Duck Creek Technologies Announces Fourth Quarter and Full Year Fiscal 2021 Financial Results
- Fourth Quarter Fiscal 2021 Subscription revenue grew 35% year-over-year
- SaaS Annual Recurring Revenue grew 41% year-over-year
“Duck Creek delivered a strong finish to a great year, highlighted by 41% SaaS ARR growth that was driven by strong demand across all tiers of the global P&C insurance industry,” said
Fourth Quarter 2021 Financial Highlights
Revenue
- Total revenue for the fourth quarter of fiscal year 2021 was
$70.9 million , an increase of 21% from the comparable period in fiscal year 2020. Subscription revenue was$33.2 million , an increase of 35%; services revenue was$27.0 million , an increase of 16%; license revenue was$4.8 million , an increase of 6%; and maintenance revenue was consistent with the prior year at$5.9 million .
Profitability
- GAAP loss from operations was
$4.1 million for the fourth quarter of fiscal year 2021, compared with a GAAP loss from operations of$21.6 million for the comparable period in fiscal year 2020. - Non-GAAP income from operations was
$4.0 million for the fourth quarter of fiscal year 2021, compared with non-GAAP income from operations of$2.2 million for the comparable period in fiscal year 2020. - GAAP net loss was
$5.6 million for the fourth quarter of fiscal year 2021, compared with GAAP net loss of$21.5 million for the comparable period in fiscal year 2020. - Non-GAAP net income was
$2.6 million for the fourth quarter of fiscal year 2021, compared with non-GAAP net income of$2.3 million for the comparable period in fiscal year 2020. - GAAP net loss per share was
$0.04 , based on basic weighted average shares outstanding of approximately 131.7 million shares as ofAugust 31, 2021 . Non-GAAP net income per share was$0.02 based on fully diluted weighted average shares outstanding of approximately 134.8 million shares as ofAugust 31, 2021 . - Adjusted EBITDA was
$4.8 million for the fourth quarter of fiscal 2021, compared with adjusted EBITDA of$3.0 million for the comparable period in fiscal year 2020.
Full Year Fiscal 2021 Financial Highlights
Revenue
- Total revenue for the fiscal year 2021 was
$260.4 million , an increase of 23% from fiscal year 2020. Subscription revenue was$125.3 million , an increase of 49%; services revenue was$98.6 million , an increase of 5%; license revenue was$12.2 million , an increase of 23%; and maintenance revenue was$24.3 million , an increase of 3%. - SaaS annual recurring revenue, or SaaS ARR, was
$135.3 million as ofAugust 31, 2021 , an increase of 41% from fiscal year 2020.
Profitability
- GAAP loss from operations was
$15.4 million for the fiscal year 2021, compared with a GAAP loss from operations of$28.7 million in fiscal year 2020. - Non-GAAP income from operations was
$13.8 million for the fiscal year 2021, compared with non-GAAP income from operations of$8.6 million in fiscal year 2020. - GAAP net loss was
$16.9 million for the fiscal year 2021, compared with GAAP net loss of$29.9 million in fiscal year 2020. - Non-GAAP net income was
$10.7 million for the fiscal year 2021, compared with non-GAAP net income of$6.7 million in fiscal year 2020. - GAAP net loss per share was
$0.13 , based on basic weighted average shares outstanding of approximately 131.1 million shares as ofAugust 31, 2021 . Non-GAAP net income per share was$0.08 based on fully diluted weighted average shares outstanding of approximately 134.1 million shares as ofAugust 31, 2021 . - Adjusted EBITDA was
$16.9 million for the fiscal year 2021, compared with adjusted EBITDA of$11.7 million in fiscal year 2020.
Liquidity
- As of
August 31, 2021 ,Duck Creek had$185.7 million in cash and cash equivalents,$192.0 million in short term investments and no debt.Duck Creek had$7.5 million in cash provided by operating activities and had free cash flow of$6.9 million during the fourth quarter of fiscal year 2021, compared with$17.5 million in cash provided by operating activities and free cash flow of$16.3 million in the comparable period in fiscal year 2020.
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
First 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 first 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
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Consolidated Balance Sheets
(unaudited, in thousands except share and per share amounts)
As of |
||||||||
2021 | 2020 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 185,657 | $ | 389,878 | ||||
Short-term investments | 191,981 | — | ||||||
Accounts receivable, net | 34,629 | 29,149 | ||||||
Unbilled revenue | 24,423 | 18,121 | ||||||
Prepaid expenses and other current assets | 14,381 | 12,186 | ||||||
Total current assets | 451,071 | 449,334 | ||||||
Property and equipment, net | 14,305 | 18,113 | ||||||
Operating lease assets | 17,798 | 18,171 | ||||||
272,455 | 272,455 | |||||||
Intangible assets, net | 65,359 | 81,687 | ||||||
Deferred tax assets | 2,331 | 1,550 | ||||||
Unbilled revenue, net of current portion | 1,401 | 3,487 | ||||||
Other assets | 19,413 | 16,303 | ||||||
Total assets | $ | 844,133 | $ | 861,100 | ||||
Liabilities and Stockholders' Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 2,070 | $ | 1,802 | ||||
Accrued liabilities | 46,437 | 58,202 | ||||||
Contingent earnout liability | 5,462 | 3,701 | ||||||
Lease liability | 4,110 | 3,611 | ||||||
Deferred revenue | 29,577 | 30,397 | ||||||
Total current liabilities | 87,656 | 97,713 | ||||||
Contingent earnout liability, net of current portion | — | 3,391 | ||||||
Lease liability, net of current portion | 21,273 | 21,739 | ||||||
Deferred revenue, net of current portion | — | 379 | ||||||
Other long-term liabilities | 4,466 | 4,121 | ||||||
Total liabilities | 113,395 | 127,343 | ||||||
Stockholders' equity | ||||||||
Common stock, 134,625,379 shares issued and 132,000,317 shares outstanding at |
1,346 | 1,333 | ||||||
Preferred stock, 0 shares outstanding, 50,000,000 shares authorized at |
— | — | ||||||
2,555,556 shares at |
(67,764 | ) | (64,688 | ) | ||||
Accumulated deficit | (41,265 | ) | (24,334 | ) | ||||
Accumulated other comprehensive income | 64 | — | ||||||
Additional paid in capital | 838,357 | 821,446 | ||||||
Total stockholders' equity | 730,738 | 733,757 | ||||||
Total liabilities and stockholders' equity | $ | 844,133 | $ | 861,100 | ||||
Consolidated Statements of Operations
(unaudited, in thousands except share and per share amounts)
Three Months Ended |
Twelve Months Ended |
|||||||||||||||
(dollars in thousands) | 2021 | 2020 | 2021 | 2020 | ||||||||||||
Revenue | ||||||||||||||||
Subscription | $ | 33,198 | $ | 24,631 | $ | 125,267 | $ | 83,999 | ||||||||
License | 4,759 | 4,483 | 12,171 | 9,914 | ||||||||||||
Maintenance and support | 5,881 | 5,889 | 24,285 | 23,680 | ||||||||||||
Professional services | 27,016 | 23,319 | 98,627 | 94,079 | ||||||||||||
Total revenue | 70,854 | 58,322 | 260,350 | 211,672 | ||||||||||||
Cost of revenue | ||||||||||||||||
Subscription | 13,726 | 10,031 | 47,266 | 34,902 | ||||||||||||
License | 519 | 506 | 1,888 | 1,853 | ||||||||||||
Maintenance and support | 854 | 863 | 3,410 | 3,338 | ||||||||||||
Professional services | 14,665 | 18,243 | 57,522 | 57,082 | ||||||||||||
Total cost of revenue | 29,764 | 29,643 | 110,086 | 97,175 | ||||||||||||
Gross margins | 41,090 | 28,679 | 150,264 | 114,497 | ||||||||||||
Operating expenses | ||||||||||||||||
Research and development | 12,509 | 14,628 | 48,549 | 44,052 | ||||||||||||
Sales and marketing | 13,734 | 16,766 | 54,124 | 50,305 | ||||||||||||
General and administrative | 18,391 | 18,746 | 62,664 | 48,662 | ||||||||||||
Change in fair value of contingent consideration | 584 | 112 | 293 | 133 | ||||||||||||
Total operating expense | 45,218 | 50,252 | 165,630 | 143,152 | ||||||||||||
Loss from operations | (4,128 | ) | (21,573 | ) | (15,366 | ) | (28,655 | ) | ||||||||
Other (expense) income, net | (578 | ) | 737 | 431 | 641 | |||||||||||
Interest (expense) income, net | (13 | ) | 30 | (100 | ) | (356 | ) | |||||||||
Loss before income taxes | (4,719 | ) | (20,806 | ) | (15,035 | ) | (28,370 | ) | ||||||||
Provision for income taxes | 840 | 673 | 1,896 | 1,562 | ||||||||||||
Net loss | $ | (5,559 | ) | $ | (21,479 | ) | $ | (16,931 | ) | $ | (29,932 | ) | ||||
Net loss per share information1 | ||||||||||||||||
Net loss per share of common stock, basic and diluted | $ | (0.04 | ) | nm | $ | (0.13 | ) | nm | ||||||||
Weighted average shares of common stock, basic and diluted | 131,733,254 | nm | 131,114,791 | nm |
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 |
Twelve Months Ended |
|||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Cost of subscription revenue | $ | 127 | $ | 405 | $ | 429 | $ | 415 | ||||||||
Cost of maintenance and support revenue | 7 | 24 | 29 | 28 | ||||||||||||
Cost of services revenue | 705 | 4,581 | 2,708 | 4,683 | ||||||||||||
Research and development | 487 | 3,844 | 1,992 | 4,128 | ||||||||||||
Sales and marketing | 716 | 5,326 | 3,209 | 5,581 | ||||||||||||
General and administrative | 1,530 | 5,524 | 4,510 | 6,273 | ||||||||||||
Total share-based compensation expense | $ | 3,572 | $ | 19,704 | $ | 12,877 | $ | 21,108 | ||||||||
(1) Prior to Duck Creek’s initial public offering in
Consolidated Statements of Cash Flows
(unaudited, in thousands)
For the Three Months Ended |
For the Twelve Months Ended |
|||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Operating activities: | ||||||||||||||||
Net loss | $ | (5,559 | ) | $ | (21,479 | ) | $ | (16,931 | ) | $ | (29,932 | ) | ||||
Adjustments to reconcile net loss to cash provided by (used in) operating activities: | ||||||||||||||||
Depreciation of property and equipment | 759 | 793 | 3,136 | 3,143 | ||||||||||||
Amortization of capitalized software | 534 | 497 | 2,040 | 703 | ||||||||||||
Amortization of intangible assets | 4,066 | 4,268 | 16,328 | 17,070 | ||||||||||||
Impairment of right of use asset | 1,883 | 1,660 | 1,883 | 1,660 | ||||||||||||
Impairment of leasehold improvements | 702 | 1,132 | 702 | 1,132 | ||||||||||||
Amortization of deferred financing fees | 29 | 28 | 114 | 134 | ||||||||||||
Share-based compensation expense | 3,572 | 19,704 | 12,877 | 21,108 | ||||||||||||
Loss on change in fair value of contingent earnout liability | 584 | 112 | 293 | 133 | ||||||||||||
Bad debt expense | 441 | 32 | 1,105 | 97 | ||||||||||||
Deferred taxes | (105 | ) | (544 | ) | (781 | ) | (690 | ) | ||||||||
Other non-cash items | 49 | — | 12 | — | ||||||||||||
Changes in operating assets and liabilities | ||||||||||||||||
Accounts receivable | 2,108 | 505 | (6,585 | ) | (3,796 | ) | ||||||||||
Unbilled revenue | (757 | ) | 2,912 | (4,216 | ) | 1,730 | ||||||||||
Prepaid expenses and other current assets | (2,572 | ) | (6,396 | ) | (2,310 | ) | (6,300 | ) | ||||||||
Other assets | (2,734 | ) | (1,663 | ) | (3,110 | ) | (5,764 | ) | ||||||||
Accounts payable | 666 | 123 | 1,561 | (181 | ) | |||||||||||
Accrued liabilities | 3,172 | 7,070 | (3,230 | ) | 16,393 | |||||||||||
Deferred revenue | 830 | 6,400 | (1,199 | ) | 6,614 | |||||||||||
Operating leases | (149 | ) | (67 | ) | (1,477 | ) | 132 | |||||||||
Cash settlement of vested phantom stock | (168 | ) | — | (9,243 | ) | — | ||||||||||
Other long-term liabilities | 181 | 2,391 | 345 | 2,339 | ||||||||||||
Net cash provided by (used in) operating activities | 7,532 | 17,478 | (8,686 | ) | 25,725 | |||||||||||
Investing activities: | ||||||||||||||||
Purchase of short-term investments | — | — | (287,912 | ) | — | |||||||||||
Maturities of short-term investments | 63,982 | — | 95,982 | — | ||||||||||||
Capitalized internal-use software | (62 | ) | (453 | ) | (926 | ) | (2,893 | ) | ||||||||
Purchase of property and equipment | (521 | ) | (690 | ) | (1,355 | ) | (3,854 | ) | ||||||||
Net cash provided by (used in) investing activities | 63,399 | (1,143 | ) | (194,211 | ) | (6,747 | ) | |||||||||
Financing activities: | ||||||||||||||||
Proceeds from follow-on offering, net of issuance costs | — | 433,657 | 3,452 | 433,657 | ||||||||||||
Payment of deferred IPO costs | — | 2,552 | (3,650 | ) | — | |||||||||||
Payment of deferred Class E offering costs | — | 225,952 | (192 | ) | — | |||||||||||
Proceeds from issuance of Class |
— | — | — | 438,840 | ||||||||||||
Payment on redemption of Class A and Class |
— | (200,000 | ) | — | (398,000 | ) | ||||||||||
Purchase of non-controlling interest | (43,125 | ) | (43,125 | ) | ||||||||||||
Purchase of treasury stock | (3,019 | ) | (64,688 | ) | (3,076 | ) | (64,688 | ) | ||||||||
Proceeds from stock option exercises | 2,108 | — | 4,065 | — | ||||||||||||
Payments of contingent earnout liability | — | — | (1,923 | ) | (3,555 | ) | ||||||||||
Proceeds from revolving credit facility | — | — | — | 5,000 | ||||||||||||
Payments on revolving credit facility | — | — | — | (9,000 | ) | |||||||||||
Payment of deferred financing costs | — | — | — | (228 | ) | |||||||||||
Net cash (used in) provided by financing activities | (911 | ) | 354,348 | (1,324 | ) | 358,901 | ||||||||||
Net increase (decrease) in cash and cash equivalents | 70,020 | 370,683 | (204,221 | ) | 377,879 | |||||||||||
Cash and cash equivalents – beginning of period | 115,637 | 19,195 | 389,878 | 11,999 | ||||||||||||
Cash and cash equivalents – end of period | $ | 185,657 | $ | 389,878 | $ | 185,657 | $ | 389,878 | ||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures
(unaudited)
Three Months Ended |
Twelve Months Ended |
|||||||||||||||
($ in thousands) | 2021 | 2020 | 2021 | 2020 | ||||||||||||
GAAP Gross Margin | $ | 41,090 | $ | 28,679 | $ | 150,264 | $ | 114,497 | ||||||||
Share-based compensation expense | 839 | 5,010 | 3,166 | 5,125 | ||||||||||||
Amortization of intangible assets | 1,165 | 1,186 | 4,724 | 4,746 | ||||||||||||
Amortization of capitalized internal-use software | 534 | 497 | 2,040 | 703 | ||||||||||||
Non-GAAP Gross Margin | $ | 43,628 | $ | 35,372 | $ | 160,194 | $ | 125,071 | ||||||||
Three Months Ended |
Twelve Months Ended |
|||||||||||||||
($ in thousands) | 2021 | 2020 | 2021 | 2020 | ||||||||||||
GAAP Loss from Operations | $ | (4,128 | ) | $ | (21,573 | ) | $ | (15,366 | ) | $ | (28,655 | ) | ||||
Share-based compensation expense | 3,572 | 19,704 | 12,877 | 21,108 | ||||||||||||
Amortization of intangible assets | 3,972 | 3,994 | 15,954 | 15,975 | ||||||||||||
Change in fair value of contingent earnout liability | 584 | 112 | 293 | 133 | ||||||||||||
Non-GAAP Income from Operations | $ | 4,000 | $ | 2,237 | $ | 13,758 | $ | 8,561 | ||||||||
Three Months Ended |
Twelve Months Ended |
|||||||||||||||
($ in thousands) | 2021 | 2020 | 2021 | 2020 | ||||||||||||
GAAP Net Loss | $ | (5,559 | ) | $ | (21,479 | ) | $ | (16,931 | ) | $ | (29,932 | ) | ||||
Provision for income taxes | 840 | 673 | 1,896 | 1,562 | ||||||||||||
Other (income) expense | 578 | (737 | ) | (431 | ) | (641 | ) | |||||||||
Interest expense, net | 13 | (30 | ) | 100 | 356 | |||||||||||
Depreciation of property and equipment | 759 | 793 | 3,136 | 3,143 | ||||||||||||
Amortization of intangible assets | 3,972 | 3,994 | 15,954 | 15,975 | ||||||||||||
Share-based compensation expense | 3,572 | 19,704 | 12,877 | 21,108 | ||||||||||||
Change in fair value of contingent earnout liability | 584 | 112 | 293 | 133 | ||||||||||||
Adjusted EBITDA | $ | 4,759 | $ | 3,030 | $ | 16,894 | $ | 11,704 | ||||||||
Adjusted EBITDA as a percent of total revenue | 7 | % | 5 | % | 6 | % | 6 | % |
Three Months Ended |
Twelve Months Ended |
|||||||||||||||||||||||
($ in thousands) | 2021 | Per Share | 2020 | 2021 | Per Share | 2020 | ||||||||||||||||||
GAAP Net Loss (1) | $ | (5,559 | ) | $ | (0.04 | ) | $ | (21,479 | ) | $ | (16,931 | ) | $ | (0.13 | ) | $ | (29,932 | ) | ||||||
Add: GAAP tax provision | 840 | 673 | 1,896 | 1,562 | ||||||||||||||||||||
GAAP pre-tax loss | (4,719 | ) | (20,806 | ) | (15,035 | ) | (28,370 | ) | ||||||||||||||||
Share-based compensation expense | 3,572 | 19,704 | 12,877 | 21,108 | ||||||||||||||||||||
Amortization of intangible assets | 3,972 | 3,994 | 15,954 | 15,975 | ||||||||||||||||||||
Change in fair value of contingent earnout liability | 584 | 112 | 293 | 133 | ||||||||||||||||||||
Non-GAAP pre-tax income | 3,409 | 3,004 | 14,089 | 8,846 | ||||||||||||||||||||
Non-GAAP tax provision applied at a 24% tax rate (2) | 818 | 721 | 3,381 | 2,123 | ||||||||||||||||||||
Non-GAAP Net Income (1) | $ | 2,591 | $ | 0.02 | $ | 2,283 | $ | 10,708 | $ | 0.08 | $ | 6,723 | ||||||||||||
Shares used in computing Non-GAAP income per share amounts:(1) |
||||||||||||||||||||||||
GAAP weighted-average shares - basic and diluted | 131,733,254 | nm | 131,114,791 | nm | ||||||||||||||||||||
Non-GAAP dilutive shares excluded from GAAP loss per share calculation |
3,022,585 | nm | 3,022,585 | nm | ||||||||||||||||||||
Non-GAAP weighted-average shares - diluted | 134,755,839 | nm | 134,137,376 | nm |
(1) Prior to Duck Creek’s initial public offering in
(2) 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
Three Months Ended |
Twelve Months Ended |
|||||||||||||||
($ in thousands) | 2021 | 2020 | 2021 | 2020 | ||||||||||||
Net cash provided by (used in) operating activities | $ | 7,532 | $ | 17,478 | $ | (8,686 | ) | $ | 25,725 | |||||||
Purchases of property and equipment | (521 | ) | (690 | ) | (1,355 | ) | (3,854 | ) | ||||||||
Capitalized internal-use software | (62 | ) | (453 | ) | (926 | ) | (2,893 | ) | ||||||||
Free Cash Flow | $ | 6,949 | $ | 16,335 | $ | (10,967 | ) | $ | 18,978 | |||||||
Source:
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