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

  • 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
[email protected]

Media Contact:
Paul Rechichi
Racepoint Global
617 624 3295
[email protected]

Sam A. Shay
Duck Creek Technologies
857 201 5784
[email protected]

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  
                                 

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