Bazaarvoice, Inc.
Bazaarvoice Inc (Form: 8-K, Received: 09/07/2017 16:11:24)
 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

 

FORM 8‑K
 

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)

September 7, 2017

 

BAZAARVOICE, INC.
(Exact name of registrant as specified in its charter)
 

Delaware
 
001-35433
 
20-2908277
(State or other jurisdiction of incorporation)
 
(Commission File Number)
 
(IRS Employer
Identification No.)

10901 South Stonelake Blvd.
Austin, Texas, 78759-5749
(Address of principal executive offices, including zip code)

(512) 551-6000
(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 





Item 2.02    Results of Operations and Financial Condition.

On September 7, 2017 , Bazaarvoice, Inc. issued a press release reporting its results of operations for the quarter ended July 31, 2017 . A copy of the press release is furnished herewith as Exhibit 99.1.


Item 9.01    Financial Statements and Exhibits.

(d) Exhibits.

Exhibit   No.
 
Description
 
 
 
99.1
 
Bazaarvoice, Inc. Press Release dated September 7, 2017.

The information furnished in this Current Report under Item 2.02 and Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities of Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.





SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
 
BAZAARVOICE, INC.
 
 
 
 
 
 
By:
/s/ Kin Gill
 
 
 
Kin Gill
Chief Legal Officer, General Counsel and Secretary
 

Date: September 7, 2017





EXHIBIT INDEX

Exhibit No.      Description

 



Exhibit 99.1

Bazaarvoice, Inc. Announces its Financial Results for the First Fiscal Quarter of 2018
First fiscal quarter highlights include:
 
Delivered Q 1 revenue of  $52.2 million , up 4% from the same period a year ago
Posted SaaS revenue of $49.3 million, up 3% from the same period a year ago
Achieved Q 1 advertising revenue of $2.9 million, up 24% from the same period a year ago
Improved GAAP net loss to $2.3 million from a loss of $5.1 million in the same period a year ago
Increased Adjusted EBITDA to $6.7 million from $3.9 million in the same period a year ago
AUSTIN, Texas,  September 7, 2017  (GLOBE NEWSWIRE) — Bazaarvoice, Inc. (Nasdaq:BV) reported its financial results for the first fiscal quarter ended July 31, 2017 .
“The first quarter for fiscal 2018 was a strong start to the year," said Gene Austin, chief executive officer and president. “We are pleased to see both our revenue growth rates increasing and our adjusted EBITDA margins expanding as we begin our new year.  We had a successful launch of Brand Edge during the first quarter which should drive additional revenue over the long term as we target the large market for brands with our newest CGC offering."
First Fiscal Quarter of 2017 Financial Details
Revenue:  Bazaarvoice reported revenue of  $52.2 million  for the first fiscal quarter of 2018 , up 4% from the first fiscal quarter of 2017 , which consisted of SaaS revenue of $49.3 million and net advertising revenue of $2.9 million.
GAAP net loss and net loss per share: GAAP net loss was  $2.3 million , compared to a GAAP net loss of  $5.1 million  for the first fiscal quarter of 2017 . GAAP net loss per share was  $0.03  based upon weighted average shares outstanding of 84.7 million , compared to a GAAP net loss per share of $0.06  for the first fiscal quarter of 2017 based upon weighted average shares outstanding of 82.2 million .
Adjusted EBITDA: Adjusted EBITDA for the first fiscal quarter of 2018 was $6.7 million compared to $3.9 million  for the first fiscal quarter of 2017 .
Non-GAAP net income and earnings per share: Non-GAAP net income was  $3.3 million , compared to a non-GAAP net loss of  $0.2 million  for the first fiscal quarter of 2017 . Non-GAAP net income per share was  $0.04 based upon weighted average shares outstanding of 84.7 million , compared to a non-GAAP loss per share of  $0.00  for the first fiscal quarter of 2017 based upon weighted average shares outstanding of 82.2 million .
Quarterly Conference Call
Bazaarvoice will host a conference call today at 4:30 p.m. Eastern Time to review the Company’s financial results for the first fiscal quarter of 2018 . To access this call, dial (877) 407-3982 from the United States or (201) 493-6780 internationally. A live webcast of the conference call can be accessed from the investor relations page of Bazaarvoice’s company website at investors.bazaarvoice.com. Following the completion of the call, a recorded replay will be available on the Company’s website, and a telephone replay will be available through September 21, 2017 by dialing (844) 512-2921 from the United States or (412) 317-6671 internationally with recording access code 13669391.
About Bazaarvoice
Bazaarvoice helps brands and retailers find and reach consumers, and win them with the content they trust. Each month in the Bazaarvoice Network, more than one-half billion consumers view and share authentic consumer-generated content (CGC), including ratings and reviews as well as curated visual content, across 5,000 brand and retail websites. This visibility into shopper behavior allows Bazaarvoice to capture unique first-party data and insights that enable our targeted advertising and personalization solutions.




Founded in 2005, Bazaarvoice is headquartered in Austin, Texas with offices across North America and Europe. For more information, visit www.bazaarvoice.com.
Non-GAAP Financial Measures
Adjusted EBITDA discussed in this press release is defined as GAAP net loss adjusted for stock-based expense, contingent consideration related to acquisitions, depreciation and amortization (including amortization of capitalized internal-use software development costs), restructuring charges, out of period sales tax refunds, integration and other costs related to acquisitions, other non-business costs and benefits, income tax expense and other (income) expense, net. GAAP net loss is the most comparable GAAP measure to Adjusted EBITDA.  

Non-GAAP net income (loss), which is used to calculate non-GAAP net loss per share, is defined as our GAAP net loss, adjusted to exclude stock-based expense, contingent consideration related to acquisitions, amortization of acquired intangible assets, restructuring charges, out of period sales tax refunds, integration and other costs related to acquisitions, and other non-business costs and benefits along with the associated income tax effect of these adjustments.

Free cash flow discussed in this release is defined as cash provided by (used in) operating activities less purchases of property, equipment and capitalized internal-use software development costs. Cash flow provided by (used in) operating activities is the most comparable GAAP measure to free cash flow.

Management presents these non-GAAP financial measures because it considers them to be important supplemental measures of core operating performance. Management uses the non-GAAP financial measures for planning purposes, including analysis of the Company’s operating performance against prior periods and the effectiveness of our business strategies, the preparation of operating budgets and to determine appropriate levels of operating and capital investments, as well as in communications with our board of directors concerning our financial performance. Management also believes that the non-GAAP financial measures provide additional insight for securities analysts and investors in evaluating the Company’s financial and operational performance without regard to items that can vary substantially from company to company depending upon their financing, capital structures, and the method by which assets were acquired. However, these non-GAAP financial measures have limitations as an analytical tool, and you should not consider them in isolation or as a substitute for analysis of our results of operations as reported under GAAP. Furthermore, these non-GAAP financial measures may not be comparable to similarly titled measures of other organizations because other organizations may not calculate these non-GAAP financial measures in the same manner. We intend to provide these non-GAAP financial measures as part of our future financial results discussions; therefore, the inclusion of these non-GAAP financial measures will provide consistency in our financial reporting. A reconciliation of these non-GAAP measures to GAAP is provided in the accompanying tables.




Forward-looking Statements
This press release contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, included in this press release regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans, and objectives of management are forward-looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “will,” “would,” “target” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements include, among other things, statements about increasing revenue growth rates, improving margin expansion, the success of our Brand Edge offering and other statements about management’s beliefs, intentions or goals. We may not actually achieve the expectations disclosed in the forward-looking statements, and you should not place undue reliance on our forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results or events to differ materially from the expectations disclosed in the forward-looking statements, including, but not limited to, our expectations regarding our revenue, expenses, sales and operations; changes in accounting standards; our ability to realize efficiencies and to execute on our strategic initiatives; our limited operating history; our ability to operate in a new and unproven market; our ability to effectively manage growth; our ability to develop and launch new products; risks associated with the uncertainty of market acceptance of our new products; our ability to retain our existing customers and satisfy their obligations and needs and upsell to existing clients; our ability to attract and retain employees; our ability to maintain pricing for our products and services; our ability to manage expansion into new vertical industries; our ability to reduce our cost structure and improve operating efficiencies;  and the effects of increased competition and commoditization of products we offer, including pricing pressure, reduced profitability or loss of market share; risks and challenges associated with international sales; our ability to successfully identify, manage and integrate potential acquisitions; the impact of the Department of Justice stipulation regarding PowerReviews on our business; and other risks and potential factors that could affect our business and financial results identified in our Form 10-K for the fiscal year ended April 30, 2017 as filed with the Securities and Exchange Commission on June 16, 2017. Additional information will also be set forth in our future quarterly reports on Form 10-Q, annual reports on Form 10-K and other filings that we make with the Securities and Exchange Commission. We do not intend and undertake no duty to release publicly any updates or revisions to any forward-looking statements contained herein.



Investor Relations Contact:
Linda Wells
Bazaarvoice, Inc.
415-582-6250
linda.wells@bazaarvoice.com

Media Contact:
Alison Kwong
Bazaarvoice, Inc.
512-551-6285
pr@bazaarvoice.com





Bazaarvoice, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
 
July 31,
2017
 
April 30,
2017
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
47,016

 
$
52,494

Short-term investments
37,522

 
38,689

Accounts receivable, net
48,861

 
43,713

Prepaid expenses and other current assets
6,892

 
7,619

Total current assets
140,291

 
142,515

Property, equipment and capitalized internal-use software development costs, net
29,117

 
28,358

Goodwill
139,155

 
139,155

Acquired intangible assets, net
7,245

 
7,717

Other non-current assets
4,217

 
4,210

Total assets
$
320,025

 
$
321,955

Liabilities and stockholders’ equity
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
4,266

 
$
4,310

Accrued expenses and other current liabilities
17,492

 
20,602

Revolving line of credit
27,000

 
32,000

Deferred revenue
73,046

 
69,656

Total current liabilities
121,804

 
126,568

Long-term liabilities:
 
 
 
Deferred revenue less current portion
2,130

 
2,540

Other liabilities, long-term
7,273

 
6,542

Total liabilities
131,207

 
135,650

Commitments and contingencies

 

Stockholders’ equity:
 
 
 
Common stock
8

 
8

Additional paid-in capital
460,641

 
455,755

Accumulated other comprehensive loss
(1,413
)
 
(1,682
)
Accumulated deficit
(270,418
)
 
(267,776
)
Total stockholders’ equity
188,818

 
186,305

Total liabilities and stockholders’ equity
$
320,025

 
$
321,955





Bazaarvoice, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except net loss per share data)
(unaudited)

 
Three Months Ended July 31,
 
2017
 
2016
Revenue
$
52,158

 
$
50,093

Cost of revenue
19,765

 
18,756

Gross profit
32,393

 
31,337

Operating expenses:
 
 
 
Sales and marketing
14,604

 
15,304

Research and development
10,503

 
11,073

General and administrative
8,585

 
8,259

Restructuring charges
40

 
327

Acquisition-related and other
261

 
176

Amortization of acquired intangible assets
309

 
309

Total operating expenses
34,302

 
35,448

Operating loss
(1,909
)
 
(4,111
)
Other income (expense), net:
 
 
 
Interest income
86

 
142

Interest expense
(394
)
 
(489
)
Other income (expense)
25

 
(512
)
Total other expense, net
(283
)
 
(859
)
Loss before income taxes
(2,192
)
 
(4,970
)
Income tax expense
124

 
135

Net loss
$
(2,316
)
 
$
(5,105
)
Net loss per share, basic and diluted
$
(0.03
)
 
$
(0.06
)
Basic and diluted weighted average number of shares outstanding
84,663

 
82,214





Bazaarvoice, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
 
Three Months Ended July 31,
 
2017
 
2016
Operating activities:
 
 
 
Net loss
$
(2,316
)
 
$
(5,105
)
Adjustments to reconcile net loss to net cash provided by operating activities:
 
 
 
Depreciation and amortization expense
3,487

 
3,578

Stock-based expense
4,822

 
3,944

Bad debt expense (recovery)
79

 
(179
)
Amortization of deferred financing costs
59

 
59

Other non-cash expense
(46
)
 
(39
)
Changes in operating assets and liabilities:
 
 
 
Accounts receivable
(5,227
)
 
1,749

Prepaid expenses and other current assets
804

 
(507
)
Other non-current assets
(87
)
 
869

Accounts payable
(461
)
 
(2,616
)
Accrued expenses and other current liabilities
(3,805
)
 
(4,442
)
Deferred revenue
2,979

 
2,974

Other liabilities, long-term
(16
)
 
(156
)
Net cash provided by operating activities
272

 
129

Investing activities:
 
 
 
Purchases of property, equipment and capitalized internal-use software development costs
(2,332
)
 
(2,760
)
Purchases of short-term investments
(17,054
)
 
(12,691
)
Proceeds from maturities of short-term investments
18,214

 
15,010

Net cash used in investing activities
(1,172
)
 
(441
)
Financing activities:
 
 
 
Proceeds from employee stock compensation plans
113

 
395

Payments on revolving line of credit
(5,000
)
 

Net cash provided by (used in) financing activities
(4,887
)
 
395

Effect of exchange rate fluctuations on cash and cash equivalents
309

 
(538
)
Net change in cash and cash equivalents
(5,478
)
 
(455
)
Cash and cash equivalents at beginning of period
52,494

 
43,963

Cash and cash equivalents at end of period
$
47,016

 
$
43,508

Supplemental disclosure of non-cash investing and financing activities:
 
 
 
Purchase of fixed assets recorded in accounts payable
$
402

 
$
83

Purchase of leasehold improvements funded by tenant improvement allowance
$
925

 
$

Capitalized stock-based compensation
$
137

 
$
122





Bazaarvoice, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(in thousands, except net loss per share data)
(unaudited)
 
Three Months Ended July 31,
 
2017
 
2016
Non-GAAP net income (loss) per share:
 
 
 
GAAP net loss
$
(2,316
)
 
$
(5,105
)
Stock-based expense (1)
4,822

 
3,944

Restructuring charges (3)
40

 
327

Amortization of acquired intangible assets
473

 
473

Acquisition-related and other expense
261

 
176

   Income tax adjustment for non-GAAP items
(2
)
 
(3
)
Non-GAAP net income (loss)
$
3,278

 
$
(188
)
GAAP basic and diluted shares
84,663

 
82,214

Non-GAAP basic and diluted net income (loss) per share
$
0.04

 
$
0.00

Adjusted EBITDA:
 
 
 
GAAP net loss
$
(2,316
)
 
$
(5,105
)
Stock-based expense (1)
4,822

 
3,944

Depreciation and amortization (2)
3,487

 
3,578

Restructuring charges (3)
40

 
327

Acquisition-related and other expense
261

 
176

Income tax expense
124

 
135

Total other expense, net
283

 
859

Adjusted EBITDA
$
6,701

 
$
3,914

Free cash flow:
 
 
 
Net cash provided by operating activities
$
272

 
$
129

Purchases of property, equipment and capitalized internal-use software development costs
(2,332
)
 
(2,760
)
Free cash flow
$
(2,060
)
 
$
(2,631
)
(1)    
Stock-based expense includes the following:
 
 
 
Cost of revenue
$
567

 
$
344

Sales and marketing
1,067

 
580

Research and development
1,080

 
1,053

General and administrative
2,108

 
1,967

Stock-based expense
$
4,822

 
$
3,944


(2)    
Depreciation and amortization includes the following:
 
 
 
Cost of revenue
$
2,580

 
$
2,592

Sales and marketing
143

 
196

Research and development
209

 
231

General and administrative
246

 
250

Amortization of acquired intangible assets
309

 
309

Depreciation and amortization
$
3,487

 
$
3,578


(3)
In February 2016, the Company made the decision to suspend sales of its BV Local product, reduce its cost structure to improve operating efficiencies and align resources with its growth strategies. Costs associated with these restructuring




activities include workforce reductions charges, and facilities charges related to the loss recorded on the sub-lease of excess office space at the Company's headquarters.
In addition, in April 2017 the Company committed to a plan to reduce its advertising sales expenses to better align with its growth expectations and restructure the Company to reduce organization layers and streamline operations. Costs associated with these restructuring activities include severance and related payroll tax.
Management excludes these restructuring charges from Adjusted EBITDA when reviewing the Company's operating results as the charges do not represent normal, routine, cash operating expenses necessary to operate our business. In addition, the timing of restructuring charges, such as the ones described above, are unpredictable and the amount of the charges vary significantly across reporting periods and are not expected to continue indefinitely. Management believes the exclusion of these charges from the Company's non-GAAP measures allows investors to supplement their understanding of the Company's short-term and long-term financial trends as we believe the items excluded are not indicative of our underlying ongoing and future performance.




Bazaarvoice, Inc.
Selected Quarterly Financial and Operational Metrics
(in thousands, except active clients and full-time employees data)
(unaudited)
 
Three Months Ended
 
Oct 31,
 
Jan 31,
 
Apr 30,
 
Jul 31,
 
Oct 31,
 
Jan 31,
 
Apr 30,
 
Jul 31,
 
2015
 
2016
 
2016
 
2016
 
2016
 
2017
 
2017
 
2017
Revenue (1)
$
49,926

 
$
50,255

 
$
50,709

 
$
50,093

 
$
50,408

 
$
50,525

 
$
50,209

 
$
52,158

Cost of revenue
19,146

 
18,920

 
19,253

 
18,756

 
18,855

 
19,196

 
19,596

 
19,765

Gross profit
30,780

 
31,335

 
31,456

 
31,337

 
31,553

 
31,329

 
30,613

 
32,393

Operating expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sales and marketing
16,502

 
16,113

 
18,027

 
15,304

 
15,819

 
16,322

 
17,803

 
14,604

Research and development
10,354

 
10,199

 
10,391

 
11,073

 
9,959

 
9,588

 
9,467

 
10,503

General and administrative
7,643

 
6,940

 
7,577

 
8,259

 
8,051

 
7,299

 
8,343

 
8,585

Restructuring charges

 

 
1,575

 
327

 
767

 

 
1,108

 
40

Sales tax refund

 

 

 

 

 

 
(3,341
)
 

Acquisition-related and other expense
224

 
332

 
157

 
176

 
120

 
84

 
196

 
261

Amortization of acquired intangible assets
310

 
309

 
309

 
309

 
310

 
309

 
309

 
309

Total operating expenses
35,033

 
33,893

 
38,036

 
35,448

 
35,026

 
33,602

 
33,885

 
34,302

Operating loss
(4,253
)
 
(2,558
)
 
(6,580
)
 
(4,111
)
 
(3,473
)
 
(2,273
)
 
(3,272
)
 
(1,909
)
Total other expense, net
(475
)
 
(719
)
 
(384
)
 
(859
)
 
(569
)
 
(332
)
 
(499
)
 
(283
)
Loss before income taxes
(4,728
)
 
(3,277
)
 
(6,964
)
 
(4,970
)
 
(4,042
)
 
(2,605
)
 
(3,771
)
 
(2,192
)
Income tax expense (benefit)
124

 
(163
)
 
165

 
135

 
92

 
123

 
203

 
124

Net loss
$
(4,852
)
 
$
(3,114
)
 
$
(7,129
)
 
$
(5,105
)
 
$
(4,134
)
 
$
(2,728
)
 
$
(3,974
)
 
$
(2,316
)
Stock-based expense (2)
$
3,787

 
$
3,762

 
$
3,602

 
$
3,944

 
$
4,239

 
$
3,989

 
$
4,110

 
$
4,822

Depreciation and amortization (3)
3,334

 
3,512

 
3,575

 
3,578

 
3,532

 
3,513

 
3,516

 
3,487

Restructuring charges (4)

 

 
1,575

 
327

 
767

 

 
1,108

 
40

Sales tax refund (5)

 

 

 

 

 

 
(3,341
)
 

Acquisition-related and other expense
224

 
332

 
157

 
176

 
120

 
84

 
196

 
261

Other stock-related benefit (6)

 

 

 

 
(25
)
 

 

 

Income tax expense (benefit)
124

 
(163
)
 
165

 
135

 
92

 
123

 
203

 
124

Total other expense, net
475

 
719

 
384

 
859

 
569

 
332

 
499

 
283

Adjusted EBITDA (7)
$
3,092

 
$
5,048

 
$
2,329

 
$
3,914

 
$
5,160

 
$
5,313

 
$
2,317

 
$
6,701

Number of active clients (at period end)
1,360

 
1,383

 
1,399

 
1,397

 
1,412

 
1,456

 
1,494

 
1,524

Full-time employees (at period end) (8)
845

 
806

 
747

 
744

 
764

 
769

 
755

 
763

(1)
Revenue includes the following:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SaaS
$
47,671

 
$
47,884

 
$
49,108

 
$
47,799

 
$
48,121

 
$
47,266

 
$
47,870

 
$
49,323

Advertising
2,255

 
2,371

 
1,601

 
2,294

 
2,287

 
3,259

 
2,339

 
2,835

Revenue
$
49,926

 
$
50,255

 
$
50,709

 
$
50,093

 
$
50,408

 
$
50,525

 
$
50,209

 
$
52,158












(2)
During the first quarter of fiscal 2017 we updated our calculation of Adjusted EBITDA. As a result of this update prior period stock compensation amounts have been updated to conform to the current presentation. Under the new definition of Adjusted EBITDA the capitalized portion of stock-based compensation related to the capitalization of internal-use software is excluded from stock-based expense.
 
Three Months Ended
 
Oct 31,
 
Jan 31,
 
Apr 30,
 
Jul 31,
 
Oct 31,
 
Jan 31,
 
Apr 30,
 
Jul 31,
 
2015
 
2016
 
2016
 
2016
 
2016
 
2017
 
2017
 
2017
Stock-based expense includes the following:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost of revenue
$
607

 
$
585

 
$
503

 
$
344

 
$
486

 
$
475

 
$
429

 
$
567

Sales and marketing
643

 
686

 
543

 
580

 
843

 
850

 
723

 
1,067

Research and development
798

 
786

 
769

 
1,053

 
907

 
867

 
943

 
1,080

General and administrative
1,739

 
1,705

 
1,787

 
1,967

 
2,003

 
1,797

 
2,015

 
2,108

Stock-based expense
$
3,787

 
$
3,762

 
$
3,602

 
$
3,944

 
$
4,239

 
$
3,989

 
$
4,110

 
$
4,822


(3)
During the first quarter of fiscal 2017 we updated our calculation of Adjusted EBITDA. As a result of this update prior period depreciation and amortization amounts have been updated to conform to the current presentation. Our new definition of Adjusted EBITDA includes amortization of capitalized internal-use software development costs in depreciation and amortization.
Depreciation and amortization includes the following:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost of revenue
$
2,480

 
$
2,559

 
$
2,619

 
$
2,592

 
$
2,600

 
$
2,601

 
$
2,613

 
$
2,580

Sales and marketing
197

 
210

 
201

 
196

 
189

 
183

 
168

 
143

Research and development
175

 
228

 
227

 
231

 
204

 
194

 
191

 
209

General and administrative
171

 
206

 
219

 
250

 
229

 
226

 
235

 
246

Amortization of acquired intangible assets
311

 
309

 
309

 
309

 
310

 
309

 
309

 
309

Depreciation and amortization
$
3,334

 
$
3,512

 
$
3,575

 
$
3,578

 
$
3,532

 
$
3,513

 
$
3,516

 
$
3,487


(4) In February 2016, the Company made the decision to suspend sales of its BV Local product, reduce its cost structure to improve operating efficiencies and align resources with its growth strategies. Costs associated with these restructuring activities include workforce reductions charges, and facilities charges related to the loss recorded on the sub-lease of excess office space at the Company's headquarters.
In addition, in April 2017 the Company committed to a plan to reduce its advertising sales expenses to better align with its growth expectations and restructure the Company to reduce organization layers and streamline operations. Costs associated with these restructuring activities include severance and related payroll tax.
Management excludes these restructuring charges from Adjusted EBITDA when reviewing the Company's operating results as the charges do not represent normal, routine, cash operating expenses necessary to operate our business. In addition, the timing of restructuring charges, such as the ones described above, are unpredictable and the amount of the charges vary significantly across reporting periods and are not expected to continue indefinitely. Management believes the exclusion of these charges from the Company's non-GAAP measures allows investors to supplement their understanding of the Company's short-term and long-term financial trends as we believe the items excluded are not indicative of our underlying ongoing and future performance.

(5)
During the fourth quarter of fiscal 2017 the Company received a $3.3 million Texas state sales tax refund related to prior years open to audit for certain purchases that are integral to the Company's products.

(6)
Other stock-related benefit represents estimated liabilities for taxes and related items in connection with the treatment of certain equity grants. Since the estimated liability directly relates to equity grants and as stock-based expenses are consistently excluded from the non-GAAP financial measures, the Company excluded these estimated liabilities. During the three months ended October 31, 2016, the Company recorded a benefit of $0.5 million due to a reduction in previously recorded estimated tax liabilities that have exceeded the statute of limitations. This benefit was partially offset by a $0.5 million liability related




to estimated employer contributions the Company expects to make on behalf of its employees related to 401(k) deferrals on employee stock-based compensation.

(7)
During the first quarter of fiscal 2017 we updated our calculation of Adjusted EBITDA. As a result of this update prior period depreciation and amortization and stock-based compensation amounts have been updated to conform to the current presentation. Our new definition of Adjusted EBITDA includes amortization of capitalized internal-use software development costs in depreciation and amortization and excludes capitalized stock-based compensation related to internal-use software from stock-based expense. All periods prior to the first fiscal quarter of 2017 discussed in this press release or presented in the accompanying financial tables have been revised to conform to this definition Adjusted EBITDA.

(8)
During the first quarter of fiscal 2018 we updated our definition of full-time employees to exclude temporary contractors. As a result of this update all prior period amounts have been updated to conform to the current definition.