Financial Performance - Net revenue decreased by 6.5% to $0.6 million in Q3 2025, compared to $0.7 million in Q3 2024[4] - Gross margin was 46.1% in Q3 2025, down from 48.4% in Q3 2024[4] - Net loss improved to $2.4 million in Q3 2025, compared to $2.8 million in the same period last year[4] - Net loss per share improved to ($0.12) in Q3 2025, compared to ($0.25) per share in Q3 2024[4] - Adjusted EBITDA for Q3 2025 was $(3.34) million, compared to $(2.89) million in Q3 2024[7] - Net loss for the nine months ended September 30, 2025, was $9,276 million, compared to a net loss of $7,683 million for the same period in 2024[22] Cash and Liquidity - Cash and cash equivalents totaled $103.8 million as of September 30, 2025[4] - Cash and cash equivalents at the end of the period were $103,783 million, down from $112,974 million at the beginning of the period[22] - Net cash used in operating activities from continued operations was $9,271 million, a decrease from $10,413 million in the prior year[22] - Proceeds from sales of common stock, net of issuance costs, amounted to $80 million, compared to $42,193 million in the previous year[22] - Interest paid during the period was $23 million, slightly up from $22 million in the prior year[22] - Income taxes paid were $23 million, down from $40 million in the previous year[22] - Stock-based compensation for the nine months ended September 30, 2025, was $338 million, a decrease from $1,532 million in the same period of 2024[22] Operating Expenses - Total operating expenses for Q3 2025 were $3.8 million, compared to $3.5 million in Q3 2024[20] Strategic Initiatives - Sales and marketing investments increased following a pullback in 2024, focusing on hospitality and healthcare sectors[4] - The AI Concierge product is currently in pilot testing with a hospitality partner, aimed at enhancing customer engagement[4] - The company continues to focus on adding AI-related features and functionalities to its product offerings[5] Deferred and Payable Accounts - Deferred revenue increased by $521 million, compared to a decrease of $43 million in the prior year[22] - Accounts payable and accrued expenses increased by $573 million, compared to an increase of $457 million in the previous year[22] - Issuance of common stock upon conversion of the 2022 Promissory Note was $4,505 million in the previous year[22]

Core Insights - Phunware, Inc. reported a decrease in net revenue of 6.5% to $0.6 million for Q3 2025 compared to $0.7 million in Q3 2024, while gross margin decreased to 46.1% from 48.4% in the same period [6] - The company is focused on integrating AI technologies into its product offerings, particularly with the launch of the AI Concierge product, which aims to enhance customer engagement in the hospitality sector [4][12] - Phunware's liquidity remains strong with cash and cash equivalents of $103.8 million as of September 30, 2025, allowing for continued investment in product development and sales initiatives [6][4] Financial Highlights - Net loss improved to $2.4 million in Q3 2025 from $2.8 million in Q3 2024, with net loss per share improving to ($0.12) from ($0.25) [6] - Operating expenses increased, with sales and marketing expenses rising to $800,000 in Q3 2025 from $619,000 in Q3 2024 [22] - Adjusted EBITDA for Q3 2025 was ($3.34 million), compared to ($2.89 million) in Q3 2024, indicating ongoing operational challenges despite improvements in net loss [22][8] Recent Business Highlights - The company is advancing its AI Concierge product, currently in pilot testing with positive initial feedback from a hospitality partner [4] - Phunware is expanding its sales initiatives and has appointed Jeremy Krol as Interim CEO, focusing on enhancing its product offerings and customer engagement strategies [6][4] - Investments in sales and marketing have increased, including a new website launch expected in Q4 2025 and the addition of senior marketing and product leadership [6]

Core Insights - Proactive provides fast, accessible, and actionable business and finance news content to a global investment audience [2] - The company focuses on medium and small-cap markets while also covering blue-chip companies, commodities, and broader investment stories [3] - Proactive's news team delivers insights across various sectors including biotech, pharma, mining, natural resources, battery metals, oil and gas, crypto, and emerging technologies [3] Technology Adoption - Proactive is committed to adopting technology to enhance workflows and content production [4] - The company utilizes automation and software tools, including generative AI, while ensuring all content is edited and authored by humans [5]

Core Insights - The article discusses a transformative strategy for the hospitality industry aimed at increasing ancillary revenue and enhancing guest experiences through intelligent digital engagement [1][4]. Revenue Opportunities - 35% of guest spending occurs after check-in, representing an untapped annual revenue opportunity exceeding $2 million for a 200-room property operating at 60% occupancy [2]. Digital Engagement Strategy - By converting static brochures into interactive digital maps with real-time concierge services, properties can enhance guest loyalty and spending behavior [3]. Key Transformation Levers - The white paper identifies five key levers for transformation: capturing guest attention on-site, unlocking post-check-in revenue, deploying precision engagement, increasing operational efficiency, and positioning properties for market leadership [4]. Company Overview - Phunware, Inc. specializes in mobile app solutions with integrated intelligent capabilities, focusing on creating, implementing, and managing custom mobile applications and services [6]. Future Directions - The company aims to expand its audience through new generative AI products and enhancements, leveraging its patents and intellectual property while serving enterprise customers [7].

Group 1 - Proactive provides fast, accessible, informative, and actionable business and finance news content to a global investment audience [2] - The news team covers medium and small-cap markets, as well as blue-chip companies, commodities, and broader investment stories [3] - Proactive's content includes insights across various sectors such as biotech, pharma, mining, natural resources, battery metals, oil and gas, crypto, and emerging technologies [3] Group 2 - Proactive has a strong focus on technology adoption, utilizing tools to enhance workflows while maintaining human oversight in content creation [4][5] - The company employs automation and software tools, including generative AI, but ensures all content is edited and authored by humans [5]

Core Insights - Phunware, Inc. has appointed Jeremy Krol to its Board of Directors, effective immediately, while he continues as Interim Chief Executive Officer [2][3] - Krol brings over 20 years of experience in engineering, finance, and technology startups, having previously served as a startup advisor for Platform Calgary [3] - The company aims to enhance its mobile technologies and expand its audience through new generative AI products and product enhancements [5] Company Overview - Phunware is an enterprise software company specializing in mobile app solutions with integrated intelligent capabilities, providing tools for businesses to create, implement, and manage custom mobile applications [4] - The company's mission focuses on achieving connectivity and monetization through the adoption of its mobile technologies, leveraging brands, consumers, partners, and market participants [5] Leadership and Strategy - Quyen Du, Board Director and Chair of the Company's Nominating and Corporate Governance Committee, expressed confidence in Krol's strategic insight and familiarity with the business as essential for executing growth plans [4] - Krol will oversee daily operations, strengthening business and sales initiatives around existing products and advancing new technology integrations [3]

Group 1 - Proactive provides fast, accessible, informative, and actionable business and finance news content to a global investment audience [2] - The news team covers medium and small-cap markets, as well as blue-chip companies, commodities, and broader investment stories [3] - Proactive's content includes insights across various sectors such as biotech, pharma, mining, natural resources, battery metals, oil and gas, crypto, and emerging technologies [3] Group 2 - Proactive is committed to adopting technology to enhance workflows and content production [4] - The company utilizes automation and software tools, including generative AI, while ensuring all content is edited and authored by humans [5]

Core Viewpoint - Phunware reported a quarterly loss of $0.16 per share, slightly worse than the Zacks Consensus Estimate of a loss of $0.15, but an improvement from a loss of $0.32 per share a year ago, indicating ongoing challenges in financial performance [1][2] Financial Performance - The company posted revenues of $0.46 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 38.18%, and down from $1.01 million in the same quarter last year [2] - Over the last four quarters, Phunware has surpassed consensus EPS estimates two times and topped consensus revenue estimates just once [2] Stock Performance - Phunware shares have declined approximately 49.2% since the beginning of the year, contrasting with the S&P 500's gain of 7.8% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is -$0.16 on revenues of $0.85 million, and for the current fiscal year, it is -$0.65 on revenues of $3.33 million [7] - The trend of earnings estimate revisions for Phunware was mixed ahead of the earnings release, which could change following the recent report [6] Industry Context - The Internet - Software industry, to which Phunware belongs, is currently in the top 33% of over 250 Zacks industries, suggesting a favorable environment compared to lower-ranked industries [8] - The performance of Phunware's stock may be influenced by the overall outlook for the industry [8]

Financial Performance - For the three months ended June 30, 2025, bookings were $568,000, a decrease from $1,149,000 in the same period of 2024, while for the six months ended June 30, 2025, bookings totaled $927,000 compared to $1,746,000 in 2024[86]. - Gross profit for the three months ended June 30, 2025, was $190,000, resulting in a gross margin of 41.8%, compared to a gross profit of $470,000 and a gross margin of 46.5% in the same period of 2024[91]. - The net loss for the three months ended June 30, 2025, was $(3,144,000), compared to $(2,631,000) in the same period of 2024[91]. - Adjusted gross profit for the three months ended June 30, 2025, was $205,000, with an adjusted gross margin of 45.1%, compared to $519,000 and 51.3% in 2024[91]. - Total revenue decreased by $0.6 million, or 55.0%, for the three months ended June 30, 2025, primarily due to a decrease in advertising campaigns[108]. - Total gross profit decreased by $0.3 million, or 59.6%, for the three months ended June 30, 2025, mainly due to a decline in advertising revenue[112]. - Total cost of revenue decreased by $276,000, or 51.0%, for the three months ended June 30, 2025, compared to the same period in 2024[110]. - Software subscriptions and services revenue decreased by $83,000, or 16.1%, for the three months ended June 30, 2025, compared to the same period in 2024[108]. - Software subscriptions and services gross profit increased by $51,000, or 36.7%, for the three months ended June 30, 2025, compared to the same period in 2024[110]. Operating Expenses - Operating expenses increased by $1.046 million, or 30.7%, for the three months ended June 30, 2025, compared to the same period in 2024[113]. - Research and development expenses increased by $474,000, or 95.6%, for the three months ended June 30, 2025, compared to the same period in 2024[113]. - General and administrative expenses increased by $491,000, or 21.4%, for the three months ended June 30, 2025, primarily due to increased professional fees[115]. - General and administrative expenses increased by $1.5 million, or 31.1%, for the six months ended June 30, 2025, compared to the same period in 2024[117]. - Research and development expenses rose by $0.5 million, or 95.6%, for the three months ended June 30, 2025, and by $0.8 million, or 81.9%, for the six months ended June 30, 2025, compared to the corresponding periods in 2024[118]. Cash Flow and Capital Requirements - As of June 30, 2025, the company held total cash of $106.3 million, all in the United States, while continuing to experience operating losses and negative cash flows[121]. - Net cash used in operating activities was $6.8 million for the six months ended June 30, 2025, resulting in a net loss of $6.9 million[131]. - The company expects to continue generating operating losses and negative cash flows, but management believes it has sufficient cash for at least one year following the filing date of the report[126]. - Future capital requirements will depend on growth pace, subscription renewals, and investments in AI technology and infrastructure, with potential for acquisitions[127]. AI and Product Development - The company is investing in artificial intelligence (AI) technologies, including generative AI and agentic AI, to enhance mobile app development and customer engagement[78][81]. - The AI Personal Concierge feature is currently in pilot testing with existing customers to improve user engagement and monetization opportunities[81]. - The Guest Services Agent feature is under development and aims to assist hospitality guests with tasks such as making restaurant reservations[82]. - The company does not expect to be profitable in the near future but will continue to invest in long-term growth and product development[84]. - Approximately 44% of the backlog as of June 30, 2025, is expected to be invoiced within the subsequent 12-month period[85]. Other Income - Total other income for the three months ended June 30, 2025, was approximately $1.1 million, up from $0.3 million in 2024, primarily due to increased interest income[119]. - Total other income for the six months ended June 30, 2025, was approximately $2.2 million, compared to $0.9 million in 2024, driven by interest income from cash and cash equivalents[120].

[Financial and Business Highlights](index=1&type=section&id=Financial%20and%20Business%20Highlights) Phunware's Q2 2025 saw a 16% software revenue decline, improved gross margin, increased net loss, and key AI product and leadership changes Key Financial Metrics | Financial Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Software Subscriptions & Services Revenue | $0.4 million | - | -16% YoY | | Software Subscriptions & Services Gross Margin | 43.9% | 26.9% | +1,694 bps | | Net Loss | $3.1 million | $2.6 million | Increased Loss | | Net Loss Per Share | ($0.16) | ($0.32) | Improved | | Net Cash Used in Operations (H1) | $6.8 million | $8.2 million | Decreased | - Key operational achievements include debuting new hospitality AI features and appointing Jeremy Krol as Interim CEO[4](index=4&type=chunk) - The company secured **$0.6 million** in software and subscription bookings in Q2 2025[4](index=4&type=chunk) [Management Commentary](index=2&type=section&id=Management%20Commentary) Interim CEO Jeremy Krol highlighted AI innovation, Map Editor 3.0 launch, new customer bookings, and strategic capital deployment for growth - The company is advancing AI investments, planning pilot testing for AI Personal Concierge and developing Guest Services Agent features[7](index=7&type=chunk) - A major platform update, **Map Editor 3.0**, was released, representing the largest update to the Multiscreen-as-a-Service platform[5](index=5&type=chunk) - Q2 software bookings of **$0.6 million** were entirely from new customer logos, with four new customers expected to launch next quarter[6](index=6&type=chunk) - The company maintains ample liquidity, with the Interim CEO planning capital deployment for organic and inorganic growth[7](index=7&type=chunk) [Non-GAAP Financial Measures](index=3&type=section&id=Non-GAAP%20Financial%20Measures) This section presents Adjusted EBITDA, a non-GAAP measure, showing a Q2 2025 loss of **$4.1 million** and an H1 2025 loss of **$8.9 million** - Adjusted EBITDA is a non-GAAP measure derived from net loss, adjusted for interest, taxes, depreciation, and non-cash items like stock-based compensation[9](index=9&type=chunk) Reconciliation to Adjusted EBITDA (in thousands) | Reconciliation to Adjusted EBITDA (in thousands) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net loss | $(3,144) | $(2,631) | $(6,867) | $(4,923) | | Adjusted EBITDA | $(4,111) | $(2,198) | $(8,854) | $(4,423) | [About Phunware & Forward-Looking Statements](index=3&type=section&id=About%20Phunware%20%26%20Forward-Looking%20Statements) Phunware, an enterprise mobile app solutions provider, focuses on AI expansion and IP monetization, with forward-looking statements subject to inherent risks - Phunware specializes in enterprise mobile app solutions, strategically expanding software with new generative AI and monetizing its patent portfolio[12](index=12&type=chunk)[13](index=13&type=chunk) - Forward-looking statements regarding future financial position and business strategy are subject to risks and uncertainties that could cause actual results to differ materially[15](index=15&type=chunk)[16](index=16&type=chunk) [Financial Statements](index=5&type=section&id=Financial%20Statements) This section presents Phunware's consolidated financial statements, detailing balance sheet, income statement, and cash flow performance for Q2 and H1 2025 [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, Phunware reported **$108.1 million** in total assets, **$106.3 million** in cash, and **$100.6 million** in stockholders' equity Condensed Consolidated Balance Sheet (in thousands) | Balance Sheet Items (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $106,264 | $112,974 | | Total current assets | $107,207 | $113,759 | | Total assets | $108,080 | $114,781 | | Total liabilities | $7,480 | $7,598 | | Total stockholders' equity | $100,600 | $107,183 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2025 net revenues decreased to **$0.46 million**, operating loss widened to **$4.26 million**, and net loss was **$3.1 million**, or **($0.16)** per share Condensed Consolidated Statements of Operations (in thousands) | Income Statement (in thousands) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net revenues | $455 | $1,011 | $1,143 | $1,932 | | Gross profit | $190 | $470 | $549 | $994 | | Operating loss | $(4,260) | $(2,934) | $(9,074) | $(5,808) | | Net loss | $(3,144) | $(2,631) | $(6,867) | $(4,923) | | Net loss per share | $(0.16) | $(0.32) | $(0.34) | $(0.65) | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) H1 2025 saw net cash used in operations improve to **$6.8 million**, with minimal financing cash flow and a strong ending cash balance of **$106.3 million** Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Summary (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(6,790) | $(8,205) | | Net cash provided by financing activities | $80 | $24,640 | | Net (decrease) increase in cash | $(6,710) | $16,435 | | Cash at end of period | $106,264 | $20,369 |