Today Phunware, Inc. (NASDAQ: PHUN), a fully-integrated enterprise
cloud platform for mobile that provides products, solutions, data
and services for brands worldwide, announced financial results for
the year ended December 31, 2018.
“We’re extremely proud to have completed our
merger and commenced trading publicly on Nasdaq, particularly in
light of tumultuous demands in the market,” said Alan S. Knitowski,
Phunware’s CEO and Co-founder. "We are extremely excited to expose
a broader global audience in the way brands and consumers interact
through our MaaS enterprise cloud platform, which will enable much
more trustworthy and transparent relationships on mobile.”
Full Year 2018 Financial
Highlights
- Net revenues increased 16% year-over-year to $30.9
million
- Platform subscriptions and services revenue increased 18% to
$19.4 million
- Gross profit was $19.1 million, or 61.8% of net revenues, an
$8.1 million increase, or 20.6 percentage points, over the prior
year
- Non-GAAP Adjusted EBITDA improved by $15.5 million to ($8.6)
million compared to the prior year
- Net loss per share improved $0.68 per share to ($0.38) compared
to ($1.06) the prior year
- Successfully completed merger with Stellar Acquisition III,
Inc. (NASDAQ: STLR), and commenced trading as Phunware, Inc.
(NASDAQ: PHUN)
"We are thrilled to have achieved nearly $31
million in net revenues, including 16% year-over-year growth, our
highest performance in platform subscriptions and services to date
and a material expansion of our gross margin to 61.8%," said
Phunware CFO Matt Aune. "We are also excited by the organic and
inorganic growth opportunities ahead and believe that our 2018
performance positions us well as we prepare for our first full year
as a public company.”
Safe Harbor Clause and Forward-Looking
Statements:This press release includes forward-looking
statements. All statements other than statements of historical
facts contained in this press release, including statements
regarding our future results of operations and financial position,
business strategy and plans, and our objectives for future
operations, are forward-looking statements. The words “anticipate,”
“believe,” “continue,” “could,” “estimate,” “expect,” “expose,”
“intend,” “may,” “might,” “opportunity,” “plan,” “possible,”
“potential,” “predict,” “project,” “should,” “will,” “would” and
similar expressions that convey uncertainty of future events or
outcomes are intended to identify forward-looking statements, but
the absence of these words does not mean that a statement is not
forward-looking.
The forward-looking statements contained in this
press release are based on our current expectations and beliefs
concerning future developments and their potential effects on us.
Future developments affecting us may not be those that we have
anticipated. These forward-looking statements involve a number of
risks, uncertainties (some of which are beyond our control) and
other assumptions that may cause actual results or performance to
be materially different from those expressed or implied by these
forward-looking statements. These risks and uncertainties include,
but are not limited to, those factors described under the heading
“Risk Factors” in our Form 10-K filed with the SEC. Should one or
more of these risks or uncertainties materialize, or should any of
our assumptions prove incorrect, actual results may vary in
material respects from those projected in these forward-looking
statements. We undertake no obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as may be required under
applicable securities laws. These risks and others described under
“Risk Factors” may not be exhaustive.
By their nature, forward-looking statements
involve risks and uncertainties because they relate to events and
depend on circumstances that may or may not occur in the future. We
caution you that forward-looking statements are not guarantees of
future performance and that our actual results of operations,
financial condition and liquidity, and developments in the industry
in which we operate may differ materially from those made in or
suggested by the forward-looking statements contained in this press
release. In addition, even if our results or operations, financial
condition and liquidity, and developments in the industry in which
we operate are consistent with the forward-looking statements
contained in this press release, those results or developments may
not be indicative of results or developments in subsequent
periods.
Disclosure InformationPhunware
uses the investor relations section on its website as the means of
complying with its disclosure obligations under Regulation FD.
Accordingly, we recommend that investors should monitor Phunware’s
investor relations website in addition to following Phunware’s
press releases, SEC filings, and public conference calls and
webcasts.
About Phunware:Phunware, Inc., is
the pioneer of Multiscreen-as-a-Service (MaaS), a fully integrated
enterprise cloud platform for mobile that provides companies the
products, solutions, data and services necessary to engage, manage
and monetize their mobile application portfolios and audiences
globally at scale. Phunware helps the world’s most respected brands
create category-defining mobile experiences, with more than one
billion active devices touching its platform each month. For more
information about how Phunware is transforming the way consumers
and brands interact with mobile in the virtual and physical worlds,
visit www.phunware.com, www.phuncoin.com and follow @phunware
and @phuncoin on all social media platforms.
Financial Results
Phunware,
Inc.Consolidated Balance Sheets(In
thousands)(Unaudited)
|
|
December 31, |
|
|
December 31, |
|
|
|
2018 |
|
|
2017 |
|
Assets |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash |
|
$ |
844 |
|
|
$ |
308 |
|
Accounts receivable, net |
|
|
3,606 |
|
|
|
6,206 |
|
Prepaid expenses and other current assets |
|
|
272 |
|
|
|
385 |
|
Total current assets |
|
|
4,722 |
|
|
|
6,899 |
|
|
|
|
|
|
|
|
|
|
Property and equipment, net |
|
|
66 |
|
|
|
128 |
|
Goodwill |
|
|
25,821 |
|
|
|
25,886 |
|
Intangible assets, net |
|
|
521 |
|
|
|
901 |
|
Deferred tax asset – long term |
|
|
64 |
|
|
|
- |
|
Restricted cash |
|
|
5,500 |
|
|
|
- |
|
Other assets |
|
|
187 |
|
|
|
187 |
|
Total
assets |
|
$ |
36,881 |
|
|
$ |
34,001 |
|
|
|
|
|
|
|
|
|
|
Liabilities, redeemable convertible preferred stock, and
stockholders’ equity |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
9,890 |
|
|
$ |
3,548 |
|
Accrued expenses |
|
|
3,028 |
|
|
|
8,796 |
|
Deferred revenue |
|
|
2,629 |
|
|
|
1,044 |
|
Factored receivables payable |
|
|
2,434 |
|
|
|
1,816 |
|
Short term notes payable – related party |
|
|
1,993 |
|
|
|
- |
|
Total current liabilities |
|
|
19,974 |
|
|
|
15,204 |
|
|
|
|
|
|
|
|
|
|
Deferred tax liability |
|
|
64 |
|
|
|
387 |
|
Deferred revenue |
|
|
5,622 |
|
|
|
7,165 |
|
Deferred rent |
|
|
17 |
|
|
|
98 |
|
Investor deposits |
|
|
- |
|
|
|
3,243 |
|
Total
liabilities |
|
|
25,677 |
|
|
|
26,097 |
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies |
|
|
- |
|
|
|
- |
|
Redeemable convertible preferred stock |
|
|
5,377 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity |
|
|
|
|
|
|
|
|
Common stock |
|
|
3 |
|
|
|
3 |
|
Additional paid in capital |
|
|
118,062 |
|
|
|
110,265 |
|
Accumulated other comprehensive loss |
|
|
(418) |
|
|
|
(347) |
|
Accumulated deficit |
|
|
(111,820) |
|
|
|
(102,017) |
|
Total stockholders’ equity |
|
|
5,827 |
|
|
|
7,904 |
|
Total
liabilities, redeemable convertible preferred stock, and
stockholders’ equity |
|
$ |
36,881 |
|
|
$ |
34,001 |
|
Phunware,
Inc.Consolidated Statements of Operations and
Comprehensive Loss(In thousands, except per share
information)(Unaudited)
|
|
Year Ended |
|
|
|
December 31, |
|
|
|
2018 |
|
|
2017 |
|
|
|
|
|
|
|
|
Net revenues |
|
$ |
30,883 |
|
|
$ |
26,722 |
|
Cost
of revenues |
|
|
11,802 |
|
|
|
15,714 |
|
Gross
profit |
|
|
19,081 |
|
|
|
11,008 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
Sales and marketing |
|
|
5,417 |
|
|
|
10,721 |
|
General and administrative |
|
|
13,562 |
|
|
|
14,795 |
|
Research and development |
|
|
6,965 |
|
|
|
11,108 |
|
Total operating expenses |
|
|
25,944 |
|
|
|
36,624 |
|
Operating loss |
|
|
(6,863) |
|
|
|
(25,616) |
|
Other
expense: |
|
|
|
|
|
|
|
|
Interest expense |
|
|
(724) |
|
|
|
(397) |
|
Fair value adjustment for warrant liabilities |
|
|
(54) |
|
|
|
— |
|
Impairment of digital currencies |
|
|
(334) |
|
|
|
— |
|
Other expense |
|
|
(2,202) |
|
|
|
(13) |
|
Total
other expense |
|
|
(3,314) |
|
|
|
(410) |
|
Loss
before taxes |
|
|
(10,177) |
|
|
|
(26,026) |
|
Income tax benefit |
|
|
374 |
|
|
|
88 |
|
Net
loss |
|
|
(9,803) |
|
|
|
(25,938) |
|
Cumulative translation adjustment |
|
|
(71) |
|
|
|
127 |
|
Comprehensive loss |
|
$ |
(9,874) |
|
|
$ |
(25,811) |
|
Net
loss per share, basic and diluted |
|
$ |
(0.38) |
|
|
$ |
(1.06) |
|
Weighted-average shares used to compute net loss per share, basic
and diluted |
|
|
25,556 |
|
|
|
24,519 |
|
Non-GAAP Financial Measures and
Reconciliation
Adjusted EBITDA should be considered in addition
to, not as a substitute for, or superior to, financial measures
calculated in accordance with GAAP. It is not a measurement of our
financial performance under GAAP and should not be considered as an
alternative to revenue or net income (loss), as applicable, or any
other performance measures derived in accordance with GAAP and may
not be comparable to other similarly titled measures of other
businesses. Adjusted EBITDA has limitations as an analytical tool
and should not be considered in isolation or as a substitute for
analysis of our operating results as reported under GAAP. Some of
these limitations include;
- Non-cash compensation is and will remain a key element of our
overall long-term incentive compensation package, although we
exclude it as an expense when evaluating its ongoing operating
performance for a particular period;
- Adjusted EBITDA does not reflect the impact of certain cash
charges resulting from matters we consider not to be indicative of
ongoing operations, and;
- other companies in our industry may calculate Adjusted EBITDA
differently than we do, limiting their usefulness as comparative
measures.
We compensate for these limitations to Adjusted
EBITDA by relying primarily on its GAAP results and using Adjusted
EBITDA only for supplemental purposes. Adjusted EBITDA includes
adjustments for items that may not occur in future periods.
However, we believe these adjustments are appropriate because the
amounts recognized can vary significantly from period to period, do
not directly relate to the ongoing operations of our business and
complicate comparisons of our internal operating results and
operating results of other peer companies over time. For example,
it is useful to exclude non-cash, stock-based compensation expenses
because the amount of such expenses in any specific period may not
directly correlate to the underlying performance of our business
operations and these expenses can vary significantly across periods
due to timing of new stock-based awards. We may also exclude
certain discrete, unusual, one-time, or non-cash costs, including
transaction costs and the income tax impact of adjustments in order
to facilitate a more useful period-over-period comparison of its
financial performance. Each of the normal recurring adjustments and
other adjustments described in this paragraph help management with
a measure of our operating performance over time by removing items
that are not related to day-to-day operations or are non-cash
expenses.
Phunware,
Inc.Reconciliation of GAAP to Non-GAAP Financial
Measures(In thousands)(Unaudited)
|
|
Year Ended December 31, |
|
|
|
2018 |
|
|
2017 |
|
|
|
|
|
Net loss |
|
$ |
(9,803) |
|
|
$ |
(25,938) |
|
Add back: Depreciation and amortization |
|
|
434 |
|
|
|
1,438 |
|
Add back: Interest expense |
|
|
724 |
|
|
|
397 |
|
Less: Income tax benefit |
|
|
(374) |
|
|
|
(88) |
|
EBITDA |
|
|
(9,019) |
|
|
|
(24,191) |
|
Add Back: Stock-based compensation |
|
|
450 |
|
|
|
118 |
|
Adjusted EBITDA |
|
$ |
(8,569) |
|
|
$ |
(24,073) |
|
Phunware,
Inc.Supplemental Information(In
thousands, except percentages)(Unaudited)
|
|
Year Ended December 31, |
|
|
Change |
|
|
|
2018 |
|
|
2017 |
|
|
Amount |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
|
|
|
|
|
|
|
|
Platform
subscriptions and services |
|
$ |
19,409 |
|
|
$ |
16,488 |
|
|
$ |
2,921 |
|
|
|
17.7% |
|
Application transaction |
|
|
11,474 |
|
|
|
10,234 |
|
|
|
1,240 |
|
|
|
12.1% |
|
Total
revenue |
|
$ |
30,883 |
|
|
$ |
26,722 |
|
|
$ |
4,161 |
|
|
|
15.6% |
|
Platform subscriptions and services as a percentage of total
revenue |
|
|
62.8% |
|
|
|
61.7% |
|
|
|
|
|
|
|
|
|
Application transactions as a percentage of total revenue |
|
|
37.2% |
|
|
|
38.3% |
|
|
|
|
|
|
|
|
|
PR & Media Inquiries:Sarah
Miller smiller@axis-entertainment.comT: (310) 276-2220
Investor Relations:Phunware,
Inc.investorrelations@phunware.comT: (512) 693-4199
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