Phunware(US:PHUN)2025-11-07 21:19Financial Performance - For the three months ended September 30, 2025, the Company reported bookings of $50,476,000, a decrease from $2,222,000 in the same period of 2024[91]. - The gross profit for the three months ended September 30, 2025, was $287,000, resulting in a gross margin of 46.1%, compared to a gross profit of $322,000 and a gross margin of 48.4% in the same period of 2024[96]. - Adjusted gross profit for the three months ended September 30, 2025, was $303,000, with an adjusted gross margin of 48.7%, compared to $373,000 and 56.1% in the same period of 2024[99]. - The net loss for the three months ended September 30, 2025, was $(2,409,000), an improvement from a net loss of $(2,760,000) in the same period of 2024[96]. - Net revenue decreased by $43,000, or 6.5%, to $622,000 for the three months ended September 30, 2025, compared to $665,000 in 2024[112]. - Total gross profit decreased by $35,000, or 10.9%, to $287,000 for the three months ended September 30, 2025, compared to $322,000 in 2024[114]. - Total gross profit decreased by $480,000, or 36.5%, to $836,000 for the nine months ended September 30, 2025, compared to $1,316,000 in 2024[116]. Revenue Breakdown - Software subscriptions and services revenue decreased by $18,000, or 3.9%, to $446,000 for the three months ended September 30, 2025, compared to $464,000 in 2024[112]. - Advertising revenue decreased by $25,000, or 12.4%, to $176,000 for the three months ended September 30, 2025, compared to $201,000 in 2024[112]. - Software subscriptions and services gross margin decreased to 38.1% for the three months ended September 30, 2025, compared to 41.8% in 2024[114]. Operating Expenses - Operating expenses increased by $275,000, or 7.8%, to $3,787,000 for the three months ended September 30, 2025, compared to $3,512,000 in 2024[117]. - Sales and marketing expense increased by $181,000, or 29.2%, to $800,000 for the three months ended September 30, 2025, compared to $619,000 in 2024[118]. - Research and development expense increased by $67,000, or 10.9%, to $679,000 for the three months ended September 30, 2025, compared to $612,000 in 2024[122]. - Total operating expenses increased by $3,096,000, or 30.0%, to $13,410,000 for the nine months ended September 30, 2025, compared to $10,314,000 in 2024[117]. Cash Flow and Capital - As of September 30, 2025, the company held total cash of $103.8 million, all in the United States, while continuing to experience operating losses and negative cash flows[126]. - The company utilized $9.3 million in cash from operating activities during the nine months ended September 30, 2025, resulting in a net loss of $9.3 million, which included non-cash charges of $0.6 million[134]. - In comparison, during the same period in 2024, the company used $10.6 million in cash from operating activities, leading to a net loss of $7.7 million[135]. - Management believes it has sufficient cash on hand for at least one year following the filing date of the Quarterly Report despite anticipated operating losses[129]. - The company expects future capital requirements to depend on growth pace, subscription renewals, and investments in AI technology and infrastructure, indicating potential future acquisitions[130]. AI Investments - The Company is investing in artificial intelligence (AI) technologies, including generative AI and agentic AI, to enhance mobile app development and customer engagement[82][88]. - The AI Concierge feature is currently in pilot testing with existing customers, aimed at improving user engagement and monetization opportunities[86]. - The Guest Services Agent feature, designed for hospitality applications, is still in development and testing phases[87]. - The Company does not expect to be profitable in the near future but plans to continue investing in product development and market expansion[89]. Backlog and Deferred Revenue - As of September 30, 2025, the backlog was $2,687,000, down from $3,635,000 as of December 31, 2024, while deferred revenue increased to $2,083,000 from $1,562,000[91]. - Approximately 48% of the backlog as of September 30, 2025, is expected to be invoiced in the subsequent 12-month period[90]. Other Income - Other income for the three months ended September 30, 2025, was approximately $1.1 million, compared to $0.4 million for the same period in 2024, primarily due to interest income from cash and cash equivalents[124]. - For the nine months ended September 30, 2025, total other income was approximately $3.3 million, up from $1.3 million in 2024, driven by increased interest income and a prior gain on extinguishment of debt[125]. Financing Activities - The company sold 14,210 shares of common stock under its Equity Distribution Agreement with Canaccord for gross cash proceeds of approximately $0.1 million during the nine months ended September 30, 2025[128]. - Financing activities in the nine months ended September 30, 2025, included various sales of common stock, with net cash provided by financing activities amounting to $80 thousand[132]. - The company did not engage in any investing activities during the nine months ended September 30, 2025, and 2024[137].