Phunware Announces First Quarter 2019 Financial Results

Revenue Growth and Strong Gross Margin Expansion Lead to Narrowed Net Loss per Share

AUSTIN, Texas--(BUSINESS WIRE)-- 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 its first quarter ended March 31, 2019, and provided an update on recent business developments.

First Quarter 2019 Financial Highlights

  • Net revenues increased 6.7% year-over-year to $5.3 million
  • Platform subscriptions and services revenue increased 20.4% year-over-year to $4.8 million
  • Gross profit margin was 50.8%, representing 8.4 percentage points higher than the prior year
  • Non-GAAP Adjusted EBITDA improved by $3.5 million to ($3.2) million, or 52.1% improvement over the prior year
  • Net loss per share improved $0.17 per share to ($0.12) compared to ($0.29), or 58.6% improvement year-over-year

“We are very excited with the financial performance underlying our first full quarter as a public company,” said Alan S. Knitowski, CEO and Co-Founder of Phunware. “Not only did we achieve continued revenue growth alongside strong gross margins and lower net losses in the first quarter, but we also established a positive backdrop for the second quarter as we anticipate launching our blockchain-enabled data exchange and mobile loyalty ecosystem in parallel with our new initiatives specific to patent licensing and intellectual property monetization.”

First Quarter 2019 Business Highlights

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 filings with the Securities and Exchange Commission (SEC), including our reports on Forms 10-K, 10-Q, 8-K and other filings that we make with the SEC from time to time. 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” in our SEC filings 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 Information

Phunware uses the investor relations section on its website,, as a means of complying with its disclosure obligations under Regulation FD. Accordingly, we recommend that investors should monitor the investor relations section on Phunware’s website in addition to following Phunware’s press releases, SEC filings, and public conference calls and webcasts.

About Phunware, Inc.

Everything You Need to Succeed on Mobile — Transforming Digital Human Experience

Phunware, Inc. (NASDAQ: PHUN) 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’s Software Development Kits (SDKs) include location-based services, mobile engagement, content management, messaging, advertising, analytics, loyalty and rewards (PhunCoin), as well as a mobile application framework of pre-integrated iOS and Android software modules for building in-house or channel-based mobile application and vertical solutions. Phunware helps the world’s most respected brands create category-defining mobile experiences. For more information about how Phunware is transforming the way consumers and brands interact with mobile in the virtual and physical worlds, visit and and follow @phunware and @phuncoin on all social media platforms.

Financial Results


Phunware, Inc.

Condensed Consolidated Balance Sheets

(In thousands, except per share information)

  March 31,   December 31,
2019 2018
Assets: (Unaudited)
Current assets:
Cash $ 1,065 $ 844
Accounts receivable, net 2,738 3,606
Prepaid expenses and other current assets   1,036     272  
Total current assets 4,839 4,722
Property and equipment, net 50 66
Goodwill 25,846 25,821
Intangible assets, net 448 521
Deferred tax asset – long term 64 64
Restricted Cash 5,500
Other assets   187     187  
Total assets $ 31,434   $ 36,881  
Liabilities, redeemable convertible preferred stock, and stockholders’ equity
Current liabilities:
Accounts payable $ 8,600 $ 9,890
Accrued expenses 2,968 3,028
Deferred revenue 2,904 2,629
Factored receivables payable 1,631 2,434
Short term notes payable - related party       1,993  
Total current liabilities 16,103 19,974
Deferred tax liability 64 64
Deferred revenue 4,447 5,622
Deferred rent   13     17  
Total liabilities   20,627     25,677  
Commitments and contingencies
Redeemable convertible preferred stock, $0.0001 par value 5,377
Stockholders’ equity
Common stock, $0.0001 par value 4 3
Additional paid in capital 125,421 118,062
Accumulated other comprehensive loss (391 ) (418 )
Accumulated deficit   (114,227 )   (111,820 )
Total stockholders’ equity   10,807     5,827  
Total liabilities, redeemable convertible preferred stock, and stockholders’ equity $ 31,434   $ 36,881  

Phunware, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except per share information)


  Three Months Ended
March 31,
2019   2018
Net revenues $ 5,315 $ 4,980
Cost of revenues   2,617     2,867  
Gross profit 2,698 2,113
Operating expenses:
Sales and marketing 724 1,919
General and administrative 3,975 4,488
Research and development   1,309     2,300  
Total operating expenses   6,008     8,707  
Operating loss (3,310 ) (6,594 )
Other income (expense):
Interest expense (188 ) (202 )
Fair value adjustment for warrant liabilities (54 )
Impairment of digital currencies (313 )
Other income (expense)   4     (1 )
Total other expense   (184 )   (570 )
Loss before taxes (3,494 ) (7,164 )
Income tax benefit        
Net loss (3,494 ) (7,164 )
Other comprehensive income
Cumulative translation adjustment   27     54  
Comprehensive loss $ (3,467 ) $ (7,110 )
Net loss per share, basic and diluted $ (0.12 ) $ (0.29 )
Weighted-average shares used to compute net loss per share, basic and diluted 30,264 24,952

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 Generally Accepted Accounting Principles in the United States (“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: (i) 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, (ii) Adjusted EBITDA does not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of ongoing operations, and (iii) 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. 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)



Three Months Ended
March 31,

2019 2018
Net loss $ (3,494 ) $ (7,164 )
Add back: Depreciation and amortization 91 124
Add back: Interest expense 188 202
Less: Income tax benefit   -     -  
EBITDA (3,215 ) (6,838 )
Add Back: Stock-based compensation   11     149  
Adjusted EBITDA $ (3,204 ) $ (6,689 )

Phunware, Inc.

Supplemental Information

(In thousands, except percentages)



Three Months Ended
March 31,

2019   2018 Amount   %
Platform subscriptions and services $ 4,821 $ 4,004 $ 817 20.4 %
Application transaction   494     976     (482 ) (49.4 )%
Total revenue $ 5,315 $ 4,980 $ 335 6.7 %
Platform subscriptions and services as a percentage of total revenue 90.7 % 80.4 %
Application transactions as a percentage of total revenue 9.3 % 19.6 %

PR & Media Inquiries:
Sarah Miller
T: 310 276.2220

Investor Relations:
Phunware, Inc.
T: 512 693.4199

Source: Phunware, Inc.