Exhibit 99.1

Bazaarvoice, Inc. Announces its Financial Results for the Second Fiscal Quarter of 2017
Second fiscal quarter highlights include:
 
•
Delivered Q2 revenue of $50.4 million, up 1.0% from the same period a year ago
•
Achieved positive operating cash flow for the fifth quarter in a row
•
Improved GAAP net loss to $4.1 million from a loss of $4.9 million in the same period a year ago
•
Increased Adjusted EBITDA to $5.2 million from $3.1 million in the same period a year ago
AUSTIN, Texas, November 30, 2016 (GLOBE NEWSWIRE) — Bazaarvoice, Inc. (Nasdaq:BV), which is creating the world's smartest network of active shoppers, brands and retailers, reported its financial results for the second fiscal quarter ended October 31, 2016.
“The second quarter was another good quarter for Bazaarvoice, as we delivered stronger dollar retention and overall bookings growth year-over-year.  We also achieved strong year-over-year Adjusted EBITDA growth and our fifth straight quarter of positive operating cash flow as we continue to improve the margin profile of the business," said Gene Austin, chief executive officer and president. “We believe our large and growing network of retailers and brands and our unique insights into shopping behavior across the network provide us with an exciting long term growth opportunity.” 
Second Fiscal Quarter of 2017 Financial Details
Revenue: Bazaarvoice reported revenue of $50.4 million for the second fiscal quarter of 2017, up 1.0% from the second fiscal quarter of 2016, which consisted of SaaS revenue of $48.1 million and net advertising revenue of $2.3 million.
GAAP net loss and net loss per share: GAAP net loss was $4.1 million, compared to a GAAP net loss of $4.9 million for the second fiscal quarter of 2016. GAAP net loss per share was $0.05 based upon weighted average shares outstanding of 82.9 million, compared to a GAAP net loss per share of $0.06 for the second fiscal quarter of 2016 based upon weighted average shares outstanding of 80.7 million.
Adjusted EBITDA: During the first quarter of fiscal 2017 we updated our definition of Adjusted EBITDA to enhance comparability between ourselves and our peers. Adjusted EBITDA for the second fiscal quarter of 2017 was $5.2 million compared to $3.1 million for the second fiscal quarter of 2016. For a reconciliation of Adjusted EBITDA as previously defined to Adjusted EBITDA under our updated definition refer to Note 6 of the “Selected Quarterly Financial and Operational Metrics” table contained herein.
Non-GAAP net income and earnings per share: Non-GAAP net income was $1.4 million, compared to a non-GAAP net loss of $0.4 million for the second fiscal quarter of 2016. Non-GAAP earnings per share was $0.02 based upon weighted average shares outstanding of 82.9 million, compared to non-GAAP net loss per share of $0.00 for the second fiscal quarter of 2016 based upon weighted average shares outstanding of 80.7 million.
Quarterly Conference Call
Bazaarvoice will host a conference call today at 4:30 p.m. Eastern Time to review the Company’s financial results for the second fiscal quarter of 2017. To access this call, dial (877) 407-3982 from the United States or (201) 493-6780 internationally. A live webcast of the conference call can be accessed from the investor relations page of Bazaarvoice’s company website at investors.bazaarvoice.com. Following the completion of the call, a recorded replay will be available on the Company’s website, and a telephone replay will be available through December 14, 2016 by dialing (844) 512-2921 from the United States or (412) 317-6671 internationally with recording access code 13648419.
About Bazaarvoice
Bazaarvoice is creating the world's smartest shopper network connecting more than one-half billion consumers monthly to thousands of retailers and brands. Our network enables Bazaarvoice's clients to engage consumers online, in-store and via mobile



devices with industry leading solutions that include targeted shopper advertising and authentic consumer generated content, such as ratings and reviews, curated photos, social posts and videos. For more information visit http://www.bazaarvoice.com.
Non-GAAP Financial Measures
During the first quarter of fiscal 2017 we updated our definition of Adjusted EBITDA to enhance comparability between ourselves and our peers. We define Adjusted EBITDA as GAAP net loss adjusted for stock-based expense, contingent consideration related to acquisitions, depreciation and amortization (including amortization of capitalized internal-use software development costs), restructuring charges, integration and other costs related to acquisitions, other non-business costs and benefits, income tax expense and other (income) expense, net.  Our previous definition of Adjusted EBITDA excluded amortization of capitalized internal-use software development costs from adjusted depreciation and amortization and included capitalized stock-based compensation in stock-based expense. For a reconciliation of Adjusted EBITDA as previously defined to Adjusted EBITDA under our updated definition refer to Note 6 of the “Selected Quarterly Financial and Operational Metrics” table contained herein.
Adjusted EBITDA discussed in this press release is defined as our GAAP net loss adjusted for stock-based expense, contingent consideration related to acquisitions, depreciation and amortization (including amortization of capitalized internal-use software development costs), integration and other costs related to acquisitions, other non-business costs and benefits, income tax expense and other (income) expense, net. GAAP net loss is the most comparable GAAP measure to Adjusted EBITDA.  

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



Forward-looking Statements
This press release contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, included in this press release regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans, and objectives of management are forward-looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “will,” “would,” “target” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements include, among other things, statements about driving future improvements in profitability, monetizing the Bazaarvoice network and driving revenue growth over the long term and other statements about management’s beliefs, intentions or goals. We may not actually achieve the expectations disclosed in the forward-looking statements, and you should not place undue reliance on our forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results or events to differ materially from the expectations disclosed in the forward-looking statements, including, but not limited to, our expectations regarding our revenue, expenses, sales and operations; changes in accounting standards; our ability to realize efficiencies and to execute on our strategic initiatives; our limited operating history; our ability to operate in a new and unproven market; our ability to effectively manage growth; our ability to develop and launch new products; risks associated with the uncertainty of market acceptance of our new products; our ability to retain our existing customers and satisfy their obligations and needs and upsell to existing clients; our ability to attract and retain employees; our ability to maintain pricing for our products and services; our ability to manage expansion into new vertical industries; our ability to reduce our cost structure and improve operating efficiencies;  and the effects of increased competition and commoditization of products we offer, including pricing pressure, reduced profitability or loss of market share; risks and challenges associated with international sales; our ability to successfully identify, manage and integrate potential acquisitions; the impact of the Department of Justice stipulation regarding PowerReviews on our business; and other risks and potential factors that could affect our business and financial results identified in our Form 10-K for the fiscal year ended April 30, 2016 as filed with the Securities and Exchange Commission on June 20, 2016. Additional information will also be set forth in our future quarterly reports on Form 10-Q, annual reports on Form 10-K and other filings that we make with the Securities and Exchange Commission. We do not intend and undertake no duty to release publicly any updates or revisions to any forward-looking statements contained herein.

Investor Relations Contact:
Linda Wells
Bazaarvoice, Inc.
415-872-3612
linda.wells@bazaarvoice.com

Media Contact:
Andy North
Bazaarvoice, Inc.
512-551-6502
andy.north@bazaarvoice.com



Bazaarvoice, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
 
October 31,
2016
 
April 30,
2016
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
44,427

 
$
43,963

Short-term investments
41,704

 
50,682

Accounts receivable, net
37,494

 
39,597

Prepaid expenses and other current assets
9,115

 
8,415

Total current assets
132,740

 
142,657

Property, equipment and capitalized internal-use software development costs, net
30,045

 
31,649

Goodwill
139,155

 
139,155

Acquired intangible assets, net
8,662

 
9,607

Other non-current assets
3,944

 
5,214

Total assets
$
314,546

 
$
328,282

Liabilities and stockholders’ equity
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
3,738

 
$
6,110

Accrued expenses and other current liabilities
18,538

 
23,167

Deferred revenue
62,719

 
62,735

Total current liabilities
84,995

 
92,012

Long-term liabilities:
 
 
 
Revolving line of credit
37,000

 
42,000

Deferred revenue less current portion
2,409

 
2,481

Other liabilities, long-term
6,871

 
7,255

Total liabilities
131,275

 
143,748

Commitments and contingencies

 

Stockholders’ equity:
 
 
 
Common stock
8

 
8

Additional paid-in capital
446,343

 
437,239

Accumulated other comprehensive loss
(2,006
)
 
(878
)
Accumulated deficit
(261,074
)
 
(251,835
)
Total stockholders’ equity
183,271

 
184,534

Total liabilities and stockholders’ equity
$
314,546

 
$
328,282




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

 
Three Months Ended October 31,
 
Six Months Ended October 31,
 
2016
 
2015
 
2016
 
2015
Revenue
$
50,408

 
$
49,926

 
$
100,501

 
$
98,802

Cost of revenue
18,855

 
19,146

 
37,611

 
38,694

Gross profit
31,553

 
30,780

 
62,890

 
60,108

Operating expenses:
 
 
 
 
 
 
 
Sales and marketing
15,819

 
16,502

 
31,123

 
35,668

Research and development
9,959

 
10,354

 
21,032

 
20,887

General and administrative
8,051

 
7,643

 
16,310

 
15,881

Restructuring charges
767

 
—

 
1,094

 
—

Acquisition-related and other
120

 
224

 
296

 
926

Amortization of acquired intangible assets
310

 
310

 
619

 
619

Total operating expenses
35,026

 
35,033

 
70,474

 
73,981

Operating loss
(3,473
)
 
(4,253
)
 
(7,584
)
 
(13,873
)
Other income (expense), net:
 
 
 
 
 
 
 
Interest income
153

 
74

 
295

 
151

Interest expense
(459
)
 
(461
)
 
(948
)
 
(1,032
)
Other expense
(263
)
 
(88
)
 
(775
)
 
(306
)
Total other expense, net
(569
)
 
(475
)
 
(1,428
)
 
(1,187
)
Loss before income taxes
(4,042
)
 
(4,728
)
 
(9,012
)
 
(15,060
)
Income tax expense
92

 
124

 
227

 
36

Net loss
$
(4,134
)
 
$
(4,852
)
 
$
(9,239
)
 
$
(15,096
)
Net loss per share, basic and diluted
$
(0.05
)
 
$
(0.06
)
 
$
(0.11
)
 
$
(0.19
)
Basic and diluted weighted average number of shares outstanding
82,930

 
80,678

 
82,572

 
80,426




Bazaarvoice, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
 
Three Months Ended October 31,
 
Six Months Ended October 31,
 
2016
 
2015
 
2016
 
2015
Operating activities:
 
 
 
 
 
 
 
Net loss
$
(4,134
)
 
$
(4,852
)
 
$
(9,239
)
 
$
(15,096
)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
 
 
 
 
 
 
 
Depreciation and amortization expense
3,532

 
3,334

 
7,110

 
6,978

Stock-based expense
4,239

 
3,787

 
8,183

 
7,722

Bad debt expense
(64
)
 
(24
)
 
(243
)
 
61

Amortization of deferred financing costs
59

 
59

 
118

 
118

Loss on sublease
501

 
—

 
501

 
—

Other non-cash expense (benefit)
(88
)
 
(6
)
 
(127
)
 
45

Changes in operating assets and liabilities:
 
 
 
 
 
 
 
Accounts receivable
596

 
13,018

 
2,345

 
11,942

Prepaid expenses and other current assets
(7
)
 
1,025

 
(514
)
 
977

Other non-current assets
89

 
(616
)
 
958

 
(930
)
Accounts payable
212

 
2,957

 
(2,404
)
 
2,149

Accrued expenses and other current liabilities
(127
)
 
(1,846
)
 
(4,569
)
 
(6,008
)
Deferred revenue
(3,062
)
 
(6,348
)
 
(88
)
 
(3,850
)
Other liabilities, long-term
(156
)
 
2,956

 
(312
)
 
2,960

Net cash provided by operating activities
1,590

 
13,444

 
1,719

 
7,068

Investing activities:
 
 
 
 
 
 
 
Proceeds from sale of discontinued operations
—

 
—

 
—

 
4,501

Purchases of property, equipment and capitalized internal-use software development costs
(2,113
)
 
(7,290
)
 
(4,873
)
 
(10,219
)
Purchases of short-term investments
(2,349
)
 
(24,700
)
 
(15,040
)
 
(39,855
)
Proceeds from maturities of short-term investments
8,870

 
22,345

 
23,880

 
40,517

Net cash provided by (used in) investing activities
4,408

 
(9,645
)
 
3,967

 
(5,056
)
Financing activities:
 
 
 
 
 
 
 
Proceeds from employee stock compensation plans
329

 
1,012

 
724

 
2,113

Payments on revolving line of credit
(5,000
)
 
—

 
(5,000
)
 
—

Net cash provided by financing activities
(4,671
)
 
1,012

 
(4,276
)
 
2,113

Effect of exchange rate fluctuations on cash and cash equivalents
(408
)
 
(189
)
 
(946
)
 
(94
)
Net change in cash and cash equivalents
919

 
4,622

 
464

 
4,031

Cash and cash equivalents at beginning of period
43,508

 
53,450

 
43,963

 
54,041

Cash and cash equivalents at end of period
$
44,427

 
$
58,072

 
$
44,427

 
$
58,072

Supplemental disclosure of non-cash investing and financing activities:
 
 
 
 
 
 
 
Purchase of fixed assets recorded in accounts payable
$
85

 
$
1,859

 
$
85

 
$
1,859

Capitalized stock-based compensation
$
124

 
$
122

 
$
246

 
$
236




Bazaarvoice, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(in thousands, except net loss per share data)
(unaudited)
 
Three Months Ended October 31,
 
Six Months Ended October 31,
 
2016
 
2015
 
2016
 
2015
Non-GAAP net loss and net loss per share:
 
 
 
 
 
 
 
GAAP net loss
$
(4,134
)
 
$
(4,852
)
 
$
(9,239
)
 
$
(15,096
)
Stock-based expense (1)
4,239

 
3,787

 
8,183

 
7,722

Restructuring charges (3)
767

 
—

 
1,094

 
—

Amortization of acquired intangible assets
472

 
472

 
945

 
945

Acquisition-related and other expense
120

 
224

 
296

 
926

Other stock-related benefit (4)
(25
)
 
—

 
(25
)
 
—

   Income tax adjustment for non-GAAP items
3

 
—

 
—

 
—

Non-GAAP net gain (loss)
$
1,442

 
$
(369
)
 
$
1,254

 
$
(5,503
)
GAAP basic and diluted shares
82,930

 
80,678

 
82,572

 
80,426

Non-GAAP basic and diluted net gain (loss) per share
$
0.02

 
$
0.00

 
$
0.02

 
$
(0.07
)
Adjusted EBITDA:
 
 
 
 
 
 
 
GAAP net loss
$
(4,134
)
 
$
(4,852
)
 
$
(9,239
)
 
$
(15,096
)
Stock-based expense (1)
4,239

 
3,787

 
8,183

 
7,722

Depreciation and amortization (2)
3,532

 
3,334

 
7,110

 
6,978

Restructuring charges (3)
767

 
—

 
1,094

 
—

Acquisition-related and other expense
120

 
224

 
296

 
926

Other stock-related benefit (4)
(25
)
 
—

 
(25
)
 
—

Income tax expense (benefit)
92

 
124

 
227

 
36

Total other expense, net
569

 
475

 
1,428

 
1,187

Adjusted EBITDA
$
5,160

 
$
3,092

 
$
9,074

 
$
1,753

(1)
During the first quarter of fiscal 2017 we updated our calculation of Adjusted EBITDA. As a result of this update prior period stock compensation amounts have been updated to conform to the current presentation. Under the new definition of Adjusted EBITDA the capitalized portion of stock-based compensation related to the capitalization of internal-use software is excluded from stock-based expense.
Stock-based expense includes the following:
 
 
 
 
 
 
 
Cost of revenue
$
486

 
$
607

 
$
830

 
$
1,079

Sales and marketing
843

 
643

 
1,423

 
1,727

Research and development
907

 
798

 
1,960

 
1,441

General and administrative
2,003

 
1,739

 
3,970

 
3,475

Stock-based expense
$
4,239

 
$
3,787

 
$
8,183

 
$
7,722


(2)
During the first quarter of fiscal 2017 we updated our calculation of Adjusted EBITDA. As a result of this update prior period depreciation and amortization amounts have been updated to conform to the current presentation. Our new definition of Adjusted EBITDA includes amortization of capitalized internal-use software development costs in depreciation and amortization.
Depreciation and amortization includes the following:
 
 
 
 
 
 
 
Cost of revenue
$
2,600

 
$
2,480

 
$
5,192

 
$
5,038

Sales and marketing
189

 
197

 
385

 
546

Research and development
204

 
175

 
435

 
384

General and administrative
229

 
171

 
479

 
391

Amortization of acquired intangible assets
310

 
311

 
619

 
619

Depreciation and amortization
$
3,532

 
$
3,334

 
$
7,110

 
$
6,978





(3)
In February 2016, the Company made the decision to suspend sales of its BV Local product, reduce its cost structure to improve operating efficiencies and align resources with its growth strategies. Costs associated with these restructuring activities include workforce reductions charges, and facilities charges related to the loss recorded on the sub-lease of excess office space at the Company's headquarters.

(4)
Other stock-related benefit represents estimated liabilities for taxes and related items in connection with the treatment of certain equity grants. Since the estimated liability directly relates to equity grants and as stock-based expenses are consistently excluded from the non-GAAP financial measures, the Company excluded these estimated liabilities. During the three and six months ended October 31, 2016, the Company recorded a benefit of $0.5 million due to a reduction in previously recorded estimated tax liabilities that have exceeded the statute of limitations. This benefit was partially offset by a $0.5 million liability related to estimated employer contributions the Company believes is probable to be incurred related to 401(k) deferrals on employee stock-based compensation.



Bazaarvoice, Inc.
Selected Quarterly Financial and Operational Metrics
(in thousands, except active clients and full-time employees data)
(unaudited)
 
Three Months Ended
 
Jan 31,
 
Apr 30,
 
Jul 31,
 
Oct 31,
 
Jan 31,
 
Apr 30,
 
Jul 31,
 
Oct 31,
 
2015
 
2015
 
2015
 
2015
 
2016
 
2016
 
2016
 
2016
Revenue (1)
$
49,562

 
$
48,317

 
$
48,876

 
$
49,926

 
$
50,255

 
$
50,709

 
$
50,093

 
$
50,408

Cost of revenue
17,988

 
18,148

 
19,548

 
19,146

 
18,920

 
19,253

 
18,756

 
18,855

Gross profit
31,574

 
30,169

 
29,328

 
30,780

 
31,335

 
31,456

 
31,337

 
31,553

Operating expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sales and marketing
18,020

 
20,427

 
19,166

 
16,502

 
16,113

 
18,027

 
15,304

 
15,819

Research and development
8,779

 
9,880

 
10,533

 
10,354

 
10,199

 
10,391

 
11,073

 
9,959

General and administrative
6,932

 
7,582

 
8,238

 
7,643

 
6,940

 
7,577

 
8,259

 
8,051

Restructuring charges
—

 
—

 
—

 
—

 
—

 
1,575

 
327

 
767

Acquisition-related and other expense
413

 
815

 
702

 
224

 
332

 
157

 
176

 
120

Amortization of acquired intangible assets
309

 
309

 
309

 
310

 
309

 
309

 
309

 
310

Total operating expenses
34,453

 
39,013

 
38,948

 
35,033

 
33,893

 
38,036

 
35,448

 
35,026

Operating loss
(2,879
)
 
(8,844
)
 
(9,620
)
 
(4,253
)
 
(2,558
)
 
(6,580
)
 
(4,111
)
 
(3,473
)
Total other expense, net
(920
)
 
(521
)
 
(712
)
 
(475
)
 
(719
)
 
(384
)
 
(859
)
 
(569
)
Loss before income taxes
(3,799
)
 
(9,365
)
 
(10,332
)
 
(4,728
)
 
(3,277
)
 
(6,964
)
 
(4,970
)
 
(4,042
)
Income tax expense (benefit)
324

 
(540
)
 
(88
)
 
124

 
(163
)
 
165

 
135

 
92

Net loss
$
(4,123
)
 
$
(8,825
)
 
$
(10,244
)
 
$
(4,852
)
 
$
(3,114
)
 
$
(7,129
)
 
$
(5,105
)
 
$
(4,134
)
Stock-based expense (2)
$
3,015

 
$
3,020

 
$
3,935

 
$
3,787

 
$
3,762

 
$
3,602

 
$
3,944

 
$
4,239

Depreciation and amortization (3)
3,117

 
3,284

 
3,644

 
3,334

 
3,512

 
3,549

 
3,578

 
3,532

Restructuring charges (4)
—

 
—

 
—

 
—

 
—

 
1,575

 
327

 
767

Acquisition-related and other expense
413

 
815

 
702

 
224

 
332

 
157

 
176

 
120

Other stock-related benefit (5)
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(25
)
Income tax expense (benefit)
324

 
(540
)
 
(88
)
 
124

 
(163
)
 
165

 
135

 
92

Total other expense, net
920

 
521

 
712

 
475

 
719

 
384

 
859

 
569

Adjusted EBITDA (6)
$
3,666

 
$
(1,725
)
 
$
(1,339
)
 
$
3,092

 
$
5,048

 
$
2,303

 
$
3,914

 
$
5,160

Number of active clients (at period end) (7)
1,292

 
1,331

 
1,337

 
1,360

 
1,383

 
1,399

 
1,397

 
1,412

Full-time employees (at period end)
825

 
826

 
834

 
855

 
817

 
756

 
766

 
775

(1)
Revenue includes the following:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SaaS
$
46,429

 
$
46,173

 
$
46,830

 
$
47,671

 
$
47,884

 
$
49,108

 
$
47,799

 
$
48,121

Advertising
3,133

 
2,144

 
2,046

 
2,255

 
2,371

 
1,601

 
2,294

 
2,287

Revenue
$
49,562

 
$
48,317

 
$
48,876

 
$
49,926

 
$
50,255

 
$
50,709

 
$
50,093

 
$
50,408











(2)
During the first quarter of fiscal 2017 we updated our calculation of Adjusted EBITDA. As a result of this update prior period stock compensation amounts have been updated to conform to the current presentation. Under the new definition of Adjusted EBITDA the capitalized portion of stock-based compensation related to the capitalization of internal-use software is excluded from stock-based expense.
 
Three Months Ended
 
Jan 31,
 
Apr 30,
 
Jul 31,
 
Oct 31,
 
Jan 31,
 
Apr 30,
 
Jul 31,
 
Oct 31,
 
2015
 
2015
 
2015
 
2015
 
2016
 
2016
 
2016
 
2016
Stock-based expense includes the following:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost of revenue
$
451

 
$
294

 
$
472

 
$
607

 
$
585

 
$
503

 
$
344

 
$
486

Sales and marketing
867

 
950

 
1,084

 
643

 
686

 
543

 
580

 
843

Research and development
600

 
614

 
643

 
798

 
786

 
769

 
1,053

 
907

General and administrative
1,097

 
1,162

 
1,736

 
1,739

 
1,705

 
1,787

 
1,967

 
2,003

Stock-based expense
$
3,015

 
$
3,020

 
$
3,935

 
$
3,787

 
$
3,762

 
$
3,602

 
$
3,944

 
$
4,239


(3)
During the first quarter of fiscal 2017 we updated our calculation of Adjusted EBITDA. As a result of this update prior period depreciation and amortization amounts have been updated to conform to the current presentation. Our new definition of Adjusted EBITDA includes amortization of capitalized internal-use software development costs in depreciation and amortization.
Depreciation and amortization includes the following:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost of revenue
$
2,189

 
$
2,340

 
$
2,558

 
$
2,480

 
$
2,559

 
$
2,593

 
$
2,592

 
$
2,600

Sales and marketing
221

 
220

 
349

 
197

 
210

 
201

 
196

 
189

Research and development
164

 
181

 
209

 
175

 
228

 
227

 
231

 
204

General and administrative
234

 
234

 
220

 
171

 
206

 
219

 
250

 
229

Amortization of acquired intangible assets
309

 
309

 
308

 
311

 
309

 
309

 
309

 
310

Depreciation and amortization
$
3,117

 
$
3,284

 
$
3,644

 
$
3,334

 
$
3,512

 
$
3,549

 
$
3,578

 
$
3,532


(4) In February 2016, the Company made the decision to suspend sales of its BV Local product, reduce its cost structure to improve operating efficiencies and align resources with its growth strategies. Costs associated with these restructuring activities include workforce reductions charges, and facilities charges related to the loss recorded on the sub-lease of excess office space at the Company's headquarters.

(5)
Other stock-related benefit represents estimated liabilities for taxes and related items in connection with the treatment of certain equity grants. Since the estimated liability directly relates to equity grants and as stock-based expenses are consistently excluded from the non-GAAP financial measures, the Company excluded these estimated liabilities. During the three and six months ended October 31, 2016, the Company recorded a benefit of $0.5 million due to a reduction in previously recorded estimated tax liabilities that have exceeded the statute of limitations. This benefit was partially offset by a $0.5 million liability related to estimated employer contributions the Company believes is probable to be incurred related to 401(k) deferrals on employee stock-based compensation.




(6)
During the first quarter of fiscal 2017 we updated our calculation of Adjusted EBITDA. As a result of this update prior period depreciation and amortization amounts have been updated to conform to the current presentation. Our new definition of Adjusted EBITDA includes amortization of capitalized internal-use software development costs in depreciation and amortization and excludes capitalized stock-based compensation related to internal-use software from stock-based expense. The following table presents a reconciliation of Adjusted EBITDA as previously defined to Adjusted EBITDA under the updated definition:
 
Three Months Ended
 
Jan 31,
 
Apr 30,
 
Jul 31,
 
Oct 31,
 
Jan 31,
 
Apr 30,
 
Jul 31,
 
Oct 31,
 
2015
 
2015
 
2015
 
2015
 
2016
 
2016
 
2016
 
2016
Adjusted EBITDA, previous definition
$
1,962

 
$
(3,567
)
 
$
(3,269
)
 
$
1,135

 
$
3,075

 
$
277

 
$
1,874

 
$
3,114

Add: Amortization of capitalized internal-use software development costs
1,789

 
1,935

 
2,044

 
2,079

 
2,103

 
2,148

 
2,162

 
2,170

Less: Capitalized portion of stock-based compensation
(85
)
 
(93
)
 
(114
)
 
(122
)
 
(130
)
 
(122
)
 
(122
)
 
(124
)
Adjusted EBITDA, current definition
$
3,666

 
$
(1,725
)
 
$
(1,339
)
 
$
3,092

 
$
5,048

 
$
2,303

 
$
3,914

 
$
5,160


(7)
Beginning as of our first fiscal quarter of 2016, we define an active client as an organization for which we have a contract and the client is launched as of the last day of the quarter, and we count organizations that are closely related as one client, even if they have signed separate contractual agreements. 
All periods prior to the first fiscal quarter of 2016 discussed in this press release or presented in the accompanying financial tables have been revised to conform to this definition of an active client.