Phunware(PHUN) - 2025 Q1 - Quarterly Results

Q1 2025 Financial Results Overview Phunware reported increased software revenue and improved net loss per share in Q1 2025, despite a wider net loss due to one-time legal expenses, maintaining a strong cash position Financial Highlights Q1 2025 saw a 40% rise in software revenue, a wider net loss due to legal expenses, but improved net loss per share and strong cash reserves Q1 2025 Key Financial Metrics | Metric | Q1 2025 ($) | Q1 2024 ($) | Change | | :--- | :--- | :--- | :--- | | Software Subscriptions & Services Revenue | $0.6 million | $0.43 million (implied) | +40% | | Net Loss | $3.7 million | $2.3 million | +60.9% | | Net Loss Per Share | ($0.18) | ($0.33) | Improved | | Net Cash Used in Operations | $3.3 million | $5.5 million | -40% | | Cash and Cash Equivalents | $109.7 million | N/A | N/A | - The primary driver for the increase in net loss was a $1.2 million one-time legal expense related to the Wild Basin litigation bench trial[4] - Software and subscription bookings for the first quarter totaled $0.4 million[4] Business Highlights Phunware expanded its customer base in hospitality and healthcare, while strategically enhancing its board to meet Nasdaq requirements - Added three new customers in the hospitality vertical during Q1 2025[4] - Secured a new $0.5 million booking for a multi-location health care facility early in Q2[4] - Appointed Quyen Du to the Board of Directors, a 25-year corporate strategy executive, satisfying Nasdaq's audit committee listing requirements[4] Management Commentary Management emphasized Q1 revenue growth, sales pipeline acceleration, and strategic investments in AI and M&A for long-term growth - Q1 2025 revenues were $0.7 million with a gross margin of 52%, driven by a 40% increase in Mobile software subscriptions and services[5] - The company is investing in R&D for generative and agentic AI initiatives, with plans to launch an 'AI Personal Concierge' product in mid-2025[5] - Strategic priorities include reinforcing core business, identifying high-impact M&A opportunities, driving operational excellence, and enhancing the team with experienced sales, marketing, and technology professionals[5] Financial Statements The company's Q1 2025 financial statements show a slight asset decrease, stable cash, and increased liabilities, reflecting operational shifts Consolidated Balance Sheets As of March 31, 2025, total assets slightly decreased to $112.0 million, with cash at $109.7 million and total equity at $103.6 million Balance Sheet Summary (in thousands) | Account | March 31, 2025 (in thousands $) | December 31, 2024 (in thousands $) | | :--- | :--- | :--- | | Cash and cash equivalents | $109,719 | $112,974 | | Total current assets | $111,086 | $113,759 | | Total assets | $112,034 | $114,781 | | Total current liabilities | $7,211 | $6,451 | | Total liabilities | $8,408 | $7,598 | | Total stockholders' equity | $103,626 | $107,183 | Consolidated Statements of Operations Q1 2025 net revenues were $0.7 million, resulting in a net loss of $3.7 million, primarily due to higher operating expenses Statement of Operations Summary (in thousands, except per share data) | Metric | Q1 2025 (in thousands $) | Q1 2024 (in thousands $) | | :--- | :--- | :--- | | Net revenues | $688 | $921 | | Gross profit | $359 | $524 | | Total operating expenses | $5,173 | $3,398 | | Operating loss | $(4,814) | $(2,874) | | Net loss | $(3,723) | $(2,292) | | Net loss per share | $(0.18) | $(0.33) | Consolidated Statements of Cash Flows Q1 2025 net cash used in operations significantly decreased to $3.3 million, with cash and equivalents ending at $109.7 million Cash Flow Summary (in thousands) | Metric | Q1 2025 (in thousands $) | Q1 2024 (in thousands $) | | :--- | :--- | :--- | | Net cash used in operating activities | $(3,335) | $(5,530) | | Net cash provided by financing activities | $80 | $23,204 | | Net (decrease) increase in cash | $(3,255) | $17,633 | | Cash at end of period | $109,719 | $21,567 | Non-GAAP Financial Measures This section provides a reconciliation of GAAP net loss to Adjusted EBITDA, a key non-GAAP metric for evaluating operational performance Reconciliation of Net Loss to Adjusted EBITDA Adjusted EBITDA for Q1 2025 was a loss of $4.7 million, reconciled from net loss by adjusting for non-cash and non-operating items - Adjusted EBITDA is a non-GAAP measure calculated by taking net loss and adjusting for interest, taxes, depreciation, non-cash impairment, valuation adjustments, and stock-based compensation[7] Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Line Item | Q1 2025 (in thousands $) | Q1 2024 (in thousands $) | | :--- | :--- | :--- | | Net loss | $(3,723) | $(2,292) | | Add back: Depreciation | $4 | $4 | | Add back: Interest expense | $9 | $108 | | Less: Interest income | $(1,119) | $(140) | | EBITDA | $(4,829) | $(2,320) | | Add back: Stock-based compensation | $86 | $630 | | Less: Gain on extinguishment of debt | $0 | $(535) | | Adjusted EBITDA | $(4,743) | $(2,225) | Supplementary Information This section provides background on Phunware's business and important disclaimers regarding forward-looking statements About Phunware Phunware is an enterprise software company specializing in mobile app solutions, now expanding into generative AI and intellectual property monetization - Phunware specializes in enterprise cloud solutions for mobile applications, providing tools for creation, implementation, and management of custom apps[1][10] - The company is developing a new Generative AI platform and is focused on monetizing its patents and intellectual property[11][12] Forward-Looking Statements The report contains forward-looking statements subject to risks and uncertainties, with no obligation for the company to update them - The report includes forward-looking statements concerning future operations and financial position, which are not guarantees of future performance[13][15] - Actual results may differ materially from those expressed due to various risks and uncertainties, including those described under "Risk Factors" in SEC filings[14]