TeleNav 2014 Annual Report Download - page 59

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Table of Contents
Comparison of the fiscal years ended June 30, 2014 and 2013
Revenue .
Product revenue . Product revenue consists primarily of revenue we receive from the delivery of customized software and royalties from
the distribution of this customized software in certain automotive navigation applications. Product revenue increased 5% to $72.7 million in
fiscal 2014 from $69.2 million in fiscal 2013
. The increase was due primarily to increased royalty revenue from automotive navigation solutions
we provide for Ford vehicles, including the launch of our solutions in additional Ford and Lincoln models and further geographic distribution.
Product revenue in fiscal 2014 and fiscal 2013 included $2.8 million and $9.2 million, respectively, of customized software revenue from Ford.
Product revenue in fiscal 2014 and 2013 also included $0.9 million and $8.7 million, respectively, related to a map content update separately
purchased by Ford. Excluding customized software and map navigation replacement unit revenue, our automotive royalty revenue increased
31% from fiscal 2013 to fiscal 2014.
Services revenue . Services revenue consists primarily of revenue we derive from our mobile navigation services and advertising. Services
revenue decreased 37% to $77.6 million in fiscal 2014 from $122.6 million in fiscal 2013
. Of the decrease, a decline of $51.8 million was due to
the termination of our fixed fee revenue from Sprint for bundled users, lower subscription fees resulting from decreases in the number of paying
subscribers for mobile navigation services provided through AT&T, T-Mobile and U.S. Cellular Corporation, or USCC, and a decrease in
mobile navigation revenue internationally. These decreases were offset in part by growth in revenue from advertising network services of $7.8
million . Going forward, we anticipate that mobile navigation services revenue from wireless carriers will continue to decline.
Revenue concentrations . In fiscal 2014 and 2013 , Ford represented 46% and 36% of our total revenue, respectively. In fiscal 2014 and
2013 , revenue from AT&T represented 24% and 28% of our total revenue, respectively, and revenue from Sprint represented less than 10% and
16% of our total revenue, respectively.
Revenue from our automotive navigation solutions represented 50% and 37% of our total revenue in fiscal 2014 and 2013 , respectively.
Subscription fees from our mobile navigation services represented 42% and 61% of our total revenue in fiscal 2014 and 2013 , respectively.
Revenue from our mobile advertising services represented 8% and 2% of our total revenue in fiscal 2014 and fiscal 2013, respectively.
49
Fiscal Year Ended June 30, 2013
2014 2013 2012
Revenue:
(as a percentage of revenue)
Product
48
%
36
%
12
%
Services
52
%
64
%
88
%
Total revenue
100
%
100
%
100
%
Cost of revenue:
Product
24
%
20
%
7
%
Services
16
%
16
%
15
%
Total cost of revenue
40
%
36
%
22
%
Gross profit
60
%
64
%
78
%
Operating expenses:
Research and development
41
%
31
%
32
%
Sales and marketing
22
%
16
%
12
%
General and administrative
17
%
13
%
13
%
Restructuring costs
3
%
1
%
—
%
Total operating expenses
83
%
61
%
57
%
Operating income (loss)
(23
)%
3
%
21
%
Other income, net
1
%
—
%
1
%
Income (loss) before provision for income taxes
(22
)%
3
%
22
%
Provision (benefit) for income taxes
(2
)%
—
%
6
%
Income (loss) from continuing operations, net of tax
(20
)%
3
%
16
%
Income from discontinued operations, net of tax
—
%
4
%
—
%
Net income (loss)
(20
)%
7
%
16
%