Phunware Announces 2019 Financial Results
AUSTIN, Texas--(BUSINESS WIRE)-- Phunware, Inc. (NASDAQ: PHUN) (the “Company”), a fully-integrated enterprise cloud platform for mobile that provides products, solutions, data and services for brands worldwide, today announced financial results for its fiscal year ended December 31, 2019, and provided an update on recent business developments.
“Today we are pleased to share our trailing financial results for the Company, which included a dramatic year-over-year revenue transformation from one-time, non-recurring application transactions revenue to annual and multi-year recurring platform subscriptions and services revenue tied to the licensing and use of our Multiscreen-as-a-Service (MaaS) enterprise cloud platform for mobile,” said Alan S. Knitowski, President, CEO and Co-Founder of Phunware. ”More importantly, and specific to the subsequent events and recent operational actions taken to address our go-forward business activities while the ongoing COVID-19 coronavirus pandemic continues to unfold worldwide, we have announced a $3 million structured debt financing to address our balance sheet and a furlough of 37 Phunware employees to address our cost structure during the existing governmental stay-in-place orders unique to our business facilities and operations in Central Texas, Southern California and Southern Florida.”
Full Year 2019 Financial Highlights
- Net revenues for the year totaled $19.2 million
- Platform subscriptions and services revenue were $17.2 million
- Gross margin was 52.9%
- Net loss was ($12.9) million
- Net loss per share was ($0.35)
- Non-GAAP adjusted EBITDA loss was ($10.2) million
“While we are releasing our full year financial results for last year as part of today’s announcement and filing requirements, our executive team, board and staff are extremely hyper-focused on our existing and pending activities for the current and future quarters in light of the realities that we and all other businesses face with the unknown macro and operating environment unique to COVID-19,” said Matt Aune, CFO of Phunware. “We are executing against our existing customer contracts and are aggressively pursuing new business opportunities where our mobile, cloud, big data and remote expertise intersects directly with the needs of our Fortune 1000 customers, including remote telehealth and telemedicine triage for healthcare patient capacity management, virtual rallies for political advocacy during a Presidential election year, remote work optimization for corporate campuses and social distance policy enforcement, communications and people and asset tracking for smart cities and government organizations at the local, state and federal level alike.”
Recent Business Highlights and Announcements
-
Notable Strategic Announcements:
- Launched a National Ventilator Registry for Critical Medical Equipment Tracking in Response to COVID-19 Coronavirus Pandemic
- Announced a $3M Structured Financing Transaction for Issuance of Senior Convertible Notes
-
Notable Customer and Partner Wins:
- Drove Digital Transformation for Global Destination Casino Resorts Operator
- Added Two Pediatric Healthcare Customers for Digital Front Door Deployments on Mobile
- Added First National Railway Customer for Mobile Corporate Campus Solution
- Partnered with Cisco Systems to Demonstrate Integrated Mobile Corporate Campus Solution at South by Southwest 2020
- Cisco Meraki Launched Phunware Location Based Services in Meraki Marketplace
- Added Top US Cancer Center as Mobile Digital Front Door Customer
- Announced New Customer Wins for Application Transactions
- Added One of the Nation’s Largest Health Systems to Enable Digital Front Door Deployments on Mobile
- Received AVIA’s Badge for Digital Front Door Mobile App
-
Product Updates:
- Released Enhancements to Location Based Services Sample Code
- Launched Landmark Routing Functionality to Location Based Services
- Announced 2019 Product Deliveries and 2020 Roadmap for Multiscreen as a Service Platform
- Released New User Activity Audiences Capability to its Multiscreen as a Service Platform
- Announced 2019 Phun Ecosystem Deliveries and 2020 Roadmap
- Announced Knowledge Graph and Data Exchange Yield Strong Results for Ten Million User Mobile Application Portfolio
-
Board and Advisory Board Appointments:
- Appointed Blythe Masters as Phunware Board Chair
- Appointed Wavemaker Partners’ Eric Manlunas to Board of Directors
- Appointed Wall Street Veteran Blythe Masters to Board of Directors
- Appointed Former CEO of T. Rowe Price's Global Investment Services Todd Ruppert to Advisory Board
- Appointed Wikipedia Co-Founder Larry Sanger to Advisory Board
-
Conferences and Events:
- Presented at Austin’s Small Business Expo
- Phunware’s Executive Team Attended CES 2020 in Las Vegas
Transcript Information
A transcript will be made available today at 1:30pm Pacific / 3:30pm Central / 4:30pm Eastern discussing the Company’s financial results, product announcements and business highlights. The transcript will be accessible on the Phunware Investor Relations website at investors.phunware.com.
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 and intends to continue to use its Investor Relations website as a means of disclosing material nonpublic information and for complying with its disclosure obligations under Regulation FD. Accordingly, investors should monitor the Company’s Investor Relations website, in addition to following the Company’s press releases, SEC filings, public conference calls, presentations 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), an award-winning, 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, loyalty (PhunCoin & Phun) and analytics, 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, 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, www.phuntoken.com, and follow @phunware, @phuncoin and @phuntoken on all social media platforms.
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Phunware, Inc.
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December 31,
|
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December 31,
|
|||||
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Assets |
|
|
|
|||||
|
Current assets: |
|
|
|
|||||
|
Cash |
$ |
276 |
|
|
|
$ |
844 |
|
|
Accounts receivable, net |
1,671 |
|
|
|
3,606 |
|
||
|
Prepaid expenses and other current assets |
368 |
|
|
|
272 |
|
||
|
Total current assets |
2,315 |
|
|
|
4,722 |
|
||
|
|
|
|
|
|||||
|
Property and equipment, net |
24 |
|
|
|
66 |
|
||
|
Goodwill |
25,857 |
|
|
|
25,821 |
|
||
|
Intangible assets, net |
253 |
|
|
|
521 |
|
||
|
Deferred tax asset – long term |
241 |
|
|
|
64 |
|
||
|
Restricted cash |
86 |
|
|
|
5,500 |
|
||
|
Other assets |
276 |
|
|
|
187 |
|
||
|
Total assets |
$ |
29,052 |
|
|
|
$ |
36,881 |
|
|
|
|
|
|
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Liabilities, redeemable convertible preferred stock, and stockholders’ equity |
|
|
|
|||||
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Current liabilities: |
|
|
|
|||||
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Accounts payable |
$ |
10,159 |
|
|
|
$ |
9,890 |
|
|
Accrued expenses and other |
4,035 |
|
|
|
3,028 |
|
||
|
Deferred revenue |
3,360 |
|
|
|
2,629 |
|
||
|
PhunCoin deposits |
1,202 |
|
|
|
— |
|||
|
Factored receivables payable |
1,077 |
|
|
|
2,434 |
|
||
|
Short term notes payable – related party |
— |
|
|
1,993 |
|
|||
|
Total current liabilities |
19,833 |
|
|
|
19,974 |
|
||
|
|
|
|
|
|||||
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Debt |
1,105 |
|
|
|
— |
|||
|
Deferred tax liability |
241 |
|
|
|
64 |
|
||
|
Deferred revenue |
3,764 |
|
|
|
5,622 |
|
||
|
Deferred rent |
83 |
|
|
|
17 |
|
||
|
Total liabilities |
25,026 |
|
|
|
25,677 |
|
||
|
|
|
|
|
|||||
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Commitments and contingencies |
|
|
|
|
||||
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Redeemable convertible preferred stock, $0.0001 par value |
— |
|
|
5,377 |
|
|||
|
|
|
|
|
|||||
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Stockholders’ equity |
|
|
|
|||||
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Common stock, $0.0001 par value |
4 |
|
|
|
3 |
|
||
|
Additional paid-in capital |
128,008 |
|
|
|
118,062 |
|
||
|
Accumulated other comprehensive loss |
(382 |
) |
|
|
(418 |
) |
||
|
Accumulated deficit |
(123,604 |
) |
|
|
(111,820 |
) |
||
|
Total stockholders’ equity |
4,026 |
|
|
|
5,827 |
|
||
|
Total liabilities, redeemable convertible preferred stock, and stockholders’ equity |
$ |
29,052 |
|
|
|
$ |
36,881 |
|
|
Phunware, Inc.
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Year Ended December 31, |
||||||
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|
2019 |
|
2018 |
||||
|
Net revenues |
$ |
19,150 |
|
|
$ |
30,883 |
|
|
Cost of revenues |
9,020 |
|
|
11,802 |
|
||
|
Gross profit |
10,130 |
|
|
19,081 |
|
||
|
Operating expenses: |
|
|
|
||||
|
Sales and marketing |
2,706 |
|
|
5,417 |
|
||
|
General and administrative |
15,403 |
|
|
13,562 |
|
||
|
Research and development |
4,333 |
|
|
6,965 |
|
||
|
Total operating expenses |
22,442 |
|
|
25,944 |
|
||
|
Operating loss |
(12,312 |
) |
|
(6,863 |
) |
||
|
Other income (expense): |
|
|
|
||||
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Interest expense |
(581 |
) |
|
(724 |
) |
||
|
Fair value adjustment for warrant liabilities |
— |
|
(54 |
) |
|||
|
Impairment of digital currencies |
— |
|
(334 |
) |
|||
|
Other income (expense) |
27 |
|
|
(2,202 |
) |
||
|
Total other expense |
(554 |
) |
|
(3,314 |
) |
||
|
Loss before taxes |
(12,866 |
) |
|
(10,177 |
) |
||
|
Income tax (provision) benefit |
(5 |
) |
|
374 |
|
||
|
Net loss |
(12,871 |
) |
|
(9,803 |
) |
||
|
Cumulative translation adjustment |
36 |
|
|
(71 |
) |
||
|
Comprehensive loss |
$ |
(12,835 |
) |
|
$ |
(9,874 |
) |
|
|
|
|
|
||||
|
Loss per share, basic and diluted |
$ |
(0.35 |
) |
|
$ |
(0.38 |
) |
|
|
|
|
|
||||
|
Weighted-average common shares used to compute loss per share, basic and diluted |
36,879 |
|
|
25,556 |
|
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Phunware, Inc.
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Year Ended December 31, |
|||||||
|
|
2019 |
|
2018 |
|||||
|
Operating activities |
|
|
|
|||||
|
Net loss |
$ |
(12,871 |
) |
|
$ |
(9,803 |
) |
|
|
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
|||||
|
Depreciation |
59 |
|
|
62 |
|
|||
|
Loss on sale of digital currencies |
4 |
|
|
21 |
|
|||
|
Bad debt expense |
114 |
|
|
167 |
|
|||
|
Amortization of acquired intangibles |
268 |
|
|
372 |
|
|||
|
Change in fair value of warrants |
— |
|
1,329 |
|
||||
|
Impairment of digital currencies |
— |
|
334 |
|
||||
|
Stock-based compensation |
1,784 |
|
|
450 |
|
|||
|
Deferred income taxes |
— |
|
(387 |
) |
||||
|
Changes in operating assets and liabilities: |
|
|
|
|||||
|
Accounts receivable |
1,817 |
|
|
2,439 |
|
|||
|
Prepaid expenses and other assets |
184 |
|
|
15 |
|
|||
|
Accounts payable |
740 |
|
|
4,156 |
|
|||
|
Accrued expenses |
1,133 |
|
|
(5,789 |
) |
|||
|
Deferred revenue |
581 |
|
|
42 |
|
|||
|
Net cash used by operating activities |
(6,187 |
) |
|
(6,592 |
) |
|||
|
|
|
|
|
|||||
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Investing activities |
|
|
|
|||||
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Proceeds received from sale of digital currencies |
88 |
|
|
913 |
|
|||
|
Payments for note receivable |
— |
|
(536 |
) |
||||
|
Capital expenditures |
(18 |
) |
|
— |
||||
|
Net cash provided by investing activities |
70 |
|
|
377 |
|
|||
|
|
|
|
|
|||||
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Financing activities |
|
|
|
|||||
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Proceeds from convertible notes |
1,105 |
|
|
— |
||||
|
Proceeds from PhunCoin deposits |
212 |
|
|
— |
||||
|
Net (repayments) proceeds from factoring agreement |
(1,357 |
) |
|
618 |
|
|||
|
Proceeds from common stock subscriptions, net of issuance costs |
— |
|
5,448 |
|
||||
|
Proceeds from warrant exercises |
6,092 |
|
|
— |
||||
|
Proceeds from exercise of options to purchase common stock |
287 |
|
|
152 |
|
|||
|
(Redemptions, dividend payments) and issuances of Series A convertible preferred stock |
(6,240 |
) |
|
6,000 |
|
|||
|
Proceeds from Business Combination |
— |
|
98 |
|
||||
|
Net cash provided for financing activities |
99 |
|
|
12,316 |
|
|||
|
|
|
|
|
|||||
|
Effect of exchange rate on cash and restricted cash |
36 |
|
|
(65 |
) |
|||
|
Net (decrease) increase in cash and restricted cash |
(5,982 |
) |
|
6,036 |
|
|||
|
Cash and restricted cash at the beginning of the period |
6,344 |
|
|
308 |
|
|||
|
Cash and restricted cash at the end of the period |
$ |
362 |
|
|
$ |
6,344 |
|
|
|
|
|
|
|
|||||
|
Supplemental disclosure of cash flow information |
|
|
|
|||||
|
Interest paid |
$ |
603 |
|
|
$ |
712 |
|
|
|
Common stock issuances from subscription payable |
$ |
— |
|
$ |
3,243 |
|
||
|
Warrants issued in conjunction with Reverse Merger and Recapitalization |
$ |
— |
|
$ |
1,106 |
|
||
|
Issuance of common stock for payment of bonus and legal fees |
$ |
562 |
|
|
$ |
— |
||
|
Waiver of sponsor promissory note originally issued in conjunction with Reverse Merger and Recapitalization |
$ |
1,993 |
|
|
$ |
— |
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Non-GAAP Financial Measures and Reconciliation
Adjusted Net Revenues and 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 net revenues 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 Net Revenues and Adjusted EBITDA have limitations as analytical tools 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 Net Revenues and Adjusted EBITDA do 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 Net Revenues or Adjusted EBITDA differently than we do, limiting their usefulness as comparative measures.
We compensate for these limitations to Adjusted Net Revenues and Adjusted EBITDA by relying primarily on its GAAP results and using Adjusted Net Revenues and Adjusted EBITDA only for supplemental purposes. Adjusted Net Revenues and Adjusted EBITDA include 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.
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Phunware, Inc.
|
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Year Ended December 31, |
|||||
|
|
2019 |
|
2018 |
|||
|
|
(in thousands) |
|||||
|
Net revenues |
$ |
19,150 |
|
$ |
30,883 |
|
|
Less: One-time revenue adjustments |
— |
|
(8,428 |
) |
||
|
Adjusted net revenues |
$ |
19,150 |
|
$ |
22,455 |
|
|
|
Year Ended December 31, |
||||||
|
|
2019 |
|
2018 |
||||
|
|
(in thousands) |
||||||
|
Net loss |
$ |
(12,871 |
) |
|
$ |
(9,803 |
) |
|
Add back: Depreciation and amortization |
328 |
|
|
434 |
|
||
|
Add back: Interest expense |
581 |
|
|
724 |
|
||
|
Add back/less: Income tax (expense) benefit |
5 |
|
|
(374 |
) |
||
|
EBITDA |
(11,957 |
) |
|
(9,019 |
) |
||
|
Less: One-time revenue adjustments |
— |
|
(8,428 |
) |
|||
|
Add Back: Stock-based compensation |
1,784 |
|
|
450 |
|
||
|
Adjusted EBITDA |
$ |
(10,173 |
) |
|
$ |
(16,997 |
) |
|
Phunware, Inc.
|
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|
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|
|
Year Ended December 31, |
|||||
|
|
|
2019 |
|
2018 |
|||
|
|
|
(in thousands) |
|||||
|
Platform subscription and services |
|
$ |
17,243 |
|
$ |
19,409 |
|
|
Less: One-time revenue adjustments |
|
|
- |
|
|
(2,106 |
) |
|
Adjusted platform subscription and services |
|
$ |
17,243 |
|
$ |
17,303 |
|
|
Application transactions |
|
$ |
1,907 |
|
$ |
11,474 |
|
|
Less: One-time revenue adjustments |
|
|
- |
|
|
(6,322 |
) |
|
Adjusted application transactions |
|
$ |
1,907 |
|
$ |
5,152 |
|
|
Net revenues |
|
$ |
19,150 |
|
$ |
30,883 |
|
|
Less: One-time revenue adjustments |
|
|
- |
|
|
(8,428 |
) |
|
Adjusted net revenues |
|
$ |
19,150 |
|
$ |
22,455 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20200330005742/en/
PR & Media Inquiries:
Lauren Beaubien
lbeaubien@phunware.com
T: (303) 434-1133
Investor Relations:
Brendhan Botkin
bbotkin@phunware.com
T: (512) 394-6837
Source: Phunware, Inc.
Released March 30, 2020
