Phunware(US:PHUN)2024-11-09 18:42Financial Data and Key Metrics Changes - Year-to-date software subscriptions and service bookings for the 9 months ended September 30 were approximately $2.2 million in 2024, a nearly 300% increase from approximately $600,000 in 2023 [21] - Net revenues for Q3 2024 totaled approximately $665,000, down from approximately $1.3 million in Q3 2023, with 2023 benefiting from a contract breakage fee [21] - Gross margin for the 9 months ended September 30 was approximately 51% in 2024, up from approximately 32% in 2023 [22] - Non-GAAP adjusted EBITDA loss was approximately $2.9 million in Q3 2024, an improvement from a loss of approximately $3.3 million in Q3 2023 [24] - Net loss from continuing operations for Q3 2024 was approximately $2.8 million or $0.25 per share, compared to a net loss of approximately $13.7 million or $5.72 per share in Q3 2023, reflecting a 96% improvement [24] Business Line Data and Key Metrics Changes - Total operating expense was approximately $3.5 million for Q3 2024, down from approximately $4.9 million in Q3 2023, excluding a $9 million goodwill impairment expense in Q3 2023 [23] - Year-to-date net revenues for the 9 months ended September 30 were approximately $2.6 million in 2024, compared to $3.9 million in 2023 [21] Market Data and Key Metrics Changes - The company remains debt-free with approximately $35.6 million in cash at the end of Q3 2024, which increased due to the utilization of the at-the-market equity program [26] - As of November 6, 2024, the company had approximately $100 million in cash and cash equivalents, significantly boosted by the ATM equity program [27] Company Strategy and Development Direction - The company aims to leverage mobile devices as a foundation for AI-driven personalized engagement, focusing on merging mobile technology with generative AI [6][8] - A next-generation AI-driven SaaS platform is anticipated to launch in mid-2025, designed to democratize mobile app creation [11] - The company is focused on scalable modular frameworks that integrate with existing platforms to support high-value customer engagements across various industries [15] Management's Comments on Operating Environment and Future Outlook - Management emphasizes the importance of fiscal responsibility and efficient capital use to ensure long-term value for shareholders [16] - The company sees itself as a leader in the rapidly expanding generative AI market, aiming to redefine how businesses and governments engage with customers and citizens [17] - Management acknowledges the challenges of building from the ground up but believes in the potential of generative AI and localized solutions for enterprise and federal government contracts [56][57] Other Important Information - The company is actively seeking to strengthen its team to align with its strategic direction, including the search for a new CFO [18] - The company has a robust pipeline of potential clients ready to engage with its AI-powered solutions for civic engagement [49] Q&A Session Summary Question: Plans around the SaaS platform launch - Management indicated that the SaaS platform is an evolution of existing capabilities, focusing on automating app creation processes [30][32] Question: Growth strategy and potential acquisitions - Management expressed a judicious approach to growth, focusing on organic scaling of the SaaS platform and potential acquisitions that align with their strategic goals [33][34] Question: Revenue visibility and future business outlook - Management acknowledged the current revenue base is low but sees opportunities in generative AI and enterprise engagements, emphasizing a long runway for growth [56][58] Question: Focus on U.S. vs. international opportunities - Management confirmed a primary focus on the U.S. market initially, with plans to explore international opportunities in the future [61] Question: Digital advertising opportunities - Management highlighted the importance of digital advertising as a revenue source and is focused on enhancing productivity through internal generative AI tools [65][70]