Mulesoft (MULE) 8-K MuleSoft Announces Financial Results for the First Quarter 2017

Exhibit 99.1

MuleSoft Announces Financial Results for the First Quarter 2017

Total Revenue of $60.9 Million, Up 56% Year-over-Year

Subscription and Support Revenue of $50.6 Million, Up 62% Year-over-Year

SAN FRANCISCO – May 4, 2017 – MuleSoft, Inc. (NYSE: MULE), provider of the leading platform for building application networks, today announced financial results for its first quarter ended March 31, 2017.

“The first quarter was a strong start to 2017 as we continued to deliver rapid growth at scale,” said Greg Schott, chairman and CEO of MuleSoft. “Companies across every industry are working to leverage modern technologies such as cloud, SaaS applications, mobile and IoT in order to digitally transform their business. MuleSoft is seeing strong demand as we are increasingly being adopted by our customers as an enterprise standard for connecting IT assets in a pluggable and reusable manner to increase agility and accelerate innovation.”

Schott added, “The completion of our initial public offering during the first quarter was a milestone event for our company. It further increases the market’s awareness of MuleSoft and provides us with additional resources to execute against our long-term growth initiatives.”

First Quarter 2017 Financial Highlights:

• Revenue:Total revenue was $60.9 million, an increase of 56% year-over-year. Subscription and support revenue was $50.6 million, an increase of 62% year-over-year. Professional services and other revenue was $10.3 million, an increase of 33% year-over-year.

• Gross margin:GAAP gross margin was 75.0%, consistent with the first quarter of 2016.Non-GAAP gross margin was 75.7% for the first quarter of 2017, an increase of 40 basis points compared to 75.3% in theyear-ago period.

• Operating loss:GAAP operating loss was $9.9 million, compared to a GAAP operating loss of $8.6 million for the first quarter of 2016.Non-GAAP operating loss for the first quarter of 2017 was $6.6 million, compared to anon-GAAP operating loss of $7.5 million in theyear-ago period.

• Loss per share:GAAP net loss per share was $0.27 based on 37.4 million weighted average shares outstanding in the first quarter of 2017, compared to GAAP net loss per share of $0.45 based on 19.4 million weighted average shares in the first quarter of 2016.

Non-GAAP net loss per share was $0.06 based on 114.8 millionnon-GAAP weighted average shares outstanding in the first quarter of 2017, compared tonon-GAAP net loss per share of $0.07 based on 109.6 millionnon-GAAP weighted average shares in the first quarter of 2016.

• Deferred Revenue:Total deferred revenue was $136.7 million at the end of the first quarter 2017, an increase of 61% year-over-year. Short-term deferred revenue was $131.3 million at the end of the first quarter 2017, an increase of 61% year-over-year.

• Cash:Cash from operating activities was ($0.2) million, compared to break-even for the first quarter of 2016. Free cash flow, which is anon-GAAP measure that reflects cash from operating activities less cash used for capital expenditures, was ($1.6) million for the first quarter of 2017, compared to ($0.2) million in theyear-ago period.

Cash and short-term investments were $339.6 million at the end of the first quarter 2017, an increase from $98.5 million at the end of the fourth quarter 2016 due primarily to $236.4 million of net proceeds associated with the company’s initial public offering.

Other Recent Highlights:

• Major Enhancements to Anypoint Platform™:MuleSoft announced the next major release of its Anypoint Platform™, the Crowd release, at CONNECT 2017. This release introduces significant updates to Anypoint Exchange and the new Anypoint Design Center, making the discovery, promotion and consumption of composable IT assets, such as APIs and best practice templates, both easier and more natural for users of the platform. By enabling self-service access to reusable assets, central IT organizations can pave the road for innovation across the enterprise, and enableline-of-business and broader IT teams to innovate freely, deliver better customer experiences, quickly introduce new products to market and contribute to the buildout of application networks.

• Record Attendance at CONNECT 2017:MuleSoft had over 3,000 registrants at its annual CONNECT 2017, a leading conference for digital business where CIOs, IT leaders and developers come together to discuss how application networks are enabling businesses agility and driving innovation. Presentations were led by industry leaders including Accenture, Airbnb, Deloitte Digital, Farmers Insurance, Guidewire, New Relic, PetSmart, Splunk, Wells Fargo, and Zendesk.

• Completed Initial Public Offering: MuleSoft completed its Initial Public Offering on the New York Stock Exchange on March 17, 2017. After the underwriters’ exercise of the option to purchase additional shares, MuleSoft sold a total of 14,950,000 shares to the public at a price of $17.00 per share for a total of $236.4 million in net proceeds.

Financial Outlook:

MuleSoft is providing guidance for its second quarter ending June 30, 2017 as follows:

• Total revenue between $63 million and $64 million

• Non-GAAP operating loss between $16 million and $17 million

• Non-GAAP net loss per share of approximately $0.13 per share

• Weighted average shares outstanding of approximately 128 million

The company is also providing guidance for the full year 2017 ending December 31, 2017 as follows:

• Total revenue between $271 million and $274 million

• Non-GAAP operating loss between $46 million and $49 million

• Non-GAAP net loss per share between $0.37 and $0.40

• Non-GAAP weighted average shares outstanding of approximately 126 million

All forward-lookingnon-GAAP measures exclude estimates for stock-based compensation expenses. A reconciliation of thesenon-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis.

Conference Call Information:

MuleSoft will host a conference call at 2 p.m. Pacific Time (or 5 p.m. Eastern Time) today, May 4, 2017, to discuss its financial results. A live webcast of the call will be available on the MuleSoft website at investors.mulesoft.com. A livedial-in will be available at (866)807-9684 for domestic participants and at (412)317-5415 for international participants.

About MuleSoft

MuleSoft’s mission is to help organizations change and innovate faster by making it easy to connect the world’s applications, data and devices. With itsAPI-led approach to connectivity, MuleSoft’s market-leading Anypoint Platform™ is enabling over 1,000 organizations in approximately 60 countries to build application networks. For more information, visit https://www.mulesoft.com.

Forward-Looking Statements

This press release and the accompanying conference call contain forward-looking statements including, among others, statements about demand for our products and being adopted as an enterprise standard; our expectations regarding benefits we expect our customers to receive from recently announced enhancements to our platform; our current estimates of second quarter and full year 2017 revenue,non-GAAP operating loss,non-GAAP net loss per share, andnon-GAAP weighted average shares outstanding; statements regarding our business and growth strategy; our expectations relating to our continued investment in our business, and the continued strength of the market we serve.

These forward-looking statements involve risks and uncertainties. If any of these risks or uncertainties materialize, or if any of our assumptions prove incorrect, our actual results could differ materially from the results expressed or implied by these forward-looking statements. These risks and uncertainties include risks associated with: our limited operating history in a new and unproven market; engagement of our customers, including through renewals of subscriptions and expanded use of our platform, and our ability to attract new customers; our ability to continue to successfully enhance our platform and develop new services to meet the needs of our customers and address future advances in technology; risks associated with managing our rapid growth, including our ability to maintain our rate of revenue growth and manage our expenses and investment plans; execution of our plans and strategies, including our strategy to target larger organizations for sales of our platform; our ability to maintain and continually develop our technology and network infrastructure to ensure that customers can access our platform at any time and within an acceptable amount of time; increasing competition; our ability to recruit and retain our employees; general economic, market and business conditions; and the risks described in the other filings we make with the Securities and Exchange Commission from time to time, including the risks described under the heading “Risk Factors” in our final prospectus related to our initial public offering, which was filed with the Securities and Exchange Commission on March 17, 2017, should be read in conjunction with our financial results and forward-looking statements, and is available on the SEC filings section of the Investor Relations page of our website at https://investors.mulesoft.com/.

All forward-looking statements in this press release are based on information available to us as of the date hereof, and we do not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.

Non-GAAP Financial Measures

To supplement its consolidated financial statements, which are prepared and presented in accordance with GAAP, MuleSoft provides investors with certainnon-GAAP financial measures, includingnon-GAAP gross margin,non-GAAP operating loss,non-GAAP net loss,non-GAAP net loss per share,non-GAAP share count andnon-GAAP free cash flow. The presentation of thesenon-GAAP financial measures is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. For more information on thesenon-GAAP financial measures, please see the reconciliation of thesenon-GAAP financial measures to their nearest comparable GAAP measures at the end of this press release.

We use thesenon-GAAP financial measures for financial and operational decision-making and as a means to evaluateperiod-to-period comparisons. Our management believes that thesenon-GAAP financial measures provide meaningful supplemental information regarding MuleSoft’s performance by excluding certain expenses that may not be indicative of our recurring core business operating results. We believe that both management and investors benefit from referring to thesenon-GAAP financial measures in assessing MuleSoft’s performance and when planning, forecasting, and analyzing future periods. Thesenon-GAAP financial measures also facilitate management’s internal comparisons to our historical performance as well as comparisons to our competitors’ operating results. We believe thesenon-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to measures used by management in its financial and operational decision-making and (2) they are used by our institutional investors and the analyst community to help them analyze the health of our business.

A limitation ofnon-GAAP financial measures is that they do not have uniform definitions. Further, our definitions will likely differ from the definitions used by other companies, including peer companies, and therefore comparability may be limited. Thus, ournon-GAAP financial measures should be considered in addition to, and not as a substitute for, or in isolation from, measures prepared in accordance with GAAP. Additionally, in the case of stock-based compensation expense, if we did not pay a portion of compensation in the form of stock-based compensation expense, the cash salary expense included in cost of revenue and operating expenses would be higher, which would affect our cash position.

Non-GAAP gross margin andnon-GAAP operating loss. We definenon-GAAP gross margin andnon-GAAP operating loss as gross margin and operating loss, respectively, excluding expenses related to stock-based compensation (“SBC”). Although SBC is an important aspect of the compensation of our employees and executives, determining the fair value of certain of the stock-based instruments we utilize involves a high degree of judgment and estimation and the expense recorded may bear little resemblance to the actual value realized upon the vesting or future exercise of the related stock-based awards. Furthermore, unlike cash compensation, the value of stock options, which is an element of our ongoing stock-based compensation expense, is determined using a complex formula that incorporates factors, such as market volatility, that are beyond our control. For restricted stock unit awards, the amount of stock-based compensation expenses is not reflective of the value ultimately received by the grant recipients. Management believes it is useful to exclude SBC in order to better understand the long-term performance of our core business and to facilitate comparison of our results to those of peer companies.

Non-GAAP net loss andnon-GAAP net loss per share. We definenon-GAAP net loss as net loss excluding expenses related to SBC. We definenon-GAAP net loss per share asnon-GAAP net loss divided by thenon-GAAP weighted average shares outstanding.

The accompanying tables have more details on the reconciliations ofnon-GAAP financial measures to their nearest comparable GAAP measures.

MuleSoft is a registered trademark of MuleSoft, Inc. All other marks are those of respective owners.

###

Media Contact

Melissa Czapiga

MuleSoft

press@mulesoft.com

415-294-0161

Investor Contact

Carla Cooper

MuleSoft

investorrelations@mulesoft.com

415-656-8831

MULESOFT, INC.

Consolidated Balance Sheets

(in thousands)

(unaudited)

	March 31,			December 31,
	2017			2016
Assets
Current assets:
Cash and cash equivalents	$	288,267		$	35,101
Investments		51,318			63,361
Trade receivables, net of allowance for doubtful accounts of $583 and $446 as of March 31, 2017 and December 31, 2016		62,276			72,324
Prepaid expenses and other current assets		16,969			18,854
Total current assets		418,830			189,640
Investments, noncurrent		—			4,151
Property and equipment, net		6,033			5,231
Restricted cash		395			671
Goodwill		603			787
Intangible assets, net		1,197			1,797
Other assets		1,124			661
Total assets	$	428,182		$	202,938
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	3,080		$	1,879
Accrued expenses		10,447			7,797
Accrued compensation and related expenses		8,695			16,369
Deferred revenue		131,320			130,045
Total current liabilities		153,542			156,090
Deferred revenue, noncurrent		5,393			5,569
Other liabilities		1,118			1,176
Total liabilities		160,053			162,835
Stockholders’ equity:
Convertible preferred stock		—			255,946
Class A and class B common stock		3			1
Additionalpaid-in capital		516,051			22,241
Accumulated deficit		(246,378	)		(236,230	)
Accumulated other comprehensive loss		(1,547	)		(1,855	)
Total stockholders’ equity		268,129			40,103
Total liabilities and stockholders’ equity	$	428,182		$	202,938

MULESOFT, INC.

Condensed Consolidated Statements of Operations

(in thousands, except share and per share amounts)

(unaudited)

	Three Months Ended,
	March 31,
	2017			2016
Revenue:
Subscription and support	$	50,594		$	31,251
Professional services and other		10,311			7,780
Total revenue		60,905			39,031
Cost of revenue:(1)
Subscription and support		4,048			2,580
Professional services and other		11,191			7,172
Total cost of revenue		15,239			9,752
Gross profit		45,666			29,279
Operating expenses:(1)
Research and development		12,789			6,860
Sales and marketing		33,126			23,705
General and administrative		9,661			7,283
Total operating expenses		55,576			37,848
Loss from operations		(9,910	)		(8,569	)
Interest income		158			97
Other income (expense), net		(76	)		1
Net loss before provision for income taxes		(9,828	)		(8,471	)
Provision for income taxes		313			280
Net loss attributable to common stockholders	$	(10,141	)	$	(8,751	)
Net loss per share attributable to common stockholders, basic and diluted	$	(0.27	)	$	(0.45	)
Weighted-average shares used in computing net loss per share, basic and diluted		37,410,235			19,361,543
(1)       Includes stock-based compensation as follows (in thousands):
Cost of subscription and support revenue	$	101		$	33
Cost of professional services and other revenue		313			92
Research and development		916			209
Sales and marketing		1,424			508
General and administrative		529			200
Total stock-based compensation expense	$	3,283		$	1,042

MULESOFT, INC.

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

	Three Months Ended, March 31,
	2017			2016
Cash flows from operating activities:
Net loss	$	(10,141	)	$	(8,751	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Stock-based compensation		3,283			1,042
Depreciation and amortization		842			359
Amortization of investment premiums		112			183
Provision for doubtful accounts		136			(62	)
Loss on disposal of property and equipment		32			—
Other		—			19
Changes in assets and liabilities:
Trade receivables		9,873			8,128
Prepaid expenses and other current assets		(111	)		(524	)
Other assets		(463	)		(66	)
Accounts payable		1,109			662
Accrued expenses		1,772			1,400
Accrued compensation and related expenses		(7,674	)		(4,605	)
Other liabilities		(278	)		20
Deferred revenue		1,293			2,225
Net cash provided by (used in) operating activities		(215	)		30
Cash flows from investing activities:
Purchases of investments		—			(1,955	)
Sales of investments		—			20,786
Maturities of investments		16,080			4,750
Purchases of property and equipment		(1,361	)		(253	)
Cash received related to acquisition		494			—
Net cash provided by investing activities		15,213			23,328
Cash flows from financing activities:
Net proceeds from issuance of common stock in initial public offering		236,360			—
Note receivable		—			(250	)
Repurchase of common shares		—			(92	)
Proceeds from issuance of common stock upon exercise of options and warrants		2,078			574
Payments of costs related to initial public offering		(792	)		—
Net cash provided by financing activities		237,646			232
Impact of foreign exchange on cash and cash equivalents		246			(130	)
Net increase in cash		252,890			23,460
Cash, cash equivalents and restricted cash, Beginning of period		35,772			22,383
Cash, cash equivalents and restricted cash, End of period	$	288,662		$	45,843
Supplemental disclosures of cash flow information:
Cash paid for income taxes	$	143		$	150
Supplemental disclosures ofnon-cash investing and financing information:
Costs related to the initial public offering, accrued but unpaid	$	1,121		$	—
Liability for purchase of property and equipment	$	206		$	54

MULESOFT, INC.

Reconciliation of GAAP toNon-GAAP Financial Measures

(in thousands, except share and per share amounts)

(unaudited)

	Three Months Ended, March 31,
	2017			2016
Cost of subscription and support revenue on a GAAP basis	$	4,048		$	2,580
Stock-based compensation expenses		(101	)		(33	)
Cost of subscription and support revenue on anon-GAAP basis	$	3,947		$	2,547
Gross margin on subscription and support revenue on a GAAP basis		92.0	%		91.7	%
Stock-based compensation expenses		0.2	%		0.1	%
Gross margin on subscription and support revenue on anon-GAAP basis		92.2	%		91.8	%
Cost of professional services and other revenue on a GAAP basis	$	11,191		$	7,172
Stock-based compensation expenses		(313	)		(92	)
Cost of professional services and other revenue on anon-GAAP basis	$	10,878		$	7,080
Gross margin on professional services and other revenue on a GAAP basis		(8.5	)%		7.8	%
Stock-based compensation expenses		3.0	%		1.2	%
Gross margin on professional services and other revenue on anon-GAAP basis		(5.5	)%		9.0	%
Gross profit on a GAAP basis	$	45,666		$	29,279
Stock-based compensation expenses		414			125
Gross profit on anon-GAAP basis	$	46,080		$	29,404
Gross margin on total revenue on a GAAP basis		75.0	%		75.0	%
Stock-based compensation expenses		0.7	%		0.3	%
Gross margin on total revenue on anon-GAAP basis		75.7	%		75.3	%
Research and development expenses on a GAAP basis	$	12,789		$	6,860
Stock-based compensation expenses		(916	)		(209	)
Research and development expenses on anon-GAAP basis	$	11,873		$	6,651
Sales and marketing expenses on a GAAP basis	$	33,126		$	23,705
Stock-based compensation expenses		(1,424	)		(508	)
Sales and marking expenses on anon-GAAP basis	$	31,702		$	23,197
General and administrative expenses on a GAAP basis	$	9,661		$	7,283
Stock-based compensation expenses		(529	)		(200	)
General and administrative expenses on anon-GAAP basis	$	9,132		$	7,083
Total operating expenses on a GAAP basis	$	55,576		$	37,848
Stock-based compensation expenses		(2,869	)		(917	)
Total operating expenses on anon-GAAP basis	$	52,707		$	36,931
Operating loss on a GAAP basis	$	(9,910	)	$	(8,569	)
Stock-based compensation expenses		3,283			1,042
Operating loss on anon-GAAP basis	$	(6,627	)	$	(7,527	)
Net loss attributable to common stockholders on a GAAP basis	$	(10,141	)	$	(8,751	)
Stock based compensation expenses		3,283			1,042
Net loss attributable to common stockholders on anon-GAAP basis	$	(6,858	)	$	(7,709	)
Net loss per share attributable to common stockholders, basic and diluted:	$	(0.27	)	$	(0.45	)
Stock-based compensation expenses		0.09			0.05
Convertible preferred stock		0.12			0.33
Net loss per share attributable to common stockholders, basic and diluted, on anon-GAAP basis	$	(0.06	)	$	(0.07	)
GAAP weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted		37,410,235			19,361,543
Convertible preferred shares issued and outstanding at beginning of the period		77,427,865			90,262,270
Non-GAAP weighted-average shares used in computingnon-GAAP net loss per share attributable to common stockholders, basic and diluted		114,838,100			109,623,813

MULESOFT, INC.

Reconciliation of GAAP toNon-GAAP Financial Measures

(in thousands)

(unaudited)

The following table presents a reconciliation of free cash flow to net cash provided (used in) by operating activities, the most directly comparable financial measure calculated in accordance with generally accepted accounting principles, or GAAP:

	Three Months Ended, March 31,
	2017			2016
Net cash provided by (used in) operating activities	$	(215	)	$	30
Less: Purchases of property and equipment		(1,361	)		(253	)
Free cash flow	$	(1,576	)	$	(223	)