EX-99.1

Exhibit 99.1

Duck Creek Technologies Announces Third Quarter Fiscal 2021 Financial Results

•

Third Quarter Fiscal 2021 Subscription revenue grew 56% year-over-year

•

SaaS Annual Recurring Revenue grew 64% year-over-year

BOSTON, MA Jul. 8, 2021 (GLOBE NEWSWIRE) — Duck Creek Technologies (NASDAQ: DCT), a provider of SaaS-delivered enterprise software to the property & casualty (“P&C”) insurance industry, today announced its financial results for the three and nine months ended May 31, 2021.

“Duck Creek continued to perform at a high level in the third quarter, highlighted by 56% subscription revenue growth,” said Michael Jackowski, Duck Creek’s Chief Executive Officer. “We signed several important wins with new and existing customers, including a substantial expansion with a Tier 1 carrier that is deploying Duck Creek OnDemand to additional lines of business.”

Mr. Jackowski added, “Our growing roster of successful Duck Creek OnDemand deployments is a clear demonstration that the P&C insurance industry is recognizing that our SaaS core systems platform can provide greater flexibility, faster innovation and a better customer experience than legacy systems. We remain at the early stages of this transformation and believe Duck Creek is well positioned to benefit for years to come.”

Third Quarter 2021 Financial Highlights

Revenue

•

Total revenue for the third quarter of fiscal year 2021 was $67.9 million, an increase of 26% from the comparable period in fiscal year 2020. Subscription revenue was $33.6 million, an increase of 56%; services revenue was $25.6 million, an increase of 6%; license revenue was $2.5 million, an increase of 15%; and maintenance revenue was $6.3 million, an increase of 4%.

•

SaaS annual recurring revenue, or SaaS ARR, was $124.1 million as of May 31, 2021, an increase of 64% from the comparable period in fiscal year 2020.

Profitability

•

GAAP loss from operations was $0.5 million for the third quarter of fiscal year 2021, compared with a GAAP loss from operations of $1.4 million for the comparable period in fiscal year 2020.

•

Non-GAAP income from operations was $4.8 million for the third quarter of fiscal year 2021, compared with non-GAAP income from operations of $2.9 million for the comparable period in fiscal year 2020.

•

GAAP net loss was $0.4 million for the third quarter of fiscal year 2021, compared with GAAP net loss of $2.0 million for the comparable period in fiscal year 2020.

•

Non-GAAP net income was $4.0 million for the third quarter of fiscal year 2021, compared with non-GAAP net income of $1.9 million for the comparable period in fiscal year 2020.

•

GAAP net loss per share was $0.00, based on basic weighted average shares outstanding of approximately 131.6 million shares as of May 31, 2021. Non-GAAP net income per share was $0.03 based on fully diluted weighted average shares outstanding of approximately 135.2 million shares as of May 31, 2021.

•

Adjusted EBITDA was $5.5 million for the third quarter of fiscal 2021, compared with adjusted EBITDA of $3.8 million for the comparable period in fiscal year 2020.

Liquidity

•

As of May 31, 2021, Duck Creek had $115.6 million in cash and cash equivalents, $256.0 million in short term investments and no debt. The Company had $6.9 million in cash provided by operating activities and had free cash flow of $6.6 million during the third quarter of fiscal year 2021, compared with $18.2 million in cash provided by operating activities and free cash flow of $16.8 million in the comparable period in fiscal year 2020.

The information presented above includes non-GAAP financial measures such as “non-GAAP income from operations,” “adjusted EBITDA,” “non-GAAP net income,” “non-GAAP net income per share,” and “free cash flow.” Refer to “Non-GAAP Financial Measures and Other Metrics” for a discussion of these measures and reconciliations of each non-GAAP financial measure to the most directly comparable GAAP financial measure.

Business Outlook

Duck Creek is issuing the following outlook for the fourth quarter of fiscal 2021 and full year of fiscal 2021 based on current expectations as of July 8, 2021:


	Fourth Quarter Fiscal 2021	Full Year Fiscal 2021
Revenue	$68.5 million to $69.5 million	$258.0 million to $259.0 million
Subscription Revenue	$32.0 million to $32.5 million	$124.0 million to $124.5 million
Adjusted EBITDA	$3.5 million to $4.5 million	$15.6 million to $16.6 million

Conference Call Information

Duck Creek Technologies will host a conference call today, July 8, 2021, at 5:00 p.m. (Eastern Time) to discuss the Company’s financial results and business outlook. A live webcast of the call will be available on the “Investor Relations” page of the Company’s website at https://ir.duckcreek.com/. To access the call by phone, dial 1-833-570-1119 (domestic) or 1-914-987-7066 (international). A replay of this conference call will be available for a limited time at 1-855-859-2056 (domestic) or 1-404-537-3406 (international) using conference ID 5077088. A replay of the webcast will also be available for a limited time at https://ir.duckcreek.com/.

About Duck Creek Technologies

Duck Creek Technologies is a leading provider of core system solutions to the P&C and General insurance industry. By accessing Duck Creek OnDemand, the company’s enterprise Software-as-a-Service solution, insurance carriers are able to navigate uncertainty and capture market opportunities faster than their competitors. Duck Creek’s functionally-rich solutions are available on a standalone basis or as a full suite, and all are available via Duck Creek OnDemand.

Forward Looking Statements

This press release includes certain disclosures which contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements because they contain words such as “expect,” “believe,” “target,” “project,” “goals,” “estimate,” “potential,” “predict,” “may,” “will,” “might,” “could,” “forecast,” “outlook” and variations of these terms or the negative of these terms and similar expressions. Forward-looking statements, including statements regarding Duck Creek’s expected outlook for fourth quarter fiscal 2021 and full year fiscal 2021, are based on Duck Creek’s current expectations and assumptions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that may differ materially from those contemplated by the forward-looking statements, which are neither statements of historical fact nor guarantees or assurances of future performance. Important factors that could cause actual results to differ materially from those in the forward-looking statements will be set forth in Duck Creek’s most recent Annual Report on Form 10-K that was filed with the Securities and Exchange Commission on November 3, 2020 and any subsequent public filings. In particular, the following factors, among others, could cause results to differ materially from those expressed or implied by such forward-looking statements: the impact of pandemics, including the on-going COVID-19 pandemic, on U.S. and global economies, Duck Creek’s business and results and financial condition, its employees, demand for its products, sales and implementation cycles, and the health of its customers’ and partners’ businesses; Duck Creek’s history of losses; changes in Duck Creek’s product revenue mix as it continues to focus on sales of its SaaS solutions, which will cause fluctuations in its results of operations and cash flows between periods; Duck Creek’s reliance on orders and renewals from a relatively small number of customers for a substantial portion of its revenue, and the substantial negotiating leverage customers have in renewing and expanding their contracts for Duck Creek’s solutions; the success of Duck Creek’s growth strategy focused on SaaS solutions and its ability to develop or sell its solutions into new markets or further penetrate existing markets; Duck Creek’s ability to manage its expanding operations; intense competition in Duck Creek’s market; third parties may assert Duck Creek is infringing or violating their intellectual property rights; U.S. and global market and economic conditions, particularly adverse in the insurance industry; additional complexity, burdens and volatility in connection with Duck Creek’s international sales and operations; the length and variability of Duck Creek’s sales and implementation cycles; data breaches, unauthorized access to customer data or other disruptions of Duck Creek’s solutions; the significant influence of Duck Creek’s largest shareholders on its management, business plans, and policies and any conflicts of interests therewith; and Duck Creek’s continued reliance on “controlled company” exemptions under the corporate governance standards of Nasdaq during the applicable phase-in periods.

Any forward-looking statement in this release speaks only as of the date of this release. Duck Creek undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by any applicable laws.

Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance unless expressed as such, and should only be viewed as historical data.

Non-GAAP Financial Measures and Other Metrics

This press release contains the following non-GAAP financial measures: non-GAAP gross margin, non-GAAP income from operations, adjusted EBITDA, non-GAAP net income, non-GAAP net income per share, and free cash flow. Adjusted EBITDA excludes provision for income taxes, other (income) expense, interest expense, net, depreciation of property and equipment, amortization of intangible assets, share-based compensation expense, and change in fair value of contingent earnout liability. Non-GAAP income from operations excludes share-based compensation expense, amortization of intangible assets and change in fair value of contingent earnout liability. Non-GAAP gross margin excludes share-based compensation expense, amortization of intangible assets, and amortization of capitalized internal-use software. Non-GAAP net income excludes share-based compensation expense, amortization of intangible assets and change in fair value of contingent earnout liability and the tax effect of such adjustments. Free cash flow consists of net cash provided by operating activities less cash used for purchases of property and equipment and capitalized internal-use software. See below for a reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure.

Other metrics include SaaS ARR and SaaS Net Dollar Retention, which are calculated for all SaaS continuing software services, excluding the subscription revenue related to one legacy contract for a service no longer offered separately by the Company. SaaS ARR is calculated by annualizing recurring revenue recorded in the last month of the measurement period. SaaS Net Dollar Retention is a rate calculated by annualizing recurring revenue recorded in the last month of the measurement period for those customers in place throughout the entire measurement period. We divide the result by annualized recurring revenue from the month that is one year prior to the end of the measurement period, for all customers in place at the beginning of the measurement period.

The Company believes that these non-GAAP financial measures and other metrics provide useful information to management and investors regarding certain financial and business trends relating to Duck Creek’s financial condition and results of operations. The Company’s management uses these non-GAAP financial measures and other metrics to manage its business, make planning decisions, evaluate its performance and allocate resources. The Company believes that the use of these non-GAAP financial measures and other metrics help investors and analysts in comparing its results across reporting periods on a consistent basis by excluding items that the Company does not believe are indicative of its core operating performance. These non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation from, or as a substitute for, the analysis of other GAAP financial measures, including net income and cash flows from operating activities.

These non-GAAP financial measures are not universally consistent calculations, limiting their usefulness as comparative measures. Other companies may calculate similarly titled financial measures differently than the Company does or may not calculate them at all. Additionally, these non-GAAP financial measures are not measurements of financial performance or liquidity under GAAP. In order to facilitate a clear understanding of its consolidated historical operating results, readers should examine the Company’s non-GAAP financial measures in conjunction with its historical GAAP financial information.

To the extent that the Company provides guidance on a non-GAAP basis, it does not provide reconciliations of such forward-looking non-GAAP measures to GAAP due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation, including adjustments that could be made for the charges reflected in the Company’s reconciliation of historic numbers, the amount of which, based on historical experience, could be significant.

Investor Contact:

Brian Denyeau

ICR

646-277-1251

Brian.denyeau@icrinc.com

Media Contact:

Paul Rechichi

Racepoint Global

617 624 3295

prechichi@racepointglobal.com

Sam A. Shay

Duck Creek Technologies

857 201 5784

sam.shay@duckcreek.com

Duck Creek Technologies, Inc. and Subsidiaries

Consolidated Balance Sheets

(unaudited, in thousands except share and per share amounts)


	May 31,			August 31,
	2021			2020
Assets
Current assets:
Cash and cash equivalents	$	115,637		$	389,878
Short-term investments		256,028			—
Accounts receivable, net		37,177			29,149
Unbilled revenue		22,491			18,121
Prepaid expenses and other current assets		11,838			12,186

Total current assets		443,171			449,334
Property and equipment, net		16,008			18,113
Operating lease assets		15,498			18,171
Goodwill		272,455			272,455
Intangible assets, net		69,425			81,687
Deferred tax assets		2,226			1,550
Unbilled revenue, net of current portion		2,576			3,487
Other assets		16,679			16,303

Total assets	$	838,038		$	861,100

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	1,693		$	1,802
Accrued liabilities		42,485			58,202
Contingent earnout liability		4,878			3,701
Lease liability		3,007			3,611
Deferred revenue		28,743			30,397

Total current liabilities		80,806			97,713
Contingent earnout liability, net of current portion		—			3,391
Lease liability, net of current portion		18,342			21,739
Deferred revenue, net of current portion		4			379
Other long-term liabilities		4,285			4,121

Total liabilities		103,437			127,343

Commitments and contingencies (Note 13)
Stockholders’ equity
Common stock, 134,217,410 shares issued and 131,660,379 shares outstanding at May 31, 2021, 133,269,301 shares issued and 130,713,745 shares outstanding at August 31, 2020, 300,000,000 shares authorized at May 31, 2021 and August 31, 2020, par value $0.01 per share		1,342			1,333
Preferred stock, 0 shares outstanding, 50,000,000 shares authorized at May 31, 2021 and August 31, 2020, par value $0.01 per share		—			—
Treasury stock, common shares at cost; 2,557,031 shares at May 31, 2021 and 2,555,556 shares at August 31, 2020		(64,745	)		(64,688	)
Accumulated deficit		(35,706	)		(24,334	)
Accumulated other comprehensive income		79			—
Additional paid in capital		833,631			821,446

Total stockholders’ equity		734,601			733,757

Total liabilities and stockholders’ equity	$	838,038		$	861,100

Duck Creek Technologies, Inc. and Subsidiaries

Consolidated Statements of Operations

(unaudited, in thousands except share and per share amounts)


	For the Three Months Ended May 31,						For the Nine Months Ended May 31,
	2021			2020			2021			2020
Revenue:
Subscription	$	33,552		$	21,555		$	92,069		$	59,368
License		2,474			2,160			7,412			5,431
Maintenance and support		6,329			6,064			18,404			17,791
Professional services		25,583			24,174			71,611			70,760

Total revenue		67,938			53,953			189,496			153,350
Cost of revenue¹:
Subscription		12,045			8,721			33,540			24,871
License		535			506			1,369			1,347
Maintenance and support		855			710			2,556			2,475
Professional services		14,315			13,459			42,857			38,839

Total cost of revenue		27,750			23,396			80,322			67,532

Gross margin		40,188			30,557			109,174			85,818

Operating expenses¹:
Research and development		12,255			10,197			36,040			29,424
Sales and marketing		13,628			11,723			40,390			33,539
General and administrative		15,238			10,184			44,273			29,916
Change in fair value of contingent consideration		(389	)		(190	)		(291	)		21

Total operating expenses		40,732			31,914			120,412			92,900

Loss from operations		(544	)		(1,357	)		(11,238	)		(7,082	)
Other income (expense), net		546			(316	)		1,009			(96	)
Interest expense, net		(6	)		(60	)		(87	)		(386	)

Loss before income taxes		(4	)		(1,732	)		(10,316	)		(7,564	)
Provision for income taxes		353			267			1,056			889

Net loss	$	(357	)	$	(1,999	)	$	(11,372	)	$	(8,453	)

Net loss per share information²
Net loss per share of common stock, basic and diluted	$	0.00		$	—		$	(0.08	)	$	—
Weighted average shares of common stock, basic and diluted		131,613,003			—			130,992,672			—

(1) Amounts include share-based compensation expense as disclosed in the following table:


	Three Months Ended May 31,				Nine Months Ended May 31,
	2021		2020		2021		2020
Cost of subscription revenue	$	90	$	—	$	302	$	10
Cost of maintenance and support revenue		7		1		22		3
Cost of services revenue		253		36		2,003		103
Research and development		285		97		1,505		285
Sales and marketing		199		93		2,493		257
General and administrative		863		253		2,980		747

Total share-based compensation expense	$	1,697	$	480	$	9,305	$	1,404

(2) Prior to Duck Creek’s initial public offering in August 2020, there were no shares of common stock outstanding, and the membership structure of Duck Creek Technologies consisted of limited partnership units. Accordingly, comparable period net loss per share has not been presented because it would not be meaningful to the users of the Company’s consolidated financial statements.

Duck Creek Technologies, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(unaudited, in thousands)


	For the Three Months Ended May 31,						For the Nine Months Ended May 31,
	2021			2020			2021			2020
Operating activities:
Net loss	$	(357	)	$	(1,999	)	$	(11,372	)	$	(8,453	)
Adjustments to reconcile net loss to cash provided by (used in) operating activities:
Depreciation of property and equipment		790			828			2,377			2,350
Amortization of capitalized software		510			154			1,506			205
Amortization of intangible assets		4,087			4,268			12,262			12,803
Amortization of deferred financing fees		28			67			85			106
Share-based compensation expense		1,697			480			9,305			1,404
Loss on change in fair value of contingent earnout liability		(389	)		(190	)		(291	)		21
Bad debt expense		654			137			664			65
Deferred taxes		(161	)		(169	)		(676	)		(146	)
Other non-cash items		(37	)		—			(37	)		—
Changes in operating assets and liabilities
Accounts receivable		(3,093	)		1,823			(8,693	)		(4,301	)
Unbilled revenue		(100	)		2,756			(3,459	)		(1,182	)
Prepaid expenses and other current assets		3,373			1,697			262			96
Other assets		303			(465	)		(376	)		(4,101	)
Accounts payable		387			(472	)		895			(304	)
Accrued liabilities		4,269			7,983			(6,402	)		9,323
Deferred revenue		(1,706	)		(50	)		(2,029	)		214
Operating leases		565			1,514			(1,328	)		199
Cash settlement of vested phantom stock		(2,171	)		—			(9,075	)		—
Other long-term liabilities		(1,774	)		(166	)		164			(52	)

Net cash provided by (used in) operating activities		6,875			18,196			(16,218	)		8,247

Investing activities:
Purchase of short-term investments		—			—			(287,912	)		—
Maturities of short-term investments		32,000			—			32,000			—
Capitalized internal-use software		(114	)		(885	)		(864	)		(2,440	)
Purchase of property and equipment		(162	)		(470	)		(834	)		(3,164	)

Net cash used in investing activities		31,724			(1,355	)		(257,610	)		(5,604	)

Financing activities:
Proceeds from follow-on offering, net of issuance costs		—			—			3,452			—
Payment of deferred IPO costs		—			—			(3,650	)		—
Payment of deferred Class E offering costs		—			—			(192	)		(2,552	)
Proceeds from issuance of Class E Units, net of issuance costs		—			(2,780	)		—			212,888
Payment on redemption of Class A and Class B Units		—			—			—			(198,000	)
Purchase of treasury stock		—			—			(57	)		—
Proceeds from stock option exercises		964			—			1,957			—
Payments of contingent earnout liability		—			(374	)		(1,923	)		(3,555	)
Proceeds from revolving credit facility		—			—			—			5,000
Payments on revolving credit facility		—			—			—			(9,000	)
Payment of deferred financing costs		—			(480	)		—			(228	)

Net cash provided by (used in) financing activities		964			(3,634	)		(413	)		4,553

Net increase (decrease) in cash and cash equivalents		39,563			13,207			(274,241	)		7,196
Cash and cash equivalents – beginning of period		76,074			5,988			389,878			11,999

Cash and cash equivalents – end of period	$	115,637		$	19,195		$	115,637		$	19,195

Duck Creek Technologies, Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP Financial Measures

(unaudited)


	Three Months Ended May 31,				Nine Months Ended May 31,
($ in thousands)	2021		2020		2021		2020
GAAP Gross Margin	$	40,188	$	30,557	$	109,174	$	85,818
Share-based compensation expense		350		39		2,327		116
Amortization of intangible assets		1,186		1,187		3,559		3,559
Amortization of capitalized internal-use software		510		154		1,506		205

Non-GAAP Gross Margin	$	42,234	$	31,937	$	116,566	$	89,698


	Three Months Ended May 31,						Nine Months Ended May 31,
($ in thousands)	2021			2020			2021			2020
GAAP Loss from Operations	$	(544	)	$	(1,357	)	$	(11,238	)	$	(7,082	)
Share-based compensation expense		1,697			480			9,305			1,404
Amortization of intangible assets		3,994			3,994			11,982			11,982
Change in fair value of contingent earnout liability		(389	)		(190	)		(291	)		21

Non-GAAP Income from Operations	$	4,758		$	2,927		$	9,758		$	6,325


	Three Months Ended May 31,						Nine Months Ended May 31,
($ in thousands)	2021			2020			2021			2020
GAAP Net Loss	$	(357	)	$	(1,999	)	$	(11,372	)	$	(8,453	)
Provision for income taxes		353			267			1,056			889
Other (income) expense		(546	)		316			(1,009	)		96
Interest expense, net		6			60			87			386
Depreciation of property and equipment		790			828			2,377			2,350
Amortization of intangible assets		3,994			3,994			11,982			11,982
Share-based compensation expense		1,697			480			9,305			1,404
Change in fair value of contingent earnout liability		(389	)		(190	)		(291	)		21

Adjusted EBITDA	$	5,548		$	3,756		$	12,135		$	8,675

Adjusted EBITDA as a percent of total revenue		8	%		7	%		6	%		6	%


	Three Months Ended May 31,								Nine Months Ended May 31,
($ in thousands)	2021			Per Share		2020			2021			Per Share			2020
GAAP Net Loss ⁽¹⁾	$	(357	)	$	—	$	(1,999	)	$	(11,372	)	$	(0.08	)	$	(8,453	)
Add: GAAP tax provision		353					267			1,056						889

GAAP pre-tax loss		(4	)				(1,732	)		(10,316	)					(7,564	)

Share-based compensation expense		1,697					480			9,305						1,404
Amortization of intangible assets		3,994					3,994			11,982						11,982
Change in fair value of contingent earnout liability		(389	)				(190	)		(291	)					21

Non-GAAP pre-tax income		5,298					2,552			10,680						5,843

Non-GAAP tax provision applied at a 24% tax rate ⁽²⁾		1,272					612			2,563						1,402

Non-GAAP Net Income ⁽¹⁾	$	4,026		$	0.03	$	1,940		$	8,117		$	0.06		$	4,441

Shares used in computing Non-GAAP income per share amounts:⁽¹⁾
GAAP weighted-average shares - basic and diluted		131,613,003								130,992,672
Non-GAAP dilutive shares excluded from GAAP loss per share calculation		3,575,928								3,575,928

Non-GAAP weighted-average shares - diluted		135,188,931								134,568,600

(1)

Prior to Duck Creek’s initial public offering in August 2020, there were no shares of common stock outstanding, and the membership structure of Duck Creek Technologies consisted of limited partnership units. Accordingly, comparable period net loss per share has not been presented because it would not be meaningful to the users of the Company’s consolidated financial statements.

(2)

Our GAAP tax provision is primarily related to state taxes and income taxes in profitable foreign jurisdictions. We maintain a full valuation allowance against our deferred tax assets in the U.S. For purposes of determining our Non-GAAP Net Income, we have applied a tax rate of 24% which represents our estimated effective tax rate once we are profitable on a GAAP basis.


	Three Months Ended May 31,						Nine Months Ended May 31,
($ in thousands)	2021			2020			2021			2020
Net cash provided by (used in) operating activities	$	6,875		$	18,196		$	(16,218	)	$	8,247
Purchases of property and equipment		(162	)		(470	)		(834	)		(3,164	)
Capitalized internal-use software		(114	)		(885	)		(864	)		(2,440	)

Free Cash Flow	$	6,599		$	16,841		$	(17,916	)	$	2,643