Presto Automation (US:PRST)2023-10-10 22:14Revenue Performance - For the year ended June 30, 2023, net revenue retention was 85%, down from 102% in the prior year, primarily due to contract terminations and renewals at lower rates [232]. - Total revenue decreased 14% to $26.1 million for the year ended June 30, 2023, compared to $30.4 million for the year ended June 30, 2022 [274]. - Platform revenue decreased 34% to $13.2 million for the year ended June 30, 2023, primarily due to contract terminations by certain franchisee customers and lower pricing renewals from large customers [275]. - Transaction revenue increased 25% to $12.9 million for the year ended June 30, 2023, driven by increases in pricing for gaming fees [276]. - The three largest restaurant customers generated approximately 94% of revenue for the year ended June 30, 2023, compared to 93% in the prior year, with contracts up for renewal between December 31, 2023, and June 30, 2024 [236]. Cost and Expenses - Total cost of revenue decreased 14% to $25.6 million for the year ended June 30, 2023, compared to $29.7 million for the year ended June 30, 2022 [277]. - Platform cost of revenue decreased 30% to $13.1 million for the year ended June 30, 2023, in line with the decrease in Platform revenue [278]. - Operating expenses increased significantly, totaling $56.9 million for the year ended June 30, 2023, compared to $33.8 million for the year ended June 30, 2022 [273]. - Research and development expenses rose to $21.3 million for the year ended June 30, 2023, compared to $16.8 million for the year ended June 30, 2022 [273]. - General and administrative expenses surged to $26.8 million for the year ended June 30, 2023, compared to $9.8 million for the year ended June 30, 2022 [273]. - Sales and marketing expenses increased 33% to $8.8 million for the year ended June 30, 2023, compared to $6.6 million for the year ended June 30, 2022 [283]. Losses and Financial Position - Loss from operations was $56.4 million for the year ended June 30, 2023, compared to a loss of $33.2 million for the year ended June 30, 2022 [273]. - Net loss and comprehensive loss was $34.5 million for the year ended June 30, 2023, compared to a loss of $56.3 million for the year ended June 30, 2022 [273]. - The company reported a net loss of $34.5 million for the year ended June 30, 2023, compared to a net loss of $56.3 million for the previous year, representing a 39% improvement [305]. - The accumulated deficit increased to $235.3 million as of June 30, 2023, up from $200.8 million in the prior year [307]. - The company expects to continue generating operating losses in the near term due to various risks and uncertainties [307]. Cash Flow and Financing - Cash and cash equivalents as of June 30, 2023, were $15.1 million, up from $3.0 million as of June 30, 2022 [304]. - Net cash used in operating activities decreased by 6% to $44.5 million in 2023 from $47.3 million in 2022 [311]. - Cash provided by financing activities surged to $74.6 million in 2023, a 377% increase from $15.6 million in 2022 [317]. - The company incurred interest expenses of $12.8 million in 2023, significantly higher than $5.4 million in 2022 [305]. - The company received $49.8 million from the completion of a merger and $9.5 million from a private placement in May 2023 [308]. Debt and Obligations - Total debt as of June 30, 2023, was $50.6 million, down from $117.1 million in 2022, with convertible promissory notes eliminated [330]. - The company entered into a Credit Agreement on September 21, 2022, with an aggregate original principal amount of $55.0 million for term loans, which was later extended by $3.0 million [331]. - As of June 30, 2023, the term loans had a noncurrent balance of $50.6 million, reflecting $55.0 million of principal and $5.4 million of PIK interest accrual [346]. - The company recorded PIK interest expense of $5.4 million during the year ended June 30, 2023, which increased the outstanding debt balance [346]. - The company repaid all outstanding loans totaling $22.4 million, including $17.8 million in principal repayment and $4.4 million in prepayment penalties [359]. Customer and Vendor Concentration - Customer A accounted for 59% of revenues in 2023, up from 53% in 2022, while Customer B and Customer C accounted for 19% and 16% respectively [394]. - As of June 30, 2023, Customer A represented 43% of accounts receivable, an increase from 31% in 2022, and Customer D accounted for 37% [394]. - Vendor concentration risk exists as the company relies on a single supplier for its next generation Presto Touch tablets, which could adversely affect operating results if prices increase or supply is disrupted [395]. Market and Technology - The company aims to expand the adoption of Presto Voice among franchisee customers as a key revenue driver in the near term [235]. - The company is focused on enhancing its AI technology platform, Presto Voice, to meet customer needs and expects increased demand as the restaurant technology market grows [227]. - The restaurant technology market is evolving rapidly, with increasing labor costs and a higher percentage of orders being placed via drive-thru, necessitating solutions that lower costs and increase revenue [226]. Other Financial Information - The company has substantial doubt about its ability to continue as a going concern within one year after the financial statements are issued [309]. - The company received forgiveness for the first Paycheck Protection Program (PPP) loan of $2.6 million and the second loan of approximately $2.0 million, recognized as other income [361]. - The company has $24.6 million in deposits exceeding federally insured limits as of June 30, 2023, exposing it to credit risk if financial institutions face receivership [397]. - The impact of inflation on the company's operations and financial condition has been deemed immaterial, although future effects cannot be assured [396].