Phunware, Inc. (“Phunware” or the “Company”) (NASDAQ: PHUN), a
leader in enterprise cloud solutions for mobile applications,
announces its financial results for the quarter ended September 30,
2024.
Financial Highlights
- Steady progress in reducing net loss; Net loss from continuing
operations was $2.8 million, or ($0.25) per share, for Q3 2024, as
compared to a net loss of $13.7 million, or ($5.72) per share, for
Q3 20231
- Net cash used in operating activities from continued operations
was $10.4 million for Q3 2024, as compared to $14.6 million for Q3
2023
- Year-to-date software and subscription bookings up 300% over
prior year
- Cash and cash equivalents as of September 30, 2024 was $35.5
million
- Subsequent to the end the third quarter and based on proceeds
from the Company’s use of the at-the-market (ATM) financing
facility, the Company’s cash and cash equivalents as of November 6,
2024 was approximately $110 million.
1 Based on 11.1
million weighted average shares outstanding as of September 30,
2024 and 2.4 million weighted shares outstanding as of September
30, 2023. Basic and diluted shares outstanding are the same
and all figures reflect the effectuation of a 50:1 reverse stock
split in February 2024
Recent Business Highlights
- Issued a Letter to Stockholders
- Appointed Stephen Chen as Interim CEO following the retirement
of former CEO Mike Snavely
- Appointed global technology and AI leader Rahul Mewawalla as
Chairman of the Board
- Signed a term sheet to acquire a controlling interest in
MyCanvass, LLC, which is currently indirectly majority owned and
controlled by Campaign Nucleus, a SaaS platform company founded by
Brad Parscale
Phunware Interim CEO Stephen Chen commented, “As
we look ahead, Phunware’s future direction is centered on
innovation that empowers both enterprises and public sector
entities to navigate the complexities of the digital age with
confidence and security. We are committed to helping companies and
federal agencies unlock the potential of AI in ways that support
their operational goals while safeguarding their proprietary data.
Our secure, localized AI frameworks will give our partners the
tools to apply generative AI without compromising control over
sensitive information. This approach reflects our dedication to
being a trusted ally across corporate and federal landscapes,
enabling sectors from healthcare and finance to national security
to leverage advanced capabilities that meet the highest standards
of security and compliance.
“Our expanded focus includes developing and
delivering AI-driven platforms that make real-time, on-demand
coordination and engagement accessible to organizations of all
sizes, allowing them to scale their efforts and achieve targeted
outcomes efficiently. Phunware’s commitment aligns with our broader
vision of supporting secure and transformative digital solutions
that meet the unique needs of government and corporate clients
alike. In the coming years, Phunware will continue to lead with
data integrity, operational excellence, and customer-centricity,
empowering our partners to achieve sustainable success in an era
where digital trust is paramount. Lastly, our CFO, Troy Reisner,
has made the decision step down from his position and depart
Phunware by November 30, 2024. I would like to thank Troy for his
service to Phunware and acknowledge his pivotal role in leading the
financial side of our Company, including our capital markets
programs, during his tenure and we wish him the best,” Mr. Chen
concluded.
Third Quarter 2024 Earnings Conference
Call
Phunware management will host a live conference
call today at 4:30 p.m. ET to review financial results and provide
an update on corporate developments. Following management’s formal
remarks, there will be a question-and-answer session.
To listen to the conference call, interested
parties within the U.S. should dial 1-888-506-0062 (domestic) or
973-528-0011 (international). All callers should dial in
approximately 10 minutes prior to the scheduled start time and use
Participant Access Code 704558 to be joined into the Phunware
conference call.
The conference call will also be available
through a live webcast that can be accessed at Phunware 3Q24
Earnings Webcast. A webcast earnings call replay will be
available approximately one hour after the live call until November
7, 2025 with this same weblink.
A telephonic replay of the call will be
available until November 21, 2024 by dialing 1-877-481-4010 (or
919-882-2331 for international callers) and using replay access
code 51482.
About Phunware
Phunware, Inc. (NASDAQ: PHUN) is an enterprise software company
specializing in mobile app solutions with integrated intelligent
capabilities. We provide businesses with the tools to create,
implement, and manage custom mobile applications, analytics,
digital advertising, and location-based services. Phunware is
transforming mobile engagement by delivering scalable,
personalized, and data-driven mobile app experiences.
Phunware’s mission is to achieve unparalleled connectivity and
monetization through widespread adoption of Phunware mobile
technologies, leveraging brands, consumers, partners, digital asset
holders, and market participants. Phunware is poised to expand its
software products and services audience through its new platform,
utilize and monetize its patents and other intellectual property,
and reintroduce its digital asset ecosystem for existing holders
and new market participants.
For more information on Phunware, please visit www.phunware.com.
To better understand and leverage generative AI and Phunware’s
mobile app technologies, visit https://ai.phunware.com/advocacy
Safe Harbor / 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. For example, Phunware is using forward-looking
statements when it discusses the proposed offering and the timing
and terms of such offering and its intended use of proceeds from
such offering should it occur.
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 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.
Investor Relations Contact:
Chris Tyson, Executive Vice PresidentMZ Group - MZ North
America949-491-8235 PHUN@mzgroup.uswww.mzgroup.us
Phunware Media Contact:
Joe McGurk, Managing Director 917-259-6895PHUN@mzgroup.us
Financial Tables Follow
Phunware, Inc. |
Condensed Consolidated Balance Sheets |
(In thousands, except share and per share
information) |
|
|
September 30, |
|
|
December 31, |
|
|
2024 |
|
|
2023 |
|
Assets: |
(Unaudited) |
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
$ |
35,537 |
|
|
$ |
3,934 |
|
Accounts receivable, net of allowance for doubtful accounts of $118
and $86 as of September 30, 2024 and December 31, 2023,
respectively |
|
1,078 |
|
|
|
550 |
|
Digital currencies |
|
19 |
|
|
|
75 |
|
Prepaid expenses and other current assets |
|
3,133 |
|
|
|
374 |
|
Current assets of discontinued operation |
|
- |
|
|
|
28 |
|
Total current assets |
|
39,767 |
|
|
|
4,961 |
|
Property and equipment, net |
|
27 |
|
|
|
40 |
|
Right-of-use asset |
|
943 |
|
|
|
1,451 |
|
Other assets |
|
276 |
|
|
|
276 |
|
Total assets |
$ |
41,013 |
|
|
$ |
6,728 |
|
|
|
|
|
|
|
Liabilities and
stockholders' equity |
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Accounts payable |
$ |
4,776 |
|
|
$ |
7,836 |
|
Accrued expenses |
|
3,005 |
|
|
|
437 |
|
Lease liability |
|
339 |
|
|
|
629 |
|
Deferred revenue |
|
1,153 |
|
|
|
1,258 |
|
PhunCoin subscription payable |
|
1,202 |
|
|
|
1,202 |
|
Debt |
|
- |
|
|
|
4,936 |
|
Current liabilities of discontinued operation |
|
- |
|
|
|
205 |
|
Total current liabilities |
|
10,475 |
|
|
|
16,503 |
|
|
|
|
|
|
|
Deferred revenue |
|
713 |
|
|
|
651 |
|
Lease liability |
|
700 |
|
|
|
1,031 |
|
Total liabilities |
|
11,888 |
|
|
|
18,185 |
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
Stockholders' equity
(deficit) |
|
|
|
|
|
Common stock, $0.0001 par
value; 1,000,000,000 shares
authorized; 11,748,780 shares issued
and 11,738,650 shares outstanding as of September 30,
2024; and 3,861,578 shares issued
and 3,851,448 shares outstanding as of December 31,
2023 |
|
1 |
|
|
|
- |
|
Treasury stock at cost; 10,130 shares as of September 30, 2024 and
December 31, 2023 |
|
(502 |
) |
|
|
(502 |
) |
Additional paid-in capital |
|
340,731 |
|
|
|
292,467 |
|
Accumulated other comprehensive loss |
|
(418 |
) |
|
|
(418 |
) |
Accumulated deficit |
|
(310,687 |
) |
|
|
(303,004 |
) |
Total stockholders' equity (deficit) |
|
29,125 |
|
|
|
(11,457 |
) |
Total liabilities and
stockholders' equity (deficit) |
$ |
41,013 |
|
|
$ |
6,728 |
|
|
|
|
|
|
|
|
|
Phunware, Inc. |
Condensed Consolidated Statements of Operations and
Comprehensive Loss |
(In thousands, except share and per share
information) |
(Unaudited) |
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
September 30, |
|
|
September 30, |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
Net revenues |
$ |
665 |
|
|
$ |
1,252 |
|
|
$ |
2,597 |
|
|
$ |
3,892 |
|
Cost of revenues |
|
343 |
|
|
|
621 |
|
|
|
1,281 |
|
|
|
2,651 |
|
Gross profit |
|
322 |
|
|
|
631 |
|
|
|
1,316 |
|
|
|
1,241 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing |
|
619 |
|
|
|
839 |
|
|
|
1,671 |
|
|
|
2,837 |
|
General and administrative |
|
2,281 |
|
|
|
2,985 |
|
|
|
7,051 |
|
|
|
11,397 |
|
Research and development |
|
612 |
|
|
|
1,042 |
|
|
|
1,592 |
|
|
|
4,023 |
|
Impairment of goodwill |
|
- |
|
|
|
9,043 |
|
|
|
- |
|
|
|
9,043 |
|
Total operating expenses |
|
3,512 |
|
|
|
13,909 |
|
|
|
10,314 |
|
|
|
27,300 |
|
Operating loss |
|
(3,190 |
) |
|
|
(13,278 |
) |
|
|
(8,998 |
) |
|
|
(26,059 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
(10 |
) |
|
|
(264 |
) |
|
|
(126 |
) |
|
|
(1,354 |
) |
Interest income |
|
381 |
|
|
|
- |
|
|
|
760 |
|
|
|
- |
|
Gain (loss) on extinguishment of debt |
|
- |
|
|
|
(237 |
) |
|
|
535 |
|
|
|
(237 |
) |
Gain on sale of digital currencies |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
5,310 |
|
Other income, net |
|
59 |
|
|
|
62 |
|
|
|
146 |
|
|
|
497 |
|
Total other income
(expense) |
|
430 |
|
|
|
(439 |
) |
|
|
1,315 |
|
|
|
4,216 |
|
Loss before taxes |
|
(2,760 |
) |
|
|
(13,717 |
) |
|
|
(7,683 |
) |
|
|
(21,843 |
) |
Income tax expense |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Net loss from continuing
operations |
|
(2,760 |
) |
|
|
(13,717 |
) |
|
|
(7,683 |
) |
|
|
(21,843 |
) |
Net loss from discontinued
operation |
|
- |
|
|
|
(5,262 |
) |
|
|
- |
|
|
|
(7,929 |
) |
Net loss |
|
(2,760 |
) |
|
|
(18,979 |
) |
|
|
(7,683 |
) |
|
|
(29,772 |
) |
Other comprehensive loss
(income) |
|
|
|
|
|
|
|
|
|
|
|
Cumulative translation
adjustment |
|
- |
|
|
|
(37 |
) |
|
|
- |
|
|
|
9 |
|
Comprehensive loss |
$ |
(2,760 |
) |
|
$ |
(19,016 |
) |
|
$ |
(7,683 |
) |
|
$ |
(29,763 |
) |
Net loss from continuing
operations per share, basic and diluted |
$ |
(0.25 |
) |
|
$ |
(5.72 |
) |
|
$ |
(0.88 |
) |
|
$ |
(9.98 |
) |
Net loss from discontinued
operations per share, basic and diluted |
$ |
- |
|
|
$ |
(2.19 |
) |
|
$ |
- |
|
|
$ |
(3.62 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares used
to compute net loss per share, basic and diluted |
|
11,104,174 |
|
|
|
2,398,873 |
|
|
|
8,755,908 |
|
|
|
2,188,101 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Phunware, Inc. |
Condensed Consolidated Statements of Cash
Flows |
(In thousands) |
(Unaudited) |
|
|
Nine Months Ended |
|
|
September 30, |
|
|
2024 |
|
|
2023 |
|
Operating
activities |
|
|
|
|
|
Net loss |
$ |
(7,683 |
) |
|
$ |
(29,772 |
) |
Net loss from discontinued operation |
|
- |
|
|
|
(7,929 |
) |
Net loss from continuing operations |
|
(7,683 |
) |
|
|
(21,843 |
) |
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
|
Gain on sale of digital assets |
|
- |
|
|
|
(5,310 |
) |
Gain (loss) on extinguishment of debt |
|
(535 |
) |
|
|
237 |
|
Impairment of goodwill |
|
- |
|
|
|
9,043 |
|
Stock based compensation |
|
1,532 |
|
|
|
3,662 |
|
Other adjustments |
|
653 |
|
|
|
1,383 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
Accounts receivable |
|
(561 |
) |
|
|
(189 |
) |
Prepaid expenses and other assets |
|
(2,759 |
) |
|
|
198 |
|
Accounts payable and accrued expenses |
|
(457 |
) |
|
|
(349 |
) |
Lease liability payments |
|
(560 |
) |
|
|
(761 |
) |
Deferred revenue |
|
(43 |
) |
|
|
(625 |
) |
Net cash used in operating activities from continued
operations |
|
(10,413 |
) |
|
|
(14,554 |
) |
Net cash used in operating activities from discontinued
operations |
|
(177 |
) |
|
|
(1,315 |
) |
Net cash used in operating activities |
|
(10,590 |
) |
|
|
(15,869 |
) |
Investing
activities |
|
|
|
|
|
Proceeds received from sale of digital currencies |
|
- |
|
|
|
15,390 |
|
Net cash provided by investing activities - continuing
operations |
|
- |
|
|
|
15,390 |
|
Net cash used in investing activities - discontinued operation |
|
- |
|
|
|
(7 |
) |
Net cash provided by investing activities |
|
- |
|
|
|
15,383 |
|
Financing
activities |
|
|
|
|
|
Payments on borrowings |
|
- |
|
|
|
(5,056 |
) |
Proceeds from sales of common stock, net of issuance costs |
|
42,193 |
|
|
|
6,879 |
|
Proceeds from exercise of options to purchase common stock |
|
- |
|
|
|
58 |
|
Payments on stock repurchases |
|
- |
|
|
|
(502 |
) |
Net cash provided by financing activities |
|
42,193 |
|
|
|
1,379 |
|
|
|
|
|
|
|
Effect of exchange rate on cash |
|
- |
|
|
|
9 |
|
Net increase in cash and restricted cash |
|
31,603 |
|
|
|
902 |
|
Cash and cash equivalents at the beginning of the period |
|
3,934 |
|
|
|
1,955 |
|
Cash and cash equivalents at the end of the period |
$ |
35,537 |
|
|
$ |
2,857 |
|
|
|
|
|
|
|
Supplemental
disclosure of cash flow information |
|
|
|
|
|
Interest paid |
$ |
22 |
|
|
$ |
1,140 |
|
Income taxes paid |
$ |
40 |
|
|
$ |
- |
|
Supplemental disclosures of non-cash financing
activities: |
|
|
|
|
|
Issuance of common stock upon conversion of the 2022 Promissory
Note |
$ |
4,505 |
|
|
$ |
800 |
|
Issuance of common stock for payment of bonuses and consulting
fees |
$ |
35 |
|
|
$ |
379 |
|
Non-cash exchange of digital assets |
$ |
- |
|
|
$ |
557 |
|
Issuance of common stock under the 2018 Employee Stock Purchase
Plan, previously accrued |
$ |
- |
|
|
$ |
47 |
|
|
|
|
|
|
|
|
|
Non-GAAP Financial Measures and
Reconciliation
Non-GAAP financial measures should be considered in addition to,
not as a substitute for, or superior to, financial measures
calculated in accordance with GAAP. They are not measurements of
our financial performance under GAAP and should not be considered
as alternatives to revenue or net 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.
Our non-GAAP financial measures 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) our non-GAAP financial measures do not reflect the
impact of certain charges resulting from matters we consider not to
be indicative of ongoing operations, and (iii) other companies in
our industry may calculate our non-GAAP financial measures
differently than we do, limiting their usefulness as comparative
measures.
We compensate for these limitations to our non-GAAP financial
measures by relying primarily on our GAAP results and using our
non-GAAP financial measures only for supplemental purposes. Our
non-GAAP financial measures 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.
Reconciliation of GAAP to Non-GAAP Financial
Measures |
(In thousands) |
|
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
(in thousands) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
Net loss from continuing operations |
|
$ |
(2,760 |
) |
|
$ |
(13,717 |
) |
|
$ |
(7,683 |
) |
|
$ |
(21,843 |
) |
Add back: Depreciation |
|
|
4 |
|
|
|
21 |
|
|
|
12 |
|
|
|
63 |
|
Add back: Interest expense |
|
|
10 |
|
|
|
264 |
|
|
|
126 |
|
|
|
1,354 |
|
Less: Interest income |
|
|
(381 |
) |
|
|
- |
|
|
|
(760 |
) |
|
|
- |
|
EBITDA |
|
|
(3,127 |
) |
|
|
(13,432 |
) |
|
|
(8,305 |
) |
|
|
(20,426 |
) |
Add back: Stock-based compensation |
|
|
242 |
|
|
|
838 |
|
|
|
1,532 |
|
|
|
3,662 |
|
Add back/less: Loss (gain) on extinguishment of debt |
|
|
- |
|
|
|
237 |
|
|
|
(535 |
) |
|
|
237 |
|
Add back: Impairment of goodwill |
|
|
- |
|
|
|
9,043 |
|
|
|
- |
|
|
|
9,043 |
|
Less: Gain on sale of digital assets |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(5,310 |
) |
Adjusted EBITDA |
|
$ |
(2,885 |
) |
|
$ |
(3,314 |
) |
|
$ |
(7,308 |
) |
|
$ |
(12,794 |
) |
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