Revenue and Growth - Nixxy, Inc. reported revenue of $13.5 million for the three months ended June 30, 2025, a significant increase of $13.3 million or 10016% compared to $0.1 million for the same period in 2024, primarily driven by an increase in telecommunication services [236]. - Total revenue for the six-month period ended June 30, 2025, was $14.9 million, an increase of $14.5 million or 4079% compared to $0.4 million in the same period of 2024 [245]. - Auralink, a subsidiary, generates revenue from telecommunications services, including SMS and VoiceIP communications, with revenue recognized at the point of delivery confirmation [220][224]. - Marketplace revenues include digital advertising and career services, with revenues recognized upon completion of services, such as job postings and resume distributions [221][222]. Costs and Expenses - The cost of revenue for the same period was $13.5 million, reflecting an increase of $13.5 million from $0 in the corresponding period of 2024, attributed to the rise in revenue-generating operations [237]. - Operating expenses for the six-month period ended June 30, 2025, were $22.4 million, an increase of $20.0 million or 835% compared to $2.4 million in the same period of 2024 [247]. - General and administrative expenses for the six-month period ended June 30, 2025, were $6.2 million, including $3.3 million of non-cash stock-based compensation, compared to $1.7 million in 2024 [251]. - Cost of revenue for the six-month period ended June 30, 2025, was $14.6 million, compared to $3 thousand in the same period of 2024, representing a significant increase [246]. - Sales and marketing expenses for the six-month period ended June 30, 2025, were $0.7 million, an increase of $0.6 million compared to $93 thousand in 2024 [248]. - Non-cash amortization charge for the six-month period ended June 30, 2025, was $831 thousand, compared to $587 thousand in the same period of 2024 [250]. Strategic Changes and Leadership - The Company is undergoing a strategic transformation, having sold its staffing business in 2023 and the Recruiter.com website in Q3 of 2024, with plans to spin out recruitment-related businesses to Atlantic Energy Solutions, now being renamed CognoGroup [219]. - The Company appointed Mike Schmidt as CEO on May 7, 2025, with a base salary of $10,000 per month and eligibility for 100,000 Restricted Stock Units, contingent upon board approval [229]. - An amendment to Mr. Schmidt's employment agreement increased his base salary to $180,000 per year, with an annual bonus of $45,000 contingent upon achieving certain milestones [232]. - The Company is focusing on finalizing strategic transactions and preparing for the spin-out of certain operating assets to CognoGroup, which will hold recruitment-related technology assets [227]. - The Company continues to improve its product offerings, particularly in Mediabistro and its job board technology, while preparing for the expected sale of Recruiter.com [228]. Financial Position and Cash Flow - Net loss from continuing operations for the six-month period ended June 30, 2025, was $8.8 million, compared to a net loss of $1.8 million during the same period in 2024 [253]. - Net cash used in operating activities for the six months ended June 30, 2025, was $3.0 million, compared to $1.2 million for the same period in 2024 [260]. - As of June 30, 2025, the company had approximately $0.9 million in cash on hand, insufficient to meet working capital needs for the next 12 months [266]. - The company recorded a loss on change in fair value of contingent consideration of $1.2 million for the six-month period ended June 30, 2025 [252]. Revenue Recognition and Accounting Policies - Marketplace advertising revenues are recognized on a gross basis when advertising is placed and displayed, with payments typically due within 30 days of service completion [274]. - Consulting and staffing services revenues are recognized when services are rendered, with payments typically due within 90 days of service completion [275]. - Auralink recognizes revenue for SMS and VoiceIP transmission services at the point of delivery confirmation, acting as principal in these transactions [276]. - Contract liabilities arise when customers have paid for services but revenue recognition criteria have not yet been met [279]. - Goodwill is tested for impairment annually on December 31st or when indicators suggest fair value may be below carrying value [282]. - The company uses the Black-Scholes option pricing model to determine the fair value of stock-based compensation, recognizing costs over the vesting period [286]. Accounting Standards Updates - In November 2023, the FASB issued ASU 2023-07 to improve reportable segment disclosures, effective for annual periods beginning after December 15, 2023 [288]. - ASU 2023-09, effective January 1, 2025, aims to enhance income tax disclosures, particularly regarding effective tax rate reconciliation [289]. - ASU 2024-03 requires detailed disaggregation of expenses in the income statement, effective for fiscal years beginning after December 15, 2026 [290]. - The company does not expect new accounting pronouncements to have a material impact on consolidated financial statements [290].
Nixxy, Inc.(NIXX) - 2025 Q2 - Quarterly Report