Phunware, Inc. (NASDAQ: PHUN), a number one cellular functions platform supplier, has introduced constructive monetary outcomes for the second quarter of 2024, demonstrating development and strategic developments. The corporate reported a ten% income improve from the primary quarter of 2024, reaching $1 million in Q2.
Notably, Phunware maintained a 100% buyer retention charge and noticed a considerable rise in buyer bookings, surpassing the whole bookings for the earlier 12 months. The corporate additionally highlighted a powerful money place of $20.4 million and a profitable capital elevate of $16.2 million in July.
Key Takeaways
- Phunware achieved $1 million in income for Q2 2024, a ten% improve from the earlier quarter.
- Buyer retention remained at 100%, with vital development in buyer bookings.
- Working bills decreased by 48.6% year-over-year, whereas gross revenue stayed constant.
- The corporate reported a web lack of $2.6 million for the quarter.
- Phunware has a stable money place of $20.4 million and raised further funds in July.
Firm Outlook
- The corporate is investing in gross sales and advertising efforts, increasing its group, and in search of partnerships with {industry} leaders.
- Plans are in place to discover potential mergers and acquisitions and spend money on analysis and growth to find new development markets.
Bearish Highlights
- Regardless of the constructive developments, Phunware reported a web lack of $2.6 million for Q2 2024.
Bullish Highlights
- The corporate is scaling expertise to bigger markets and is assured in its means to ship worth by software program innovation, cryptocurrency, and AI.
- Phunware is increasing into the conference market and strengthening its relationship with Gaylord Lodges.
Misses
- There have been no particular misses reported within the earnings name.
Q&A Highlights
- Phunware recognized roughly $7 million in whole contract worth and expects to transform a good portion into income.
- The implementation cycle for purchasers ranges from one week to 6 months, with a median of 30 to 45 days.
- The corporate is concentrating on one-to-many relationships to penetrate a number of properties concurrently and cut back the gross sales cycle time.
In abstract, Phunware’s Q2 2024 earnings name underscored the corporate’s monetary development, buyer retention success, and strategic initiatives geared toward increasing market attain. With a give attention to innovation and partnerships, Phunware is poised to discover new alternatives in software program, cryptocurrency, and AI, whereas strengthening its place within the conference market. Regardless of a web loss, the corporate’s lowered working bills and strong money reserves sign a constructive trajectory for the long run.
Full transcript – Phunware Inc (NASDAQ:) Q2 2024:
Operator: Girls and gents, thanks for standing by. Good afternoon, and welcome to the Phunware Second Quarter Convention Name. All members are in a listen-only mode. [Operator Instructions] Members of this name are suggested that the audio of this convention name is being broadcast reside over the web and can be being recorded for playback functions. A webcast replay of the decision shall be obtainable roughly one hour after the tip of the decision by August 8, 2025. I might now like to show the decision over to Joey Delahoussaye of Core IR, the corporate’s Investor Relations agency. Please go forward, sir.
Joey Delahoussaye: Thanks, operator. Good afternoon and thanks for collaborating in immediately’s convention name. Earlier this afternoon, the corporate launched its monetary outcomes for the quarter ended June 30, 2024. A replica of that press launch will be discovered on the corporate’s web site at www.phunware.com by choosing Buyers below the About tab from the company residence web page. Becoming a member of me on immediately’s earnings name from Phunware’s administration group are Mike Snavely, Chief Govt Officer; and Troy Reisner, Chief Monetary Officer. Throughout this name, administration shall be making forward-looking statements, together with statements that tackle Phunware’s expectations for future efficiency or operational outcomes. Ahead-looking statements contain dangers and different components that will trigger precise outcomes to vary materially from these statements. For extra details about these dangers, please consult with the danger components described in Phunware’s most lately filed annual report on Type 10-Ok and subsequent periodic experiences filed with the SEC and Phunware’s press launch that accompanies this name, significantly the cautionary statements in it. The content material of this name incorporates time-sensitive data that’s correct solely as of immediately, August 8, 2024. Besides as required by regulation, Phunware disclaims any obligation to publicly replace or revise any data to replicate occasions or circumstances that happen after this name. It’s now my pleasure to show the decision over to CEO, Mike Snavely.
Mike Snavely: Thanks, Joey, and good afternoon to everybody on the decision. Through the second quarter of 2024, we have continued constructing upon the momentum begun throughout our first quarter. In quarter two, we delivered 100% buyer retention, strengthened our bench of advisers throughout the hospitality sector and most lately turned a part of the Russell Microcap Index. Within the first half of 2024, our buyer bookings, that are signed contracts with shoppers that generate revenues over the course of the multiyear contract interval have already exceeded bookings for all of 2023 at the same time as we protect money by decreasing our group. This can be a testomony to the effectiveness and effectivity of our revamped gross sales group and our developed gross sales mannequin, which continues to drive a powerful and constant pipeline, together with over $7 million in new pipeline recognized thus far within the third quarter. As leaders within the cellular functions platform {industry}, I believe it is helpful to take a second and overview what units us aside. We offer location-based providers, content material administration, cellular engagement, viewers monetization and software analytics that assist our shoppers at each stage of cellular software life cycle administration. We assist companies create their superb cellular app, monetize their audiences and create hyper-personalized cellular experiences all within the curiosity of guaranteeing our shoppers’ clients absolutely make the most of their choices by cellular interactions. We have been on this enterprise for about 15 years, and we’re its pioneers. The Phunware platform is a completely built-in enterprise cloud for cellular gadgets that gives our shoppers with merchandise, options, information and providers essential to have interaction with our audiences globally and handle and monetize their cellular app portfolios globally and at scale. Our mannequin supplies a sooner time to market, requires much less funding of assets and technical experience and doesn’t require buyer administration and integrations. We create a white label product that’s absolutely brandable, industry-specific, configurable, and with reusable modules that supply over-the-air app updates for steady studying and testing with out App Retailer approvals. In contrast to different white label software providers, the Phunware software framework creates native functions that leverage device-specific capabilities similar to location applied sciences, sensors and working system particular design patterns and pointers. Due to the depth and scalability of our platform, we imagine there are various different industries that we are able to serve. Through the second quarter, we plan to start executing on parts of our go-forward methods to proceed our development and diversify our alternatives matrix. In our core markets, hospitality and well being care, we’ll prudently improve advertising spend and construct modern packages to drive consciousness and income. We’re additionally centered on hiring and making productive new account executives, whereas additionally partnering with {industry} leaders to succeed in further alternatives and to make Phunware on the prime of our prospect listing. Our resolution delivers robust ROI, which is driving new gross sales conversions and cementing the relationships with present clients, which results in that 100% buyer retention stat I discussed earlier. We’re additionally seeing curiosity from the operators of multi-property portfolios from regional resort locations to among the largest hospitality flags on the planet. Along with the natural development methods talked about above, we additionally intend to develop in hospitality and elsewhere by investing in M&A. We’re actively evaluating a number of potential transactions and will have bulletins shortly. To establish the following development markets, we’re investing in analysis and growth and anticipate to reclaim our crown as an innovation chief. This may end in enhancements to and extra makes use of for our core product providing. We envision constructing extra innovation capability round our group of proficient engineers and product managers by using close to and offshore engineering assets as wanted. We anticipate this focus to deliver forth new and differentiated merchandise to serve markets past hospitality and well being care. Now, I might like to show the decision over to Troy, who will overview our monetary ends in extra element. Troy?
Troy Reisner: Thanks, Mike and good afternoon everybody. I might wish to thanks for becoming a member of us immediately for a overview of our second quarter of 2024 monetary efficiency. As traditional, I will be discussing GAAP monetary measures until in any other case particularly famous. Our press launch, 8-Ok and web site present a reconciliation of all GAAP to non-GAAP monetary outcomes. As Mike indicated, a selected word is our bookings development. Bookings is a forward-looking metric that displays the dedication from our clients to pay Phunware cash for subscriptions and providers that we offer over time. Once we use the time period bookings, it would replicate the whole contract worth with the shopper that was executed throughout the interval outlined. Software program bookings in 2024 have elevated roughly 623% and 939% for the second quarter of 2024 and the 6-month interval then ended respectively as in comparison with the 2023 prior intervals. Revenues for the second quarter of 2024 had been $1 million, practically a ten% improve over the primary quarter of 2024. And for the 6-month interval ended June 30, 2024, revenues had been $1.9 million. The lower of roughly $0.7 million or 26.8% for the six months ended June 30, 2024 in comparison with the corresponding interval in 2023 was primarily attributable to a buyer breakage charge in 2023. Gross revenue for the three months ended June 30, 2024, was $470000, which is according to the prior 12 months interval. Gross revenue for the six months ended June 30, 2024 was $994000, a rise of roughly $400000 or 63% in comparison with the corresponding interval in 2023. Whole working bills for the three months ended June 30, 2024 had been $3.4 million, which represents a lower of over $3.2 million or 48.6% from the identical interval one 12 months in the past. For the six months ended June 30, 2024, working bills had been $6.8 million, which is a lower of $6.5 million or 49.2% from the identical interval ended June 30, 2023. On earlier calls, I shared the character of our focus areas and these working expense reductions have resulted from the brand new administration group’s execution of doing what we stated we’d do. Excluding noncash stock-based compensation of roughly $1.3 million from the 6-month interval in 2024, our month-to-month working expense run charge was roughly $930000 per 30 days, as in comparison with roughly $1.8 million per 30 days for the prior 12 months 6-month interval. As Mike famous above, we plan to start investing in gross sales and advertising, so we do anticipate a modest improve on this run charge over the again half of 2024. Web loss for the second quarter of 2024 was $2.6 million or a per share lack of $0.32 as in comparison with $6.5 million or a per share lack of $3.10 within the 12 months in the past quarter. The web loss for the six months ended June 30, 2024 was $4.9 million or a per share lack of $0.65 as in comparison with a web lack of $10.8 million or a per share lack of $5.18 from the identical interval in 2023. Our stability sheet stays robust. And as of June 30, we had money of $20.4 million. As well as, throughout July, we opportunistically added roughly $16.2 million of money by web proceeds from promoting roughly 2.7 million shares through our ATM. Our money place now supplies the knowledge and stability we have to navigate our path to profitability and to make the investments essential to speed up and maintain our development. That concludes my ready remarks and I might like to show the decision again over to Mike for any remaining feedback. Mike?
Mike Snavely: Thanks, Troy. As these numbers reveal, we’re diligently engaged on growing our foothold throughout the hospitality and well being care markets, whereas consciously controlling prices. I wish to take a second to acknowledge the great work of administration and the good group members who’ve helped to show round the way forward for Phunware. We now stay up for scaling the core of Phunware reaching new markets, creating new options and persevering with to innovate. I additionally want to acknowledge and thank our loyal shareholders who’ve entrusted us with the mantle to drive Phunware ahead. Thanks on your belief. We’re honored by it and are devoted to delivering lasting shareholder worth. Now, I might like to show the decision over to the operator, in order that we are able to start the question-and-answer session. Operator?
Operator: [Operator Instructions] Your first query comes from the road of Darren Aftahi of ROTH Capital. The road is open.
Unidentified Analyst: That is Dylan on for Darren. Thanks for taking my query. To start out Mike, while you speak about funding in R&D and a few new merchandise for different markets, may you perhaps speak about what precisely you want by way of technology-wise and why these different markets is likely to be totally different from the hospitality and resort fashion that you are going after proper now?
Mike Snavely: Certain sufficient, we have now constructed – I imply over the past 15 years actually an unlimited capability to ship cellular functions at scale globally. And we have now had that scale to 25 million concurrent customers and a video-on-demand streaming, context and in any other case all through the historical past of the corporate. What we’re seeking to do is to essentially level that terrific expertise asset towards frequently bigger markets. So hospitality is a terrific market. We prefer it. We’re actually making some progress in that market as you’ll be able to see from the numbers that we have simply proven. However we imagine that there are different and extra and considerably bigger markets that we are able to level our expertise stack at. So R&D goes to be extra about figuring out these further bigger markets that we are able to go level our tech at after which most likely some evolution and modification of the platform to satisfy the distinctive wants of these markets.
Unidentified Analyst: Acquired it. Thanks. After which by way of bookings like clearly, one other actually robust quarter. I suppose like while you’re taking a look at three of your largest clients renewing is that accounting for a lot of the power you are seeing thus far? Or how a lot is coming from new clients as effectively? And what do you might want to do to get these throughout the end line into kind of prime line income?
Mike Snavely: Sure. I haven’t got the precise breakdown in entrance of me. However what I am going to say is that we have now – we’re frequently figuring out new alternatives and shifting them down the gross sales pipeline. I believe we have recognized – final quarter I believe we recognized one thing like $5.5 million in whole contract worth. This quarter we have already recognized roughly $7 million on prime of that and we anticipate to liquidate an inexpensive proportion of these over a time frame. So I believe the gross sales machine is actually beginning to work.
Unidentified Analyst: Nice. Thanks. I’ll go it on.
Operator: Thanks. Your subsequent query comes from the road of Howard Halpern from Taglich Brothers. Line is open.
Howard Halpern: Congratulations nice quarter. By way of implementing these clients are you able to speak somewhat bit concerning the implementation cycle and what you anticipate within the second half by way of deployments?
Mike Snavely: Sure you guess. Now we have – I might say if you concentrate on the blissful path for implementation it is a few 30-day course of. Now that assumes that buyer dependencies are fulfilled well timed, it assumes that we have now the supply capability obtainable to ship these functions. However remember that our platform is generally a configuration engine. So we ingest buyer content material. We work with the shopper to make sure that the content material meets the model requirements and is the right description of the issues that they wish to show within the software. And so for that we’re considerably reliant upon the shopper. We have seen implementations go as shortly as per week. We have seen different implementations take six months. So I might say that our common is in that 30- to 45-day vary most likely shading somewhat nearer to the 45.
Howard Halpern: Okay. I imagine within the earlier name this 12 months you talked about in search of I suppose clients throughout the hospitality vertical however in occasions clients or conventions and such have you ever had any success in that space but? Or is it coming within the pipeline?
Mike Snavely: Sure it is coming within the pipeline. And so let me talk about that. So the bull’s eye of our hospitality market is actually going to be a vacation spot property. Now it could possibly be a vacation spot property for a few causes. Cause primary could possibly be that it is a wonderful seaside resort. Cause quantity two could possibly be that it is a conference property. And so our relationship with Gaylord Lodges for instance type of falls into extra of the conference class and we’re truly increasing our relationship with these guys to accommodate sure of their convention-related services and actions. And we’re additionally partnering with a few main gamers within the internet hosting of conventions to essentially penetrate that market. And the conference market is definitely actually attention-grabbing for us. And I might say that we’re making good progress and we’ll actually hold you apprised of that progress as these buyer wins are available in.
Howard Halpern: Okay. Properly, thanks and sustain the good work.
Mike Snavely: Thanks, sir.
Operator: Thanks. [Operator Instructions] And our subsequent query come from — All proper, I apologize. Our subsequent query comes from the road of Ed Woo from Ascendiant Capital. Your line open.
Ed Woo: Sure. Congratulations on the progress. My query is have you ever seen any modifications within the gross sales cycle whether or not clients have been extra cautious? Or has it been about the identical up to now quarter?
Mike Snavely: It is actually about the identical. I imply we’re taking a look at a roughly talking 90-day gross sales cycle. Generally it is shorter, generally it is sooner and we proceed to work on our gross sales course of to see if we are able to cut back the cycle time. Now, notably, we’re additionally extremely centered on figuring out one-to-many relationships. And this is what I imply by that. So it is one factor to promote a person property. That is terrific and we love our clients. It is one other factor altogether to strategy administration firms, property portfolio house owners and others in such a method as to penetrate a number of properties without delay. And so we have now some very attention-grabbing conversations happening proper now with such teams the place we may doubtlessly spend the same period of time on the gross sales cycle however decide up 5 properties, 10 properties at a time. In order that’s the place I believe that you will see what I might characterize because the tempo of rooftop wins growing as a result of we’re taking a look at these one-to-many relationships.
Ed Woo: Nice. Properly, thanks for answering my query and I want you guys good luck. Thanks.
Mike Snavely: Thanks very a lot, Ed.
Operator: Thanks. Seeing as there aren’t any extra questions within the queue that concludes our question-and-answer session. I’ll now flip the decision again over to Mike Snavely for closing remarks.
Mike Snavely: Sure. And I needed to do these closing remarks reside. I wish to acknowledge that we have had a tricky 2021 by 2023. And we have needed to unhealthy time, completely and as we needed to shed price and we had to purchase time for the corporate. As you’ll be able to see we’re off to begin right here in 2024. We have delivered a few successive quarters of development and enchancment to our bottom-line significantly while you have a look at it similar to the earlier 12 months. We have type up our stability sheet and we have gotten our gross sales rhythm down. Now we benefit from time, capital and nice curiosity amongst our loyal buyers together with the seasoned administration group and a Board with an enormous imaginative and prescient. We even have a monitor document of worth supply to the perfect manufacturers on the planet, together with Fox, NBC, the Dallas Cowboys Stadium together with more moderen clients like Ryman (NYSE:) Entertainment and varied Marriott properties. From this platform we couldn’t be extra enthusiastic about what markets we are able to deal with and the performs that we are able to run in software program innovation crypto and AI. We intend to show the attentions of tens of tens of millions of lives again on Phunware and our options and to make Phunware nice once more. Thanks so much all people.
Operator: Girls and gents that concludes immediately’s name. Thanks all for becoming a member of. It’s possible you’ll now disconnect.
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