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Table of Contents
TELENAV, INC.
Notes to Consolidated Financial Statements
Description of business
Telenav, Inc., also referred to in this report as “we,” “our” or “us,” was incorporated in September 1999 in the State of Delaware. We are a
leading provider of location-based platform services. These services consist of our automotive and mobile navigation platform and our
advertising delivery platform. Our auto and mobile navigation platform allows Telenav to deliver enhanced location-based services to auto
manufacturers, developers, and end users through various distribution channels, including wireless carriers. Our advertising delivery platform
delivers highly targeted advertising services leveraging our location expertise. Through June 30, 2014 we operated in one business segment.
Commencing July 1, 2014, we operate in three business segments: automotive, advertising and mobile navigation. Our fiscal year ends on
June 30 and in this report we refer to the fiscal years ended June 30, 2015 , 2014 and 2013 as fiscal 2015 , fiscal 2014 and fiscal 2013 ,
respectively.
Basis of presentation
The consolidated financial statements and accompanying notes have been prepared in accordance with U.S. generally accepted accounting
principles, or GAAP. The consolidated financial statements include the accounts of Telenav, Inc. and our wholly owned subsidiaries. All
significant intercompany balances and transactions have been eliminated in consolidation. Certain prior year balances have been reclassified to
conform to the current year presentation.
Our consolidated financial statements also include the financial results of Shanghai Jitu Software Development Ltd., or Jitu, located in
China. Based on our contractual arrangements with the shareholders of Jitu, we have determined that Jitu is a variable interest entity, or VIE, for
which we are the primary beneficiary and are required to consolidate in accordance with Accounting Standards Codification, or ASC, subtopic
810-10, or ASC 810-10, Consolidation: Overall . The results of Jitu did not have a material impact on our overall operating results for fiscal
2015 , fiscal 2014 or fiscal 2013 .
On April 16, 2013, we completed the sale of our enterprise business to FleetCor Technologies Operating Company, LLC, or FleetCor.
The results of operations of our enterprise business, which were previously presented as a component of our consolidated operating results, have
been classified as discontinued operations in our consolidated statements of operations for fiscal 2013. All information in the following notes to
the consolidated financial statements includes only results from continuing operations for all periods presented, unless otherwise noted. See Note
11 Sale of enterprise business.
Use of estimates
The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts
reported in the consolidated financial statements and accompanying notes. Significant estimates and assumptions made by us include the
determination of revenue recognition and deferred revenue, the recoverability of accounts receivable, the determination of acquired intangibles
and an assessment of goodwill impairment, the fair value of stock awards issued, the determination of income taxes and the recoverability of
deferred tax assets. Actual results could differ from those estimates.
Revenue recognition
We generate revenue primarily from software licenses, service subscriptions and customized engineering fees. We also generate revenue
from the delivery of search and display advertising impressions. We recognize revenue when persuasive evidence of an arrangement exists,
delivery of the product or service has occurred, the fee is fixed or determinable, and collectability is reasonably assured. We evaluate whether it
is appropriate to recognize revenue based on the gross amount billed to our customers or the net amount earned as revenue. When we are
primarily obligated in a transaction, have latitude in establishing prices, are responsible for fulfillment of the transaction, have credit risk, or have
several but not all of these indicators, we record revenue on a gross basis. While none of the factors individually are considered presumptive or
determinative, in reaching conclusions on gross versus net revenue recognition, we place the most weight on the analysis of whether or not we
are the primary obligor in the arrangement. We report our automotive and advertising revenue on a gross basis.
We derive product revenue from the delivery of customized software and royalties earned from the distribution of this customized software
in certain automotive navigation applications. We generally recognize customized software revenue using the completed contract method of
contract accounting under which revenue is recognized upon delivery to, and acceptance by, the automobile manufacturer of our on-board
navigation solutions. We generally recognize royalty revenue as the software is reproduced for installation in vehicles, assuming all other
conditions for revenue recognition have been met. We recognize
F-9
1.
Summary of business and significant accounting policies