08/08/2024 | Press release | Distributed by Public on 08/08/2024 05:31
Q2 2024 Financial Highlights | ||||||
(in millions, except % and per share amounts) | GAAP |
Non-GAAP(1)
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Q2 2024 | Q2 2023 | vs. Q2 2023 | Q2 2024 | Q2 2023 | vs. Q2 2023 | |
Revenue | $78.2 | $69.5 |
better 12.4%
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Net Loss from Continuing Operations/Adjusted EBITDA | $(23.6) | $(21.8) |
worse $1.7 million
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$(4.3) | $(12.3) |
better $7.9 million
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Diluted Net Loss Per Share from Continuing Operations | $(0.69) | $(0.80) |
better $0.11
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$(0.23) | $(0.60) |
better $0.37
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Subscription Service Gross Margin Percentage | 53.1% | 43.3% |
better 9.8%
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66.4% | 60.9% |
better 5.5%
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Year-to-Date 2024 Financial Highlights | ||||||
(in millions, except % and per share amounts) | GAAP |
Non-GAAP(1)
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Q2 2024 | Q2 2023 | vs. Q2 2023 | Q2 2024 | Q2 2023 | vs. Q2 2023 | |
Revenue | $148.2 | $138.1 |
better 7.3%
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Net Loss from Continuing Operations/Adjusted EBITDA | $(44.0) | $(40.9) |
worse $3.1 million
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$(14.5) | $(24.5) |
better $9.9 million
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Diluted Net Loss Per Share from Continuing Operations | $(1.33) | $(1.49) |
better $0.16
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$(0.66) | $(1.18) |
better $0.52
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Subscription Service Gross Margin Percentage | 52.4% | 46.6% |
better 5.8%
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66.1% | 65.6% |
better 0.5%
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Assets | June 30, 2024 | December 31, 2023 | ||
Current assets: | ||||
Cash and cash equivalents | $ | 114,928 | $ | 37,183 |
Cash held on behalf of customers | 12,804 | 10,170 | ||
Short-term investments | 27,527 | 37,194 | ||
Accounts receivable - net | 50,203 | 42,679 | ||
Inventories | 25,526 | 23,560 | ||
Other current assets | 9,427 | 8,123 | ||
Current assets of discontinued operations | 6,382 | 21,690 | ||
Total current assets | 246,797 | 180,599 | ||
Property, plant and equipment - net | 14,452 | 15,524 | ||
Goodwill | 623,875 | 488,918 | ||
Intangible assets - net | 148,292 | 93,969 | ||
Lease right-of-use assets | 4,740 | 3,169 | ||
Other assets | 17,689 | 17,642 | ||
Noncurrent assets of discontinued operations | 839 | 2,785 | ||
Total Assets | $ | 1,056,684 | $ | 802,606 |
Liabilities and Shareholders' Equity | ||||
Current liabilities: | ||||
Accounts payable | $ | 30,682 | $ | 25,599 |
Accrued salaries and benefits | 13,954 | 14,128 | ||
Accrued expenses | 4,047 | 3,533 | ||
Customers payable | 12,804 | 10,170 | ||
Lease liabilities - current portion | 1,288 | 1,120 | ||
Customer deposits and deferred service revenue | 14,294 | 9,304 | ||
Current liabilities of discontinued operations | 2,033 | 16,378 | ||
Total current liabilities | 79,102 | 80,232 | ||
Lease liabilities - net of current portion | 3,540 | 2,145 | ||
Long-term debt | 378,672 | 377,647 | ||
Deferred service revenue - noncurrent | 2,876 | 4,204 | ||
Other long-term liabilities | 4,173 | 3,603 | ||
Noncurrent liabilities of discontinued operations | - | 1,710 | ||
Total liabilities | 468,363 | 469,541 | ||
Shareholders' equity: | ||||
Preferred stock, $0.02 par value, 1,000,000 shares authorized, none outstanding | - | - | ||
Common stock, $0.02 par value, 116,000,000 shares authorized, 35,574,128 and 29,386,234 shares issued, 34,104,235 and 28,029,915 outstanding at June 30, 2024 and December 31, 2023, respectively | 705 | 584 | ||
Additional paid in capital | 852,406 | 625,154 | ||
Accumulated deficit | (239,054) | (274,956) | ||
Accumulated other comprehensive loss | (3,908) | (939) | ||
Treasury stock, at cost, 1,469,893 shares and 1,356,319 shares at June 30, 2024 and December 31, 2023, respectively | (21,828) | (16,778) | ||
Total shareholders' equity | 588,321 | 333,065 | ||
Total Liabilities and Shareholders' Equity | $ | 1,056,684 | $ | 802,606 |
Three Months Ended June 30, |
Six Months Ended June 30, |
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2024 | 2023 | 2024 | 2023 | |||||
Revenues, net: | ||||||||
Hardware | $ | 20,116 | $ | 26,390 | $ | 38,342 | $ | 53,167 |
Subscription service | 44,872 | 30,372 | 83,251 | 58,337 | ||||
Professional service | 13,162 | 12,767 | 26,630 | 26,609 | ||||
Total revenues, net | 78,150 | 69,529 | 148,223 | 138,113 | ||||
Cost of sales: | ||||||||
Hardware | 15,539 | 21,326 | 29,709 | 43,707 | ||||
Subscription service | 21,041 | 17,233 | 39,635 | 31,158 | ||||
Professional service | 9,542 | 11,784 | 20,793 | 23,150 | ||||
Total cost of sales | 46,122 | 50,343 | 90,137 | 98,015 | ||||
Gross margin | 32,028 | 19,186 | 58,086 | 40,098 | ||||
Operating expenses: | ||||||||
Sales and marketing | 9,811 | 10,075 | 20,737 | 19,473 | ||||
General and administrative | 25,369 | 16,434 | 50,544 | 35,401 | ||||
Research and development | 16,237 | 14,888 | 32,005 | 29,203 | ||||
Amortization of identifiable intangible assets | 1,946 | 465 | 2,878 | 929 | ||||
Adjustment to contingent consideration liability | (600) | (2,300) | (600) | (7,500) | ||||
Gain on insurance proceeds | - | (500) | - | (500) | ||||
Total operating expenses | 52,763 | 39,062 | 105,564 | 77,006 | ||||
Operating loss | (20,735) | (19,876) | (47,478) | (36,908) | ||||
Other (expense) income, net | (610) | 155 | (310) | 146 | ||||
Interest expense, net | (1,630) | (1,735) | (3,338) | (3,402) | ||||
Loss from continuing operations before (provision for) benefit from income taxes | (22,975) | (21,456) | (51,126) | (40,164) | ||||
(Provision for) benefit from income taxes | (612) | (383) | 7,173 | (698) | ||||
Net loss from continuing operations | (23,587) | (21,839) | (43,953) | (40,862) | ||||
Net income from discontinued operations | 77,777 | 2,137 | 79,855 | 5,255 | ||||
Net income (loss) | $ | 54,190 | $ | (19,702) | $ | 35,902 | $ | (35,607) |
Net income (loss) per share (basic and diluted): | ||||||||
Continuing operations | $ | (0.69) | $ | (0.80) | $ | (1.33) | $ | (1.49) |
Discontinued operations | 2.29 | 0.08 | 2.42 | 0.19 | ||||
Total | $ | 1.60 | $ | (0.72) | $ | 1.09 | $ | (1.30) |
Weighted average shares outstanding (basic and diluted) | 34,015 | 27,357 | 32,935 | 27,381 |
Non-GAAP Measure | Definition | Usefulness to management and investors |
Non-GAAP subscription service gross margin percentage |
Non-GAAP subscription service gross margin percentage represents subscription service gross margin percentage adjusted to exclude amortization from acquired and internally developed software, stock-based compensation, and severance.
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We believe that non-GAAP subscription service gross margin percentage and adjusted EBITDA provide useful perspectives with respect to the Company's core operating performance and ongoing cash earnings by adjusting for certain non-cash and non-recurring charges that may not be indicative of our financial performance. |
Adjusted EBITDA |
Adjusted EBITDA represents net income (loss) before income taxes, interest expense and depreciation and amortization adjusted to exclude certain non-cash and non-recurring charges that may not be indicative of our financial performance.
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Non-GAAP diluted net loss per share |
Non-GAAP diluted net loss per share represents net loss per share excluding amortization of acquired intangible assets and certain non-cash and non-recurring charges that may not be indicative of our financial performance.
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We believe that adjusting our non-GAAP diluted net loss per share to remove non-cash and non-recurring charges provides a useful perspective with respect to the Company's operating performance as well as comparisons to past and competitor operating results.
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Non-GAAP Adjustment | Definition | Usefulness to management and investors |
Stock-based compensation | Stock-based compensation consists of charges related to our employee equity incentive plans. | We exclude stock-based compensation because these non-cash charges are not viewed by management as part of our core operating performance. This adjustment facilitates a useful evaluation of our current operating performance as well as comparisons to past and competitor operating results. |
Contingent consideration | Adjustment reflects a non-cash reduction to the fair market value of the contingent consideration liability related to our acquisition of MENU Technologies AG. | We exclude changes to the fair market value of our contingent consideration liability because management does not view these non-cash, non-recurring charges as part of our core operating performance. This adjustment facilitates a useful evaluation of our current operating performance as well as comparisons to past and competitor operating results. |
Transaction costs | Adjustment reflects non-recurring professional fees incurred in transaction due diligence, including costs incurred in the acquisitions of Stuzo Blocker, Inc., Stuzo Holdings, LLC and their subsidiaries (the "Stuzo Acquisition") and TASK. | We exclude professional fees incurred in corporate development because management does not view these non-recurring charges, which are inconsistent in size and are significantly impacted by the timing and valuation of our transactions, as part of our core operating performance. This adjustment facilitates a useful evaluation of our current operating performance, comparisons to past and competitor operating results, and additional means to evaluate expense trends. |
Gain on insurance proceeds | Adjustment reflects the gain on insurance proceeds due to the settlement of a legacy claim. | We exclude these non-recurring adjustments because these costs do not reflect our core operating performance. These adjustments facilitate a useful evaluation of our current operating performance as well as comparisons to past and competitor operating results. |
Severance | Adjustment reflects the severance included in cost of sales, sales and marketing expense, general and administrative expense, and research and development expense. | |
Discontinued operations | Adjustment reflects income from discontinued operations related to the disposition of our Government segment. | |
Other expense (income), net | Adjustment reflects foreign currency transaction gains and losses, rental income and losses, and other non-recurring expenses recorded in other expense (income), net, in the accompanying statements of operations. | |
(Provision for) benefit from income taxes | Adjustment reflects a partial release of our deferred tax asset valuation allowance resulting from the Stuzo Acquisition. | We exclude these non-cash and non-recurring adjustments for purposes of calculating non-GAAP diluted net loss per share because these costs do not reflect our core operating performance. These adjustments facilitate a useful evaluation of our current operating performance, comparisons to past and competitor operating results, and additional means to evaluate expense trends. |
Non-cash interest | Adjustment reflects non-cash amortization of issuance costs related to the Company's long-term debt. | |
Acquired intangible assets amortization | Adjustment reflects amortization expense of acquired developed technology included within cost of sales and amortization expense of acquired intangible assets. |
(in thousands) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||
Reconciliation of Net Income (Loss) to Adjusted EBITDA | 2024 | 2023 | 2024 | 2023 | ||||
Net income (loss) | $ | 54,190 | $ | (19,702) | $ | 35,902 | $ | (35,607) |
Discontinued operations | (77,777) | (2,137) | (79,855) | (5,255) | ||||
Net loss from continuing operations | (23,587) | (21,839) | (43,953) | (40,862) | ||||
Provision for (benefit from) income taxes | 612 | 383 | (7,173) | 698 | ||||
Interest expense, net | 1,630 | 1,735 | 3,338 | 3,402 | ||||
Depreciation and amortization | 8,834 | 6,817 | 16,127 | 13,584 | ||||
Stock-based compensation | 6,286 | 3,601 | 10,696 | 6,609 | ||||
Contingent consideration | (600) | (2,300) | (600) | (7,500) | ||||
Transaction costs | 1,573 | - | 4,978 | - | ||||
Gain on insurance proceeds | - | (500) | - | (500) | ||||
Severance | 294 | - | 1,728 | 253 | ||||
Other expense (income), net | 610 | (155) | 310 | (146) | ||||
Adjusted EBITDA | $ | (4,348) | $ | (12,258) | $ | (14,549) | $ | (24,462) |
(in thousands, except per share amounts) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||
Reconciliation between GAAP and Non-GAAP Diluted Net Income (Loss) per share |
2024 | 2023 | 2024 | 2023 | ||||
Diluted net income (loss) per share | $ | 1.60 | $ | (0.72) | $ | 1.09 | $ | (1.30) |
Discontinued operations | (2.29) | (0.08) | (2.42) | (0.19) | ||||
Diluted net loss per share from continuing operations | (0.69) | (0.80) | (1.33) | (1.49) | ||||
Provision for (benefit from) income taxes | 0.01 | - | (0.23) | - | ||||
Non-cash interest | 0.02 | 0.02 | 0.03 | 0.04 | ||||
Acquired intangible assets amortization | 0.20 | 0.16 | 0.36 | 0.32 | ||||
Stock-based compensation | 0.18 | 0.13 | 0.32 | 0.24 | ||||
Contingent consideration | (0.02) | (0.08) | (0.02) | (0.27) | ||||
Transaction costs | 0.05 | - | 0.15 | - | ||||
Gain on insurance proceeds | - | (0.02) | - | (0.02) | ||||
Severance | 0.01 | - | 0.05 | 0.01 | ||||
Other expense (income), net | 0.02 | (0.01) | 0.01 | (0.01) | ||||
Non-GAAP diluted net loss per share | $ | (0.23) | $ | (0.60) | $ | (0.66) | $ | (1.18) |
Diluted weighted average shares outstanding | 34,015 | 27,357 | 32,935 | 27,381 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||
Reconciliation between GAAP and Non-GAAP Subscription Service Gross Margin Percentage |
2024 | 2023 | 2024 | 2023 | ||||
Subscription Service Gross Margin Percentage | 53.1 | % | 43.3 | % | 52.4 | % | 46.6 | % |
Depreciation and amortization | 13.1 | % | 17.4 | % | 13.4 | % | 18.8 | % |
Stock-based compensation | 0.2 | % | 0.2 | % | 0.2 | % | 0.2 | % |
Severance | - | % | - | % | 0.1 | % | - | % |
Non-GAAP Subscription Service Gross Margin Percentage | 66.4 | % | 60.9 | % | 66.1 | % | 65.6 | % |