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Duck Creek Technologies Announces Fourth Quarter and Full Fiscal Year 2022 Financial Results

October 12, 2022

  • Fourth Quarter Fiscal 2022 Subscription revenue increased to $40.2 million, up 21% year-over-year

  • SaaS Annual Recurring Revenue (“SaaS ARR”) increased to $169.3 million, up 25% year-over-year

BOSTON, Oct. 12, 2022 (GLOBE NEWSWIRE) -- Duck Creek Technologies (NASDAQ: DCT), the intelligent SaaS solutions provider defining the future of property and casualty ("P&C") insurance, today announced its financial results for the fourth quarter and fiscal year ended August 31, 2022.

“Duck Creek’s fourth quarter performance was highlighted by improved deal activity as customer demand and interest in modernizing their core systems to Duck Creek OnDemand, our industry-leading SaaS cloud platform, remained strong. I am proud of what the Duck Creek team accomplished in a year that saw significant changes in the market and the economy,” said Michael Jackowski, Duck Creek’s Chief Executive Officer.

Jackowski added, “While we and our customers are still facing some of the same challenges as we and our customers faced in recent quarters, we are encouraged by the sales performance in the fourth quarter and pipeline entering fiscal 2023. We are focused on building upon our success in the quarter and are well positioned to execute on our growth strategy.”

Fourth Quarter 2022 Financial Highlights

Revenue

  • Total revenue for the fourth quarter of fiscal year 2022 was $80.7 million, an increase of 14% from the comparable period in fiscal year 2021. Subscription revenue was $40.2 million, an increase of 21%; professional services revenue was $25.4 million, a decrease of 6%; license revenue was $7.8 million, an increase of 65%; and maintenance and support revenue was $7.2 million, an increase of 23%.

Profitability

  • GAAP loss from operations was $2.1 million for the fourth quarter of fiscal year 2022, compared with a GAAP loss from operations of $4.1 million for the comparable period in fiscal year 2021.
  • Non-GAAP income from operations was $6.1 million for the fourth quarter of fiscal year 2022, compared with non-GAAP income from operations of $4.0 million for the comparable period in fiscal year 2021.
  • GAAP net loss was $2.4 million for the fourth quarter of fiscal year 2022, compared with GAAP net loss of $5.6 million for the comparable period in fiscal year 2021.
  • Non-GAAP net income was $4.5 million for the fourth quarter of fiscal year 2022, compared with non-GAAP net income of $2.6 million for the comparable period in fiscal year 2021.
  • GAAP net loss per share was $0.02 for the fourth quarter of fiscal year 2022, compared with a GAAP net loss per share of $0.04 for the comparable period in fiscal year 2021, based on a basic and diluted weighted average shares outstanding of approximately 132.6 million shares and 131.7 million shares, respectively. Non-GAAP net income per share was $0.03 for the fourth quarter of fiscal year 2022, compared with a non-GAAP net income per share of $0.02 for the comparable period in the fiscal year 2021, based on fully diluted weighted average shares outstanding of approximately 133.9 million shares and 134.8 million shares, respectively.
  • Adjusted EBITDA was $6.8 million for the fourth quarter of fiscal 2022, compared with adjusted EBITDA of $4.8 million for the comparable period in fiscal year 2021.

Liquidity

  • Duck Creek had net cash provided by operating activities of $16.3 million and had free cash flow of $15.7 million during the fourth quarter of fiscal year 2022, compared with $7.5 million of cash provided by operating activities and free cash flow of $6.9 million in the comparable period in fiscal year 2021.

Full Year Fiscal 2022 Financial Highlights

Revenue

  • Total revenue for the fiscal year 2022 was $302.9 million, an increase of 16% from fiscal year 2021. Subscription revenue was $153.5 million, an increase of 23%; professional services revenue was $106.3 million, an increase of 8%; license revenue was $17.3 million, an increase of 42%; and maintenance and support revenue was $25.8 million, an increase of 6%.
  • SaaS ARR, was $169.3 million as of August 31, 2022, an increase of 25% from fiscal year 2021

Profitability

  • GAAP loss from operations was $5.4 million for the fiscal year 2022, compared with a GAAP loss from operations of $15.4 million in fiscal year 2021.
  • Non-GAAP income from operations was $21.6 million for the fiscal year 2022, compared with non-GAAP income from operations of $13.8 million in fiscal year 2021.
  • GAAP net loss was $8.3 million for the fiscal year 2022, compared with GAAP net loss of $16.9 million in fiscal year 2021.
  • Non-GAAP net income was $15.1 million for the fiscal year 2022, compared with non-GAAP net income of $10.7 million in fiscal year 2021.
  • GAAP net loss per share was $0.06 for the fiscal year 2022, compared with a GAAP net loss per share of $0.13 in fiscal year 2021, based on a basic and diluted weighted average shares outstanding of approximately 132.2 million shares and 131.1 million shares, respectively. Non-GAAP net income per share was $0.11 for the fiscal year 2022, compared with a non-GAAP net income per share of $0.08 in fiscal year 2021, based on fully diluted weighted average shares outstanding of approximately 133.5 million shares and 134.1 million shares, respectively.
  • Adjusted EBITDA was $24.2 million for the fiscal 2022, compared with adjusted EBITDA of $16.9 million in fiscal year 2021.

Liquidity

  • As of August 31, 2022, Duck Creek had $273.1 million in cash, cash equivalents and short-term investments and no debt. Duck Creek had net cash provided by operating activities of $10.7 million and had free cash flow of $8.0 million during the fiscal year 2022, compared with $8.7 million of cash used in operating activities and free cash flow of ($11.0) million in the comparable period in fiscal year 2021.

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

Duck Creek is issuing the following outlook for the first quarter of fiscal 2023 and full year of fiscal 2023 based on current expectations as of October 12, 2022:

     
  First Quarter Fiscal 2023  Full Year Fiscal 2023   
 Revenue$75.5 million to $77.5 million$328.0 million to $336.0 million 
 Subscription Revenue$40.5 million to $41.5 million$175.0 million to $179.0 million 
 Adjusted EBITDA$0.0 million to $1.0 million$25.0 million to $27.0 million 
 Non-GAAP net (loss) income$(1.0) million to $0.0 million$15.0 million to $17.0 million 
 Non-GAAP EPS$(0.01) to $0.00$0.11 to $0.13 
     

The foregoing business outlook is a forward-looking statement and is based on a number of assumptions, many of which are out of the Company’s control. Actual results may differ from such outlook, and such differences may be material.

Conference Call Information

Duck Creek Technologies will host a conference call today, October 12, 2022, at 5:00 p.m. (Eastern Time) to discuss Duck Creek’s financial results and business outlook. A live webcast of the call will be available on the “Investor Relations” page of the Duck Creek’s website at https://ir.duckcreek.com/. To access the call by phone, please go to this link (registration link), and you will be provided with dial in details. To avoid delays, we encourage participants to dial into the conference call fifteen minutes ahead of the scheduled start time. A replay of the webcast will also be available for a limited time at https://ir.duckcreek.com/.

About Duck Creek Technologies

Duck Creek Technologies (NASDAQ: DCT) is the intelligent solutions provider defining the future of the property and casualty (P&C) and general insurance industry. We are the platform upon which modern insurance systems are built, enabling the industry to capitalize on the power of the cloud to run agile, intelligent, and evergreen operations. Authenticity, purpose, and transparency are core to Duck Creek, and we believe insurance should be there for individuals and businesses when, where, and how they need it most. Our market-leading solutions are available on a standalone basis or as a full suite, and all are available via Duck Creek OnDemand. Visit www.duckcreek.com to learn more. Follow Duck Creek on our social channels for the latest information – LinkedIn and Twitter.

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 fourth 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 Securities and Exchange Commission on October 29, 2021, as supplemented by Duck Creek’s subsequent public filings. In particular, the following factors, among others, could cause results to differ materially from those expressed or implied by such forward-looking statements: the impact of pandemics, including the on-going COVID-19 pandemic, on U.S. and global economies, Duck Creek’s business and results and financial condition, its employees, demand for its products, sales and implementation cycles, and the health of its customers’ and partners’ businesses; Duck Creek’s history of losses; changes in Duck Creek’s product revenue mix as it continues to focus on sales of its SaaS solutions, which will cause fluctuations in its results of operations and cash flows between periods; Duck Creek’s reliance on orders and renewals from a relatively small number of customers for a substantial portion of its revenue, and the substantial negotiating leverage customers have in renewing and expanding their contracts for Duck Creek’s solutions; the success of Duck Creek’s growth strategy focused on SaaS solutions and its ability to develop or sell its solutions into new markets or further penetrate existing markets; Duck Creek’s ability to manage its expanding operations; intense competition in Duck Creek’s market; third parties may assert Duck Creek is infringing or violating their intellectual property rights; U.S. and global market and economic conditions, particularly adverse in the insurance industry; additional complexity, burdens and volatility in connection with Duck Creek’s international sales and operations; the length and variability of Duck Creek’s sales and implementation cycles; data breaches, unauthorized access to customer data or other disruptions of Duck Creek’s solutions; and the significant influence of Duck Creek’s largest shareholders on the composition of its board of directors, its management, business plans, and policies and any conflicts of interests therewith.

Any forward-looking statement in this release speaks only as of the date of this release. Duck Creek undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by any applicable laws.

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 (income) expense, net, depreciation of property and equipment, amortization of intangible assets, share-based compensation expense, change in fair value of contingent earnout liability, and acquisition-related expenses. Non-GAAP income from operations excludes share-based compensation expense, amortization of intangible assets, change in fair value of contingent earnout liability, and acquisition-related expenses. 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, change in fair value of contingent earnout liability and acquisition-related expenses and the tax effect of such adjustments.  Free cash flow consists of net cash provided by operating activities adjusted for purchases of property and equipment, capitalized internal-use software, and acquisition-related payments. 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 Duck Creek. SaaS ARR is calculated by annualizing recurring revenue recorded in the last month of the measurement period. SaaS Net Dollar Retention is a rate calculated by annualizing recurring revenue recorded in the last month of the measurement period for those customers in place throughout the entire measurement period. We divide the result by annualized recurring revenue from the month that is one year prior to the end of the measurement period, for all customers in place at the beginning of the measurement period.

Duck Creek believes that these non-GAAP financial measures and other metrics provide useful information to management and investors regarding certain financial and business trends relating to Duck Creek’s financial condition and results of operations. Duck Creek’s management uses these non-GAAP financial measures and other metrics to manage its business, make planning decisions, evaluate its performance and allocate resources. Duck Creek believes that the use of these non-GAAP financial measures and other metrics help investors and analysts in comparing its results across reporting periods on a consistent basis by excluding items that Duck Creek does not believe are indicative of its core operating performance. These non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation from, or as a substitute for, the analysis of other GAAP financial measures, including net income and cash flows from operating activities.

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 Duck Creek does or may not calculate them at all. Additionally, these non-GAAP financial measures are not measurements of financial performance or liquidity under GAAP. In order to facilitate a clear understanding of its consolidated historical operating results, readers should examine Duck Creek’s non-GAAP financial measures in conjunction with its historical GAAP financial information.

Duck Creek is providing certain guidance on a non-GAAP basis, but is not providing reconciliations of such forward-looking non-GAAP measures to GAAP due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation, including adjustments that could be made for the charges reflected in Duck Creek’s reconciliation of historic numbers, the amount of which, based on historical experience, could be significant.

Investor Contact:
Brian Denyeau
ICR
646 277 1251
Brian.denyeau@icrinc.com

Media Contact:
Paul Rechichi
Racepoint Global
617 624 3295
prechichi@racepointglobal.com

Drake Manning
Duck Creek Technologies
860 877 3609
drake.manning@duckcreek.com

 
Duck Creek Technologies, Inc. and Subsidiaries
Consolidated Balance Sheets
(unaudited, in thousands except share and per share amounts)
    
  August 31, 
  2022  2021 
Assets      
Current assets:      
Cash and cash equivalents $155,265  $185,657 
Short-term investments  117,823   191,981 
Accounts receivable, net  29,939   34,629 
Unbilled revenue, net  31,696   24,423 
Prepaid expenses and other current assets  13,355   14,381 
Total current assets  348,078   451,071 
Property and equipment, net  14,076   14,305 
Operating lease assets  16,502   17,798 
Goodwill  355,498   272,455 
Intangible assets, net  82,888   65,359 
Deferred tax assets  1,132   2,331 
Unbilled revenue, net of current portion  209   1,401 
Other assets  21,293   19,413 
Total assets $839,676  $844,133 
Liabilities and Stockholders' Equity      
Current liabilities:      
Accounts payable $2,577  $2,070 
Accrued liabilities  41,747   46,437 
Contingent earnout liability     5,462 
Lease liability  4,552   4,110 
Deferred revenue, net  29,618   29,577 
Total current liabilities  78,494   87,656 
Lease liability, net of current portion  17,877   21,273 
Deferred income taxes  8,654   634 
Deferred revenue, net of current portion  39    
Other long-term liabilities  2,206   3,832 
Total liabilities  107,270   113,395 
Commitments and contingencies      
Stockholders' equity      
Common stock, 135,370,279 shares issued and 132,685,963 shares outstanding at
August 31, 2022, 134,625,379 shares issued and 132,000,317 shares outstanding at
August 31, 2021, 300,000,000 shares authorized at August 31, 2022 and August 31,
2021, par value $0.01 per share
  1,353   1,346 
Treasury stock, common shares at cost; 2,684,316 shares at August 31, 2022 and
2,625,062 shares at August 31, 2021
  (68,784)  (67,764)
Accumulated deficit  (49,596)  (41,265)
Accumulated other comprehensive (loss) income  (393)  64 
Additional paid in capital  849,826   838,357 
Total stockholders' equity  732,406   730,738 
Total liabilities and stockholders' equity $839,676  $844,133 


Duck Creek Technologies, Inc. and Subsidiaries
Consolidated Statements of Operations
(unaudited, in thousands except share and per share amounts)
       
  Three Months Ended
August 31,
  Year Ended
August 31,
 
  2022  2021  2022  2021 
             
Revenue:            
Subscription $40,188  $33,198  $153,535  $125,267 
License  7,846   4,759   17,284   12,171 
Maintenance and support  7,233   5,881   25,752   24,285 
Professional services  25,447   27,016   106,346   98,627 
Total revenue  80,714   70,854   302,917   260,350 
Cost of revenue:            
Subscription  16,124   13,726   59,592   47,266 
License  288   519   1,386   1,888 
Maintenance and support  884   854   3,676   3,410 
Professional services  15,889   14,665   63,640   57,522 
Total cost of revenue  33,185   29,764   128,294   110,086 
Gross margin  47,529   41,090   174,623   150,264 
Operating expenses:            
Research and development  14,486   12,509   55,359   48,549 
Sales and marketing  14,713   13,734   57,454   54,124 
General and administrative  20,462   18,391   67,111   62,664 
Change in fair value of contingent consideration     584   67   293 
Total operating expenses  49,661   45,218   179,991   165,630 
Loss from operations  (2,132)  (4,128)  (5,368)  (15,366)
Other (expense) income, net  (636)  (578)  (2,277)  431 
Interest income (expense), net  474   (13)  604   (100)
Loss before income taxes  (2,294)  (4,719)  (7,041)  (15,035)
Provision for income taxes  87   840   1,291   1,896 
Net loss $(2,381) $(5,559) $(8,332) $(16,931)
Net loss per share information            
Net loss per share of common stock, basic and diluted $(0.02) $(0.04) $(0.06) $(0.13)
Weighted average shares of common stock, basic and diluted  132,576,783   131,733,254   132,205,020   131,114,791 
                 

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
August 31,
  Year Ended
August 31,
 
  2022  2021  2022  2021 
Cost of subscription revenue $96  $127  $349  $429 
Cost of maintenance and support revenue  9   7   35   29 
Cost of services revenue  414   705   1,063   2,708 
Research and development  465   487   1,746   1,992 
Sales and marketing  407   716   1,133   3,209 
General and administrative  1,404   1,530   5,198   4,510 
Total share-based compensation expense $2,795  $3,572  $9,524  $12,877 
                 


Duck Creek Technologies, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(unaudited, in thousands)
 
  Three Months Ended
August 31,
  Year Ended
August 31,
 
  2022  2021  2022  2021 
Operating activities:            
Net loss $(2,381) $(5,559) $(8,332) $(16,931)
Adjustments to reconcile net loss to cash provided by (used in) operating activities:            
Depreciation of property and equipment  659   759   2,646   3,136 
Amortization of capitalized software  671   534   2,355   2,040 
Amortization of intangible assets  4,659   4,066   16,516   16,328 
Amortization of deferred financing fees  35   29   128   114 
Impairment of right of use asset     1,883      1,883 
Impairment of leasehold improvements     702      702 
Share-based compensation expense  2,795   3,572   9,524   12,877 
Change in fair value of contingent earnout liability     584   67   293 
Payment of contingent earnout liability in excess of acquisition date fair value        (1,650)   
Changes to allowance for credit losses  1,323   441   3,566   1,105 
Deferred taxes  262   (105)  1,194   (781)
Other non-cash items  (140)  49   (140)  12 
Changes in operating assets and liabilities            
  Accounts receivable  3,356   2,108   3,637   (6,585)
  Unbilled revenue  (921)  (757)  (5,392)  (4,216)
  Prepaid expenses and other current assets  (294)  (2,572)  943   (2,310)
  Other assets  (1,261)  (2,734)  (1,309)  (3,110)
  Accounts payable  28   666   (978)  1,561 
  Accrued liabilities  7,284   3,172   (2,626)  (3,230)
  Deferred revenue  596   830   (4,554)  (1,199)
  Operating leases  (213)  (149)  (1,657)  (1,477)
  Cash settlement of vested phantom stock  (66)  (168)  (1,077)  (9,243)
  Other long-term liabilities  (45)  181   (2,134)  345 
       Net cash provided by (used in) operating activities  16,347   7,532   10,727   (8,686)
Investing activities:            
Purchase of short-term investments  (21,862)    (245,204)  (287,912)
Maturities of short-term investments  127,722   63,982   319,639   95,982 
Payments for business acquisitions, net of cash acquired  (106,947)     (106,947)   
Capitalized internal-use software  (562)  (62)  (1,844)  (926)
Purchase of property and equipment  (442)  (521)  (1,283)  (1,355)
       Net cash (used in) provided by investing activities  (2,091)  63,399   (35,639)  (194,211)
Financing activities:            
Proceeds from follow-on offering, net of issuance costs          3,452 
Payment of deferred IPO costs          (3,650)
Payment of deferred Class E offering costs          (192)
Purchase of treasury stock  (674)  (3,019)  (1,020)  (3,076)
Proceeds from stock option exercises     2,108   132   4,065 
Payments of contingent earnout liability      (3,879)  (1,923)
Payment of deferred financing costs      (713)  
       Net cash (used in) financing activities  (674)  (911)  (5,480)  (1,324)
       Net increase (decrease) in cash and cash equivalents  13,582   70,020   (30,392)  (204,221)
Cash and cash equivalents – beginning of period  141,683   115,637   185,657   389,878 
Cash and cash equivalents – end of period $155,265  $185,657  $155,265  $185,657 
                 


Duck Creek Technologies, Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Financial Measures
(unaudited)
 
       
  Three Months Ended
August 31,
  Year Ended
August 31,
 
($ in thousands) 2022  2021  2022  2021 
GAAP Gross Margin $47,529  $41,090  $174,623  $150,264 
Share-based compensation expense  519   839   1,447   3,166 
Amortization of intangible assets  1,325   1,165   4,627   4,724 
Amortization of capitalized internal-use software  671   534   2,355   2,040 
Non-GAAP Gross Margin $50,044  $43,628  $183,052  $160,194 


  Three Months Ended
August 31,
  Year Ended
August 31,
 
($ in thousands) 2022  2021  2022  2021 
GAAP Loss from Operations $(2,132) $(4,128) $(5,368) $(15,366)
Share-based compensation expense  2,795   3,572   9,524   12,877 
Amortization of intangible assets  4,615   3,972   16,340   15,954 
Change in fair value of contingent earnout liability     584   67   293 
Acquisition-related expense  821      1,038    
Non-GAAP Income from Operations $6,099  $4,000  $21,601  $13,758 


  Three Months Ended
August 31,
  Year Ended
August 31,
 
($ in thousands) 2022  2021  2022  2021 
GAAP Net loss $(2,381) $(5,559) $(8,332) $(16,931)
Provision for income taxes  87   840   1,291   1,896 
Other income (expense), net  636   578   2,277   (431)
Interest (expense) income, net  (474)  13   (604)  100 
Depreciation of property and equipment  659   759   2,646   3,136 
Amortization of intangible assets  4,615   3,972   16,340   15,954 
Share-based compensation expense  2,795   3,572   9,524   12,877 
Change in fair value of contingent earnout liability     584   67   293 
Acquisition-related expenses  821      1,038    
Adjusted EBITDA $6,758  $4,759  $24,247  $16,894 
Adjusted EBITDA as a percent of total revenue  8%  7%  8%  6%


  Three Months Ended
August 31,
    Year Ended
August 31,
    
($ in thousands) 2022  Per
Share

 2021  Per
Share
 2022  Per
Share
  2021 Per
Share

GAAP Net loss $(2,381) $(0.02) $(5,559) $(0.04)$(8,332) $(0.06) $(16,931) $(0.13)
Add: GAAP tax provision(1)  87      840     1,291      1,896    
GAAP pre-tax (loss)  (2,294)     (4,719)    (7,041)     (15,035)   
Share-based compensation expense  2,795      3,572     9,524      12,877    
Amortization of intangible assets  4,615      3,972     16,340      15,951    
Change in fair value of contingent earnout liability        584     67      293    
Acquisition-related expenses  821           1,038          
Non-GAAP pre-tax income  5,937      3,409     19,928      14,086    
Non-GAAP tax provision applied at a 24% tax rate(1)  1,425      818     4,783      3,381    
Non-GAAP Net Income(1) $4,512  $0.03  $2,591  $0.02 $15,145  $0.11  $10,705  $0.08 
                        
Shares used in computing Non-GAAP income per share
amounts(2):
                       
GAAP weighted-average shares - basic and diluted  132,576,783      131,733,254     132,205,020      131,114,791    
Non-GAAP dilutive shares (using the treasury stock method)  1,292,551      3,022,585     1,292,551      3,022,585    
Non-GAAP weighted-average shares - diluted  133,869,334      134,755,839     133,497,571      134,137,376    

(1) 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 U.S.  For purposes of determining our Non-GAAP Net Income, we have applied a tax rate of 24% which represents our estimated effective tax rate.

(2) For all periods presented, the Company had a GAAP net loss and non-GAAP net income. As such, outstanding potential shares of common stock are only included for the calculation of Non-GAAP earnings per share since these shares would be anti-dilutive for the calculation of GAAP earnings per share.

       
  Three Months Ended
August 31,
  Year Ended
August 31,
 
($ in thousands) 2022  2021  2022  2021 
Net cash provided by (used in) operating activities $16,347  $7,532  $10,727  $(8,686)
Purchases of property and equipment  (442)  (521)  (1,283)  (1,355)
Capitalized internal-use software  (562)  (62)  (1,844)  (926)
Acquisition-related payments  358      358    
Free Cash Flow $15,701  $6,949  $7,958  $(10,967)