- First Quarter Fiscal 2022 revenue grew 25% year-over-year
- SaaS Annual Recurring Revenue grew 40% year-over-year
“Duck Creek’s first quarter results were a good start to fiscal 2022, with 40% SaaS ARR growth and profitability that was well ahead of expectations. We continue to see strong demand activity amongst new and existing customers that are making meaningful investments in their core systems to drive better, more profitable performance across their businesses,” said
First Quarter 2022 Financial Highlights
Revenue
- Total revenue for the first quarter of fiscal year 2022 was
$73.4 million , an increase of 25% from the comparable period in fiscal year 2021. Subscription revenue was$35.7 million , an increase of 28%; professional services revenue was$29.5 million , an increase of 26%; license revenue was$1.9 million , an increase of 42%; and maintenance and support revenue was$6.3 million , an increase of 1%.
Profitability
- GAAP income from operations was
$1.9 million for the first quarter of fiscal year 2022, compared with a GAAP loss from operations of$4.2 million for the comparable period in fiscal year 2021. - Non-GAAP income from operations was
$7.1 million for the first quarter of fiscal year 2022, compared with non-GAAP income from operations of$2.8 million for the comparable period in fiscal year 2021. - GAAP net income was
$0.7 million for the first quarter of fiscal year 2022, compared with GAAP net loss of$4.7 million for the comparable period in fiscal year 2021. - Non-GAAP net income was
$4.8 million for the first quarter of fiscal year 2022, compared with non-GAAP net income of$2.1 million for the comparable period in fiscal year 2021. - GAAP net income per share was
$0.01 , on both a basic and fully diluted basis. Non-GAAP net income per share was$0.04 . Basic and fully diluted weighted average shares outstanding were approximately 132.0 million shares and 134.2 million shares, respectively, for the quarter endedNovember 30, 2021 . - Adjusted EBITDA was
$7.8 million for the first quarter of fiscal 2022, compared with adjusted EBITDA of$3.6 million for the comparable period in fiscal year 2021.
Liquidity
- As of
November 30, 2021 ,Duck Creek had$251.7 million in cash and cash equivalents,$95.9 million in short term investments and no debt.Duck Creek used$24.6 million of cash in operating activities and had free cash flow of($25.5) million during the first quarter of fiscal year 2022, compared with$22.2 million in cash used in operating activities and free cash flow of($22.9) million in the comparable period in fiscal year 2021.
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 reconciliations of each non-GAAP financial measure to the most directly comparable GAAP financial measure.
Business Outlook
Second Quarter Fiscal 2022 | Full Year Fiscal 2022 | ||
Revenue | |||
Subscription Revenue | |||
Adjusted EBITDA |
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 second quarter fiscal 2022 and full year fiscal 2022, 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 are set forth in Duck Creek’s most recent Annual Report on Form 10-K that was filed with the
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 income from operations excludes share-based compensation expense, amortization of intangible assets, 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 net income excludes share-based compensation expense, amortization of intangible assets and change in fair value of contingent earnout liability and the tax effect of such adjustments. 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, excluding the subscription revenue related to one legacy contract for a service no longer offered separately by
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
To the extent that
Investor Contact:
ICR
646-277-1251
Brian.denyeau@icrinc.com
Media Contact:
617 624 3295
prechichi@racepointglobal.com
860 877 3609
drake.manning@duckcreek.com
Consolidated Balance Sheets
(unaudited, in thousands except share and per share amounts)
As of | As of | ||||||
2021 | 2021 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 251,739 | $ | 185,657 | |||
Short-term investments | 95,996 | 191,981 | |||||
Accounts receivable, net | 39,771 | 34,629 | |||||
Unbilled revenue | 27,611 | 24,423 | |||||
Prepaid expenses and other current assets | 16,895 | 14,381 | |||||
Total current assets | 432,012 | 451,071 | |||||
Property and equipment, net | 14,107 | 14,305 | |||||
Operating lease assets | 16,970 | 17,798 | |||||
272,455 | 272,455 | ||||||
Intangible assets, net | 61,386 | 65,359 | |||||
Deferred tax assets | 1,042 | 2,331 | |||||
Unbilled revenue, net of current portion | 1,327 | 1,401 | |||||
Other assets | 19,199 | 19,413 | |||||
Total assets | $ | 818,498 | $ | 844,133 | |||
Liabilities and Stockholders' Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 1,321 | $ | 2,070 | |||
Accrued liabilities | 28,102 | 46,437 | |||||
Contingent earnout liability | — | 5,462 | |||||
Lease liability | 3,999 | 4,110 | |||||
Deferred revenue | 27,197 | 29,577 | |||||
Total current liabilities | 60,619 | 87,656 | |||||
Lease liability, net of current portion | 20,096 | 21,273 | |||||
Deferred revenue, net of current portion | 68 | — | |||||
Other long-term liabilities | 3,826 | 4,466 | |||||
Total liabilities | 84,609 | 113,395 | |||||
Stockholders' equity | |||||||
Common stock, 134,690,424 shares issued and 132,062,061 shares outstanding at | 1,347 | 1,346 | |||||
Preferred stock, 0 shares outstanding, 50,000,000 shares authorized at | — | — | |||||
2,625,062 shares at | (67,905 | ) | (67,764 | ) | |||
Accumulated deficit | (40,573 | ) | (41,265 | ) | |||
Accumulated other comprehensive income | 51 | 64 | |||||
Additional paid in capital | 840,969 | 838,357 | |||||
Total stockholders' equity | 733,889 | 730,738 | |||||
Total liabilities and stockholders' equity | $ | 818,498 | $ | 844,133 |
Consolidated Statements of Operations
(unaudited, in thousands except share and per share amounts)
Three Months Ended | |||||||
(dollars in thousands) | 2021 | 2020 | |||||
Revenue | |||||||
Subscription | $ | 35,705 | $ | 27,909 | |||
License | 1,912 | 1,350 | |||||
Maintenance and support | 6,277 | 6,190 | |||||
Professional services | 29,527 | 23,457 | |||||
Total revenue | 73,421 | 58,906 | |||||
Cost of revenue | |||||||
Subscription | 14,585 | 10,084 | |||||
License | 244 | 388 | |||||
Maintenance and support | 880 | 842 | |||||
Professional services | 15,242 | 13,716 | |||||
Total cost of revenue | 30,951 | 25,030 | |||||
Gross margins | 42,470 | 33,876 | |||||
Operating expenses | |||||||
Research and development | 12,321 | 11,104 | |||||
Sales and marketing | 13,167 | 12,597 | |||||
General and administrative | 15,035 | 14,418 | |||||
Change in fair value of contingent consideration | 67 | 3 | |||||
Total operating expense | 40,590 | 38,122 | |||||
Income (loss) from operations | 1,880 | (4,246 | ) | ||||
Other expense, net | (696 | ) | (47 | ) | |||
Interest expense, net | (118 | ) | (43 | ) | |||
Income (loss) before income taxes | 1,066 | (4,336 | ) | ||||
Provision for income taxes | 374 | 315 | |||||
Net income (loss) | $ | 692 | $ | (4,651 | ) | ||
Net loss per share information | |||||||
Net earnings (loss) per share of common stock, basic | $ | 0.01 | $ | (0.04 | ) | ||
Net earnings per share of common stock, diluted | $ | 0.01 | $ | (0.04 | ) | ||
Weighted average shares of common stock, basic | 132,038,274 | 130,788,359 | |||||
Weighted average shares of common stock, diluted | 134,212,210 | 130,788,359 |
Cost of revenue and operating expenses amounts in the Consolidated Statements of Operations include share-based compensation expense as disclosed in the following table:
Three Months Ended | |||||||
2021 | 2020 | ||||||
Cost of subscription revenue | $ | 42 | $ | 80 | |||
Cost of maintenance and support revenue | 8 | 7 | |||||
Cost of services revenue | (100 | ) | 610 | ||||
Research and development | 229 | 511 | |||||
Sales and marketing | (60 | ) | 899 | ||||
General and administrative | 1,093 | 985 | |||||
Total share-based compensation expense | $ | 1,212 | $ | 3,092 |
Consolidated Statements of Cash Flows
(unaudited, in thousands)
For the Three Months Ended | |||||||
2021 | 2020 | ||||||
Operating activities: | |||||||
Net income (loss) | $ | 692 | $ | (4,651 | ) | ||
Adjustments to reconcile net loss to cash provided by (used in) operating activities: | |||||||
Depreciation of property and equipment | 704 | 787 | |||||
Amortization of capitalized software | 561 | 498 | |||||
Amortization of intangible assets | 3,973 | 4,087 | |||||
Amortization of deferred financing fees | 18 | 28 | |||||
Share-based compensation expense | 1,212 | 3,092 | |||||
Loss on change in fair value of contingent earnout liability | 67 | 3 | |||||
Payment of contingent earnout liability in excess of acquisition date fair value | (1,650 | ) | — | ||||
Bad debt expense | 817 | 14 | |||||
Deferred taxes | 1,288 | (171 | ) | ||||
Changes in operating assets and liabilities | |||||||
Accounts receivable | (5,959 | ) | 1,280 | ||||
Unbilled revenue | (3,115 | ) | (1,730 | ) | |||
Prepaid expenses and other current assets | (2,428 | ) | 319 | ||||
Other assets | 604 | (15 | ) | ||||
Accounts payable | (909 | ) | 712 | ||||
Accrued liabilities | (16,891 | ) | (16,629 | ) | |||
Deferred revenue | (2,312 | ) | (4,558 | ) | |||
Operating leases | (460 | ) | (161 | ) | |||
Cash settlement of vested phantom stock | (175 | ) | (6,677 | ) | |||
Other long-term liabilities | (640 | ) | 1,600 | ||||
Net cash used in operating activities | (24,603 | ) | (22,172 | ) | |||
Investing activities: | |||||||
Maturities of short-term investments | 95,967 | — | |||||
Capitalized internal-use software | (366 | ) | (536 | ) | |||
Purchase of property and equipment | (540 | ) | (188 | ) | |||
Net cash provided by (used in) investing activities | 95,061 | (724 | ) | ||||
Financing activities: | |||||||
Payment of deferred IPO costs | — | (3,650 | ) | ||||
Payment of deferred Class E offering costs | — | (192 | ) | ||||
Purchase of treasury stock | (141 | ) | (57 | ) | |||
Proceeds from stock option exercises | 132 | — | |||||
Payments of contingent earnout liability | (3,879 | ) | (1,923 | ) | |||
Payment of deferred financing costs | (488 | ) | — | ||||
Net cash used in financing activities | (4,376 | ) | (5,822 | ) | |||
Net increase (decrease) in cash and cash equivalents | 66,082 | (28,718 | ) | ||||
Cash and cash equivalents – beginning of period | 185,657 | 389,878 | |||||
Cash and cash equivalents – end of period | $ | 251,739 | $ | 361,160 |
Reconciliation of GAAP to Non-GAAP Financial Measures
(unaudited)
Three Months Ended | |||||||
($ in thousands) | 2021 | 2020 | |||||
GAAP Gross Margin | $ | 42,470 | $ | 33,876 | |||
Share-based compensation expense | (50 | ) | 697 | ||||
Amortization of intangible assets | 1,121 | 1,186 | |||||
Amortization of capitalized internal-use software | 561 | 498 | |||||
Non-GAAP Gross Margin | $ | 44,102 | $ | 36,257 |
Three Months Ended | |||||||
($ in thousands) | 2021 | 2020 | |||||
GAAP Income (Loss) from Operations | $ | 1,880 | $ | (4,246 | ) | ||
Share-based compensation expense | 1,212 | 3,092 | |||||
Amortization of intangible assets | 3,929 | 3,994 | |||||
Change in fair value of contingent earnout liability | 67 | 3 | |||||
Non-GAAP Income from Operations | $ | 7,088 | $ | 2,843 |
Three Months Ended | |||||||
($ in thousands) | 2021 | 2020 | |||||
GAAP Net Income (Loss) | $ | 692 | $ | (4,651 | ) | ||
Provision for income taxes | 374 | 315 | |||||
Other expense, net | 696 | 47 | |||||
Interest income, net | 118 | 43 | |||||
Depreciation of property and equipment | 704 | 787 | |||||
Amortization of intangible assets | 3,929 | 3,994 | |||||
Share-based compensation expense | 1,212 | 3,092 | |||||
Change in fair value of contingent earnout liability | 67 | 3 | |||||
Adjusted EBITDA | $ | 7,792 | $ | 3,630 | |||
Adjusted EBITDA as a percent of total revenue | 11 | % | 6 | % |
Three Months Ended | ||||||||||||||||
($ in thousands) | 2021 | Per Share | 2020 | Per Share | ||||||||||||
GAAP Net Income (Loss) (1) | $ | 692 | $ | 0.01 | $ | (4,651 | ) | $ | (0.04 | ) | ||||||
Add: GAAP tax provision | 374 | 315 | ||||||||||||||
GAAP pre-tax income (loss) | 1,066 | (4,336 | ) | |||||||||||||
Share-based compensation expense | 1,212 | 3,092 | ||||||||||||||
Amortization of intangible assets | 3,929 | 3,994 | ||||||||||||||
Change in fair value of contingent earnout liability | 67 | 3 | ||||||||||||||
Non-GAAP pre-tax income | 6,274 | 2,753 | ||||||||||||||
Non-GAAP tax provision applied at a 24% tax rate (1) | 1,506 | 661 | ||||||||||||||
Non-GAAP Net Income (1) | $ | 4,768 | $ | 0.04 | $ | 2,092 | $ | 0.02 | ||||||||
Shares used in computing Non-GAAP income per share amounts: | ||||||||||||||||
GAAP weighted-average shares - basic | 132,038,274 | 130,788,359 | ||||||||||||||
GAAP dilutive shares | 2,173,936 | — | ||||||||||||||
Non-GAAP dilutive shares excluded from GAAP loss per share calculation (using the treasury stock method) | — | 3,227,281 | ||||||||||||||
Non-GAAP weighted-average shares - diluted | 134,212,210 | 134,015,640 |
(1) Our GAAP 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 U.S. For purposes of determining our Non-GAAP Net Income, we have applied a tax rate of 24% which represents our estimated effective tax rate.
Three Months Ended | |||||||
($ in thousands) | 2021 | 2020 | |||||
Net cash used in operating activities | $ | (24,603 | ) | $ | (22,172 | ) | |
Purchases of property and equipment | (540 | ) | (188 | ) | |||
Capitalized internal-use software | (366 | ) | (536 | ) | |||
Free Cash Flow | $ | (25,509 | ) | $ | (22,896 | ) |
Source:
2022 GlobeNewswire, Inc., source