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 MuleSoft Announces Financial Results for the Fourth Quarter and Fiscal Year 2017
   Thursday, February 15, 2018 4:26:00 PM ET

--Fiscal 2017 Total Revenue of $296.5 Million, Up 58% Year-over-Year

--Company Sets Target of $1 Billion in Total Revenue in 2021

MuleSoft, Inc. (MULE ), provider of the leading platform for building application networks, today announced financial results for its fourth quarter and fiscal year 2017, ended December 31, 2017.

"Robust market demand and strong sales execution enabled us to deliver fourth quarter and fiscal 2017 revenue well ahead of expectations," said Greg Schott, chairman and CEO of MuleSoft. "We are excited about MuleSoft’s growth opportunity and expect to reach $1 billion in total revenue in 2021. Our disruptive platform is addressing one of the largest areas of enterprise IT spend, and we’re confident in our long-term strategy to become the de facto application network platform for our customers to become more agile and to transform their businesses."

Fourth Quarter 2017 Financial Highlights:

-- Revenue: Total revenue was $88.7 million in Q4 2017, an increase of 60% year-over-year. Subscription and support revenue was $70.6 million, an increase of 57% year-over-year. Professional services and other revenue was $18.1 million, an increase of 75% year-over-year.

-- Gross margin: GAAP gross margin was 71.2% in Q4 2017, compared to 72.7% in the year ago period. Non-GAAP gross margin was 72.9% in Q4 2017, compared to 73.2% in the year-ago period. On a non-GAAP basis, gross margin for subscription and support and professional services revenue each increased year-over-year; however, total gross margin decreased due to the higher mix of services revenue, which has a lower gross margin than subscription and support.

-- Operating loss: GAAP operating loss was $25.5 million in Q4 2017, compared to a GAAP operating loss of $12.8 million in the year-ago period. Non-GAAP operating loss in Q4 2017 was $16.0 million, compared to a non-GAAP operating loss of $10.6 million in the year-ago period. Non-GAAP sales and marketing expense as a percentage of revenue improved to 59% compared to 62% a year ago, despite higher commissions as a result of strong sales activity in the quarter.

-- Net loss per share: GAAP net loss per share attributable to common stockholders was $0.19 based on 130.4 million weighted-average shares outstanding in Q4 2017, compared to GAAP net loss per share attributable to common stockholders of $0.52 based on 25.4 million weighted-average shares outstanding in Q4 2016. Non-GAAP net loss per share attributable to common stockholders was $0.12 based on 130.4 million non-GAAP weighted-average shares outstanding in Q4 2017, compared to non-GAAP net loss per share attributable to common stockholders of $0.10 based on 112.6 million non-GAAP weighted-average shares outstanding in Q4 2016.

-- Deferred revenue: Total deferred revenue was $211.4 million at the end of Q4 2017, an increase of 56% year-over-year. Short-term deferred revenue was $202.0 million at the end of Q4 2017, an increase of 55% year-over-year.

-- Cash: Cash provided by (used in) operating activities was $8.9 million in Q4 2017, compared to ($8.6) million in the year-ago period. Free cash flow, which is a non-GAAP measure that reflects cash from operating activities less cash used for capital expenditures, was $7.6 million for Q4 2017, compared to ($10.9) million in the year-ago period. Cash, cash equivalents, and investments totaled $347.3 million at the end of Q4 2017.

Fiscal Year 2017 Financial Highlights:

-- Revenue: Total revenue was $296.5 million in FY 2017, an increase of 58% year-over-year. Subscription and support revenue was $238.0 million, an increase of 56% year-over-year. Professional services and other revenue was $58.5 million, an increase of 68% year-over-year.

-- Gross margin: GAAP gross margin was 72.6% in FY 2017, compared to 73.9% in the year-ago period. Non-GAAP gross margin was 74.1% in FY 2017, compared to 74.4% in the year-ago period. On a non-GAAP basis, gross margin for both subscription and support and professional services revenue increased year-over-year; however, total gross margin decreased due to the higher mix of services revenue, which has a lower gross margin than subscription and support.

-- Operating loss: GAAP operating loss was $79.8 million in FY 2017, compared to a GAAP operating loss of $48.4 million in the year-ago period. Non-GAAP operating loss in FY 2017 was $51.7 million, compared to a non-GAAP operating loss of $31.9 million in the year-ago period.

-- Net loss per share: GAAP net loss per share attributable to common stockholders was $0.75 based on 106.7 million weighted-average shares outstanding in FY 2017, compared to GAAP net loss per share attributable to common stockholders of $2.73 based on 21.6 million weighted-average shares outstanding in FY 2016. Non-GAAP net loss per share attributable to common stockholders was $0.41 based on 125.8 million non-GAAP weighted-average shares outstanding in FY 2017, compared to non-GAAP net loss per share attributable to common stockholders of $0.30 based on 110.9 million non-GAAP weighted-average shares outstanding in FY 2016.

-- Cash: Cash provided by (used in) operating activities was $2.0 million in FY 2017, compared to ($2.4) million in the year-ago period. Free cash flow, which is a non-GAAP measure that reflects cash from operating activities less cash used for capital expenditures, was ($2.9) million in FY 2017, compared to ($6.9) million in the year-ago period.

Other Fourth Quarter 2017 and Fiscal Year 2017 Highlights:

-- Appointment of Two New Board Members: MuleSoft appointed Yvonne Wassenaar and Marcus Ryu to its board of directors. Wassenaar and Ryu bring a combined 40 years of technology leadership experience to MuleSoft. Wassenaar is currently the CEO of Airware, a leading enterprise drone analytics company. Ryu is the CEO and co-founder of Guidewire Software, a leading provider of software to the global property-casualty industry.

-- Forty-five customers with over $1.0 million in annual contract value: Executing successfully on its land-and-expand strategy and delivering value to customers, MuleSoft ended 2017 with 45 customers with over $1.0 million in annual contract value, up from 30 at year-end 2016.

-- Top Place to Work in Multiple Geographies: MuleSoft was ranked the #1 Top Workplace for mid-sized companies by the Bay Area News Group, owner of the San Jose Mercury News. It is the fifth consecutive year that MuleSoft has been named a top employer on the list. In addition, MuleSoft was named one of the Best Places to Work for a third time by the San Francisco Business Times and Silicon Valley Business Journal. Additionally, MuleSoft received accolades for being a top place to work in Australia, Argentina, and the United Kingdom.

Financial Outlook:

MuleSoft is providing guidance for its first quarter ending March 31, 2018 as follows:

-- Total revenue between $87 million and $90 million

-- Non-GAAP operating loss between $10 million and $13 million

-- Non-GAAP net loss per share between $0.07 and $0.09

-- Weighted-average shares outstanding of approximately 131 million

MuleSoft is also providing guidance for the fiscal year ending December 31, 2018 as follows:

-- Total revenue between $405 million and $415 million

-- Non-GAAP operating loss between $35 million and $40 million

-- Non-GAAP net loss per share between $0.26 and $0.30

-- Non-GAAP weighted-average shares outstanding of approximately 133 million

All forward-looking non-GAAP measures exclude estimates for stock-based compensation ("SBC") expenses. We do not provide reconciliations of our forward-looking non-GAAP financial measures to the corresponding GAAP measures due to the high variability and difficulty in making accurate forecasts and projections with respect to SBC expenses, which are excluded from these non-GAAP measures. SBC expenses are impacted by future hiring and retention needs, as well as the future fair market value of our common stock, all of which are difficult to predict and subject to change. The actual amounts of the excluded SBC expenses will have a significant impact on our GAAP operating loss and GAAP net income (loss) per share. Accordingly, reconciliations of our forward-looking non-GAAP financial measures to the corresponding GAAP measures are not available.

Conference Call Information:

MuleSoft will host a conference call at 2 p.m. Pacific Time (5 p.m. Eastern Time) today, February 15, 2018, to discuss its financial results. A live webcast of the call will be available on the MuleSoft website at investors.mulesoft.com. A live dial-in will be available at (844) 340-9044 for domestic participants and at (412) 858-5204 for international participants.

About MuleSoft

MuleSoft’s mission is to help organizations change and innovate faster by making it easy to connect the world’s applications, data and devices. With its API-led approach to connectivity, MuleSoft’s market-leading Anypoint Platform(TM) is enabling over 1,200 organizations in approximately 60 countries to build application networks. For more information, visit https://www.mulesoft.com.

Forward-Looking Statements

This press release and the accompanying conference call contain forward-looking statements including, among others, statements about demand for our products and customer adoption; our expectations regarding benefits we expect our customers to receive from our platform and recently announced enhancements; future expansion opportunities; the benefits of partner engagements; our planned investments to capitalize on our market position and continue our growth; our current estimates of fiscal year 2021 revenue; our current estimates of first quarter and fiscal year 2018 revenue, non-GAAP operating loss, non-GAAP net loss per share, and GAAP and non-GAAP weighted-average shares outstanding; statements regarding our business and growth strategy; our expectations relating to quarterly gross margins and our ability to leverage in sales and marketing as we scale; our expectations relating to the revenue mix from our products and services; our expectations relating to the variability and growth of our dollar-based net retention rate; the impact of new accounting standards and changes in our accounting policies; our expectations relating to our continued investment in our business, and the continued strength of the market we serve.

These forward-looking statements involve risks and uncertainties. If any of these risks or uncertainties materialize, or if any of our assumptions prove incorrect, our actual results could differ materially from the results expressed or implied by these forward-looking statements. These risks and uncertainties include risks associated with: our limited operating history in a new and unproven market; engagement of our customers, including through renewals of subscriptions and expanded use of our platform, and our ability to attract new customers; our ability to continue to successfully enhance our platform and develop new services to meet the needs of our customers and address future advances in technology; risks associated with managing our rapid growth, including our ability to maintain our rate of revenue growth and manage our expenses and investment plans; execution of our plans and strategies, including our strategy to target larger organizations for sales of our platform; our ability to maintain and continually develop our technology and network infrastructure to ensure that customers can access our platform at any time and within an acceptable amount of time; increasing competition; our ability to recruit and retain our employees; general economic, market and business conditions; and the risks described in the other filings we make with the Securities and Exchange Commission from time to time, including the risks described under the heading "Risk Factors" in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2017, which was filed with the Securities and Exchange Commission on November 2, 2017, and which should be read in conjunction with our financial results, and is available on the SEC filings section of the Investor Relations page of our website at https://investors.mulesoft.com/. All forward-looking statements in this press release are based on information available to us as of the date hereof, and we do not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.

Non-GAAP Financial Measures

To supplement its consolidated financial statements, which are prepared and presented in accordance with GAAP, MuleSoft provides investors with certain non-GAAP financial measures, including non-GAAP gross margin, non-GAAP operating loss, non-GAAP net loss, non-GAAP net loss per share attributable to common stockholders, non-GAAP weighted-average share count, and non-GAAP free cash flow. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the reconciliation of these non-GAAP financial measures to their nearest comparable GAAP measures at the end of this press release.

We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Our management believes that these non-GAAP financial measures provide meaningful supplemental information regarding MuleSoft’s performance by excluding certain expenses that may not be indicative of our recurring core business operating results. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing MuleSoft’s performance and when planning, forecasting, and analyzing future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to our historical performance as well as comparisons to our competitors’ operating results. We believe these non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to measures used by management in its financial and operational decision-making and (2) they are used by our investors and the analyst community to help them analyze the health of our business.

A limitation of non-GAAP financial measures is that they do not have uniform definitions. Further, our definitions will likely differ from the definitions used by other companies, including peer companies, and therefore comparability may be limited. Thus, our non-GAAP financial measures should be considered in addition to, and not as a substitute for, in isolation from, or as superior to, measures prepared in accordance with GAAP. Additionally, in the case of SBC expense, if we did not pay a portion of compensation in the form of SBC expense, the cash salary expense included in cost of revenue and operating expenses would be higher, which would affect our cash position.

Non-GAAP gross margin and non-GAAP operating loss. We define non-GAAP gross margin and non-GAAP operating loss as gross margin and operating loss, respectively, excluding expenses related to SBC. Although SBC is an important aspect of the compensation of our employees and executives, determining the fair value of certain of the stock-based instruments we utilize involves a high degree of judgment and estimation and the expense recorded may bear little resemblance to the actual value realized upon the vesting or future exercise of the related stock-based awards. Furthermore, unlike cash compensation, the value of stock options and shares purchased under our employee stock purchase plan ("ESPP"), which are elements of our ongoing SBC expense, is determined using a complex formula that incorporates factors, such as market volatility, that are beyond our control. For restricted stock unit awards, the amount of SBC expenses may not reflect the value ultimately received by the grant recipients. Management believes it is useful to exclude SBC in order to better understand the long-term performance of our core business and to facilitate comparison of our results to those of peer companies.

Non-GAAP net loss and non-GAAP net loss per share attributable to common stockholders. We define non-GAAP net loss as net loss excluding expenses related to SBC. We define non-GAAP net loss per share attributable to common stockholders as non-GAAP net loss divided by the non-GAAP weighted-average outstanding shares.

The accompanying tables have more details on the reconciliations of non-GAAP financial measures to their nearest comparable GAAP measures.

MuleSoft is a registered trademark of MuleSoft, Inc. All other marks are those of respective owners.

                                                                      
                                                                                    MULESOFT, INC.
                                                                              Consolidated Balance Sheets
                                                                                    (in thousands)
                                                                                      (unaudited)
                                                                                           
                                                                                                                                  December 31,
                                                                                          --------------------------------------------------------------------------------------------
                                                                                                          2017                                  2016
                                                                                          -------------------------------------                     ----------------------------------
                               Assets
Current assets:
   Cash and cash equivalents                                                                    $  79,568                                              $  35,101
   Investments                                                                                    124,603                                                 63,361
   Trade receivables, net of allowance for doubtful accounts of $527                              111,863                                                 72,324
   and $446 as of December 31, 2017 and December 31, 2016
   Prepaid expenses and other current assets                                                       18,987                              18,854  
                                                                                          ------------------------------------                      ---------------------------------
      Total current assets                                                                        335,021                                                189,640
Investments, noncurrent                                                                           143,108                                                  4,151
Property and equipment, net                                                                         6,791                                                  5,231
Restricted cash                                                                                       784                                                    671
Goodwill                                                                                              814                                                    787
Intangible assets, net                                                                                789                                                  1,797
Other assets                                                                                        5,289                                 661  
                                                                                          ------------------------------------                      ---------------------------------
      Total assets                                                                              $ 492,596                           $ 202,938  
                                                                                          ======= ======= ====================                      ==== ======= ====================
                Liabilities and Stockholders’ Equity
Current liabilities:
   Accounts payable                                                                             $   2,219                                              $   1,879
   Accrued expenses                                                                                12,158                                                  7,797
   Accrued compensation and related expenses                                                       31,065                                                 16,369
   Deferred revenue, current                                                                      201,976                             130,045  
                                                                                          ------------------------------------                      ---------------------------------
      Total current liabilities                                                                   247,418                                                156,090
Deferred revenue, noncurrent                                                                        9,456                                                  5,569
Other liabilities                                                                                   2,775                               1,176  
                                                                                          ------------------------------------                      ---------------------------------
      Total liabilities                                                                           259,649                             162,835  
                                                                                          ------------------------------------                      ---------------------------------
Stockholders’ equity:
   Convertible preferred stock                                                             --                                                255,946
   Common stock                                                                                         3                                                      1
   Additional paid-in capital                                                                     552,260                                                 22,241
   Accumulated deficit                                                                           (316,218 )                                             (236,230 )
   Accumulated other comprehensive loss                                                            (3,098 )                                               (1,855 )
                                                                                          ------------------------------------                      ---------------------------------
      Total stockholders’ equity                                                                  232,947                              40,103  
                                                                                          ------------------------------------                      ---------------------------------
      Total liabilities and stockholders’ equity                                                $ 492,596                           $ 202,938  
                                                                                          ======= ======= ====================                      ==== ======= ====================
                                                                                                                                                                  
 
                                                                                                                                                        MULESOFT, INC.
                                                                                                                                        Condensed Consolidated Statements of Operations
                                                                                                                                      (in thousands, except share and per share amounts)
                                                                                                                                                          (unaudited)
                                                                                                                                                                          
                                                                                                                                                        Three Months Ended                                                                                                  Year Ended
                                                                                                                                                           December 31,                                                                                                    December 31,
                                                                                                                    ------------------------------------------------------------------------------------                            ------------------------------------------------------------------------------------
                                                                                                                                   2017                                 2016                                                    2017                                 2016
                                                                                                                    -----------------------------------                     -----------------------------------                     -----------------------------------                     -----------------------------------
Revenue:
   Subscription and support                                                                                             $  70,605                                               $  45,006                                               $ 237,980                                               $ 152,843
   Professional services and other                                                                                         18,109                               10,347                               58,476                               34,904  
                                                                                                                    ----------------------------------                      ----------------------------------                      ----------------------------------                      ----------------------------------
      Total revenue                                                                                                        88,714                                                  55,353                                                 296,456                                                 187,747
Cost of revenue: (1)
   Subscription and support                                                                                                 6,062                                                   4,182                                                  20,001                                                  13,722
   Professional services and other                                                                                         19,521                               10,952                               61,269                               35,341  
                                                                                                                    ----------------------------------                      ----------------------------------                      ----------------------------------                      ----------------------------------
      Total cost of revenue                                                                                                25,583                               15,134                               81,270                               49,063  
                                                                                                                    ----------------------------------                      ----------------------------------                      ----------------------------------                      ----------------------------------
      Gross profit                                                                                                         63,131                                                  40,219                                                 215,186                                                 138,684
Operating expenses: (1)
   Research and development                                                                                                18,608                                                   9,969                                                  64,585                                                  32,862
   Sales and marketing                                                                                                     56,933                                                  35,190                                                 184,583                                                 122,630
   General and administrative                                                                                              13,058                                7,896                               45,813                               31,577  
                                                                                                                    ----------------------------------                      ----------------------------------                      ----------------------------------                      ----------------------------------
      Total operating expenses                                                                                             88,599                               53,055                              294,981                              187,069  
                                                                                                                    ----------------------------------                      ----------------------------------                      ----------------------------------                      ----------------------------------
      Loss from operations                                                                                                (25,468 )                                               (12,836 )                                               (79,795 )                                               (48,385 )
Interest income                                                                                                             1,000                                                     151                                                   2,483                                                     465
Other income (expense), net                                                                                                  (394 )                                                     8                               (1,015 )                                                  (340 )
                                                                                                                    ----------------------------------                      ----------------------------------                      ----------------------------------                      ----------------------------------
      Net loss before provision for income taxes                                                                          (24,862 )                                               (12,677 )                                               (78,327 )                                               (48,260 )
Provision for income taxes                                                                                                    226                                  414                                1,653                                1,339  
                                                                                                                    ----------------------------------                      ----------------------------------                      ----------------------------------                      ----------------------------------
      Net loss                                                                                                          $ (25,088 )                                             $ (13,091 )                                             $ (79,980 )                                             $ (49,599 )
                                                                                                                    ===== ======= ====================                      ===== ======= ====================                      ===== ======= ====================                      ===== ======= ====================
      Net loss attributable to common stockholders                                                                      $ (25,088 )                                             $ (13,091 )                                             $ (79,980 )                                             $ (59,035 )
                                                                                                                    ===== ======= ====================                      ===== ======= ====================                      ===== ======= ====================                      ===== ======= ====================
      Net loss per share attributable to common stockholders, basic and                                                 $   (0.19 )                                             $   (0.52 )                                             $   (0.75 )                                             $   (2.73 )
      diluted
                                                                                                                    ===== ======= ====================                      ===== ======= ====================                      ===== ======= ====================                      ===== ======= ====================
      Weighted-average shares used in computing net loss per share, basic                                             130,423,175                           25,364,224                          106,742,923                           21,623,610  
      and diluted
                                                                                                                    ============  ====================                      ============  ====================                      ============  ====================                      ============  ====================
        (1) Includes stock-based compensation expenses, and other
        compensation expenses related to the 2016 Tender Offer as follows
        (in thousands):
        Cost of subscription and support revenue                                                                        $     320                                               $      90                                               $     945                                               $     255
        Cost of professional services and other revenue                                                                     1,172                                                     188                                                   3,442                                                     675
        Research and development                                                                                            2,428                                                     625                                                   6,994                                                   2,831
        Sales and marketing                                                                                                 4,166                                                     844                                                  12,646                                                   8,619
        General and administrative                                                                                          1,352                                  457             4,043                                4,120  
                                                                                                                    ----------------------------------                      ---------------------------------- -------------------- ----------------------------------                      ----------------------------------
            Total stock-based compensation expenses                                                                     $   9,438                            $   2,204         $  28,070                            $  16,500  
                                                                                                                    ===== ======= ====================                      ===== ======= ==================== ==================== ===== ======= ====================                      ===== ======= ====================
                                                                                                                                                                                                                                                                                                           
 
                                                                                                                                                        MULESOFT, INC.
                                                                                                                                        Condensed Consolidated Statements of Cash Flows
                                                                                                                                                        (in thousands)
                                                                                                                                                          (unaudited)
                                                                                                                                                                                  
                                                                                                                                        Three Months Ended                                                                                          Year Ended
                                                                                                                                           December 31,                                                                                                               December 31,
                                                                                              -----------------------------------------------------------------------------------------------       -------------------- -----------------------------------------------------------------------------------------------
                                                                                                                  2017                                      2016                                                          2017                                      2016
                                                                                              --------------------------------------------                     -------------------------------------                     --------------------------------------------                     -------------------------------------
Cash flows from operating activities:
   Net loss                                                                                         $        (25,088 )                                               $ (13,091 )                                               $        (79,980 )                                               $ (49,599 )
   Adjustments to reconcile net loss to net cash provided by (used in)
   operating activities:
      Stock-based compensation                                                                                 9,438                                                     2,204                                                           28,070                                                     6,552
      Other non-cash compensation related to 2016 Tender Offer                                        --                                            --                                                   --                                                     9,948
      Depreciation and amortization                                                                            1,006                                                       746                                                            3,833                                                     1,949
      Amortization of investment premiums                                                                        284                                                       125                                                              766                                                       559
      Provision for doubtful accounts                                                                           (180 )                                                     (75 )                                                             81                                                       206
      Tax benefits from employee stock plans                                                          --                                                        95                                                   --                                                       321
      Loss on disposal of property and equipment                                                                  74                                            --                                                              134                                                         6
      Other                                                                                           --                                            --                                                   --                                                        13
      Changes in assets and liabilities:
         Trade receivables                                                                                   (27,606 )                                                 (25,598 )                                                        (39,658 )                                                 (25,106 )
         Prepaid expenses and other current assets                                                              (407 )                                                  (9,112 )                                                         (2,024 )                                                  (6,836 )
         Other assets                                                                                         (3,022 )                                                     (91 )                                                         (4,628 )                                                    (343 )
         Accounts payable                                                                                        873                                                       (66 )                                                            380                                                     1,090
         Accrued expenses                                                                                       (517 )                                                    (415 )                                                          4,637                                                     1,127
         Accrued compensation and related expenses                                                            13,199                                                     6,468                                                           12,759                                                     4,705
         Other liabilities                                                                                       441                                                       600                                                            1,599                                                     1,096
         Deferred revenue                                                                                     40,409                                 29,575                                        76,012                                 51,931  
                                                                                              -------------------------------------------                      ------------------------------------                      -------------------------------------------                      ------------------------------------
            Net cash provided by (used in) operating activities                                                8,904                                 (8,635 )                                                          1,981                                 (2,381 )
                                                                                              -------------------------------------------                      ------------------------------------                      -------------------------------------------                      ------------------------------------
Cash flows from investing activities:
   Purchases of investments                                                                                  (58,289 )                                                 (19,259 )                                                       (319,709 )                                                 (41,214 )
   Sales of investments                                                                                       40,051                                            --                                                           42,476                                                    24,536
   Maturities of investments                                                                                  27,050                                                    21,100                                                           74,957                                                    39,650
   Purchases of property and equipment                                                                        (1,287 )                                                  (2,310 )                                                         (4,835 )                                                  (4,501 )
   Business combinations, net of cash acquired                                                        --                                 (1,000 )                                                           (106 )                                                  (1,000 )
                                                                                              -------------------------------------------                      ------------------------------------                      -------------------------------------------                      ------------------------------------
            Net cash provided by (used in) investing activities                                                7,525                                 (1,469 )                                                       (207,217 )                                                  17,471  
                                                                                              -------------------------------------------                      ------------------------------------                      -------------------------------------------                      ------------------------------------
Cash flows from financing activities:
   Net proceeds from issuance of common stock in initial public offering                              --                                            --                                                          236,360                                            --
   Proceeds from employee stock purchase plan                                                                  2,552                                            --                                                            7,031                                            --
   Repurchase of common shares                                                                        --                                                      (601 )                                                 --                                                    (3,208 )
   Proceeds from issuance of common stock upon exercise of options and                                         4,565                                                     1,375                                                            7,998                                                     4,281
   warrants
   Payments of costs related to initial public offering                                               --                                 (1,730 )                                                         (1,823 )                                                  (1,730 )
                                                                                              -------------------------------------------                      ------------------------------------                      -------------------------------------------                      ------------------------------------
            Net cash provided by (used in) financing activities                                                7,117                                   (956 )                                                        249,566                                   (657 )
                                                                                              -------------------------------------------                      ------------------------------------                      -------------------------------------------                      ------------------------------------
Impact of foreign exchange on cash and cash equivalents                                                         (136 )                                                    (539 )                                                            250                                 (1,044 )
                                                                                              -------------------------------------------                      ------------------------------------                      -------------------------------------------                      ------------------------------------
            Net increase (decrease) in cash                                                                   23,410                                                   (11,599 )                                                         44,580                                                    13,389
Cash, cash equivalents and restricted cash, Beginning of period                                               56,942                                 47,371                                        35,772                                 22,383  
                                                                                              -------------------------------------------                      ------------------------------------                      -------------------------------------------                      ------------------------------------
Cash, cash equivalents and restricted cash, End of period                                           $         80,352                              $  35,772                              $         80,352                              $  35,772  
                                                                                              ======= ============== ====================                      ======= ======= ====================                      ======= ============== ====================                      ======= ======= ====================
                                                                                                                                                                                                                                                                                           
Supplemental disclosures of cash flow information:
   Cash paid for income taxes                                                                       $            117                              $     323                              $          1,084                              $     764  
                                                                                              ======= ============== ====================                      ======= ======= ====================                      ======= ============== ====================                      ======= ======= ====================
Supplemental disclosures of non-cash investing and financing
information:
   Deemed dividends on preferred stock                                                              $ --                              $   9,436                              $ --                              $   9,436  
                                                                                              ======= ============== ====================                      ======= ======= ====================                      ======= ============== ====================                      ======= ======= ====================
   Costs related to the initial public offering, accrued but unpaid                                 $ --                              $     266                              $ --                              $     266  
                                                                                              ======= ============== ====================                      ======= ======= ====================                      ======= ============== ====================                      ======= ======= ====================
   Liability for purchase of property and equipment                                                 $             41                              $      91                              $             41                              $      91  
                                                                                              ======= ============== ====================                      ======= ======= ====================                      ======= ============== ====================                      ======= ======= ====================
                                                                                                                                                                                                                                                                                                           
 
                                                                                                                                                         MULESOFT, INC.
                                                                                                                                      Reconciliation of GAAP to Non-GAAP Financial Measures
                                                                                                                                       (in thousands, except share and per share amounts)
                                                                                                                                                           (unaudited)
                                                                                                                                                                         
                                                                                                                                                     Three Months Ended                                                                                                      Year Ended
                                                                                                                                                        December 31,                                                                                                        December 31,
                                                                                                               ----------------------------------------------------------------------------------------                            ---------------------------------------------------------------------------------------
                                                                                                                               2017                                   2016                                                      2017                                   2016
                                                                                                               -------------------------------------                     -------------------------------------                     -------------------------------------                     ------------------------------------
Cost of subscription and support revenue on a GAAP basis                                                             $   6,062                                                 $   4,182                                                 $  20,001                                                $  13,722
Stock-based compensation expenses                                                                                         (320 )                                                     (90 )                                                    (945 )                                                   (255 )
                                                                                                               ------------------------------------                      ------------------------------------                      ------------------------------------                      -----------------------------------
Cost of subscription and support revenue on a non-GAAP basis                                                         $   5,742                              $   4,092                              $  19,056                             $  13,467  
                                                                                                               ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================                      ====== ======= ====================
                                                                                                                                                                                                                                                                                              
Gross margin on subscription and support revenue on a GAAP basis                                                          91.4                    %                                 90.7                    %                                 91.6                    %                                91.0                    %
Stock-based compensation expenses                                                                                          0.5                    %                                  0.2                    %                                  0.4                    %                                 0.2                    %
                                                                                                               ------------------------------------                      ------------------------------------                      ------------------------------------                      -----------------------------------
Gross margin on subscription and support revenue on a non-GAAP basis                                                      91.9                    %                                 90.9                    %                                 92.0                    %                                91.2                    %
                                                                                                               ====================================                      ====================================                      ====================================                      ===================================
                                                                                                                                                                                                                                                                                              
Cost of professional services and other revenue on a GAAP basis                                                      $  19,521                                                 $  10,952                                                 $  61,269                                                $  35,341
Stock-based compensation expenses                                                                                       (1,172 )                                                    (188 )                                                  (3,442 )                                                   (675 )
                                                                                                               ------------------------------------                      ------------------------------------                      ------------------------------------                      -----------------------------------
Cost of professional services and other revenue on a non-GAAP basis                                                  $  18,349                              $  10,764                              $  57,827                             $  34,666  
                                                                                                               ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================                      ====== ======= ====================
                                                                                                                                                                                                                                                                                              
Gross margin on professional services and other revenue on a GAAP                                                         (7.8                   )%                                 (5.8                   )%                                 (4.8                   )%                                (1.3                   )%
basis
Stock-based compensation expenses                                                                                          6.5                    %                                  1.8                    %                                  5.9                    %                                 1.9                    %
                                                                                                               ------------------------------------                      ------------------------------------                      ------------------------------------                      -----------------------------------
Gross margin on professional services and other revenue on a                                                              (1.3                   )%                                 (4.0                   )%                                  1.1                    %                                 0.6                    %
non-GAAP basis
                                                                                                               ==============  ====================                      ==============  ====================                      ==============  ====================                      =============  ====================
                                                                                                                                                                                                                                                                                              
Gross profit on a GAAP basis                                                                                         $  63,131                                                 $  40,219                                                 $ 215,186                                                $ 138,684
Stock-based compensation expenses                                                                                        1,492                                    278                                  4,387                                   930  
                                                                                                               ------------------------------------                      ------------------------------------                      ------------------------------------                      -----------------------------------
Gross profit on a non-GAAP basis                                                                                     $  64,623                              $  40,497                              $ 219,573                             $ 139,614  
                                                                                                               ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================                      ====== ======= ====================
                                                                                                                                                                                                                                                                                              
Gross margin on total revenue on a GAAP basis                                                                             71.2                    %                                 72.7                    %                                 72.6                    %                                73.9                    %
Stock-based compensation expenses                                                                                          1.7                    %                                  0.5                    %                                  1.5                    %                                 0.5                    %
                                                                                                               ------------------------------------                      ------------------------------------                      ------------------------------------                      -----------------------------------
Gross margin on total revenue on a non-GAAP basis                                                                         72.9                    %                                 73.2                    %                                 74.1                    %                                74.4                    %
                                                                                                               ====================================                      ====================================                      ====================================                      ===================================
                                                                                                                                                                                                                                                                                              
Research and development expenses on a GAAP basis                                                                    $  18,608                                                 $   9,969                                                 $  64,585                                                $  32,862
Stock-based compensation expenses                                                                                       (2,428 )                                                    (625 )                                                  (6,994 )                                                 (2,831 )
                                                                                                               ------------------------------------                      ------------------------------------                      ------------------------------------                      -----------------------------------
Research and development expenses on a non-GAAP basis                                                                $  16,180                              $   9,344                              $  57,591                             $  30,031  
                                                                                                               ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================                      ====== ======= ====================
                                                                                                                                                                                                                                                                                              
Sales and marketing expenses on a GAAP basis                                                                         $  56,933                                                 $  35,190                                                 $ 184,583                                                $ 122,630
Stock-based compensation expenses                                                                                       (4,166 )                                                    (844 )                                                 (12,646 )                                                 (8,619 )
                                                                                                               ------------------------------------                      ------------------------------------                      ------------------------------------                      -----------------------------------
Sales and marketing expenses on a non-GAAP basis                                                                     $  52,767                              $  34,346                              $ 171,937                             $ 114,011  
                                                                                                               ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================                      ====== ======= ====================
                                                                                                                                                                                                                                                                                              
General and administrative expenses on a GAAP basis                                                                  $  13,058                                                 $   7,896                                                 $  45,813                                                $  31,577
Stock-based compensation expenses                                                                                       (1,352 )                                 (457 )                                                  (4,043 )                                                 (4,120 )
                                                                                                               --------------  --------------------                      --------------  --------------------                      --------------  --------------------                      -------------  --------------------
General and administrative expenses on a non-GAAP basis                                                              $  11,706                              $   7,439                              $  41,770                             $  27,457  
                                                                                                               ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================                      ====== ======= ====================
                                                                                                                                                                                                                                                                                              
Total operating expenses on a GAAP basis                                                                             $  88,599                                                 $  53,055                                                 $ 294,981                                                $ 187,069
Stock-based compensation expenses                                                                                       (7,946 )                                                  (1,926 )                                                 (23,683 )                                                (15,570 )
                                                                                                               ------------------------------------                      ------------------------------------                      ------------------------------------                      -----------------------------------
Total operating expenses on a non-GAAP basis                                                                         $  80,653                              $  51,129                              $ 271,298                             $ 171,499  
                                                                                                               ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================                      ====== ======= ====================
                                                                                                                                                                                                                                                                                              
Operating loss on a GAAP basis                                                                                       $ (25,468 )                                               $ (12,836 )                                               $ (79,795 )                                              $ (48,385 )
Stock-based compensation expenses                                                                                        9,438                                  2,204                                 28,070                                16,500  
                                                                                                               ------------------------------------                      ------------------------------------                      ------------------------------------                      -----------------------------------
Operating loss on a non-GAAP basis                                                                                   $ (16,030 )                                               $ (10,632 )                                               $ (51,725 )                                              $ (31,885 )
                                                                                                               ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================                      ====== ======= ====================
                                                                                                                                                                                                                                                                                              
Net loss attributable to common stockholders on a GAAP basis                                                         $ (25,088 )                                               $ (13,091 )                                               $ (79,980 )                                              $ (59,035 )
Deemed dividend to preferred stockholders from 2016 Tender Offer                                                --                                            --                                            --                                                    9,436
Stock-based compensation expenses                                                                                        9,438                                  2,204                                 28,070                                16,500  
                                                                                                               ------------------------------------                      ------------------------------------                      ------------------------------------                      -----------------------------------
Net loss on a non-GAAP basis                                                                                         $ (15,650 )                                               $ (10,887 )                                               $ (51,910 )                                              $ (33,099 )
                                                                                                               ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================                      ====== ======= ====================
                                                                                                                                                                                                                                                                                              
Net loss per share attributable to common stockholders, basic and                                                    $   (0.19 )                                               $   (0.52 )                                               $   (0.75 )                                              $   (2.73 )
diluted
Deemed dividend to preferred stockholders from 2016 Tender Offer                                                --                                            --                                            --                                                     0.44
Stock-based compensation expenses                                                                                         0.07                                                      0.09                                                      0.26                                                     0.76
Convertible preferred stock                                                                                     --                                   0.33                                   0.08                                  1.23  
                                                                                                               ------------------------------------                      ------------------------------------                      ------------------------------------                      -----------------------------------
Net loss per share attributable to common stockholders, basic and                                                    $   (0.12 )                                               $   (0.10 )                                               $   (0.41 )                                              $   (0.30 )
diluted, on a non-GAAP basis
                                                                                                               ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================                      ====== ======= ====================
                                                                                                                                                                                                                                                                                              
GAAP weighted-average shares used to compute net loss per share                                                    130,423,175                             25,364,224                            106,742,923                            21,623,610  
attributable to common stockholders, basic and diluted
                                                                                                               ==============  ====================                      ==============  ====================                      ==============  ====================                      =============  ====================
                                                                                                                                                                                                                                                                                              
Convertible preferred shares issued and outstanding at beginning of                                             --                             87,200,703                             19,091,802                            89,296,160  
the period
                                                                                                               ==============  ====================                      ==============  ====================                      ==============  ====================                      =============  ====================
                                                                                                                                                                                                                                                                                              
Non-GAAP weighted-average shares used to compute Non-GAAP net loss                                                 130,423,175                            112,564,927                            125,834,725                           110,919,770  
per share attributable to common stockholders, basic and diluted
                                                                                                               ==============  ====================                      ==============  ====================                      ==============  ====================                      =============  ====================
                                                                                                                                                                                                                                                                                                             
                                                                                                                                                                                                                                                                                                             

The following table presents a reconciliation of free cash flow to net cash provided by (used in) operating activities, the most directly comparable financial measure calculated in accordance with generally accepted accounting principles, or GAAP:

                                                                                                                          
                                                                                                 Three Months Ended                                                                          Year Ended
                                                                                                    December 31,                                                                            December 31,
                                                                         ------------------------------------------------------------                            -----------------------------------------------------------
                                                                                      2017                     2016                               2017                     2016
                                                                         -------------------------------                     ---------------                     -------------                     --------------------------------
Net cash provided by (used in) operating activities                        $ 8,904                                             $  (8,635 )                         $  1,981                          $ (2,381 )
    Less: Purchases of property and equipment                               (1,287 )                                              (2,310 )                           (4,835 )                          (4,501 )
                                                                         ------------------------------                      --------------                      ------------                      -------------------------------
Free cash flow                                                             $ 7,617                          $ (10,945 )                         $ (2,854 )                        $ (6,882 )
                                                                         === ===== ====================                      === ======= ==                      === ====== =                      === ====== ====================
                                                                                                                                                                                                               

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20180215006431r1&sid=cmtx6&distro=nx&lang=en

View source version on businesswire.com: http://www.businesswire.com/news/home/20180215006431/en/

SOURCE: MuleSoft, Inc.

MuleSoft 
Media Contact: 
Melissa Czapiga, 415-294-0161 
press@mulesoft.com 
or 
Investor Contact: 
Carla Cooper, 415-229-2009 
investorrelations@mulesoft.com


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