BOULDER,
Colo., June 4, 2015
/PRNewswire/ -- Rally (NYSE: 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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