BOULDER, Colo., June 4, 2015 /PRNewswire/ -- Rally RALY, a leading global provider of software and services to drive agility, today announced financial results for its first quarter of fiscal year 2016 ended April 30, 2015.
First quarter fiscal year 2016 results:
- Revenues of $24.5 million, an increase of 26% compared to the same period one year ago.
- GAAP net loss of $(6.9) million, or a loss of $(0.27) per basic and diluted share based on 25.5 million weighted average shares of common stock outstanding, as compared to a GAAP net loss of $(8.5) million, or a loss of $(0.34) per basic and diluted share based on 24.8 million weighted average shares of common stock outstanding in the same period one year ago.
- Non-GAAP net loss of $(5.2) million, or $(0.20) per basic and diluted share, as compared to a non-GAAP net loss of $(6.8) million, or $(0.27) per basic and diluted share in the same period one year ago (see the table titled "Reconciliation of GAAP to non-GAAP Financial Measures").
- Total paid seats increased to over 276,000, a 22% increase over the total paid seats in the same period one year ago.
Cash flow from operations in the first quarter was $1.2 million. Cash and cash equivalents and short-term investments at April 30, 2015, excluding restricted cash, were $67.7 million.
About Rally
Rally delivers software and services that drive agility. Organizations worldwide use Rally's solutions to navigate evolving market demands, improve performance, and accelerate the pace of innovation to deliver value faster. Rally's enterprise-class cloud-based platform transforms the way organizations manage the software development lifecycle by aligning software development with strategic business objectives, facilitating collaboration, and increasing transparency. By applying Agile and Lean approaches, Rally's consulting and training services help companies innovate, lead, adapt, and deliver.
© 2015 Rally Software Development Corp. All rights reserved. Rally, Rally Software, and the Rally logo are trademarks or registered trademarks of Rally Software Development Corp. in the United States and other countries. All other trademarks are properties of their respective owners.
Non-GAAP Financial Measures
To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with Generally Accepted Accounting Principles (GAAP), we have provided certain measures that have not been prepared in accordance with GAAP. These non-GAAP financial measures include non-GAAP results for cost of revenue, gross profit, gross margin, operating expenses, 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.
Our non-GAAP financial measures exclude stock-based compensation expense and amortization of acquired intangible assets. We believe 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 our core operating results and comparison of operating results across reporting periods and is therefore useful to investors in analyzing and assessing our 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.
Rally Software Development Corp. Condensed Consolidated Balance Sheets (Unaudited, in thousands) April 30, January 31, 2015 2015 ASSETS Current assets: Cash and cash equivalents $ 14,564 $ 15,175 Short-term investments 53,152 51,410 Restricted cash - 15 Accounts receivable, net 19,014 25,986 Other receivables 384 117 Prepaid expenses and other current assets 3,799 3,393 Total current assets 90,913 96,096 Property and equipment, net 5,444 5,419 Goodwill 2,049 2,104 Intangible assets, net 1,250 1,382 Restricted cash 4,200 4,200 Other assets 503 671 Total assets $ 104,359 $ 109,872 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 3,467 $ 3,230 Accrued liabilities 4,353 5,511 Deferred revenue 43,733 43,978 Other current liabilities 2,657 1,909 Total current liabilities 54,210 54,628 Deferred revenue, net of current portion 458 697 Other long-term liabilities 1,105 876 Total liabilities 55,773 56,201 Stockholders' equity: Common stock 3 3 Additional paid-in capital 185,374 183,532 Accumulated deficit (136,350) (129,424) Accumulated other comprehensive income (loss) (441) (440) Total stockholders' equity 48,586 53,671 Total liabilities and stockholders' equity $ 104,359 $ 109,872
Rally Software Development Corp. Condensed Consolidated Statements of Operations (unaudited, in thousands, except per share amounts) Three Months Ended April 30, 2015 2014 Revenue: Subscription and support $ 19,203 $ 16,105 Perpetual license 267 639 Total product revenue 19,470 16,744 Professional services 4,981 2,687 Total revenue 24,451 19,431 Cost of revenue (1) (2): Product 2,977 2,396 Professional services 4,033 2,771 Total cost of revenue 7,010 5,167 Gross profit 17,441 14,264 Operating expenses (1): Sales and marketing 12,992 11,410 Research and development 6,314 5,986 General and administrative 5,164 5,188 Total operating expenses 24,470 22,584 Loss from operations (7,029) (8,320) Other income (expense): Interest and other income 52 39 Loss on foreign currency transactions and other gain (loss) (84) (82) Loss before provision for income taxes (7,061) (8,363) Provision (credit) for income taxes (135) 118 Net loss $ (6,926) $ (8,481) Net loss per share attributable to common stockholders, basic and diluted $ (0.27) $ (0.34) Weighted average common shares outstanding, basic and diluted 25,538 24,816 (1) Includes stock-based compensation expense as follows: Three Months Ended April 30, 2015 2014 Cost of product revenue $ 94 $ 95 Cost of professional services revenue 73 89 Sales and marketing 435 438 Research and development 305 412 General and administrative 656 522 $ 1,563 $ 1,556 (2) Includes amortization expense of acquired intangible assets as follows: Cost of product revenue $ 132 $ 132
Rally Software Development Corp. Condensed Consolidated Statements of Cash Flows (Unaudited, in thousands) Three Months Ended April 30, 2015 2014 Cash flow from operating activities: Net loss $ (6,926) $ (8,481) Adjustments to reconcile net loss to net cash provided by (used) in operating activities: Depreciation and amortization 762 724 Noncash stock-based compensation expense 1,563 1,556 Other 5 19 Changes in operating assets and liabilities: Accounts receivable 6,972 5,742 Other receivables (268) (30) Prepaid and other current assets (405) (867) Restricted cash 15 - Other assets 155 36 Accounts payable and accrued expenses (1,159) (1,183) Deferred revenue (484) (1,075) Other current liabilities 748 815 Other long-term liabilities 228 (15) Net cash provided by (used) in operating activities 1,206 (2,759) Cash flow from investing activities: Purchase of property and equipment (365) (648) Purchase of investments (27,958) - Proceeds from maturities of investments 26,225 - Proceeds from sale of property and equipment 1 1 Net cash (used) in investing activities (2,097) (647) Cash flow from financing activities: Proceeds from exercise of common stock options 470 246 Proceeds from issuance of common stock warrants 20 - Payment of payroll taxes related to net settled restricted stock units (210) - Net cash provided by financing activities 280 246 Net (decrease) in cash and cash equivalents during period (611) (3,160) Cash and cash equivalents at beginning of period 15,175 88,891 Cash and cash equivalents at end of period $ 14,564 $ 85,731
Rally Software Development Corp. Reconciliation of GAAP to Non-GAAP Financial Measures (unaudited, in thousands, except per share amounts) Three Months Ended April 30, 2015 2014 GAAP product cost of revenue $ 2,977 $ 2,396 Amortization expense of acquired intangible assets (132) (132) Stock-based compensation expense (94) (95) Non-GAAP product cost of revenue $ 2,751 $ 2,169 GAAP professional services cost of revenue $ 4,033 $ 2,771 Stock-based compensation expense (73) (89) Non-GAAP professional services cost of revenue $ 3,960 $ 2,682 GAAP gross profit $ 17,441 $ 14,264 Amortization expense of acquired intangible assets 132 132 Stock-based compensation expense 167 184 Non-GAAP gross profit $ 17,740 $ 14,580 Gross margin: GAAP 71% 73% Non-GAAP 73% 75% Product gross margin: GAAP 85% 86% Non-GAAP 86% 87% Professional services gross margin: GAAP 19% (3%) Non-GAAP 20% 0% GAAP sales and marketing expense $ 12,992 $ 11,410 Stock-based compensation expense (435) (438) Non-GAAP sales and marketing expense $ 12,557 $ 10,972 GAAP research and development expense $ 6,314 $ 5,986 Stock-based compensation expense (305) (412) Non-GAAP research and development expense $ 6,009 $ 5,574 GAAP general and administrative expense $ 5,164 $ 5,188 Stock-based compensation expense (656) (522) Non-GAAP general and administrative expense $ 4,508 $ 4,666 GAAP net loss $ (6,926) $ (8,481) Amortization expense of acquired intangible assets 132 132 Stock-based compensation expense 1,563 1,556 Non-GAAP net loss $ (5,231) $ (6,793) Basic and diluted net loss per share: GAAP basic and diluted net loss per share $ (0.27) $ (0.34) Amortization expense of acquired intangible assets 0.01 0.01 Stock-based compensation expense 0.06 0.06 Non-GAAP basic and diluted net loss per share $ (0.20) $ (0.27) Shares used to calculate basic and diluted net loss per share 25,538 24,816
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