
Liabilities and Stockholders' Equity/Partners' Capital | |||||
Current liabilities: | |||||
Accounts payable | 1,802 | 1,362 | |||
Accrued liabilities | 58,202 | 31,003 | |||
Contingent earnout liability | 3,701 | 4,055 | |||
Lease liability | 3,611 | - | |||
Deferred revenue | 30,397 | 23,470 | |||
Total current liabilities | 97,713 | 59,890 | |||
Contingent earnout liability, net of current portion | 3,391 | 6,460 | |||
Borrowings under credit facility | - | 4,000 | |||
Deferred rent, net of current portion | - | 5,388 | |||
Lease liability, net of current portion | 21,739 | - | |||
Deferred revenue, net of current portion | 379 | 692 | |||
Other long-term liabilities | 4,121 | 1,781 | |||
Total liabilities | 127,343 | 78,210 | |||
Total stockholders' equity/partners' capital | 733,757 | 389,066 | |||
Total liabilities and stockholders' equity/partners' capital | $ | 861,100 | $ | 467,277 | |
Consolidated Statements of Operations | ||||||||||||||
(unaudited, in thousands) | ||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||
Revenue: | ||||||||||||||
Subscription | $ | 24,631 | $ | 15,977 | $ | 83,999 | $ | 55,909 | ||||||
License | 4,483 | 4,237 | 9,914 | 13,776 | ||||||||||
Maintenance and support | 5,889 | 5,798 | 23,680 | 23,896 | ||||||||||
Professional services | 23,319 | 21,908 | 94,079 | 77,692 | ||||||||||
Total revenue | 58,322 | 47,920 | 211,672 | 171,273 | ||||||||||
Cost of revenue (1): | ||||||||||||||
Subscription | 10,031 | 7,211 | 34,902 | 24,199 | ||||||||||
License | 506 | 503 | 1,853 | 1,970 | ||||||||||
Maintenance and support | 863 | 610 | 3,338 | 2,781 | ||||||||||
Professional services | 18,243 | 11,924 | 57,082 | 43,228 | ||||||||||
Total cost of revenue | 29,643 | 20,247 | 97,175 | 72,178 | ||||||||||
Gross margin | 28,679 | 27,672 | 114,497 | 99,095 | ||||||||||
Operating expenses (1): | ||||||||||||||
Research and development | 14,628 | 9,597 | 44,052 | 35,936 | ||||||||||
Sales and marketing | 16,766 | 10,227 | 50,305 | 40,189 | ||||||||||
General and administrative | 18,746 | 9,417 | 48,662 | 36,493 | ||||||||||
Change in fair value of contingent consideration | 112 | 840 | 133 | 628 | ||||||||||
Total operating expenses | 50,252 | 30,081 | 143,152 | 113,246 | ||||||||||
Loss from operations | (21,573 | ) | (2,409 | ) | (28,655 | ) | (14,151 | ) | ||||||
Other income (expense), net | 737 | (252 | ) | 641 | (565 | ) | ||||||||
Interest income (expense), net | 30 | (19 | ) | (356 | ) | (1,030 | ) | |||||||
Loss before income taxes | (20,806 | ) | (2,681 | ) | (28,370 | ) | (15,746 | ) | ||||||
Provision for income taxes | 673 | 143 | 1,562 | 1,150 | ||||||||||
Net loss | $ | (21,479 | ) | $ | (2,823 | ) | $ | (29,932 | ) | $ | (16,896 | ) | ||
(1) Amounts include share-based compensation expense as disclosed in the following table: | ||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||
Share-based compensation expense: | ||||||||||||||
Cost of subscription revenue | 405 | 8 | 415 | 20 | ||||||||||
Cost of license revenue | - | - | - | - | ||||||||||
Cost of maintenance and support revenue | 24 | 2 | 28 | 9 | ||||||||||
Cost of services revenue | 4,581 | 41 | 4,683 | 123 | ||||||||||
Research and development | 3,844 | 132 | 4,128 | 397 | ||||||||||
Sales and marketing | 5,326 | 101 | 5,581 | 418 | ||||||||||
General and administrative | 5,524 | 292 | 6,273 | 1,103 | ||||||||||
Total share-based compensation expense | $ | 19,704 | $ | 576 | $ | 21,108 | $ | 2,070 | ||||||
As part of the Company's re-organization in conjunction with the | ||||||||||||||
Condensed Consolidated Statements of Cash Flows | |||||||||||||
(unaudited, in thousands) | |||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||
Operating activities: | |||||||||||||
Net loss | $ | (21,479 | ) | $ | (2,823 | ) | $ | (29,932 | ) | $ | (16,896 | ) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||||||
Depreciation of property and equipment | 793 | 668 | 3,143 | 2,398 | |||||||||
Amortization of intangible assets | 4,765 | 4,348 | 17,773 | 17,594 | |||||||||
Impairment of right of use asset | 2,792 | - | 2,792 | - | |||||||||
Amortization of deferred financing fees | 28 | (66 | ) | 134 | 136 | ||||||||
Share-based compensation expense | 19,704 | 576 | 21,108 | 2,070 | |||||||||
Change in fair value of contingent earnout liability | 112 | 840 | 133 | 628 | |||||||||
Payment of contingent earnout liability in excess of acquisition date fair value | - | - | - | (2,350 | ) | ||||||||
Bad debt expense | 32 | 158 | 97 | 182 | |||||||||
Deferred taxes | (544 | ) | 211 | (690 | ) | 188 | |||||||
Changes in operating assets and liabilities | |||||||||||||
Accounts receivable | 505 | 1,897 | (3,796 | ) | (6,285 | ) | |||||||
Unbilled revenue | 2,912 | 5,065 | 1,730 | 4,481 | |||||||||
Prepaid expenses and other current assets | (6,396 | ) | (624 | ) | (6,300 | ) | 198 | ||||||
Other assets | (1,663 | ) | (1,335 | ) | (5,764 | ) | (3,788 | ) | |||||
Accounts payable | 123 | 189 | (181 | ) | (783 | ) | |||||||
Accrued liabilities | 7,070 | 7,459 | 16,393 | 9,150 | |||||||||
Deferred revenue | 6,400 | (205 | ) | 6,614 | 5,972 | ||||||||
Deferred rent | - | 779 | - | 1,661 | |||||||||
Operating leases | (67 | ) | - | 132 | - | ||||||||
Other long-term liabilities | 2,391 | (45 | ) | 2,339 | 277 | ||||||||
Net cash provided by operating activities | 17,478 | 17,092 | 25,725 | 14,833 | |||||||||
Investing activities: | |||||||||||||
Acquisition of | - | - | - | (9,814 | ) | ||||||||
Acquisition of CedeRight Products | - | (1,827 | ) | - | (1,827 | ) | |||||||
Capitalized internal-use software | (453 | ) | (781 | ) | (2,893 | ) | (2,956 | ) | |||||
Purchase of property and equipment | (690 | ) | (3,517 | ) | (3,854 | ) | (5,314 | ) | |||||
Net cash used in investing activities | (1,143 | ) | (6,125 | ) | (6,747 | ) | (19,911 | ) | |||||
Financing activities: | |||||||||||||
Net cash provided by (used in) financing activities | 354,348 | (8,802 | ) | 358,901 | 3,198 | ||||||||
Net increase (decrease) in cash and cash equivalents | 370,683 | 2,165 | 377,879 | (1,880 | ) | ||||||||
Cash and cash equivalents - beginning of period | 19,195 | 9,834 | 11,999 | 13,879 | |||||||||
Cash and cash equivalents - end of period | $ | 389,878 | $ | 11,999 | $ | 389,878 | $ | 11,999 | |||||
Reconciliation of GAAP to Non-GAAP Financial Measures | |||||||||||||||
(unaudited, in thousands) | |||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Non-GAAP Gross Margin: | |||||||||||||||
GAAP Gross Margin | $ | 28,679 | $ | 27,672 | $ | 114,497 | $ | 99,095 | |||||||
Share-based compensation expense | 5,010 | 51 | 5,125 | 151 | |||||||||||
Amortization of intangible assets | 1,186 | 1,164 | 4,746 | 4,680 | |||||||||||
Amortization of capitalized internal-use software | 497 | - | 703 | - | |||||||||||
Non-GAAP Gross Margin | $ | 35,372 | $ | 28,887 | $ | 125,071 | $ | 103,926 | |||||||
Non-GAAP Income from Operations: | |||||||||||||||
GAAP Loss from Operations | $ | (21,573 | ) | $ | (2,409 | ) | $ | (28,655 | ) | $ | (14,151 | ) | |||
Share-based compensation expense | 19,704 | 576 | 21,108 | 2,070 | |||||||||||
Amortization of intangible assets | 3,994 | 3,921 | 15,975 | 15,884 | |||||||||||
Change in fair value of contingent earnout liability | 112 | 840 | 133 | 628 | |||||||||||
Non-GAAP Income from Operations | $ | 2,237 | $ | 2,927 | $ | 8,561 | $ | 4,431 | |||||||
Adjusted EBITDA: | |||||||||||||||
GAAP Net Loss | $ | (21,479 | ) | $ | (2,823 | ) | $ | (29,932 | ) | $ | (16,896 | ) | |||
Provision for income taxes | 673 | 143 | 1,562 | 1,150 | |||||||||||
Other (income) expense | (737 | ) | 252 | (641 | ) | 565 | |||||||||
Interest expense, net | (30 | ) | 19 | 356 | 1,030 | ||||||||||
Depreciation of property and equipment | 793 | 668 | 3,143 | 2,398 | |||||||||||
Amortization of intangible assets | 3,994 | 3,921 | 15,975 | 15,884 | |||||||||||
Share-based compensation expense | 19,704 | 576 | 21,108 | 2,070 | |||||||||||
Change in fair value of contingent earnout liability | 112 | 840 | 133 | 628 | |||||||||||
Adjusted EBITDA | $ | 3,030 | $ | 3,595 | $ | 11,704 | $ | 6,829 | |||||||
Non-GAAP Net Income: | |||||||||||||||
GAAP Net Loss | $ | (21,479 | ) | $ | (2,823 | ) | $ | (29,932 | ) | $ | (16,896 | ) | |||
Share-based compensation expense | 19,704 | 576 | 21,108 | 2,070 | |||||||||||
Amortization of intangible assets | 3,994 | 3,921 | 15,975 | 15,884 | |||||||||||
Change in fair value of contingent earnout liability | 112 | 840 | 133 | 628 | |||||||||||
Tax effect of adjustments (1) | - | - | - | - | |||||||||||
Non-GAAP Net Income | $ | 2,331 | $ | 2,513 | $ | 7,284 | $ | 1,686 | |||||||
Non-GAAP Net Income per Share (Basic) (2) | $ | 0.02 | nm | $ | 0.06 | nm | |||||||||
Shares used in computing Non-GAAP Net Income per Share (Basic) (2) | 129,264,149 | nm | 127,367,969 | nm | |||||||||||
(1) Our tax provision is primarily related to state taxes and income taxes in profitable foreign jurisdictions. We maintain a full valuation allowance against our deferred tax assets in the | |||||||||||||||
(2) Prior to the IPO, there were no shares of common stock outstanding, and the membership structure of | |||||||||||||||
Free Cash Flow: | |||||||||||||||
Net cash provided by operating activities | $ | 17,478 | $ | 17,092 | $ | 25,725 | $ | 14,833 | |||||||
Purchases of property and equipment | (690 | ) | (3,517 | ) | (3,854 | ) | (5,314 | ) | |||||||
Capitalized internal-use software | (453 | ) | (781 | ) | (2,893 | ) | (2,956 | ) | |||||||
Free Cash Flow | $ | 16,335 | $ | 12,794 | $ | 18,978 | $ | 6,563 | |||||||
Source:
2020 GlobeNewswire, Inc., source