Phunware(PHUN) - 2025 Q2 - Quarterly Report

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].