GlobeNewswire Inc | Oct 14, 2021 04:05PM EDT

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 Creeks 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 October14, 2021:

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

Conference Call Information

Duck Creek Technologies will host a conference call today, October14, 2021, at 5:00 p.m. (Eastern Time) to discuss Duck Creeks financial results and business outlook. A live webcast of the call will be available on the Investor Relations page of the Duck Creeks 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 companys enterprise Software-as-a-Service solution, insurance carriers are able to navigate uncertainty and capture market opportunities faster than their competitors. Duck Creeks 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 Creeks expected outlook for first quarter fiscal 2022 and full year fiscal 2022, are based on Duck Creeks 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 Creeks 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 Creeks 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 Creeks 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 Creeks history of losses; changes in Duck Creeks 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 Creeks 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 Creeks solutions; the success of Duck Creeks growth strategy focused on SaaS solutions and its ability to develop or sell its solutions into new markets or further penetrate existing markets; Duck Creeks ability to manage its expanding operations; intense competition in Duck Creeks 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 Creeks international sales and operations; the length and variability of Duck Creeks sales and implementation cycles; data breaches, unauthorized access to customer data or other disruptions of Duck Creeks solutions; the significant influence of Duck Creeks largest shareholders on its management, business plans, and policies and any conflicts of interests therewith; and Duck Creeks 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 Creeks financial condition and results of operations. Duck Creeks 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 Creeks 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 Creeks 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 ? 3,391 portionLease 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 and132,000,317 shares outstanding at August 31, 2021,133,269,301 shares issued and 130,713,745 shares 1,346 1,333 outstanding at August 31, 2020, 300,000,000 sharesauthorized at August 31, 2021 and August 31, 2020,par value $0.01 per sharePreferred stock, 0 shares outstanding, 50,000,000shares authorized at August 31, 2021 and August 31, ? ? 2020, par value $0.01 per shareTreasury stock, common shares at cost; 2,625,062shares at August 31, 2021 and (67,764 ) (64,688 )2,555,556 shares at August 31, 2020Accumulated 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 2021 2020 2021 2020 thousands) Revenue Subscription $ 33,198 $ 24,631 $ 125,267 $ 83,999 License 4,759 4,483 12,171 9,914 Maintenance 5,881 5,889 24,285 23,680 and supportProfessional 27,016 23,319 98,627 94,079 servicesTotal revenue 70,854 58,322 260,350 211,672 Cost of revenueSubscription 13,726 10,031 47,266 34,902 License 519 506 1,888 1,853 Maintenance 854 863 3,410 3,338 and supportProfessional 14,665 18,243 57,522 57,082 servicesTotal cost of 29,764 29,643 110,086 97,175 revenueGross margins 41,090 28,679 150,264 114,497 Operating expensesResearch and 12,509 14,628 48,549 44,052 developmentSales and 13,734 16,766 54,124 50,305 marketingGeneral and 18,391 18,746 62,664 48,662 administrativeChange in fairvalue of 584 112 293 133 contingentconsiderationTotaloperating 45,218 50,252 165,630 143,152 expenseLoss from (4,128 ) (21,573 ) (15,366 ) (28,655 )operationsOther(expense) (578 ) 737 431 641 income, netInterest(expense) (13 ) 30 (100 ) (356 )income, netLoss before (4,719 ) (20,806 ) (15,035 ) (28,370 )income taxesProvision for 840 673 1,896 1,562 income taxesNet loss $ (5,559 ) $ (21,479 ) $ (16,931 ) $ (29,932 )Net loss pershare information^1Net loss pershare ofcommon stock, $ (0.04 ) nm $ (0.13 ) nm basic anddilutedWeightedaverage sharesof common 131,733,254 nm 131,114,791 nm stock, basicand diluted

Cost of revenue and operating expenses amounts in the Consolidated Statements of Operations include share-based compensation expense as disclosed in the following table:

Three Months Ended Twelve Months Ended August 31, August 31, 2021 2020 2021 2020 Cost ofsubscription $ 127 $ 405 $ 429 $ 415 revenueCost ofmaintenance and 7 24 29 28 support revenueCost of services 705 4,581 2,708 4,683 revenueResearch and 487 3,844 1,992 4,128 developmentSales and 716 5,326 3,209 5,581 marketingGeneral and 1,530 5,524 4,510 6,273 administrativeTotalshare-based $ 3,572 $ 19,704 $ 12,877 $ 21,108 compensationexpense

(1) Prior to Duck Creeks 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 For the Twelve Months Ended Ended August 31, August 31, 2021 2020 2021 2020 Operating activities:Net loss $ (5,559 ) $ (21,479 ) $ (16,931 ) $ (29,932 )Adjustments toreconcile net lossto cash provided by (used in) operatingactivities:Depreciation ofproperty and 759 793 3,136 3,143 equipmentAmortization of 534 497 2,040 703 capitalized softwareAmortization of 4,066 4,268 16,328 17,070 intangible assetsImpairment of right 1,883 1,660 1,883 1,660 of use assetImpairment ofleasehold 702 1,132 702 1,132 improvementsAmortization ofdeferred financing 29 28 114 134 feesShare-based 3,572 19,704 12,877 21,108 compensation expenseLoss on change infair value of 584 112 293 133 contingent earnoutliabilityBad debt expense 441 32 1,105 97 Deferred taxes (105 ) (544 ) (781 ) (690 )Other non-cash items 49 ? 12 ? Changes in operatingassets and liabilitiesAccounts receivable 2,108 505 (6,585 ) (3,796 )Unbilled revenue (757 ) 2,912 (4,216 ) 1,730 Prepaid expenses and (2,572 ) (6,396 ) (2,310 ) (6,300 )other current assetsOther 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 (168 ) ? (9,243 ) ? vested phantom stockOther long-term 181 2,391 345 2,339 liabilitiesNet cash provided by(used in) operating 7,532 17,478 (8,686 ) 25,725 activitiesInvesting activities:Purchase ofshort-term ? ? (287,912 ) ? investmentsMaturities ofshort-term 63,982 ? 95,982 ? investmentsCapitalizedinternal-use (62 ) (453 ) (926 ) (2,893 )softwarePurchase of property (521 ) (690 ) (1,355 ) (3,854 )and equipmentNet cash provided by(used in) investing 63,399 (1,143 ) (194,211 ) (6,747 )activitiesFinancing activities:Proceeds fromfollow-on offering, ? 433,657 3,452 433,657 net of issuancecostsPayment of deferred ? 2,552 (3,650 ) ? IPO costsPayment of deferredClass E offering ? 225,952 (192 ) ? costsProceeds fromissuance of Class E ? ? ? 438,840 Units, net ofissuance costsPayment onredemption of Class ? (200,000 ) ? (398,000 )A and Class B UnitsPurchase ofnon-controlling (43,125 ) (43,125 )interestPurchase of treasury (3,019 ) (64,688 ) (3,076 ) (64,688 )stockProceeds from stock 2,108 ? 4,065 ? option exercisesPayments ofcontingent earnout ? ? (1,923 ) (3,555 )liabilityProceeds fromrevolving credit ? ? ? 5,000 facilityPayments onrevolving credit ? ? ? (9,000 )facilityPayment of deferred ? ? ? (228 )financing costsNet cash (used in)provided by (911 ) 354,348 (1,324 ) 358,901 financing activitiesNet increase(decrease) in cash 70,020 370,683 (204,221 ) 377,879 and cash equivalentsCash and cashequivalents ? 115,637 19,195 389,878 11,999 beginning of periodCash and cashequivalents ? end of $ 185,657 $ 389,878 $ 185,657 $ 389,878 period

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

Three Months Ended August Twelve Months Ended August 31, 31,($ in 2021 2020 2021 2020 thousands)GAAP Gross $ 41,090 $ 28,679 $ 150,264 $ 114,497 MarginShare-basedcompensation 839 5,010 3,166 5,125 expenseAmortizationof intangible 1,165 1,186 4,724 4,746 assetsAmortizationofcapitalized 534 497 2,040 703 internal-usesoftwareNon-GAAP $ 43,628 $ 35,372 $ 160,194 $ 125,071 Gross Margin

Three Months Ended August Twelve Months Ended August 31, 31,($ in 2021 2020 2021 2020 thousands)GAAP Lossfrom $ (4,128 ) $ (21,573 ) $ (15,366 ) $ (28,655 )OperationsShare-basedcompensation 3,572 19,704 12,877 21,108 expenseAmortizationof 3,972 3,994 15,954 15,975 intangibleassetsChange infair valueof 584 112 293 133 contingentearnoutliabilityNon-GAAPIncome from $ 4,000 $ 2,237 $ 13,758 $ 8,561 Operations

Three Months Ended August Twelve Months Ended August 31, 31,($ in 2021 2020 2021 2020 thousands)GAAP Net $ (5,559 ) $ (21,479 ) $ (16,931 ) $ (29,932 )LossProvisionfor income 840 673 1,896 1,562 taxesOther(income) 578 (737 ) (431 ) (641 )expenseInterest 13 (30 ) 100 356 expense, netDepreciationof property 759 793 3,136 3,143 andequipmentAmortizationof 3,972 3,994 15,954 15,975 intangibleassetsShare-basedcompensation 3,572 19,704 12,877 21,108 expenseChange infair valueof 584 112 293 133 contingentearnoutliabilityAdjusted $ 4,759 $ 3,030 $ 16,894 $ 11,704 EBITDAAdjustedEBITDA as apercent of 7 % 5 % 6 % 6 %totalrevenue

Three Months Ended Twelve Months Ended August 31, August 31,($ in thousands) 2021 PerShare 2020 2021 PerShare 2020 GAAP Net Loss ^ $ (5,559 ) $ (0.04 ) $ (21,479 ) $ (16,931 ) $ (0.13 ) $ (29,932 )(1)Add: GAAP tax 840 673 1,896 1,562 provisionGAAP pre-tax (4,719 ) (20,806 ) (15,035 ) (28,370 )lossShare-basedcompensation 3,572 19,704 12,877 21,108 expenseAmortization ofintangible 3,972 3,994 15,954 15,975 assetsChange in fairvalue ofcontingent 584 112 293 133 earnoutliabilityNon-GAAP pre-tax 3,409 3,004 14,089 8,846 incomeNon-GAAP taxprovision 818 721 3,381 2,123 applied at a 24%tax rate ^(2)Non-GAAP Net $ 2,591 $ 0.02 $ 2,283 $ 10,708 $ 0.08 $ 6,723 Income ^(1) Shares used incomputingNon-GAAP income per shareamounts:^(1)GAAPweighted-average 131,733,254 nm 131,114,791 nm shares - basicand dilutedNon-GAAPdilutive sharesexcluded from 3,022,585 nm 3,022,585 nm GAAPloss per sharecalculationNon-GAAPweighted-average 134,755,839 nm 134,137,376 nm shares - diluted

(1) Prior to Duck Creeks 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 Twelve Months Ended August 31, August 31,($ in 2021 2020 2021 2020 thousands)Net cashprovided by(used in) $ 7,532 $ 17,478 $ (8,686 ) $ 25,725 operatingactivitiesPurchases ofproperty and (521 ) (690 ) (1,355 ) (3,854 )equipmentCapitalizedinternal-use (62 ) (453 ) (926 ) (2,893 )softwareFree Cash Flow $ 6,949 $ 16,335 $ (10,967 ) $ 18,978