Remark Holdings(MARK) - 2024 Q2 - Quarterly Results

Second Quarter 2024 Financial Results Announcement Remark Holdings announced its Q2 2024 financial results, highlighting a significant sequential and year-over-year revenue increase, primarily driven by rapid scaling in North America Overview and Key Financial Highlights Remark Holdings announced its Q2 2024 financial results, highlighting a significant sequential and year-over-year revenue increase, primarily driven by rapid scaling in North America - Total Revenue for Q2 2024 increased sequentially by $3.3 million, an 856% improvement over Q1 2024[1] - Total Revenue for Q2 2024 increased 16.8% Year over Year versus Q2 2023, with revenue from North America scaling rapidly[1] Management Commentary Management highlights strategic progress, including a successful school district project and commitment to delivering world-class computer vision solutions CEO's Statement on Strategic Progress The CEO, Kai-Shing Tao, expressed excitement over completing the first project for the Clark County School District, which has opened doors for additional opportunities with educational institutions, law enforcement, and government agencies across the U.S. The company remains focused on delivering world-class computer vision solutions - Completed the first project for the Clark County School District, the fifth largest school district in the U.S., leading to additional opportunities with other educational institutions, law enforcement, and government agencies[2] - Committed to converting opportunities into revenue by delivering world-class computer vision solutions and customer service that provide cost savings and improved security processes[2] Second Quarter 2024 Business Highlights Business highlights include strategic contract wins, platform development, and successful proof of concepts driving future growth Strategic Contract Wins Remark AI secured a significant contract with the Clark County School District for weapons detection, demonstrating its capability to scale and provide AI-powered safety solutions to large educational institutions - Remark AI was awarded a one-year, $5 million weapons detection contract by the Clark County School District Board of Trustees, with nine one-year extension options valued at $5 million annually[3] Platform & Product Development The company showcased its AI solutions at the NYC Smart City Expo and completed its migration to the Microsoft Azure Platform, enhancing its market reach and sales capabilities - Remark AI showcased its Fire and Smoke, Smart City, and Smart Agent solutions at the NYC Smart City Expo in conjunction with Oracle and NVIDIA, leading to additional POCs for top 100 US cities[3] - Completed migration to the Microsoft Azure Platform, making Remark's Smart Safety Platform (SSP) Marketplace ready for Microsoft's global salesforce and systems integrators[4] Successful Proof of Concepts (POCs) Remark AI successfully completed multiple Proof of Concepts (POCs) for a large European railway system and a Migrant Center in a major Sanctuary City, with both leading to current contract negotiations for the second half of 2024 - Completed a successful POC at the headquarters train station for a large European railway system, deploying AI-powered passenger counting, fare evasion, fire and smoke detection, and unattended baggage detection analytics, leading to contract negotiations for H2 2024[4] - Completed a successful POC for a Migrant Center in a large Sanctuary City, deploying AI-powered facial recognition, fight warnings, fire and smoke detection, and weapons detection analytics, leading to preparations for deployment across multiple city agencies and contract negotiations for H2 2024[4][5] Detailed Financial Performance Detailed financial performance reveals revenue growth, reduced losses, and changes in balance sheet and cash flow metrics Consolidated Statements of Operations Remark Holdings reported a 16.8% increase in Q2 2024 revenue year-over-year, alongside a reduction in operating and net losses, driven by a large school district project and cost management efforts | Metric | Q2 2024 (in thousands) | Q2 2023 (in thousands) | Change (%) | | :---------------------------------- | :--------------------- | :--------------------- | :--------- | | Revenue | $3,699 | $3,167 | 16.8% | | Operating Loss | $(3,213) | $(3,959) | (18.8%) | | Net Loss | $(5,259) | $(5,874) | (10.5%) | | Net Loss per Share (basic & diluted)| $(0.12) | $(0.42) | (71.4%) | - Revenue for Q2 2024 included $3.7 million from a project for a large school district in the U.S.[6] - Operating loss decreased by 18.8% due to a $0.2 million reduction in payroll-related expenses (Technology and development) from staff reductions in China, and no impairment charges in Q2 2024 compared to $0.4 million in Q2 2023[6] Consolidated Balance Sheets The balance sheet as of June 30, 2024, shows an increase in cash and total assets compared to December 31, 2023, while total liabilities and stockholders' deficit also increased | Metric | June 30, 2024 (in thousands) | December 31, 2023 (in thousands) | | :-------------------------- | :--------------------------- | :------------------------------- | | Cash | $438 | $145 | | Total Assets | $13,304 | $10,236 | | Total Liabilities | $59,653 | $49,826 | | Total Stockholders' Deficit | $(46,349) | $(39,590) | Cash Flow and Debt Management Net cash used in operating activities increased for the six months ended June 30, 2024, and the company successfully resolved outstanding debt defaults by converting non-convertible notes into convertible debentures - Net cash used in operating activities was $6.1 million for the six months ended June 30, 2024, a 17.0% increase compared to $5.2 million during the same period in 2023[7] - In August 2024, the company resolved all outstanding events of default regarding their debt agreement with Mudrick Capital Management by exchanging existing non-convertible notes for convertible debentures[7] Corporate Information Corporate information covers company overview, forward-looking statements, and investor relations contact details About Remark Holdings, Inc. Remark Holdings, Inc. is a U.S.-based company specializing in AI-powered analytics platforms and computer vision solutions, serving various sectors with GDPR and CCPA compliant technology - Remark Holdings, Inc. is a U.S.-based company that developed and sells an AI-powered analytics platform providing insights to video feeds and computer vision solutions[9] - The company's integrated suite of AI tools helps organizations understand customer behavior and demographics, while providing real-time alerts for security parameters[9] - Remark's solutions are GDPR-compliant and CCPA-compliant, servicing government agencies, hospitality, public safety, retail, and transportation sectors[9] Forward-Looking Statements This section provides a standard disclaimer regarding forward-looking statements, emphasizing that they involve known and unknown risks and uncertainties, and the company undertakes no obligation to update them - The press release contains forward-looking statements related to future events, financial performance, strategies, and competitive environment[10] - These statements involve known and unknown risks, uncertainties, and other factors, as discussed in the company's SEC filings[10] - Remark Holdings undertakes no obligation to update or revise publicly any forward-looking statements after the date of the release, except as required by law[10] Investor Relations & Conference Call Details for the Q2 2024 earnings conference call are provided, along with contact information for investor relations - A conference call to discuss financial results and business developments was scheduled for Monday, August 19, 2024, at 4:30 p.m. Eastern Time[8] - Contact information for Investor Relations is provided: Fay Tian, Vice President of Investor Relations, F.Tian@remarkholdings.com[11]