HUCK 10-Q

Huckleberry.ai, Inc. (HUCK)

10-Q 2020-09-09 For: 2020-07-31

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Added on April 09, 2026

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(Mark One)
☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 31, 2020
OR
☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


			Page
PART I. FINANCIAL INFORMATION			1
Item 1. Financial Statements (unaudited)			1
Condensed Consolidated Balance Sheets			1
Condensed Consolidated Statements of Operations			2
Condensed Consolidated Statements of Comprehensive Loss			3
Condensed Consolidated Statements of Stockholders' Equity (Deficit)			4
Condensed Consolidated Statements of Cash Flows			6
Notes to Condensed Consolidated Financial Statements			7
















Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			27











Item 3. Quantitative and Qualitative Disclosures about Market Risk			42
Item 4. Controls and Procedures			43
PART II. OTHER INFORMATION			44
Item 1. Legal Proceedings			44
Item 1A. Risk Factors			44
Item 6. Exhibits			75
Signatures			76


	As of January 31,		As of July 31,
	2020		2020
Assets
Current assets:
Cash and cash equivalents	$	80,843	$	78,455
Short-term investments	17,967		4,899
Accounts receivable, net of allowances of $2,164 and $2,601 as of January 31, 2020 and July 31, 2020, respectively	47,967		34,933
Contract acquisition costs, net	12,676		12,872
Prepaid expenses and other current assets	12,809		9,756
Total current assets	172,262		140,915
Property and equipment, net	12,816		14,051
Right-of-use assets	—		10,214
Contract acquisition costs, noncurrent, net	17,083		16,008
Intangible assets, net	3,865		3,663
Goodwill	9,478		9,478
Other assets	1,234		806
Total assets	$	216,738	$	195,135
Liabilities and stockholders' deficit
Current liabilities:
Accounts payable	$	2,298	$	1,774
Accrued expenses and other current liabilities	46,473		41,105
Lease liabilities	—		4,076
Deferred revenue	105,290		101,982
Total current liabilities	154,061		148,937
Lease liabilities, noncurrent	—		7,159
Deferred revenue, noncurrent	4,454		2,248
Other liabilities, noncurrent	6,329		6,584
Long-term debt	101,074		103,075
Total liabilities	265,918		268,003
Commitments and contingencies (Note 12)
Stockholders' deficit:
Preferred stock, $0.001 par value per share; 10,000 shares authorized as of January 31, 2020 and July 31, 2020; no shares issued and outstanding as of January 31, 2020 and July 31, 2020	—		—
Class A common stock, $0.001 par value per share; 3,264 shares authorized as of January 31, 2020 and July 31, 2020; 3,264 shares issued and outstanding as of January 31, 2020 and July 31, 2020	3		3
Class B common stock, $0.001 par value per share; 500,000 shares authorized as of January 31, 2020 and July 31, 2020; 24,986 and 26,007 shares issued and outstanding as of January 31, 2020 and July 31, 2020, respectively	25		26
Additional paid-in capital	988,141		1,007,022
Accumulated other comprehensive income	389		617
Accumulated deficit	(1,037,738)		(1,080,536)
Total stockholders' deficit	(49,180)		(72,868)
Total liabilities and stockholders' deficit	$	216,738	$	195,135


	Three Months Ended July 31,						Six Months Ended July 31,
	2019		2020		2019		2020
Revenue:
Subscription	$	34,873	$	44,347	$	69,264	$	86,783
Professional services and other	6,787		6,784		13,194		12,909
Total revenue	41,660		51,131		82,458		99,692
Cost of revenue:
Subscription	8,816		8,811		16,851		17,916
Professional services and other	5,395		4,838		10,164		9,842
Total cost of revenue	14,211		13,649		27,015		27,758
Gross profit	27,449		37,482		55,443		71,934
Operating expenses:
Sales and marketing	29,501		27,384		65,450		56,480
Research and development	17,046		15,917		34,145		33,370
General and administrative	9,275		9,557		17,292		19,426
Total operating expenses	55,822		52,858		116,887		109,276
Loss from operations	(28,373)		(15,376)		(61,444)		(37,342)
Other expense, net	(2,482)		(2,417)		(4,807)		(5,141)
Loss before income taxes	(30,855)		(17,793)		(66,251)		(42,483)
Provision for income taxes	305		110		445		315
Net loss	$	(31,160)	$	(17,903)	$	(66,696)	$	(42,798)
Net loss per share, basic and diluted	$	(1.14)	$	(0.62)	$	(2.45)	$	(1.49)
Weighted-average number of shares used in computing net loss per share, basic and diluted	27,418		29,001		27,196		28,728


	Three Months Ended July 31,						Six Months Ended July 31,
	2019		2020		2019		2020
Net loss	$	(31,160)	$	(17,903)	$	(66,696)	$	(42,798)
Foreign currency translation adjustments	(8)		273		(66)		230
Unrealized gains on securities available for sale	(2)		(1)		—		(2)
Comprehensive loss	$	(31,170)	$	(17,631)	$	(66,762)	$	(42,570)


Delaware (State or Other Jurisdiction of Incorporation or Organization)						27-3687433 (I.R.S. Employer Identification Number)


	Six Months Ended July 31, 2019
	Class A Common Stock				Class B Common Stock						Additional Paid-in Capital		Accumulated Other Comprehensive Income		Accumulated Deficit	Total Stockholders' Equity (Deficit)
	Shares	Amount		Shares	Amount
Balance as of January 31, 2019	3,263,659	$	3	23,434,542	$	23	$	956,145	$	438	$	(912,082)	$	44,527


Vesting of restricted stock units	—	—		357,565	—		—		—		—		—
Shares repurchased for tax withholdings on vesting of restricted stock	—	—		(20,726)	—		(900)		—		—		(900)
Issuance of common stock under employee stock purchase plan	—	—		253,104	1		4,518		—		—		4,519
Exercise of stock options	—	—		61,844	—		1,338		—		—		1,338
Stock-based compensation expense	—	—		—	—		7,653		—		—		7,653
Exercise of common stock warrants	—	—		3,130	—		—		—		—		—
Other comprehensive loss	—	—		—	—		—		(56)		—		(56)
Net loss	—	—		—	—		—		—		(35,536)		(35,536)
Balance as of April 30, 2019	3,263,659	3		24,089,459	24		968,754		382		(947,618)		21,545













Vesting of restricted stock units	—	—		143,893	—		—		—				—
Shares repurchased for tax withholdings on vesting of restricted stock	—	—		(3,677)	—		(112)		—				(112)

Exercise of stock options	—	—		4,928	—		93		—				93
Stock-based compensation expense	—	—		—	—		4,738		—				4,738

Other comprehensive loss	—	—		—	—		—		(10)				(10)
Net loss	—	—		—	—		—		—		(31,160)		(31,160)
Balance as of July 31, 2019	3,263,659	$	3	24,234,603	$	24	$	973,473	$	372	$	(978,778)	$	(4,906)


	Six Months Ended July 31, 2020
	Class A Common Stock				Class B Common Stock						Additional Paid-in Capital		Accumulated Other Comprehensive Income		Accumulated Deficit	Total Stockholders' Deficit
	Shares	Amount		Shares	Amount
Balance as of January 31, 2020	3,263,659	$	3	24,985,698	$	25	$	988,141	$	389	$	(1,037,738)	$	(49,180)
Vesting of restricted stock units	—	—		99,762	—		—		—		—		—
Shares repurchased for tax withholdings on vesting of restricted stock	—	—		(4,578)	—		(38)		—		—		(38)
Issuance of common stock under employee stock purchase plan	—	—		466,214	1		3,658		—		—		3,659
Exercise of stock options	—	—		1,155	—		11		—		—		11
Stock-based compensation expense	—	—		—	—		6,499		—		—		6,499
Other comprehensive loss	—	—		—	—		—		(44)		—		(44)
Net loss	—	—		—	—		—		—		(24,895)		(24,895)
Balance as of April 30, 2020	3,263,659	3		25,548,251	26		998,271		345		(1,062,633)		(63,988)







Vesting of restricted stock units	—	—		396,680	—		—		—		—		—
Shares repurchased for tax withholdings on vesting of restricted stock	—	—		(24,222)	—		(485)		—		—		(485)
Issuance of common stock under employee stock purchase plan	—	—		(1,301)	—		(10)		—		—		(10)
Exercise of stock options	—	—		87,994	—		2,048		—		—		2,048
Stock-based compensation expense	—	—		—	—		7,198		—		—		7,198
Other comprehensive loss	—	—		—	—		—		272		—		272
Net loss	—	—		—	—		—		—		(17,903)		(17,903)
Balance as of July 31, 2020	3,263,659	$	3	26,007,402	$	26	$	1,007,022	$	617	$	(1,080,536)	$	(72,868)


Computer equipment and software			2-3 years
Furniture, vehicles and office equipment			3 years
Leasehold improvements			Shorter of remaining lease term or estimated useful life


	January 31, 2020
	Amortized Cost		Unrealized Gain		Unrealized Loss		Estimated Fair Value
Cash	$	10,375	$	—	$	—	$	10,375
Cash equivalents:
Money market funds	45,654		—		—		45,654
Certificates of deposit	15,021		—		—		15,021
Reverse repurchase agreements	4,200		—		—		4,200
Commercial paper	4,093		—		—		4,093

Corporate debt securities	1,500		—		—		1,500
Total cash and cash equivalents	80,843		—		—		80,843
Short-term investments:
Commercial paper	10,567		—		—		10,567
U.S. treasury securities	4,999		1		—		5,000
Asset-backed securities	2,399		1		—		2,400

Total short-term investments	17,965		2		—		17,967
Total cash, cash equivalents and short-term investments	$	98,808	$	2	$	—	$	98,810


	July 31, 2020
	Amortized Cost		Unrealized Gain		Unrealized Loss		Estimated Fair Value
Cash	$	14,526	$	—	$	—	$	14,526
Cash equivalents:
Money market funds	48,816		—		—		48,816
Certificates of deposit	15,113		—		—		15,113




Total cash and cash equivalents	78,455		—		—		78,455
Short-term investments:
Commercial paper	3,898		—		—		3,898

Asset-backed securities	1,001		—		—		1,001

Total short-term investments	4,899		—		—		4,899
Total cash, cash equivalents and short-term investments	$	83,354	$	—	$	—	$	83,354


	January 31, 2020
	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	45,654	$	—	$	—	$	45,654
Certificates of deposit	—		15,021		—		15,021
Reverse repurchase agreements	—		4,200				4,200
Commercial paper	—		4,093				4,093

Corporate debt securities	—		1,500		—		1,500
Total cash equivalents	45,654		24,814		—		70,468
Short-term investments:

Commercial paper	—		10,567		—		10,567
U.S. treasury securities	5,000		—		—		5,000
Asset-backed securities	—		2,400		—		2,400

Total short-term investments	5,000		12,967		—		17,967
Total cash equivalents and short-term investments	$	50,654	$	37,781	$	—	$	88,435


	Three Months Ended July 31, 2020		Six Months Ended July 31, 2020
Operating lease expense	$	1,185	$	2,524
Short-term lease expense	503		1,242
Total lease expense	$	1,688	$	3,766


	As of July 31, 2020
Weighted average remaining lease term (years)	4.6
Weighted average discount rate	10.0	%


Year Ending January 31:
2021	$	2,518
2022	4,322
2023	1,666
2024	1,072
2025	1,104
Thereafter	3,414
Total lease payments	14,096
Less imputed interest	(2,861)
Present value of lease liabilities	$	11,235


	As of January 31,		As of July 31,
	2020		2020
Intellectual property excluding patents	$	2,354	$	2,459
Software licenses	1,603		1,603
Patents	950		950
	4,907		5,012
Less accumulated amortization	(1,042)		(1,349)
	$	3,865	$	3,663


Balance as of January 31, 2020			$	109,744
Revenue recognized that was included in the deferred revenue balance at the beginning of the period:
Subscription	$	(67,272)
Professional services and other	(4,672)
Total			(71,944)
Increase due to billings excluding amounts recognized as revenue during the period			66,430
Balance as of July 31, 2020			$	104,230


	As of January 31,		As of July 31,
	2020		2020
Principal	$	105,123	$	106,458
Less: unamortized debt issuance costs	(4,049)		(3,383)
Net carrying amount	$	101,074	$	103,075


	Shares Subject to Outstanding Options	Weighted- Average Exercise Price per Share		Weighted-Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (in thousands)
Outstanding as of January 31, 2020	1,745,415	$	23.91	4.6	$	5,152

Exercised	(89,149)	23.09
Forfeited	(1,431)	27.95
Expired	(60,405)	35.79
Outstanding as of July 31, 2020	1,594,430	$	23.50	4.1	$	14,792
Vested and exercisable at July 31, 2020	1,561,627	$	23.35	4.0	$	14,734


	Number of Shares	Weighted- Average Grant Date Fair Value
Outstanding as of January 31, 2020	2,176,805	$	23.40
Granted	2,095,000	19.08
Vested	(496,442)	21.95
Canceled	(363,648)	22.63
Outstanding as of July 31, 2020	3,411,715	$	21.02