Exhibit 99.1
Rally Software Announces Financial Results for
Fourth Quarter and Fiscal Year 2014
BOULDER, Colo., Mar. 20, 2014 /PRNewswire/ — Rally (NYSE: RALY), a leading global provider of cloud-based solutions for managing Agile software development, today announced financial results for its fourth quarter and fiscal year 2014 ended January 31, 2014.
Fourth quarter 2014 results:
· Revenues of $19.6 million, an increase of 27% compared to the fourth quarter in the same period one year ago.
· GAAP net loss of $(6.3) million, or a loss of $(0.26) per basic and diluted share based on 24.6 million weighted average shares of common stock outstanding, compared to a GAAP net loss of $(4.0) million, or a loss of $(1.82) per share based on 2.2 million weighted average shares of common stock outstanding in the same period one year ago.
· Non-GAAP net loss of $(4.7) million, or $(0.19) per basic and diluted share, compared to a non-GAAP net loss of $(3.7) million, or $(1.68) per basic and diluted share in the same period one year ago (see the table titled “Statement of Operations GAAP to Non-GAAP Reconciliation” for a reconciliation of these GAAP and non-GAAP financial measures).
· Deferred revenue of $40.8 million, a 21% increase over the $33.7 million reported at the end of the prior quarter.
· Calculated billings were $26.7 million, a 12% increase over the $23.8 million in the same period one year ago, and a 63% increase over the $16.4 million reported in the previous quarter (see the table titled “Reconciliation of Total Revenue to Calculated Billings and Days Sales Outstanding” for a reconciliation of GAAP revenue to calculated billings).
· Total paid seats increased to over 214,000, a 27% increase over the total paid seats in the same period one year ago and an 8% increase over total paid in seats in the prior quarter.
Fiscal 2014 results:
· Revenues of $74.3 million, an increase of 31% compared to the prior year.
· GAAP net loss of $(20.1) million, or a loss of $(1.01) per basic and diluted share based on 19.8 million weighted average shares of common stock outstanding, compared to a GAAP net loss of $(10.8) million, or a loss of $(5.13) per share based on 2.1 million weighted average shares of common stock outstanding in the prior year.
· Non-GAAP net loss of $(15.1) million, or $(0.76) per basic and diluted share, compared to a non-GAAP net loss of $(9.7) million, or $(4.59) per basic and diluted share in the prior year (see the table titled “Statement of Operations GAAP to Non-GAAP Reconciliation” for a reconciliation of these GAAP and non-GAAP financial measures).
· Calculated billings were $76.9 million, a 10% increase over the $69.9 million in the prior year (see the table titled “Reconciliation of Total Revenue to Calculated Billings and Days Sales Outstanding” for a reconciliation of GAAP revenue to calculated billings).
Cash flow used in operations in the fourth quarter was $7.9 million and cash flow used in operations in fiscal year 2014 was $18.5 million. Cash and cash equivalents at January 31, 2014, excluding restricted cash, were $88.9 million.
“This quarter marked a finish to a great year, distinguishing a continued trend of Agile acceptance in the mainstream. Large, enterprise customers are going bigger, faster with Agile and Rally to keep pace in the age of digital disruption. Today’s hyper-competitive marketplace requires business leaders to recognize the benefits of their Agile teams’ fast-pace delivery, and scale the process across many functions of the business. Rally is addressing the need to innovate at speed and thus supporting the Agile wave,” says Rally’s Chairman and CEO, Tim Miller.
“Of the deals closed during this quarter, we’d like to highlight two companies that strongly demonstrate the role of Agile in large scale enterprise transformations. One with a Fortune 500 American multinational conglomerate and one with a major American multinational semiconductor chip manufacturer representing 19,000 total aggregated seats, proving the all-in approach to Agile is a must for these large enterprise customers.”
Other key customer wins this quarter include renewals, add-ons to existing subscriptions and new customers in industries ranging from media and entertainment to travel and healthcare, including: Chipotle, Jive Communications, Whole Foods Market, eHarmony, Pearson, Autodesk, Betfair, InterContinental Hotels, Financial Times, Churchill Downs, Truven Health Analytics, Western Union, National Geographic, Edmunds, and TomTom International.
Business Outlook
As of March 20, 2014, management is providing its financial outlook as follows:
First Quarter of Fiscal 2015
· Total revenue in the range of $19.4 to $19.6 million, or 21% to 22% growth over the prior year’s first quarter.
· GAAP net loss per basic and diluted share of approximately $(0.60) to $(0.57), based on 24.8 million weighted average shares of common stock outstanding.
· Non-GAAP net loss per basic and diluted share of approximately $(0.53) to $(0.50), based on 24.8 million weighted average shares of common stock outstanding, and excludes $1.6 million in stock-based compensation and amortization of acquired intangible assets.
Fiscal Year 2015
· Total revenue in the range of $91.5 to $93.5 million, or 23% to 26% growth over the prior year.
· GAAP net loss per basic and diluted share of approximately $(1.87) to $(1.82), based on 25.2 million weighted average shares of common stock outstanding.
· Non-GAAP net loss per basic and diluted share of approximately $(1.61) to $(1.56), based on 25.2 million weighted average shares of common stock outstanding, and excludes $6.5 million in stock-based compensation and amortization of acquired intangible assets.
Conference Call Today March 20, 2014
Rally will host a conference call and live webcast to discuss the financial results at 3:00 p.m. Mountain Time, 5:00 p.m. Eastern Time, today, Thursday, March 20, 2014. The conference call can be accessed by dialing 1-877-870-4263, or 1-412-317-0790 (outside the U.S. and Canada). A live webcast will be available on the Investor Relations page of the Rally corporate website at www.rallydev.com and beginning approximately one hour after the completion of the call is available for replay for 30 days. An audio replay of the call will also be available to all interested parties beginning at approximately 4:00 p.m. Mountain Time, 6:00 p.m. Eastern Time, on Thursday, March 20, 2014 until 7:00 a.m. Mountain Time, 9:00 a.m. Eastern Time, on Friday, March 28, 2014, by dialing 1-877-344-7529 or 1-412-317-0088 (outside the U.S. and Canada) and entering pass code 10041965#.
About Rally
Rally Software is a leading global provider of cloud-based solutions for managing Agile software development. The Rally® Agile application lifecycle management (ALM) platform transforms the way organizations manage the software development lifecycle by closely aligning software development and strategic business objectives, facilitating collaboration, increasing transparency and automating manual processes. Companies use Rally to accelerate the pace of innovation, improve productivity and more effectively adapt to rapidly changing customer needs and competitive dynamics.
©2014 Rally Software Development Corp. Rally, Rally Software and the Rally logo are trademarks or registered trademarks of Rally Software Development Corp. in the United States and/or other countries. All other trade names, trademarks and service marks are properties of their respective owners.
Non-GAAP Financial Measures
To supplement Rally’s condensed consolidated financial statements, which are prepared and presented in accordance with Generally Accepted Accounting Principles (GAAP), the company has provided certain measures that have not been prepared in accordance with GAAP. These non-GAAP financial measures include non-GAAP results for calculated billings, net loss and basic and diluted net loss per share, which are in addition to, and, not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.
Rally’s non-GAAP financial measures exclude stock-based compensation expense and amortization of acquired intangible assets. Management believes the presentation of operating results excluding stock-based compensation expense and the amortization of acquired intangible assets provides useful supplemental information to investors and facilitates the analysis of Rally’s core operating results and comparison of operating results across reporting periods and is therefore useful to investors in analyzing and assessing the company’s past and future operating performance.
Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial
measures. A reconciliation of the non-GAAP financial measures to such GAAP measures can be found in the accompanying financial statements included with this press release.
Forward-looking Statements
This press release contains forward-looking statements, including statements regarding Rally’s future financial performance, market growth, the demand for Rally’s solutions, and general business conditions. Any forward-looking statements contained in this press release are based upon Rally’s historical performance and its current plans, estimates and expectations and are not a representation that such plans, estimates, or expectations will be achieved. These forward-looking statements represent Rally’s expectations as of the date of this press release. Subsequent events may cause these expectations to change, and Rally disclaims any obligation to update the forward-looking statements in the future. These forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially from Rally’s current expectations. Important factors that could cause actual results to differ materially from those anticipated in such forward-looking statements include, but are not limited to, the growth of demand for Agile software development, Rally’s ability to expand its relationships with existing customers, Rally’s ability to attract and retain customers, the mix of perpetual license and subscription revenue, competitive factors, including but not limited to pricing pressures, industry consolidation, and entry of new competitors and new products, Rally’s ability to manage growth effectively, Rally’s ability to maintain, protect and enhance its brand and intellectual property, general economic and financial conditions, and other risks and uncertainties. Further information on risk factors that could cause actual results to differ materially from forecasted results is included in Rally’s reports filed with the SEC, including its prospectus dated July 24, 2013 and filed with the SEC on July 25, 2013, the company’s Form 10-Q for the quarter ended October 31, 2013 filed on December 11, 2013 and our Form 10-K that will be filed for the fiscal year ended January 31, 2014.
Investor Relations contact:
The Blueshirt Group
Erica Abrams
415-217-5864
Erica@blueshirtgroup.com
Rally Software Development Corp.
Condensed Consolidated Balance Sheets
(Unaudited, in thousands)
| | January 31, | | January 31, | |
| | 2014 | | 2013 | |
ASSETS | | | | | |
| | | | | |
Current assets: | | | | | |
Cash and cash equivalents | | $ | 88,891 | | $ | 17,609 | |
Restricted cash, short-term | | 16 | | — | |
Accounts receivable, net | | 21,771 | | 16,318 | |
Other receivables | | 78 | | 288 | |
Prepaid expenses and other current assets | | 3,310 | | 1,912 | |
Total current assets | | 114,066 | | 36,127 | |
| | | | | |
Property and equipment, net | | 5,569 | | 3,789 | |
Goodwill | | 2,529 | | — | |
Intangible assets, net | | 1,909 | | 367 | |
Restricted cash, long-term | | 4,200 | | — | |
Other assets | | 810 | | 1,572 | |
| | | | | |
Total assets | | $ | 129,083 | | $ | 41,855 | |
| | | | | |
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) | | | | | |
| | | | | |
Current liabilities: | | | | | |
Accounts payable | | $ | 2,170 | | $ | 1,945 | |
Accrued liabilities | | 4,812 | | 3,062 | |
Deferred revenue | | 38,352 | | 32,984 | |
Other current liabilities | | 2,054 | | 727 | |
Total current liabilities | | 47,388 | | 38,718 | |
| | | | | |
Deferred revenue, net of current portion | | 2,433 | | 5,206 | |
Deferred rent expense, net of current portion | | 888 | | 939 | |
Warrants for redeemable convertible preferred stock, at estimated fair value | | — | | 1,604 | |
| | | | | |
Total liabilities | | 50,709 | | 46,467 | |
| | | | | |
Redeemable convertible preferred stock | | — | | 68,410 | |
| | | | | |
Stockholders’ equity (deficit): | | | | | |
Common stock | | 3 | | 1 | |
Additional paid-in capital | | 174,027 | | 2,503 | |
Accumulated deficit | | (95,660 | ) | (75,529 | ) |
Accumulated other comprehensive loss | | 4 | | 3 | |
Total stockholders’ equity (deficit) | | 78,374 | | (73,022 | ) |
| | | | | |
Total liabilities and stockholders equity (deficit) | | $ | 129,083 | | $ | 41,855 | |
Rally Software Development Corp.
Condensed Consolidated Statements of Operations
(unaudited, in thousands, except per share amounts)
| | Three Months Ended | | Twelve Months Ended | |
| | January 31, | | January 31, | |
| | 2014 | | 2013 | | 2014 | | 2013 | |
Revenue: | | | | | | | | | |
Subscription and support | | $ | 15,371 | | $ | 12,387 | | $ | 57,852 | | $ | 43,794 | |
Perpetual license | | 1,495 | | 1,546 | | 5,914 | | 5,815 | |
Total product revenue | | 16,866 | | 13,933 | | 63,766 | | 49,609 | |
| | | | | | | | | |
Professional services | | 2,739 | | 1,559 | | 10,563 | | 7,237 | |
| | | | | | | | | |
Total revenue | | 19,605 | | 15,492 | | 74,329 | | 56,846 | |
| | | | | | | | | |
Cost of revenue (1) (2): | | | | | | | | | |
Product | | 2,085 | | 1,426 | | 7,567 | | 5,242 | |
Professional services | | 2,319 | | 1,709 | | 9,105 | | 7,005 | |
Total cost of revenue | | 4,404 | | 3,135 | | 16,672 | | 12,247 | |
| | | | | | | | | |
Gross profit | | 15,201 | | 12,357 | | 57,657 | | 44,599 | |
| | | | | | | | | |
Operating expenses (1): | | | | | | | | | |
Sales and marketing | | 10,876 | | 8,676 | | 39,628 | | 29,445 | |
Research and development | | 5,515 | | 4,423 | | 20,812 | | 15,121 | |
General and administrative | | 5,064 | | 3,203 | | 16,708 | | 10,810 | |
Sublease termination income | | — | | — | | — | | (839 | ) |
Total operating expenses | | 21,455 | | 16,302 | | 77,148 | | 54,537 | |
| | | | | | | | | |
Loss from operations | | (6,254 | ) | (3,945 | ) | (19,491 | ) | (9,938 | ) |
| | | | | | | | | |
Other income (expense): | | | | | | | | | |
Interest and other income | | 37 | | 13 | | 128 | | 56 | |
Interest expense | | — | | 39 | | (464 | ) | (683 | ) |
Loss on foreign currency transactions and other gain (loss) | | (20 | ) | (27 | ) | (131 | ) | (87 | ) |
| | | | | | | | | |
Loss before provision for income taxes | | (6,237 | ) | (3,920 | ) | (19,958 | ) | (10,652 | ) |
Provision for income taxes | | 40 | | 128 | | 173 | | 128 | |
Net loss | | $ | (6,277 | ) | $ | (4,048 | ) | $ | (20,131 | ) | $ | (10,780 | ) |
| | | | | | | | | |
Net loss per share attributable to common stockholders, basic and diluted | | $ | (0.26 | ) | $ | (1.82 | ) | $ | (1.01 | ) | $ | (5.13 | ) |
| | | | | | | | | |
Weighted average common shares outstanding, basic and diluted | | 24,592 | | 2,219 | | 19,841 | | 2,101 | |
(1) Includes stock-based compensation expense as follows:
| | Three Months Ended | | Twelve Months Ended | |
| | January 31, | | January 31, | |
| | 2014 | | 2013 | | 2014 | | 2013 | |
Cost of product revenue | | $ | 76 | | $ | 5 | | $ | 250 | | $ | 16 | |
Cost of professional services revenue | | 60 | | 11 | | 181 | | 27 | |
Sales and marketing | | 413 | | 56 | | 1,316 | | 198 | |
Research and development | | 251 | | 66 | | 1,239 | | 193 | |
General and administrative | | 601 | | 129 | | 1,465 | | 523 | |
| | | | | | | | | |
| | $ | 1,401 | | $ | 267 | | $ | 4,451 | | $ | 957 | |
(2) Includes amortization expense of acquired intangible assets as follows:
Cost of product revenue | | $ | 132 | | $ | 60 | | $ | 542 | | $ | 170 | |
Rally Software Development Corp.
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
| | Three Months Ended | | Twelve Months Ended | |
| | January 31, | | January 31, | |
| | 2014 | | 2013 | | 2014 | | 2013 | |
Cash flow from operating activities: | | | | | | | | | |
Net loss | | $ | (6,277 | ) | $ | (4,048 | ) | $ | (20,131 | ) | $ | (10,780 | ) |
| | | | | | | | | |
Adjustments to reconcile net loss to cash provided by (used) in operating activities: | | | | | | | | | |
Depreciation and amortization | | 699 | | 547 | | 2,686 | | 1,893 | |
Noncash stock-based compensation expense | | 1,401 | | 267 | | 4,451 | | 957 | |
Noncash interest expense | | — | | (40 | ) | 462 | | 679 | |
Noncash sublease termination income | | — | | — | | — | | (839 | ) |
Other | | 2 | | (11 | ) | 3 | | (15 | ) |
Changes in operating assets and liabilities: | | | | | | | | | |
Accounts receivable | | (10,051 | ) | (7,177 | ) | (5,454 | ) | (4,414 | ) |
Other receivables | | 92 | | (185 | ) | 213 | | (246 | ) |
Prepaid and other current assets | | (624 | ) | (586 | ) | (1,374 | ) | (1,091 | ) |
Other assets | | (154 | ) | 14 | | (427 | ) | (106 | ) |
Accounts payable and accrued expenses | | 828 | | 1,079 | | 1,958 | | 1,318 | |
Deferred revenue | | 7,098 | | 8,307 | | 2,595 | | 13,082 | |
Other current liabilities | | (882 | ) | 409 | | 806 | | 491 | |
Deferred rent expense, net of current portion and other long-term liabilities | | (15 | ) | 10 | | (50 | ) | 892 | |
Restricted cash | | (16 | ) | — | | (4,216 | ) | — | |
| | | | | | | | | |
Net cash provided by (used) in operating activities | | (7,899 | ) | (1,414 | ) | (18,478 | ) | 1,821 | |
| | | | | | | | | |
Cash flow from investing activities: | | | | | | | | | |
Purchase of property and equipment | | (698 | ) | (829 | ) | (3,963 | ) | (2,405 | ) |
Proceeds from sale of property and equipment | | — | | 3 | | — | | 12 | |
Purchase of Agile Advantage, Inc. assets | | — | | — | | — | | (420 | ) |
Purchase of Flowdock Oy, net of cash received | | — | | — | | (2,857 | ) | — | |
| | | | | | | | | |
Net cash (used) in investing activities | | (698 | ) | (826 | ) | (6,820 | ) | (2,813 | ) |
| | | | | | | | | |
Cash flow from financing activities: | | | | | | | | | |
Proceeds from exercise of common stock options | | 769 | | 318 | | 1,233 | | 451 | |
Proceeds from employee stock purchase plan | | 1,884 | | — | | 1,884 | | — | |
Proceeds from initial public offering, net of underwriting discounts and commissions | | — | | — | | 89,838 | | — | |
Proceeds from follow-on public offering, net of underwriting discounts and commissions | | — | | — | | 5,884 | | — | |
Payments of offering costs | | — | | (72 | ) | (2,259 | ) | (1,271 | ) |
Payments on capital lease liabilities | | — | | (1 | ) | — | | (31 | ) |
| | | | | | | | | |
Net cash provided by (used) in financing activities | | 2,653 | | 245 | | 96,580 | | (851 | ) |
| | | | | | | | | |
Net increase (decrease) in cash and cash equivalents during period | | (5,944 | ) | (1,995 | ) | 71,282 | | (1,843 | ) |
| | | | | | | | | |
Cash and cash equivalents at beginning of period | | 94,835 | | 19,604 | | 17,609 | | 19,452 | |
Cash and cash equivalents at end of period | | $ | 88,891 | | $ | 17,609 | | $ | 88,891 | | $ | 17,609 | |
Rally Software Development Corp.
Statement of Operations GAAP to Non-GAAP Reconciliation
(unaudited, in thousands, except per share amounts)
| | Three Months Ended | |
| | January 31, 2014 | | January 31, 2013 | |
| | GAAP | | Adjustments | | Non-GAAP | | GAAP | | Adjustments | | Non-GAAP | |
Revenue: | | | | | | | | | | | | | |
Subscription and support | | $ | 15,371 | | $ | — | | $ | 15,371 | | $ | 12,387 | | $ | — | | $ | 12,387 | |
Perpetual license | | 1,495 | | — | | 1,495 | | 1,546 | | — | | 1,546 | |
Total product revenue | | 16,866 | | — | | 16,866 | | 13,933 | | — | | 13,933 | |
| | | | | | | | | | | | | |
Professional services | | 2,739 | | — | | 2,739 | | 1,559 | | — | | 1,559 | |
| | | | | | | | | | | | | |
Total revenue | | 19,605 | | — | | 19,605 | | 15,492 | | — | | 15,492 | |
| | | | | | | | | | | | | |
Cost of revenue (1)(2): | | | | | | | | | | | | | |
Product | | 2,085 | | (208 | ) | 1,877 | | 1,426 | | (65 | ) | 1,361 | |
Professional services | | 2,319 | | (60 | ) | 2,259 | | 1,709 | | (11 | ) | 1,698 | |
Total cost of revenue | | 4,404 | | (268 | ) | 4,136 | | 3,135 | | (76 | ) | 3,059 | |
| | | | | | | | | | | | | |
Gross profit (3) | | 15,201 | | 268 | | 15,469 | | 12,357 | | 76 | | 12,433 | |
| | 78 | % | | | 79 | % | 80 | % | | | 80 | % |
Operating expenses (1): | | | | | | | | | | | | | |
Sales and marketing | | 10,876 | | (413 | ) | 10,463 | | 8,676 | | (56 | ) | 8,620 | |
Research and development | | 5,515 | | (251 | ) | 5,264 | | 4,423 | | (66 | ) | 4,357 | |
General and administrative | | 5,064 | | (601 | ) | 4,463 | | 3,203 | | (129 | ) | 3,074 | |
Sublease termination income | | — | | — | | — | | — | | — | | — | |
Total operating expenses | | 21,455 | | (1,265 | ) | 20,190 | | 16,302 | | (251 | ) | 16,051 | |
| | | | | | | | | | | | | |
Loss from operations | | (6,254 | ) | 1,533 | | (4,721 | ) | (3,945 | ) | 327 | | (3,618 | ) |
| | | | | | | | | | | | | |
Other income (expense): | | | | | | | | | | | | | |
Interest and other income | | 37 | | — | | 37 | | 13 | | — | | 13 | |
Interest expense | | — | | — | | — | | 39 | | — | | 39 | |
Loss on foreign currency transactions and other gain (loss) | | (20 | ) | — | | (20 | ) | (27 | ) | — | | (27 | ) |
| | | | | | | | | | | | | |
Loss before provision for income taxes | | (6,237 | ) | 1,533 | | (4,704 | ) | (3,920 | ) | 327 | | (3,593 | ) |
Provision for income taxes | | 40 | | — | | 40 | | 128 | | — | | 128 | |
Net loss | | $ | (6,277 | ) | $ | 1,533 | | $ | (4,744 | ) | $ | (4,048 | ) | $ | 327 | | $ | (3,721 | ) |
| | | | | | | | | | | | | |
Net loss per share attributable to common stockholders, basic and diluted | | $ | (0.26 | ) | $ | 0.07 | | $ | (0.19 | ) | $ | (1.82 | ) | $ | 0.14 | | $ | (1.68 | ) |
| | | | | | | | | | | | | |
Weighted average common shares outstanding, basic and diluted | | 24,592 | | | | 24,592 | | 2,219 | | | | 2,219 | |
(1) Adjustments include stock-based compensation expense
(2) Adjustment includes amortization expense of acquired intangible assets
(3) Gross profit includes product and professional services gross profit (loss) as follows:
Product gross profit | | $ | 14,781 | | $ | 208 | | $ | 14,989 | | $ | 12,507 | | $ | 65 | | $ | 12,572 | |
| | 88 | % | | | 89 | % | 90 | % | | | 90 | % |
Professional services gross profit (loss) | | $ | 420 | | $ | 60 | | $ | 480 | | $ | (150 | ) | $ | 11 | | $ | (139 | ) |
| | 15 | % | | | 18 | % | -10 | % | | | -9 | % |
Rally Software Development Corp.
Statement of Operations GAAP to Non-GAAP Reconciliation
(unaudited, in thousands, except per share amounts)
| | Twelve Months Ended | |
| | January 31, 2014 | | January 31, 2013 | |
| | GAAP | | Adjustments | | Non-GAAP | | GAAP | | Adjustments | | Non-GAAP | |
Revenue: | | | | | | | | | | | | | |
Subscription and support | | $ | 57,852 | | $ | — | | $ | 57,852 | | $ | 43,794 | | $ | — | | $ | 43,794 | |
Perpetual license | | 5,914 | | — | | 5,914 | | 5,815 | | — | | 5,815 | |
Total product revenue | | 63,766 | | — | | 63,766 | | 49,609 | | — | | 49,609 | |
| | | | | | | | | | | | | |
Professional services | | 10,563 | | — | | 10,563 | | 7,237 | | — | | 7,237 | |
| | | | | | | | | | | | | |
Total revenue | | 74,329 | | — | | 74,329 | | 56,846 | | — | | 56,846 | |
| | | | | | | | | | | | | |
Cost of revenue (1)(2): | | | | | | | | | | | | | |
Product | | 7,567 | | (792 | ) | 6,775 | | 5,242 | | (186 | ) | 5,056 | |
Professional services | | 9,105 | | (181 | ) | 8,924 | | 7,005 | | (27 | ) | 6,978 | |
Total cost of revenue | | 16,672 | | (973 | ) | 15,699 | | 12,247 | | (213 | ) | 12,034 | |
| | | | | | | | | | | | | |
Gross profit (3) | | 57,657 | | 973 | | 58,630 | | 44,599 | | 213 | | 44,812 | |
| | 78 | % | | | 79 | % | 78 | % | | | 79 | % |
Operating expenses (1): | | | | | | | | | | | | | |
Sales and marketing | | 39,628 | | (1,316 | ) | 38,312 | | 29,445 | | (198 | ) | 29,247 | |
Research and development | | 20,812 | | (1,239 | ) | 19,573 | | 15,121 | | (193 | ) | 14,928 | |
General and administrative | | 16,708 | | (1,465 | ) | 15,243 | | 10,810 | | (523 | ) | 10,287 | |
Sublease termination income | | — | | — | | | | (839 | ) | — | | (839 | ) |
Total operating expenses | | 77,148 | | (4,020 | ) | 73,128 | | 54,537 | | (914 | ) | 53,623 | |
| | | | | | | | | | | | | |
Loss from operations | | (19,491 | ) | 4,993 | | (14,498 | ) | (9,938 | ) | 1,127 | | (8,811 | ) |
| | | | | | | | | | | | | |
Other income (expense): | | | | | | | | | | | | | |
Interest and other income | | 128 | | — | | 128 | | 56 | | — | | 56 | |
Interest expense | | (464 | ) | — | | (464 | ) | (683 | ) | — | | (683 | ) |
Loss on foreign currency transactions and other gain (loss) | | (131 | ) | — | | (131 | ) | (87 | ) | — | | (87 | ) |
| | | | | | | | | | | | | |
Loss before provision for income taxes | | (19,958 | ) | 4,993 | | (14,965 | ) | (10,652 | ) | 1,127 | | (9,525 | ) |
Provision for income taxes | | 173 | | — | | 173 | | 128 | | — | | 128 | |
Net loss | | $ | (20,131 | ) | $ | 4,993 | | $ | (15,138 | ) | $ | (10,780 | ) | $ | 1,127 | | $ | (9,653 | ) |
| | | | | | | | | | | | | |
Net loss per share attributable to common stockholders, basic and diluted | | $ | (1.01 | ) | $ | 0.25 | | $ | (0.76 | ) | $ | (5.13 | ) | $ | 0.54 | | $ | (4.59 | ) |
| | | | | | | | | | | | | |
Weighted average common shares outstanding, basic and diluted | | 19,841 | | | | 19,841 | | 2,101 | | | | 2,101 | |
| | | | | | | | | | | | | |
| |
(1) Adjustments include stock-based compensation expense | | | | | | | | | | |
(2) Adjustment includes amortization expense of acquired intangible assets | | | | | | | | |
(3) Gross profit includes product and professional services gross profit as follows: | | | | | | | |
| | | | | | | | | | | | | |
Product gross profit | | $ | 56,199 | | $ | 792 | | $ | 56,991 | | $ | 44,367 | | $ | 186 | | $ | 44,553 | |
| | 88 | % | | | 89 | % | 89 | % | | | 90 | % |
Professional services gross profit | | $ | 1,458 | | $ | 181 | | $ | 1,639 | | $ | 232 | | $ | 27 | | $ | 259 | |
| | 14 | % | | | 16 | % | 3 | % | | | 4 | % |
Rally Software Development Corp.
Reconciliation of Total Revenue to Calculated Billings and
Days Sales Outstanding
(unaudited, in thousands except days sales outstanding)
| | Three Months Ended | | Twelve Months Ended | |
| | January 31, | | January 31, | |
| | 2014 | | 2013 | | 2014 | | 2013 | |
| | | | | | | | | |
Total revenue | | $ | 19,605 | | $ | 15,492 | | $ | 74,329 | | $ | 56,846 | |
| | | | | | | | | |
Deferred revenue- | | | | | | | | | |
End of period | | 40,785 | | 38,190 | | 40,785 | | 38,190 | |
Beginning of period | | (33,688 | ) | (29,883 | ) | (38,190 | ) | (25,109 | ) |
| | | | | | | | | |
Net change | | 7,097 | | 8,307 | | 2,595 | | 13,081 | |
| | | | | | | | | |
Calculated billings | | $ | 26,702 | | $ | 23,799 | | $ | 76,924 | | $ | 69,927 | |
| | | | | | | | | |
Accounts receivable | | $ | 21,771 | | $ | 16,318 | | | | | |
| | | | | | | | | |
Days Sales Outstanding | | 75 | | 62 | | | | | |
Rally Software Development Corp.
Reconciliation of Non-GAAP Financial Guidance
The financial guidance provided below is an estimate based on information available as of March 20, 2014. The company’s future performance and financial results are subject to risks and uncertainties, and actual results could differ materially from the guidance set forth below. Some of the factors that could affect the company’s financial results are stated above in this press release. More information on potential factors that could affect the company’s financial results is included in the company’s public reports filed with the SEC, including the company’s prospectus dated July 24, 2013, the company’s Form 10-Q for the quarter ended October 31, 2013 filed on December 11, 2013 and the company’s Form 10-K for the year ended January 31, 2014 to be filed with the SEC. The company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.
| | Three Months Ended
April 30, 2014 | | Fiscal Year Ended
January 31, 2015 | |
| | | | | |
Non-GAAP basic and diluted net loss per share | | $(0.53) - $(0.50) | | $(1.61) - $(1.56) | |
| | | | | |
Stock-based compensation expense | | $(0.06) | | $(0.24) | |
| | | | | |
Amortization of acquired intangible assets | | $(0.01) | | $(0.02) | |
| | | | | |
GAAP basic and diluted net loss per share | | $(0.60) - $(0.57) | | $(1.87) - $(1.82) | |
