News Release

« Back

Duck Creek Technologies Announces Fourth Quarter and Full Year Fiscal 2021 Financial Results

October 14, 2021

  • Fourth Quarter Fiscal 2021 Subscription revenue grew 35% year-over-year

  • SaaS Annual Recurring Revenue grew 41% year-over-year

BOSTON, Oct. 14, 2021 (GLOBE NEWSWIRE) -- Duck Creek Technologies (NASDAQ: DCT), a provider of SaaS-delivered enterprise software to the property & casualty (“P&C”) insurance industry, today announced its financial results for the fourth quarter and fiscal year ended August 31, 2021.

“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 Michael Jackowski, Duck Creek’s Chief Executive Officer. “We had a notably strong quarter with Tier 1 carriers, where we expanded our relationships with two existing customers and had several important go-lives.”

Mr. Jackowski added, “We enter fiscal 2022 with significant momentum across our business. The digital transformation of the P&C insurance industry is just getting started and we think that the early success customers are having with Duck Creek is a clear demonstration of the power of our SaaS platform. Our focus this year will be to continue executing on our land and expand strategy and extending the value of Duck Creek OnDemand so that we are best positioned to capitalize on our multi-billion-dollar market opportunity.”

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 of August 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 of August 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 of August 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 of August 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 of August 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

Duck Creek is issuing the following outlook for the first quarter of fiscal 2022 and full year of fiscal 2022 based on current expectations as of October 14, 2021:

  First Quarter Fiscal 2022 Full Year Fiscal 2022
Revenue $68.0 million to $70.0 million $292.0 million to $300.0 million
Subscription Revenue $34.0 million to $35.0 million $151.0 million to $155.0 million
Adjusted EBITDA $2.5 million to $3.5 million $16.0 million to $18.0 million

Conference Call Information

Duck Creek Technologies will host a conference call today, October 14, 2021, 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, dial 1-833-570-1119 (domestic) or 1-914-987-7066 (international). A replay of this conference call will be available for a limited time at 1-855-859-2056 (domestic) or 1-404-537-3406 (international) using conference ID 7257418. 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 is a leading provider of core system solutions to the P&C and General insurance industry. By accessing Duck Creek OnDemand, the company’s enterprise Software-as-a-Service solution, insurance carriers are able to navigate uncertainty and capture market opportunities faster than their competitors. Duck Creek’s functionally-rich solutions are available on a standalone basis or as a full suite, and all are available via Duck Creek OnDemand.

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 Securities and Exchange Commission on November 3, 2020, 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; the significant influence of Duck Creek’s largest shareholders on its management, business plans, and policies and any conflicts of interests therewith; and Duck Creek’s continued reliance on “controlled company” exemptions under the corporate governance standards of Nasdaq during the applicable phase-in periods.

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 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 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.

To the extent that Duck Creek provides guidance on a non-GAAP basis, it does not provide 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

Sam A. Shay
Duck Creek Technologies
857 201 5784
sam.shay@duckcreek.com


Duck Creek Technologies, Inc. and Subsidiaries
Consolidated Balance Sheets
(unaudited, in thousands except share and per share amounts)

  As of August 31, 
  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 
Goodwill  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 August 31, 2021, 133,269,301 shares issued and 130,713,745 shares outstanding at August 31, 2020, 300,000,000 shares authorized at August 31, 2021 and August 31, 2020, par value $0.01 per share  1,346   1,333 
Preferred stock, 0 shares outstanding, 50,000,000 shares authorized at August 31, 2021 and August 31, 2020, par value $0.01 per share      
Treasury stock, common shares at cost; 2,625,062 shares at August 31, 2021 and
2,555,556 shares at August 31, 2020
  (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 
         


Duck Creek Technologies, Inc. and Subsidiaries
Consolidated Statements of Operations
(unaudited, in thousands except share and per share amounts)

  Three Months Ended August 31,  Twelve Months Ended August 31, 
(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 August 31,  Twelve Months Ended August 31, 
  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 August 2020, there were no shares of common stock outstanding, and the membership structure of Duck Creek Technologies consisted of limited partnership units. GAAP earnings per share for Q4 2020 and fiscal year 2020 have not been presented as they resulted in values that would not be meaningful to the users of this earnings release because they only reflect the operations of Duck Creek for the 17 day period subsequent to the IPO. 


Duck Creek Technologies, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(unaudited, in thousands)

  For the Three Months Ended
August 31,
  For the Twelve Months Ended
August 31,
 
  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 E Units, net of issuance costs           438,840 
Payment on redemption of Class A and Class B Units     (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 
                 


Duck Creek Technologies, Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Financial Measures
(unaudited)

  Three Months Ended August 31,  Twelve Months Ended August 31, 
($ 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 August 31,  Twelve Months Ended August 31, 
($ 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 August 31,  Twelve Months Ended August 31, 
($ 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
August 31,
  Twelve Months Ended
August 31,
 
($ 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 August 2020, there were no shares of common stock outstanding, and the membership structure of Duck Creek Technologies consisted of limited partnership units. GAAP and Non-GAAP earnings per share for Q4 2020 and fiscal year 2020 have not been presented as they resulted in values that would not be meaningful to the users of this earnings release because they only reflected the operations of Duck Creek for the 17-day period subsequent to the IPO.

(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 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 once we are profitable on a GAAP basis.

  Three Months Ended
August 31,
  Twelve Months Ended
August 31,
 
($ 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